SDNY Dismisses Action against Iraq based on Impossibility under Article 79 of CISG

Prior to the commencement of United States-led war in Iraq, Hilaturas Miel S.L. (“Hilaturas”) entered into a contract to supply the Republic of Iraq with yarn under the U.N. Oil For Food Program. The Southern District of New York (Sweet, J.) recently had occasion to opine on the effect of the hostilities in Iraq on the contractual rights and obligations of the parties.

Hilaturas filed a complaint alleging that Iraq breached the parties’ contract, and alleged damages as a result of the failure of Iraq to provide means of inspection and acceptance of yarn shipped under the contract. On Iraq’s motion for summary judgment, citing Article 79 of the CISG, the court dismissed the complaint, concluding that the war precluded the performance of the contract — namely, inspection, which was a condition precedent under the contract, became impossible.

Hilaturas Miel S.L. v. Republic of Iraq, 06 Civ. 12 (S.D.N.Y. Aug. 20, 2008). [Decision available in NYLJ, subscription required].

[Meredith R. Miller]