Force Majeure in Ethiopian Contract Law: Judicial Interpretations by the Cassation Bench

1. Introduction: The Concept of Force Majeure in Contract Law

The principle of pacta sunt servanda – agreements must be kept – forms the bedrock of contract law. However, legal systems worldwide recognize that circumstances can arise that render the performance of a contractual obligation impossible or excessively burdensome, despite the best efforts of the parties. It is in such exceptional situations that the doctrine of force majeure comes into play.

In civil law jurisdictions like Ethiopia, force majeure operates as an excuse for non-performance of a contract. It aims to strike a balance between holding parties accountable for their promises and acknowledging external, uncontrollable events that genuinely impede performance. The Ethiopian Civil Code, particularly Articles 1792 and 1793, provides the foundational legal framework for force majeure. However, the abstract nature of these provisions necessitates judicial interpretation to apply them to concrete cases. The Cassation Bench of the Federal Supreme Court plays a pivotal role in this regard, offering authoritative interpretations that shape the understanding and application of force majeure in Ethiopia.

This article delves into the intricacies of force majeure under Ethiopian law, primarily through the lens of key Cassation Bench decisions. It will explore the definition and requirements of force majeure, the stringent burden of proof imposed on the party invoking it, and how various unforeseen events – from natural disasters and wars to economic fluctuations and human actions – have been judicially assessed. By analyzing these landmark cases, we aim to provide a comprehensive understanding of the Cassation Bench’s approach to force majeure, highlighting its emphasis on foreseeability, irresistibility, and the duty to mitigate.

2. Legal Framework: Articles 1792 and 1793 of the Ethiopian Civil Code

The core provisions governing force majeure in Ethiopia are enshrined in the Civil Code:

• Article 1792 – Definition of Force Majeure:
  • Sub-Article (1) states: “An irresistible force or an unforeseen, sudden event which creates an absolute impediment to the fulfillment of the obligation shall be deemed to be force majeure.”
  • Sub-Article (2) clarifies: “Events which are normally foreseeable or which merely make the fulfillment of the obligation more onerous shall not be deemed to be force majeure.”
• Article 1793 – Examples of Force Majeure: This article provides a non-exhaustive list of events that may constitute force majeure:
  • (a) Natural catastrophes such as earthquakes, floods, epidemics, or widespread diseases.
  • (b) War, civil strife, revolution, or insurrection.
  • (c) An act of a public authority, such as expropriation or requisition.
  • (d) Total or partial destruction of the object of the contract.
  • (e) The death or serious illness of the debtor, where the obligation is personal.

These articles establish a high threshold for invoking force majeure. The event must be:

1. Unforeseen: It could not have been reasonably anticipated by the parties at the time of contract formation.
2. Irresistible: It could not have been prevented or overcome by reasonable means.
3. Absolute Impediment: It must render performance impossible, not merely difficult or more expensive. Crucially, the burden of proving that these conditions are met lies squarely on the party claiming force majeure.

3. The Cassation Bench’s Interpretation: Key Principles and Burden of Proof

The Cassation Bench consistently emphasizes a stringent interpretation of force majeure, reflecting the principle that contractual obligations are sacred. Several recurring themes emerge from its decisions:

3.1. High Burden of Proof (Cassation Case No. 38844)

One of the most foundational principles articulated by the Cassation Bench is the high burden of proof required to successfully claim force majeure.

Cassation Case No. 38844: Addis Ababa Roads Authority vs. Gad Business Private Limited Company (June 25, 2009 / Sene 25, 2001 E.C.)

