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Editorial remark
by Igor Bechtlufft

The CISG and UNIDROIT Principles were directly applied to resolve the dispute, in the absence of a clear place of contract. In this case, Buyer (Venezuelan company) celebrated an agreement with Seller (Brazilian company) concerning the importation of 16 motor engines. However, Seller unduly retained values anticipated by Buyer. As such, Buyer filed a collection suit against Seller. The First-Instance Court ruled in favor of Buyer, condemning Seller to pay the amounts specified in the decision. Buyer later appealed, arguing that no evidence was provided concerning the alleged excess in payment and that the agreement was void under Venezuelan Law. Initially, the Appellate Court requested further clarifications concerning the place where the agreement was celebrated. Seller stated that the agreement took place in Venezuela, arguing that Venezuelan substantive Law was applicable and that Brazilian Courts lacked jurisdiction. Buyer, on the other hand, informed that the agreement was celebrated in Brazil. The Appellate Court ultimately denied the Appeal. It reasoned that (i) Brazilian Courts had jurisdiction, as Seller was seated in Brazil, (ii) the evidence presented was inconclusive as to the place where the agreement was celebrated, and so the most significant relationship rule applied; (iii) such an analysis led to the application of the CISG; (iv) the CISG, however, does not regulate the validity of the contract, and so it had to be supplemented by the UNIDROIT Principles; (v) Section III of the UNIDROIT Principles did not support Seller’s claim that the agreement was void; (vi) such a claim was also not in line with the principle of good faith enshrined by Article 7(1) CISG; (vii) contrary to Seller’s assertions, the evidence provided showed that Buyer made the payment in excess in order to comply with strict provisions of Venezuelan Law.

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1714