16 March, 2020
Due to the outbreak of COVID-19 the State of Emergency was declared in Kazakhstan for the period of March 16th till April 15, 2020.
The spread of the virus across Central Asia, particularly in Kazakhstan and Uzbekistan began last week. Despite the low number of infected people, the virus has affected many areas of activity such as production, export and import, oil& gas, manufacturing, tourism, etc.
According to the information provided below, you will be able to understand the extent of liability in force majeure circumstances.
FORCE MAJEURE
At present, it is safe to say that the success of international and national commercial activities depends on the timely fulfillment of the obligations assumed by the parties. However, in some cases, due to circumstances beyond the control of the parties, the performance of such obligations is practically impossible. Such circumstances could be treated as force majeure.
According to Kazakh law, an entity that has not fulfilled or improperly fulfilled its obligations shall be liable if it does not prove that proper performance was impossible due to force majeure, which includes emergencies and unavoidable circumstances (natural disasters, military actions, etc). The agreement may provide for other consequences of force majeure, however, Kazakh legislation highlights that such circumstances do not include, in particular, the lack of goods, works or services necessary for the execution in the market. There is also no remedy for any party to the contract, as in case of force majeure both parties suffer losses.
In order to confirm force majeure circumstances, entrepreneurs who are unable to fulfill their contractual obligations in connection with the state of emergency bears the obligation to prove the event affected the fulfillment of the respective obligation. As such, they can apply to the Foreign Trade Chamber to evidence the force majeure circumstance. Foreign Trade Chamber certifies the force majeure in accordance with the terms of foreign trade transactions and international treaties.
In cases of confirmation of force majeure circumstances, the company is not liable for non-performance of obligations if it proves that the obstacle was beyond the company's control and could not have been foreseen before entering into the contract.
The occurrence of force majeure does not cancel the performance of the contract, but only releases from liability for its untimely performance.
For further information, please contact:
Saniya Perzadayeva, Managing Partner, Unicase Law Firm
saniya.p@unicaselaw.com
