High Court finds Covid-19 pandemic amounted to force majeure event enabling party to terminate contract

In a recent decision, the High Court has held that a broadcaster was entitled to terminate a media rights agreement relating to premier club rugby union competitions in Europe as a result of the postponement of the final stages of the 2019-20 season due to the Covid-19 pandemic: European Professional Club Rugby v RDA Television LLP [2022] EWHC 50 (Comm).

Although set in a non-financial context, this decision will be of interest to financial institutions considering the ongoing impact of the pandemic as it illustrates how similar factual circumstances can give rise to very different results depending on the contractual protections parties have been able to negotiate. In this case, it was clear that the pandemic qualified as a force majeure event, as the relevant definition referred expressly to “epidemic”, and in any event was drafted non-exhaustively to cover circumstances beyond a party’s reasonable control including the circumstances listed. In contrast, in a recent case relating to a contract for football broadcasting rights (considered here), the clause was drafted more restrictively and neither party sought to rely on force majeure – the broadcaster seeking instead to rely (though unsuccessfully) on a material adverse change clause.

In the present case the relevant clause provided that, if a force majeure event prevented, hindered or delayed performance for a continuous period of more than 60 days, “the party not affected by” the event could terminate on 14 days’ written notice. The court found that the clause was triggered, rejecting an argument that it could not be relied on where (as here) both parties had been affected by the pandemic. It was also irrelevant that the party in breach had not served a notice expressly notifying force majeure. The right to terminate depended on the force majeure event having had the relevant effect for more than 60 days; it was not dependent on the party in breach having served notice of force majeure.

For a more detailed discussion of the decision, please see our litigation blog post.

Note: In February 2022, the claimant applied to the Court of Appeal for permission to appeal.

In March 2022, the Court of Appeal allowed the claimant's application for permission to appeal. The Court of Appeal hearing is currently floated for 30 November or 1 December 2022.