COVID-19: FORCE MAJEURE

In the context of recent events related to the spread of coronavirus (COVID-19), including the adoption of various types of restrictions by state authorities, many entrepreneurs have faced the inability to fulfill their contractual obligations, both on their part and on the part of their contractors. We will not describe for a long time how and how much the current situation affects the economy as a whole and each entrepreneur but will try to understand it by applying the legal norms of the Republic of Uzbekistan.
According to subsection 3 of article 333 Of the civil Code of the Republic of Uzbekistan, unless otherwise provided by law or contract, a person who has failed to perform or improperly performed an obligation in the course of business activity is liable, if he does not prove that proper performance was impossible due to force majeure, that is, extraordinary and unavoidable circumstances under these conditions (force majeure). Such circumstances do not include, in particular, violation of obligations on the part of the debtor's counterparties, the absence of goods necessary for performance on the market, or the debtor's lack of necessary funds.
The procedure for confirming force majeure circumstances occurring on the territory of the Republic of Uzbekistan is regulated by the Regulation "On the procedure for confirming force majeure circumstances (force majeure)" (see Annex to Resolution of the Cabinet of Ministers of 15 February 2005 No. 63). According to the Regulation, "force majeure circumstances are extraordinary, unavoidable and unforeseen circumstances under these conditions, caused by natural phenomena (earthquakes, landslides, hurricanes, droughts, etc.) or socio-economic circumstances (a state of war, blockades, prohibitions on imports and exports in the public interest, etc.) that do not depend on the will and actions of the parties, in connection with which they cannot fulfill their obligations."
Confirmation of force majeure circumstances is made by the Ministry of foreign trade of the Republic of Uzbekistan by issuing the appropriate certificate on the basis of a written application of the interested party indicating the force majeure circumstances. Note that this Provision, as well as the issuance of the certificate, applies to obligations under foreign trade transactions and international agreements (see paragraph 1 of the Regulation). Ministry of foreign trade of the Republic of Uzbekistan on its website (https://mift.uz/ru/news/biznes-v-uzbekistane-perehodit-v-rezhim-fors-mazhor) informed that the time limit for obtaining the certificate is one day (if a force majeure event is associated with a coronavirus).
The certificate is also issued by the chamber of Commerce and industry of Uzbekistan, as reported on the official website of the CCI (http://www.chamber.uz/ru/news/6076).
If your contract is not an international transaction, in this case, the party for which the performance of the contractual obligations has become impossible due to restrictive and / or prohibitive state measures in connection with the spread of COVID-19 coronavirus, may refer to the Decree of the President of the Republic of Uzbekistan no. up-5969 of March 19, 2020. "On priority measures to mitigate the negative impact on the economy of the coronavirus pandemic and global crisis phenomena", as well as other relevant regulations and decisions of authorized state bodies. In this case, you should send a corresponding notification to the counterparty stating the reasons and circumstances that prevent the proper performance of contractual obligations, attaching supporting documents.  If the agreement provides for the procedure, method, and timing of notification of the occurrence of force majeure, the document must meet these requirements.
What is the algorithm of actions in the event of force majeure that led to the inability to properly perform contractual obligations? Let's try to describe the necessary steps step by step.
1. Study of the contract to determine the applicable law. This stage is important, because, for example, English law does not contain the concept of "force majeure". Further actions are performed in accordance with the law chosen by the parties to the agreement.
For example, the applicable law under the terms of the agreement is the legislation of the Republic of Uzbekistan. Let's move on to the next stage.
Study of the contract for the presence of "force majeure" conditions.
2. If the conditions are stipulated, we act in strict accordance with them, observing the term, procedure, method of notification and confirmation of force majeure. For the appropriate certificate, we apply to the Ministry of investment and foreign trade of the Republic of Uzbekistan. The application must be accompanied by duly certified copies of contracts and specifications for contracts, information about the scope of fulfilled obligations under the agreement, and a copy of the payment document confirming payment of the fee for issuing a certificate confirming force majeure. For the issuance of a certificate confirming the force majeure circumstances (force majeure), a fee is charged in the amount of one basic calculation amount established in the Republic of Uzbekistan on the day of payment (currently 223,000 soums). The application and attached documents are submitted by the applicant directly to the Ministry on purpose or sent by mail.
If the contract does not contain such conditions of force majeure, we notify the party of the impossibility of performance of obligations, referring to the Civil Code of the Republic of Uzbekistan (part 3 of article 333), justifying the impossibility of performance by the extraordinary and insurmountable circumstances, fixing the date from which such impossibility of performance occurred. It is important to demonstrate a causal relationship between the circumstances that have occurred, such as prohibitive or restrictive measures taken by state authorities, and the inability to fulfill the obligations assumed under the contract. At this stage of notification preparation, the judicial perspective of a possible future dispute should be kept in mind.
Further actions depend on the agreement of the parties (if the contract does not provide a specific mechanism), it is possible to extend the terms of performance of obligations, review prices, change the order and method of execution, etc. at this stage, much depends on the ability and desire of the parties to continue cooperation.

How will the circumstances recognized as "force majeure" affect the contract?
First, this entails an exemption from liability for breach of the agreement, that is, you will not be charged penalties, your counterparty does not have the right to recover losses from you. It should be remembered that this does not mean the termination of the obligation itself: after the end of the epidemic (in the case of COVID-19), goods, works, and services are subject to delivery and payment (unless the parties have reached a different agreement).
Secondly, the terms of performance of obligations are suspended. The terms of the force majeure agreement may provide for periods for which the performance of obligations is suspended, or the parties agree on new terms.
The situation related to the COVID-19 coronavirus is new for our country as a whole and, in particular, for Uzbek entrepreneurs, since the previous types of viruses, fortunately, did not have such an impact on our entrepreneurs. Judicial practice on non-performance of obligations during the pandemic has not yet been formed, not to mention the fact that the courts themselves are working in a special mode today. However, in any, even the most adverse situation, the experience is gained, and according to popular wisdom, the experience is more valuable than force, even if it is the force of extraordinary and unavoidable circumstances (force majeure).