A French company hereinafter, the Seller concluded a contract for the sale of heating units with a Polish company hereinafter, the Buyer , in which it was also provided that the Buyer became the exclusive distributor of the Seller in Poland and Slovakia. The parties chose Polish law as the law applicable to the contract. The Buyer then brought an action against the Seller, seeking compensation for actual loss and loss of profit, as well as the payment of a penalty provided for in the contract in the event of delay in delivery.
The Seller argued that CISG was applicable to the contract, since the exclusivity clause was merely incidental to the main contract of sale and therefore did not change the legal nature of the contract.
Furthermore, the Seller relied on Article 6. The Seller appealed. Consequently, the filling of internal gaps in the Convention must be done firstly by recourse to the general principles on which it was based, and only secondarily, by recourse to private international law; - in consideration of the above, the application of Polish law in all matters not regulated by the contract did not call into question the leading role of general principles for all subjects that were covered by CISG, although not expressly settled in it, since the intervention of national law was limited to matters excluded from the Convention; - in particular CISG did not exclude hardship, defined in Article 6.
Nevertheless, the Court of Appeal confirmed the First Instance decision and declined to grant the relief sought by the Seller. It concluded that Seller had failed to produce evidence that the price increases it suffered satisfied the requirements of the hardship doctrine, and that, even if Seller had suffered losses, the UNIDROIT Principles did not authorize a disadvantaged party to suspend performance.
Thus, Seller continued to bear the risk that performance of the contract would become more financially onerous. Nor had Seller demonstrated that Buyer violated the principle of good faith when it failed to renegotiate the price or postponed meetings to discuss the situation.
