Serbia 22 November 2000 Foreign Trade Court attached to the Serbian Chamber of Commerce (Sweet corn, peas and green beans case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/001122sb.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: T -19/99
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Yugoslavia (Claimant)
BUYER'S COUNTRY: Greece (Respondent)
GOODS INVOLVED: Sweet corn, peas and green beans
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
54A [Obligation to pay includes enabling steps]; 59A [Payment due at time fixed or determinable by contract or Convention]; 78A ; 78B [Interest on delay in receiving price or any other sum in arrears ; Rate of interest]
54A [Obligation to pay includes enabling steps];
59A [Payment due at time fixed or determinable by contract or Convention];
78A ; 78B [Interest on delay in receiving price or any other sum in arrears ; Rate of interest]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Serbian): Click here for Serbian text of case
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English:  Vladimir Pavić, Milena Djordjević, Application of the CISG Before the Foreign Trade Court of Arbitration at the Serbian Chamber of Commerce - Looking Back at the Latest 100 Cases, 28 Journal of Law and Commerce 1, 14,15, 25.Go to Case Table of Contents
Queen Mary Case Translation Programme
Translation [*] by Sonja Sreckovic and Sara Pender
Edited by Milena Djordjevic, LLM and Marko Jovanovic [**]
AWARD (Proceedings No. T -19/99)
Claimant [Seller] from Yugoslavia v. Respondent [Buyer] from Greece
The Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce in Belgrade, the Arbitral Tribunal consisted of Mr. A (the presiding arbitrator), Mr. B (arbitrator appointed by [Seller]) and Mr. C (arbitrator appointed by [Buyer]), in the dispute concerning the claim of [Seller] from Serbia against Respondent [Buyer] from Greece, for payment of the main debt in the amount of DEM 216,743.44, with interest and compensation for the costs of the proceedings, upon conducting the arbitration proceedings and hearing held in camera on 22 November 2000, pursuant to Article 47 of The Rules of the Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce (hereinafter The Rules ) makes the following:
I. [Buyer] is ordered to pay to [Seller] the main debt in the amount of DEM 216,743.44 (two hundred and sixteen thousand seven hundred and forty three point forty four Deutsche Marks) within 15 days of the day of receipt of this award subject to court enforcement.
II. [Buyer] is ordered to pay to [Seller] the interest at the annual rate of 6% as follows:
|-||For the amount of DEM 1,493.44 - from 16 February 1996 until final payment|
|-||For the amount of DEM 21,400.00 - from 22 February 1996 until final payment|
|-||For the amount of DEM 17,050.00 - from 22 March 1996 until final payment|
|-||For the amount of DEM 20,000.00 - from 5 May 1996 until final payment|
|-||For the amount of DEM 40,800.00 - from 17 May 1996 until final payment|
|-||For the amount of DEM 27,200.00 - from 15 June 1996 until final payment|
|-||For the amount of DEM 13,600.00 - from 6 July 1996 until final payment|
|-||For the amount of DEM 13,600.00 - from 2 August 1996 until final payment|
|-||For the amount of DEM 44,400.00 - from 26 September 1996 until final payment|
|-||For the amount of DEM 17,200.00 - from 18 October 1996 until final payment|
[Buyer] is ordered to pay the interest within 15 days of the day of receipt of this award subject to court enforcement.
III. [Buyer] is ordered to pay to [Seller] the costs of proceedings - arbitration fees in the amount of RSD 32,035.00 within 15 days of the day of receipt of the award subject to court enforcement.
STATEMENT OF REASONS
I. Parties in this dispute
In the Statement of Claim submitted to the Foreign Trade Court of Arbitration in Belgrade on 9 November 1999, [Seller] designated [Buyer] as the Respondent. Until the conclusion of the arbitral proceedings [Buyer] did not change its company name.
[Buyer] duly received the claim on 23 March 2000, which is proved by the mail receipt enclosed on page 85 of the case file. [Buyer] did not object to the claim nor to the company name stated in the claim. The contract concluded between the parties on 26 December 1995 (pages 5 and 6 of the case file) clearly shows that the company name for [Buyer] is the one stated in the Statement of Claim. In the parties' fax correspondence (pages 79, 80 and 81 of the case file) [Buyer] refers to itself under the same name that [Seller] uses in the Statement of Claim.
