By LawCite Advocates

Abstract

The COVID-19 pandemic upended commercial arrangements worldwide, triggering an unprecedented surge in contract disputes. This paper examines how Indian contract law principally Sections 32 and 56 of the Indian Contract Act, 1872 has addressed force majeure and frustration of contract in the wake of the pandemic, and what lessons can be drawn for the future. We analyse the doctrinal foundations of force majeure and frustration/impossibility under Indian law, including their historical interpretation by courts. The focal point is the post-2020 litigation boom in India, where businesses across shipping, infrastructure, hospitality, construction, manufacturing, and services invoked these doctrines to excuse non-performance. Through a detailed review of recent Indian case law from the Bombay High Court’s landmark Standard Retail decision during the 2020 lockdown to subsequent rulings across various High Courts and the Supreme Court we illustrate how courts have applied Sections 32 and 56 to pandemic-related contingencies. Comparative insights from the UK (frustration of purpose) and US (commercial impracticability and frustration doctrines) are integrated to highlight similarities, divergences, and global trends in handling pandemic-induced contract issues. The paper maintains a practitioner-oriented perspective, emphasizing practical implications: how contract drafters should allocate risk of unforeseen events, how litigators can approach force majeure claims, and how policymakers might strengthen legal frameworks for systemic crises. Ultimately, the post-pandemic jurisprudence reinforces that Indian courts remain reluctant to lightly excuse contractual performance, insisting on strict proofs of impossibility and honouring contractual allocations of risk a stance mirrored in major common law jurisdictions. Nonetheless, nuanced relaxations (such as temporary suspensions of obligations) have emerged as equitable solutions. By synthesizing these developments, this paper provides a comprehensive resource for advocates and jurists navigating the interplay of force majeure clauses and the doctrine of frustration in the aftermath of COVID-19 and offers forward-looking recommendations to better prepare for the next “unforeseen” event.

Introduction

Businesses worldwide faced unprecedented disruptions during COVID-19 lockdowns, as illustrated by storefront signs announcing, “Closed due to Covid-19.” Contractual obligations came under strain, leading to a wave of legal disputes over non-performance and relief. The COVID-19 pandemic has had a seismic impact on contractual relationships across the globe. India, under one of the strictest lockdowns, witnessed widespread business closures, supply chain breakdowns, and government-imposed restrictions on commerce. As a result, parties increasingly scrambled to invoke force majeure clauses or the statutory doctrine of frustration of contract to avoid liability for non-performance. The period from 2020 onwards saw a surge of litigation a “post-pandemic litigation boom” in which courts were called upon to interpret century-old contract law principles in the context of an unprecedented global crisis.

In Indian contract law, two key provisions govern such situations: Section 32 and Section 56 of the Indian Contract Act, 1872. Section 32 provides that if a contract is contingent on the occurrence of an uncertain future event, it becomes void if that event becomes impossible. Section 56, on the other hand, embodies the doctrine of frustration (also termed impossibility or impracticability in other jurisdictions) by declaring that a contract becomes void if an act becomes impossible or unlawful by a supervening event that the promisor could not prevent. While these provisions have been on the statute book for over 150 years, their application received renewed attention during COVID-19 as parties argued that the pandemic and ensuing lockdowns either triggered express force majeure clauses (per Section 32) or frustrated the fundamental basis of their bargains (per Section 56).

This paper provides a comprehensive analysis of force majeure and commercial impracticability in Indian contract law, with a spotlight on how courts have responded in the post-pandemic period. It is written in the style of a practitioner-oriented legal publication, aiming to equip advocates and jurists with a clear understanding of the latest doctrinal developments and practical guidance. We begin by examining the legal framework in India, tracing how Sections 32 and 56 have been interpreted from early landmark cases to recent Supreme Court pronouncements. Next, we delve into the flood of COVID-19 related cases in Indian courts, extracting lessons from key judgments delivered since 2020 across various sectors notably shipping, infrastructure, hospitality, construction, manufacturing, and services. The discussion then broadens to a comparative perspective, analysing analogous doctrines in the United Kingdom (the common law doctrine of frustration and the concept of frustration of purpose) and the United States (the doctrines of impossibility and commercial impracticability under both common law and the Uniform Commercial Code). These comparisons highlight both the common lineage of these principles and jurisdictional nuances in outcomes for example, the general reluctance of courts worldwide to excuse performance for temporary COVID-19 disruptions, tempered by some innovative remedial measures.

Throughout the analysis, emphasis is placed on how courts balanced the sanctity of contracts against the equities of an unforeseen calamity. Indian courts have repeatedly underscored that a mere increase in onerousness or economic hardship is not a ground to escape contractual obligations. At the same time, where truly impossible circumstances arose such as government prohibitions on activity the courts have provided relief, sometimes in novel forms like partial suspensions of obligations rather than outright termination. We also consider the role of contractual drafting: many disputes turned on the specific wording of force majeure clauses (e.g. whether “pandemic” or “government lockdown” was enumerated), highlighting the critical importance of precise drafting.

Finally, the paper concludes with practical insights and recommendations. For legal practitioners, we identify best practices in drafting force majeure clauses and managing risk (including the use of material adverse change clauses and insurance). For litigators, we outline strategies in presenting or defending force majeure/frustration claims for instance, the need to demonstrate a clear causal link between the pandemic event and the inability to perform, as emphasized by multiple courts. For policymakers and industry bodies, we reflect on whether legal frameworks could be refined to handle such mass-disruption events (e.g. temporary ‘pandemic’ legislation, standardized relief measures, or strengthening of mediation/arbitration avenues for mass claims). In doing so, we take note of measures in other jurisdictions, such as the UK’s targeted legislation for pandemic-related rent disputes, to assess potential models.

In sum, the post-pandemic litigation surge has stress-tested the doctrines of force majeure and frustration in Indian law. This paper distils those tests and their outcomes into a usable guide. The tone remains formally legal and oriented to a seasoned advocate’s interests, avoiding technical AI jargon in Favor of doctrinal analysis, case law exposition, and pragmatic guidance. Citations are provided in Bluebook style to ensure that readers can identify and consult the primary sources and authorities that form the backbone of this discussion.

Chapter 1: Force Majeure and Frustration in Indian Contract Law Statutory Framework and Judicial Evolution

1.1 Statutory Foundations: Sections 32 and 56 of the Indian Contract Act, 1872

Indian contract law’s treatment of supervening events is codified primarily in two provisions of the Indian Contract Act, 1872. Section 32 and Section 56, read together, lay down the legal basis for when a contract may be discharged or rendered void due to circumstances beyond the parties’ control. Understanding the distinctions between these sections is crucial, as the choice between them often decides the outcome of force majeure or frustration claims in court.

• Section 32 Enforcement of contracts contingent on an event happening: This section falls under Chapter III of the Act, which deals with contingent contracts. It provides that “If a contract is contingent on the happening of an uncertain future event, it cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.” In essence, Section 32 applies when the contract itself contains a term or is predicated on the occurrence (or non-occurrence) of a specific event. If that event which is outside the control of the parties fails to happen or becomes impossible to happen, the contractual obligation dependent on it is discharged as per the contractual stipulation. In modern parlance, a force majeure clause in a contract is a species of contingent contract: the contract stipulates that on the occurrence of certain extraordinary events (war, fire, flood, epidemic, etc.), one or both parties may be excused from performance, or the contract may be suspended/terminated. Indian courts have consistently held that when an express force majeure clause covers the event in question, Section 32 is the governing provision. The consequences of the event (and any relief to the promisor) must then be found within the four corners of the contract’s terms.

• Section 56 Agreement to do impossible act (frustration of contract): This section, appearing in the chapter on the performance of contracts, embodies what common law jurisdictions call the doctrine of frustration, impossibility, or impracticability. Section 56 contains multiple limbs: first, it voids ab initio any agreement to do an act impossible (e.g. a promise to do something inherently impossible is void from the start). More relevantly, it provides that “A contract to do an act which, after the contract is made, becomes impossible or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.” This is the statutory articulation of supervening impossibility or frustration. Importantly, Section 56 also includes a third limb addressing the scenario where the promisor knew (or could have reasonably known) of the impossibility and the promisee did not in such cases, the promisor must compensate the promisee for any loss suffered. In essence, Section 56 operates as a rule of positive law that intervenes to dissolve a contract when a fundamentally unexpected event or change of circumstance defeats the very purpose of the contract or makes its performance impracticable, provided that event was not caused by either party and was beyond their control.

The difference between Section 32 and Section 56 is one of contractual allocation vs. external intervention. If the contract has explicitly allocated the risk of the supervening event (by providing what happens if the event occurs), that stipulation is enforced per Section 32. If the contract is silent and the event is truly outside the contemplation of the parties, the default rule in Section 56 may apply to frustrate (i.e. void) the contract by operation of law. The Supreme Court of India succinctly explained this dichotomy in the landmark case Energy Watchdog v. CERC (2017), observing that an express or implied force majeure clause in a contract is governed by Chapter III (contingent contracts) and specifically Section 32, whereas a force majeure event occurring de hors (outside) the contract i.e. one not addressed by the terms is dealt with under Section 56. This clarification has been repeatedly cited in pandemic-era cases to determine whether a given dispute should be resolved by interpreting the contract (if it has an FM clause covering the situation) or by invoking the doctrine of frustration as a matter of law.

It should be noted that the effect of frustration under Section 56 is that the contract becomes void forthwith. Indian law, following the common law, does not permit partial frustration in a straightforward manner the contract is either entirely discharged or not at all. However, issues of restitution for any benefits conferred pre-frustration are governed by Section 65 of the Contract Act (obligating restitution of benefits received under an agreement that becomes void). By contrast, when Section 32 operates, the consequences depend on the contract’s terms: some contracts may provide for suspension, some for extension of time, others for termination, and so on.

