Client Alert – Legal Consequences of COVID-19

The COVID-19 virus and the measures taken by different governments worldwide are having a huge impact on our society. This week, the measures in Belgium have been reinforced. Safeguarding everyone’s health takes first place. Eubelius itself has taken important measures to ensure the health and safety of its attorneys, staff, clients and business relations.

We would like to remind you that our 150 attorneys, staff members and administrative personnel will work from home as much as possible during the next period. We have extensive technological capabilities to continue, as before, to guarantee the handling of your case. You can find the full contact details of all our attorneys via this link. Do not hesitate to reach out to your Eubelius contact by phone or email. As physical meetings are replaced by virtual alternatives, we have limited our physical presence at the office. Our reception desk will continue to handle your calls between 9.00 a.m. and 5.00 p.m., but our specialists can be reached at all times by using their direct contact details. 

Besides everyone’s awareness of the importance of the safety measures, many companies and organisations are concerned about the impact on their business and activity. Eubelius has brought together its expertise in different fields to assess various unprecedented situations.

Here we list a few of the issues we are currently addressing:

Contracts – Force Majeure

Many contracts contain specific provisions addressing force majeure and/or hardship events/situations. If not, general principles of contracts apply. Pursuant to these principles, an event can only qualify as force majeure if it (1) is (reasonably) unforeseeable and irresistible, (2) has not been caused by a breach of obligations by the party affected by the event and (3) prevents one of the parties from complying with its obligations under the contract (even at a higher cost).

Each specific situation must be analysed in order to assess whether the government or other measures are to be considered as force majeure, from what moment on the force majeure starts and what the consequences are for the (non)-performance of your contract. The consequences of a force majeure event can be the suspension or termination of all or part of the contact, depending on the nature and the length of the event. In the coming days and weeks, it will be important to evaluate how long one can continue invoking certain measures as force majeure.

For several contracts (e.g. travel, rent, international sales, etc.), specific force majeure regimes apply.

Public procurement

Contractors in public contracts may invoke changes to the contract if this is required by “unexpected circumstances” which cause them a disadvantage. Examples of possible changes are (i) the extension of deadlines for the performance of the contract, and (ii) in severe cases, additional compensation for the contractor or termination of the contract. Some public contracts contain an express clause with respect to unexpected circumstances. For other public contracts, contractors can invoke the general conditions of public contracts, which contain a default rule on this subject. Eubelius is assessing whether “unexpected circumstances” can be invoked, and is helping contractors and contracting authorities define suitable changes for specific contracts.

In order to invoke any rights under the “unexpected circumstances” rule, the contractor must notify the contracting authority in writing of those circumstances and their impact on the contract, within thirty days after these circumstances arise or the moment the contractor should normally have been informed about them. Eubelius can assist in assessing this possibility in the coming days.

In some cases, contracting authorities may wish to suspend temporarily the performance of a public contract.

Human resources

The measures introduced by the Belgian Government as well as measures taken by individual employers to safeguard their employees’ and clients’ well-being have an immediate and important impact on the employer’s employees. Employers are confronted with atypical threats to the safety and well-being at work of their employees and need to seek and implement adjusted (preventive) measures to protect their employees. The prompt introduction of teleworking, homeworking, and social distancing measures is required. Depending on the employer’s business, if no suitable measures can be found, temporary unemployment may even be inevitable.

Furthermore, employers are faced with pressing questions relating to the absence of employees as well as travel restrictions, which can impinge on cross-border employment situations. Business continuity is thus a major challenge in this unprecedented situation, which makes it necessary for some businesses simply to close down. At the same time, due to their specific activities (e.g. supermarkets), certain employers are confronted with additional demands and thus require additional personnel and more flexibility in the employment relationship. However, adequate safety measures are also key for such employers.

In addition, we are looking ahead in order to be prepared for questions on the impact over time, such as the consequences of the postponing of the social elections, possible peaks in demand when the corona crisis has been averted, but also possible restructurings which may be required to deal with the aftermath of the corona crisis.

Data protection – Privacy

The measures companies are taking to prevent spreading of the virus and the associated collection and sharing of employees’ personal data raise new questions concerning GDPR compliance and the processing of sensitive data in particular.

Questions we have been facing relate inter alia to the legal basis for processing sensitive data (e.g. whether a company can rely on the necessity of processing personal data to protect vital interests of natural persons (Article 6(1)(d) GDPR)), the proportionality of processing activities (e.g. can we ask employees to fill out medical questionnaires?, can we ask about the whereabouts of our employees? etc.), the confidentiality of personal data (e.g. can I inform employees about the identity of an infected colleague?) and the security of processing activities (e.g. what security obligations do we have vis-à-vis teleworking?).

Corporate – General meetings of shareholders

COVID-19 forces companies – and listed companies in particular – to re-evaluate how they organise their upcoming general meeting of shareholders. One approach is to encourage shareholders to abstain from participating in person and instead to vote by proxy. If the articles of associations so provide, the board of directors may allow shareholders to cast their vote by correspondence prior to the meeting or to participate in the meeting electronically. A second approach is to postpone the meeting to a later date. Which approach is the most appropriate will depend largely on the specific circumstances and the government measures in force at that moment in time. In any case, companies should provide clear information about the reasons for changing the format of the meeting or postponing the meeting to a later date.

