- Arbitral Award
- Ad hoc Arbitration, Paris
LOAN AGREEMENT - BETWEEN A RUSSIAN TRADE ORGANIZATION AND A UNITED STATES COMPANY - PARTIES' CHOICE OF DOMESTIC LAW (RUSSIAN LAW) - IF NECESSARY SUPPLEMENTED BY THE UNIDROIT PRINCIPLES
AVOIDANCE OF CONTRACT - PARTY'S CONDUCT PRECLUDING ITS ABILITY TO CLAIM THE INVALIDITY OF THE CONTRACT (VENIRE CONTRA FACTUM PROPRIUM) (ARTS. 3.12 AND 4.3 (C)UNIDROIT PRINCIPLES)
A Russian trade organisation and a United States company entered into a loan agreement. The agreement did not contain a choice of law clause but when the dispute arose the parties agreed that the arbitral tribunal should apply Russian law, if necessary supplemented by the UNIDROIT Principles. One of the parties asserted the invalidity of the contract because of the non-observance of the formal requirement of double signature as prescribed by Decree no. 126 of 14 February 1978.
The Arbitral Tribunal held that the Claimant was no longer entitled to avoid the contract, firstly because of the three-year time bar provided by Arts. 78 and 82 of the Russian Civil Code of 1964, and secondly because the Claimant, having previously repeatedly requested the defendant to perform its contractual obligations, was estopped by its own conduct from subsequently invoking the invalidity of the contract. In support of the latter conclusion, the Arbitral Tribunal expressly referred to Arts. 3.12 and 4.3(c) of the UNIDROIT Principles.
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