1.2 Historical Jurisprudence on Frustration in India

Indian courts inherited the doctrine of frustration from English common law, but its incorporation via Section 56 means that Indian law on the subject is not purely judge-made but has a statutory footing. Over the decades, a rich body of case law has developed around Section 56, delineating the contours of when a contract is considered frustrated. Two early Supreme Court decisions are particularly noteworthy for establishing foundational principles:

• Satyabrata Ghose v. Mugneeram Bangur & Co., AIR 1954 SC 44. This 1954 Supreme Court case is often cited as the locus classicus on frustration in India. In Satyabrata, a developer had agreed to develop a parcel of land and allot it to the plaintiff, but during World War II the land was temporarily requisitioned by the government for military purposes, causing an indefinite delay. The question was whether this supervening event frustrated the contract. Justice B.K. Mukherjea, speaking for the Court, held that the contract was not frustrated by a temporary requisition. The judgment made several important observations: (1) “Impossibility” under Section 56 is not to be interpreted in a narrow literal sense it is not limited to physical or literal impossibility. Even if an event makes the performance only impracticable from the point of view of the object and purpose of the parties, it could fall under Section 56. However, (2) the doctrine of frustration cannot apply so long as the fundamental basis of the contract remains substantially intact, and the supervening event causes mere inconvenience or delay in performance that was within the commercial risks assumed by the parties. In Satyabrata, the requisition did not fundamentally destroy the object of the contract; it merely caused delay, and once the war ended and the requisition was lifted, performance could resume. Thus, the contract was not discharged. The Court emphasized that the doctrine is to be applied in a practical manner, and the test is whether the changed circumstances “uproot the very foundation” of the agreement. Notably, Satyabrata also observed that English authorities on frustration (like Taylor v. Caldwell and Krell v. Henry) should be used as helpful guides, but ultimately Section 56 must be applied keeping in mind the Indian statute’s wording. The case firmly established that the threshold for frustration is high: a contract does not terminate simply because it becomes onerous or more difficult the change must be fundamental.

• Rajendra Kumar (Alopi Parshad) & Sons Ltd. v. Union of India, AIR 1960 SC 588. In this 1960 decision (commonly cited as Alopi Parshad), the Supreme Court reinforced the principle that commercial hardship or inconvenience, without more, is not a ground for frustration. The case involved a supplier to the government whose costs had risen steeply due to post-war economic conditions, and who sought to be excused from performance or have the contract voided. The Court rejected the plea, famously observing that “the Act does not enable a party to a contract to ignore the express covenants thereof and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, merely because the performance has become more onerous …”. Even if the transaction turns out to be a losing proposition for one side, that is not per se an “impossibility” it is simply bad luck or poor contract planning. Alopi Parshad has since been cited to underscore that impossibility must be understood not in terms of literal impossibility alone but in terms of the fundamental change in obligation; however, mere economic loss or onerousness does not qualify.

Subsequent cases through the 1960s and 1970s continued to develop these themes. In Naihati Jute Mills Ltd. v. Khyaliram Jagannath (1968), the Supreme Court held that a contract for jute delivery was not frustrated even though a government order stopped jute imports from a particular source, because the contract did not limit performance to that source alone the seller could still buy jute elsewhere at a higher price. The Court reasoned that it was not impossible for the seller to perform; it was just more onerous, and the contract contained no clause that tied it to that source alone. Thus, the allocation of risk (price fluctuation, alternative procurement) lay with the seller under the contract, and Section 56 could not be invoked.

It is also pertinent to note Section 32’s role in historical cases. The classic illustration is where a contract itself provided for a condition and its fallout. For instance, if a construction contract stated that if the government prohibits work at the site, the contract “shall stand terminated”, then that situation, when it occurred, would be governed by Section 32 (the contract becomes void under its own clause). An example in recent times is National Agricultural Coop. Marketing Federation (NAFED) v. Alimenta S.A. (2020), where an export contract was contingent on government approval for export of a commodity. When the government refused permission, the Supreme Court held that the contract became void under Section 32 the contingency (permission) failing to materialize made the contract unenforceable. The Court expressly applied Section 32, distinguishing it from frustration, because the contract had allocated that risk by requiring governmental approval as a condition precedent.

To summarize the pre-pandemic position in Indian law: force majeure and frustration were well-recognized but strictly construed doctrines. Courts maintained a “strict yet flexible” approach strict in the sense that they would not excuse performance for light or transient reasons, but flexible in acknowledging that impossibility could be practical in nature (e.g. if the main object of the contract is defeated) and not just literal. The overarching principle was that the sanctity of contracts must be upheld to the extent possible, and frustration is an extreme remedy invoked only to avoid “a fundamentally unjust” outcome where an unforeseen event has radically altered the obligation. Moreover, if parties foresaw an event and provided for it, that bargain would be enforced (Section 32) and frustration would have no role.

Indian jurisprudence thus entered 2020 with these settled principles. The doctrines had typically been applied in cases of wars, government policy changes, non-availability of raw materials, etc. But never had courts faced an event as sweeping as a pandemic that virtually shut down all economic activity for a time. The question was: Would COVID-19 be treated as just another instance where the existing rules apply, or would it prompt a rethinking or more liberal application of force majeure and frustration? The answer, as we will see, leaned towards the former courts largely reinforced existing law but with certain innovative applications in relief.

Chapter 2: The COVID-19 Pandemic - A Catalyst for Force Majeure Claims

2.1 The Pandemic and the “Act of God” Question

The onset of the COVID-19 pandemic in early 2020 posed an immediate question for contract law: Does a pandemic (and government-imposed lockdowns resulting from it) qualify as a force majeure event or frustration-causing event? In principle, pandemics are natural events (often termed “Acts of God” in contracts) and, being of a rare and catastrophic character, they fit the classic definition of force majeure an event beyond the control of parties, unforeseeable, and one that renders performance impracticable or impossible. Indeed, historical force majeure clauses frequently include terms like “epidemic” or “plague,” hearkening back to events like the Spanish Flu of 1918. However, in modern times, few contracting parties truly anticipated a global standstill of the nature caused by COVID-19, and thus many contracts did not explicitly mention “pandemic” in their force majeure lists. This gap led to immediate disputes: some parties argued that the generic wording of their clauses (e.g. “any other cause beyond the control of the parties”) should cover COVID-19, while others argued that unless “disease” or “epidemic” was specified, the clause might not be triggered. In India, this interpretative issue coincided with executive action: in February 2020, even before the nationwide lockdown, the Indian Government’s Ministry of Finance issued an Office Memorandum declaring that COVID-19 should be considered a natural calamity and force majeure for government procurement contracts. Similarly, specific sectoral reliefs were announced (e.g., the Ministry of New & Renewable Energy gave extensions to renewable projects treating the pandemic as force majeure; the Ministry of Road Transport & Highways issued circulars treating COVID-19 as FM for highway contracts). These government recognitions did not change the law but provided a supportive backdrop, especially in disputes involving government contracts or regulatory domains.

For private contracts, the pandemic was quickly accepted by courts as falling within the ambit of force majeure either by virtue of clause interpretation or, in absence of a clause, as a contingency potentially frustrating contracts. The Delhi High Court observed in mid-2020 that “the lockdown imposed due to COVID-19 was prima facie in the nature of a force majeure event”. Multiple High Court decisions, as discussed below, took judicial notice of the extraordinary and all-pervasive nature of the pandemic, often referencing official lockdown orders, to conclude that the situation was beyond anyone’s control. The Supreme Court in one case referred to the pandemic as an “unusual” situation of global impact.

Thus, on a fundamental level, there was little debate that COVID-19 = force majeure in abstract. The real contentious issues were: to what extent does this force majeure event excuse performance? Does it temporarily suspend obligations (and for how long)? Does it permanently discharge the contract? Does it excuse some obligations (e.g. timely delivery) but not others (e.g. payment)? And what if the contract had no force majeure clause at all can Section 56 be invoked for a temporary impracticability?

2.2 The Litigation Surge: An Overview

As soon as lockdowns were announced (India’s national lockdown commenced on March 25, 2020), affected parties rushed to courts. The shipping and trade sector saw early cases, with importers, exporters, and logistics companies grappling with disruptions. The infrastructure and construction sector involving large projects often bound by strict timelines and heavy financial obligations also generated disputes, particularly where contractors were unable to proceed or faced huge losses due to halted work. Commercial leases and licenses became a hotbed of contention: retail stores, restaurants, cinemas, and others forced to shut down looked for ways to avoid paying rent for the closure period, often citing frustration or invoking any hardship clause available. The hospitality industry (hotels, event venues) faced cancellations en masse. Manufacturers declared inability to supply due to broken supply chains or workforce issues. Service providers ranging from consultants to schools faced difficulties in delivering promised services or had clients seeking to terminate agreements.

Indian High Courts, especially in commerce-heavy cities like Mumbai (Bombay High Court) and New Delhi (Delhi High Court), as well as certain sector-specific fora, were inundated with urgent petitions in the initial months of the pandemic. Many of these were not final suits but interim relief applications for instance, petitions to restrain invocation of bank guarantees, to stay eviction or enforcement of contractual remedies, etc., pending resolution of the force majeure claim. This early period set the tone for how courts would handle COVID-19 force majeure arguments.

In the following sections, we undertake a sector-wise analysis of representative cases from the post-pandemic litigation surge in India, distilling how the law was applied in each context. This is followed by an identification of common principles emerging from these cases.

Chapter 3: Post-Pandemic Case Law Developments in India Sectoral Analysis

3.1 Shipping and International Trade

Shipping and international trade were among the first arenas where COVID-19 force majeure issues emerged, reflecting how global supply chains were thrown into disarray. A hallmark case in this domain is the Bombay High Court’s decision in Standard Retail Pvt. Ltd. v. G.S. Global Corp & Ors. (order dated 8 April 2020) one of India’s earliest reported COVID-19 contract rulings. This case involved a steel import transaction: Indian buyers (Standard Retail and others) had contracted with a South Korean supplier (GS Global) for steel shipments on a CFR (Cost and Freight) basis. The contracts contained a force majeure clause, but significantly, the clause by its terms applied only to the seller’s obligations (the supplier) and not to the buyer’s obligation of payment. When India’s lockdown was imposed, the buyers faced downstream difficulties presumably their own customers were not taking delivery or sales had collapsed and they sought to resile from the contracts by claiming frustration/impossibility due to the lockdown. They filed a petition under Section 9 of the Arbitration and Conciliation Act to restrain the issuing bank from making payment under Letters of Credit that were due to be honored to the foreign supplier. Essentially, the buyers wanted the court to prevent the LCs from being cashed, arguing that the underlying contract was terminated by frustration (Section 56) or by force majeure.

