- Russian Federation
- Fourth circuit Arbitrazh Court of Appeal
SUPPLY CONTRACT - BETWEEN A RUSSIAN COMPANY AND A CHINESE COMPANY - UNIDROIT PRINCIPLES APPLIED AS MEANS FOR INTERPRETING DOMESTIC LAW (RUSSIAN LAW)
UNIDROIT PRINCIPLES APPLIED TOGETHER WITH ARTICLE 58(1) CISG
FREEDOM TO ENTER INTO AND DETERMINE THE CONTENT OF THE CONTRACT - REFERENCE TO ARTICLE 1.1. OF THE UNIDROIT PRINCIPLES
Claimant, a Russian company, entered into contracts with a Chinese company for the supply of pumpkin seeds for industrial processing. When Respondent, a Russian Customs Authority, performed an inspection of Claimant's customs clearance documents, it held, among other things, that the terms of the supply contracts and invoices provided were incomplete because they did not determine the payment schedule and form for goods delivered. As a consequence, Respondent did not accept the customs value as declared by Claimant and recalculated it asking Claimant to pay higher customs fees, which Claimant eventually did.
Claimant filed suit, requesting the Court to state that, notwithstanding the discrepancies in the documentation provided, Respondent's assessment of the customs value of the goods was incorrect.
The First Instance Court decided in favor of Claimant. Though acknowledging a certain discrepancy between the terms of the contract and the documents presented to the Customs Authority, it found the discrepancy irrelevant and in this respect referred, among others, to Article 1.1 of the UNIDROIT Principles of International Commercial Contracts, which states that the parties are free to enter into a contract and to determine its content, and to Article 58 (1) of the CISG, which states that if the buyer is not bound to pay the price at any other specific time, he must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and the Convention.
Also in view of the fact that the parties had developed an ongoing business relationship, the Court concluded that it was not necessary to write out the payment schedule and form for each shipment of goods. Respondent filed an appeal.
On appeal the Second Instance Court confirmed the First Instance Court's arguments and likewise referred to Article 1.1. of the UNIDROIT Principles and to Article 58 (1) of the CISG.
Original in Russian available at the bank of decisions of the Commercial Courts of the Russian Federation: http://ras.arbitr.ru/}}