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Certification of Force Majeure circumstances


Оn 23.12.2015 the new «Regulations on the order of certification of Force Majeure circumstances» (hereinafter - «the Regulations») were adopted by the Russian Chamber of Commerce and Industry (hereinafter – «the Russian CCI») Board instead of the previous ones.

The Regulations have:

  • clarified the definition of force majeure circumstance;
  • defined the list of force majeure circumstances;
  • specified circumstances that do not constitute force majeure;
  • precisely described  the procedure of certification of force majeure circumstances.

NEW DEFINITION

In addition to mandatory features of Force Majeure circumstances as emergency and unavoidability, the unforseeability feature is also introduced.

The list of Force Majeure circumstances includes inter alia:

  • Acts of God (earthquakes, floods, hurricanes);
  • fire;
  • mass diseases (epidemics);
  • strikes;
  • military operations of any character;
  • acts of terrorism;
  • sabotage;
  • traffic restrictions;
  • prohibitive measures of states;
  • a ban on exports and imports connected with the adoption of international sanctions.

The list of Force Majeure circumstances may be supplemented with other circumstances beyond the contractual parties’ control.

Another innovation fixed in the Regulations is a direct reference to the circumstances that do not constitute Force Majeure, namely:

  • business risks (such as contractor’s contract breach; the lack of necessary goods to fulfill the obligations, etc.);
  • financial and economic crisis;
  • change in currency exchange rate;
  • devaluation of the national currency;
  • criminal actions committed by unidentified individuals (unless otherwise provided by the contract)

It should be noted that the above mentioned lists are not exhaustive and are able to be altered/added by the contractual parties as well as are binding for them, except for those cases when the contract stipulates otherwise.

Thus, while negotiating the terms and conditions of contracts, the contractual parties should bear in mind which circumstances are able to be considered as Force Majeure.

NEW PROCEDURE OF CERTIFICATION

Certification of Force Majeure circumstances are executed by issuance of the Certificate of Force Majeure (hereinafter – “the Certificate”). The decision on issuance of the Certificate is made by the Russian CCI in each particular case, based on the contract terms and conditions as well as the RF competent authorities’ documents confirming the existence of such circumstances.

The Regulations also set forth:

  • the list of data and documents to be submitted for issuance of the Certificate;
  • procedure for consideration of the submitted data and documents;
  • conditions for execution and issuance of the Certificate.

The fee is charged for execution and issuance of the Certificate in accordance with the Russian CCI current tariffs.

The grounds for refusal to issue the Certificate are:

  • failure to submit a full set of documents necessary for issuance of the Certificate;
  • failure to make a payment for execution and issuance of the Certificate;
  • non-recognition of the existence of force-majeure circumstances upon consideration of the submitted documents.

Thereby, the new Regulations were adopted for clarification and improvement of the definition of Force Majeure circumstances. The said amendments have been caused by a large number of disputes between the contractual parties with regard to the issue what circumstances not fixed in the contract could constitute Force Majeure.

We believe that the adoption of the Regulations should minimize the risk of disagreements between the contractual parties regarding the interpretation of Force Majeure circumstances.



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