- Russian Federation
- Arbitrazh Court of Sakhalin region
ADMINISTRATIVE CONTRACTS - CONSTRUCTION CONTRACT - BETWEEN A RUSSIAN LOCAL AUTHORITY AND A RUSSIAN COMPANY - UNIDROIT PRINCIPLES AS MEANS FOR INTERPRETING APPLICABLE DOMESTIC LAW (RUSSIAN LAW)
CONTRACT FOR THE CONSTRUCTION OF A DAM - PERFORMANCE DELAYED DUE TO A FLOOD OF THE RIVER - FORCE MAJEURE EXCLUDED BECAUSE THIS EVNET COULD HAVE BEEN FORESEEN BY PARTY - REFERENCE TO APPLICABLE RUSSIAN DOMESTIC LAW AND TO ARTICLE 7.1.7 UNIDROIT PRINCIPLES.
Claimant, a Russian local authority, and Respondent, a Russian company, entered into a contract for the construction of a dam. Respondent, the constructor, was late with the performance of its obligations. When Claimant requested Respondent to comply with the terms of the contract, Respondent invoked as excuse the flood of the river, which in its view amounted to a case of force majeure. Claimant therefore brought an action against Respondent.
The Court rejected Respondent's argument basing its decision on both Russian domestic law and Art. 7.1.7 of the UNIDROIT Principles. The Court found that Respondent, having taken part in the open auction and having entered into the administrative contract, have accepted the terms of the auction which ought to have been complied with. As to the argument that the flood of the river prevented it from a timely performance, the Court pointed out that Respondent could have foreseen the weather conditions and therefore this event did not amount to a case of force majeure.