Russia: 25 December 1996 High Arbitration Court (or Presidium of Supreme Arbitration Court) of the Russian Federation: Information Letter 10 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/961225r1.html]
DATE OF DECISIONS:
[Russia has two types of State courts for private law disputes: Courts of general jurisdiction (also called "People's Courts") and economic courts (also called "Arbitration Courts"). The above is the official title of the top judicial authority of the Arbitration Courts.]
CASE NUMBER/DOCKET NUMBER: Information Letter No. 10
[In his chapter of the Encyclopedia, René David discusses practices of different jurisdictions. For Russia he mentions a tradition of interpretive rulings by the Supreme Court: rulings not handed down to dispose of a specific case, but interpretive rulings on an abstract issue or issues that may have arisen in a case or cases. This Information Letter is an example of this practice. The Information Letter is entitled, "The review of the practice of disputes consideration on the cases with participation of foreign persons, considered by the Arbitration Courts after 1 July 1995"].
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Russia (claimant)
BUYER'S COUNTRY: England (respondent)
GOODS INVOLVED: Medical goods
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issues:
Classification of issues using UNCITRAL classification code numbers:
Go to Case Table of Contents
Usages and practices. "[T]he central issue was whether or not the goods had been properly packed. The contract had been concluded on CIF terms. According to the claimant, however, the goods were packed in accordance with 'Free car' (railroad) terms. The goods which had been arrived by sea, turned out to be of non-conforming quality. The claimant sought damages for the loss caused y the non-conformity of the goods. The Arbitration Court rejected the claim 'referring to the fact that the goods had been delivered in the proper way'. The Arbitration court neither considered the issue of applicable law, nor referred to the contract terms. The High Arbitration Court of the Russian Federation in its Information Letter stated that the Arbitration Court should have interpreted the terms of the contract. In the opinion of the High Arbitration Court, reference to CIF terms in the contract meant that the parties had agreed to be bound by these terms, which represented usage of international trade. Therefore, on the basis of Article 9(1) CISG, the court expressed the view that the parties had to abide by the terms of this usage.
"An important factor in deciding whether or not a trade usage is applicable to the relationships between the parties to the contract is proof of the existence and applicability of the usage. In this regard, it must be noted that the position of the ICAC has been that it is up to the party which relies upon a trade usage, to prove existence and applicability thereof." Djakhongir Saidov, 7 Vindobona Journal of International Commercial Law and Arbitration (1/2003) 1-62 at 20-21 (citations omitted)Go to Case Table of Contents
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstracts: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Russian): Text presented below; published also in Vestnik Vysshego Arbitrazhnogo Suda Rossyiskoi Federatsii (1997) No. 3
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: Flambouras, Transfer of risk (1999) n.270
Go to Case Table of Contents
Click here to view the text of the case in Cyrillic
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
Queen Mary Case Translation Programme
of the practice of examination of disputes on matters involving foreign persons,
examined by arbitration courts after 1 June 1995
|11.||Arbitration court in resolving a dispute applies usages in the sphere of international trade using "Incoterms" where the parties have agreed thereupon at the time of the conclusion of their foreign economic contract.|
A Russian joint-stock company [seller] filed a claim with an arbitration court [Russian judicial state body] against [buyer] an English company.
The [seller] delivered medical products to developing States for the [buyer]. It was indicated in the foreign-trade contract that any dispute would be settled in Russian arbitration, but the applicable law of the contract was not stipulated.
The foreign-trade contract defined the basic delivery terms.
The parties agreed at the time of the conclusion of their contract would be effected C.I.F. (carriage by sea), "Incoterms-90". The [seller] indicated in his statement of claim that the goods were packed as required by "Free car" (railroad) terms. In fact the medical products were carried by sea, and they arrived at the destination point in unfit condition.
The arbitration court refused to allow the [seller] to recover damages, referring to the fact that the goods had been delivered in the proper way. The arbitration court did not consider the issue of applicable law, nor did it refer to the contract terms on international delivery of goods, although the foreign-trade contract contained references to the regulations on international delivery of goods that were to be applied.
This is a case in which the contracting parties stipulated that they would apply international trade usages on basic delivery terms that are widely applied in international trade. International agreements to which the Russian Federation is a party and the Civil Legislation of the Russian Federation contain direct references to such usages.
Thus, article 9 of the UN Convention on Contracts for the International Sale of Goods (in force for Russia since 1991) provides that the parties are bound by any usages to which they have agreed and by practices of their relationship, established by them. In addition, the Convention states:
And article 5 of the Civil Code of the Russian Federation assigns business usages to their sources, regulating the relationships of contracting parties.
In a number of cases, usages of international trade are interpreted by international organizations. A case in point is the "International Rules for the Interpretation of Trade Terms - "Incoterms", developed by the International Chamber of Commerce. "Incoterms" rules cover a wide range of issues, including the difference between the delivery terms "C.I.F." and "Free car". At the time of the conclusion of their contracts, parties can extend the operation of these rules to their relationships, extending them to such relationships in an obligatory manner.
In rendering its decision in this case, the arbitration court was entitled to rely upon "C.I.F." terms as the obligatory rules determined in the agreement of the parties.
Section 11 of the Review is published in "The Herald of the Higher Arbitration Court of the Russian Federation" (1997) No. 3, pages 97-98. The Review is published in its entirety at pages 87-101.
* All translations should be verified by cross-checking against the original text.Go to Case Table of Contents