Data

Date:: 02-07-2015
Country:: Russian Federation
Number:: 304-C15-4108
Court:: Supreme Court of the Russian Federation
Parties:: Department of Construction of the Khanty-Mansiysk Regional Administration v. System Engineering Company LLC

Keywords

CONSTRUCTION CONTRACT BETWEEN A RUSSIAN COMPANY AND A RUSSIAN PUBLIC ENTITY - REFERENCE TO UNIDROIT PRINCIPLES IN SUPPORT OF SOLUTION ADOPTED UNDER APPLICABLE DOMESTIC LAW (RUSSIAN LAW)

QUESTION AS TO WHETHER TIME OF PERFORMANCE FIXED IN THE CONTRACT INCLUDED ALSO THE TIME FOR THE STATE INSPECTION OF THE WORKS. APPLICATION OF CONTRA PROFERENTEM RULE AS RECOGNISED BY RUSSIAN CASE LAW AS WELL AS BY ARTICLE 4.6 UNIDROIT PRINCIPLES

Abstract

In a construction contract entered into between a Russian company and a Russian public entity the question arose as to whether the time of performance fixed in the contract was to include also the time for the state inspection of the works. Since neither the wording of the contract nor the context and the practices established between the parties did permit to establish the common intention of the parties, the Court held that a contractual provision with an ambiguous meaning should be interpreted against the party which proposed that provision. In support of its finding the Court referred not only to the ruling “Contractual Freedom and its Limits” of the Russian Supreme Commercial Court (the highest court competent to hear commercial cases until August 2014 when it was ich merged with the Russian Supreme Court), but also to Article 4.6 of the UNIDROIT Principles stating the so-called “contra proferentem” rule which according to the Court represented an internationally recognized rule of contract interpretation. Based on this, the Court concluded that in the case at hand the time of performance as fixed in the contract didn’t include the time for the state inspection of the works.

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