Data

Date:
07-02-2023
Country:
Belarus
Number:
--
Court:
Economic Court of Vitebsk Region
Parties:
--

Keywords

SELLER'S FUNDAMENTAL BREACH OF CONTRACT (ART. 25 CISG) - BUYER'S RIGHT TO TERMINATE THE CONTRACT (ART. 49(1)(b) CISG)

EFFECTS OF AVOIDANCE - RESTITUTION BY SELLER OF THE PRICE RECEIVED (ART. 81(2) CISG)

Abstract

[Abstract prepared by Aleksei Korochkin, National Correspondent]

A Belarusian buyer and a Russian seller entered into an agreement under which the seller undertook to manufacture and transfer equipment, components or spare parts to
the buyer (the “goods”), and the buyer undertook to accept and pay for the goods. According to the agreement, if the seller failed to perform its obligations within a
specified time period, it was obliged to return the 100 per cent advance payment made by the buyer. Despite the buyer’s 100 per cent advance payment, the seller failed to
deliver the goods within the specified time period. After declaring the contract avoided, the buyer sued to collect the advance payment and a penalty from the seller due to the seller’s failure to fulfil its obligations to manufacture and deliver the goods within the time period, as well as its failure to return the advance payment.

The Court determined that the CISG was applicable in the case at hand. Noting articles 31 and 33 of the CISG concerning the place and the date of delivery of the goods, the
Court acknowledged that the buyer was entitled to declare the contract avoided under article 49(1)(a) of the CISG which stipulated that the buyer may declare the contract
avoided if the seller’s failure to perform any of its obligations under the contract or the Convention amounts to a fundamental breach of contract. In this light, the Court
further held that a party who has performed the contract either wholly or in part may claim restitution from the other party of whatever the first party has supplied or paid
under the contract under article 81(2) CISG.

The Court ordered the seller to return the advance payment and pay the penalty.

Fulltext

}}

Source

[Case law on UNCITRAL Texts, A/CN.9/SER.C­/ABSTRACTS/2218]}}