The above-mentioned facts led the Tribunal to conclude beyond any doubt that [Buyer]'s business name is correct.
[Seller]'s company name indicated in the Statement of Claim is identical to the company name stated in the company's memorandum and its legal representative's power of attorney.
In the Contract of 26 December 1995, the [Seller]'s company name was abbreviated, but with the same registered place of business.
The Tribunal explicitly asked [Seller]'s legal representative, during the hearing that took place on 22 November 2000, about the name of [Seller]'s company and the legal representative answered specifically: […].
After duly receiving the Statement of Claim and the summons the hearing on 19 October 2000, which is proved by the receipt enclosed on page 104 in the case file, [Buyer] did not object to the validity of the [Seller]'s company name nor its claims. In light of these facts the Tribunal established that [Seller]'s company name is undisputed.
II. Appointment of the Arbitration Court
[Seller] proposed Mr. X to be appointed sole arbitrator.
Upon payment of arbitration fees on 15 November 1999, the Secretariat of the Court of Arbitration forwarded the Statement of Claim, along with all attachments to [Buyer] via RAR to the address indicated in Statement of Claim on 22 November 1999.
The envelope containing the Statement of Claim was returned to the Court of Arbitration on 10 December 1999 with the indication "parti sans laisser d'adresse" ('left without giving a forwarding address'), so the Arbitration asked [Seller] to provide [Buyer]'s exact address.
[Seller] submitted [Buyer]'s new address on 6 January 2000. The Statement of Claim (and the attachments thereto) was resent on 6 January, also via RAR, but returned to the Court of Arbitration on 28 January 2000 with the same mark - "parti sans laisser d'adresse". [Seller] was notified of this event on 31 January 2000 and was asked to submit [Buyer]'s exact address.
[Seller] submitted [Buyer]'s new address on 16 March 2000, so the Statement of Claim (and the attachments thereto) was resent on the same day. The receipt signed by [Buyer] (enclosed on page 85 of the case file) confirms that [Buyer] acknowledged the receipt of the Statement of Claim and all the attachments thereto on 23 March 2000. [Buyer] was also instructed to submit an answer to the Statement of Claim, to appoint its arbitrator and his deputy arbitrator and to state its position with respect to [Seller]'s proposal that the dispute be settled by a sole arbitrator.
[Buyer] was warned that the dispute will be settled pursuant to the Rules, so even if it fails to submit its answer or refuses to take part in the arbitral proceedings, the proceedings will nevertheless resume pursuant to the Rules.
[Buyer] did not exercise its right to reply to the Statement of Claim within 30 days from the day of the receipt thereof, it did not appoint an arbitrator nor did it state its position with respect to [Seller]'s proposal regarding the settlement of the dispute by a sole arbitrator. [Seller] was duly informed of [Buyer]'s failure to respond on 3 May 2000. It was also notified that the proposed arbitrator, Mr. X, had in the meantime passed away. [Seller] was therefore asked to appoint another arbitrator and his deputy. In its letter dated 12 May 2000 [Seller] accepted that the appointment of new arbitrator be done by the President of the Court of Arbitration.
Pursuant to [Seller]'s request and in accordance with Article 28(2) of the Rules, the President of the Court of Arbitration appointed Mr. B as arbitrator on 13 June 2000. Mr. B signed a statement of acceptance of duty.
The President of the Court of Arbitration also appointed Mr. C as arbitrator on behalf of [Buyer] on 15 June 2000.
The appointed arbitrators, acting pursuant to Article 28(4) of the Rules, appointed Mr. A as president of the Arbitral Tribunal.
The arbitrators and President of the Arbitral Tribunal signed a statement, in accordance with Article 33 (1) of the Rules, that they accept their duties, that they are impartial to both sides, and that there are no facts or circumstances that will question their independence.
The above-mentioned statements were delivered to both parties on 31 August 2000 and the parties were called upon to submit their objections with 15 days.
Both parties were duly served with the aforementioned statements and signed the mail receipts: [Seller] on 4 September 2000 and [Buyer] on 12 September 2000 (enclosed on page 103).
