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Jun 30, 2020

COVID-19 as the Basis for Invocation of a Force Majeure Clause

The Delhi High Court, in Halliburton Offshore Services Inc. v. Vedanta Limited[1], held that outbreak of the COVID-19 pandemic and consequent nation-wide lockdown, cannot by itself be used as an excuse for non-performance of a contract, where performance deadlines were prior to the occurrence of the outbreak. It was held that there has to be a ‘real reason’ and ‘real justification’ for invoking a force majeure clause and that the Court must inter alia assess (a) the conduct of the parties prior to the outbreak; (b) the deadlines imposed under the contract; and (c) the steps taken to mitigate the impact of the force majeure event, to determine whether the concerned party was genuinely prevented from performing its contractual obligations due to the outbreak.

[1] O.M.P (I)(COMM.) No. 88/2020.

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These are the views and opinions of the author(s) and do not necessarily reflect the views of the Firm. This article is intended for general information only and does not constitute legal or other advice and you acknowledge that there is no relationship (implied, legal or fiduciary) between you and the author/AZB. AZB does not claim that the article's content or information is accurate, correct or complete, and disclaims all liability for any loss or damage caused through error or omission.

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