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.

Published In:Inter Alia - Quarterly Edition - June 2020 [ English Chinese japanese ]
Date: June 30, 2020