Important conditions of contracts concluded by foreign organizations with Belarusian counterparties
Preliminary consultation from a lawyer with 15-25 years of experience
In the process of concluding foreign economic contracts with Belarusian companies, foreign companies should stipulate in the contract the applicable law and the court that considers disputes favorable for them. The parties have the right to choose the applicable law, both for the contract as a whole and for its particular parts. The choice of applicable law is made on a case-by-case basis. If this is not done, the law and the court will be determined by the conflict of laws and procedural law. Most often, the law and the court are at the location of the defendant. If it is impossible to determine the law to be applied by the court, the law most closely related to the civil law relations, complicated by a foreign and Belarusian element, is applied.
Thus, in the absence of an agreement of the parties on the choice of the applicable law, the court may choose the law on its own. As a result, the law of the wrong country may be applied, which the foreign and Belarusian parties intended when concluding the contract, or the law may put the foreign party at a disadvantage. Foreign countries and Belarus, for example, calculate the limitation period differently, determine requirements for the quality of goods and services, peculiarities of proof, sanctions and much more. For this reason, it is extremely important to assess at the stage of concluding a contract what possible legal claims may arise on it, and based on that choose the more convenient law with regard to the foreign company.
Consideration of disputes by the state court is the most traditional way of resolving disputes arising from the contractual relations of the parties. In favor of the state court is a clear regulation of the procedure for consideration of a dispute, a simple mechanism for execution of the decision, the availability of judicial practice, the possibility of execution immediately after the decision or a simple procedure for recognition of the decision abroad.
The main pros and cons to be taken into account deciding between the courts of the two countries are the financial and time costs of the recognition and enforcement procedure if a Belarusian decision is executed in a foreign country and vice versa. For the foreign entity there is a risk of non-recognition of the decision issued by a foreign court in Belarus anyway.
Recognition and enforcement of decisions of foreign courts on the territory of the Republic of Belarus is carried out by Belarusian economic courts. If a contract chooses to apply Belarusian law, then there will be fewer errors in its application by a Belarusian court than in its application by a foreign court for which that law is foreign and vice versa.
Enforcement of a court decision in the Republic of Belarus is carried out in a simplified procedure in accordance with the New York Convention of 10.06.1958 "On the Recognition and Enforcement of Foreign Arbitral Awards".
Both foreign and Belarusian companies should pay attention to the limitation period. The limitation period is the period granted to protect the violated right in court. The limitation period is the period within which the court may grant protection. The transition of rights by way of assignment shall not affect the beginning of the period of limitation or the procedure for calculating it. The general period of limitation in Belarus is 3 years. The period of limitation begins from the day when a person knew or should have known about the violation of his right. Belarusian legislation provides methods of securing obligations of foreign companies: penalties, pledge, retention of the debtor's property, surety, guarantee, bank guarantee, deposit and other ways provided by law or contract. Accordingly, the obligation may be secured by law or by contract. The maximum limits of sanctions are not set.
Issues regarding the acceptance of goods in quantity and quality, as well as other issues related to the sale of goods, are specified in the Vienna Convention of the United Nations "On Contracts for the International Sale of Goods" of 11.04.1980.
Law firm "Economic disputes" renders services on development, drafting and analysis of foreign economic contracts. High level of professionalism of our lawyers allows to develop contracts with the most protected and safe conditions for a foreign client. Our lawyers are fluent in more than 5 foreign languages. They use both Belarusian and foreign legal bases. They are well aware of the differences between foreign and Belarusian law and will be able to choose the most favorable combination of terms for you.
