Adaptation of contract

A contract’s initial circumstances may have evolved over time

The initial circumstances in which a long term contract was drafted may change over time. If this is the case, it may become necessary to review and adapt the contract on the basis of the new situation.

The CEPANI Rules of Adaptation of Contracts offer a pragmatic solution to these problems. They set a rapid and clear proceeding for the appointment of the third-party decider while the CEPANI and its Secretariat offer assistance during the whole process. The independent third party will either make recommendations to the parties involved, or, if the parties agree, a decision that definitively binds the parties.

This ADR is expected to expand following the recent recognition in Belgian law of the theory of hardship.

Costs

The costs for the adaptation of contracts procedure include the fees and expenses of the  third-party as well as the administrative costs of CEPANI. They shall be set by the Secretariat in consultation with the appointed third person and  taking into account the nature and scope of the mission entrusted to the third party. Unless otherwise agreed, costs are shared on an equal basis between the parties.

Other costs and expenses relating to the adaptation of contracts proceedings, such as expenses incurred by one of the parties, are not included in the costs of the adaptation of contracts procedure and are to be borne by that party.

During the proceedings, the amount of the costs of the adaptation of contracts proceedings may be reviewed by the Secretariat if it appears from the circumstances of the case or from the submission of new claims that the importance of the dispute is greater than initially foreseen.

Standard Adaptation of Contracts clause

The Parties who wish to refer to the CEPANI Rules of Adaptation of Contracts are advised to insert the following clause in their contracts:

“The Parties hereby undertake to apply the CEPANI Rules of Adaptation of Contracts, should either one of them so Request.

The opinion of the Third Person appointed in accordance with these Rules shall have the authority of a [recommendation] or [decision]”1.

The following provisions may be added to this clause:

“The seat of the proceedings shall be [          ]”.

“The proceedings shall be conducted in the [            ] language”.

“The adaptation of contracts proceedings shall be followed by arbitration proceedings under the Rules of CEPANI, if so Requested by one of the Parties”.