Commercial Court applied foreign law in a commercial dispute between residents of Türkiye and Azerbaijan

The parties to the Purchase Agreement did not prescribe which country's law would apply in dealing with a dispute between them. 

According to subparagraph 1 of part 1 of Article 25 of the Law of the Republic of Azerbaijan "On Private International Law", in the absence of an agreement between the parties to a purchase and sale contract on the law applicable to that contract, the law of the country where the seller is established or has its main place of business shall apply to the contract.

According to the legislation of the Republic of Azerbaijan, the limitation period for contractual claims is three years and this period has expired. Turkish legislation provides for a ten-year limitation period for sales contracts. Therefore, it was fundamentally important for the plaintiff that the court apply Turkish law to the case, since otherwise, when the defendant filed an application for the application of the limitation period provided for in the Civil Code of Azerbaijan, the court was obliged to apply the limitation period and issue a decision to reject the claim.

The specificity of such disputes is that when applying foreign law, the court is obliged to take all necessary measures to establish the content of these legal norms in accordance with their official interpretation and practice of application in the relevant country. In the event that these actions have not yielded results or require extremely large expenses and neither of the parties involved in the process can submit documents confirming the legal norms to which it refers to substantiate its claims and protests, the legislation of the Republic of Azerbaijan shall apply.

Therefore, we took active measures to collect documents confirming the legal norms to which we referred to substantiate our claims.

It is also noteworthy that the court responded positively to our motion to involve an associate professor of the Civil Law Department of the Law Faculty of Baku State University in the case as a specialist.

As a result, the court of first instance fully satisfied our demands for recovery of the debt from the defendant under the contract in the amount of 405,000 euros.

The defendant's appeal was dismissed and the decision of the court of first instance was upheld. In the end, Commercial Collegium of the Supreme Court ruled to uphold the last judgement of the Commercial  Collegium of the Court of Appeals.