- Russian Federation
- Arbitrazh Court of Novosibirsk region
DISPUTE BETWEEN TWO RUSSIAN PARTIES - REFERENCE TO UNIDROIT PRINCIPLES AS MEANS FOR INTERPRETING AND SUPPLEMENTING APPLICABLE DOMESTIC LAW (RUSSIAN LAW)
REFERENCE TO ARTICLE 1.8 UNIDROIT PRINCIPLES STATING THE PROHIBITION OF INCONSISTENT BEHAVIOUR WHICH IS OF PARAMOUNT IMPORTANCE IN INTERNATIONAL TRADE LAW
In a dispute involving Russian entities, one of the issues at stake concerned inconsistent behaviour by one of the parties and its consequences. In its decision, the court referred not only to the applicable Russian law, but also to Article 1.8 of the UNIDROIT Principles of International Commercial Contracts (2010 edition), according to which a party cannot act inconsistently with an understanding it has caused the other party to have and upon which that other party reasonably has acted in reliance to its detriment. In so doing, the court pointed out the prohibition of inconsistent behaviour was of paramount importance in international trade law.
Russian entities, jointly referred to as Claimant, filed a joint action with the abitrazh court of first instance, asking for redress of infringed rights through reclamation of final stocks and shares from the final beneficiaries, Russian entities, jointly referred to as Respondent. Claimant argued that Respondent was acting not bona fide. Claimant held shares in possession, shares were properly deposited by the above stated entity. Claimant stated that the shares were conveyed against its will, since the conveyance was authorized by the general director of one of the entities who was not empowered to do so. Thus, the deal should be adjudicated as void.
Respondent argued that at the time of the sale and purchase of the shares Claimant had had all the powers of due owner, in particular, to benefit from any and all actions performed with the shares or the omission to do so. In addition, the fact that the disputed shares had belonged to Claimant had been checked and confirmed by the extract of the depository. Finally, Respondent stated that Claimant had acted not in good faith, violating the “Venire contra factum proprium” principle. In the court decree it is mentioned that this principle is of a paramount importance in the international private law. It is fixed in Art. 1.8 of the UNIDROIT Principles of International Commercial Contracts 2010, according to which a party cannot act inconsistently with an understanding it has caused the other party to have and upon which that other party reasonably has acted in relience to its detriment.
The court decided the case in favour of Claimant, referring to the law of the Russian Federation.}}