Justice A.A. Sayed of the Bombay High Court firmly rejected the buyers’ plea. Several key points were made:

• The independence of letters of credit: The court held that letters of credit are an independent contract between the buyer’s bank and the seller; the bank’s obligation to pay is not subject to underlying contract disputes. Thus, on this ground alone, an injunction on LCs was difficult to obtain (fraud or irretrievable injustice being the only exceptions in LC law, which were not present).

• Force Majeure Clause Interpretation: The force majeure clause in the contracts was available only to the seller (GS Global) and not to the buyers. The court noted it “cannot come to the aid of the Petitioners (buyers).” In other words, the buyers could not invoke a clause that was not meant for them; and since the seller had already performed (shipped the goods), the clause was irrelevant to performance already completed.

• Section 56 inapplicable due to partial performance and essential nature of obligations: The contracts were CFR the seller’s obligation was to ship the goods to the port, which it had done; the goods were in transit or delivered to port. Payment was the buyers’ obligation. The court observed that the lockdown did not affect the seller’s performance, which was done, nor the transport and delivery of steel which was classified as an essential service exempt from lockdown restrictions. The buyers’ real problem was that their own customers within India had presumably cancelled orders due to the lockdown, leaving them with goods they might not immediately use or with a cash flow crunch. The court held that these downstream difficulties did not absolve the buyers from paying the seller. It emphasized that the lockdown was temporary (“for a limited period”) and that performance in the sense of making payment was not truly impossible. It could not be said that the entire contract was frustrated the goods existed and were deliverable, the ports were functioning, and movement of goods was permitted. The buyer’s loss of demand or potential financial hardship was not enough to invoke frustration.

• No frustration when the event’s impact is partial or when contract can still be performed in substance: The court’s broader observation was that even if COVID-19 and the lockdown qualify as a force majeure event, that alone doesn’t void all contracts; one must assess the degree to which the event “affects the performance of the contract.” Here, the lockdown did not affect the core obligation (delivery and payment for goods) in any insurmountable way. It only affected the buyers’ ability to on-sell the goods or their convenience, which is collateral from the perspective of the buyer-seller contract. Crucially, the court noted, “In any event, the lockdown would be for a limited period and the lockdown cannot come to the rescue of the Petitioners so as to resile from its contractual obligations… of making payments”. The temporary nature of the force majeure was highlighted frustration generally requires a permanent or indefinite impossibility, not a passing event (even if lengthy in impact).

The Standard Retail ruling set a clear tone: Indian courts would not lightly allow buyers or financially affected parties to escape contracts merely due to the economic difficulties posed by COVID-19, especially if performance of the contract was not literally rendered impossible. The case also underscored the primacy of contract terms (the FM clause allocation) had the buyers’ contracts included a clause allowing them to cancel or delay payment on the occurrence of a pandemic, the result might have been different, but absent that, Section 56 could not be used to rewrite the allocation of risk.

In a similar time frame, the Delhi High Court dealt with a dispute in the oil drilling sector that, while not a classic shipping case, involved an international services contract impacted by the lockdown. In Halliburton Offshore Services Inc. v. Vedanta Ltd. & Anr. (Delhi HC, May 29, 2020), a contractor (Halliburton) performing drilling services sought relief when Vedanta (the oilfield operator) sought to invoke bank guarantees due to alleged non-performance. Halliburton argued that the COVID-19 lockdown had prevented it from performing and thus the non-performance was excusable under force majeure. The Delhi High Court, in an interim order, made important observations on how COVID-19 force majeure claims should be evaluated:

• It cautioned that one cannot assume force majeure = no liability in a blanket manner. Justice Prathiba M. Singh stated that “Every breach or non-performance cannot be justified or excused merely on the invocation of COVID-19 as a Force Majeure condition”. The party invoking it must show a real and substantial impediment.

• The court should examine the facts: the conduct of the parties before the outbreak, the steps taken to mitigate, how the timelines were affected, etc., to see if non-performance was truly caused by the pandemic or whether there were pre-existing delays or defaults.

• The Halliburton order reaffirmed that force majeure clauses are to be interpreted narrowly. The Court quoted from the Supreme Court’s Energy Watchdog case that it is not the court’s domain “to absolve parties from performing contract” or to provide shelter unless a “real reason and a real justification” due to the force majeure event is shown. Even as an interim matter, the court was unwilling to give a free pass—though it did grant a partial relief, restraining encashment of the bank guarantee for a short period, it made that conditional on steps like the contractor extending the validity of the bank guarantee, etc., signaling that relief would be balanced and not absolute.

Between Standard Retail and Halliburton, Indian courts established a consistent approach for international trade/shipping related cases: COVID-19 could be invoked as force majeure, but its invocation is subject to rigorous scrutiny. If performance was possible albeit in a different or delayed manner, or if the party’s real issue was financial hardship or downstream market conditions, the courts were reluctant to terminate the contract. The notion “temporary impossibility” came to fore an impossibility of performance during the lockdown period might justify temporary suspension, but not automatic frustration of the contract as a whole (unless the timing was of the essence and delay nullified the contract’s purpose).

It is worth mentioning that while Standard Retail was about goods already shipped, one can conceive scenarios in shipping where frustration might be easier to establish for example, if a vessel chartered for a specific voyage became subject to an indefinite quarantine or a port closure that made the voyage impossible. Under English law, there were cases during the pandemic where charterers attempted to invoke off-hire or cancellation clauses due to port delays, often failing unless contractually covered. In India, to our knowledge, most such matters in shipping were resolved via contractual clauses or arbitration in London (given many shipping contracts choose English law). Thus, no major Indian reported decision on a pure charterparty frustration has emerged from COVID-19. However, the principles laid in Standard Retail would likely apply: if the contract (charterparty) had a force majeure or “off-hire” clause covering quarantine delays, that would govern (Section 32). If not, frustration would only apply if the delay was so long as to defeat the adventure (a very high bar, as English cases like The Sea Angel suggest).

In sum, for the shipping and trade sector: The immediate lesson from the pandemic jurisprudence is that sellers and service providers continued to enjoy robust contractual enforcement (buyers could not walk away simply due to market downturn), and that letters of credit remained sacrosanct despite buyers’ invocation of force majeure. The focus was on whether the actual ability to perform (ship, deliver, accept goods) was eliminated by the pandemic or not. “Essential” commodities and logistics being allowed during lockdown played a role in undercutting force majeure claims, as courts took notice of government exemptions for movement of goods. A practical insight here for drafters is to ensure force majeure clauses cover scenarios like pandemic explicitly and allocate risks to avoid such disputes for instance, specifying what happens if ports are closed or if government action prevents end use of goods.

3.2 Infrastructure and Construction Contracts

The construction and infrastructure sector in India was severely impacted by COVID-19: work sites were shut, labor forces migrated away during lockdown, supply of materials halted, and project deadlines became infeasible. Many construction contracts (especially in government projects like highways, railways, etc.) contain force majeure clauses and also are subject to government directives. The Indian Government, as noted, proactively characterized COVID-19 as force majeure for such contracts. Courts, when faced with disputes, often leveraged these official recognitions.

A prominent case exemplifying this sector is MEP Infrastructure Developers Ltd. v. South Delhi Municipal Corporation (Delhi High Court, June 2020). MEP was a contractor operating a toll plaza under contract with a municipal body (SDMC). In return for the right to collect tolls from vehicles, the contractor had to pay a fixed periodic amount to the corporation (a common “toll-operate-transfer” model). With the lockdown, toll collection was suspended (the Government had ordered temporary free passage on toll roads during the initial lockdown), meaning the contractor had no income. The question was whether the contractor was bound to adhere to the payment schedule despite this situation.

The Delhi High Court, referencing the Ministry of Road Transport and Highways (MoRTH) Circular dated 18 May 2020, which declared COVID-19 as a force majeure for highway contracts, granted significant relief to the contractor. Key takeaways from the judgment:

• No Notice Requirement for FM Invocation: The contract presumably had a clause requiring notice to invoke force majeure. However, the Court held that given the MoRTH circular (and an earlier Feb 2020 Dept. of Expenditure circular) that automatically classified COVID-19 as force majeure, the event was notorious and widespread, and thus no specific notice by the contractor was necessary. The force majeure clause “immediately becomes applicable” and notice would be superfluous. This is an interesting development because ordinarily, courts insist on compliance with contractual procedures (notice within X days, etc.) to claim force majeure. Here, the Court relaxed that, recognizing the exceptional nature of the pandemic and presumably that the counterpart (SDMC) was obviously aware of the situation.

• Suspension of Obligations (Partial Frustration): The Court effectively ordered that the strict payment timeline under the contract was suspended during the force majeure period and until restoration of normalcy. It did not terminate the contract entirely (the contract would resume once lockdowns lifted), but it said that enforcing payment when toll collection was impossible would be unjust. The Court’s observations went as far as to suggest this was an instance of a “partial frustration” meaning that for the duration of the supervening event, the obligation is discharged, but the contract survives and can be enforced once the event passes. Indian contract law does not explicitly provide for partial frustration, but the court read Section 56 to allow that if a part of a contract (or obligations for a certain time frame) is impossible, courts can excuse performance for that part/time while keeping the rest alive. This is a nuanced and pragmatic approach, aligning with what some other jurisdictions did (and indeed with equitable considerations).

• Reliance on Government Directives: The judgment leaned on the fact that government circulars themselves were treating the lockdown as force majeure and giving blanket extensions/waivers. It effectively gave judicial sanction to those executive instructions in the specific contract before it.

