Data

Date:
08-06-2021
Country:
Russian Federation
Number:
A33-15874/2020
Court:
Third Arbitrazh Appellate Court
Parties:
Rosmorport v Khatanga Sea Trade Port

Keywords

LONG-TERM CONTRACTS - SERVICE CONTRACT - BETWEEN TWO RUSSIAN COMPANIES – REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER THE APPLICABLE LAW (RUSSIAN LAW)

INTERPRETATION OF CONTRATUAL TERMS PROVIDED BY ONE OF THE PARTIES - CONTRA PROFERENTEM RULE - REFERENCE TO UNIDROIT PRINCIPLES (ART. 4.6)

Abstract

The claimant sought to recover debts and penalties from the respondent under a contract for icebreaker services (escorting vessels in ice).

The dispute centered on whether “waiting time” of the icebreaker could be charged as a payable service.

The first-instance court rejected the claim, and the appellate court upheld that decision.

Among other things, the court found that since the claimant, as a natural monopoly, proposed the disputed contract clause, it was necessary to prove that, when concluding the contract, active negotiations took place regarding any of its provisions. Since no evidence has been provided in this regard, the clause should be interpreted by applying the principle of contra proferentem. If contract terms supplied by one party are unclear, an interpretation against that party is preferred (Article 4.6 of the UNIDROIT Principles). This principle is applied in judicial practice whenever two different (reasonable) interpretations exist, regardless of which one appears more reasonable.

First, this rule is intended to place the party responsible for ambiguity at a disadvantage. Second, the rule of contra proferentem is aimed at protecting the legitimate expectations of the party that had no choice in the drafting of the contract. As a general matter, contra proferentem applies where it is evident that only one party was involved in selecting the contractual wording. However, it should be borne in mind that the rule is unlikely to apply if the contract’s terms were agreed through intensive negotiations. In the case of detailed negotiations, it is presumed that both parties participated in the choice of terminology and wording.

Abstract in English kindly provided by Roman Zykov.

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