Court awards COBALT client full compensation in international goods sale dispute

A Riga Regional Court judgment in favour of COBALT’s client has come into force concerning a commercial dispute. The dispute arose from the purchase of non-compliant luminaires that an international company, COBALT’s client, had bought from a Latvian seller for resale to third parties.  All purchased luminaires were found to be seriously defective during the warranty period. This led the final purchasers (third parties) to demand a refund from COBALT’s client for the price paid for the goods.

Acting on behalf of its client, COBALT filed a claim against the seller, seeking damages equivalent to the claims made by the third parties. The courts decided the case by applying the United Nations Convention on Contracts for the International Sale of Goods (‘CISG’). Both courts not only ruled that the seller had breached the contract of sale, but they also fully endorsed COBALT’s interpretation of Article 74 CISG. Specifically, they agreed that this provision embodies the general principle of full compensation. This principle entitles the injured party, COBALT’s client, to full compensation for pecuniary losses incurred from the breach, including losses arising from third-party claims – the end buyers – in the amount of such claims.

The client’s claim was fully upheld by both the court of first instance and the Riga Regional Court. The Supreme Court then refused to initiate cassation proceedings, thereby confirming that the Regional Court’s judgment as entirely correct.

The client was represented in the case by COBALT’s Senior Associate Sabīne Zaula.