Another case in the infrastructure realm is from the Madras High Court: R. Narayanan v. Government of Tamil Nadu (2020) concerning a commercial lease of a shop in a bus stand (the shop was effectively operating under a license from the municipal authorities). The lessee/licensee sought waiver of license fees during the lockdown. The Madras High Court treated the lockdown as a force majeure event that legally excused the licensee from paying rent for the period of full lockdown. The Court pointed out that the government itself had granted a waiver for two months and it saw no reason why the same logic shouldn’t apply for the entire period when business was impossible. This judgment is notable because it leaned more in favor of the affected party (tenant) by granting a complete waiver for a defined period, essentially reallocating the loss to the licensor (government). It illustrates that courts did have the willingness, especially against a government body, to impose what is essentially a fairness-based solution once force majeure was acknowledged.

Thus, in construction/infrastructure cases, courts showed a tad more flexibility in fashioning relief. Unlike pure private commercial cases where obligations were enforced strictly (with perhaps just deferred timing, as in Ramanand case discussed below), in infrastructure cases the relief was sometimes an outright standstill of obligations. Two reasons can be surmised: (a) many infrastructure contracts involve government or public authority as one party, and courts may have been more comfortable requiring a public authority to share the burden (especially as government circulars were in play); (b) infrastructure projects often have force majeure and extension clauses built-in, so the legal framework to excuse performance was readily available and within the contemplation of the contract (Section 32 scenario).

From a practitioner’s perspective, the pandemic experience in this sector underscores the importance of explicit contractual provisions for extensions and cost-sharing in force majeure events. Standard form contracts (like the FIDIC forms or Indian government contracts) usually contain such clauses, but the pandemic tested their sufficiency. For example, was mere time extension enough, or should contractors also be compensated for idling costs? Most government contracts do not compensate money for force majeure downtime (they only extend time), meaning contractors had to absorb losses. The judicial trend was not to rewrite those contracts to grant monetary compensation, but occasionally, as seen, to waive payments due to the government, which indirectly achieves some monetary relief for the contractor.

3.3 Real Estate: Leases and Licenses (Rent Obligations)

One of the most socially and commercially pressing questions during the lockdowns was: Do tenants have to pay rent even if the premises cannot be used due to lockdown? This affected retail stores, offices, and even residential tenancies. While residential evictions were informally paused due to policy, commercial leases quickly became contentious. The doctrine of frustration has a peculiar application to leases. Historically, English law was reluctant to apply frustration to leases of land (treating leases as transferring an estate in land, not merely contractual rights), though modern law recognizes it in extreme cases. Indian law too did not have much precedent of leases being held frustrated. Moreover, lease agreements often contain force majeure clauses or, conversely, hell-or-high-water rent clauses (some explicitly stating rent must be paid regardless of force majeure).

The Delhi High Court’s decision in Ramanand & Ors v. Dr. Girish Soni & Anr. (May 21, 2020) was among the first to address this. In Ramanand, a tenant of a commercial property in Connaught Place, Delhi (a prime location) sought suspension of rent due to the lockdown closure of his shop. The court examined Section 32 and Section 56 in context of leases. It noted that Section 56 generally does not apply to leases because the transfer of property is effectuated and temporary non-use does not extinguish the lease (the contract is not executory in the same way as for services or construction the tenant already has the estate). Unless there is a force majeure clause in the lease (which is uncommon in many tenancy agreements), frustration would not easily apply, especially for short-term interruptions. The Delhi High Court held that suspension of rent was not warranted on force majeure grounds. However, showing a pragmatic side, the court did allow the tenant some relief by way of postponement in the schedule of payment of the accrued rent. Essentially, the tenant had to pay, but was given time or allowed to pay in instalments considering the hardship.

The Ramanand judgment is instructive in laying out factors to consider whether the lease had a clause on suspension of rent (in that case, it did not), the nature of the rights (property right vs contract right), the duration of lockdown relative to lease term, and any evidence of the parties’ negotiation on rent adjustment. It concluded that temporary non-use due to external constraints did not amount to “frustration” of the lease contract; the tenancy wasn’t destroyed, it resumed once lockdown lifted. The tenant’s obligation to pay rent, albeit deferred, was intact.

In contrast to Ramanand, which dealt with a private landlord-tenant situation, the R. Narayanan case (Madras HC) mentioned earlier involved a government licensor and that court granted a waiver for the period of total lockdown. This indicates that outcomes could diverge based on context and equities. A license in a government bus stand might be seen differently (perhaps as governed by government policy on waivers) than a private tenancy.

By late 2020 and 2021, many such disputes either got settled or resulted in tenants exiting leases through negotiated terminations, since courts were not giving them a legal escape hatch. The jurisprudence signaled that contracts of lengthy duration (like multi-year leases) are not frustrated by a few months of closure the effect is temporary and does not defeat the overall purpose, which remains viable after reopening. This was consistent with international trends (as discussed in the UK section, courts refused to allow frustration for COVID closures in leases, and legislatures had to step in to mediate rent disputes in some cases).

The practical lesson for the real estate sector is to incorporate clear clauses addressing government-forced closures or similar events. Post-pandemic, some commercial leases now include specific rent abatement clauses for pandemic-related closures (akin to a clause that if the mall is shut by government order, rent or a portion of it is abated for that period). Without such a clause, tenants are at the mercy of the doctrine of frustration which, as we’ve seen, is a blunt instrument usually favouring contract continuity.

3.4 Hospitality and Events

The hospitality industry (hotels, resorts, event venues) and events (conferences, weddings, sports) experienced total shutdown during lockdown and continued restrictions thereafter. Contracts in these areas (like hotel booking agreements, event catering contracts, etc.) often have force majeure clauses allowing cancellation or rescheduling. Many such disputes likely did not reach reported judgments because parties either refunded deposit under force majeure clauses or negotiated adjustments. However, conceptually, if an event was scheduled during the lockdown and could not take place, that contract’s purpose was destroyed a classic frustration scenario. For example, a banquet hall booking for a wedding on April 5, 2020, when gatherings were banned, would clearly be impossible to perform on that date; if it could not be simply postponed (say the event was tied to an auspicious date), frustration would discharge both parties from further liability, and typically deposits would be refundable (subject to any contractual term).

Indian courts did not produce a widely cited case on an event contract frustration, likely because many service providers honored refunds or because of the relatively smaller stakes involved compared to, say, infrastructure projects. But one allied area that saw litigation was school fee disputes: Parents argued that since schools were closed or only giving online classes, they should not have to pay full fees (or any fees) during the closure. This raises similar principles: is the contract for education frustrated or partially to be abated? Various High Courts gave differing directions. In Delhi, the High Court in Justice for All v. Govt. of NCT of Delhi (2021) directed private schools to forego some charges (like transportation) and allowed fees for online classes to be collected, implying no frustration but an adaptation. The Supreme Court in Indian School, Jodhpur v. State of Rajasthan (2021) eventually balanced interests by allowing schools to collect only a percentage of the fee for the year of closure, citing the need for both sides to share the burden a sort of equitable adjustment, though not framed explicitly as force majeure doctrine.

These educational cases highlight a trend: courts, while not declaring contracts void, did sometimes adjust obligations for fairness. They are analogous to partial frustration or force majeure suspension outcomes. The lockdown was deemed an Act of God affecting all, so some duties (like providing in-person teaching or full infrastructure) were impossible; thus, charging fees for those components was unwarranted.

For the hospitality sector contracts: if formally litigated, a court would likely see COVID-19 closure as a force majeure event excusing performance (e.g., the hotel isn’t liable for not providing the venue, and the customer isn’t liable to pay cancellation charges, as neither side is at fault and event couldn’t happen). Indeed, many contracts have a force majeure clause to that effect which would be a Section 32 scenario (contractual voidance or excuse pursuant to terms). If a contract lacked such clause, Section 56 could be invoked because the very purpose (e.g. a conference on a specific date) was thwarted by an unexpected event.

Anecdotally, given governmental advisories and general fairness, most hospitality businesses offered either rescheduling or refunds. The legal stance supports that as the correct approach no party should unjustly enrich themselves when an event is cancelled for reasons neither party caused.

3.5 Manufacturing and Supply Chain Agreements

Many manufacturing operations faced raw material shortages, supply chain bottlenecks, or complete shutdown due to workforce unavailability and travel restrictions. Supply contracts often have force majeure provisions listing things like “act of God, government order, epidemic” which would cover these scenarios. One example in Indian case law of a supply contract affected (outside pandemic context, but relevant by analogy) was Siemens Ltd. v. DMRC (2014 Delhi HC) where a sharp change in law affecting import of equipment was argued as force majeure the contract clause was analysed in depth. During COVID-19, such cases likely went to arbitration or settled.

However, a notable Supreme Court decision during this period, though involving an earlier event, illustrates how government-imposed restrictions can trigger frustration: NAFED v. Alimenta S.A. (2020). As mentioned, this concerned a 1980 export contract where the Indian government’s refusal to grant export permission (due to a change in export policy) was held to have rendered the contract void not under Section 56, but under Section 32, since the contract itself was contingent on that governmental approval. During COVID-19, the Indian government invoked laws like the Export Control to ban export of certain medical supplies (PPE kits, etc.) at times. Contracts for those goods would similarly become void (by frustration if not contingent, or by contingent condition failure if structured that way).

For manufacturing contracts, commercial impracticability in the sense of drastically increased cost was mostly not entertained as a basis for non-performance. If a factory could not operate due to lockdown, that is a straightforward force majeure (performance literally halted). But if it could operate at higher cost (say due to social distancing, or expensive air freight needed due to lack of shipping), that would not qualify as impossible it’s akin to Alopi Parshad’s principle: more onerous, but not legally impossible.

One reported case, Standard Retail (discussed above under shipping), actually straddles manufacturing/supply chain the buyers in that case were essentially in a supply chain and their downstream sale collapsed. The court did not excuse them. Similarly, a manufacturer who found their demand dropped could not cite that as force majeure to cancel procurement contracts; only actual inability to produce or deliver (due to lockdown laws or logistical shutdown) would count.

