Claused or confused: how force majeure complicates contractual clarity in pandemic-era projects?

Learning outcomes Case overview/synopsis M/s Silver Ventures Incorporated (SVI), the Indian subsidiary of the American company headquartered in Simi Valley, California, faced significant challenges owing to the COVID-19 pandemic, which has led to the disruption of their project. This case aims to capture the unforeseen impact of the pandemic on ongoing infrastructure projects and contracts. Mr. Vinod Basu, the Project Manager at SVI, is at the epicentre of this scenario. He is tasked with navigating the contractual and legal complexities arising from the COVID-19 pandemic and the resultant delays. In this case, both SVI as a client and its contractor invoked the Force Majeure clause, each seeking to avoid penalties for delays and claim compensation for their incurred costs. This dispute creates a dilemma for Mr. Vinod, who is now compelled to make a pivotal decision on whether to pursue renegotiation, arbitration or legal action, as there are significant implications for each option and a direct impact on project timelines (leading to a delayed schedule), financial stability issues (increased costs, cash flow issues, etc.) and deteriorating stakeholder relationships. This case highlights the intricacies of managing force majeure claims due to this unprecedented crisis, with some contractors attempting to use this reason to obfuscate their poor performance, leading to far-reaching consequences in managing contracts in the infrastructure and construction sectors. Complexity academic level Graduate/Post-graduate, MDP/EDP. Supplementary material Teaching notes are available for educators only. Subject code CSS 2: Built Environment.