- Russian Federation
- A32-25991/2013 15AP-20443/2013
- Fifteenth circuit Arbitrazh Court of Appeal
LONG-TERM CONTRACTS - SUPPLY CONTRACT - BETWEEN A RUSSIAN COMPANY AND A SPANISH COMPANY - UNIDROIT PRINCIPLES APPLIED AS MEANS FOR INTERPRETING DOMESTIC LAW (RUSSIAN LAW)
FREEDOM TO ENTER INTO AND DETERMINE THE CONTENT OF THE CONTRACT - REFERENCE TO ARTICLE 1.1. OF THE UNIDROIT PRINCIPLES OF INTERNATIONAL CONTRACTS AND TO ARTICLE 432 OF THE CIVIL CODE OF THE RUSSIAN FEDERATION.
Claimant, a Russian company, entered into a contract with a Spanish company for the supply of floor and wall tiles. When importing the goods from the Spanish supplier, Claimant used the contract price as the basis for the calculation of customs value of the goods.
When Respondent, a Russian Customs Authority, performed an inspection of Claimant's customs clearance documents, it held that in the case at hand the chosen method of calculation of the customs value was not correct and as a consequence imposed on Claimant additional customs fees and penalties.
Claimant paid the additional fees and penalties but complained that Respondent's alternative calculations were wrong and therefore asked for the return of what it had overpaid. When Respondent refused to do so Claimant file a suit seeking invalidation of Respondent's actions of adjusting the customs value of the goods imported under the Agreement.
Both the Court of First Instance decided in favor of Claimant on the basis of the Russian law and the Customs Code of the Customs Union (entered into in 2008 by Russia, Belarus and Kazakhstan. The Court of Second Instance decided in favor of the Claimant. One of the issues to be decided was whether Claimant's declared customs value was incorrect as matching invoices were not provided. The Court of Second Instance stated the documents provided by Claimant contained sufficient information to establish with certainty the contract price.
In support of its argument, the Court referred to Article 1.1 of the UNIDROIT Principles of International Commercial Contracts, on the freedom of contract, which states that the parties are free to enter into a contract and to determine its content, and to Article 432 (1) of the Civil Code of the Russian Federation, which states that the contract is regarded as concluded, if an agreement has been achieved between the parties on all its essential terms and in the proper form.
Essential conditions are: the subject matter of the contract, the terms of which are named in the law or other legal acts as essential or necessary for contracts of this kind, as well as all the conditions on which at the request of one of the parties an agreement must be reached.
Parties to the contract executed it, there is no claim for improper execution of the contract, which indicates that the parties agreed on the payment form and terms trough their actions during the performance of the contract.
Further, the Court noted that the invoice is issued by the foreign counterparty and Respondent is not entitled to issue Claimant demands on its content and form.
Original in Russian available at the bank of decisions of the Commercial Courts of the Russian Federation: http://ras.arbitr.ru/}}