3.6 Banking and Finance Contracts

While not a “sector” in the traditional sense, banking/finance contracts (loan agreements, credit facilities) also faced stress. Borrowers sought moratoria, and indeed the RBI (India’s central bank) issued a blanket moratorium on loan repayments for a period (March-August 2020). That was a regulatory intervention rather than contractual force majeure. However, some cases still went to court, such as Transcon Iconica Pvt. Ltd. v. ICICI Bank (Bombay HC, 2020). In that case, a developer faced loan default and an NPA (non-performing asset) tag due to inability to pay during lockdown. The Bombay High Court, aligning with RBI’s moratorium scheme, ordered that the lockdown period should not be counted in the 90-day default period for classifying the account as NPA. This effectively gave the borrower relief, treating the lockdown as an event justifying temporary non-performance of payment obligations. Notably, the court did this even though the contract itself (loan agreement) wouldn’t typically have a force majeure clause for payment obligations (financial contracts usually exclude payment from force majeure). It shows courts indirectly implemented an equitable result consistent with regulatory measures.

Another area was performance bank guarantees (BGs). Many construction and supply contracts have BGs to secure performance. With work stalled, employers tried to invoke BGs for delay. Contractors rushed to court to restrain this, claiming the delays were due to force majeure, thus invocation would be fraudulent or inequitable. Indian courts traditionally do not stop BG invocation unless there’s egregious fraud or the invocation is not per contract terms. During COVID-19, some interim orders (like in Halliburton above) granted temporary injunctions on invoking BGs, noting that if non-performance was solely due to lockdown, invoking the guarantee might be abusive. However, those were interim and generally courts still held the line that guarantees are independent. A lesson emerges: if a party fears being in default due to force majeure, it should communicate and seek standstill from the counterparty or approach the court quickly for interim relief, as Halliburton did, rather than wait for guarantee encashment.

3.7 Synthesis of Indian Post-Pandemic Jurisprudence

From the array of cases and scenarios above, a consistent judicial philosophy is evident:

• Indian courts validated COVID-19 as a force majeure event in principle, often expressly calling it so. There was virtually no case where a court said COVID-19 is not covered under force majeure (except possibly if a contract explicitly excluded pandemics, which was rare).

• Force Majeure clauses were honored strictly: If the contract had an FM clause, courts confined themselves to interpreting it. They did not expand its scope beyond what parties agreed. For example, if notice was required, courts expected notice (with the MEP case as a slight deviation in light of government notification). If the clause covered ‘epidemic’, it was triggered; if not, a party might have to fall back on Section 56.

• Frustration (Section 56) remained narrow: No Indian court handed down a judgment voiding a contract for frustration solely due to a temporary lockdown, except in cases where the contract was wholly date-specific or government order made performance illegal. The mantra repeated was that temporary hardship or difficulty does not frustrate a contract. Courts also cautioned against misuse one judgment cited that “the Courts have no general inclination to absolve a party from performance merely because it has become onerous”, reflecting a policy that people cannot use the pandemic opportunistically to walk away from bad bargains.

• Reliefs granted were often calibrated: Rather than binary outcomes (contract valid vs contract void), many orders fashioned interim or partial relief. E.g., deferment of rent, suspension of payments during lockdown, extension of time to perform, etc., while keeping the contract alive. This is a practical reconciliation of the absolute language of Section 56 with the realities courts, in effect, paused obligations without terminating agreements, especially when the pandemic impact was seen as transient (even if the “transience” lasted a year or more in some form).

• Role of Government directives: Courts gave weight to executive notifications treating COVID-19 as force majeure, especially in areas like infrastructure and finance. It shows a collaborative stance judiciary aligning with policy intent to cushion the blow. However, ultimately the legal basis was found either in contract clauses or general contract law principles (e.g., sometimes invoking Section 63 of the Contract Act mutual relinquishment of obligations when parties agreed to adjustments).

• Requirement of Causation and Mitigation: Implicit in many decisions is the expectation that the party claiming force majeure must show the pandemic directly prevented performance and that they made efforts to mitigate the damage. For instance, if a supplier could have sourced materials from a different open region but didn’t try, a court may view the non-performance less sympathetically. In Halliburton, the court explicitly mentioned examining conduct prior to the outbreak to see if delay was already happening. Thus, force majeure cannot cover up prior defaults.

The pandemic jurisprudence in India, therefore, did not revolutionize contract law but rather reinforced the classical doctrines of force majeure/frustration with real-world illustrations. In doing so, it provided clarity on applying those doctrines to a modern global crisis. It showed that Indian law, as codified in 1872 and developed in mid-20th century cases, proved resilient and adaptable enough to handle 21st century challenges by relying on core tenets: pacta sunt servanda (agreements must be kept) balanced by an allowance for true impossibility.

Chapter 4: Comparative Analysis UK and US Approaches to Force Majeure and Frustration

The contractual turmoil caused by COVID-19 was a global phenomenon, and it prompted reliance on analogous doctrines in other jurisdictions. This chapter compares how the United Kingdom (as a representative common law system from which Indian law draws heritage) and the United States (a common law system with its own evolution of impracticability and UCC provisions) dealt with similar issues. The aim is to highlight similarities in legal reasoning and any differences that stem from doctrinal or societal factors.

4.1 United Kingdom: Frustration of Contract and Force Majeure Clauses

The UK’s contract law on frustration is rooted in common law without a statutory counterpart like India’s Section 56. The doctrine is famously narrow. As Lord Radcliffe noted in Davis Contractors Ltd. v. Fareham UDC [1956] AC 696, frustration occurs whenever “the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract.” This definition has guided UK courts for decades, and emphasis is placed on the “radical change” test. An oft-cited exposition is Bingham LJ’s five propositions in J. Lauritzen A.S. v. Wijsmuller B.V. (The Super Servant Two) [1990] which stress that frustration is an “outside event or extraneous change of situation” that “must be so significant as to strike at the root of the agreement”, and it releases parties from further performance automatically, but it must not be induced by either party and is kept within very narrow limits.

Force majeure clauses in English law are purely contractual; there is no inherent concept of force majeure outside what parties agree (unlike civil law systems where it may be codified). However, English courts readily enforce such clauses, and they approach their interpretation strictly (much like Indian courts do under Section 32). If a contract has a force majeure clause that covers “pandemics” or “government action”, a party prevented from performing by those events may be excused or may terminate the contract as per the clause’s terms.

When COVID-19 hit, many English contracts had force majeure clauses, though some, like older leases, did not contemplate pandemic. The English courts dealt with numerous disputes, especially in the context of commercial leases and event contracts similar to India, tenants tried to avoid rent, event companies tried to recover payments, etc. A few notable instances:

• Leases (Rent Abatement and Frustration): In London Trocadero (2015) LLP v. Picturehouse Cinemas Ltd. [2021] EWHC 2591 (Ch), a case concerning a cinema tenant that could not operate due to lockdown, the High Court rejected the tenant’s argument that the lease was frustrated by the temporary closure. The Court noted that the lease was a long-term contract (25 years) and the temporary closure, while of considerable length, did not make the performance (i.e. using the premises as a cinema) permanently impossible or illegal once lockdown ended, the tenant could resume the use. The “radical difference” test was not satisfied: the tenant still had the asset (the leasehold interest) and the possibility of using it over the term. The tenant’s inability to trade for some months, though burdensome, was not fundamentally outside what the lease contemplated (leases inherently involve some risk that a tenant might not be able to use property for a time, e.g. due to repairs, etc., without negating the lease). Moreover, frustration of a lease would be an extreme outcome with many collateral consequences. The court thus held no frustration occurred.

In Bank of New York Mellon (International) Ltd. v. Cine-UK Ltd. [2021] EWHC 1013 (QB), a judgment covering several joined cases (including large retail and leisure chains like Cineworld, Mecca Bingo, Sports Direct), the High Court granted summary judgment to landlords for rent accruing during lockdown. Tenants had advanced various arguments: that the lockdown triggered a rent suspension clause (which usually exists for physical damage, not applicable here), or that the lockdown amounted to a failure of consideration or temporary frustration. The court dismissed these, again emphasizing that the lease terms did not provide for rent suspension in these circumstances and the law of frustration did not apply to a transient government restriction. It was pointed out that many leases had clauses requiring rent even if premises couldn’t be accessed (save for specific insured risks); thus risk of legal restrictions lay with the tenant in absence of contrary provision. The tenants’ attempt to invoke doctrines like frustration of purpose also failed because the purpose of the lease (to operate a cinema, store, etc.) was resumed after restrictions, and the closure, though unforeseen, was not permanent.

Ultimately, the Court of Appeal in London Trocadero and the joined cases in 2022 upheld these outcomes, cementing that COVID-19 did not legally frustrate commercial leases in England. Instead, the solution for rent arrears was largely left to negotiated settlements and, eventually, a legislative intervention (the UK’s Commercial Rent (Coronavirus) Act 2022, which introduced a binding arbitration scheme to resolve rent arrear disputes for mandated closure periods, effectively splitting losses between landlords and tenants in a fair manner). This legislation underscores that the existing contract law was too rigid to give a remedy, prompting a policy response. It’s a telling point that neither English nor Indian courts were willing to stretch frustration doctrine to cover temporary closures; instead, the remedy, if any, had to come from either contract renegotiation or targeted legislation.

• Event Contracts: A classic frustration scenario in English law is Krell v. Henry (1903) a contract to rent a room to view King’s coronation parade was frustrated when the parade was cancelled (frustration of purpose). During the COVID pandemic, many events (e.g., sports matches, conferences) were cancelled or postponed. If contracts didn’t have force majeure clauses, frustration would apply if the event could not simply be deferred without losing its essential purpose (like a concert on a particular date that could not happen). There were fewer reported litigations because consumer protection laws and voluntary refunds often addressed these. However, one case in the sports context: Football Association Premier League v. Bank (unreported, 2020) where a TV broadcasting contract’s purpose was partly defeated by matches being suspended, the parties ended up renegotiating terms (with rebates to broadcasters). The legal question of partial frustration or adjustment did not get a definitive court airing, largely due to settlements.

• Construction and Supply Contracts: Many English law-governed contracts had force majeure clauses which parties invoked. The general approach was to interpret the clause and see if notice and mitigation obligations were met. There isn’t a widely cited English case of a supply contract without an FM clause that had to rely on frustration due to COVID-19. Hypothetically, if one had existed, an English court would likely say: if the contract could be performed later (delay), not frustrated; if the contract was for something that became illegal to sell, then frustrated.

