Coronavirus, are you a force majeure?

Legal issues, arising in the field of business law, labor law and human rights due to coronavirus, will be resolving in courts for many years. They often attract special attention in sports, because sporting events are the reason for bringing people together in large groups, and given the commercial and cultural value of many of these events. News about the virus around the world runs in parallel with links to news about the cancellation of major sporting events or measures taken to hold competitions "behind closed doors".

What happens when a sporting event is canceled as a result of steps taken by the government or other regulator to prevent the spread of Covid-19? Or when a team or a player refuses to participate in sporting events because of fear of infection? What if a match is supposed to be played behind closed doors, but an audience has already bought tickets? The consequences of legal proceedings are almost endless: claims by broadcasters and sponsors against those who do not fulfill their obligations; claims against players for negligence leading to their infection; claims from viewers who bought tickets or hospitality packages; and clubs that lost a substantial portion of revenue.

The main question of the emergence of new lawsuits in the field of sports: will international and national federations accept specific instructions to cancel the continuation of national and international Championships? (To date, most European sports leagues, American leagues in various sports, and CIS sports leagues have already canceled or suspended their Championships).

In the Romano-German legal system, parties are exempt from contractual obligations if they cannot be fulfilled.

Thus, article 119 (1) of the Swiss code of obligations states: "Obligations are considered extinguished in cases where performance is impossible due to circumstances beyond the control of the debtor".

The English law system has its own response to the current circumstances: the legal doctrine of "termination of obligations due to inability to perform them", which will take effect when an event occurs that the parties did not provide for in their contract, if the current situation makes it impossible to perform the contract and does not arise as a result of violations by one of the parties. In other words, the parties are released from performing obligations that arose in connection with the occurrence of events beyond their control.

However, in order for courts to refer to the above-mentioned doctrine, it must be proved that the event occurred was unforeseen for both parties, and therefore the parties cannot fulfill their obligations under the contract through no fault of their own.

Force majeure as an unforeseen and insurmountable circumstance that prevents a party from fulfilling its obligations under the contract is not recognized by the English law as a doctrine. Despite this, when entering into a contract, many participants in contractual relations include a clause with conditions relating to possible force majeure situations, which narrows the effect of the doctrine "on the termination of obligations due to the inability to perform them".

A similar example of the current situation is CAS 2015/A/392. Facts of the case:

The Royal Moroccan football Federation had cancelled the African Cup of Nations due to the Ebola virus outbreak;
CAS did not recognize the Ebola virus outbreak as a force majeure event because it did not create conditions under which the competition could not be held;
CAS in its decision referred to the expert's conclusion that the virus can only be transmitted through human organic fluids and cannot be transmitted by air;
the appeal of the Royal Moroccan football Federation to reduce the amount of penalties was also considered against the sports Federation.

Each agreement or set of rules must contain specific circumstances that will later be considered as force majeure. Otherwise, it is possible to transfer the right to determine the situation as force majeure to a sports organization. For example, article 83 "Unforeseen circumstances" of the Regulations of the UEFA Champions League 2019/20 defines the following:

any issues not regulated in these Regulations, such as force majeure, will be resolved by UEFA Emergency Commission or, if this is not possible due to lack of time, by the President of UEFA or, in his absence, by the General Secretary of UEFA. Such decisions are final.

Many English clubs have clauses in their ticket or hospitality programs that deal with a force majeure situation. It is also worth noting that the descriptions of such situations differ significantly in the contracts of the League clubs. Some specify a force majeure clause without defining it specifically, which may be acceptable in countries of the Romano-German legal family, but is not actually applicable in other countries. Some contracts make reference to the definition of "epidemic", which may be applicable to the Covid-19 coronavirus.

The circumstances of cancellation or postponement of a match are not always force majeure. Therefore, it is necessary to prove that the obligations stipulated in the contract cannot be fulfilled.

In the case of cancellations and postponements of matches due to the coronavirus outbreak, it is highly likely that these circumstances were beyond the control of the parties to the contract and were not their fault. But the postponement of the match, as well as the suspension of the sports season, in contrast to the cancellation of the match and the season, do not make the performance of obligations under the contract impossible, because if a spectator buys a ticket, the postponement of the match does not cancel the opportunity to attend it, but only postpones it.

The situation with sponsorship contracts for placing the logo of certain brands on the uniform of a football club is more complicated, since the contract often specifies a specific period of placement, during which the team goes to games in a uniform with the logo of the sponsor. For example, until the 30th of May, and the season will end in July due to the coronavirus. It is clear that the contract was originally signed for the length of the entire championship, which was extended due to unforeseen circumstances, but this situation can be interpreted differently by the parties, which will probably lead to new lawsuits.

The problems do not end with these cases. What to do with the owners of clubs who find themselves in a situation with empty stadiums, canceled games, Championships and constant obligations to pay salaries to players, staff, rent to stadium owners, obligations to maintain fields in a suitable condition for games, and whether all this will lead to a complete legal collapse in the world of sports? Mikhail Prokopets answered these questions in his interview for Sport-express: https://m.sport-express.ru/football/rfpl/reviews/pochemu-rossiyskie-kluby-mogut-sokratit-zarplaty-futbolistam-obyasnyaet-sportivnyy-yurist-mihail-prokopec-1654269/ (only in Russian).

Source: www.lawinsport.com