• Facts: Gad Business was contracted to supply asphalt. They failed to deliver on time, citing the Iraq War (blocking the Suez Canal) and port congestion in Djibouti due to food aid ships as force majeure events. They provided a newspaper article and a letter from a freight forwarding company as evidence.
• Lower Courts: The Federal First Instance Court rejected the force majeure claim, finding the evidence insufficient. The Federal High Court and Federal Supreme Court Civil Appellate Division reversed this, accepting the force majeure defense.
• Cassation Bench’s Decision: The Cassation Bench reversed the appellate courts, reinstating the First Instance Court’s ruling.
• Legal Interpretation:
  • The Court firmly established that the party claiming force majeure must provide concrete and specific evidence demonstrating:
    1. The occurrence of an unforeseen and irresistible event beyond their control.
    2. A direct causal link between the event and their inability to perform within the agreed timeframe.
    3. That they took reasonable steps to mitigate the impact of the event.
  • General news reports or letters from non-authoritative entities are insufficient. Specific evidence related to the contracted goods, the specific hindrance, and its direct impact is required. In this case, Gad Business failed to prove the specific ship carrying their asphalt was blocked due to the war or provide authoritative evidence of port congestion.

This case underscores that mere assertions or general evidence of disruptive events are inadequate. The causal link must be precise, and the evidence must be robust.

3.2. Foreseeability and Due Diligence

The concept of “unforeseen” is critically examined by the Cassation Bench. Events that an experienced party should have reasonably anticipated, or risks inherent to a particular business, generally do not qualify as force majeure. Furthermore, parties are expected to exercise due diligence to prevent or mitigate the effects of potential disruptions.

3.2.1. Foreseeability of Business Risks (Cassation Case No. 196905)

Cassation Case No. 196905: Mardak Trading Plc. vs. Bahir Dar University (Ginbot 2013 E.C.)

• Facts: Mardak Trading PLC contracted to import an “Anatomage Table” but faced significant delays due to a shortage of foreign currency (forex). They claimed forex shortage as force majeure.
• Lower Courts: The Amhara Regional Supreme Court accepted the force majeure defense, but the Federal Supreme Court Appellate Chamber reversed this, holding that forex shortage was a foreseeable business risk.
• Cassation Bench’s Decision: The Cassation Bench upheld the Appellate Chamber’s decision.
• Legal Interpretation:
  • The court reasoned that a business engaged in import/export activities should reasonably anticipate potential foreign currency fluctuations and shortages. Therefore, such a shortage, while challenging, did not reach the threshold of force majeure as it was a foreseeable business risk.
  • The fact that the Respondent (Bahir Dar University) wrote a letter of cooperation for forex did not imply acceptance of the currency shortage as force majeure.
  • This case highlights that economic hardship or regulatory changes, even if disruptive, generally do not constitute force majeure if they are within the realm of foreseeable business risks for a party operating in that sector.

3.2.2. Foreseeability of Social Unrest and Duty to Mitigate (Cassation Case No. 187834)

Cassation Case No. 187834: Ato Mikael Asresakegn vs. Arab Contractors PLC (September 28, 2020 / Meskerem 28, 2013 E.C.)

• Facts: Arab Contractors PLC rented machinery from Ato Mikael. The machinery was idle for an extended period due to protests by local farmers demanding compensation from the Ethiopian Roads Authority. Arab Contractors claimed force majeure.
• Lower Courts: The trial court and subsequent appellate courts (by majority) accepted the force majeure defense.
• Cassation Bench’s Decision: The Cassation Bench, by majority vote, upheld the lower courts’ decision, accepting the farmers’ protest as force majeure.
• Legal Interpretation (Majority): The majority emphasized the factual finding that the idle time was caused by a third party’s (local farmers) actions due to unpaid compensation by the Ethiopian Roads Authority, and that even the Applicant (machinery owner) was prevented from moving the machinery. This human-made event was deemed to constitute force majeure under Article 1793/1/a of the Civil Code.
• Dissenting Opinion (Key Legal Rule): The dissenting judges offered a crucial alternative interpretation, arguing for a narrower construction of force majeure, especially concerning foreseeability and mitigation in long-term contracts. They contended that:
  • Foreseeability: An experienced contractor like Arab Contractors should have foreseen potential land disputes and investigated compensation status. Therefore, the farmers’ protest, while disruptive, was not an unforeseeable event.
  • Duration and Mitigation: Even if initially considered force majeure, its prolonged nature (over three months) imposed a duty on the respondent to mitigate (e.g., seeking assistance from authorities, compensating farmers). Prolonged idleness beyond reasonable mitigation efforts should not be attributed to force majeure.

