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ITALY - THE IMPACT OF COVID CONTAINMENT MEASURES AND THE CONFLICT IN UKRAINE ON PUBLIC CONTRACT OBLIGATIONS




The National Anti-Corruption Authority (“ANAC”) with resolution No. 227 adopted on 11.05.2022 stated that the adoption of the lock-down measures in China and the ongoing conflict in Ukraine are events that, in the abstract, can be ascribed to the category of force majeure, as they may take the form of unforeseeable circumstances beyond the control of the suppliers.


According to ANAC, therefore, in the event that it is objectively impossible or difficult to proceed with the necessary regularity and timeliness in the supply of goods for reasons strictly related to such events, the contracting stations will be required to assess, on a case-by-case basis, the possibility of deeming force majeure to be configurable and to apply the applicable regulatory provisions.


The assessment to be conducted by the contracting authorities will have to take due account of all the circumstances of the concrete case, including the time of signing the contract, the subject matter of the obligations, the contractual time limits envisaged for performance, as well as the possibility of the supplier applying appropriate measures to overcome the situation of impossibility.


Administrations may therefore consider the possibility of ordering: (i) the suspension of the contract for the time strictly necessary and in accordance with the Public Procurement Code; (ii) the renegotiation of the agreed terms for performance; or (iii) the existence in the concrete case of the prerequisites for the exclusion of the application of penalties for delay or termination of the contract.


However, the onus will be on the supplier that intends to avail itself of the force majeure to fulfil any information obligations that may be provided in the contract or that are in any case applicable in the light of the principle of good faith, providing the necessary evidence, with particular reference to the measures put in place to avoid or overcome the impediment, as well as to mitigate the negative effects of the impossibility or its duration.


Finally, ANAC recommends that contracting stations consider amending contracts already in execution, as well as inserting ad hoc elaborated clauses in future contracts, identifying in detail:


– the events that are considered to be force majeure;

– the reporting obligations of the supplier; and

– the contractual obligations to which this clause will apply.


These contractual provisions have the declared objective of reducing the risk that any disputes with suppliers may result in litigation.


ANAC’s resolution represents a notable opening, albeit only in the context of public procurement on national territory, towards the recognition of the destructive effects of the current international situation on the supply chain.

However, it will be necessary to wait and monitor the first concrete applications of

ANAC’s recommendations in order to assess their impact on the activities of companies, which are currently experiencing particular difficulties in fulfilling their obligations.

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