Application Of CISG Article 79 Under Public Health Emergencies

In the post-epidemic era,disputes arising from public health emergencies and their prevention and control measures have led to disruptions in the performance of international contracts for the sale of goods.Due to the differences in national laws regarding the exclusion of liability for "force majeure","hardship" and "change of circumstances",the application of Article 79 of the United Nations Convention on Contracts for the International Sale of Goods("CISG")is controversial in practice.Article 79 of the CISG has institutional advantages in dealing with such disputes due to its bridging provisions and its widespread use in international trade.Clarification of the scope of the exemption under Article 79 of the CISG and the definition of public health emergencies and their prevention and control measures is the basis for accurate application.In principle,a public health emergency constitutes an impediment under CISG,but in practice,its prevention and control measures do not necessarily constitute an "impediment" to being exempted from liability under Article 79 CISG.The dual nature of the natural and social aspects of public health emergencies makes this issue a separate one.Whether it is the event itself or the preventive and control measures taken by the government,the determination is based on "uncontrollable","unforeseeable","unavoidable and insuperable" and "causation",depending on the time of the contract,the geographical location of the contracting parties and the specific conduct.CISG Advisory Council Opinion No.20 issued in 2020 provides a specific answer to the question of whether a dispute in which a public health emergency and its prevention and control measures indirectly cause economic hardship to the performance of a contract can constitute a "impediment" for the purposes of Article 79 CISG.CISG Advisory Council Opinion No.20 specifies that hardship(economic impediment)is a special type of "impediment",which is regulated by Article 79,and gives reference to the criteria for determining whether it constitutes a "hardship".On this theoretical basis,the threshold for determining hardship due to public health emergencies and their prevention and control measures is the focus of attention.The analysis is based on the nature of the subject matter of the contract between the parties,the market situation and whether the risk is hedged.Based on the above analysis,recommendations are made for Chinese international trading companies from the perspective of contract content and post-incident response to public health emergencies.Chinese international trading companies should review the existing exemption clauses in the contract and redraft them in a personalized listing way,and should provide detailed provisions on the obligation to notify,the burden of proof and the obligation to mitigate.It should also be clear that the exemption clause applies to "third parties" to the contract.After the occurrence of a public health emergency,international trading companies in China should continue to fulfil their contractual obligations,give timely notification of the progress of the incident in stages,and actively collect relevant evidence to prepare for the presentation of evidence,so as to improve the companies’ ability to control and reduce commercial risks.