- Arbitral Award
- International Arbitration Court of the Chamber of Commerce and Industry of the Russian Federation
SALES CONTRACT - BETWEEN A GERMAN COMPANY AND A RUSSIAN COMPANY - CONTRACT GOVERNED BY RUSSIAN LAW
MODIFICATION OF WRITTEN CONTRACT BY AGREEMENT OF THE PARTIES - MUST BE MADE IN WRITING
AGREEMENT THROUGH EXCHANGE OF DOCUMENTS AND ELECTRONIC MESSAGES -REQUIREMENT OF WRITING MET - REFERENCE TO RELEVANT PROVISIONS OF RUSSIAN CIVIL CODE AS WELL AS TO ARTICLE 2.1.1 AND 4.1 TO 4.3 UNIDROIT PRINCIPLES
Claimant, a German company, entered into a contract with Respondent, a Russian company, for the delivery a certain goods (“the Contract”). The dispute arose when Claimant asserted that after the conclusion of the Contract the parties had by agreement modified its terms concerning the quantity of the goods and the time of delivery and of payment, and accused Respondent, which insisted on performing the Contract according to its original terms, of breach of contract and claimed damages.
The Contract was governed by the law of the Russian Federation, according to which a modification of a written contract must be made in writing. Claimant argued that this formal requirement was met by the exchange between the parties of messages and documents, some of which in electronic form, while Respondent objected that the alleged modifications should have been laid down in a single document signed by both parties.
The Arbitral Tribunal decided in favor of Claimant. In so doing it first of all relied on a specific provision contained in the Contract itself stating that any appendices, addenda and alterations to it were valid and constituted an integral part of it only if made in writing and signed by both parties, and that the said appendices, addenda and alterations communicated by means of electronic interchange, including facsimile messages, were considered as originals. Moreover it referred to the applicable rules of the Civil Code of the Russian Federation and to “customs effective now in international trade […] set forth in Articles 2.1.1, 4.1, 4.2, 4.3 of the UNIDROIT Principles of International Commercial Contracts of 2004 [...] according to which a contract may be concluded by the acceptance of an offer or by conduct of the parties that is sufficient to show agreement [and] the agreement shall be interpreted according to the common intention of the parties […]".
“[…] In interpreting the contract in accordance with the applicable rules of the Civil Code of the Russian Federation the arbitral tribunal takes into consideration the literal meaning of the provisions of the contract, while in that part where it does not allow to ascertain the content of the contract, the arbitral tribunal ascertains the true common intention of the parties taking into account negotiations and correspondence prior to the contract, the practice established in mutual relations of the parties, the customs of commerce, the subsequent conduct of the parties. Upon this the arbitral tribunal takes into account the customs effective now in international trade, which are set forth in Articles 2.1.1, 4.1, 4.2, 4.3 of the UNIDROIT Principles of International Commercial Contracts of 2004. Pursuant to them a Contract may be concluded by the acceptance of an offer or by conduct of the parties that is sufficient to show agreement; the agreement shall be interpreted according to the common intention of the parties.
Relying on that the arbitral tribunal comes to the conclusion that the parties after making the Contract altered its provisions on the quantity of goods and on terms of payments and established in their mutual relations the practice according to which the goods under the Contract were to be delivered not at once in total quantity provided for in the Contract, but in several consignments pursuant to the orders from the Claimant, whereas the terms of payment were to be determined by the parties separately in respect of each consignment.
The relevant agreements of the parties on alteration of the Contract were reached by exchange of documents which in accordance with the said provisions of the Russian legislation is considered as the offer of one party and the acceptance by the other party […].”}}