Saturday, September 12, 2009
Ikea discovers the hazards of courts that aren't judicial.
Ikea's troubles in Russia point up how crucial an efficient and fair judicial system is to the operation of a market economy. Ikea responded to the demand for a bribe from the local utility in return for electricity for its Moscow store by leasing generators. But Ikea allegedly discovered the company that leased the generators had fraudulently overcharged, and, therefore, Ikea canceled the contract and sued for damages. But, so far, the Russian courts have ruled for the defendant: "in rulings over the last two weeks, Ikea has lost another 5 million euros in damages that the judges awarded the generator rental company for breach of contract."