• <i>Force Majeure</i>

'5.2.1.1. The Law

According to the English translation of Article 388 of the Greek Civil Code given by Claimant's expert witnesses, "if the circumstances on which the parties, having regard to good faith and business usage, mainly based a synallagmatic contract, subsequently changed for extraordinary and unforeseeable reasons, and if, as a result of this change, performance of the obligation, taking into account the counter-obligation, became inordinately onerous for the obligor, the latter may request the court to adjust his obligation at its discretion to a suitable extent, or to rescind the whole of the contract or the part not carried out. If the rescission of the contract is decided upon, the obligations of both parties are extinguished and the parties have a mutual obligation to return whatever they have received, pursuant to the provisions relating to the unjust enrichment" (joint opinion on Greek law by . . . and . . .).

The English translation of Article 388 invoked by Defendant . . . essentially conforms to the above.

Defendant argues that, Article 388 being applicable, the Arbitral Tribunal may either rescind the Contract and release the Parties from the non-performed part thereof, or adjust the performance to an appropriate level by reducing the price by an amount which reflects the value of the performance of the opposing Party.

Claimant answers that Article 388 is not applicable to the present dispute.

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5.2.3. Application of Article 388 to the facts

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5.2.3.2. Unforeseeable and extraordinary

a) The war.

Nobody at the outset of the . . . war could know how long it would last. As usual in case of war, there was a difference of opinion as to its probable duration. A war may end at any time and no one can unilaterally base a contract on the assumption that it will last for a certain period ; by doing so, a party simply miscalculates its risks and cannot ask for application of a rule which requires the unforeseeability of an event.

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5.2.3.4. Decision

A war necessarily ends but it is very seldom that the date of such end can be safely predicted. The fact, however, that a war can end at any time is not unpredictable.

Nothing, however, prevents the parties from agreeing that, should the war end before or after a given date, contractual provisions are to be amended.

If [Defendant] based its purchasing policy on the assumption that the war was to last long, [Defendant] was simply wrong and the purpose of Article 388 is certainly not to correct a commercial miscalculation.

Therefore, the conditions for applicability of Article 388 of the Greek Civil Code are not met.'