News
News
3/16/20

Information to project coordinators for projects financed by Diku

Diku understands that the corona situation will have a significant impact on the implementation of many of the projects we finance.

For many of you, the implementation of certain activities will now presumably have to be postponed or cancelled. Many have perhaps also paid for e.g. travels which now may not be carried out –and perhaps with meager means of recourse against travel agents or other third-party service suppliers. Other projects may also have encountered entirely different hindrances as a consequence of the corona situation.

Some of you have already notified Diku that the corona situation has given rise to delays, loss and other problems for your projects. Many therefore harbour questions regarding possibilities for extensions and additional funding, how to navigate difficult situations, and the possibility for making changes to ongoing projects.

We will endeavour to provide clear answers to these and other questions which may arise as quickly as possible. Diku is however also affected by the measures imposed by the Norwegian government, and we must therefore prioritize our resources so as to provide as much guidance as possible to as many as possible. For this reason, we now seek to initially address such issues in this general information letter.

 

Information about contractual consequences of the corona situation

  • The contracts governing the project implementation still apply

    The general point of departure, also in extraordinary circumstances, is that contracts continue to apply in full, and that the parties thus shall continue to make their utmost efforts to carry out their individual obligations. Amongst other thing, this means that the contracts’ provisions regarding change to projects continue to apply. More information regarding applications for effecting changes to your project is set out in a separate section below.

    Diku’s contracts also cater for situations where extraordinary circumstances, in whole or in part, prevent the parties from fulfilling their obligations. Such situations are regulated through the provisions on force majeure.

    In brief terms, the effect of these provisions is that a failure to fulfil an obligation may not be sanctioned insofar the fulfilment is prevented by extraordinary force majeure events, and reasonable attempts have been made to overcome or mitigate the hindrance and its effects. In this situation, this means that delays caused by the corona situation and the obstacles it gives rise to, as a general rule will be accepted by Diku. The same will apply for grant funds that must be deemed lost due to similar hindrances outside one’s control. Taken together, this means that the hindrances arising out of the corona situation primarily constitute a practical problem for your projects and the institutions you represent, and not an economical one.

    Diku underscores that it will regard many of the hindrances that projects now face as grounds for invoking the contracts’ force majeure clauses. At present, we confirm that this apply to all hindrances arising out of restrictions imposed by local and national governmental bodies, in Norway and abroad. Diku further confirms that all hindrances caused through compliance with advice and recommendations regarding disease prevention from Norwegian and foreign health authorities, will be treated as grounds for invoking force majeure.

    If the implementation of activities in your project has been prevented by force majeure related hindrances, you will need to notify Diku in writing. Please see more information on this below.

  • Applications concerning changes to projects

    We assume that many projects are experiencing severe practical problems due to the corona situation, and that many of you therefore may consider whether changes may mitigate such problems. If there is a need for changes to your project, you will need to send an application to Diku. However, in a time more than anything characterized by change and uncertainty, such revision of initial plans may prove difficult. We therefore encourage all project coordinators to consider postponing such applications until the situation is clearer and more stable.

    We also underscore that it will generally not be possible to increase the budget of projects. This will apply regardless of whether the need for such additional funds results from a force majeure related hindrance.

    We further underscore that even though Diku will exercise as much flexibility as possible with regard to extensions that may alleviate problems that projects now experience, there nevertheless will apply certain absolute limits for such extensions. For Erasmus+ projects, an absolute limit for project duration of 36 months apply, except for KA 107 (2018 projects) where the limit is 38 months. For Diku’s other programmes, projects may as a general rule only be awarded up to 12 months extension beyond the initially agreed project period. Each application will be individually assessed based on its merits.

    For some projects, we assume that the problems either already are or will become so severe that the projects have been rendered unfit for continuation. If it already now seems clear that your project will be too difficult to continue, we kindly ask that you notify relevant persons at Diku in writing as soon as possible. In such instances, we will enter into a dialogue with you with an aim to cancel the project in a manner suitable for all involved interests.

    When we receive such applications/notifications, we will prioritize those perceived most urgent. In light of the circumstances, we kindly inform you that the time for processing individual cases may be longer than normal.

  • Projects that are hindered by force majeure must send a notification to Diku

    Under Norwegian law, there exists a general duty to inform the other party when one is significantly prevented or barred from fulfilling one’s own obligations under a contract due to force majeure events. Those of you who have experienced that the implementation of your projects have become more or less thwarted due to such hindrances must thus notify Diku.

    Such notifications may be sent by e-mail to the contact person listed for the programme funding the project. The e-mail ought to address the following items in brief terms:

    • Which project the notification is regarding (project number or ID, and title);
    • What hindrance(s) is/are perceived to have, in whole or in part, made implementation of the project impossible (e.g. travel restrictions, quarantine, restrictions of the right to assembly);
    • What consequences the hindrance(s) have had on the implementation of the project; and
    • How you assess the further implementation of the project is affected by the hindrance(s).

     

    It is not required that particular delays, losses or the like is documented in the notification. Relevant receipts and other documentation must however be kept as usual. Decisions regarding approval of funds lost due to force majeure will be rendered in connection with our approval of the next reports from the projects, whether such reports are interim or final. If you also wish to submit an application concerning changes to your project, we kindly ask that this is separated from notifications regarding force majeure, cf. above.

    If such hindrances have not yet affected your project, then there is no need to send such notification to Diku until your project has been adversely affected. And those of you who already have notified Diku of such problems due to the corona situation, will not need to send a new notification if your initial message generally covered the above bullet points.

    We kindly also remind all project coordinators that there applies a general duty to avoid and mitigate unnecessary loss of grant funds. This general duty may for instance be actualized if hindrances prove it impossible to make use of hotel reservations, flight tickets or similar. In such cases, one must as soon as possible take steps to effect cancellations, and insofar necessary seek recourse from insurance providers.

    This duty also requires that projects carry out risk assessments when planning and effecting new activities, so that additional delays and losses insofar possible may be avoided. We underscore that failure to adhere to this duty may result in expenses deemed avoidable will not be approved by Diku. Upon considering such cases, Diku will however bear in mind that projects may have been forced to make difficult decisions under uncertain conditions.

 

Summary and key points

We hope this information letter has provided you with guidance on how the corona situation affects contractual matters of relevance to your project, and what you need to do in order to secure your project. In summary, we regard the following as key points to keep in mind in dealing with your projects, contracts and Diku in this situation:

  • Assess whether it is possible to implement activities in spite of the corona situation.
  • Notify Diku if your project has been affected by a force majeure related hindrance.
  • If losses are incurred, take steps to mitigate them as much as possible through cancellations etc.
  • Keep relevant receipts and documentation concerning loss and mitigation of losses.
  • Contact us if your project has incurred such problems that it ought to be discontinued.
  • Delay applications concerning change to projects until the situation is stable enough that you may be confident that the proposed changes will be effective.

We will continue to assess the need for further information, and how we may best reach you with such information.

Diku above all wishes to assist you in securing the best possible results from your projects. This will, as always, be our primary concern when assessing notifications of force majeure, progress reports and applications concerning changes to projects

Do you have any questions?

Please contact your contact person in Diku directly and we will answer you as best we can.