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CISG CASE PRESENTATION

Russia 15 July 1998 High Arbitration Court (or Presidium of Supreme Arbitration Court) of the Russian Federation [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/980715r1.html]

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

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Case identification

DATE OF DECISION: 19980715 (15 July 1998)

JURISDICTION: Russian Federation

TRIBUNAL: Vysshi Arbitrazhnyi Sud Rossyiskoi Federatsii [High Arbitration Court (or Presidium of Supreme Arbitration Court) of the Russian Federation]*

* 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.

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: Unavailable

CASE NAME: Naim Anvar Co. Ltd v. Vneshintorg

CASE HISTORY: 1st instance 22 May 1994 International Commercial Arbitration Tribunal at the Chamber of Commerce and Industry of the Russian Federation [affirmed]; 2d instance Arbitration Court for the City of Moscow 16 February 1996 [affirmed]

SELLER'S COUNTRY: Afganistan (plaintiff)

BUYER'S COUNTRY: Russian Federation (defendant)

GOODS INVOLVED: Jackets


Classification of issues present

APPLICATION OF CISG: Dicta reference to Convention

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: [-]

Classification of issues using UNCITRAL classification code numbers:

Unavailable

Descriptors: Unavailable

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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): Bulletin of the Supreme Court of Russian Federation (1998), Issues 8, 9, 10

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Digest of decision of the Supreme Court of the Russian Federation
15 July 1998
"Certain issues of civil judicial practice"

Translation by Yelena Kalika [*]

[The text of this digest is published in the Bulletin of the Supreme Court of the Russian Federation 1998, issues No. 8, 9, 10]

In accordance with the contracts of 16 December 1991, which were entered into by the firm "Naim Anvar Co. Ltd." (Kabul, Afghanistan) and the All-Soviet International Trade Association "Vostokintorg", which was later reincorporated as the public joint stock company "Vneshintorg" (JS "Vneshintorg", Moscow), as well as with the amendments to the contracts, the Afghani firm delivered the goods (jackets) for the total cost of 19,313,060.00 clearing dollars.

In March 1993, JS "Vneshintorg" made a transfer of the said amount to "Da Afghanistan Bank" through Vnesheconombank. However, a year later, on 6 April 1994, this amount was returned to Vnesheconombank by "Da Afghanistan Bank", the bank servicing the foreign firm.

On 14 April 1994, the foreign firm claimed that JS "Vneshintorg" should pay its debt for the delivered but unpaid goods in hard currency, precisely US $3,138,373.52.

Since JS "Vneshintorg" refused the claim, the firm "Naim Anvar Co. Ltd." commenced an action with the International Commercial Arbitration Tribunal at the Chamber of Commerce and Industry of the Russian Federation.  The action was brought to recover the above debt, 5% of annual interest from 6 April 1994 to the day of payment, as well as all the court expenses and fees.

On 22 May 1994, the International Commercial Arbitration Tribunal at the Chamber of Commerce and Industry of the Russian Federation ruled requiring JS "Vneshintorg" to pay to the firm "Naim Anvar Co. Ltd." the following amounts:  US $1,745,145.60 of the main debt, US $54,580.40 of annual interest from 14 April 1994 to 31 December 1994 as well as other expences.

JS "Vneshingtorg" appealed this ruling, seeking to have it reversed. On 16 February 1996, the Moscow City Court ruled against this appeal.

On 21 June 1996, the judicial panel of the Supreme Court of the Russian Federation reviewing civil cases denied the protest of the Deputy Prosecutor General of the Russian Federation in which he argued that the decision of the Moscow City Court should be reversed.

In his protest, the Deputy Prosecutor General of the Russian Federation argued that the court decisions and the arbitral award of the International Commercial Arbitration Tribunal be reversed and the case remanded to the same arbitration court.

The Presidium of the Supreme Court of the Russian Federation did not sustain the protest on the following grounds:

As follows from article 34 of the Russian Federation Law "On the International Commercial Arbitration Tribunal" of 7 July 1993, the grounds for contesting an arbitral award in a general jurisdiction court are the breach of the procedural rules set for commencing an action and conducting an arbitration hearing as well as an arbitral award being against the public policy of the Russian Federation.

In Prosecutor's opinion, the decision of the International Commercial Arbitration Tribunal of 22 May 1994 is against the public policy of the Russian Federation which assumes that the main principles of the international law should be observed.  This includes the principle that contracts should be fulfilled. 

However, the above reasons cannot serve as grounds for contesting an arbitral award in a general jurisdiction court.  The list of such grounds is set forth in Article 34 of the Russian Federation Law "On the International Commercial Arbitration Tribunal".  This list is exhaustive.

Besides, there is no reason to conclude that the decision made by the arbitration court is against the public policy of the Russian Federation.

Such arguments in the protest are based on the premise that the payment method, which was suggested by the arbitration court for making payments between the parties to the said contracts, cannot be reconciled with the Russian laws.

The requirement that the Respondent, as a party to an international commercial transaction, pay its debt in hard currency does not contradict the currency regulations of the Russian Federation.  It is stated both in the letter No. 10-2/1268 of 1 September 1992 of the Central Bank of the Russian Federation and in the letter No. 01-13/5109 of 9 September 1992 of the State Customs Committee of the Russian Federation that in accordance with the Ordinance No. 621 of 12 June 1992 of the Russian Federation President "On payments in international commercial transactions in the Russian Federation in 1992" the payments by the Russian Federation in its transactions with foreign countries in 1992 shall be made in hard currency in accordance with the current world prices, unless the intergovernmental treaties of the Russian Federation state otherwise.

No data that there is a treaty on clearing payments between the Russian Federation and the Islamic State of Afghanistan has been submitted to the Court.

For these grounds the judicial decisions are found correct and are upheld by the Presidium of the Supreme Court of the Russian Federation.


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.

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Pace Law School Institute of International Commercial Law - Last updated August 25, 2003
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