- Corte Suprema de Justicia – Sala Civil y Comercial
- Iglesia Evangelica Asamblea de Dios Misionera v. El Comercio Pyo Cia de Seguros
INSURANCE CONTRACT - BETWEEN TWO PARAGUAYAN PARTIES - REFERENCE TO UNIDROIT PRINCIPLES TO INTERPRET APPLICABLE DOMESTIC LAW (PARAGUAYAN LAW)
TACIT ACCEPTANCE OF THE CLAIM - REFERENCE BY THE SUPREME COURT TO ART. 1.8 UNIDROIT PRINCIPLES
Claimant, a Paraguayan religious institution, filed a claim against Respondent, an insurance company, seeking the performance of the contract concluded between the parties. In addition, Claimant requested compensation for damages resulting from Respondent’s non performance
The First Instance Judge ruled in favor of the Claimant granting its claim for performance of the contract and ordering the Respondent to pay the insurance policy plus interests, while Claimant’s claim for damages claim was rejected.
This decision was appealed. The Court of Appeal reformed the first instance decision by rejecting all of the Claimant’s claims.
As a result, the case was brought before the Supreme Court.
By majority, the Supreme Court proceeded to review the case. The relevant issues addressed by the court were the following: whether Respondent tacitly acknowledged the occurrence of the incident (1), whether Claimant had engaged in any negligent behavior (2), and the amount owed as compensation, if applicable (3).
The first issue was particularly relevant since the Claimant argued that the Respondent tacitly waived its right to compensation by not objecting to the claim within the term established by law. While the precise date on which the incident was first reported to Respondent was debated throughout the case, the relevant issue here, according to the Supreme Court, was to determine when effectively the Respondent became aware of the incident.
In its reasoning, the Supreme Court highlighted that the duty to inform that lies on a contractual party must go in hand with the duty to comply with one’s obligations in good faith and in this contest referred to the Unidroit Principles, namely Art. 1.8, in order to interpret and supplement national legislation. The Court affirmed that the principle of “venire contra factum propium non valet”, contemplated in Art. 1.8 UNIDROIT Principles, must be applied to the case at hand, since Respondent’s conduct shows that it was aware of the reported incident.
After reaching this conclusion, the Supreme Court considered that Respondent ha not promptly exercised its right to object to the claim and, therefore, it had tacitly accepted the occurrence of the incident. Respondent’s tacit acceptance of the claim also meant that it consented to the Claimant’s right to receive compensation, that has been awarded by the Supreme Court to the extent requested by Claimant.
As a result, the Supreme Court revoked the Appellate Court’s ruling, ordering Respondent to pay the insurance policy plus interests.