First of all, a debtor should prove the causal link between the occurrence of a force majeure (quarantine) and the inability to make a specific payment. In this case, the debtor is released only from the negative liability (payment of fines, penalties, etc.) for non-performance, but still has to settle the debt, that is to fulfil the main obligation under the agreement.
The existence of a force majeure circumstance shall be evidenced by a certificate of the Ukrainian Chamber of Commerce and Industry (the "UCCI").
The following circumstances will not constitute the force majeure according to the law and the explanations of the UCCI:
- financial and economic crisis;
- growth of official and commercial exchange rates of a foreign currency to the national currency;
- non-compliance / violation of obligations by a counterparty of a debtor;
- the market deficit of goods required to fulfil the obligation;
- lack of funds, etc.
In practice, the complete cessation of the banking system or the freezing of the debtor's accounts may be considered as a force majeure which makes it impossible for the debtor to fulfil their monetary obligations. What is the procedure for certifying force majeure by the UCCI?
A force majeure circumstance shall be certified at the request of corporate entities and individuals under each separate contractual, tax and / or other obligations, execution of which became impossible due to the alleged force majeure.
The burden of proof for the force majeure existence, as well for the accuracy of the data provided, lies with the applicant.
The director of the company shall sign the application and solicit it to the UCCI. The application shall be accompanied by:
- a certified copy of the contract or regulation confirming the existence of an obligation;
- scope of fulfilled and unfulfilled obligations;
- a document confirming that the counterparty has been notified on the occurrence of a force majeure;
- original documents by the competent public authorities confirming the existence of the force majeure.
Depending on the complexity and volume of documents, the application shall be considered within 10 business days. The applicant can order a fast-track procedure, that is, the application shall be considered within 5 business days.
The certificate issued by the UCCI, or the denial to certify the force majeure,
may be challenged before the Regulatory Committee on the Certification of Force Majeure of the UCCI within 3 months from the date when the person became aware of its issuance. The Regulatory Committee is obliged to consider the appeal within 30 calendar days from the date of its receipt.
Typically, contracts provide for a procedure and terms of notifying the counterparty on the occurrence of force majeure. Even in the absence of contractual timelines, we recommend informing about the occurrence of a force majeure within a reasonable time.