Brazilian ports and navigation remain in operation, reports ANTAQ

In view of the worsening of the coronavirus epidemic in Brazil, the country’s port terminals have reinforced the security measures and containment of the spread of Covid-19, according to guidelines from health authorities and the federal government. However, there is already a concern about possible logistical bottleneck due to the crisis.

The first fear is the very need to dismiss employees. Industry officials and executives have reiterated that there is no forecast for any port terminal shutdown, as occurred in China. The standard measure has been to implement remote work for administrative areas, release employees from risk groups and expand precautionary measures for those who work directly in the port operation.

Agribusiness & Port Logistics

A letter signed by almost 50 entities representing agribusiness segment was addressed on Wednesday, 18, to the President of the Republic, Jair Bolsonaro, and to the Minister of Infrastructure, Tarcísio Gomes de Freitas, requesting support from the federal government to guarantee the functioning of the national port logistics amid the coronavirus crisis.

Public & Private Ports In Operation

The National Waterway Transportation Agency (ANTAQ) announced today, 20, that public (including delegates), private and other port facilities remain in operation, as well as coastal and long-haul transportation activities.

In a note, ANTAQ clarified that only the Union will be able to determine the closure of port facilities in all Brazilian states or the suspension of service provision on interstate and international waterway transportation lines. The legal basis is Article 22, item X, of the Federal Constitution, and Ordinance 125, of March 19th, 2020, of the Presidency of the Republic.

“At the moment, the unrestricted suspension of passenger transport is not a measure indicated by the National Health Surveillance Agency (Anvisa). The complete suspension of this service could harm access to medical care, the displacement of health professionals, the supply of vaccines , supplies and medicines for the Brazilian states,” added ANTAQ in its statement.

Cabotage

The Brazilian Association of Cabotage Shipowners (Abac) reported that the modal remains active. The companies associated with Abac have taken actions to protect their employees and contribute to the prevention of the contagion of Covid-19, following the guidelines of the country’s health authorities. The measures safely guarantee the continuity of cabotage services, always within the principles of preventing and maintaining the supply of products to society.

Santos Port

On Wednesday, operation in Santos Port was threatened due to a possible halt of the stevedores work, who even sent a letter to the authorities announcing their decision to stop working. The situation was, in principle, contained in a meeting between port authority, representatives of companies and unions.

The Santos Port Authority (SPA) published a note stating that maritime and road access are “open without any restrictions” and that it “acts to guarantee the full functioning” of the port. The agency has taken security measures since the beginning of the crisis.

Container terminals DP World, Santos Brasil and Brasil Terminal Portuário (BTP) have reinforced their security measures and dismissed employees, but said there is no impact on activities.

The port operation could also be impacted in other ways, in addition to an employee stoppage itself. One of the concerns, for example, is in relation to the release of the cargo by inspection agencies, such as the Federal Revenue Service, the Ministry of Agriculture or the National Health Surveillance Agency (Anvisa), which need to verify imports.

The fear is that, with the delay, a huge queue will be generated. For now, the operations proceeds normally.

According to the president of Portos do Paraná, Luiz Fernando Garcia da Silva (who manages Paranaguá and Antonina), there is no forecast of an impact on the operation in the State, “unless there are mobility problems, as there was in China”. At the height of the crisis in the Asian country, one of the bottlenecks for cargo transport was the restriction of truck drivers, who interrupted activities.

According to the National Association of Cargo Transport and Logistics, it is too early to say whether there will be an impact on cargo transport, which will depend on the worsening of the epidemic. In March, the assessment is that the movement has been positive, driven by the soybean harvest.

In general, the assessment of executives and analysts about the current scenario is highly uncertain, and the forecasts seem to change every day. The fear – and the main scenario to be avoided panic, that could lead to a complete halt in activities and logistical chaos in the country.

Stevedores Union threatening to stop working in Santos Port

At a meeting held at the headquarters of the Union of Stevadores of Santos, São Vicente, Guarujá and Cubatão (SOPESP), which was attended by all the presidents of the professional unions, a series of measures was decided on the operational continuity of the Port of Santos, last Tuesday (17th).

The Union sent a letter to the National Secretariat of Ports and Waterway Transport expressing the need for a complete halt of operations in the Port of Santos, starting this Wednesday, 18th, due to the worsening of the pandemic generated by the Coronavirus in Brazil.

In the letter, the union president stressed that stevedores are exposed to high risk, since they work on the front lines and are subject to high contamination, because the vessels come from countries facing the pandemic. The Stevedore Union added that most federal, executive, legislative and judicial bodies have stopped their physical operations.

According to the chairman of the management board of the São Paulo State Secretariat for Logistics and Transport, Roberto Giannetti, “stopping the port of Santos would be putting millions of Brazilians at risk, since supply could stop between 60 and 90 days if the strike was declared “.

This means that many industrial inputs and imported basic consumer products could go into shortages, especially of hospital medical supplies essential for the crisis period. It is worth mentioning that the Government has determined that a series of medical products import tax will be lowered to zero and they will have priority treatment in customs clearance procedures.

