Data

Date:: 26-03-2020
Country:: Russian Federation
Number:: A27-17671/2019
Court:: Arbitrazh Court of Kemerovo Region
Parties:: Committee for the Management of Municipal Property v OOO Sibgravy

Keywords

LONG-TERM AGREEMENT – LAND LEASE CONTRACT – BETWEEN A RUSSIAN STATE AGENCY AND A RUSSIAN COMPANY - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER THE APPLICABLE LAW (RUSSIAN LAW)

INCONSISTENT BEHAVIOUR - REFERENCE TO UNIDROIT PRINCIPLES (ART. 1.8)

Abstract

Claimant filed a claim against Respondent claiming penalties under a land lease agreement. The respondent argued that the obligation to pay rent had ceased when the leased land plot had been completely exploited for sand and gravel extraction and had tranformed into a lake, thereby ceasing to exist as an object of land law.

The court accepted the argument that the land plot no longer existed and that a landlord may only claim rent for the period during which the tenant actually had the ability to possess and use the property.

The claimant sought to rely on the principle of estoppel, arguing that the respondent had continued to pay rent even when the land plot ceased to exist. The court cited Article 1.8 of the UNIDROIT Principles of International Commercial Contracts and the Model Rules of European Private Law, which prevent a party from acting inconsistently with a position on which the other party has reasonably relied. Nevertheless, the court refused to apply estoppel in the present case. It held that factual circumstances—namely the objective disappearance of the land plot—precluded the landlord from claiming rent, and estoppel could not override such a fundamental reality.

The claim was dismissed in its entirety.

Abstract in English kindly provided by Roman Zykov

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