The Evolution of Requirements to the Form of Foreign Trade Transactions in Civil Law of Russia

Limarev Victor, School of Governance and Politics

Abstract. Until 2013, the Russian Civil Code contained the requirement for an obligatory written form of foreign trade transactions. The requirement caused some issues in the judicial practice on recognition of transactions. The foreign transaction party was not in pari causa with the Russian party. Russian lawmakers excluded the provision of article 162 from the Civil Code in 2013.

Key words: Civil Code of the Russian Federation, foreign transactions, form of transactions, judicial practice

1. Introduction. There is no single, unified for the form of foreign trade transactions. The parties may determine the form of the transaction themselves. The United Nations Convention on Contracts for the International sale of goods 1980 in article 12 provides for a peremptory rule that «acceptance or other indication to be made in any form other than in writing does not apply where any party has his place of business in a Contracting State which has made a declaration».

To understand the meaning of this provision it is necessary to refer to historical context. The adoption of this Convention is a compromise between capitalist and socialist countries. It means that the penholders of the Convention made the reservation because of long negotiation of the text.

The Soviet Union could not allow freedom of the forms of foreign trade transactions. The full state control of all foreign trade was one of the elements of the socialist system. The mandatory written form of the transaction was a manifestation of public policy.

After the collapse of the Soviet Union, it remained unclear maintaining the provision about obligatory written form of foreign trade transactions in Civil Code of the Russian Federation.

2. The position of the Higher Arbitrazh Court of the Russian Federation and his interpretation of article 12 of the United Nations Convention on Contracts for the International sale of goods.

There was a misinterpretation on the form of foreign trade transactions in legal environment of Russia. Legal scientists continued the tradition of the commitment to the mandatory form of the transaction. Perhaps, there was a strong influence of the Soviet school of civil law. The new political and social order demanded changes in the economic system within the country and in foreign trade matters. The foreign trade could not remain the prerogative of the state

Of course, the existence of the requirement of written form of foreign trade transaction in article 162 of the Civil Code was a relic of the civil law system of USSR. The question was not that there was such a rule in the national legislation. The Higher Arbitrazh Court took the position that the United Nations Convention 1980 determines the obligatory form of any foreign trade transaction by means of jus cogens in Article 12 (Resolution of the Presidium of the Higher Arbitrazh Court 25.03.1997 №4670/96).

ICAS took the same position as The Higher Arbitrazh Court. But in some disputes, the Arbitration Court expressed a different view. ICAS awarded judgement according to which the Convention did not provide for mandatory written form but in Civil Code of the Russian Federation and acknowledged the requirement of the written form.

3. The interpretation of article 12 of the United Nations Convention on Contracts for the International sale of goods in the foreign legal literature.

Foreign lawyers in determining of the form of foreign trade transactions tend to use two approaches. The first approach is that national law should fill the gap in international regulation of transactions in accordance with article 12. According to the second approach, the court must apply to their own conflict-of-laws rules to determine in which countries the mandatory written form is a reservation under the United Nations Convention or vice versa in which countries there are no restrictions on the form of transactions.

For comparison with the practice of the courts of the Russian Federation, we conclude that it is likely to be the first approach. From another angle, the Higher Arbitrazh Court refers directly to the imperative norms of the Convention. The provision of Russian Civil Code only was in addition to the content of the Convention on Contracts for the International sale of goods in the foreign legal literature.

4. Conclusion.

Initially, the resolution of the Presidium of the Higher Arbitrazh Court was the result of inaccurate interpretation of the Convention. The Soviet doctrine strongly influenced the practice of the courts. Thus, paragraph 3 of article 162 of the Civil Code that had super-mandatory nature. The provision led to unequal status of the foreign party in comparison with the Russian contractor in determining the form of the transaction under national law. In the result, the legislator repealed that norm of law.

References

Asoskov A.V. the United Nations Convention on Contracts for the International sale of goods 1980: article-for-article commentary. Infotropic Media, 2013.

Zeller B. CISG and the Unification of International trade law. Routledge-Cavendish, 2007.