Early Closure on a Banking Day – What to do if you are the beneficiary of a standby and the bank is closed at a time when it should be open? This situation occurred on a regular banking and business day in Hong Kong in July 2015 when the Hong Kong Observatory issued a Typhoon 8 Signal. On this day, some banks in Hong Kong closed their doors at 14:30 after receiving a pre-alert of the Typhoon 8 Signal. Other banks did not close until the Typhoon 8 Signal was actually hoisted two hours later at 16:30. The forecasted typhoon never materialized. Does it qualify as a force majeure event? A trickier question: What liability (if any) does a bank assume if it elects to release its staff and close its doors hours in advance of a government department’s action permitting it to do so?
At the Americas Forum, delegates were informed that the US Comptroller of the Currency has the authority to declare a legal holiday for banks in the event of a natural disaster or other emergency conditions. Could a bank request the Comptroller (or appropriate regulator in its jurisdiction) that a declaration be issued? If so, how long would it take to get such a declaration and could it be issued retroactively?
Other scenarios were discussed. What if the designated place for presentation is Tampa and presentation is attempted on the last business day for presentation while Tampa is experiencing a hurricane? How does the presenter prove that it attempted presentation? One delegate said that it depends on the type of force majeure. Maybe the presenter could send a fax or e-mail that you tried (to make presentation)? Jim Barnes said: “You have to appreciate that force majeure is a narrow concept. It does not handle all the situations that can occur.” Rather than attempt to define or list what qualifies as a force majeure event, drafters of ISP98 chose not to use the concept. Instead, the question under ISP98 is whether the place for presentation is closed on a day that it is regularly scheduled to be open for business (see ISP98 Rule 3.14).
For more on this subject, see the October 2015 issue of DCW.
Tomorrow’s blog post: Opening Hours Listed in LC