Cross-border supply and payment disputes

No. Incoterms allocate specified delivery costs, obligations and risks between seller and buyer. They do not resolve all the other contractual issues that can give rise to a dispute. Incoterms 2020 address transfer of the risk of loss or damage, allocation of transport, insurance and customs-clearance responsibilities, relevant documents, and obligations to deliver and take delivery under the selected rule. Incoterms do not replace terms on quality, quantity and composition; inspection and recording defects; delay remedies; claims and notice periods; termination; defect liability; changes to a shipment; governing law; or dispute resolution. Address those issues in the contract separately from Incoterms. A specification and an Incoterms rule alone may leave important questions unresolved when quality, timing or payment is disputed.

Revise the contract when general wording does not explain what happens in the actual transaction, particularly if performance falls short. Warning signs include vague price, specification or acceptance terms without tolerances, inspection methods or consequences of defects. Changes agreed through WhatsApp, WeChat or Telegram may not be formally linked to the contract. Check how performance and breach are recorded, how force majeure is notified, which documents support a claim, the response deadline, available remedies, governing law and dispute forum. Also check sanctions clauses, particularly for arrangements affected by changes since 2022; any unilateral price-review right; the payment currency and exchange-rate mechanism; and provisions for defective returns or replacement supplies. Reviewing the terms before a shipment can avoid a much larger dispute later. The work required depends on the contract; neither the review time nor the cost of a future dispute should be assumed in advance.

Common weaknesses are an inaccurate calculation, poor links between the debt and performance records, and correspondence that changes or obscures the basis of the claim. Break the total down by period and legal basis. Account for partial payments, calculate interest and contractual penalties correctly, and separate principal from additional claims. Each figure should follow from the contract or applicable rule; unexplained differences invite objections. Link each part of the debt to the relevant delivery, service or acceptance record. Identify individual shipments rather than referring generally to numerous supplies. Where documents are unsigned or missing, establish what other evidence proves performance and the amount due. Check correspondence for inconsistent amounts or changing grounds. Informal agreement to supplier expenses or bonuses may affect the balance. Explain any difference between the pre-action demand and the claim filed in court. Audit the records before making a demand and prepare one reconciled account of the debt, with supporting documents. Gaps may be repairable later, but doing so during proceedings can be harder and subject to procedural limits.

Damages are worth adding where there is a distinct loss, a provable causal link and documents showing that the contractual remedies do not cover the full loss. Without that evidential basis, a damages claim can burden the case. Legal basis: Article 15 of the Russian Civil Code — right to claim compensation for recoverable loss caused by a breach; Article 393 of the Russian Civil Code — liability for loss caused by non-performance or improper performance, subject to the applicable legal requirements; Article 404 of the Russian Civil Code — reduction of damages where the creditor contributed to the loss. A damages claim generally requires proof of the breach, recoverable loss, causal link and amount, with fault or the applicable liability standard assessed under the governing law. Actual loss should be supported by evidence of expenditure or property damage; lost profit requires a reasoned basis showing that the income was realistically obtainable. Market-price or cover-transaction damages depend on the legal regime and facts. Russian Supreme Court Plenum Resolution No. 7 of 24 March 2016 provides guidance on liability and damages under Russian civil law. Claims for lost profit should be supported by a concrete calculation and evidence of a realistic opportunity to earn it. Do not mix actual loss with lost profit or include costs that would have arisen anyway. Damages should be developed as an evidential claim, not added as an unsupported fallback.