Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography

CISG CASE PRESENTATION

Russia 11 February 2002 Arbitration Court [Appellate Court] for the Moscow Region [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/020211r1.html]

Primary source(s) of information for case presentation: Case text

Case Table of Contents


Case identification

DATE OF DECISION: 20020211 (11 February 2002)

JURISDICTION: Russian Federation

TRIBUNAL: Federal Arbitration Court for the Moscow Region

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: KG-A40/274-02

CASE NAME: TC Maltsevsky Ltd. v. Homag GUS GmbH

CASE HISTORY: 1st instance Arbitration Court for the City of Moscow (A40-26013/01-40-345) 18 September 2001; 2d instance Appellate Division of the Arbitration Court for the City of Moscow (A40-26013/01-40-345) 14 November 2001 [reversed and remanded (lower courts had not applied the Convention)]

SELLER'S COUNTRY: Unavailable

BUYER'S COUNTRY: Unavailable

GOODS INVOLVED: Unavailable


Classification of issues present

APPLICATION OF CISG: Yes, parties from Contracting States (Germany and Russia)

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 7(2)

Classification of issues using UNCITRAL classification code numbers:

7C22 ; 7C23 [Gap-filling: recourse to general principles on which Convention is based; Gap-filling by domestic law]

Descriptors: Gap-filling

Go to Case Table of Contents


Editorial remarks

Go to Case Table of Contents


Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Russian): Unavailable

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

Go to Case Table of Contents


Case text (English translation)

Queen Mary Case Translation Programme

Federal Arbitration Court for the Moscow Region of the Russian Federation
Case No. KG-A40/274-02 of 11 February 2002

Translation by Yelena Kalika [*]

Translation edited by Mykhaylo Danylko [**]

The Federal Arbitration Court for the Moscow Region has reviewed the cassation complaint filed by the Prosecutor's Office for the Bryansk District with regards to the decision of 18 September 2001 and the order issued by the Appellate Division of the Arbitration Court for the City of Moscow on 14 November 2001 in re case No. A40-26013/01-40-345. The following parties took part in the hearing of the case: "TC Maltsevsky Ltd." - Babichenko S.V., power of attorney No. 28 of 27 June 2001, Tkachevsky D.V., power of attorney of 27 June 2001 "Homag GUS GmbH" - Pluschuk A.I., power of attorney of 20 August 2001, Gerasimova L.N., power of attorney of 8 February 2002; the Prosecutor's Office for the Bryansk District - Smirnov S.S., ID No. 155.

The court has found:

The Prosecutor's Office for the Bryansk District on behalf of "TC Maltsevsky Ltd." filed a lawsuit against "Homag GUS GmbH". In this lawsuit commenced at the Arbitration Court for the City of Moscow, the plaintiff was seeking the amount of RuR [Russian rubles] 130,652,092.21 (RuR 902,466 in damages, RuR 12,782,200 for lost profit, RuR 1,972,626.21 in interest for use of another's money).

The claim was denied in the decision of the Arbitration Court for the City of Moscow of 18 September 2001 in re case No. A40-26013/01-40-345 as the plaintiff did not prove either the amount asked or the grounds for a lawsuit.

In its resolution issued on 14 November 2001, the Appellate Division of the Arbitration Court for the City of Moscow affirmed the decision of the trial court in re case No. A40-26013/01-40-345 of 18 September 2001.

In the cassation complaint on the decision of 18 September 2001 and on the resolution issued by the Appellate Division of the Arbitration Court for the City of Moscow on 14 November 2001 in re case No. A40-26013/01-40-345, the First Deputy Prosecutor for the Bryansk District asks to reverse the mentioned judicial acts because in his opinion the trial court incorrectly applied the rules of material and procedural law, and also asks the court to enter a new judgment granting the claims stated in the original complaint.

In response to the cassation complaint, "Homag GUS GmbH" asks the Court to affirm the contested judicial acts as lawful and reasonable. "Homag GUS GmbH" also asks that the cassation complaint be denied because of its unreasonableness.

