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Legal Implications of the Corona (COVID-19) Crisis

Our previous newsletter addressed various legal implications of the corona crisis. The corona crisis, and the various directives issued by different authorities in countries grappling with the pandemic, such as lock-down measures, have raised many legal questions. Some of the key issues are now being addressed in legal proceedings, including in the Dutch Caribbean jurisdiction. For instance, several court decisions have been rendered, albeit in interlocutory proceedings, concerning the extent to which there is an obligation to pay rent in the hotel and catering industry at the time of the corona crisis.

In two recent Curaçao cases it was ruled that a reduction of the rent is not unreasonable, because of the forced closure. The court ruled that the government measures as a result of the corona crisis constituted an unforeseen circumstance within the meaning of Section 6:258 of the Civil Code. The court considered it unreasonable that the financial consequences of the government measures (including forced shut downs of hotels and restaurants) should be passed on in full to the tenant, and ruled that the rent during the period of closure should be divided between both parties.

It is important to keep in mind that these are preliminary judgments, in which the specific circumstances play a major role. Such as: what is rented, an office space or a shop; is it a catering establishment that has been forcibly closed, or an establishment that was in principle allowed to remain open; what is the financial position of the landlord, and that of the tenant; have the parties consulted each other and acted reasonably et cetera.