- Russian Federation
- Second circuit Arbitrazh Court of Appeal
SALES CONTRACT - BETWEEN TWO RUSSIAN COMPANIES – REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET AND SUPPLEMENT APPLICABLE LAW (RUSSIAN LAW).
NOTION OF FORCE MAJEURE – REFERENCE TO ARTICLE 7.1.7 OF UNIDROIT PRINCIPLES
Claimant, a Russian company, concluded a sales contract with Respondent, another Russian company. When Respondent failed to pay the price of the goods delivered by Claimant, the latter brought an action claiming the payment of the price plus interest on the amount due.
The Court of first instance held that Claimant was entitled to the payment requested.
Respondent appealed against the decision, invoking a supervening financial crisis as an excuse for its non-performance.
The Court of Appeal rejected the argument put forward by Respondent on the ground that a party’s financial and economic crisis could not be considered as force majeure, since it was not unavoidable and therefore lacked one of the essential characteristics of force majeure. The Court based its decision not only on the relevant provisions of the Russian Civil Code but also on Article 7.1.7 of the UNIDROIT Principles of International Commercial Contracts.