- Russian Federation
- High Court of Arbitration of the Russian Federation
APPLICATION OF CISG (ART. 1(1)(B) CISG) - CHOICE OF THE LAW OF A CONTRACTING STATE AS LAW GOVERNING THE CONTRACT - CONTRACT GOVERNED BY CISG
MODIFICATION OF THE CONTRACT BY ORAL AGREEMENT OF THE PARTIES (ARTS. 11 AND 29 CISG) - CONTRACT INVOLVING PARTY SITUATED IN CONTRACTING STATE HAVING MADE A DECLARATION UNDER ARTS. 12 AND 96 CISG - NO-ORAL MODIFICATION
EXEMPTION FOR NON-PERFORMANCE (ART. 79 CISG) - MONEY STOLEN FROM FOREIGN BANK AFTER BUYER'S PAYMENT - NOT AMOUNTING TO IMPEDIMENT BEYOND THE BUYER'S CONTROL
A Russian buyer and a Bulgarian seller concluded a written contract for the sale of goods. The contract contained a choice of law clause in favor of Russian law. The seller commenced arbitration proceedings against the buyer claiming damages for breach of contract on account of the buyer's failure to pay the price. The buyer defended itself on the grounds that the contract had been modified by the parties over the telephone, and that the price had already been paid but the money was stolen from the foreign bank, as was evidenced by a penal prosecution pending abroad.
The Court held that the contract was governed by CISG as the parties had chosen to apply the law of a Contracting State (Art. 1(1)(b) CISG).
As to the buyer's argument concerning modification of the contract, the Court noted that the Russian Federation maintains the declaration made by the former USSR in accordance with Arts. 12 and 96 CISG, so that any provision of Arts. 11 and Art. 29 that allows a contract of sale or its modification or termination by agreement to be made in any form other than in writing does not apply where any party has its place of business in the Russian Federation. On this ground, the Court held that the contract could not be validly modified by the oral agreement of the parties.
The Court also rejected the buyer's defense regarding the stolen payment, holding that this was not an impediment beyond the buyer's control under Art. 79 CISG.
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Published in Russian:
- Website of the Pace Law School Institute of International Commercial Law. Editorial remarks by Alexander Mouranov. (http://cisgw3.law.pace.edu/).}}