Issue: The government of Equatoriana imposed additional costs (30% tariff) on the frozen horse semen, which is a good used by the Parties. However, this increase in tariff is out of the Claimant’s control.
Rule: As it was claimed by Lutz (2004), “The scarcity of CISG-related case law from common law countries has led to the assumption that common law jurisdictions have specific issues with the application of the CISG” (p. 711). These UNIDROIT Principles are applied to justify the court’s decision. Although Respondent was meant to pay all the money to the seller of goods (Claimant), this dispute was not resolved with the help of the CISG document. If the dispute is beyond the CISG, according to Art. 7(2) of the CISG, the UNIDROIT Principles, which is an abbreviation for the UNIDROIT Principles on International Commercial Contracts, should be applied to fill the internal gap mechanism (Bonell, 1996). According to these principles, the seller should receive the full amount of money, despite the conditions, which are beyond the Parties’ control.
Application: A party’s sphere of control is represented by the area in which it is objectively able to ensure the trouble-free passage of the measures that are required to prepare and perform the contract, using and adopting the necessary measures of an organization. The dispute was not solved with the help of CISG, and the UNIDROIT Principles are to be applied. Moreover, according to the case, additional tariffs were imposed on the frozen horse semen by the government of Equatoriana. Thus, this government’s legislation is definitely beyond the control of the Claimant’s side, which is registered and officially located in Capital City, Mediterraneo.
Conclusion: Although Respondent was meant to pay all the money to the seller of goods (Claimant), this dispute was not resolved with the help of the CISG document. As the increase in tariffs is out of the Claimant’s control, it could not prepare and perform the contract by adopting measures to address the legislation of Equatoriana, which is out of Mediterraneo’s control. In this case, one should remember that the UNIDROIT Principles provide requirements that should be fulfilled in hardship conditions, such as those discussed previously. Therefore, it is justified that the Claimant was decided during the court process to be entitled to the payment from the Respondent. This is true, according to the right to performance written in the Art. 7.2.1. of the UNIDROIT Principles (Bonell, 1996).
References
Bonell, M. J. (1996). The UNIDROIT principles of international commercial contracts and CISG – Alternatives or complementary instruments? Uniform Law Review-Revue de droit uniforme, 1(1), 26-39.
Roque, C. A. M., de Medeiros Carreiro, C., & Cerqueira, C. M. T. (2019). Work project: 26th annual Willem C. Vis international commercial arbitration moot. Nova University of Lisbon – School of Law.
Lutz, H. (2004). The CISG and common law courts: Is there really a problem. Victoria U. Wellington L. Rev., 35, 711-734.