Coronavirus - Overview of the impacts of the lockdown in Mauritius Part III - Effects of Force Majeure on supply chains in Mauritius

• Mauritius

• Coronavirus
• Coronavirus - Country overview
• Coronavirus - Force Majeure issues

31-03-2020

1. Force majeure under Mauritius law

Articles 1147 and 1148 of the Civil Code of Mauritius (the Code) set out the regime applicable for force majeure events. The definition of force majeure under Mauritius law is a trite principle, whereby 2 cumulative elements must exist [1] :

• The unforeseeable nature of the supervening event or circumstance, whereby the parties involved could not have reasonably foreseen the event or circumstance at the time the contract was concluded; and

• The irresistible nature of the event or circumstance, whereby the event made it, reasonably, impossible for the party, invoking force majeure, to perform its contractual obligation(s) in a manner that was not preventable.

If the obligor (the performing party) successfully proves the existence of a force majeure event, the performing party will be exonerated from any delay in performing its obligations or from altogether performing its obligations. Such exoneration can be total or partial depending on the impact of the force majeure.

However, the determination of a force majeure is tempered by the fact that the performing party seeking to raise that exception must have acted reasonably ^[2] . The court is not likely to order the payment of damages and interest if the performing party proves that it took all reasonable actions in mitigating the impact of the force majeure.

Notwithstanding the court’s assessment of whether the payment of damages is justified, either the party to whom the obligation is owed (the affected party) or the performing party may terminate the contractual relationship, provided that such termination is catered for in the agreement.

In the absence of such a termination clause, the performing party or the affected party may avail itself of the statutory position under article 1148 of the Code as grounds to seek a court order article 1184 of the Code to terminate the agreement, due to the occurrence and impact of a force majeure, provided that sufficient evidence is adduced.

Although Mauritian contractual law is based on and guided by its French counterpart, the Code does not reproduce a hardship provision akin to article 1195 of the French Civil Code, pursuant to which the parties have an obligation to negotiate if a change in unforeseen circumstances at the time of contracting has the effect of making the performance of obligations excessively onerous such that a party would not have assumed the risks. It remains to be seen whether Mauritian courts would be willing to accept a hardship argument in the absence of a similar statutory provision.

2. Implications on contracts governed by Mauritius law

Contracts with no force majeure clause

A party seeking to exonerate its liability for damages and interest may rely on 1148 of the Code. The party must prove that the impediment contains the 2 elements and that any actions taken could not reasonably prevent the occurrence of a force majeure or its consequential effects.

Contracts with a generic force majeure clause

A party falling in this category must demonstrate that the supervening event satisfies the elements of a force majeure and must adduce evidence to show that it took all reasonable preventive measures.

Contracts with a force majeure clause listing outbreaks or diseases

This category of contracts contains a clause expressly listing outbreaks or diseases, thereby suspending the obligations and exonerating the debtor of any liability for as long as the force majeure continues.

Contracts with a force majeure clause expressly excluding outbreaks and diseases

Exoneration from liability under this category of contracts will depend on the manner in which the force majeure clause is drafted, particularly with regard to what qualifies as an outbreak or disease.

3. The effect of the Coronavirus on supply chain contracts in Mauritius

Parties should firstly consider whether their contract caters for a force majeure clause or not. In the absence of a contractual provision, articles 1147 and 1148 of the Code offer a remedy to the party seeking a total or partial exoneration of liability for payment of damages and interest.

However, it is arguable whether in the first place, the Coronavirus qualifies as an unforeseen event inasmuch as (a) several countries were already affected by the epidemic and (b) it was only a matter of time before the global authorities decreed the Coronavirus as a pandemic and the Mauritian authorities took concrete actions to curb the spread.

Assuming that one can successfully argue that the Coronavirus is indeed a force majeure, another consideration is whether the Coronavirus truly affects the performance of the substantive obligations. A party is unlikely to be exonerated from liability for payment of damages and interest, unless the effect of the Coronavirus renders the performance of obligations impossible.

Moreover, as mentioned in Part I National Measures, the businesses which fall in the ‘essential services’ category can carry on their activities subject to obtaining the Permit.

Companies providing essential services must therefore continue fulfilling their current contractual obligations as they are operating during the lockdown and in light of the court’s views in General Construction Co. Ltd ^[3] whereby consideration would be given to whether “the consequences could be averted or the damages mitigated.”

^[1] See for example Chedee & Anor v Venkarasamy J (1991 SCJ 65); Lam Po Tang Co Ltd v Chan Tai Kong Properties Ltd (1998 SCJ 389); L.S. Mootoo v Ranbow Insurance Co. (2000 SCJ 254); Soondron L. & Anor v Swan Insurance Co Ltd & Anor (2004 SCJ 125); General Construction Co. Ltd v Ibrahim Cassan & Co. Ltd (2011 SCJ 19). 

^[2] See Chedee v Venkatasamy (supra): “In order words the defendant has to show that the event on which he is relying to exonerate himself was unforeseeable, beyond his powers to prevent its occurrence and altogether independent of him” (underlining added).

^[3] General Construction Co. Ltd v Ibrahim Cassan & Co. Ltd (2011 SCJ 19)