On 8 July 2024, the Arbitrazh Court of the Moscow District considered the issue of at what moment a contract is considered concluded.
In 2023, UNICO LOGISTICS RUS LLC (Plaintiff) filed a claim with the Moscow Arbitrazh Court against SULZGITTER AG (Defendant) for the recovery of USD 73,500.
Since April 2022, the Plaintiff and Defendant had been negotiating urgent delivery of cargo. As the court of first instance found, all essential terms were settled in the correspondence of the parties.
The essential terms of the freight forwarding agreement include information about the cargo and the terms of its transportation (route, consignor, consignee), as well as other information necessary for the execution of the freight forwarding agreement. Correspondence regarding these terms was conducted by e-mail.
The rate for the provision of sea freight services was USD 300,000. The rate was agreed upon via What’s Up on 2 September 2022, in the correspondence the Plaintiff's commercial offer was accepted.
The court determined that in September 2022, a freight forwarding agreement was concluded between the Plaintiff and the Defendant.
In pursuance of the contract, the Plaintiff booked a third-party vessel. A few days before the vessel booking date, on 8 September 2022, the Plaintiff asked the Defendant whether he planned to load on 17 September 2022, and informed him of a possible fine from the shipowner in case of refusal to book.
On 8 September 2022, the Defendant refused the sea freight. The Plaintiff notified the Defendant of the need to cover the costs of canceling the vessel charter. The costs amounted to USD 300,000 (the shipowner's fine). During the negotiations, the Plaintiff managed to reduce the amount of the fine to USD 73,500. The Plaintiff paid this amount to the shipowner and presented it for payment to the Defendant.
The Defendant did not pay this amount. The court of first instance recovered these costs from the Defendant, and this decision was approved in subsequent instances.
Comment:
There is no uniformity in Russian judicial practice on the issue of when to consider a contract concluded: at the moment when the parties have reached agreement on all essential terms of the contract, or at the moment when the parties have exchanged signed texts of the contracts.
The case under comment is an example of the first approach, which is fully consistent with Russian civil law. The contract is considered concluded at the moment when the parties have reached agreement on all essential terms. In this case, both email messages and What’s Up messages were recognized as admissible evidence.
Source: Case No. A40-73660/2023
In 2023, UNICO LOGISTICS RUS LLC (Plaintiff) filed a claim with the Moscow Arbitrazh Court against SULZGITTER AG (Defendant) for the recovery of USD 73,500.
Since April 2022, the Plaintiff and Defendant had been negotiating urgent delivery of cargo. As the court of first instance found, all essential terms were settled in the correspondence of the parties.
The essential terms of the freight forwarding agreement include information about the cargo and the terms of its transportation (route, consignor, consignee), as well as other information necessary for the execution of the freight forwarding agreement. Correspondence regarding these terms was conducted by e-mail.
The rate for the provision of sea freight services was USD 300,000. The rate was agreed upon via What’s Up on 2 September 2022, in the correspondence the Plaintiff's commercial offer was accepted.
The court determined that in September 2022, a freight forwarding agreement was concluded between the Plaintiff and the Defendant.
In pursuance of the contract, the Plaintiff booked a third-party vessel. A few days before the vessel booking date, on 8 September 2022, the Plaintiff asked the Defendant whether he planned to load on 17 September 2022, and informed him of a possible fine from the shipowner in case of refusal to book.
On 8 September 2022, the Defendant refused the sea freight. The Plaintiff notified the Defendant of the need to cover the costs of canceling the vessel charter. The costs amounted to USD 300,000 (the shipowner's fine). During the negotiations, the Plaintiff managed to reduce the amount of the fine to USD 73,500. The Plaintiff paid this amount to the shipowner and presented it for payment to the Defendant.
The Defendant did not pay this amount. The court of first instance recovered these costs from the Defendant, and this decision was approved in subsequent instances.
Comment:
There is no uniformity in Russian judicial practice on the issue of when to consider a contract concluded: at the moment when the parties have reached agreement on all essential terms of the contract, or at the moment when the parties have exchanged signed texts of the contracts.
The case under comment is an example of the first approach, which is fully consistent with Russian civil law. The contract is considered concluded at the moment when the parties have reached agreement on all essential terms. In this case, both email messages and What’s Up messages were recognized as admissible evidence.
Source: Case No. A40-73660/2023