Contributed by Law firm KBP, member of Adriala
How might businesses in your jurisdiction be impacted by the Covid-19 pandemic?
The competent authorities in the Republic of Slovenia have already taken certain measures to curb and control the COVID-19 epidemic in Slovenia, which also affect businesses. New measures are being adopted daily.
Temporary prohibition of sale of goods and services to consumers in the Republic of Slovenia
As of March 16, 2020 at 00:00 hours, the Ordinance on the temporary prohibition of sale of goods and services to consumers in the Republic of Slovenia is in force. The Ordinance shall be in force until further notice.
The Order temporarily prohibits the sale and offering of goods and services directly to consumers in the territory of the republic of Slovenia. Such goods and services include accommodation, catering, sports and recreation, cinema, culture, hairdressers, pedicure, gambling and other similar services. The following goods/services/activities are not covered by the ordinance and as such are permitted:
- Remote sale of goods and services to consumers (distance sales)
- Sale of food products (including sale of farm products on farms)
- Sale of medical supplies
- Sale of goods related to garden and farming in stores
- Farmhouse sales
- Gas stations
- Delivery services
- Tobacco sales and sales of newspapers
- Other services urgently needed to ensure public health and safety
- Other sales of goods and services to consumers which are indicated as exceptions to the Ordinance by the Government of the Republic of Slovenia in other ordinances.
Prohibition and restriction of public transport
On March 16, 2020, at 00:00 hours, the Order on the temporary prohibition and restriction of public transport of passengers in the Republic of Slovenia entered into force, temporarily prohibiting public transportation of passengers in the Republic of Slovenia. Taxis are still permitted to operate if the driver of the vehicle, before allowing a new passenger to enter, arranges for the proper disinfection of parts of the vehicle that are in regular physical contact with the passenger.
Temporary ban of air transport in the Republic of Slovenia
In order to curb the spread of the SARS-CoV-2 virus and its related impact on the protection of public health and assets protection, the Government of the Republic of Slovenia has issued an Order banning air transport in the Republic of Slovenia.
The Order applies from March 17, 2020 (00:00 hours) until March 30, 2020 (until 24:00 hours) for international air transport operating within the European Union in accordance with European Union regulations, and from March 17, 2020 (00:00 hours) until further notice for international air transport from or to non-EU countries.
Operation of schools and kindergartens
From March 16-29, 2020, the Order on the Prohibition of gatherings in Institutions in the Field of Education and gatherings in Universities and Independent Higher Education Institutions is in force. Pursuant to this order, gatherings in kindergartens and in all stages of the educational process in Slovenia are prohibited. Educational institutions (kindergartens, primary schools, secondary schools, faculties, etc.) will thus be closed from March 16, 2020 to March 29, 2020.
Prohibition of gatherings at public events
As of March 7, 2020, the Order on the prohibition of public gatherings at public events in enclosed public places has been in force. The Order bans gatherings of more than 100 people at public events in enclosed (indoor) public places in the Republic of Slovenia. The ban will apply as long as the risk of spread of the contagious SARS-CoV-2 disease (COVID 19) exists.
Operation of the courts
As of March 16, 2020, all courts shall hold hearings and issue rulings only in urgent cases.
All oral hearings scheduled in cases which do not fall within the urgent matters specified in the order are cancelled. Except for urgent matters referred to in the order, procedural time limits will not run while these special measures apply, nor will court documents be served. If a court document has been served, the procedural time limits will begin to run on the first day after the special measures cease to apply.
Border control checks between Slovenia and Italy
The Order on the conditions of entry into the Republic of Slovenia from the Italian Republic to prevent the spread of SARS-CoV-2 (COVID-19) came into force on March 11, 2020.
The Order does not apply to citizens of the Republic of Slovenia, persons with permanent or temporary residence in the Republic of Slovenia, or to freight transport, but applies to all other entities and other transport/traffic.
Entry into the Republic of Slovenia is granted to an individual to whom the Order applies if he/she submits proof in Slovenian, English, or Italian which is no more than three days old showing negative results for SARS-CoV-2 (COVID-19) (or even without such proof if his/her body temperature is below 37,5°C and he/she shows no clear signs of upper respiratory tract infection (cough, sneezing, shortness of breath)).
Passenger train traffic between Italy and Slovenia has been suspended.
In your jurisdiction, if it becomes impossible for a party to perform its contractual obligations because of an external event beyond its control (such as the Covid-19 pandemic), can that party cancel its contract?
In certain circumstances, yes. Please see below the relevant provisions and legal institutes, which allow for such cancellation/termination of, or withdrawal from, a contract.
Total Impossibility of Performance
Pursuant to Article 116 of the Obligations Code (in connection with Article 329 of the Obligations Code), if the performance of obligations becomes impossible (in full) for one party to a bilateral contract, due to a development for which neither party is responsible, the obligation of the first party shall cease, whereby the obligation of the other party shall also cease; if the latter has already performed part of their obligations, it can demand the return thereof in accordance with the rules on the return of that which was acquired unjustly.
