IMPACT OF COVID-19 ON FINANCIAL CONTRACTS
-Richa Saraf
With the outbreak of COVID pandemic, there have been several instances wherein parties are running to court for various reliefs, whether to obtain injunction from invocation of bank guarantee or to seek extension of letter of credit, but mostly to seek declaration that COVID is a force majeure event and therefore, there is an impossibility of performance of the obligations. While some regulatory relief has been provided by regulators such as RBI, by allowing moratorium on loan repayments/ asset deterioration[1], and SEBI has provided relaxation on disclosure requirements[2], for other matters, the judiciary has been quite proactive in delivering judgments. Below we discuss the impact of COVID-19 on financial contracts.