The coronavirus has caused affected businesses. Legally, a lot of companies es are facing the risk of breach of contract due to hardship in performing their end of the contract due to the virus.
A force majeure is an event which happens beyond the control of a contracting party and which makes them unable to perform their contractual obligations. Coronavirus is by interpretation an event of force majeure. The effect is that performance of many contracts may be directly or indirectly affected by coronavirus. In some cases it may be impossible to perform the contractual obligations.
Here is an example. A number of tourists from China had booked a “safari” through a well-known tour operator, in the months of March to April. They made their bookings last September and made full payments. Just as they were preparing to come, flights from China were banned by the recent court order.
The effect of this is that the tour operator who had arranged the safari did not deliver on his promise despite being paid in full. Unfortunately the tour operator used some of the monies paid to sub-contract staff and he had already expended most of the money. The tour operator therefore exposed his business to a lawsuit on breach of contract. In this case he would be required to either perform his end of the contract or possibly refund the money and pay damages for breach.
However, the breach is not his fault. Coronavirus can be faulted for the non-performance. Force majeure clause will step in to save this tour operator by minimising risk.
The insurance industry is currently facing a challenge in interpretation ever since the outbreak of the virus. Is coronavirus covered? Does it fall under exceptions or pandemics? There will be a lot of health related lawsuits for example in the workplace. We are likely to witness a suit by employees forcing the employer to take steps to provide a safe working environment by provisions of safety elements like masks.
Kenya recently set global precedence by being one of the first jurisdictions to make a ruling on some coronavirus related issues. This ruling is likely to be cited in subsequent cases in different jurisdictions across the globe.
The Law Society of Kenya (LSK), the two doctor petitioners and the lawyers handling the matters all did a commendable job. The judge in the case issued a very sound ruling that will likely be emulated in similar cases in the future.
Kenya was thrown into panic when certain officials allowed flights from China into Kenya arguing that it was for Kenya’s economic good. Pursuant to that the first flight from China landed, causing a huge outcry. The LSK and two doctors separately filed petitions in the human rights division of the High Court of Kenya.
The court ordered all flights from China into Kenya temporarily stopped. The Ministry of Health was ordered to file a contingency plan for court scrutiny should the virus enter Kenya. The court ordered all passengers aboard flight CZ6043 quarantined in a military facility until it was established that they were coronavirus- free.
I believe this is the first case of its kind globally and will likely be cited as a persuasive authority. The case goes to show the division of power between the executive and the Judiciary. It shows the Judiciary can overrule executive decisions if they contravene the Constitution. This should therefore encourage citizens to file more public interest litigation suits.