Partial Impossibility of Performance
In the event of partial impossibility of performance, and if the partial impossibility of performance is the consequence of a development for which neither party was responsible, the other party may withdraw from the contract if the partial performance does not satisfy such party’s needs; otherwise the contract shall remain in force and the other party shall have the right to demand the proportionate reduction of such party’s obligations.
Rescission or Amendment of a Contract owing to a Change of Circumstances
Pursuant to Articles 112 and 113 of the Obligations Code, in the event that:
- after the conclusion of a contract, circumstances arise that render the performance of obligations by one party (hereinafter referred to also as: the First Party) more difficult, or
- owing to these circumstances, the purpose of the contract cannot be achieved,
and in both cases to such an extent that the contract clearly no longer complies with the expectations of the contracting parties and it would in the general opinion be unjust to retain the contract in force as it is, then the party whose obligations have been rendered more difficult to perform or the party that owing to the changed circumstances cannot realize the purpose of the contract, may request the court to rescind the contract.
Rescission of a contract cannot be requested if the party invoking a change of circumstances should have taken such circumstances into consideration at the time the contract was concluded or could have avoided them or could have averted the consequences thereof.
The party requesting the rescission of the contract (i.e., the First Party) may not invoke the change of circumstances if that change occurred after the deadline stipulated for the performance of the First Party's obligation.
A party who is entitled to request the rescission of a contract, owing to the changed circumstances (i.e., the First Party), must notify the other party of its intention to request a rescission as soon as it learns that such circumstances have occurred. A party that fails to do so shall be held liable for the damage incurred to the other party as a consequence of the notification not being provided on time.
A contract shall not be rescinded if the other party offers to have the relevant contract conditions fairly amended.
Release of Debtor's Liability
Pursuant to Article 240 of the Obligations Code the debtor (i.e., the party required to perform a certain contractual obligation) shall be released from liability for damages (which occurred as a consequence of non-performance), if it is shown that the debtor was unable to perform the obligation or was late in performing the obligation owing to:
- circumstances arising after the conclusion of the contract, that
- could not be prevented, eliminated or avoided.
In your jurisdiction, if a party’s performance of its contractual obligations is adversely affected by an external event beyond its control (an “FM Event”) but does not become completely impossible, can that party typically seek relief from compliance with its obligations?
In certain circumstances, yes. Please see above answers under b), especially the Release of Debtor's Liability section and Rescission or Amendment of a Contract owing to a Change of Circumstances section.
If yes, what considerations should be borne in mind by such parties, in particular in relation to:
Any notification obligations (Is the affected party typically required to notify any counterparties of the FM Event within a specific time period?)
With respect to the Rescission or Amendment of a Contract owing to a Change of Circumstances: A party who is entitled to request the rescission of a contract, owing to the changed circumstances, must notify the other party of its intention to request a rescission as soon as it learns that such circumstances have occurred. A party that fails to do so shall be held liable for the damage incurred to the other party as a consequence of the notification not being provided on time.
With respect to the Release of Debtor's Liability: The Obligations Code does not stipulate such an obligation specifically in connection with Article 240, however, according to the general rule of Article 10 and Article 5 of the Obligations Code, each party shall be obliged to refrain from action by which damage could be inflicted on another an to observe the principle of fairness and conscientiousness. Thus, if refraining from notification would cause damages to the other person, the affected party may have an obligation to notify.
Any causation requirements (Is the affected party typically required to demonstrate that it would have performed its contractual obligations but for the FM Event?)
With respect to the Rescission or Amendment of a Contract owing to a Change of Circumstances: As stated above, the affected party must demonstrate that the specific FM Event occurred after the conclusion of a contract and that the specific FM Event renders the performance of its obligations more difficult, or that owing to the FM Event, the purpose of the contract cannot be achieved, and in both aforementioned cases to such an extent that the contract clearly no longer complies with the expectations of the contracting parties and it would in the general opinion be unjust to retain the contract in force as it is.
With respect to the Release of Debtor's Liability: The affected party has to demonstrate and prove the fact that the FM Event could not have been prevented, eliminated, or avoided. Thus, the affected party has to demonstrate and prove that these the particular FM Event (and not other circumstances) adversely affect the performance of its contractual obligations.
Any mitigation obligations (Is he affected party typically required to demonstrate that it took specific steps to avoid the impact of the FM Event as far as possible?)
With respect to the Rescission or Amendment of a Contract owing to a Change of Circumstances: Article 112 of the Obligations Code mandates that the affected party shall notify the other party of their intention to request a rescission as soon as it learns that such circumstances have occurred (which is intended to mitigate the damages of the other party). In all other respects, general principles of the Obligations Code apply (duty to observe the principle of conscientiousness and fairness; prohibition of infliction of damages, etc.).
With respect to the Release of Debtor's Liability: The affected party must demonstrate that these circumstances could not have been prevented, eliminated, or avoided and, thus, that no relevant measures could have been taken to avoid or mitigate the damages. General principles of the Obligations Code apply (duty to observe the principle of conscientiousness and fairness; prohibition of infliction of damages, etc.).