Consequently, since the parties submitted no objections within the time frame set by the Rules, the Arbitral Tribunal was properly constituted and enabled to proceed with preparations for the hearings and the hearings.
III. Arbitration clause and the jurisdiction of the Arbitration
As far as the jurisdiction of Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce in Belgrade is concerned, [Seller] relies upon the arbitration clause contained in Article 8 of the Contract of 26 December 1995. The Contract is enclosed in the English and Serbian languages. Article 8 provides that any disputes arising out of the performance of this Contract shall be resolved in an amicable manner. If the amicable settlement is not possible, the International arbitration in Belgrade or Athens shall be competent to hear the dispute. The applicable law shall be Yugoslav or Greek law.
Given that [Buyer] failed to submit an answer to the Statement of Claim, the Board of the Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce in Belgrade, acting pursuant to Article 15(1) of the Rules, had to determine whether [Seller] enclosed the arbitration clause. The Board, in accordance with the said Article, concluded in written form (on 5 May 2000) that [Seller] may rely on the arbitration clause contained in Article 8 of the Contract concluded on 26 December 1995. Both sides were duly informed about this decision in written form.
In establishing the jurisdiction of the Arbitration, pursuant to Article 18 of the Rules, the Board noted that one of the parties, [Buyer], is a foreign company, that the dispute arises from foreign trade transactions (as required by Article 12 of the Rules), that there is an agreement in written form on the jurisdiction of "International Arbitration" either in Belgrade or in Athens and that neither the dispute nor subject-matter fall within exclusive competence of a State court, so the parties are free to decide on the dispute resolution method, subject to requirements set by applicable law.
The Board considered whether the terms contained in Article 8 of the Contract ("International Arbitration in Belgrade or Athens") is specific enough to confer jurisdiction to the Arbitration, since this term does not fully comply with the term used in the Rules and the Law on the Yugoslav Chamber of Commerce (Official Gazette SFRY 53/92) where it is referred to as: Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce. The Board found that the parties' intention was to have their potential dispute settled by arbitration with international capacity. Accordingly, the party appearing as claimant would have to opt between Arbitration in Belgrade and Arbitration in Athens. In any event, the Contract shows that the parties' main intention was to have their dispute resolved by an Arbitration which has the authority to hear cases containing a foreign element, which is the case here, so the pathological element of the arbitration clause contained in Article 8 of the Contract, the vague term used to designate the competent arbitral institution, is not crucial for establishing the jurisdiction of either the Belgrade or the Athenian Arbitration.
The Board had no dilemma regarding the above-mentioned, because of the additional fact that at the time of conclusion of the Contract at the time when the dispute was brought before arbitration, the Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce is the only permanent arbitral institution in Belgrade and in FR Yugoslavia.
[Buyer], which duly received the claim, the notification of formation and members of the Tribunal and the summons to the hearing, had not objected to the jurisdiction of this Arbitration for the settling the dispute at hand.
IV. Claim, Written Submissions and Hearings
[Seller] personally delivered the Statement of Claim in five copies to the Arbitration on 9 November 1999. In an attachment to the Statement of Claim, [Seller] submitted the Contract concluded between the parties on 26 December 1995 and put forward that it undertook to deliver specifically stated goods and quantities to [Buyer] (sweet corn, peas and green beans) at the market price which will be determined by the parties prior to delivery.
In accordance with the Contract, [Seller] delivered the above-mentioned goods in installments throughout 1996. The total value of the goods delivered was DEM 229,250.00. However, [Buyer] only made a partial payment in the amount of DEM 12,506.56 for the invoice number 35801464 of 16 January 1996. Consequently, [Buyer] failed to pay the amount of DEM 216,743.44. Considering the difficulties of payment within contractual terms (30 days from delivery), the parties explored the possibility of having [Buyer] deliver to [Seller] files and engines as a compensation for the value of the goods received, but did not reach a final consensus. For this reason the abovementioned sum that [Buyer] owes to [Seller] has remained unsettled. [Seller] therefore claims the payment of the main debt, domiciliary interest and reimbursement of the cost of arbitral proceedings. It also proposed the dispute and correspondence ensue in Serbian. In support to its claim [Seller] enclosed 16 invoices, delivery notes, 16 JCI, international waybills and declarations of transactions performed, along with payment reports from abroad via Bank J in the amount of only DEM 12.506,56 (page 16 of case file). [Seller] proposed a joint overview of all documents, a specification of debt from the invoices and JCI specification of debt per goods from three faxes from [Buyer] of 15 December 1997, 18 August 1998 and 8 December 1998, where [Buyer] suggests the delivery of files or engines for VW Golf as a compensation for its debt of DEM 218,000.00, stating in the last fax the possibility of settling the debt by a barter arrangement with a Russian partner with whom negotiations have already started.