A noteworthy English Supreme Court decision, though in an insurance context, is FCA v. Arch Insurance [2021] UKSC 1 (the “Business Interruption Insurance Test Case”). While not about contract frustration between parties, it dealt with the construction of insurance policy clauses for business interruption coverage for disease outbreaks and prevention of access by public authority. The Supreme Court took a broad, policyholder-friendly view that many such clauses did cover the pandemic losses. This indirectly softened the blow for many businesses (especially small ones) by shifting some loss to insurers. It shows that outside strict contract law, other legal avenues (insurance, legislation) played a role in outcomes.

In sum, the UK’s experience mirrored India’s in that frustration was rarely applied to excuse performance for pandemic disruptions. Force majeure clauses (where present) were the first port of call e.g., many construction contracts under English law (like JCT or NEC contracts) have force majeure provisions or specific clauses for epidemics, which gave mechanisms like time extensions. Where no clause covered it, most contracts were able to resume after lockdown, so frustration didn’t bite, except possibly for unique cases like long events cancelled outright (and those were straightforward frustration of purpose cases).

The UK law’s strictness is encapsulated by Rix LJ’s observation in The Sea Angel [2007] 2 All ER (Comm) 634: the doctrine of frustration is “not to be lightly invoked” and courts must look at the risk allocation in the contract and whether the event was foreseeable or provided for. If a contract had a force majeure clause that didn’t list pandemic but had an “any other event” catch-all, English courts might accept COVID as included (some debate on ejusdem generis could arise but generally a pandemic would fit as an extraordinary event beyond control). If a contract required prompt notice to claim FM and a party failed to give it, they might lose the right to claim (English law is quite strict on compliance).

One difference to highlight: unlike India, the UK has the Law Reform (Frustrated Contracts) Act 1943, which applies when a contract is frustrated to adjust the losses (apportion recoverable expenses, deposits, etc.). If any contracts were declared frustrated due to COVID (say, one-off event contracts), that Act would determine what happens to pre-paid money or work done. In India, we lack a similar statute; Section 65 of the Contract Act does somewhat similar work by requiring restitution of benefits in void contracts, but it’s less detailed. Fortunately, few cases of total frustration emerged that weren’t handled by mutual settlement.

4.2 United States: Impossibility, Impracticability, and Frustration of Purpose

In the United States, contract law regarding supervening events is split between common law doctrines and, for sale of goods, the Uniform Commercial Code (UCC).

Under the common law (Restatement (Second) of Contracts §§ 261-265):

• Impossibility (now often termed Impracticability): A party’s performance is excused if it has become impracticable because of an occurrence of an event, the non-occurrence of which was a basic assumption on which the contract was made, unless the contract language or circumstances indicate the contrary. This is akin to frustration but focused on the promisor’s ability to perform rather than the mutual purpose.

• Frustration of Purpose: A party’s duties can be discharged if a supervening event substantially frustrates the principal purpose for which the contract was made, so long as the event was not the fault of the party and the contract didn’t allocate the risk of that event.

The Uniform Commercial Code (UCC) § 2-615 provides for excuse for non-performance in contracts for sale of goods when performance has been made impracticable by an unforeseen contingency (e.g., a supplier’s source failing due to an unforeseen event), or by compliance with governmental regulation or order. The UCC commentaries even use the term “Act of God” and similar concepts.

When the pandemic struck, US courts faced numerous disputes, especially commercial leases, event cancellations, and some supply chain issues. Much like the UK and India, many of the high-stakes battles were in the landlord-tenant arena for retail and office leases:

• For instance, in New York (a state which adheres to common law frustration and also often enforces force majeure clauses strictly), one early case was BKNY1, Inc. v. 132 Capulet Holdings, LLC (N.Y. Sup. Ct. Aug 2020), where a restaurant tenant argued frustration of purpose for not paying rent during the period indoor dining was banned. The court denied the tenant’s claim, reasoning that the closure, though temporary, did not permanently frustrate the lease; the tenant’s inability to operate for months, while severe, was not the death of the lease’s purpose (which extended for years). The tenant was still theoretically able to resume and benefit from the lease later. New York courts also noted that many leases had clauses covering emergencies or might have a use clause that did not guarantee lawful ability to operate at all times (implying the risk of regulatory closure lay with tenant absent contrary wording).

• In one notable case, The Gap, Inc. v. Ponte Gadea New York LLC (S.D.N.Y. 2021), The Gap sought to avoid rent for its storefront in Manhattan for the lockdown period, invoking frustration and impossibility. The federal court (applying NY law) acknowledged the unprecedented nature of the pandemic but held that neither frustration nor impossibility was met: the lease wasn’t completely frustrated as it remained in force after restrictions lifted, and performance (payment of rent) was not impossible it was not that the currency ceased to exist or something of that sort. The court granted summary judgment to the landlord for the rent. However, interestingly, The Gap case initially survived a motion to dismiss on the pleadings because the court allowed that the tenant had stated a plausible claim of frustration/impossibility for the fully closed period showing that at least at the pleading stage, some judges were open to hearing evidence. But ultimately, the outcome favored landlords.

• California courts, applying the impossibility doctrine (which includes impracticability under California Civil Code), had some early divergent outcomes. One often-cited instance: In re Hitz Restaurant Group, a bankruptcy court case in Illinois (applying Illinois law) in June 2020, where a force majeure clause in a lease mentioned “governmental action” and the governor’s shutdown order was deemed to fall under it. The court held that the clause partially excused rent specifically, since the order prohibited on-premises dining but allowed takeout, the judge roughly estimated that 25% of the space (the kitchen) could still be used for takeout, so the tenant had to pay 25% rent during the closure, and 75% was excused as the dining area was unusable. This pragmatic approach was unique and stemmed from the explicit contract wording plus bankruptcy court’s equitable powers. It’s not a state supreme court precedent but illustrates an approach to partial impracticability.

• Many force majeure clauses in US contracts were litigated regarding whether the pandemic qualifies as an “Act of God” or “natural disaster” or “beyond control” event. Generally, courts had little trouble finding that it does qualify, especially if the clause included terms like “epidemic” or “pandemic”. For example, in AB Stable VIII LLC v. Maps Hotels and Resorts One LLC (Delaware Chancery, 2020) a case about a merger where one party invoked a Material Adverse Effect/force majeure clause due to COVID the court held that COVID-19 did fall within the force majeure definition (as a natural disaster) in that contract, but the clause in question carved out pandemics from what counted as a Material Adverse Effect (meaning the risk was allocated to the buyer). That case was more about MAE in M&A context, but relevant in that courts recognized the pandemic in the class of force majeure events.

• On the doctrine of frustration of purpose itself, some U.S. courts did accept it in limited scenarios. For example, consider a contract to rent a venue for an event on a specific date which was rendered impossible by a lockdown that is a textbook frustration of purpose; any deposit would typically be recoverable. If litigated, courts likely would declare such contracts discharged (some states have consumer protection laws that would ensure refunds). The Uniform Restatement’s approach would support frustration where the principal purpose is destroyed. We saw a hint of that even in the Ponte Gadea case reasoning: had the lease’s purpose truly been completely negated (say if an event space lease for one event, not an ongoing retail lease), frustration might lie.

Comparatively, U.S. courts are possibly slightly more open than English courts to concepts of impracticability in terms of increased burdens, but the threshold is still high. Historical cases like Mineral Park Land Co. v. Howard (Cal. 1916) excused a contractor when completing the job would have required exponentially more expense due to unforeseen conditions (half the gravel was underwater impracticable to extract without extreme cost). But post-World War II and in modern times, courts have been cautious, as unpredictability is part of business risk unless allocated.

During COVID, a widespread judicial trend in the U.S. was to require parties to honor their contracts or settle. Many states saw a flood of rent nonpayment cases, but the resolution often came from outside strict contract law: eviction moratoriums (which didn’t forgive rent but delayed enforcement) and federal relief funds to help pay rents.

Key similarities with India/UK:

• Temporary impossibility did not void contracts; it sometimes delayed them.

• Courts looked to contract clauses first (force majeure clauses, etc.).

• Frustration and impossibility were narrowly applied; economic loss alone was not enough.

• Many outcomes were negotiated or achieved via external intervention (in India, RBI moratorium; in UK, legislation; in US, stimulus/forgiveness programs and bankruptcy processes).

One difference is the U.S. concept of commercial impracticability under UCC: For example, if a supplier’s cost of raw materials skyrocketed due to the pandemic (and no price-adjustment clause existed), could they claim impracticability? UCC 2-615 might excuse them if the rise was due to an unforeseen contingency that fundamentally alters the nature of the performance. But generally mere cost increases don’t suffice unless it’s extreme and due to unforeseen events (some commentary suggests price multiplication or collapse of source qualifies). There were few reported cases on pure price impracticability due to COVID by 2025, possibly because many supply contracts were renegotiated or governments intervened (like the U.S. Defense Production Act used to direct production of some goods).

Overall, U.S. courts did not depart from the cautious approach: like others, they signaled that a pandemic, however severe, doesn’t suspend basic contract law. Instead, it tests the contracts if well-drafted, those clauses are enforced; if not, only truly untenable situations get relief by doctrines.

4.3 Comparative Conclusions

Across India, UK, and US, one sees a common theme: force majeure and frustration doctrines remain devices for exceptional cases, not a blanket rescue for all parties in distress. The pandemic led to many claims, but courts sifted through them with an eye on preserving contracts where possible. The hardest-hit sectors (like hospitality and retail leases) found little solace in courts and had to resort to compromise or policy relief.

Where Indian law’s approach is codified, it essentially mirrored the results in common law jurisdictions:

• The requirement of impossibility or fundamental change was consistently emphasized in all jurisdictions.

• Courts demanded that the risk was not allocated to the party in the contract e.g., if a party promised absolute performance come what may (like many rent clauses do), they were held to it.

