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China Council for the Promotion of International Trade (CCPIT) said on Thursday that they can issue proof of force majeure to help companies reduce and mitigate losses in case of legal disputes amid the ongoing outbreak of the pneumonia by the novel coronavirus (nCoV).

This statement came after the ongoing outbreak of pneumonia caused by the nCoV has seriously affected some Chinese enterprises in goods and logistics, which may lead to the failure to perform international trade contracts.

A person involved in international logistics told the Global Times on Thursday that the international logistics business has been affected by the outbreak, but the contract contains a force majeure clause, which can exempt the company from paying compensation with the support of relevant national authorities.

Zhao Ping, a research fellow and director of the international trade research department of the CCPIT, told the Global Times on Friday that according to international trade practice, the legal provisions of force majeure have the following characteristics: unforeseen contingency, unexpected events when signing the contract, and events beyond the control of either party.

"In general, both parties shall be exempted from liability if any force majeure is included in the agreement," Zhao noted.

Huo Jianguo, former president of the research institute of the Ministry of Commerce, said in a recent interview with the Global Times that the current outbreak of pneumonia caused by the nCoV has been recognized by WHO as a public safety event, naturally within the scope of force majeure.

"The manufacturer fails to deliver the goods on time due to flight cancellations and other reasons, resulting in the incomplete execution of the contract. Therefore, it is necessary to issue the relevant certificate of force majeure, proving that it is not due to its own reasons that cannot be completed," Huo said.

According to the article of the CCPIT approved by the State Council, China's cabinet, CCPIT may issue a certificate of force majeure. Relevant reports on the organization's website also suggested that the factual proof of force majeure issued by CCPIT has been universally recognized by the governments, customs, chambers of commerce and enterprises of more than 200 countries and regions around the world, and has strong executive power.

Global Times