CYIL vol. 15 (2024)

CYIL 15 ȍ2024Ȏ VIS MAJOR AND HARDSHIP IN INTERNATIONAL TRADE: A STUDY OF THE CISG … liability. In the following section, I will analyze how the Czech regulation approaches claims raised in the context of the sale contracts in particular. There is only a handful of Czech cases before courts 50 regarding alleged vis major situations that concern sales contracts. The most comprehensive published court case 51 concerned a seller who failed to deliver mustard seed because of a crop failure during the harvest. The court considered such development as foreseeable but, more importantly, emphasized that there was no direct link between the obstacle and the failed contractual obligation. When the obligation was to deliver commodities and not to grow certain crops, the court did not consider bad weather as prohibitive for such performance. While this seems to be a correct conclusion for the vis major argument, the factual background points more to hardship than to vis major . 52 This is implied also by the calculation of claimed damages which was based on the increase in the price paid by the buyer to an alternative seller, showing that delivery of the seeds was possible but ‘only’ more onerous. Hence, while the case made important findings regarding vis major , I consider it primarily as indirect evidence that Czech courts were unwilling to engage in the same extensive interpretation used for the CISG. Their consideration was strictly focused on impossibility. This is even more obvious in a similar case, 53 where a forest manager claimed that it would face insolvency if it bought timber for a price fixed by a previously concluded long-term contract widely above the market value at the time of sale. The discrepancy was allegedly caused by vis major events (a series of cyclones and the US mortgage crisis). Again, the court refused the exemption argument stating that a shift of price was foreseeable and did not prevent the contract performance. And again, it is hardship, not vis major , that seems like a better fit for the presented facts. 54 The only case concerning a sales contract where the exemption was successfully claimed at first instance 55 referred to a seller who failed to deliver steel plates after its sub-contractor was affected by a sharp escalation of conflict in the Donetsk area in 2014. 56 Notably, in the case of war destroying/blocking production, a textbook vis major event, the courts granted an 50 It is possible (and probable) that a good portion of purely commercial cases is decided by arbitrators and not by courts. In Czech context, the Arbitration court has not published any decision that would be directly relevant for this article. The closest to the present topic is case no. Rsp 581/14 (available in Czech only at: https://www. soud.cz/_files/ugd/8b4341_8494673c05c7415b8adf0f91786ce928.pdf ) reflects penalties for refusal to enter into a contract based on a previously agreed contract on a future contract where the defendant argued that its economic circumstances significantly changed and he should be thus not liable for the refusal. The arbitration tribunal refused the argument and made a point that relevant circumstances would have to be external and not just inherent business risk of making less money than previously budgeted. This conclusion is in line with the analyzed litigation cases. Due to a lack of sources for analysis, the arbitration will not be further addressed when considering Czech law regulation. 51 Czech Supreme Court case no. 23 Cdo 3066/2010 dated 25.1.2012. 52 ŠILHÁN, J. (2015) Právní následky porušení smlouvy v novém občanském zákoníku . [Legal consequences of breach of contract in the new Civil Code] Praha: C. H. Beck, p. 194. 53 Decision of High Court in Prague no. 37 ICm 710/2013 (103 VSPH 374/2022-1404). 54 The forest manager tried to renegotiate the price but was unsuccessful. 55 Decisions of Regional Court in Ostrava case no. 44 ICm 718/2019-394 dated 20.11.2019 and no. 44 ICm 718/2019-530, dated 13.10.2021. The decision of Regional Court in Ostrava case no. 44 ICm 718/2019-530, dated 13.10.2021 was successfully appealed and the High Court in Olomouc, in its decision in case no. 12 VSOL 101/2022 dated 29.6.2022 returned the case back to the Regional Court in Ostrava. As of July 2024, there is not yet a final decision in this case. 56 This was supported by a confirmation issued by Ukrainian Chamber of Commerce in late July 2014 on interruption of the steel production and train transportation.

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