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September 11, 2020
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September 14, 2020
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12th September Current Affairs

What counts as ‘Act of God’?

In News:

This week, attributing the shortfall in GST collections to disruptions due to Covid-19, Finance Minister Nirmala Sitharaman said the economy is facing an Act-of-God-like situation.

Details:

In February this year too, the Finance Ministry had said that this pandemic “should be considered a case of natural calamity and Force majeure clause (FMC) may be invoked, wherever considered appropriate”.

What is a force majeure clause?

The force majeure or “Act of God” clause has its origins in the Napoleonic Code.

FMC is a clause that is present in most commercial contracts and is a carefully drafted legal arrangement in the event of a crisis.

When the clause is triggered, parties can decide to break from their obligations temporarily or permanently without necessarily breaching the contract.

Force majeure clause (FMC) is mentioned in the 2017 Manual for Procurement of Goods issued by the Department of Expenditure.

Besides, some reference can also be found in Section 32 of the Indian Contract Act, 1872 (the “Contract Act”).

Difference between an “Act of God” and “force majeure”:

Generally, an “Act of God” is understood to include only natural unforeseen circumstances, whereas force majeure is wider in its ambit and includes both naturally occurring events and events that occur due to human intervention.

What situations legally qualify for use of force majeure?

War, riots, natural disasters or acts of God, strikes, introduction of new government policy imposing an embargo, boycotts, outbreak of epidemics and such situations are generally listed.

How do courts view this clause?

Court rulings have established that force majeure cannot be invoked when performance of the contract has become difficult, but only when it has become impossible.

In April this year, the Bombay High Court did not accept the force majeure argument in a case where the petitioner argued that Covid-19-related lockdowns had frustrated a contract for supply of steel.

Global examples:

China’s Supreme People’s Court had recognised the 2002 SARS outbreak as a force majeure event.

Singapore enacted the Covid-19 (Temporary Measures) Act in April to provide relief to businesses that could not perform their contractual obligations due to the pandemic.

The Paris Commercial Court in July ruled that the pandemic could be equated to a force majeure event.

Model Code on the force majeure clause:

The International Chamber of Commerce has developed a Model Code on the force majeure clause reflecting current international practice.

The Code states that the impediment triggering the operation of the force majeure clause must be beyond the party’s reasonable control; and that it could not reasonably have been foreseen at the time of the conclusion of the contract; and that the effects of the impediment could not reasonably have been avoided or overcome by the affected party.

Indo-Pacific Business Forum to be held in Hanoi

In News:

The third annual Indo-Pacific Business Forum is to be held in Hanoi, Vietnam capital between October 28, 2020 and October 29, 2020. The forum is to be sponsored by US-ASEAN Business Council, Vietnam Chamber of Commerce and Industry, US Chamber of Commerce and Government of Vietnam.

Details:

The forum aims to provide a free and open Indo-Pacific region with countries that are independent, prosperous and strong. During the forum, the business leaders will discuss infrastructure, energy, market connectivity, digital economy, health.

Background:

The economic growth of the world has shifted towards Asia-Pacific, now called the Indo-Pacific that includes South Asia. The idea of Indo-Pacific Economic Corridor was conceptualised during US-India Strategic Dialogue, 2013.

Geography of Indo-Pacific:

The World-wide Fund (WWF) has divided the Indo-Pacific into three regions, The Central Indo-Pacific includes seas in Indonesian archipelago, Philippines sea, South China sea. The Eastern Indo-Pacific region includes islands in central pacific ocean. The western Indo-Pacific includes red sea, Arabian sea, Persian Gulf, Bay of Bengal.

Indo-Pacific Maritime Exercises:

The Malabar Exercise has now become a major Indo-Pacific Exercise. It was started as Indo-US maritime exercise in 1992. However, today Japan has also joined. Australia has agreed to join this year.

Triumph is army, air force and naval exercise that involves India, USA and Japan.

Indo Pacific Ocean Initiative:

The Indo Pacific Ocean Initiative was launched for a safe and secure maritime domain in the Indo-Pacific region. It was launched at the 14th East Asia Summit. The initiative focuses on enhancing maritime security, disaster prevention, sustainable use of marine resources, cooperation in trade and maritime transport.

India in the Indo-Pacific:

For India, the Indo-Pacific has strategic and geographic importance for the trade in the region and for maritime security. Also, the region is important for fisheries, mineral resources and offshore oil. 40% of world offshore oil production takes place in Indian Ocean.

Cannbis Medicine Project: First Foreign Investment in Jammu and Kashmir

The first ever Cannabis Medicine project that is to be set up in Jammu and Kashmir in collaboration with Canada is to be the first foreign investment in the union territory.

Details:

The project is to be set up at the Indian Institute of Integrative Medicine in Jammu and Kashmir. The project was recently reviewed by the Union Minister Jitendra Singh. Along with this, the minister also reviewed progress of the construction of new biotech iindustrial park in KAthua, Jammu and Kashmir.

Background:

Jammu and Kashmir is to be the first in the country to develop medicines from the cannabis plant.

Cannabis in India:

The United Nations Office on Drugs and Crime report, World Drug Report says that around 2.83% of Indians of age 10-75 years use Cannabis products. Also, the retail price of Cannabis in India is 0.10 USD per gram. This is the lowest of any country in the world.

In 2019, AIIMS submitted its report on “Magnitude of Substance Use in India” to the Ministry of Social Justice and Empowerment. The fey findings of the report are as follows

Legal status:

The 1961 Single Convention on Narcotic Drugs, an international treaty classed cannabis as a hard drug. Drugs that are more harmful are hard drugs and those that are less harmful are soft drugs.

Narcotic Drugs and Psychotropic Substances Act:

India is a signatory of United Nations Single Convention on Narcotic Drugs, 1961. Abiding to the convention, the Narcotic Drug and Psychotropic Substances Act was framed.

International Solar Alliance: Eight Initiatives to be launched at the first World Solar Technology Summit

In News:

The International Solar Alliance released the agenda of the first World Solar Technology Summit. The summit is to be held on September 8, 2020. Around 8 initiatives are to be launched at the summit.

Highlights:

The World Solar Technology Summit is to be held between 4 PM and 9:30 PM. The summit will have five sessions focusing on the following

The Summit is to be addressed by PM Modi.

About the summit:

The summit is to be conducted to achieve the following

Initiatives to be launched at the summit:

The International Solar Alliance is to launch the following eight initiatives

International Solar Alliance:

The ISA has 121 countries that work to tap benefits of solar power and promote clean energy applications. The alliance was initiated by India. It was proposed at the Paris Climate change Conference that was held in 2015.

The GoI allocated 5 acres of land to construct headquarters of ISA in Gurugram. Also, Rs 160 crores was released for the infrastructure facilities. The first ISA assembly was held in 2018.

Solar Power in India:

According to Central Electricity Authority, India produced 35 GW of solar power in July 2020.