The crisis in Ukraine will increase the pressure on global supply chains, which are already under significant strain as a result of the ongoing impact of COVID.
We anticipate that businesses will need to review their supply contracts urgently to assess the possible impact and whether specific actions are required in order to comply with their contractual obligations and/or protect their position.
We see the following areas as being central to that review for English law governed contracts:
There are various actions that businesses can take (and should be taking) now to ensure that they do not become legally and/or commercially exposed, as a result of the present crisis in Ukraine. These include:
Although the present circumstances and their impact on supply chains are likely to heap further pressure on already strained supply chain conditions, the risk of a dispute arising can be mitigated through clear and regular communication between parties up and down the supply chain – all of whom are likely to be facing common challenges.
Therefore, whilst it is important for businesses to ensure that all their legal positions are adequately protected, it is equally important to keep commercial channels of communication open to avoid supply issues escalating into full-blown commercial disputes.