States measures to contain the COVID-19 and the impact on the global economy are likely to affect research infrastructures in many ways. One issue that comes to mind from a legal perspective is research infrastructures’ ability, or their contractual parties’ ability, to meet certain contractual obligations entered into prior to the outbreak of the Coronavirus. Outsourcing contracts, supplies, services, construction works and projects, including H2020 projects, may face delays or difficulties in performance. In such cases, there is a risk that suppliers or a party to a contract may try to invoke ‘force majeure’ in order to be relieved from its obligations and avoid liability for its non-performance.
What is force majeure?
‘Force majeure’ means the occurrence of an event or circumstances that prevent a party from performing one or more of its contractual obligations, provided that such party can prove that the event or circumstances causing to its inability to perform the contractual obligation is beyond its reasonable control, that it could not reasonably have been foreseen at the time of entry into contract and that it could not reasonably have been avoided by the affected party.
The concept of force majeure can be applied automatically in civil law jurisdictions, although it may be interpreted differently, depending on national law. In common law jurisdictions force majeure will usually only be invoked if the contract includes a specific clause.
Is COVID-19 a force majeure event?
Important to note that COVID-19 is not automatically considered to be a force majeure event. A case-by case analysis will be required in order to determine whether a contractual obligation may be cancelled or postponed due to COVID-19. This will depend on the specific circumstances of each case and may also depend on the drafting of the relevant clause in the contract. In any event, parties to the contract will often have an obligation to make efforts to continue performance.
In March 2020 the International Chamber of Commerce updated the ICC force majeure clause in light of COVID-19 and it may be useful to make similar updates to the research infrastructure’s contractual templates. This may be particularly important for research infrastructures with an international dimension or research infrastructures that enter into cross-border contracts.
What about H2020 project?
Article 51 of the H2020 MGA sets out the conditions in which the force majeure clause can be invoked. It is important to communicate any difficulties in performing the action due to COVID-19 to the funding agency as soon as possible, and in parallel, take all the necessary steps to limit the exposure due to the force majeure event. If the circumstances are deemed to be justified, also additional costs incurred for the implementation of the action may be eligible.
Many research infrastructures diverted resources and now offer services to tackle the COVID-19. The Commission may allow to reorient a H2020 project if it could contribute to achieve such a goal, by way of an amendment to the grant agreement.
It seems that in any event, the Commission will be open and flexible to accommodate requests for an extension of up to 6 months of initial project duration due to the Covid-19 situation. Equally, deadlines for H2020 application are likely to be extended and for H2020 calls with original deadlines until 15 April, extensions will be applied.