Articles 1147 and 1148 of the Belgian Civil Code enable a contractual party to avoid normal performance of the contract without having to pay damages in case of force majeure.
The “Corona” Royal Decree No 2 dated 9 April 2020 and published in the Belgian State Gazette on the same date provides that all procedural deadlines ending between 9 April and 3 May 2020 are automatically extended until 3 June 2020.
With Covid-19 raging worldwide, Belgium has been swept up in the storm as well. The situation is improving and we are slowly but steadily preparing to reopen our economic activity soon. But what does Covid-19 mean for contracts under Belgian law and for the proceedings pending before the Belgian courts?
It is clear that the performance of many contracts, such as manufacturing or distribution or even license agreements, will be impacted by the consequences of the Covid-19 outbreak and the governmental measures taken in its wake.
In this situation, the first thing to do is to check the terms and conditions of the contract itself. If the contract does not contain any clear provision on unforeseeable events or force majeure, the question arises whether Belgian law contains any provisions that may release the contracting parties from their obligations.
Articles 1147 and 1148 of the Belgian Civil Code enable a contractual party to avoid normal performance of the contract without having to pay damages in case of force majeure. The Belgian Supreme Court further specified that force majeure is present when three conditions are met, namely (i) an unforeseeable event (ii) beyond the control of the party who is to perform the contract (iii) which renders the performance of the contract (temporarily or permanently) completely impossible.
Although each contract and each situation must be examined on a case-by-case basis, it is significant that on 11 March 2020 the World Health Organization designated the Covid-19 outbreak as a pandemic, stating that it had never seen a pandemic that can be controlled. It is therefore fair to say that the Covid-19 outbreak meets the (second) condition of being beyond the control of the contracting parties. The question whether the Covid-19 outbreak constitutes an unforeseeable event (first condition), very much depends on the time when the contract was entered into: if the contract was concluded years ago, the pandemic will normally be qualified as unforeseeable. However, this will not be the case if the contract was entered into last week. The last condition, whether the Covid-19 outbreak renders the performance of the contract completely impossible, is a question of fact that very much depends on the performance concerned. Payment as such, for instance, is not a performance that is made impossible by the Covid-19 outbreak. But timely delivery of certain manufacturing products under license – to give a random example- may very well be.
Judicial proceedings in Belgium have meanwhile been regulated by a special “Corona” Royal Decree No 2 dated 9 April 2020 and published in the Belgian State Gazette on the same date. This Royal Decree provides that all procedural deadlines ending between 9 April and 3 May 2020 are automatically extended until 3 June 2020. This automatic extension does not apply to urgent or precarious matters. Furthermore all hearings for oral arguments in civil proceedings that were scheduled to take place between 11 April and 3 June 2020 are automatically cancelled and the matter will be judged on the basis of the written documents, exhibits and trial briefs submitted to the court, unless parties object to such a written adjudication of the matter. In that case, the oral hearing will take place on a later date. Finally, limitation periods and time limits for taking legal action falling between 9 April and 3 May 2020 are also extended until 3 June 2020. Note that it is foreseen in the Royal Decree that the currently mentioned enddates of 3 May and 3 June 2020 may be extended by the government if necessary.
S. Stijns, Verbintenissenrecht, die Keure, 2015, p. 162-163; Zie o.a. Cass. 18 november 1996, Arr. Cass. 1996, 1051, Pas. 1996, 1221, JT 1997, 173 en RW 1997-98, 604, noot; Cass. 9 december 1976, Arr. Cass. 1977, 404, Pas. 1977, 408 en RW 1977-78, 695; S. Stijns, Verbintenissenrecht, die Keure, 2015, p. 161.