- Supreme Economic Court of the Republic of Belarus
SALES CONTRACT - BETWEEN BELORUSSIAN COMPANY AND POLISH COMPANY - BELORUSSIAN LAW AS GOVERNING LAW - APPLICATION OF THE CISG SINCE PARTIES SITUATED IN TWO CONTRACTING STATES (ART. 1(1)(A) CISG)
RIGHT TO INTEREST - RATE OF INTEREST NOT DETERMINED BY CISG - COURT HELD RATE TO BE DETERMINED IN ACCORDANCE WITH "GENERAL RULES OF INTERNATIONAL COMMERCIAL CONTRACTS (UNIDROIT PRINCIPLES)" - REFERENCE TO ART. 7.4.9(2)UNIDROIT PRINCIPLES
Plaintiff, a Polish company, concluded a contract of supply of goods with Defendant, a Belarusian company. Plaintiff delivered the goods to Defendant as required under the contract but Defendant paid only part of the price.
Plaintiff filed a lawsuit claiming in addition to the balance owed payment of interest for the delayed payment. Defendant acknowledged the main debt, but refused to pay interest.
According to the contract the governing law was the law of Belarus. As the parties were situated in different States, both of which are Contracting Parties to the CISG, the Court applied the CISG.
The Court found that according to Art. 53 of the CISG Defendant had to pay the price for the goods and since it failed to do Plaintiff was entitled to require Defendant to do so (Art 62 of the CISG).
Furthermore, the Court referred to Art 78 of the CISG according to which “if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it”.
The Court found that according to paragraph 36 of the Plenum Resolution of the Supreme Commercial Court of Belarus Republic of 7 May 2001 on “The practice of the commercial courts of Belarus Republic in the consideration of disputes involving foreign persons” in applying Art 78 of the CISG the rate of interest could be determined according to “general rules of international commercial contracts (UNIDROIT Principles)” and in this context the Court quoted the full text of Art 7.4.9 (2) of UNIDROIT Principles.
The Court decided in favor of Plaintiff and awarded interest of the amount claimed by Plaintiff.