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| The claim arose out of a contract between a German seller and a US buyer, where the former agreed to sell and deliver 15,000-18,000 metric tonnes of used Russian railroad rail to the latter. The buyer alleged breach of contract and fraud relating to the seller's failure to deliver the goods and applied for summary judgement.
The seller contended that its failure to perform should be excused on force majeure grounds as it was precluded from shipping the rail by the fact that St. Petersburg port unexpectedly froze over at the time of delivery, preventing vessels from entering and exiting the port. The parties agreed that their contract was governed by CISG. Since the contract did not contain any express force majeure provision, the Court examined Art. 79 CISG. This provides that 'a party is not liable for failure to perform any of his obligations if he proves that failure was due to an impedimant beyond his control and that he could reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome its consequences.' In applying Art. 79 CISG the Court used as a guide case-law interpreting analogous provisions of the domestic law on excuse, an approach used by other Federal Courts. The Court applied a three stage test: (1) whether an impediment occurred, (2) whether the impediment made performance impractical and (3) whether the impediment was foreseeable. The Court stated that summary judgement may only be granted where there is no genuine issue as to material fact. As questions of fact existed as to whether the early freezing of the port prevented the seller's performance and was foreseeable, the Court dismissed the buyer's application for summary judgement and stated that the seller's force majeure defence may be viable. |