While the majority view prevailed in this specific case, the dissenting opinion provides valuable insight into a stricter application of foreseeability and the duty to mitigate within the context of force majeure.

3.3. Absolute Impossibility vs. Difficulty or Increased Cost

Article 1792(1) explicitly requires an “absolute impediment.” The Cassation Bench consistently rejects force majeure claims where performance is merely difficult, costly, or less profitable.

3.3.1. Economic Hardship vs. Impossibility (Cassation Case No. 219513 & 217966)

Cassation Case No. 219513 (October 10, 2022 / Tikimt 02, 2015 E.C.)

• Facts: An applicant failed to deliver vehicles, citing the COVID-19 pandemic, foreign currency shortages, and border closures as force majeure.
• Cassation Bench’s Decision: The Court upheld the lower courts’ rejection of the force majeure defense.
• Legal Interpretation: While the pandemic caused disruptions, it did not create a complete impossibility of performance. The Applicant failed to prove they had taken all reasonable steps to secure foreign currency or explore alternative means. Economic hardship or regulatory changes do not automatically qualify as force majeure; a higher threshold of impossibility is required.

Cassation Case No. 217966 (June 8, 2022 / Sene 01, 2014 E.C.)

• Facts: Loan defaulters cited the COVID-19 pandemic and Tigray conflict as force majeure to avoid penalty interest.
• Cassation Bench’s Decision: The Court reversed the lower court’s decision that had excused them.
• Legal Interpretation: The default occurred before the alleged force majeure events began. Force majeure cannot be claimed for events that occur after a breach has already taken place. Economic hardship or difficulty in performance, even due to widespread events like a pandemic or regional conflict, does not automatically constitute force majeure.

These cases collectively affirm that while global events can be disruptive, they do not automatically excuse contractual obligations unless they render performance absolutely impossible. The timing of the force majeure event relative to the breach is also critical.

3.4. Theft and Carrier Liability: Duty of Care (Cassation Case No. 230127 & 151040 & 42253)

The Cassation Bench adopts a strict stance on claims of force majeure arising from theft, particularly in contractual contexts involving a duty of care, such as transportation or custody of goods.

Cassation Case No. 230127 (March 9, 2023 / Yekatit 30, 2015 E.C.)

• Facts: A carrier transporting sugar claimed force majeure after the sugar was stolen during transit.
• Cassation Bench’s Decision: The Court reversed the lower courts, holding the carrier liable.
• Legal Interpretation: Theft, while a criminal act, does not automatically qualify as force majeure. The carrier failed to demonstrate that the theft was truly unavoidable or that they had taken reasonable precautions to prevent it. A party claiming force majeure must prove a direct causal link and the exercise of due diligence.

Cassation Case No. 151040 (April 23, 2018 / Miyazya 15, 2010 E.C.)

• Facts: A driver transporting goods claimed force majeure after some barrels went missing, citing a dust-obscured vision and a blocking minibus on a detour.
• Cassation Bench’s Decision: The court implicitly rejected the force majeure defense, holding the driver and his guarantor liable.
• Legal Interpretation: The court found that the driver’s explanation, while possibly true, did not meet the standard for force majeure. It likely considered whether the driver took reasonable precautions, secured the load properly, and whether the incident was truly unforeseeable and unavoidable, indicating that the loss was not completely beyond his control.

Cassation Case No. 42253: Teacher Mulu Haileselassie vs. Zemnawi Printing Press (July 8, 2009 / July 15, 2001 E.C.)

• Facts: Books entrusted to a printing press were stolen by an employee and sold. The printing press claimed force majeure.
• Cassation Bench’s Decision: The Court reversed the lower court’s decision, finding the printing press liable for breach of contract and moral damages.
• Legal Interpretation: Theft by an employee is not considered an “insurmountable force” under Article 1792(1) of the Civil Code. The printing house should have reasonably anticipated the possibility of theft and taken precautions (Article 1792(2)). The theft constituted a breach of their contractual obligation, not a force majeure event.

