Data

Date:
21-06-2010
Country:
Ukraine
Number:
2-a-10084/09/0470
Court:
Dnipropetrovsk Regional Administrative Court
Parties:

Keywords

LOAN AGREEMENT - BETWEEN AN UKRAINIAN COMPANY AND A FOREIGN BANK - REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET APPLICABLE DOMESTIC LAW (UKRAINIAN LAW) - UNIDROIT PRINCIPLES AS EXPRESSION OF INTERNATIONAL TRADE CUSTOMS

Abstract

Claimant, a Ukrainian company, had been granted a loan by a foreign bank guaranteed by the Government of Ukraine. Subsequently Claimant failed to repay the loan timely and the guarantee event occurred, making the Government of Ukraine liable for the debt. However, when the competent Government Agencies requested payment by Claimant, they asked for an increased amount due to supervening changes in the exchange rate between the Euro and Ukrainian national currency. This requested prompted Claimant to file a suit asking the Court to declare the request of the competent Government Agencies invalid.

The Court rejected the claim on the ground that as the the loan was given to Claimant in German marks (later converted to Euro) at the exchange rate of the day of the loan disbursement, also repayment had to be made at the exchange rate of the day of the actual repayment. In support of this conclusion reached in accordance with the applicable Ukrainian law, the Court also referred to the UNIDROIT Principles of International Commercial Contracts, which it considered applicable by virtue of the explanatory note of the High Commercial Court of Ukraine (see Note below). In particular, the Court relied on paras 1 and 4 of article 6.1.9 "Currency of payment" of the UNIDROIT Principles, which state, respectively, that if a monetary obligation is expressed in a currency other than that of the place for payment, it may be paid by the debtor in the currency of the place of payment, unless the parties have agreed that payment should be made only in the currency of the monetary obligation, and that if the debtor did not pay by due when payment was due, the creditor may require payment according to the applicable exchange rate prevailing either when payment is due or at the time of the actual payment.

Note by Editor:

The Official Explanatory Note of the High Commercial Court of Ukraine of 2008 states that "Documents which enshrine the trade customs applied in Ukraine are: “Uniform Customs and Practice for Documentary Credits", 1993 edition (988_003); Principles of International Commercial Contracts (UNIDROIT Principles), 1994 edition (995_920); "Incoterms" The Official Rules for the Interpretation of Trade Terms of the "ICC", 2000 edition (988_007)".

Fulltext

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Source

Original in Ukrainian available at the Unified State Register of Court Decisions: http://www.reyestr.court.gov.ua/}}