Procurement under Law No. 44-FZ under sanctions: are there grounds for non-fulfillment of the contract?

Procurement under Law No. 44-FZ under sanctions: are there grounds for non-fulfillment of the contract? Arbitrage practice.

Under sanctions, suppliers face many challenges. In the case under consideration, the court analyzed the possibility of not concluding a contract as a result of winning the auction due to an increase in the prices of the supplied goods.

Case plot:

1. LLC "TD Alsimag" became the winner of the tender for the supply of tin from JSC "BOP" Sibpribormash "(customer). As a result of evading the conclusion of the contract, the FAS Department included LLC in the register of unscrupulous suppliers.

2. Applying to the court, LLC indicates that there is no fault in its actions in non-performance of the contract, since the non-conclusion of the contract was not the result of intentional actions.

3. LLC Trade House Alsimag, in support of the stated requirements, indicated that due to changes in the exchange rate and the spread of coronovirus infection, it was not possible to supply tin at the price indicated in the application.

Judicial act: Decision of the Arbitration Court of the Altai Territory dated September 22, 2021 in case No. А03-7466/2021

Court's findings:

1. To enter information about the supplier in the register of unscrupulous suppliers, it is not enough just the desire of the customer, it is necessary to establish the fact of dishonest behavior, expressed in the supplier's intentional avoidance of concluding a contract.

2. Inflationary processes are not among the circumstances, the occurrence of which cannot be foreseen. When entering into contractual relations, the parties had to predict the economic situation, and therefore could not exclude the possibility of price increases during the period of the transaction.

3. The applicant did not submit documents confirming the occurrence of force majeure circumstances in the case file. Fluctuations in prices on the stock exchange cannot be recognized as a force majeure circumstance that creates an objective impossibility of signing a contract.

4. Good faith behavior for a professional commodity market participant is the possession of information about the peculiarities of price formation and price instability in the relevant commodity market.

5. At the same time, being reliably aware of the instability of the cost of tin and its shortage, the party, nevertheless, sent an application for participation in the auction. Ltd. is a regular participant in this market and was aware of the current situation with the cost of tin at the time of filing the application.

Comment:

The main idea of ​​the courts when considering this type of dispute is that the party under the contract always bears the risk of adverse consequences for him, related both to market conditions and taking into account the risky nature of entrepreneurial activity.

Meanwhile, today the state is taking a number of socio-economic measures to support business.

Thus, Federal Law No. 46-FZ of March 8, 2022 “On Amendments to Certain Legislative Acts of the Russian Federation” amended Federal Law No. 44-FZ of April 5, 2013 “On the Contract System”. The following amendment is of interest on the issue under consideration:

Art. 112 44-FZ was supplemented with part 65.1: customers and suppliers will be able to adjust the essential terms of contracts concluded before January 1, 2023, if:

1. Circumstances beyond the control of the parties have arisen due to which it is impossible to fulfill the contract

2. The conditions of Part 1.3-1.6 of Art. 95 44-FZ and there is a corresponding decision of the Government of the Russian Federation, the governor or the head of the municipality

This will allow customers and suppliers to operate in an environment of increased risk and changing markets without fines, threats of listings and litigation.

Please note that in 2020 the law firm Vetrov & Partners was marked by the industry rating of law firms Pravo.ru-300 in the nominations Arbitration Proceedings, Dispute Resolution in Courts of General Jurisdiction and is one of the regional companies throughout Russia in these nominations.

In the event that your litigation or other dispute, contractual work or any other form of activity concerns the issues discussed in this or our other material, we recommend that you check and make sure that your legal position complies with the latest changes in practice and legislation.

We will be happy to provide you with legal assistance regarding the minimization of legal risks and available opportunities. We will try to find a solution that is right for you.

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