Neither « force majeure » nor « act of state » are defined in the 2002 Isda Director Treaty, so it is appropriate to carefully consider whether the circumstances in question are relevant. It is plausible that this provision could be triggered if, for example, formal state-imposed restrictions prevented employees with keys to access office systems, but in most cases there would likely be some form of business continuity plan, which would make the delivery possible, even if it was uncomfortable or less effective. « Non-feasibility » would be easier to prove than « impossibility, » but again, there could be some form of business continuity plan to get around the problems, making it a difficult argument. In short, force majeure is difficult to prove in the English courts and market participants should examine the issue carefully before trying to recover as a redundancy event. This article focuses exclusively on the force majeure provisions contained in the 2002 ISDA Executive Contract. For more agreements on the COVID-19 epidemic, click here in our current article « Coronavirus Crisis (COVID-19), Key Concerns for Hedge Fund and Asset Managers with Respect to Trading « . In addition, for managers still working under the 1992 ISDA Executive Contract, please contact your board to determine if force majeure clauses have been introduced regarding changes to the ISDA protocol on illegal/force majeure or bilateral amendments. In principle, it should be kept in mind that any notification must be served at the most recent address specified in the contract, whether or not it is the most appropriate address in practice. For this reason, it may be useful to send communications to multiple addresses, such as headquarters. B of the counterparty and/or the address to which the entity is known if it differs from the one mentioned in the agreement. The invocation of the case of force majeure does not exempt you indefinitely from your obligations; it simply defers payment or delivery to a maximum of eight local business days after the day that would have been the first local business day if the force majeure event had not taken place. In other words, it is due eight local working days after the day when the payment would otherwise have been due, that the state quarantine or any other force majeure event is no longer in effect. In cases where the force majeure base event ends earlier than the above date, payment or delivery is rescheduled for the local first business day after the end of the force majeure event.
Leaders should therefore be prepared to act immediately and honour the commitment during the event, as their recruitment will be difficult to anticipate in advance. Any market participant in the rights discussions should also be aware that any reservation could be invalidated if its subsequent conduct is inconsistent with the reservation. For example, the amicable liquidation of trades, the acceptance of a difference in performance or the continuation of trades under the agreement could invalidate an alleged reserve of ownership. The COVID 19 pandemic has caused widespread market turbulence and continues to create serious problems for businesses trying to mitigate the effects of the lockdown and the resulting economic downturn.