15 六月 2020

Every breach not justifiable merely on invocation of COVID-19 as a force majeure

The Delhi High Court has recently held that every breach or non-performance cannot be justified or excused merely on the invocation of COVID-19 as a force majeure condition.


The High Court was of the view that it would have to assess the conduct of the parties prior to the outbreak, the deadlines that were imposed in the contract, the steps that were to be taken, the various compliances that were required to be made and only then assess as to whether, genuinely, a party was prevented or is able to justify its non-performance due to the pandemic.


Observing that the parties ought to be compelled to adhere to contractual terms and conditions and excusing non-performance would be only in exceptional situations, the Court in the case of Halliburton Offshore Services v. Vedanta Limited reiterated that a force majeure clause is to be interpreted narrowly and not broadly. Vacating the ad interim Order, the Court declined to grant restraint against encashment of the Bank Guarantee.

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