- Arbitral Award
- ICC International Court of Arbitration ICC-FA-2020-003
CONTRACT BETWEEN TWO EUROPEAN PARTIES - REFERENCE TO APPLICABLE ROMANIAN LAW AND TO THE UNIDROIT PRINCIPLES
INCONSISTENT BEHAVIOR - PARTY PRECLUDED TO INSIST ON A CONTRACTUAL TERM SUPERSEDED BY A SUBSEQUENT AGREEMENT REACHED BY THE PARTIES
PROHIBITION OF INCONSISTENT BEHAVIOR - ESTOPPEL - GENERAL PRINCIPLE OF GOOD FAITH - REFERENCE TO ARTICLES 1.7 AND 1.8 UNIDROIT PRINCIPLES WHICH ACCORDING TO ARBITRAL TRIBUNAL "RESTATE THESE FUNDAMENTAL PRINCIPLES"
In a dispute relating to a contract between two European parties governed by Romanian law, the Arbitral Tribunal referred to Arts. 1.7 and 1.8 UNIDROIT Principles in order to affirm that Respondent was estopped from going back on the collateral agreement reached by the parties after the conclusion of the main contract and not yet embodied within its terms.
According to the Arbitral Tribunal, "the need for the protection of the bona fide reliance which a contracting party has placed on an agreement reached with the other, or on representations made by the other, and which is intended to be relied and acted upon, reflects a general principle of contract law. Such principle is expressed in civil law jurisdictions by the rule of good faith on the one hand, and the prohibition against abuse of legal and contractual rights (interdiction de l'abus de droit) and in particular against inconsistent conduct to the detriment of the other contracting party (interdiction de se contredire au détriment d'autrui). [...] These rules are broadly accepted not only throughout the civil law tradition (...), but also in the common law tradition, in which unconscionable conduct by a contracting party may be sanctioned by equitable remedies such as estoppel, in particular promissory estoppel. Articles 1.7 and 1.8 of the UNIDROIT Principles restate these fundamental principles"
The Arbitral Tribunal concluded that insistence by the Respondent on a contract term which was superseded by a subsequent agreement between the parties was unconscionable under the circumstances of the case.