Data

Date:: 22-04-2022
Country:: Colombia
Number:: --
Court:: Consejo de Estado
Parties:: Insituto Nacional de Vías -INVIAS vs. Consorcio B&B - Ana María Benítez Camargo, Adriana Rocío Benítez Camargo y otros

Keywords

WORK CONTRACT - BETWEEN A COLOMBIAN CONSORTIUM AND THE COLOMBIAN NATIONAL INSTITUTE OF ROADS - REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET AND SUPPLEMENT APPLICABLE DOMESTIC LAW (COLOMBIAN LAW)

VALIDITY OF THE LIABILITY LIMITATION CLAUSE CONTAINED IN THE CONTRACT IN FAVOR OF THE PUBLIC ENTITY - REFERENCE TO ARTICLE 7.1.6 UNIDROIT PRINCIPLES - GENERAL VALIDITY OF THIS TYPE OF CLAUSE, BUT IT COULD NOT ALLOW A PARTY TO ACT WITH THE INTENTION OF CAUSING HARM TO THE OTHER WITHOUT BEING RESPONSIBLE FOR IT

Abstract

The Council of State's ruling addresses a contractual dispute between the B&B Consortium (including the co-plaintiffs) and the National Institute of Roads (INVIAS), in the context of a works contract signed in 2010 and awarded following a public tender. Specifically, the dispute arises from the plaintiffs' claims regarding INVIAS's alleged failure to pay the works certificates (specifically, numbers 6 and 7) and their adjustments, corresponding to the 2010 contract. The Consortium seeks payment of the outstanding amounts, as well as the liquidation and payment of late payment interest, and a declaration of termination of the contract.

The Council of State examines in detail the arguments regarding INVIAS's alleged failure to pay the aforementioned works certificates and their adjustments. The contractual obligations of both parties regarding the submission of the documents, deadlines, and payment requirements are analyzed. The Council relies on an examination of the various clauses of the contract entered into by both parties.

The Court analyzes the validity and limits of the liability limitation clause contained in the contract in favor of the defendant. In this regard, the Court examines the clause from both a national and international law perspective, based on Article 7.1.6 of the Unidroit Principles, as well as the Italian and German Civil Codes, to determine the main characteristics of these clauses. It concludes that, while such clauses are generally valid, they cannot protect conduct that violates good faith, public order, abuse of rights, or the binding force of contracts. It determines that the liability limitation clause would not allow the defendant to act with the intention of causing harm to the contractor without being responsible for it.

The Court also addresses the issue of late payment of interest, detailing the calculation and the start dates for accrual, which were established based on INVIAS's default in payment.

The Council of State decides to partially modify the first instance judgment. The declaration of breach of contract by INVIAS is upheld, and the judgments relating to payment of the construction certificates and late payment interest are adjusted.

Excerpts of interest:

"Without prejudice to the foregoing, it is clear to the Court that limitation of liability clauses do not have absolute scope as they are subject to certain limits based on respect for good faith, mandatory rules, the prohibition of abuse of rights, and the normative force of contracts; this is the prevailing trend in Colombia and in contemporary contracting."

After that, the judge quotes the following in footnote: "Article 7.1.6 of the UNIDROIT Principles of Contract Law states that 'A clause which limits or excludes one party’s liability for non-performance or which permits one party to render performance substantially different from what the other party reasonably expected may not be invoked if it would be grossly unfair to do so, having regard to the purpose of the contract'. Also Article 1229 of the Italian Civil Code establishes that any agreement which excludes or limits liability for intent or gross negligence is void. Article 276 of the German BGB establishes that the debtor cannot be exonerated in advance from his intentional act."

English translation of the Spanish abstract written by Miguel Sopeña Pinilla for CISG Spain

Fulltext

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Source

Abstract and fulltext in Spanish:
- available at the University of Carlos III website, http://www.cisgspanish.com}}