This alert is the first in a series addressing the issues affecting trade finance documentation and transactions in the current climate.
Greater clarity for policyholders suffering business interruption losses due to Covid-19 — the FCA test case
Most commercial insurance policies are taken out in the expectation that a claim will never be necessary. For the most part, this expectation is borne out by experience, with the result that when the loss or damage occurs, policyholders are often unprepared for the claims process and are unsure about the obligations they will be expected to perform.
This article provides some practical tips for commercial policyholders to consider when a claim arises, along with recommendations to help smooth the claims process.
Written by: Geoffrey Wynne and Ryan Johnson (trainee solicitor)
The emergence of COVID-19 (the Coronavirus) at the end of 2019 has had an unprecedented impact on the global economic system. This alert focuses on the effect the Coronavirus pandemic is likely to have on small and medium sized businesses (SMEs), their lenders in the UK and the options available to continue trading and avoid insolvency. It will also consider recent measures that have been proposed by the UK Government to enable businesses to avoid insolvency during this pandemic, specifically the temporary changes to the insolvency rules and the financial support being offered by the UK Government.
London, UK – International law firm Sullivan is delighted to announce that it has again been named "Best Trade Finance Law Firm" by leading trade finance publication Global Trade Review (GTR) at its 2020 Leaders in Trade awards, announced today.
By Geoff Wynne and trainee Szonja Kolbenheyer at Sullivan in London
On 6 April 2020, the International Chamber of Commerce (ICC) published an urgent memorandum addressed to governments and Central Banks, urging them to take the necessary steps towards the immediate transition from mandating the use of paper-based trade documentation to recognising digital authentication and delivery of documents as a legally binding and enforceable alternative.
By Geoffrey Wynne and trainee Szonja Kolbenheyer at Sullivan in London
On 7 April 2020, the International Chamber of Commerce ("ICC") published a paper titled "Guidance paper on the impact of COVID-19 on trade finance transactions issued subject to ICC rules."
This paper addressed the question as to whether banks and guarantors could seek to apply force majeure as a result of Covid-19, as a defence to non-performance. The key consideration is whether Covid-19 amounts to an interruption of their respective businesses or to an event beyond their control. This paper also considered the issues currently faced around the delivery of documents in trade finance transactions. The ICC looked at various scenarios relating to the delivery of documents under rules including UCP 600 and ISP 98 for letters of credit (‘LCs’) and URDG 758 for guarantees.
By Fiona Luong and Rajan Dhami
In these uncertain times, trade finance and other transaction parties may face particular logistical challenges when signing documents in person. One option available to the transaction parties is to sign documents "virtually" (in other words, signing a hard copy of a document and sending a scan of the signature page to the other side). This method of signing will be familiar to most people who have entered into transactional documents with an international counterparty. Certain formalities must be observed for virtual signings in light of the Mercury case (discussed further below).
Parties are also increasingly turning to the possibility of utilising electronic platforms for signing documents, called "e-signing" or "electronic signing".
But can electronic signing be a valid form of signing an agreement? We look in detail at the options available to those signing agreements under English law.
By Katharine Wheatcroft and Duncan Burrell
As the so-called COVID-19 virus continues to spread in China and this week also in Italy, Iran and Korea, with almost 80,000 confirmed cases and over 2,000 dead as of late February, the world’s second largest economy is struggling to get back to work, and other economies are feeling the effects.
Within the trade sphere, worker shortages, transport disruption and heavy government restrictions have meant that many of the corporations that drive China’s economy, the world’s largest importer of raw materials, are starting to review their international supply and demand contracts.
Sullivan Monthly Breakfast Seminar, 23 January 2020
At Sullivan's January 2020 London Breakfast Briefing, Sam Fowler-Holmes provided an overview of key challenges facing the trade finance sector in 2020. From sanctions to LIBOR, with a hint of Brexit, Sam covered a broad range of topical issues.