- No. 55/16
- Economic Court of the Gomel Region
- Agropodderzhka Trade House LLC v. Sozh State Farm Complex
BREACH OF CONTRACT BY BUYER - SELLER'S RIGHT TO DEMAND PAYMENT OF PRICE (ARTS. 61 & 62 CISG)
[CLOUT case n. 496].
The case deals with the application of the CISG in case of failure of fulfilment of the obligation of payment by the buyer.
Agropodderzhka Trade House (the seller), a Russian company, concluded on 1 March 2002 in Gomel, Belarus, a contract for the sale of forage wheat with Sozh (the buyer), a Belarusian State farm complex. The goods were delivered and accepted by the buyer. However, the buyer paid only part of the total agreed price of $175,293. The seller sued the buyer to recover the outstanding sum of $117,293.
The court stated that, when settling the dispute arising from an international economic transaction in relation to which the parties have not determined the applicable law, the court shall determine the applicable law on the basis of the collision norms provided in an international treaty or national law. According to Belarusian legislation, the rights and duties of the parties to the transaction shall be determined in accordance with the legislation of the place when the contract is concluded, unless otherwise provided by the parties’ agreement.
In this case, the parties did not choose the law applicable to the contract, which was concluded in Gomel, Belarus. Therefore, the court, based on the relevant norms on conflict of laws, found that Belarusian legislation applies.
The court stated, by virtue of article 11(e) of the Agreement on the Procedure Settlement of Disputes relating to Carrying Out Economic Activity (Kiev, 20 March 1992), that the CISG should apply to the contract, and that the legislation of the Republic of Belarus should apply to the aspects of the contract not covered by the CISG.
In accordance with articles 61 and 62 CISG, in case the purchaser fails to fulfil any of its obligation under a contract, the seller shall be entitled to demand the payment of the price from the purchaser. Since the buyer had failed to make the payment within the specified term, the court entered a judgement against the buyer for the full amount of $117,293 requested by the seller.
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