Contractually, loan documents usually stipulate the non-existence of a termination event (EoD) as a requirement for utilizations. Thus, utilizations may be refused based on the occurrence of a MAC (see details above).
Moreover, Macedonian law provides changed circumstances (променети околности) and impossible fulfillment (невoзможност за исполнување) as two extraordinary termination rights in respect to agreements in general – not exclusive to finance agreements.
Changed circumstances – If upon conclusion of the financing contract, due to crisis the ability of the lender to make available funds under a committed facility is hindered, the lender may request termination of the contract from the competent court. However, in case the borrower offers or accepts lender’s offer to fair contract amendments, the contract would not be terminated.
Careful legal assessment is recommended as to whether crisis alone would qualify as changed circumstance ie whether due to a crisis (i) it would be obvious that the contract does not correspond to the intention of the contracting parties, (ii) objectively (looking) it would be unjust to maintain the contract in force (iii) the lender could have taken into account (at the time of conclusion of the contract) or could have avoided or overcome the changed circumstances (ie a crisis).
Impossible fulfilment – if upon conclusion of the financing contract it became impossible for the lender make available funds under a committed facility due to force majeure (ie an event which cannot be foreseen, avoided or prevented and for which neither party is responsible), obligations of both parties under a finance contract would be terminated.
In such case the lender would have to prove that it is not responsible for the impossibility of fulfilment of its obligation (ie making available funds under a committed facility).
Finally, the Obligation Act provides that in case financial condition of the borrower is such that it is uncertain whether the borrower will be able to repay the loan, the lender may refuse to make available funds under a committed facility, provided that the lender did not know about the repayment uncertainty at the time of contract conclusion and that financial standing of the borrower deteriorated after contract conclusion. However, the lender is obliged to make available funds under a committed facility if the borrower (or third party) grants adequate security.