Force Majeure and Unforeseen Change of Circumstances. The Case of Embargoes and Currency Fluctuations (Russian, German and French Approaches)
Abstract
Economic and political instability has become a characteristic of many societies around the globe. Recent examples revealing the volatility of the current state of affairs include the trade restrictions imposed by the Russian Federation in August 2014, and currency fluctuations experienced by many countries, including Russia and potentially Greece. In this situation, one may wonder whether contract law has a solution to offer to the parties affected. Traditionally dominated by the pacta sunt servanda principle, jurisdictions made their own choices. This paper analyses approaches adopted by Russian, German and French law in response to situations of force majeure (trade embargoes)and unforeseen change of circumstances (currency fluctuations). In search for an explanation of each given approach, we reviewed historical arguments, as history played a crucial role in the formation of German and French responses, though in a completely different way. Whereas Germany, heavily affected by the cataclysms of the World Wars, was eager to adopt a lenient view on the possibility of the judicial revision of contracts, France never gave up its suspicion of court interventions. As legal preferences are often connected with cultural factors, we looked at distinct cultural traits of the societies at issue, by using the Hofstede index. We realized that there could be compelling cultural reasons why France and Germany are situated at opposite poles, while Russia is somewhere in the middle. Lastly, we took into account considerations derived from law and economics, arguing that narrowly construed court intervention might be economically justified in cases of impossibility and impracticability, as ultimately decreasing transaction and risk-appraisal costs.
About the Authors
Ilya Kokorin
Buzko Kokorin Law Firm
Russian Federation
Russian Federation
Attorney-at-Law, Partner at Buzko Kokorin Law Firm, LL.M. (Central European University, Leiden Law School),
9/2 Pulkovskaya str., St. Petersburg, 196158
Jeroen van der Weide
Institute for Private Law
Netherlands
Netherlands
Associate Professor of Private Law, Leiden Law School,
Kamerlingh Onnes Gebouw, Steenschuur 25, Office No. C207, Leiden, 2311 ES
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For citation:
Kokorin I., van der Weide J. Force Majeure and Unforeseen Change of Circumstances. The Case of Embargoes and Currency Fluctuations (Russian, German and French Approaches). Russian Law Journal. 2015;3(3):46-82. https://doi.org/10.17589/2309-8678-2015-3-3-46-82
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