As was formerly stated, the claim along with evidence, the Rules and a list of arbitrators were duly delivered to the Respondent on 23rd March 2000. [Buyer] was asked to give its reply, to nominate its arbitrator and deputy arbitrator. It was also warned that in the event it does not enclose its reply or refuses to take part in the arbitral procedure, the proceedings will resume in accordance with The Rules.
[Buyer] did not object to the claim or the pleadings in the notice given to it, so the President of the Arbitration, pursuant to Article 34(6) of The Rules, fixed an oral hearing for 22nd November 2000 at 10 o'clock in the chambers of the arbitration.
The Arbitration concurred that both [Seller] and [Buyer] had promptly signed the mail receipts of delivery of invitations to the hearing: the Claimant on 18th and the Respondent on19th October 2000 (see enclosed receipts on page 104).
The hearing for oral argument was held on 22 November 2000 in the seat of the Arbitration. [Seller] was represented by a counsel, but [Buyer] failed to appear. Furthermore, [Buyer] did not appoint its counsel, did not ask for the hearing to be adjourned, nor did it justify its absence.
In the meantime the Arbitration received a short submission from [Seller] in which it confirmed the receipt of the summons and submitted excerpts from the register of Commercial Court C with attachments 1, 3, 4, 5, 6 and 7 on 24 October 2000. On the same day [Seller] presented the Arbitration a submission further defining its claim regarding the interest, where instead of the before-instilled claim of domiciliary interest now asked for a 6% interest rate per annum which is in accordance with the Law on the Default Interest Rate. These two submissions (excerpts from the register and the modified claim for interest) were forwarded to [Buyer] on 25 October 2000, but were returned with the same indication from the Greek post: "parti sans laisser d'adresse", so they were resent on 10 November 2000 only to be returned with the recurring mark.
At the hearing held on 22 November 2000 the Tribunal concluded in written form that the claim, with all its attachments, was duly delivered to [Buyer] on 23 March 2000. The summons for the hearing was delivered on 19 October 2000. [Buyer] did not object to the claim. The Tribunal also took note of the fact that [Buyer] changed its business address without leaving a new address, so in accordance with Article 25(5) of the Rules, the tribunal decided to hold the hearing in the absence [Buyer] and that all future correspondence is to be sent via DHL or by attachment on the notice board in the seat of Arbitration, with a set time limit of 8 days, which is in accordance with Article 145 of the Yugoslav Law on Civil Procedure ("Official Gazette SFRY 4/77). Pursuant to this Article, the parties are required to inform the Court (i.e. the Arbitration in the case at hand) of any changes of their domicile without delay.
Pursuant to paragraph 2, of the same Article, the Arbitration has the right to declare that all future deliveries to a party that changes its domicile without informing the Tribunal thereof are to be posted on the notice board in the seat of Arbitration, and are deemed delivered after on the eighth day following the day of posting to the notice board.
Counsel for [Seller] did not amend the claim nor the submissions contained in the Statement of Claim. He did not have any proposition regarding the extension of time frame for gathering evidence.
For the purposes of gathering evidence, the Tribunal read the Contract of 26 December 1995; all commercial-financial documentation enclosed with the Statement of Claim (invoices, dispatches, waybills, JCI, reports considering payments, registration forms for the business transactions performed and three fax messages sent by [Buyer]) and concluded the hearing on the same day.
V. Disputed questions and assessment of the evidence
The Tribunal assessed that the following questions could be unclear, even though [Buyer] did not object nor answer to the Statement of Claim.
