- Russian Federation
- A21 -2552/2010
- Federal Arbitrazh Court of the North-West district
SALES CONTRACT - BETWEEN A RUSSIAN COMPANY AND A GERMAN COMPANY - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION PROVIDED BY APPLICABLE DOMESTIC LAW (RUSSIAN LAW)
RIGHT TO DAMAGES FOR BREACH OF CONTRACT - REFERENCE TO ARTICLE 7.4.1 UNIDROIT PRINCIPLES AND TO ARTICLES 45 AND 61 OF THE CISG IN SUPPORT OF ARTICLE 309 OF THE CIVIL CODE OF THE RUSSIAN FEDERATION
Claimant, a Russian company, entered into a sales contract with Respondent, a German Company (hereinafter the "Agreement"). Subsequently, Claimant filed suit, seeking damages for the undelivered goods and breach of other contractual obligations.
The Court of First Instance ruled in favor of Respondent.
The Agreement was silent as to the applicable law, and the Court decided to apply the law of the Russian Federation to the case.
As to the merits, the Court held that Claimant was not entitled to damages. Admittedly, neither according to Article 309 of the Russian Civil Code nor according to Articles 45 and 61 CISG, as well as to article 7.4.1 of the Unidroit Principles (to which the Court referred on the ground that they constitute the most authoritative legal instrument dealing with the remedy of damages for breach of contract at international level), in order to be awarded damages the aggrieved party has to prove the fault of the party in breach. However, the aggrieved party must prove the other party's breach of its contractual obligations and the amount of loss caused by that breach. In the case at hand, Claimant did not satisfy these two requirements and could therefore not be awarded any damages.
The Courts of Second and Third Instance denied the appeals confirming the decision of the Court of First instance.
Original in Russian available at the bank of decisions of the Commercial Courts of the Russian Federation: http://ras.arbitr.ru/}}