Santos Port Authority (SPA) highlighted, in a note, that, together with the port community, it acting to guarantee the full functioning of the Port of Santos, respecting the determinations of the Health authorities.

There will be even more negotiations between the stevedores in order to reach a final understanding. Meanwhile, all port activities continue to be carried out normally.

Coronavirus (Covid-19), French continuing plans and economy

On 13 March 2020, French Ministry of Justice issued a press release just after the announcements of the President of the French Republic. The aim, due to the emergency, is to protect citizens who are the most vulnerable and to curb the epidemic. Chancery has now prepared continuing plans to allow Justice to face core obligations of the Nation.

According to a CNB (Conseil National des Barreaux) release dated 15 March 2020, the continuing plans will be triggered as from 16 March 2020 by the Ministry of Justice to avoid propagation of Covid-19. Tribunal and courts will be closed, except for cases relating to core litigations.

Core litigations are limited to (i) criminal tribunals and courts including (a) pre-trial custody (détention provisoire) and probation (contrôle judiciaire), (b) immediate criminal summary trials (comparution immédiate), (c) appearance before the liberty and custody judge (juge des libertés et de la détention), (d) appearance before the enforcement judge (juge de l’application des peines) including appeals, these latest in the events of emergency only, (e) permanence of public prosecutor’s office (permanence du parquet), (f) hearings relating to investigation chamber for custody (audience de la chambre d’instruction pour la détention) and (ii) civil tribunals and courts including (a) children’s courts and permanence in the events of emergency only (audiences du tribunal pour enfants et du juge pour enfants et permanence du tribunal pour enfants) – including educational assistance (assistance educative), (b) summary judgments (including relating to family matters), but based on emergency only, (c) civil liberties and custody judge hearings (juge des libertés et de la détention civil).

Due to the risks of contamination, instructions are, to the extent possible, to cancel criminal court sessions related to crimes (cour d’assises). It is also allowed to postpone hearings (taking into account reasonable time extension and pre-trial custody time-frame).

Legal public facilities (services d’accueil du public) will be closed as well as justice centers and legal access points. Even if justice civil servants will not be allowed to receive public, they will be reachable by phone to address emergency situations.

As far as Paris is concerned, the first President of the court of appeal of Paris issued an ordinance dated 16 March 2020 (N°105/2020) named ordonnance de roulement modificative (amending rotation ordinance), on the basis of, inter alia, the decision of the Ministry of justice dated 15 March 2020 triggering continuing plans, article L1142-7 of the French Code de la Défense and emergency. Such article not only states that (i) the Ministry of Justice ensures in all circumstances the continuity of the legal criminal services as well as enforcement of criminal sanctions, but also (ii) he participates in fighting against elements adversely affecting fundamental interests of the Nation (this including preservation of the population in and outside France, according to article 410-1 of the French Code pénal).

Aside to the public authorities, the legal profession, as a whole, may support the economy : it can be suggested that business lawyers may wish to consider advising their clients to enter into settlement agreements (within the meaning of article 2044 of the French Civil Code) to solve pending litigations and to unlock commercial situations created by the current sanitary crisis.

This would give the economy a possibility to maintain a flow of activity.

Up to date 16 March 2020

Herbert Smith Freehills advises on sale of Earnd to Greensill Capital

Herbert Smith Freehills’ private equity and venture capital team has advised on the sale of 100% of Earnd to Greensill Capital. Founded by Josh Vernon and Serge Kotlyarov, Earnd’s platform enables employees to access their pay packet on-demand as they earn it, facilitated through their employer payroll systems.

The Herbert Smith Freehills team was led by partner and Australian Head of Venture Capital Peter Dunne, consultant Elizabeth Henderson, and solicitor Lisa Alderson.

Elizabeth Henderson said, “Earnd is an incredible example of Australian fintech innovation and business talent. In less than two years, Earnd has grown from a small start-up into a serious challenger in the financial services space. We have enjoyed working with Earnd’s founders and investors who believed in the company and have enabled it to reach this great milestone.”

Earnd’s co-founder and CEO, Josh Vernon, said, “Peter, Elizabeth, Lisa and the team at Herbert Smith Freehills were incredible partners throughout the acquisition process. We felt as if we had a friendly yet deeply professional and competent team on our side and, for a first-time founder, they made the journey a breeze. It was nothing short of a pleasure working with them and we look forward to working together in the future.”

This deal is another example of Herbert Smith Freehills’ market-leading work in Australian venture capital. Other recent examples include:

  • Adairs Limited in its NZ$80 million acquisition of Mocka Group from its founders;
  • Deputy Group on its A$111 million Series B capital raise;
  • Culture Amp on its A$120 million Series E capital raise;
  • Nura on its A$21 million Series A capital raise;
  • Expert360 on its A$12 million Series C capital raise;
  • Roborigger on its Series A capital raise; and
  • Reejig on its Series Seed capital raise.