1. Foundation of the Main Claim
The Tribunal's consideration of Article 6 of the Contract of 26 December 1995 should represent the starting point in assessing whether [Seller]'s claim is founded. The above-mentioned provisions state that [Buyer] is obliged to pay to [Seller] the delivered goods by bank transfer within 30 days from the day of delivery. Parties recognized [Buyer]'s banking draft as a guarantee for every delivery. As a contract is a law for parties (settled principle PACTA SUNT SERVANDA), [Buyer] was obliged to pay to [Seller] the delivered goods within 30 days from the day of delivery. It had not acted accordingly, apart from a partial payment on 20 October 1998, in the amount of DEM 12,506.56, via Bank J.
The Tribunal has gathered the evidence by reading all invoices, dispatches, international waybills and JCI (altogether 16) and reports regarding payment, the Statement of Claim, and the form No. 743 issued by the Bank J from 20 October 1998 that had been enclosed with the Statement of Claim. The Tribunal established as undeniable the fact that during 1996 [Seller] delivered goods worth DEM 229,250. [Buyer] paid only DEM 12,506.56, so its principle debt amounts to DEM 216,743.44.
The Tribunal gave [Buyer] multiple chances and reasonable time to respond to the claim and to take part in the arbitration procedure in order to try to prove that [Seller]'s claim is unfounded. But [Buyer] did not respond to the claim. However, [Buyer]'s absence from the proceedings does not render [Seller]'s claim void. Its claim is in fact proved and founded on the grounds of the written submissions and the fact that the delivery of goods was in conformity with the said documents. In conclusion, [Buyer] did not pay [Seller] the principle debt (mentioned above in this Award).
The Tribunal has gathered the evidence by reading all 16 of [Seller]'s enclosed invoices regarding the delivery of goods, 16 dispatches, 16 international invoices, 16 JCI and the registration forms regarding the business transactions performed. The report from Bank J (form 743 of 20 October 1998), regarding the partial payment of DEM 12,506.56, as well as three fax messages from [Buyer] to [Seller] concerning the offer to compensate for the amount due by delivering car engines or files, were also read. The Tribunal assessed all those documents in light of the principle of authenticity and persuasive power of evidence, so it came to a conclusion that they present irrefutable evidence of [Buyer]'s debt, that [Buyer] has acknowledged its debt in almost the same amount through fax messages, especially in the fax message from 25 December 1997. Taking into consideration the above-mentioned, it was decided as in part I of enacting terms of this decision.
2. Substantive and procedural law
The Tribunal first considered the Contract between the Parties concluded on 26 December 1995, in which, pursuant to its Article 6, [Buyer] agreed to pay the goods to [Seller] primarily by bank transfer within 30 days from the day of delivery. The Tribunal also concluded that the contract is the law for the parties, as noted above. That being said, there was no dilemma concerning [Buyer]'s obligation or the relevance of the Contract, which represents the primary source of law designated by the parties.
The Tribunal considered the arbitration clause found in Article 8 of the Contract, in which the parties agreed on the alternative application of Yugoslav or Greek law, and an alternative possibility that the dispute be resolved by arbitration either in Belgrade or Athens. In coherence with the particular legal framework, the Tribunal concurred that both parties had the option of choosing the arbitration in Belgrade or Athens, a fact that [Seller] pointed out in its Statement of Claim. However, the Tribunal considered the arbitration clause, the will of the parties expressed in the Contract and their written submissions in order to determine which substantive law is to be applied to the dispute, Yugoslav or Greek. In order to take the correct position on this matter the Tribunal resorted to, in accordance with Article 7 of the European Convention on International Commercial Arbitration from 1961 (hereinafter EC 1961), the application of the proper law under the rules of conflict of laws that the arbitrators deem applicable, taking into account the terms of the Contract and the trade usages. A similar provision exists in Article 46(2) of the Rules, which are mandatory for the Tribunal. Article 46(2) of the Rules provides that the arbitrators are to apply the substantive law determined by the rules of private international law of the country they deem most suitable for the subject at hand.
