Businesses throughout the Kingdom will be assessing the short-term and long-term impacts of the Covid-19 pandemic, which has been recognised as a ja’iha (calamity) event. Effective steps will include identifying the core leadership team who will lead the risk assessment; mapping relevant stakeholders; and identifying risks in all aspects of operations, so that comprehensive mitigation plans can be prepared.
The impact of a ja’iha in law is primarily determined by courts applying fiqh principles relating to force majeure (AlQuwa AlQahira) or emergency circumstances (Dhuruf Tari’a) in the context of commercial disputes and administrative cases.
However, be wary of seeking to terminate or renegotiate your contractual obligations to customers due to the impact of the pandemic, as the likelihood of a contract being validly terminated or amended by reason of force majeure or emergency circumstances is relatively low.
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