The Chamber of Commerce and Industry of the Russian Federation will not issue conclusions on evidence of force majeure circumstances under local Russian agreements

Due to economic sanctions, the Chamber of Commerce and Industry of the Russian Federation, in Letter No. PR/0181 of March 22, 2022, clarified the issuance of opinions on evidence of force majeure circumstances under contracts concluded as part of domestic economic activity, due to sanctions restrictions on foreign components and equipment.

The Chamber of Commerce and Industry of the Russian Federation notes that the introduced prohibitions and restrictions have a significant impact on the ability of Russian legal entities to fulfill a whole range of obligations under local transactions, since many local companies are forced to suspend the supply of their intermediate or final products to counterparties within the existing production (technological) chains, because the components necessary for the production of products become unavailable to them.

However, paragraph 3 of Art. 401 of the Civil Code of the Russian Federation, does not qualify such circumstances as a breach of obligations by the debtor’s counterparties and the lack of goods on the market necessary for execution, as force majeure circumstances. In this regard, there is difficulty in recognizing the cases described above as force majeure circumstances.

The Chamber of Commerce and Industry of the Russian Federation has developed its own draft amendments to the Civil Code of the Russian Federation in terms of expanding the concept of "force majeure circumstance", which allows recognizing the actions of persons not participating in the contract, but under the sanctions of states, without whose participation the contract nevertheless cannot be executed, as circumstances of insuperable strength.

Immediately after the adoption of the relevant law, the Chamber of Commerce and Industry of Russia will prepare and send to the chambers of commerce and industry methodological recommendations on its application in terms of contracts concluded within the framework of domestic economic activity.

Until the adoption of this law, the Chamber of Commerce and Industry of the Russian Federation suspends consideration of applications for issuing conclusions on evidence of force majeure circumstances under contracts concluded within the framework of domestic economic activity in connection with the above sanctions restrictions on foreign components and equipment. Acceptance of relevant applications, as well as the issuance of conclusions on force majeure circumstances under domestic Russian contracts on other grounds, will continue.