The Tribunal took into consideration that the contract was concluded in Belgrade and that the principle part of [Seller]'s obligation, the delivery of the goods, was performed in FR Yugoslavia. Applying the principle LEX LOCI VENDITORIS (the law of the seller's country), the Tribunal decided to apply Yugoslav rules of private international law contained in the Law on resolution of conflict of laws with regulations of other countries ("Official Gazette SFRY 43/82). Since the contract was concluded in Belgrade, another principle - LEX LOCI CONTRACTUS (the law of the place where the contract was made) upholds the application of Yugoslav rules of private international law in order to determine the applicable substantive law for the dispute at hand.
Consequently, the Tribunal applied Article 20(1)(1) of the Yugoslav Law on resolution of conflict of laws with regulations of other countries and decided that the dispute should be settled in accordance with Yugoslav substantive law.
In determining which piece of legislation contains Yugoslav substantive law, the Tribunal first referred to the United Nations Convention on Contracts for the International Sale of Goods (Vienna 1980), hereinafter CISG, the Yugoslav Law on Contracts and Torts ("Official gazette SFRY 29/78) (hereinafter LCT) and the Yugoslav Law on Default Interest Rate ("Official Gazette FRY 32/93), keeping in mind that the last two pieces of legislation are to be applied to questions not regulated by the CISG.
The Tribunal primarily applied the CISG, as prescribed by Article 16 of the Yugoslav Constitution, which states that international treaties which are ratified and promulgated in accordance with the Constitution, as well as the universally accepted principles of international law, form an integral part of the domestic legal system. The Tribunal concluded that both Yugoslavia and Greece are bound by the CISG. According to the data available at the depositary of the CISG, the Secretary General of the United Nations, the CISG entered into force in Yugoslavia on 12 January 1988. The CISG has been applicable in Greece since 27 March 1985. The Tribunal also considered provisions of another Convention - The Vienna Convention on the Law of Treaties, hereinafter VC 1969, which came into force on 30 October 1974 in Greece and 27 August 1970 in Yugoslavia (according to official reports). Article 27 of the said Convention explicitly stipulates that a contracting state may not invoke the provisions of its internal law as justification for its failure to perform a treaty (Article 27).
Consequently, the Tribunal came to the conclusion that the CISG is to be primarily applied to the dispute on the grounds of the principle LEX SPECIALIS DEROGAT GENERALI.
Article 54 of the CISG states that the main obligation of the buyer is to pay the price for the goods delivered and to take steps to comply with such formalities as may be required to enable payment to be made. A similar provision exists in Article 516 of the Yugoslav Law on Contracts and Torts. This provision also requires the buyer to pay the purchase price at the time and in the place stipulated in the contract. [Buyer] did not act in accordance with the Contract regarding payment within 30 days of delivery (Article 6), nor did it comply with Article 54 of the CISG or Article 516 of the LCT.
Since [Buyer] failed to comply with the terms of the Contract, accepted the delivery of the goods and acknowledged its debt, the Tribunal, acting in accordance with the Contract and legislative provisions, concluded as stated under point I of the Award.
As to [Seller]'s claim for interest [Award, point II], the Tribunal, on the basis of evidence previously mentioned, found that since [Buyer] failed to pay the main debt within the time frame provided for by the Contract (30 days from the day of delivery), [Seller] is entitled to interest, the rate of which shall be specified by internal law. This conclusion is in accordance with Article 78 of the CISG and Article 277 of the LCT.
Since neither Article 78 of the CISG nor Article 277 of the LCT fix interest rates (it should be noted, however, that the LCT states that the interest rates are to be determined by internal legislation), the Tribunal applied the Yugoslav Law on Default Interest Rate ("Official Gazette FRY" 32/93). Article 2 of the said law states that, for pecuniary obligations in relations between domestic and foreign subjects, which are to be executed in a foreign currency, the interest rate is set at 6% per annum (Award II).
The Tribunal primarily applied the Rules of the Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce (the Rules) with respect to the arbitral procedure, their application being mandatory pursuant to Article 44 of the Rules. On issues not governed by the Rules the Tribunal applied the Yugoslav Law on Civil Procedure, providing that provisions of the said law are in accordance with the competences and principles of arbitration.
Seeing as there was no prior agreement or request made by the Parties regarding the language in which the procedure would ensue, the Tribunal chose Serbian (Article 37(1) of the Rules). [Seller] explicitly requested that the procedure be carried out in Serbian to which [Buyer] had no objections.
