China shields coronavirus-hit companies from legal damages

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BEIJING, Feb. 17 (Xinhua/GNA) – China has
issued more than 1,600 force majeure certificates to shield companies from
legal damages arising from the novel coronavirus disease (COVID-19) outbreak.

The China Council for the Promotion of
International Trade (CCPIT) has issued 1,615 certificates by last Friday for
companies involving over 30 sectors, covering a total contract value of 109.9
billion yuan (about US$15.7 billion), said the CCPIT.

The certificate exonerates companies from
not performing or partially performing contractual duties by proving they are
suffering from circumstances beyond their control.

The COVID-19 epidemic has delayed production
for some companies as quarantine measures held back many workers from returning
to their posts.

Some firms have presented the certificate to
their clients and agreed on a later date to fulfill orders without facing legal
liabilities, said the CCPIT.

A manufacturing company in eastern China’s
Zhejiang Province was the first to obtain the certificate on Feb. 2 to excuse
itself from breaching a 2.4-million-yuan overseas order that could incur 30
million yuan of compensation.  

The CCPIT’s force majeure certificates are
recognized by governments, customs, trade associations and enterprises of more
than 200 countries and regions, it said. To minimize losses for foreign trade
companies amid the outbreak, especially from contractual breaches, the Ministry
of Commerce has instructed six trade associations in sectors like textile,
mining, machinery and healthcare to help with legal counseling and applying for
force majeure certificates.

Chinese authorities have also urged local
officials to help foreign-funded companies with work resumption and operation,
with eastern China’s Shandong Province rolling out a raft of measures like tax
relief and deferring social insurance payments.

GNA