• Foreseeability: While no one quite foresaw COVID-19’s impact, some courts pointed out that contracts signed during the pandemic could no longer claim the event as unforeseen if the timing was such (for example, a lease signed in late 2020 is executed in the shadow of COVID; one could argue frustration won’t apply since the possibility was known).

An interesting comparative note is the civil law systems (though not asked in the question): countries like France have codified force majeure (requiring it to be unforeseeable and impossible to overcome) and also doctrines of imprévision (hardship) to renegotiate contracts if performance, while not impossible, becomes excessively onerous due to an unforeseen event. In 2020, many civil law courts (and even arbitral tribunals) saw arguments to adjust or terminate contracts on hardship basis. Common law systems (India, UK, US) historically do not have a general hardship doctrine they either enforce the contract or terminate it if truly frustrated, but not rewrite it. What we observe though is courts in all three common law jurisdictions sometimes informally did what looks like hardship mitigation (e.g., postponing rent, partial excuse, etc.), without overtly stating a new doctrine. They achieved equity through interim orders or interpretation, but not by recognizing a legal right to renegotiate. Policymakers in those jurisdictions had to fill that gap to some extent (like UK’s arbitration for rent or India’s regulatory interventions).

For practitioners in a global context, the pandemic has underscored:

• Always check governing law: while outcomes converged a lot, subtle differences (like availability of statutory relief or not) can matter.

• In cross-border contracts, force majeure clauses should be carefully crafted to avoid uncertainties across jurisdictions. Many international contracts after SARS 2003 started including “pandemic” explicitly; those who didn’t by 2020 paid the price in litigation.

• The concept of notification and duty to mitigate is present in all systems: a party claiming force majeure is expected to notify timely and try to mitigate damages (e.g., find alternate means if possible). Failure to do so can weaken their case.

The comparative analysis reaffirms that Indian jurisprudence on force majeure/frustration is in harmony with global common law trends. In fact, Indian courts extensively cited English case law (like Taylor v. Caldwell, Krell v. Henry, Energy Watchdog citing British Movietone case etc.) and kept the doctrinal consistency.

Chapter 5: Lessons Learned and Practical Insights

The experiences of the pandemic-induced litigation wave provide rich lessons for contract drafting, risk management, and legal strategy. This chapter distills practical insights for various stakeholders:

5.1 For Contract Drafters and Commercial Parties:

1. Draft Clear and Specific Force Majeure Clauses: Post-pandemic, it is imperative that contracts explicitly address events like pandemics, epidemics, and government lockdowns. Clauses should define what constitutes a force majeure event (including broad “act of God” language and illustrative lists that now include “pandemic or public health emergency” and “government order or quarantine affecting performance”). The clause should also spell out the consequences: e.g., suspension of obligations, extension of time, or right to terminate if the force majeure continues beyond a certain period. Parties should decide and memorialize whether obligations like payment are suspended or not during force majeure many lessors now negotiate that only the obligation to operate is excused but rent still accrues, whereas tenants may bargain for rent abatement during forced closures. The more clarity in the clause, the less room for dispute about Section 32 vs Section 56, because courts will simply implement the contractual allocation.

2. Include Notice and Mitigation Requirements: A well-drafted clause will require the affected party to give prompt notice of the force majeure event and to use reasonable efforts to mitigate its impact. From the case law, it is evident that courts value such efforts. In Halliburton, the court examined what steps were taken prior to and during the outbreak. A party that sits idle will find sympathy hard to come by. Therefore, contract clauses should mandate mitigation (and in turn, if one is the non-affected party, one can demand proof of mitigation if a force majeure is claimed).

3. Consider Hardship/MAC Clauses: While force majeure covers outright impediments, parties might also consider hardship or material adverse change (MAC) clauses for scenarios that, while not impossible, fundamentally alter the economics of the deal. Indian law doesn’t automatically provide a remedy for hardship (unlike some civil laws), so if that is a concern, a contractual provision is needed. For example, a price escalation clause tied to an index can save a supplier from ruinous cost spikes (as an alternative to claiming frustration due to impracticability, which is unlikely to succeed given Alopi Parshad). In M&A or financing, a MAC clause might allocate pandemic-like risks to the target or acquirer expressly, avoiding ambiguity whether it’s “foreseeable”.

4. Allocate Risk of Government Intervention: One theme is government orders (export bans, lockdown directives) causing non-performance. Contracts, especially in regulated industries or cross-border trade, should address what happens if government acts disrupt the deal. The NAFED v. Alimenta case shows a contract contingent on government clearance was sensible since it treated the risk upfront. Parties can agree on termination rights or alternative fulfillment methods if a law or order prevents the originally intended performance.

5. Liquidated Damages and Penalties in a Pandemic: Where contracts have liquidated damages for delay (common in construction), drafters should include carve-outs for delays caused by force majeure. Otherwise, as seen, contractors rush to claim frustration to avoid penalties. It’s better to expressly say, e.g., “if a force majeure event occurs, the time for completion is extended and no LDs accrue for that period.” This was effectively what happened through government policy in infrastructure contracts, but having it in the contract provides certainty.

6. Review Insurance and Include Insurance Obligations: One ancillary lesson many businesses found relief through insurance (or found that they lacked coverage). Contract drafters can allocate who must carry business interruption insurance or event cancellation insurance for certain risks. If such insurance is available (post-pandemic, insurers exclude pandemics or charge high premiums, but coverage can sometimes be negotiated), specifying it in the contract might ensure that at least one party has a safety net. For instance, commercial leases could require tenants to insure against rent loss due to force majeure (or landlords to carry insurance for loss of rent), thereby mitigating disputes.

7. Express Exclusion of Force Majeure in Certain Cases: If a party wants absolute certainty of performance come what may (e.g., a financial obligation), they might explicitly exclude force majeure as a defense for that obligation. Many loan agreements do this (payment obligations continue regardless of force majeure). If that is the intent, state it clearly. Conversely, if parties intend even monetary duties to pause (which is less common), that should be clearly articulated, because generally courts and the nature of money will not consider payment impossible unless banking systems collapse.

5.2 For Litigators and In-House Counsel:

1. Early Assessment and Invocation: The moment a potential force majeure event occurs, counsel should promptly assess if it falls under the contract’s clause or under legal frustration doctrine. If yes, ensure notices are sent as required (even if the other side seems to know the situation, formal notice preserves rights). In Standard Retail, one issue was buyers invoking Section 56 after the fact, but the contract clause was actually only seller-protective; a pre-emptive engagement with the counterparty might have yielded a commercial solution rather than a lost injunction bid. Thus, proactive communication and invocation under the contract can sometimes avoid a dispute or strengthen a litigating position.

2. Document Causation: If performance will be delayed or hampered, document how exactly the pandemic (or other FM event) is the cause. Courts separate genuine prevention from mere difficulty. Maintaining logs of, say, government orders that shut the site, or letters from suppliers unable to deliver due to lockdown, etc., can serve as evidence that non-performance was indeed beyond the party’s control. Conversely, if representing the side opposing the force majeure claim, investigate whether there were alternatives the promisor ignored. For instance, did they fail to invoke an exemption or apply for a permit that could have allowed partial performance? Any hint that the non-performance was avoidable will undercut the force majeure defense.

3. Beware of Overreaching Claims: Advise clients that claiming force majeure or frustration too readily can backfire. Courts might view an overstated claim as a breach in itself. For example, if a party terminates a contract citing frustration when in law it was not frustrated, they risk being held in repudiatory breach. In uncertain situations, it may be better to seek a declaratory relief from court or to negotiate an interim standstill rather than unilaterally cancel. The Indian jurisprudence suggests courts were sympathetic to those who acted responsibly and in good faith, and unsympathetic to opportunism (like trying to use a short lockdown to escape a bad long-term contract).

4. Interim Relief Strategy: In many cases, the initial battle was at interim stage (injunctions against guarantees, stay on termination, etc.). Crafting the narrative of irreparable harm and prima facie case requires showing that the balance of convenience favors a temporary hold because the event is no one’s fault and damages aren’t adequate remedy. The Halliburton case, where an interim stay on guarantee encashment was granted, is an example. However, one must also prepare to give security or conditions e.g., the court might order part payment into court, extension of bank guarantees, etc., to safeguard the other side. Being ready with such proposals can make a judge more inclined to grant relief.

5. Use of Mediation/Alternate Dispute Resolution: A surge of cases can overwhelm courts (indeed the term “litigation surge” implies numbers). It is often in clients’ interest to mediate a solution. In fact, in some Indian High Courts, judges informally nudged parties to negotiate a rent waiver or a restructured performance schedule rather than litigate to the bitter end, knowing the legal doctrine might not favor one side entirely. As counsel, exploring without prejudice negotiations perhaps framing it as “a commercial compromise given the unforeseen pandemic” rather than admission of liability can preserve relationships and yield a faster result than protracted litigation where, ultimately, courts might only offer a delayed, partial remedy.

6. Leverage Sectoral Knowledge: Each sector had nuances (shipping LCs, construction extensions, etc.). A litigator should be aware of industry practices. E.g., in construction, if government granted an extension of time by policy, bring that on record to bolster a force majeure argument. In shipping, knowing that ports remained operational undermines a claim of impossibility for delivery, as in Standard Retail where the court noted ports were open. Industry context can be critical in demonstrating what was truly beyond control and what wasn’t.

7. Plan for the End of Force Majeure: Advise clients on how to resume performance once the event passes, and to give notice of resumption. Some contracts require notice of the end of the force majeure. Even if not, a prudent approach is to communicate readiness to perform as soon as able. This protects against a counterparty later arguing that you repudiated or delayed unnecessarily.

5.3 For Policymakers and the Legal System:

1. Legislative Gaps: The pandemic revealed that, while contract law had tools to handle many disputes, there were areas where ad hoc solutions were needed. Policymakers might consider whether laws akin to the UK’s 2022 Act for rent disputes are needed in future crises to provide a streamlined solution, rather than pushing every landlord-tenant pair into court. In India, one could debate whether a temporary frustrated contracts adjustment act is needed, or empowering executive directives (like the MoF’s OM on force majeure) with more uniform legal effect. During COVID, the Indian government issued various advisories (for instance asking landlords to be considerate to migrant labor on rent, etc.), but they weren’t legally binding, resulting in uneven adherence. A statute or ordinance in a future emergency could, for example, mandate or incentivize mediation for certain contract disputes, or provide principles for rent abatement, etc.