Apart from the Rules and Law on Civil Procedure, the Tribunal had the option to apply the UNCITRAL Arbitration Rules from 1976 providing there was a clause in the contract that specifically called for the application of this set of rules. Since the parties did not stipulate such a clause, the Tribunal applied the Rules and Law on Civil Procedure accordingly.
Given that [Buyer], according to official information from the Greek Post, changed its address without notification of its subsequent location, the Statement of Claim, written submissions, notices and all other written documentation could not be delivered or were delivered after being redispatched (in the case of the Statement of Claim and the summons). The above-mentioned facts were the basis for the Tribunal to act pursuant to Article 145 of the Law on Civil Procedure and to have all further written communication sent by DHL or attached on the notice board in the seat of Arbitration. The requirement of notification in the event the respondent changes his address is also prescribed by the UNCITRAL Model Law on International Commercial Arbitration 1985 (Article 3), which is also a source of procedural law. The Model Law states in Article 3 that any written communications are deemed to have been received if they are delivered to the addressee personally or if it is delivered at his place of business, habitual residence or mailing address; if none of these can be found after making reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee's last-known place of business, habitual residence or mailing address by registered letter or any other means which provides a record of the attempt to deliver it. The communication is deemed to have been received on the day it is so delivered.
The Tribunal considered that the procedure should not be carried out in a manner that would unduly prolong the time in which the parties can pursue their interests emanating from the claim. [Buyer] avoided the reception of written communication by departing from its address without leaving a subsequent address, which was its duty as a business partner and a party to this dispute.
The avoidance of reception of written communication should not in any way be an obstacle for maintaining the principle of procedural efficiency. A different position would lead to blanketing the misuse of rights. Both parties are duty-bound while executing their contractual agreements, and their obligations arising from their dispute, to notify each other and the Tribunal of any modification to their address. Each Party must pay attention to the course of the proceedings and will be liable if they fail to act accordingly (the principle of VIGILANTIBUS IURA or CULPA IN VIGILANDO). Hence, Article 3 of UNCITRAL Model Law on International Commercial Arbitration provides the legal presumption (PRAESUMPTIO IURIS) that written communication is deemed to have been received on the day it was sent to the addressee's place of business.
The Tribunal further protected [Buyer]'s interests by allowing delivery to be carried out by DHL or by attachment on the notice board in the seat of Arbitration, since regular postal service often returns communications. Both of the above mentioned methods, including Article 3 of UNCITRAL Model Law on International Commercial Arbitration, are deemed satisfactory.
3. Costs of the proceedings
[Seller]'s claims were entirely granted as it successfully proved its submissions both with respect to the existence of the main debt and the interest due.
[Seller] proved that its expenses in this dispute consist of the arbitration fee in the amount of RSD 32,035.00. On 22 November 1999 [Seller] submitted a bank report confirming that the arbitration fee was duly paid. It neither proved nor claimed reimbursement of other costs.
Pursuant to Article 155 of the Law on Civil Procedure, the Tribunal found that [Seller] is entitled to reimbursement of the abovementioned costs, because a party that entirely fails to prove its claims is bound to reimburse the costs of proceedings to the other party.
Applying Article 155 of the Law on Civil Procedure, the Tribunal found that [Seller] needed to incur the arbitration fee, so in accordance with the abovementioned, these costs should be reimbursed to it by [Buyer].
VI. Finality of the award
Pursuant to Article 54 of the Rules of the Foreign Trade Court of Arbitration attached to the Yugoslav Chamber of Commerce and Article 183 of the Yugoslav Law on Civil Procedure, this arbitral award is final, is not subject to appeal and has the force of a final decision of a court.
|Clerk of the court
|President of Arbitration board
Members of Arbitration board
* All translations should be verified by cross-checking against the original text.
** Sonja Sreckovic is an LLM student at the University of Belgrade Faculty of Law and Sara Pender is an associate with Belgrade law firm Stankovic & Partners. Milena Djordjevic, LL.M (U. Pittsburgh) and Marko Jovanovic are lecturers at University of Belgrade Faculty of Law.Go to Case Table of Contents