Judicial Adaptation of International Commercial Contracts: Foreign Approaches and Russian Prospects

Abstract

Adaptation of a commercial contract provided for in international commercial law allows the court in exceptional cases to amend the terms of the contract in the event of the occurrence of circumstances that significantly affect the contract’s performance. An example of such circumstances are the unilateral sanctions restrictions that have affected international contracts involving Russian merchants, which brings the problem of adaptation into focus in the current Russian legal environment. The aim of the research is to identify the main models of contract adaptation by the court when applying the institute of hardship in international and foreign and to compare them with the Russian approach. The achieve the above the following objectives have been consistently reached: the concept of adaptation of an international contract was actualized, the latest approaches to judicial intervention in a contract in the main foreign legal orders (common law countries, France and Germany) were compared, legal grounds for contract modification by a court in the Russian legislation were identified and recent Russian court practice has been studied. The results were facilitated by the application of comparative legal technique with a predominance of functional method. Judicial intervention in a contract is an exceptional measure and is permissible in international turnover if there are sufficient grounds (in particular, those provided for in the UNIDROIT Principles of International Commercial Contracts). The basic approach here is centered on the priority of preserving the contractual relationship over termination of the contract by the court. In domestic turnover this measure is considered by legislators as extraordinary (France), or judicial intervention is not allowed at all by national law (the United Kingdom). However, some legal orders (Germany) take a position close to international commercial law, at the legislative level providing the court with quite wide opportunities to adapt a commercial contract. In Russian practice the approach of the courts has traditionally differed from the international standard, as the courts, based on the provisions of local civil law, preferred to terminate the contract in the event of a material change of circumstances. The recent years’ legal practice, dictated by the sanctions agenda, shows a shift of this vector towards judicial modification of the contract.