Government Leased Property in Afghanistan. The Taliban Took the Property. Does the Government Owe the Lessor?

The government leased property in Afghanistan but evacuated when the Taliban took over. The government terminated the leases. The lessor challenged the termination and implicitly argued the government should have protected the property from the Taliban. But the CBCA found the government had properly terminated the leases for convenience. 

Hamidullah, Son of Mohammad Rajab v. Department of State, CBCA 7502, 7503

• Claim – The government leased properties in Afghanistan from the claimant. In 2021, the Taliban took over Afghanistan. The government evacuated the properties. The Taliban took possession of the properties. The government notified the lessor that it was terminating the leases. The lessor filed a claim challenging the terminations. The government denied the claim. The lessor appealed. 
• Act of God – The government claimed it properly terminated the lease under a force majeure clause. But the board found that the clause only applied to physical damage that rendered the properties unfit for further tenancy. The Taliban may have created a security risk, but the government had not shown the properties suffered physical damage. The government could not terminate under the force majeure clause. 
• Termination for Convenience – But the leases also contained a termination for convenience clause. The board found the government could terminate the leases under this clause. The board directed the parties to calculate the amount of rent still owed. 
• Physical Control of the Property – The claimant asserted the government had not terminated the leases because it had not returned physical control of the property to the lessor. Indeed, the Taliban now controlled the property. But the board found the lease did not require a formal transfer. The government had left improvements to the property, but the contract did not obligate the government to remove improvements. To the extent the lessor was arguing that the government should have protected the property from the Taliban, the lease explicitly released the government for any damage caused by third parties. 

The claimant is represented by Enayat Qasimi and Shamsi Maqsoudi of Whiteford, Taylor & Preston LLP. The government is represented by Erin M. Kriynovich of the Department of State. 

--Case summary by Craig LaChance, Senior Editor