We have received confirmation that the government is currently working on solutions in the short term to allow for more flexibility in the organisation of general meetings of shareholders.

Mergers & Acquisitions

The impact of COVID-19 on global M&A activity will undoubtedly be significant. Here is a brief summary of some important legal questions we have been addressing so far in the context of the impact of the coronavirus on (Belgian) M&A transactions.

Due Diligence – Potential buyers are advised to pay specific attention to the impact of the coronavirus on the business of the target. This includes verifying the ability of the target, as well as its suppliers, customers and financers, to perform, suspend or terminate their contractual obligations as a result of the coronavirus (see above).

MAC clauses – As a (potential) buyer, it is recommended to include a “Material Adverse Change” (MAC) clause in offer letters and SPAs. Depending on the wording thereof, the impact of the coronavirus on the target and/or the (potential) buyer and the timing, such a clause may allow the (potential) buyer to withdraw from the transaction.

Financing – Even if a financing commitment has already been obtained from the lender(s), we advise verifying to what extent COVID-19 is a factor allowing financing parties to withdraw their committed funding. If a financing commitment has not yet been obtained, it can be expected that the coronavirus will have an impact on the willingness of financing parties to provide financing and the conditions on which such financing is offered. As a potential buyer, it is prudent to include a financing condition in both offer letters and share purchase agreements in situations where no financing commitment has been obtained.

Purchase price – COVID-19 will most likely have an impact on the valuation of targets and price mechanisms included in transaction documents. Buyers may want to include a closing accounts mechanism, in combination with earn-out clauses or other price adjustment mechanisms covering the impact of the coronavirus on the recent and future business of the target.

Transaction logistics – The quarantines and travel restrictions heavily affect the physical signing and closing of transactions. Delays may also be expected at notary’s offices needed to complete incorporations, capital increases or real estate transactions at or around closing. Transaction logistics should be carefully considered, and, where appropriate, alternatives to physical signing and closing sessions should be organised in order to respect social distancing rules.


The Belgian Government has introduced a number of support measures regarding VAT, wage withholding tax and income taxes in order to provide companies affected by the spreading of the coronavirus with some financial breathing space and to allow debtors to bridge their temporary financial difficulties. Moreover, the government is constantly monitoring the situation and adjusting the measures accordingly. Eubelius is assisting in determining the steps that should be taken to apply for these measures and the timeframe within which this has to be done.

Moreover, the present circumstances may also have an impact on whether or not deadlines can be met regarding both tax compliance and tax disputes (e.g. the deadlines for filing a tax return or a tax complaint, responding to a request for information (“vraag om inlichtingen”/”demande de renseignements”), responding to a notice of amendment (“bericht van wijziging”/”avis de rectification”), etc.). Eubelius is advising companies on how to deal with these issues.

Protection against creditors

Belgian law provides an enterprise in financial difficulties with the possibility of obtaining protection against its creditors by means of a court proceeding. In a nutshell, this procedure entails the rights of creditors being frozen during a suspension period determined by the court. During this suspension period, the enterprise can try to (i) agree on debt rescheduling with a number of creditors, (ii) convince a majority of its creditors to agree to a debt rescheduling that will apply to all creditors or (iii) organise a restart through a transfer of assets.

In addition, in the current difficult economic circumstances, it is of course very important for every enterprise to collect its claims as efficiently as possible and to take all measures to safeguard its rights as a creditor as much as possible.

Litigation and judicial procedures

In the past, Belgian case law has already dealt with force majeure issues in disputes that were affected or influenced by unforeseen events. We expect that the current events will lead to procedural incidents which a court could subsequently treat as force majeure. Due to the measures taken by the Belgian Government and by judicial authorities themselves, access to courts, tribunals and court registries is limited to the strict minimum. Most hearings have been suspended; only urgent cases or cases that do not require a hearing are being dealt with. Judicial auxiliaries are not always available, and teleworking is often not possible within the judiciary. These measures and circumstances could, in certain matters, prevent parties from accomplishing specific judicial acts (filing of an appeal, etc.) in due time. The negative effects of such non-compliance in time could subsequently be waived by a court due to force majeure. In order to avoid disputes as much as possible, courts and tribunals are trying to maintain a minimum service and facilitate an increasing number of acts that can now be performed online. In the comings days, the Belgian Government is likely to adopt more specific measures in order to clarify the situation and to avoid negative effects with regard to the rights of the parties.


The above-mentioned practice areas are only the tip of the iceberg. COVID-19 risks impacting many areas of law during the upcoming weeks. It is therefore our intention to keep you informed through our LinkedIn account about specific issues we encounter which could be of interest to you.

We have a dedicated team of experts who can streamline and dispatch your specific questions to the appropriate specialist. You can also address such questions to our general e-mail address or contact one of the experts directly.

The Experts of our Task Force, 
Barteld Schutyser, Ignace Claeys, Véronique Pertry and Pieter Callens