“Unstoppable Sanctions” — Arltan Tserenov for the Legal Information Agency
The practice of recognizing the application of foreign sanctions as force majeure circumstances remains contradictory. Most often, courts place such risks on businesses, while releasing banks and the state from liability.
At the end of June, the European Union announced its 21st sanctions package, new "black lists" were presented by the United Kingdom and Canada, and the U.S. Congress approved a special bill. Russia is introducing "counter-sanctions," which make operations even more complicated for even the most apolitical businesses and citizens.
Arltan Tserenov, Senior Associate at Prime Advice Law Offices:
For circumstances to be recognized as force majeure, it is necessary to prove that the sanctions meet the criteria of being extraordinary and unavoidable. That is, they are not ordinary under the specific conditions, and any other participant in the same market could not have avoided the occurrence of such circumstances or their consequences.
In practice, it is necessary to prove a combination of conditions: the sanctions were imposed after the conclusion of the contract, their occurrence at that time could not have been reasonably foreseen, and they cannot be overcome. There must also be a direct causal link between the imposed restrictive measures and the impossibility of fulfilling the terms of the contract.
Chambers of Commerce and Industry, as associations of entrepreneurs, possess in-depth knowledge in the business sphere due to the specifics of their activities. This allows them to competently assess circumstances as force majeure. However, the certificate issued is merely one piece of evidence and does not have predetermined authority. The court may recognize the existence of force majeure circumstances even without such a certificate.