Exemption of liability for damages: Hardship and the rule from Art. 79 of the Vienna Convention

Abstract

Although most scholars appear to favor the interpretation according to which exceptional cases of hardship are governed by the Convention , voices also exist that oppose this point of view . Many scholars have tried to find a solution to the problem by analyzing the travaux preparatoire in search for the drafter’s intention. This approach, however, in recent times seems to be superseded by the policy-based approach, since incomplete materials from the stage preceeding the promulgation of the Convention leave too much margin for both interpretations . The current COVID-19 pandemic has once again drawn scholars’ attention to the problem, forcing them to resume the study of the issue. Art. 79 CISG has once again been placed under the microscope . We can expect hardship to become one of the major problems in the international trade for a considerable time following the outbreak of the novel coronavirus strain. The situation will especially affect the contracting parties involved in long term or complex contracts. Taking into account that international trade by definition implies the participation of multiple actors and elements from a number of different countries, the imponderables generated by the COVID-19 epidemics are countless. An increase in import tariffs in the countries where production is based, the producer’s necessity to acquire commodities from countries with much higher production costs, and import or export bans (as COVID-19 protection measures) resulting in changes in the expected flows of goods , are only a few of the possible consequent scenarios qualifying the affected contract for possible exemption grounded in hardship under the CISG. The present paper presents the drafting history of Art. 79 CISG, as well as the position of the CISG Advisory Council on the matter presented in the Opinion No. 7 I. on the Exemption of Liability for Damages Under Article 79 of the CISG. One particular section briefly examines how recent case law and arbitration awards together apply the Convention to the hardship issue and then the following section reviews the different and often divergent legal doctrine’s theories as to if and how the hardship could be addressed by the CISG in its current form. Finally, the last section presents shortly the last hit related to the topic of this paper- Opinion No. 20 on Hardship under the CISG of February 2020 with a personal summary of the author somehow critic with the recommendations of the CISG Advisory Council encapsulated in the aforementioned document.