- Kyiv District Administrative Court
LONG-TERM CONTRACTS - LEASE CONTRACT – BETWEEN AN UKRAINIAN STATE-OWNED COMPANY AND ROMANIAN COMPANY - REFERENCE TO UNIDROIT PRINCIPLES (1994 ED.) IN SUPPORT OF THE SOLUTION ADOPTED UNDER APPLICABLE DOMESTIC LAW (UKRAINIAN LAW)
INTERPRETATION OF CONTRACT ACCORDING TO THE INTENTIONS OF THE PARTY AND THE RELEVANT CIRCUMSTANCES - REFERENCE TO ARTICLES 4.1 AND 4.3 OF UNIDROIT PRINCIPLE
Claimant, a Ukrainian state-owned company, entered into an agreement with a Romanian company for the lease of an airplane. Claimant transferred a sum of money in USD as a lease guarantee. When subsequently Respondent, the Ukrainian Tax Authority, performed an inspection of Claimant's accounts it concluded that Claimant had violated the regulations for foreign trade operations as required from Ukrainian companies by Ukrainian law and also violated the currency laws and for that reason issued a fine. Claimant filed a suit claiming the annulment of the fine that Respondent had issued.
The Court decided in favor of Claimant. It pointed out that the issue at stake was whether the transfer of money made by Claimant had to be considered a deposit, as Claimant argued, or as an advance payment, in which case Claimant may have violated the relevant foreign trade regulations and currency laws. In holding that the transfer of the money was to be considered a deposit, the Court, after recalling that international contracts may be interpreted and supplemented in accordance with the well-known international customs and recommendations of international organizations, unless they are contrary to the laws of Ukraine, relied on UNIDROIT Principles of International Commercial Contracts, 1994 ed., Article 4.1 (1) and 4.3.
Original in Ukrainian available at the Unified State Register of Court Decisions: http://www.reyestr.court.gov.ua/}}