Data

Date:
06-06-2019
Country:
Russian Federation
Number:
A40-246928/17-162-1943
Court:
Arbitrazh Court of Moscow City
Parties:
Sinegorets v Bank SSTB

Keywords

BANK GUARANTEE – BETWEEN A RUSSIAN COMPANY AND A RUSSIAN BANK - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER THE APPLICABLE LAW (RUSSIAN LAW)

CONTRA PROFERENTEM RULE - INTERPRETATION OF THE AGREEMENT – REFERENCE TO UNIDROIT PRINCIPLES (ARTS. 4.6 AND 1.7)

Abstract

The dispute arose over the enforcement of a bank guarantee between two Russian companies. The bank guarantee was issued by Financial Trust Bank (later replaced by Bank SSTB) in favour of a Russina company, securing the obligations of a construction company under a construction contract.

The Claimant alleged that contruction company failed to perform the contract and submitted payment demands to the guarantor who refused to pay. The Claimant sought recovery under the guarantee and interest until full payment. The Defendant asserted that the guarantee only guaranteed obligations arising from the conclusion of the contract.

The Court held that the contract and the guarantee, when interpreted together, evidenced the parties’ intent that the guarantee cover performance obligations, not merely the conclusion of the contract.

The court referred, among others, to Article 4.6 of the UNIDROIT Principles of International Commercial Contracts, as a universal principle, which enshrines the contra proferentem rule: where contract terms supplied by one party are unclear, interpretation should be against that party’s interests. The Court stressed that this principle is widely recognised in international commercial law and is consistent with Russian jurisprudence. Since the bank drafted the guarantee, ambiguities had to be construed in favour of the beneficiary.

The court also noted that the beneficiary was not a party to the guarantee issuance contract and had no role in formulating its wording. Thus, it could not prevent ambiguities or inconsistencies introduced by the guarantor. Refusing enforcement on the basis of unclear drafting would therefore undermine the principle of good faith, which underlies both Russian civil law and the UNIDROIT Principles.

The Court upheld the beneficiary’s claim, ordering the bank to pay under the guarantee and to compensate penalties and court fees.

Abstract in English kindly provided by Roman Zykov

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