- Arbitral Award
- SG 126/90
- Schiedsgericht Berlin
SALES CONTRACT - BETWEEN AN ECONOMIC UNIT OF THE GERMAN DEMOCRATIC REPUBLIC AND AN ECONOMIC UNIT OF AN ANOTHER EASTERN EUROPEAN COUNTRY - CONTRACT GOVERNED BY DOMESTIC LAW (LAW OF THE GERMAN DEMOCRATIC REPUBLIC)
HARDSHIP - RADICAL CHANGE IN THE ORIGINAL CONTRACTUAL EQUILIBRIUM - REFERENCE BY ARBITRAL TRIBUNAL TO THE UNIDROIT PRINCIPLES (ARTS. 6.2.1, 6.2.2, 6.2.3) TO DEMONSTRATE THAT SOLUTION REACHED UNDER APPLICABLE DOMESTIC LAW CORRESPONDED TO INTERNATIONALLY ACCEPTED PRINCIPLES
An economic unit of the German Democratic Republic and an economic unit of another Eastern European country concluded a contract for the delivery of machinery. The applicable law was that of the German Democratic Republic. When, following the reunification of Germany, Western markets were opened to the enterprises of the former G.D.R., the machinery in question lost all value for the German importer. Consequently the latter, invoking the radical change of circumstances existing at the time the contract was concluded, refused to take delivery of the goods and to pay the price.
The Arbitral Tribunal decided in favour of the German importer and, in order to prove that the principle according to which a substantial change in the original contractual equilibrium may justify the termination of the contract is increasingly accepted at international level, referred to the provisions on hardship contained in the UNIDROIT Principles.
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- D. Maskow, Hardship and Force Majeure, in 40 American Journal of Comparative Law, 1992, 657 et seq. (at 665)}}