Reference of the Parties to Economic Hardship in the Practice of International Dispute Resolution

Abstract

In contractual disputes, debtors are likely to refer to the economic impossibility, the unexpectedly burdensome or difficult performance of the contract, which are caused by external circumstances, such as an economic crisis or price fluctuations. This paper considers some examples of existing approaches to the assessment of such arguments in international commercial arbitrations and litigations. The author argues that it is important to preserve the legal certainty of international trade transactions. Therefore even in the light of the unprecedented scale of the pandemic, as a general rule, the party should not be exempted from liability merely due to lack of financing or an unexpectedly increased burden of contract performance.