2. Strengthen Force Majeure Understanding in Public Contracts: Government and public sector are big contracting parties. The early OM in Feb 2020 by the Govt. was forward-looking. Continued refinement of standard contract clauses in government tenders to address calamities will reduce disputes. Also, ensuring that those clauses are fair (not one-sided) will prevent situations where contractors feel compelled to invoke frustration out of desperation. For example, if a government contract only gives time extension but the contractor suffers huge cost increases due to a calamity, perhaps there should be a mechanism (like some sharing of additional cost) to be fair otherwise the contractor may default or litigate on implicit grounds of equity.

3. Judicial Infrastructure for Mass Disputes: The courts coped impressively by going virtual and deciding many cases quickly (e.g., the Standard Retail case was decided within weeks of lockdown). However, the surge in cases suggests that specialized benches or guidelines could be useful for consistency. The Supreme Court of India could consider formulating a guiding judgment (or already perhaps has by now through dismissing SLPs) to unify the approach. If another widespread event occurs, early guidance from higher judiciary can channel lower courts and parties towards settlements.

4. Encourage Arbitration and ADR Clauses: Many commercial contracts have arbitration clauses; indeed, Standard Retail was an arbitration-related court intervention. Arbitration can be faster, but in emergencies parties still run to court for interim relief. Perhaps institutional arbitral rules could incorporate emergency arbitrator provisions (some already do) and parties should be educated on using those. Policymakers (like the Arbitration Council) might promote awareness that force majeure disputes can be resolved via arbitration just as well, to take pressure off courts.

5. Support for Small Businesses and Individuals: While large corporate disputes get court attention, many small businesses didn’t have the means to litigate for force majeure relief. Government schemes like moratoria, MSME reliefs, and so on were crucial. In future, more targeted legal safe harbors (like “no eviction for X months”, “automatic moratorium on certain contracts”) might be considered to preempt a wave of litigation at lower consumer levels. Of course, such interventions must balance the interests of the other side (landlords, lenders) to not cause unfair prejudice.

5.4 Doctrinal Clarifications:

It is worth reflecting academically whether the pandemic has shifted the doctrine’s boundaries. In India, one question is: Can Section 56 allow for suspension (temporary impossibility) or is it always annihilative (void ab initio after event)? The Delhi High Court in MEP case seemingly recognized a form of temporary impossibility and allowed resumption later. While not explicitly calling it a new doctrine, it practically treated the contract as not void, just paused. This indicates courts found pragmatic solutions within existing law by perhaps reading the contract as containing an implied term that time is extended. It might be useful for higher courts to clarify this aspect it would provide future guidance if, say, a 3-month lockdown happens again, whether that “frustrates” a one-year contract or just pauses it. A possible view is that Section 56’s phrase “becomes void” need not mean permanent dissolution if the impossibility is transient; once the impossibility is removed, the contract might “revive”. Traditional understanding is contract is discharged permanently, but perhaps Indian law could evolve to mirror civil law’s concept of force majeure suspension for temporary events. Such evolution might come through case law if not legislation.

Finally, a key lesson for all is that force majeure is not a panacea. Contracts are about allocating risk, and the pandemic showed that unforeseen collective risks do occur. The legal system is a blunt instrument for reallocation after the fact, thus it’s far better to negotiate risk allocation at the contracting stage. The pandemic has moved force majeure clauses from boilerplate to front and center in negotiations. That awareness in the business and legal community is itself a positive outcome it means future contracts will likely be more resilient, and parties will know to actively discuss “what if” scenarios rather than copy-pasting a clause without thought.

Conclusion

The COVID-19 pandemic, as a once-in-a-century crisis, posed an extraordinary test to the law of contracts. In India, the twin doctrines under the Contract Act contingent contract (Section 32) and frustration (Section 56) were robustly examined in courts, and they largely withstood the challenge. The jurisprudence emerging from 2020 onwards reaffirms foundational principles: pacta sunt servanda remains the norm, and only truly compelling supervening events justify exoneration of contractual duties. Indian courts emphasized that mere economic difficulty or inconvenience even if severe does not suffice; there must be an event that strikes at the root of the contract or makes performance impossible in the real sense. This stance is consistent with the ethos of commercial law that upholds certainty and bargain allocation of risk.

At the same time, the courts demonstrated sensitivity to the equities of unprecedented situations. They utilized the flexibility inherent in doctrines to deliver nuanced outcomes: granting interim relief to prevent unfair forfeitures, allowing deferred performance, recognizing implied terms of time extension, and nudging parties towards reasonable adjustments. The use of Section 32 vs Section 56 was clarified: if the contract anticipated the event, follow the contract (Section 32); if not, Section 56 may intervene, but only in extreme cases. The line of Supreme Court authority from Satyabrata through Energy Watchdog to Alimenta was applied to modern facts, and it proved capable of resolving new disputes without any need for legislative overhaul of these provisions.

Comparatively, Indian law’s outcomes were in harmony with those in the UK and US showing the universal character of force majeure/frustration principles in the common law tradition. In all jurisdictions, courts were reluctant to let the pandemic become a blanket excuse for contract avoidance. Instead, they looked for tailored remedies and often left any large-scale loss distribution to be handled outside the courts (through policy measures or negotiated resolutions).

For legal practitioners, the pandemic has underscored the importance of diligence in contract drafting and counseling. Force majeure clauses can no longer be treated as boilerplate or afterthought; they must be crafted with foresight and precision. Lawyers must also prepare clients for the reality that invoking these clauses or doctrines is not straightforward it requires strategy, evidence, and often negotiation.

For businesses, a key takeaway is the value of risk management: diversifying supply chains, obtaining appropriate insurance, and having contingency plans can make the difference between survival and insolvency when disaster strikes. Those who had thought through force majeure scenarios beforehand were better placed in 2020 than those who had not. The post-pandemic litigation surge can thus be seen as a costly global classroom that taught the business community the hard way about legal preparedness.

From a policy perspective, while the law as is has managed, there is room for improving resilience. Governments and courts might consider institutionalizing some of the ad hoc solutions used for instance, setting up fast-track dispute resolution for force majeure claims in emergencies, or issuing guideline protocols (similar to how bankruptcy courts sometimes issue guidelines for certain waves of cases).

In conclusion, the doctrines of force majeure and frustration in Indian contract law have emerged from the pandemic not fundamentally changed but certainly illuminated. They have been re-validated in the face of a novel calamity. The courts have sent a clear message: contracts will be enforced to the extent possible, and parties cannot simply walk away citing “act of God” without meeting the stringent legal tests. However, where those tests are truly met, the courts will not hesitate to declare obligations discharged, for the law recognizes that lex non cogit ad impossibilia the law does not compel the impossible. The pandemic has also fostered a greater appreciation for the interplay of law and equity: the strict black-letter rules were, when needed, tempered by equitable considerations to achieve just results (such as relieving a party from a penalty during a forced lockdown).

For ‘LawCite Advocates’ and similar practitioner forums, the task ahead is to disseminate these lessons, advise clients on robust contract practices, and be ready to litigate or arbitrate the next unforeseen event with the knowledge gained. Whether the next challenge comes from a climate event, geopolitical turmoil, or another health crisis, the legal framework built on the foundation of Sections 32 and 56 enriched by comparative insights will continue to guide us in allocating risks and responsibilities in a fair and predictable manner.

Sources:

1. Fox Mandal & Associates, Force Majeure: Evolution of Jurisprudence in India Post COVID-19, Lexology (2021)

2. Standard Retail Pvt. Ltd. v. G.S. Global Corp, Bombay High Court (2020) as discussed in Jurist commentaryand Lexology summary.

3. Halliburton Offshore Services Inc. v. Vedanta Ltd., Delhi High Court (2020) quoted in Lexology.

4. Ramanand v. Girish Soni, Delhi High Court (2020) Delhi HC Order dated 21-5-2020.

5. Parvasi Legal Cell v. Union of India, Supreme Court of India (2020) observation on pandemic as ‘unusual’.

6. Transcon Iconica Pvt. Ltd. v. ICICI Bank, Bombay High Court (2020) quoted in Lexology.

7. R. Narayanan v. State of Tamil Nadu, Madras High Court (2020) as discussed in Lexology.

8. Energy Watchdog v. CERC, Supreme Court of India (2017) SC on Sec 32 vs Sec 56.

9. NAFED v. Alimenta S.A., Supreme Court of India (2020) SC on contingent contract (government permission).

10. NTPC v. Voith Hydro JV, Delhi High Court (2019) Delhi HC on FM clause prevails over Sec 56.

11. Herbert Smith Freehills, COVID-19: English Court of Appeal dismisses “Covid defences” in rent cases (2022).

12. W. Legal, Frustration of contract and Covid (2022) overview of English frustration and cases.

13. London Trocadero (2015) LLP v. Picturehouse Cinemas Ltd., [2021] EWHC 2591 (Ch) excerpt.

14. Commerz Real Investmentgesellschaft v. Cine-UK Ltd. & Ors, [2021] EWHC 1013 (QB) summary judgment for landlords.

15. Cadwalader, COVID-19 Update: Court Rejects All Legal Theories by Retail Tenant (2020) discussing The Gap case and frustration under NY law.

16. Holland & Knight, Frustration of Purpose and Impossibility in COVID-19 era (2020) survey of US cases (e.g., citing that courts have largely not excused rent).

17. New Indian Express, COVID Force Majeure in construction contracts: No need to adhere to strict timelines (June 22, 2020).

18. The Atlantic, India Under Coronavirus Lockdown (2020) photographic evidence of lockdown impact.

19. Dreamstime Stock Photo (accessed 2025) “Closed due to Covid-19” sign image.

20. S&A Law Offices, Interplay Between Section 32 and 56, Indian Contract Act (2023) Mondaq article

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