Advisory firm Avonhurst boosts practice with associate hires

Avonhurst today announced four new associate hires, cementing the rapid growth that has characterised its first year. Senior associate Joshua Swerner joins the firm from Linklaters, where he spent time in the London and Moscow offices; Tanya Macrae joins from Allen & Overy (Brussels and London) and has worked at both Latham & Watkins and Herbert Smith Freehills; Oliver Elsaesser joins as an associate from Paul Hastings and Katja Loncaric joins from the London office of Norton Rose Fulbright, having previously worked in Clifford Chance’s Frankfurt office.

Avonhurst is a political risk and legal advisory firm dedicated to representing sophisticated capital. Since its launch in July 2019 by founding partner Jonathan Bloom, the firm has attracted a raft of established talent, including seven partner hires – mostly from magic circle firms – as well as hiring four leading figures from the political, financial and legal sectors as senior advisers, including Lord (Gavin) Barwell, tech entrepreneur Sean West, General, the Lord (Nick) Houghton, Blackstone’s Andrew Dowler and Tina Fordham (Partner and Head of Global Political Strategy), formerly of Citigroup.

These have been complemented by the additions of high yield specialist Albert Aharonian (previously at Milbank, Paul Hastings and Sidley Austin), and political expert Jessica Turner who is a US lawyer having joined out of law school and has extensive experience including working on Capitol Hill, Washington DC and at the House of Commons in London.

Jonathan Bloom, Chief Executive of Avonhurst, comments: “We are delighted to welcome Joshua, Tanya, Oliver and Katja to the firm. While we are justifiably proud of our ability to attract established partner talent, we recognise that our long-term sustainability as a leading adviser to sophisticated capital clients requires excellence at every level. We are committed to attracting, nurturing and growing the very best associates.

“Our new hires bring valuable UK and international experience in corporate, antitrust, leveraged, export credit, trade and asset-backed finance, financial services and capital markets, honed at some of the biggest and best law firms in the world. They will work alongside our market-leading partners and advisers to ensure our clients get top-level service across legal, legislative and political advisory, and capital services.”

Continued

Launched in 2019, Avonhurst is dedicated to meeting the changing needs of sophisticated capital by providing a bespoke offering comprising legal advisory, political strategy and capital services. A group of market-leading founders and influencers from the legal world have created a revolutionary advisory business dedicated to helping funds, capital providers, corporate borrowers and issuers, and secured lenders, navigate the complexities of ever-changing markets.

Are you covered for Coronavirus-related business interruptions?

The recent emergence and rapid spread of the COVID-19 novel coronavirus has resulted in unprecedented disruptions to virtually all aspects of global and locally based commerce, as well as almost everyone’s normal routines. While we collectively and individually should now focus on protecting our personal, family, and greater community health and safety in this emergent situation, it is also important for businesses to be aware that the extreme stresses that the inevitable economic disruption will, and in many cases has already caused, may be mitigated somewhat by reliance on contractual force majeure clauses set forth in contractual agreements, as well as the availability of business interruption provisions contained in certain commercial insurance policies.

A contractual force majeure clause generally permits a party to a contract to avoid its obligations to perform, where certain external events prevent the party from being able to deliver the product or service as agreed. These are usually unforeseen events, such as strikes, natural disasters, and other large-scale societal disruptions, which by their overwhelming and unusual nature, disrupt a party from performing due to the circumstances imposed upon them by the uncontrollable force majeure event. Many contracts set forth with specificity what events may be deemed to trigger force majeure relief. Some may even include epidemics as a force majeure event. Any contract which does not state the same with such particularity will need to be reviewed to determine whether the COVID-19 virus may be deemed to provide the parties with a contractual right to declare force majeure and thus be relieved of their duty of compliance.

Additionally, UAE Civil Code Article 273 provides a separate basis under which force majeure may apply, in circumstances where performance is impossible, and may lead to rescission of some or all of the contract.

As such, all commercial entities should review their contracts to determine if they may obtain relief accordingly where they are unable to meet their obligations. Conversely, entities must be aware that their contractual counterparties may seek to invoke force majeure protections to avoid their duties, and should be prepared to resist the same should the circumstances and/or contractual provision not support invocation of the same. It is also important to evaluate whether the force majeure event has truly prevented a party from performing, and is not being used as an excuse to avoid complying with duties that are merely commercially not to that parties’ benefit.

An insurance policy that provides “business interruption” coverage may also provide relief from economic distress by offering indemnification for business losses arising from the peril insured against. The business interruption provisions must be carefully reviewed to determine if the event, in this case the COVID-19 disruption, is covered. There are many different forms of business interruption coverage, some being much more restrictive than others. For example, a typical commercial property insurance policy may provide business interruption cover, but requires that physical damage or loss first be sustained to the relevant business property, before the business interruption coverage will be triggered. Whether the circumstances of COVID-19 will be judicially construed as creating such physical loss will be hotly litigated over the coming years, although have been previously determined in limited cases in some jurisdictions, depending on specific fact patterns.

Some commercial policies contain more specified forms of business interruption coverage; however these may be subject to exclusions and other limitations as to scope and applicability. As with any insurance matter, the specific circumstances and policy language will control, and a careful review of both must be undertaken to see if these losses may be mitigated through the coverage.