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‘Force Majeure Clause in contracts should be applied prudently’

Published : Wednesday, 29 July, 2020 at 12:00 AM  Count : 217
Business Correspondent

Experts  in  a webinar  on  ''Application  of  Force  Majeure  Clause:  Should  COVID-19  Be Included?''-organised  by  Bangladesh  International  Arbitration  Centre  (BIAC)  held  on Monday emphasised prudent invocation  of  Force  Majeure  Clause  in  commercial contracts  at  this  hard  time  of  growing  spread  of  COVID-19  pandemic  throughout  the globe.  
They  also  urged  upon  entrepreneurs  to  forge  unity  among  themselves.  
The webinar  aimed  to  discuss  on  the  possible  impacts  of  COVID-19  on  the  ongoing  ADR proceedings, applicability of Force Majeure clause, risk factors and how to manage risks arising out of commercial contracts.Judges,  business  leaders,  bankers,  lawyers,  ADR  experts  from  home  and  abroad, academicians, corporate representatives and students of law and business participated in  the webinar.
 Six  outstanding  Panelist  Discussants  took  part  in  the  discussion  and viewed  the issues  of  Application  of  Force  Majeure clause  in  the  current  COVID-19 scenario from their own perspectives.
Justice Md. Rezaul Hasan, Judge of the High Court Division, Supreme Court of Bangladesh in his deliberation said that only unforeseeable circumstances that prevent someone from fulfilling a contract or irresistible compulsion come under the purview of Force Majeure, but proximate cause of non performance of contract is government order, not  Force  Majeure  itself.  
In  existing  laws  there  are  remedies  of  non  performance  of contract  and  Force  Majeure  clause  is  not  applicable  as  a  proximate  cause,  except  in shutdown,  lockdown,  stoppage  of  traffic  which  are  followed  pursuant  to  government orders, he said.
Justice Hasan emphasised prudent invocation of Force Majeure Clause in commercial contracts only under unforeseeable circumstances during COVID-19.
Speaking  on  the occasion  BIAC  Chairman Mahbubur  Rahman  opined that  commercial contracts  chiefly  base  on  mutual  trust  between  the  parties;unless  there  is  any comprehensive contract, Force Majeure clause can not be enforced. During the spread of COVID-19,  in  some  cases  Force  Majeure  may  be  applicable  where  flights  and movement of sea going vessels and surface transport have been shut down or restricted by governments, he said.
Mahbubur Rahman, also Chairman of International Chamber of Commerce-Bangladesh stressed the need of fixing favourable terms for our exporters in the Pro Forma Invoices, so that Force Majeure issues can not be misinterpreted by the buyers for their own interest.
The  largely  attended  Webinar  through  Zoom  transmission  was  moderated  by  Barrister Sameer Sattar, Advocate of Bangladesh Supreme Court and Head of Firm, Sattar and Co. Chief Executive Officer of BIAC Muhammad A. (Rumee) Ali in his address of welcome said that BIAC as the country's only licenced ADR institution and also recognised by the Permanent  Court  of  Arbitration,  the  Hague,  has  been  relentlessly  trying  to  resolve business disputes through Arbitration, Mediation and other methods of ADR.
Miran  Ali,  Director,  Bangladesh Garment Manufacturers and Exporters Association, Rahel  Ahmed,  Managing  Director and  CEO of Prime  bank  Ltd., Dr. Md. Anowar Zahid, Dean, Faculty of Laws, Eastern University, Barrister Margub Kabir, Adocate of the Supreme Court of Bangladesh, Barrister Sameer Sattar, Director of BIAC M A Akmall Hossain Azad also participated.

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