COVID-19 AND PF
~BLE 1- FORCE MAJEURE CLAUSES IN EXAMPLE STANDARD DOCUMENTS IN PROJECTS
;ource document
:nStandardisation of PFI Contract (SOPC) Version 4 for UK context;
:section 5.4}
:H) draft Standardisation of PF2 Contracts (SOPC) for UK context (2012 -
intended to replace SOPC 4}
:section 15.4}
>ource: World Bank, UK HM Treasury
>ower Purchase Agreement produced for wind projects in the US context
)ource: World Bank (Section 14.1}
BOT Agreement for treatment of Effluent/ Wastewater for common
law jurisdictions
Source: World Bank (Section 19.1)
~BLE 2- FORCE MAJEURE CLAUSES IN EXAMPLE STANDARD DOCUMENTS IN PROJECTS
Source document
Power Purchase Agreement for emergency power generation complex-
thermal power generation plant for Africa
Source: World Bank (Section 15.1)
Power Purchase Agreement (PPA) for Small Scale Rural Power Projects in
South east Asia
Source: World Bank (Section 16.1.4)
Power Purchase Agreement for oil fired power plant for use in developing
countries
Source: World Bank (Section 13.1.1)
Concession Agreement for an International Airport in India
Source: World Bank (Schedule 1)
' have been available are probably now within the
• defined exclusions fi-om cover.
In the context of dispute resolution, which
must inevitably now aJise on specific projects, it is
, interesting that in the UK, the Lord Chiefjustice has
' already flagged new measures to address the impact
• of Covid-19- see : www_judiciary.uk/announcements/
' coronavirus-covid-19-message-fi.-om-the-lord-chief-
, justice-to-judges-in-the-civil-and-family-courts.
These measures are intended to allow the courts
' to continue to work but note that it "will not be
: business as usual"_Measures being imposed in
' the judicial systems elsewhere, including the US,
• Ausu-alia and many Em opean court systems, va1y
' from temporary shut-downs in individual cases
• requil.ing "in-person proceedings", to staggering
' the scheduling of matters and limiting the number
of people within court rooms, along with other
: measures aimed at protecting public safety.
Project Finance International March 25 2020
Covid-19
Events of Force Majeure No and why
(a) war, civil war, armed conftict or terrorism; or No. List of force majeure events purports to
(b) nuclear, chemical or biological contamination; or be exhaustive, and unlikely to fit an epidemic
(c) pressure waves ca used by devices travelling at supersonic speeds. under "biological contamination".
Force Majeure event includes: Yes or no, as the definition is not exhaustive.
(a} acts of God; No mentioning of epid emic or further
{b) civil disturbance, sabotage, strikes; lock-outs, work stoppages; or elaboration to state events such as
(c) and action or restraint by court order or public or governmental Authority. non-availability of fuel, economic hardship,
inability to sell will not constitute force
majeure. Further examination required.
Force Majeure events includes: Yes or no. List of force majeure events is not
(a) act of God; exhaustive, and no mention of epidemic
(b) war and hostilities; or plague. Further examination required.
(c) rebellion and revolution;
(d) contamination by radio-activity;
(e) riot and strikes; or
(f) acts or threats of terrorism.
Covid-19
Events of Force Majeure No and why
Definition of "natural force majeure: include: Yes. Epidemic Included as natural force
(i} acts of God; m ajeure events.
(il} epidemic or plague; or
(ill) explosion or chemical contamination.
Definition of "other force majeure events" include but not limited to: Yes, epidemic is specifically included as an
(a) earthquake, flood, storm, cyclone, lightning; Other Force Majeure Event.
(b) fire, explosion, or chemical contamination; or
(c) epidemic or plague.
Definition of "natural force majeure: include: Yes. Epidemic included as natural force.
(i) acts of God; majeure event
(li} epidemic or pl ague; or
(ill} explosion or chemical contamination.
Force Majeure events includes, amongst others: Yes. Epidemic included as a force majeure
(a} strikes, lock-outs or other industrial action or labour disputes; event.
(b) any accidental toss of or damage to cargo in the course of transit
by any means and intended for incorporation into the Airport;
(c) toss of or serious accidental damage to the Airport; or
(d) epidemic.
View of government
The key priorities within government stemm ing
from the outbreak ofCovid-19 appear to be
implementing measures that (a) optimise
preservation of life, including tlu-ough availability
of hospitals and m edical practitioners etc, (b)
ensure good public order is maintained, (c) achieve
wide-spread public acceptance around restricting
movements or imposing isolation of people, (d)
minimise economic fallout, and (e) enable a course
of appropriate actions to be plotted and undettaken.
Where government agencies have been
in the course of procuring projects, we are
starting to see delays in that process already,
with the possible exception of public hospitals
and elderly care facilities. These latter types of
projects, however, face different procurement
issues, including sourcing much-needed medica l
ventilators and protective equipm ent for medics.
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