FORCE MAJEURE DURING WAR

With the start of a full-scale invasion and the establishment of martial law, many entrepreneurs began to have problems meeting their obligations. This is due to complicated logistics, the destruction of certain resources of enterprises, and restrictions on movement. With this in mind, much attention began to be paid to the condition of force majeure, which was previously either ignored altogether or was a formality.

If we analyze the concept of force majeure in Ukrainian legislation, then according to part two of Article 14-1 of the Law of Ukraine "On Chambers of Commerce and Industry in Ukraine", force majeure circumstances (circumstances of force majeure) are extraordinary and unavoidable circumstances that objectively make it impossible fulfillment of obligations stipulated by the terms of the contract (contract, agreement, etc.), obligations according to legislative and other regulatory acts, including, in particular, the threat of war, armed conflict or a serious threat of such a conflict, general military mobilization, military actions, declared and undeclared war, etc.

Thus, in the event of force majeure circumstances, business entities are released from responsibility for their contractual obligations, tax obligations, etc. Exemption from liability in such cases occurs only if it was not fulfilled precisely as a result of certain conditions, therefore, the impossibility of fulfilling the conditions should be distinguished from material impracticability. In order to be able to refer to force majeure, certain conditions must be met.

First, force majeure is primarily a contractual instrument, so it is necessary to analyze in detail the contract that was concluded. It is worth finding out whether the circumstances related to force majeure were detailed in the contract, whether there is a condition on the possibility of unilateral performance of the contract, what are the terms and form of notification to the counterparty about the impossibility of fulfilling obligations. In the future, all actions must comply with the terms of the contract and the norms of current legislation;

Secondly, it is necessary to immediately inform the counterparty about the impossibility of fulfilling obligations due to force majeure. The form of such notification is usually specified in the contract. If it is impossible to report in the specified way, it is worth reporting in any option. It should be remembered that force majeure does not exempt from the need to fulfill an obligation, but rather exempts from responsibility for its non-fulfillment under specific conditions.

Thirdly, force majeure must be confirmed. For such confirmation, as a rule, a certificate of the Chamber of Commerce and Industry regarding the confirmation of force majeure is obtained. Of course, in the conditions of war, it seems almost impossible to get such a certificate on time. Therefore, we recommend in any case to collect all documentation related to the occurrence of a force majeure circumstance, regardless of obtaining the specified certificate. We also recommend confirming the message with the general letter of the Chamber of Commerce and Industry No. 2024/02.0-7.1 dated February 28, 2022, by which the Chamber of Commerce and Industry certified that the military aggression of the Russian Federation against Ukraine is a force majeure circumstance (circumstance of irresistible force).

Also, we emphasize that the presence of compelling circumstances must be documented in each specific case of the impossibility of timely fulfillment of your obligations.

As a conclusion, we can say that indeed force majeure is one of the good options for protecting yourself from liability for non-fulfillment of obligations arising as a result of certain circumstances. However, it is very important to prepare for such cases and draw up contracts correctly. This will enable you to insure yourself and your business against unwanted consequences.