Posted on: 20 March 2020
International law firm Penningtons Manches Cooper (PMC) has issued a communique with regards to COVID-19 and its effects on business.
PMC says that “although we all have health concerns arising from the Covid-19 virus, we must also gauge how to react in a business setting and be prepared to deal with the crisis now and going forward.”
At PMC, we think that past financial crises offer warnings and some guidance to the shipping sector. A severe economic slow-down will engender payment issues for many businesses, and as in the financial crises of 2008-9, even sound businesses can run into trouble if others default. Where payment issues arise, quick action will need to be taken to ensure that security is in place and experience tells us that, despite the massive international government interventions, insolvency events will follow.
In the next few weeks international shipping by sea will be increasingly crucial to the economy as goods, particularly foodstuffs, need to continue to move notwithstanding quarantines and disruption to transport. For our economic well-being as a whole, trade must continue, or at least must restart as quickly as possible when disrupted. Just as the virus has moved very quickly due to modern transport methods, we all remain dependent on maintaining international transport links for goods notwithstanding the disruption.
To read the full text please follow this link.