These cases collectively illustrate that simply being the victim of theft does not automatically excuse contractual liability. The courts scrutinize whether the party claiming force majeure exercised adequate care, whether the event was truly beyond their control, and if reasonable precautions could have prevented it. The inherent risks of a business, such as security for goods in transit or custody, fall within the realm of foreseeable challenges, not force majeure.

3.5. Health Issues and Personal Obligations (Cassation Case No. 193701)

While Article 1793(e) mentions “serious illness of the debtor” as a potential force majeure event where the obligation is personal, the Cassation Bench applies a strict interpretation.

Cassation Case No. 193701: W/rit Lidya Alemayehu & Ato Abiy Alemu vs. Ethiopian Agricultural Research Institute (EARI) (May 27, 2013 E.C. / June 4, 2021 G.C.)

• Facts: A PhD student (Applicant) under a training agreement with EARI discontinued her studies, citing a severe health condition as force majeure.
• Cassation Bench’s Decision: The Court upheld the lower courts’ decisions, finding her liable for repayment.
• Legal Interpretation:
  • The medical evidence presented did not demonstrate that the health issues absolutely prevented her from continuing her studies. The medical report indicated the condition did not preclude normal academic activities.
  • The Court emphasized that health issues, while challenging, do not automatically constitute force majeure. The party claiming it must provide clear and convincing evidence demonstrating that the obstacle is insurmountable. Simply informing the employer about health issues is insufficient to establish an insurmountable obstacle or EARI’s written consent to discontinue.

This case reinforces that even in personal obligations, a high bar exists. The illness must render performance absolutely impossible, not merely difficult or uncomfortable.

3.6. “Act of God” in Maritime Law (Cassation Case No. 166675)

While the Civil Code broadly covers force majeure, specialized laws like the Maritime Code contain specific provisions. The Cassation Bench differentiates between general force majeure and “Act of God” in this context.

Cassation Case No. 166675 (December 31, 2019 / Tahsas 23, 2012 E.C.)

• Facts: Rail wagons transported by sea were damaged by a severe storm. The carrier claimed “Act of God” as an exemption from liability.
• Cassation Bench’s Decision: The Court upheld the lower courts’ decision, finding the storm constituted an “Act of God.”
• Legal Interpretation:
  • The Maritime Code Article 197(1)(c) exempts carriers from liability for damage caused by an “Act of God,” interpreted as an event resulting directly and exclusively from natural causes that could not have been prevented by foresight or caution. This aligns with Civil Code force majeure but specifically addresses natural events.
  • The court relied on expert reports to establish the cause of damage. While awareness of monsoon season is relevant to general due diligence, an exceptionally severe storm can still qualify as an “Act of God.”
  • The burden of proving “Act of God” lies with the carrier.

This case illustrates the application of force majeure principles within a specialized legal framework, emphasizing the natural and unforeseeable nature of an “Act of God” for carrier liability exemptions.

3.7. Force Majeure and Prescription Periods (Cassation Case No. 21359)

The concept of “insurmountable obstacle” which can extend prescription periods, is interpreted by the Cassation Bench through the lens of force majeure principles.

Cassation Case No. 21359 (Tikmit, 2001 E.C.)

• Facts: Employees filed a claim for salary adjustment more than two years after the change, arguing the delay was due to ongoing discussions with the employer and waiting for a response from the head office, constituting an “insurmountable obstacle.”
• Cassation Bench’s Decision: The Court rejected the argument, finding the claim time-barred.
• Legal Interpretation:
  • The Court referenced force majeure principles (Articles 1792 and 1793) to interpret “insurmountable obstacle” under labor law.
  • Waiting for a response from the head office or internal discussions does not constitute an “insurmountable obstacle.” The employees had ample opportunity to file their claim. Their situation did not represent an absolute impossibility preventing them from exercising their rights.
  • This demonstrates the rigorous application of force majeure principles even in procedural matters like prescription.

3.8. Interplay with Contractual Penalties and Restitution (Cassation Case No. 228657)

Force majeure directly impacts the enforceability of penalty clauses and the right to restitution.

Cassation Case No. 228657 (Yekatit 29, 2015 E.C.)

