COVID-19 stokes force majeure claims

COVID-19 stokes force majeure claims

March 25, 2020, Project Finance International

Lido Fontana is quoted in Project Finance International regarding COVID-19’s impact on the project finance market. Developers and procurement authorities are receiving force majeure (FM) notices as they fear they will not be able to meeting their deadlines. Mr. Fontana says, “As soon as China started shutting down, we found that a lot of European-headquartered companies with operations in Africa and South African-based contractors started issuing FM notices.

”What we are seeing is a number of contractors claiming FM but they can’t yet show in what meaningful way the project will be impacted, so some of the projects are continuing for now with the actual impact expected at some point in the future,” he adds.

”With FM, there’s no prescribed definition under English law or South African law, so one is guided principally by the contracts and how FM is defined, what obligations are placed on the parties during periods of FM and what compensation or relief the party claiming FM is entitled to,” Mr. Fontana says.