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Coronavirus Pandemic (COVID-19): Invoking Force Majeure and Doctrine of Frustration: An Analysis From an Indian Law Perspective
Published online by Cambridge University Press: 08 April 2021
Extract
The on-going global Coronavirus disease (“COVID-19”) pandemic, has affected a countless number of people around the world, businesses, and the global economies alike and is certainly nothing short of a ticking time bomb. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic after noting that COVID-19 has increased 13-fold in countries other than China. A few state governments in India have also termed COVID-19 as an epidemic. In testing times like these, India, currently amidst an unprecedented nationwide lock-down, which has subsequently been extended until May 3, 2020 and has resulted in a temporary or partial shutdown of most business(es)-in India—whether they be small, medium or big business houses, with the exception of only a list of services notified by the relevant governmental authorities which have been deemed to be and are categorized as ‘essential services’ and allowing functioning of select additional activities (such as allowing manufacturing activities in certain sectors to take place), which have also only been permitted to start from April 20, 2020.
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Footnotes
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© Aseem Sahni 2020. The author is a lawyer in New Delhi/Mumbai, Maharashtra, India. He can be reached at [email protected].
References
2 Honorable Supreme Court of India in: ‘RE: CONTAGION OF COVID 19 VIRUS IN PRISONS’ – order dated April 26, 2020; Writ Petition (Civil) No.1/2020.
3 In line with the order of the Central Government of India, dated March 24, 2020 (“Order”) r/w the addendum to the Order dated March 25, 2020, ‘essential services’ has allowed that certain services deemed important and critical for economy, which includes items and services falling under the ambit of the services, including but not limited to the following list of services: (i) healthcare; (ii) pharmaceutical; (iii) FMCG; (iv) agriculture and food processing.
4 Refer to order No. 40-3/2020-DM-I-(A) dated April 15, 2020, issued by the Ministry of Home Affairs, Government Of India.
5 Refer to study paper issued by Federation of Indian Chambers of Commerce and Industry (“FICCI”), entitled “Impact of Covid-19 on Indian Industry” dated March 23, 2020 and the subsequent addendums, available at: http://ficci.in/spdocument/23221/Industry-Feedback-MHA-Circular-15-April.pdf.
6 Refer to article, available at: http://ficci.in/ficci-in-news-page.asp?nid=21078, last visited on April 06,2020.
7 Supra.
9 A crore denotes ten million (10,000,000 or 107 in scientific notation) and is equal to 100 lakh in the Indian numbering system. In this case, it refers to the official Indian currency, rupees.
10 Refer to definition provided at: https://dictionary.cambridge.org/dictionary/english/force-majeure
11 ‘Contingent Contracts’ are contracts which depend on event of ‘Contingency.’ Refer to definition of ‘Contingency’ provided at: https://dictionary.thelaw.com/contingency, wherein ‘contingency’ has been defined as a contract provision that states that something in a provision requires something to happen or not to happen.
12 MANU/SC/0362/1961.
14 Id.
15 Section 56 of the Act, lays down the legal principle of ‘Doctrine of Principle’ wherein it has been mentioned that an agreement to do an impossible act would be held to be void.
16 High Court of Andhra Pradesh in the case of Alluri Narayana Murthy Raju vs. Dist. Collector and Ors. (MANU/AP/0514/2008).
17 Allahabad High Court in the case of Ganga Singh And Ors. vs Santosh Kumar And Ors (AIR/1963/All 201).
18 Refer to Office Memorandum, No: F.18/4/2020-PPD- dated February 19, 2020, issued by Ministry of Finance, Department of Expenditure, Procurement Policy Division, Government of India.
20 See Office Memorandum, supra at note 18.
21 Id.