In a hearing held by the cassation division, the representatives of the Prosecutor's Office and the plaintiff repeated the reasoning stated in the cassation complaint. The defendant's representative objected to a cassation complaint on the grounds stated in the response.

After reviewing the materials of the case and discussing the reasoning of the cassation complaint, and after hearing the arguments of the representatives of the parties, the cassation division has concluded that the contested judicial acts shall be reversed for the following reasons.

As follows from the materials of the case and as determined by the court, the present controversy resulted from an international commercial contract.

Paragraph 11 of the contract No. 1999.00.01.27 concluded by the plaintiff and defendant states that if the partners are not able to settle either a dispute or a controversy by virtue of negotiations, all the disputes and controversies between the partners to the contract arising from this contract shall be fully resolved in conformity with the legal rules of judicial proceedings of the Russian Federation.

It follows from the context of this paragraph that the parties provided that the Russian procedural law would be applicable in case of a dispute. However, the parties left open and did not agree on the material law applicable to their disputes.

Taking into account that pursuant to Article 15(4) of the Constitution of the Russian Federation the well-established principles and norms of the international law and the international treaties of the Russian Federation shall be a component part of its legal system; in the absence of an agreement between the parties on the applicable law, in cases where an international commercial transaction is involved, the court should, first of all, determine whether or not the relationships between the parties are governed by an international treaty. Taking into consideration that the parties to the transaction in controversy are the German and Russian firms and that both Russia and Germany are Parties to the United Nations Convention on Contracts for the International Sale of Goods 1980 (the Vienna Convention), when resolving the dispute the court below should have applied the provisions of the mentioned international treaty. Pursuant to Article 7(2) of the said Convention, questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.

Therefore, the court should have determined that the relationships between the parties were governed by the Vienna Convention as well as by the appropriate national law governing the questions not settled in the Convention. In order to determine the applicable law, the court should have applied the relevant rules of conflict of law which refer to the material law.

Pursuant to Article 176(1) of the Arbitration Procedural Code of the Russian Federation, the incorrect application of the rules of material law shall be a ground for reversal of judicial acts.

As the court below incorrectly determined the applicable law and the dispute was resolved without taking the rules governing the relationships between the parties into consideration, the decision and resolution shall be reversed. The case shall be remanded for new trial.

On remand the court shall take the above mentioned factors into consideration and determine the applicable law. It should be also noted that on 1 March 2002 Part 3 of the Civil Code of the Russian Federation comes into force. Part 3 of the Civil Code shall replace the Principles of the Civil Legislation of the USSR and of the Republics which is currently applicable. In addition, when applying an international treaty (the Vienna Convention 1980 in this case) it is necessary to use its rules on the subsidiary application of the national laws. The parallel references to the rules of the international treaty and the national laws are not allowed.

On the above mentioned grounds and pursuant to Articles 171, 174-177 of the Russian Federation Code of Arbitration Procedure the Federal Arbitration Court for the Moscow Region holds:

The decision of 18 September 2001 and the resolution issued by the Appellate Division of the Arbitration Court for the City of Moscow on 14 November 2001 on case No. A40-26013/01-40-345 are reversed. The case is remanded to the trial court.


FOOTNOTES

* Yelena Kalika, a law student at the Pace University School of Law, has studied at the Moscow State Law Academy, interned with a Moscow law firm, and is a Research Assistant at the Pace Institute of International Commercial Law.

All translations should be verified by cross-checking against the original text.

** Mykhaylo Danylko is a Partner with the law firm Danylko, Kushnir, Soltys & Yakymyak, Attorneys & Counselors at Law, Kiev, Ukraine <http://www.dksylaw.com>. He holds a Masters of Laws (European Studies Program) from the Law School of International Science and Technology University, Kiev, Ukraine (July 2000); a Master of Management in Business of the Business School of International Science and Technology University (June 2002); and has received his LL.M. in International and Comparative Law at the Pace University School of Law.

Go to Case Table of Contents
Pace Law School Institute of International Commercial Law - Last updated May 17, 2004
Comments/Contributions
Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography