- Kyiv Commercial Court of Appeal
SALES CONTRACT - BETWEEN TWO UKRAINIAN COMPANIES - UNIDROIT PRINCIPLES SETTING FORTH GENERAL RULES OF INTERNATIONAL COMMERCIAL CONTRACTS - NOT APPLICABLE TO DOMESTIC CONTRACTS
Claimant, a Ukrainian company entered into two contracts with Respondent, another Ukrainian company, for the purchase of a certain quantity of malt (the “Agreements”). Subsequently, Claimant asked Respondent to agree to terminate the Agreements, alleging that due to negative developments of the beer market and the consequent reduction of the malt price the performance of the Agreement would cause it significant losses. Since Respondent did not react, Claimant filed a suit seeking termination of the Agreements due to a substantial change of circumstances.
The Court of First Instance rejected Claimant’s claim. The Court stated that although Claimant had invoked in support of its claim the UNIDROIT Principles of International Commercial Contracts, they are not applicable to the dispute at hand, since according to the Preamble they establish general rules for international commercial contracts, while the Agreements were concluded between two nationals of Ukraine. As a consequence, the Court based its arguments only on Ukrainian law, in particular on Article 652 of the Civil Code of Ukraine, on the change or termination of the contract due to a substantial change of circumstances and concluded that the circumstances presented by Claimant failed to satisfy the standard set therein.
The Court of Appeal rejected the appeal and reiterated the preceding Court’s arguments regarding the inapplicability of the UNIDROIT Principles in the case at hand as the Agreements were concluded between two Ukrainian nationals.
Original in Ukrainian available at the Unified State Register of Court Decisions: http://www.reyestr.court.gov.ua/}}