• Facts: A buyer failed to make full payment for a house, citing temporary suspension of housing loans by the National Bank of Ethiopia as force majeure.
• Cassation Bench’s Decision: The Court overturned the lower court’s rescission, finding the loan suspension did not constitute force majeure and the breach was not fundamental enough for rescission. It also ordered the lower court to address the restitution of partial payment.
• Legal Interpretation:
  • The bank’s temporary suspension of loans, while causing delay, did not constitute an insurmountable obstacle. The parties were aware of this potential issue when they extended the payment deadline, suggesting it was a foreseeable risk.
  • The failure to pay, while a breach, was not a fundamental breach justifying rescission, especially given the circumstances and principles of good faith and fairness.
  • The case also highlights that if a force majeure claim is rejected, the breaching party may still be liable for penalties or damages, and issues of restitution for partial payments must be addressed by courts if raised.

3.9. Insurance and Liability for Delays (Cassation Case No. 110824)

Force majeure can also arise in the context of insurance contracts, particularly when assessing liability for delays in repairs.

Cassation Case No. 110824: W/ro Etala Beyene vs. National Insurance Company of Ethiopia (NICE) et al. (February 24, 2009 E.C. / March 3, 2017 G.C.)

• Facts: An insurance company (NICE) delayed repairing a damaged truck, leading to lost income for the truck owners. NICE claimed the delay was due to the owners’ lack of cooperation, implying a justification akin to force majeure.
• Cassation Bench’s Decision: The Court modified the lower court’s decision, holding NICE solely liable for the lost income due to its delay. It reversed the part holding the truck owner jointly liable.
• Legal Interpretation:
  • The primary responsibility for promptly repairing and returning the vehicle rested with NICE. NICE failed to provide any evidence of force majeure to justify the delay in repair.
  • Once the damaged vehicle was handed over to the insurer for repair, and the insurer undertook that obligation, any subsequent delay and resulting lost income primarily became the insurer’s responsibility, absent a proven force majeure. The insurer could not pass on liability to the insured unless they could prove the delay was due to an unforeseeable and irresistible event beyond their control.

This case reinforces that even an insurer, once they undertake a contractual obligation, must meet it unless a genuine force majeure event prevents them from doing so.

4. Conclusion: The Evolving Landscape of Force Majeure in Ethiopia

The judicial interpretations by the Federal Supreme Court’s Cassation Bench provide invaluable clarity on the application of force majeure under Ethiopian contract law. The consistent theme across these diverse cases is a strict and high threshold for excusing contractual non-performance.

Key takeaways from the Cassation Bench’s jurisprudence include:

• Rigorous Burden of Proof: The party invoking force majeure bears a heavy evidentiary burden, requiring specific, concrete proof of an unforeseen, irresistible, and absolutely impeding event, coupled with evidence of mitigation efforts. General claims or unauthoritative sources are insufficient.
• Emphasis on Foreseeability: Events that are inherent business risks (e.g., foreign currency fluctuations for importers) or situations that could have been reasonably anticipated and prepared for (e.g., land disputes in construction projects, security against theft) generally do not qualify.
• Absolute Impossibility, Not Mere Difficulty: Force majeure requires performance to be genuinely impossible, not just more burdensome, expensive, or less profitable. Economic hardship, while challenging, rarely meets this standard.
• Timing is Crucial: An event cannot be invoked as force majeure if it occurs after a breach of contract has already taken place.
• Duty to Mitigate: Even when an event initially appears to be force majeure, parties are expected to take reasonable steps to mitigate its effects and resume performance.
• Contextual Application: While core principles remain consistent, the application of force majeure can vary slightly depending on the specific contractual context (e.g., general contracts, administrative contracts, maritime transport, labor relations) and the nature of the obligation.

In essence, the Ethiopian Cassation Bench strives to uphold the sanctity of contracts. While acknowledging that extraordinary circumstances can arise, it ensures that force majeure remains an exceptional defense, preventing its misuse as a convenient excuse for non-performance or poor planning. This judicial posture fosters contractual certainty and encourages parties to engage in thorough risk assessment and robust contract drafting.