CYIL vol. 15 (2024)

CYIL 15 ȍ2024Ȏ VIS MAJOR AND HARDSHIP IN INTERNATIONAL TRADE: A STUDY OF THE CISG … solution other than the significant commercial damage and loss of market position in Russia or Belarus. To summarize, the relevant respondents considered the Czech Vis Major Rule as useful but a true negative effect on their businesses, especially the stalled payment for delivery postponed by anti-pandemic restrictions, was left entirely outside of the scope of the regulation. While the excuse from liability for contractual non-performance was a welcomed protection, it was not considered a full solution. The vis major situations were still experienced as damaging and causing losses. In response, the relevant respondents reconsidered their payment mechanics to include long-stop dates for payments. 4.4 Respondents’ experience with hardship situations All twelve respondents who reported non-performance of contracts encountered rapid increases in the production price for their goods which affected the economical balance of their standing contracts. This happened either within their production, usually because of energy prices, 70 or due to rapid price increases at input from their suppliers. 71 Eleven affected respondents attempted to resolve the situation by reaching out to customers and asking for price adjustments. These attempts were usually successful. Respondents highlighted the quality and length of the commercial relationship, 72 lack of competition or interdependence in cases where the customer needed future services (training, maintenance, etc.) among factors relevant to the positive result in price renegotiation. Nevertheless, while this conduct is perfectly aligned with the law, only two respondents used or were confronted with the Czech Hardship Rule as a basis for the renegotiation process. Otherwise, the reasoning was purely commercial. Not all renegotiations were successful. The aggrieved respondents across the board reported that in those cases, they have simply accepted the situation. Under the Czech Hardship Rule, they could have been entitled to revision or termination of the contract by the court but when asked, respondents did not show much interest in such solutions. Similarly to the indifferent respondents, the respondents with direct experience also largely considered interference by a third party as an extreme solution for highly non-standard contracts. One respondent stated that this would be an interesting option, but this concerned customers from the automotive industry which were repeatedly reported as one of the strictest contractual partners without a will to renegotiate contracts. 73 Finally, one respondent (R5) reported that it is in the early stages of a lawsuit brought on by its supplier who requested renegotiation of a price based on the Czech Hardship Rule. Interestingly, R5 considered this a negotiation failure caused by the interference of lawyers into business operations which would have been otherwise settled amicably. 70 In some cases, also combined with the bankruptcy of “Bohemia Energy” which was the largest alternative energy supplier in the entire Czech Republic which occurred in October 2021. 71 The reasons were similar: increasing prices of energy, transport, higher demand for certain materials combined with stifled production, inflation etc. 72 In some cases, the long-term relationship worked against renegotiation when several respondents decided to avoid renegotiations and incur a loss because they considered it more advantageous long-term. 73 The full original quote in Czech from chief executive officer of R12: “ In this, the automotive is specific, we have agreed with all the other customers… it’s a little different in case of the cars… it is very, very difficult to enforce any price increase. ”.

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