Data
- Date:
- 08-04-2019
- Country:
- Russian Federation
- Number:
- А32-773/19
- Court:
- Arbitrazh Court of Krasnodar Region
- Parties:
- Eren Tarim Urunleri Sanayi Ve Ticaret Limited Sirketi v. Kronos
Keywords
SALES CONTRACT – BETWEEN A TURKISH COMPANY (SELLER) AND A RUSSIAN COMPANY (BUYER) - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THAT SOLUTION PROVIDED BY APPLICABLE LAW (RUSSIAN LAW)IS IN CONFORMITY WITH INTERNATIONAL STANDARDS
GOOD FAITH – REFERENCE TO UNIDROIT PRINCIPLES (ART. 1.7)
Abstract
The dispute arose from a contract for the international sale of goods concluded between a Turkish company (Seller) and a Russian company (Buyer), according to which the Seller had shipped several consignments of mandarins and oranges to the Buyer under invoices under CIF Incoterms 2010.
The contract required 50% pre-payment and the remaining balance 14 days after delivery. The goods were received by the Buyer - as confirmed by bills of lading, customs documents, phytosanitary certificates, and certificates of origin - but it failed to pay the remaining part of the price.
The Seller sought from the Arbitrazh Court for recovery of the principal debt, legal interests and other costs. The court ruled in favour of the Seller.
The Court applied the United Nations Convention on Contracts for the International Sale of Goods (CISG), to which Russia and Turkey are parties, and in particular relied on Articles 30, 53, and 59 CISG, which impose on the seller a duty to deliver goods and on the buyer a duty to pay the price on the due date without requiring additional demands. The Court also applied provisions of the Russian Civil Code on contracts of sale and supply (Articles 307, 309, 310, 314, 454, 486, 506, 516).
The Court also explicitly invoked Article 1.7 of the UNIDROIT Principles of International Commercial Contracts, which enshrines the principle of good faith and fair dealing in international trade. The court reasoned that Russian law, through its requirement of good faith in civil and commercial dealings, aligns with the same principle recognised in international trade practices.
The court emphasised that in international commercial transactions, parties are bound not only by strict contractual obligations but also by an overarching duty to act in good faith and in accordance with fair business practices. The Buyer’s complete failure to pay, despite accepting the goods, violated both Russian law and the general principle of good faith as expressed in the UNIDROIT Principles. This reinforced the Seller’s entitlement to full recovery.
Abstract in English kindly provided by Roman Zykov
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