How to use force majeure? Practical moments related to force majeure
Regardless of whether you are a small business or a large company, whether you are selling tools or delivering food, there may always be situations that prevent you from fulfilling your obligations directly due to force majeure events.
It is the concept of force majeure that will help you avoid further liability for possible breach of contractual obligations. Of course, if this is indeed your case and the fact that force majeure prevent you from fulfilling the contractual obligations will be proven.
Today we will talk about the practical aspects of force majeure, which will provide answers to many questions related to the process.
Read also: How To Terminate A Lease Agreement Early Due To Force Majeure?
Can force majeure be used to avoid paying taxes or other mandatory payments?
It is a common misconception that force majeure can only be invoked in the event of breach of contractual obligations.
A business entity may apply to the regional representative office of the Chamber of Commerce and Industry of Ukraine with a request to certify force majeure circumstances:
- For contractual obligations;
- For tax liabilities (e.g. to extend the deadlines for filing tax returns, applications for refund of overpayment or postponement of cash/tax liabilities, etc.);
- For obligations of business entities, in accordance with the legislation and other regulations of Ukraine (relevant for business entities that are agricultural producers).
Thus, the obtained Certificate of the Chamber of Commerce and Industry (CCI) may help you prove that force majeure events have prevented you from payment of individual mandatory payments.
Read also: More About The Force Majeure Certificate Issued By The Ukrainian Chamber Of Commerce And Industry
What problems can arise in the process of obtaining the Force Majeure Certificate at the Chamber of Commerce and Industry?
In our previous publication we have already discussed the practical benefits and the process of obtaining the Force Majeure Certificate. Let’s briefly recall the algorithm:
1. A business entity should submit an application in a standard format to the regional CCI with a minimum package of documents that are provided in this sample application.
All application forms for evidence of force majeure can be found on the official website of the CCI.
2. The application will be considered within seven business days from the date of application. Based on the results of the documents review, the CCI issues a Force Majeure Certificate.
Can the CCI refuse to issue the Certificate?
Of course it can. Let’s consider two possible situations:
1. If mistakes are made in the application or an incomplete package of documents is submitted.
The most common mistake made in the application is an incorrect statement of unfulfilled contractual obligations or lack of deadlines for their fulfillment. Due to such errors, the CCI is unable to determine the impact of the force majeure event on the fulfillment of the agreement.
The CCI may also leave your application without consideration if the copies of the submitted documents are not properly certified.
Result: The CCI leaves the application without consideration and notifies the applicant. However, this is not the end and things can be settled.
After correcting the errors, you can re-apply to the regional representative office of the Ukrainian CCI.
2. If the CCI concludes that there are no force majeure circumstances based on the results of consideration of the application and submitted documents, you will be rejected the Force Majeure Certificate.
Can the CCI decision to refuse the Certificate be challenged?
The decision to refuse the Certificate cannot be challenged in court. New edition of the Rules of Certification of Force Majeure by the Chamber of Commerce and Industry of Ukraine and Regional Chambers of Commerce and Industry of Ukraine approved by the decision of the Presidium of the Chamber of Commerce and Industry of Ukraine 44 (5) dd. 18.12.2014 does not contain any provisions on the possibility of appealing against the issued certificates or refusal to issue them.
Therefore, if you want to get confirmation that you can not fulfill certain obligations due to force majeure events, take care of proper execution of documents in advance. As you won’t be able to appeal against the decision.
If you want to be sure that the CCI will grant you the Force Majeure Certificate and your documents will be drawn up correctly and legally, don’t hesitate to call us.