Can Businesses Claim Force Majeure After the Government Calls COVID-19 a National Disaster?
Besides imposing restrictions and offering stimuli to affected people and businesses, the Indonesian government made another important decision with reference to the coronavirus (COVID-19) outbreak. Through Presidential Decree No. 12/2020 on the Determination of COVID-19 as a Non-Natural Disaster, signed by President Widodo on 13 April 2020, the novel coronavirus was declared a ‘national disaster’.
There are four points in Presidential Decree No. 12/2020:
(1) COVID-19 has been determined a natural disaster.
(2) Countermeasures in the context of the COVID-19 outbreak are conducted by a special taskforce that needs to act through synergy between ministries/government institutions and regional governments (and actions need to be in line with relevant, and already issued, Presidential Decrees).
(3) The regional policies of governors, regents and mayors (as heads of the regional taskforce) need to be in line with the central government’s policy.
(4) Presidential Decree No. 12/2020 comes into effect per direct (13 April 2020).
Based on Indonesian media (newspapers and television), most Indonesians seem to applaud the signing of Presidential Decree No. 12/2020 (Decree). However, there has also emerged confusion about the legal consequences of the Decree, in particular related to point (1).
The most important (potential) legal consequence that has been discussed in local media is whether the Decree allows companies and entrepreneurs to claim a force majeure, thereby essentially being freed from liabilities or obligations because of the sudden arrival of an extraordinary event that is far beyond the control of involved parties?
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