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CISG CASE PRESENTATION

Belarus 31 July 2006 Cassational Board of the Supreme Economic Court (Bird factory case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060731b5.html]

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

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Case identification

DATE OF DECISION: 20060731 (31 July 2006)

JURISDICTION: Belarus

TRIBUNAL: Cassational Board of the Supreme Economic Court of the Republic of Belarus

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: N1-5ux/06707K

CASE NAME: Unavailable

CASE HISTORY: 1st instance Economic Court of Belarus, ruling of 2 June 2006 (ruling on enforcement of Award N 021/2003 of Stockholm Chamber of Commerce) [affirmed]

SELLER'S COUNTRY: Germany

BUYER'S COUNTRY: Belarus

GOODS INVOLVED: [-]


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 61(3)

Classification of issues using UNCITRAL classification code numbers:

4B [Scope of Convention (issues excluded): whether or not a grace period my be granted for enforcement of a judgment on a CISG proceeding];

61C [Remedies for breach of contract by buyer: tribunal may not grant grace period]

Descriptors: Scope of Convention ; Grace period

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Editorial remarks

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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): Click here for Russian text of case

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Resolution of the Cassational Board of the Supreme
Economic Court of the Republic of Belarus

31 July 2006 [N1-5ux/06/707K]

Translation [*] by Karyna Loban [**]

The Cassational Board of the Supreme Economic Court of the Republic of Belarus examined the appeal filed by Company "A" Germany on the ruling of the Supreme Economic Court of the Republic of Belarus of 2 June 2006 (Case No. 1-5n?/2006) regarding the grace period for the order of the Supreme Economic Court of 17 March 2006 (Case No. 1-5n?/2006) according to which Public Corporation "B" [PC "B"] was ordered to pay to Company "A" of Germany:

115,571.68 Euro, the amount of the basic debt;
  42,223.24 Euro, the amount of interest;
    2,862 Euro, costs of legal representation;
         20 Euro, the costs of the proceedings; and
  10,467     Euro, the costs of arbitration proceedings;
171,343.92 Euro, in total

STATED THE FOLLOWING:

According to the ruling of the Supreme Economic Court of the Republic of Belarus of 17 March 2006 the Supreme Economic Court of the Republic of Belarus recognized and enforced the award of the Arbitration Institute of the Stockholm Chamber of Commerce on Case N 021/2003 according to which the Bird Factory "V" (legal successor of which is PC "B") was ordered to pay 115,571.68 Euro the amount of basic debt, the amount interest according to the rate 5 % per annum from 11 November 1998 until the day of payment, 2,862 Euro the costs of legal representation, 20 Euro the costs of the proceedings and 10,467 Euro the costs of arbitration proceedings and issued an order according to which PC "B" was ordered to pay to Company "A" of Germany:

115,571.68 Euro, the amount of the basic debt;
  42,223.24 Euro, the amount of interest;
    2,862 Euro, costs of legal representation;
         20 Euro, the costs of the proceedings; and
  10,467     Euro, the costs of arbitration proceedings;
171,343.92 Euro, in total.

The Supreme Economic Court of the Republic of Belarus under the ruling of 2 June 2006 granted a grace period for the order of 17 March 2006 until 29 December 2008.

In its appeal, Company "A" of Germany requests to cancel the court ruling of 2 June 2006 and the period of grace granted, alleging that the period of grace granted by this ruling contradicts Article 61(3) of the UN Convention on the International Sale of Goods (1980) which states that no period of grace may be granted to the buyer by a court or arbitral tribunal when the seller resorts to a remedy for breach of contract.

The representatives of the parties were not present during the court session, but were duly informed about the time and place of the hearings. Under Article 293 of the Code of Economic Procedure, that does not prevent examination of the case in their absence.

After the examination of the material of the case and its appeal, the Cassational Board decided that the ruling of 2 June 2006 did not infringe the procedural norms and there are no grounds to cancel that court ruling.

Upon request of PC "B" to grant a grace period of the order of 17 March 2006, the Court of First Instance under 1.4 of the Edict of the President of the Republic of Belarus of 19 March 2004 N 138 "About the Measures of Financial Support of Agricultural Organizations and Investments in Agricultural Production" granted a period of grace until 29 December 2008.

Under 1.4 of Edict N 138, all companies that legally acquired from 1 January 2004 to 1 January 2006 as a result of legal succession, acquisition (transfer free of charge) of enterprises as property complex the rights and duties of agricultural organizations which have a period of grace according to 1.1 of Edict N 138 and declared as losers (under the terms of agricultural production) were granted a period of grace for their obligations.

For the received goods, performed works and services, agricultural organizations with losses received a period of grace for three years to fulfill their obligations ( 1.4.2. of Edict N 138).

The arguments of Company "A" of Germany that the Edict N 138 is not applicable to non-residents of the Republic of Belarus as well as reference to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Convention on the International Sale of Goods cannot be taken into account by the Cassational Board of the Supreme Economic Court of the Republic of Belarus according to the following:

-    The procedure in the Economic Courts of the Republic of Belarus is regulated by the Constitution of the Republic of Belarus, the Code of Economic Procedure of the Republic of Belarus, decrees and edicts of the President of the Republic of Belarus and by international agreements of the Republic of Belarus.
 
-    The legal procedure in Economic Courts is held under the legal acts which are in force during the time of settlement of dispute, hearings of the case, election of separate procedural acts or enforcement of court ruling (Article 5 of the Code of Economic Procedure of the Republic of Belarus).
 
-    There are no legal rules applicable on the stage of enforcement of court ruling in international law.

Consequently, on the stage of enforcement of court ruling, the court applies the national legal rules. Therefore the Cassational Board considers that:

-    Under the Edict of the President of the Republic of Belarus of 19 March 2004 N 138, PC "B" can be granted a period of grace under 1.4 of Edict N 138.
 
-    The Court of First Instance comprehensively and objectively examined the situation; the ruling of the court below is legal and cannot be cancelled.

According to the Articles 294, 296, 298 of the Code of Economic Procedure of the Republic of Belarus, the Cassational Board of the Republic of Belarus

DECIDED

The court affirms the ruling of the Supreme Economic Court of the Republic of Belarus of 2 June 2006 granting a grace period for the order of the Supreme Economic Court of 17 March 2006 (Case No. 1-5n?/2006). The appeal of Company "A" of Germany should be dismissed.

This ruling enters into legal force from the moment of its declaration and can be reviewed in the exercise of supervisory powers by a protest of the officials according to Articles 300-304 of the Code of Economic Procedure.


FOOTNOTES

* All translations should be cross-checked against the original text.

** Karyna Loban, Attorney of Belarus, participant in the Willem C. Vis International Commercial Arbitration Moot.

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Pace Law School Institute of International Commercial Law - Last updated May 24, 2010
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