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CISG CASE PRESENTATION

Bulgaria 12 March 2001 Arbitration Case 33/98 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/010312bu.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 20010312 (12 March 2001)

JURISDICTION: Arbitration ; Bulgaria

TRIBUNAL: Bulgarian Chamber of Commerce and Industry

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 33/98

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Unknown

BUYER'S COUNTRY: Unknown

GOODS INVOLVED: Unknown


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 7(2) ; 78 [Also cited: Article 59]

Classification of issues using UNCITRAL classification code numbers:

7C231 [Gap-filling by domestic law: recourse to domestic law selected by Private International Law];

78B [Rate of interest]

Descriptors: Gap-filling ; Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Bulgarian): Praktika Bulgarska turgovsko-promishlena palata (BTPP) 2000-2001, No. 2 [10-11], No. 3 [11-12]

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]

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Case text (English translation)

Queen Mary Case Translation Programme

Arbitration Tribunal of Bulgarian Chamber of Commerce & Industry
Case No. 33/98 of 12 March 2001

Translation by Bojidara Borisova [*]

Translation edited by Vessela Velkova [**]

SUMMARY

Where the contracting parties did not indicate the applicable substantive law, the Arbitral Tribunal applies the law that it deems applicable by virtue of the rules of private international law.

If a party fails to pay the price or any sum that is in arrears, the other party is entitled to interest on it.

CASE DECISION

Applicable law

The parties did not stipulate the applicable law. In cases like this according to article 38(2) of the Bulgarian International Commercial Arbitration Law (BICL) and article 36(2) of the Statute of the Arbitral Tribunal (SAT) of the Bulgarian Chamber of Commerce and Industry (BCCI). the Arbitral Tribunal applies the law that it deems applicable by virtue of the rules of private international law. When a disputed relationship is regulated by international convention, the convention is the applicable law.

Considering that at the time of the conclusion of the disputed contract for sale of goods, the contracting parties had their places of business in different countries -- Bulgaria and Italy -- both of which ratified the CISG, plus the fact that the contract does not include a clause excluding its application, the Arbitral Tribunal accepts that the applicable substantive law is the CISG. The plaintiff also claims the application of the CISG and the defendant did not consider the matter. According to article 7(2) CISG, when there is a gap, as well as when there are matters governed by the Convention which are not expressly settled in it, the applicable law is the Bulgarian substantive law as the municipal law of the seller who owes the obligation characterizing the contract.

Calculation of interest

The legal basis for the interest claim is article 78 of CISG, according to which if a party fails to pay the price that is in arrears, the other party is entitled to interest on it. According to article 59 of the CISG, the buyer must pay the price on the date fixed by or determinable from the contract and the CISG.

The CISG does not define the amount of the interest in arrears. Considering that in this particular case the contracting parties did not stipulate the applicable law, the Arbitral Tribunal accepts that the substantive law of the plaintiff's country must be applied, because he owes the characterizing contractual obligation. According to Government Decree N 72/94 for the determination of the amount of the interest, quarter LIBOR for the US dollar is used plus 10 points.

Considering the above, the Arbitral Tribunal finds the claim for the interest reasonable. The defendant is directed to pay to the plaintiff the interest over the main amount calculated until the date when the claim was brought to trial.

The claim for the legal interest over the main amount, calculated from the day when the claim was brought to trial until its final payment, is also reasonable.


FOOTNOTES

* Bojidara Borisova is a candidate for the degree of Ph.D. in Law at Sofia University "ST.Kl.Oxridski", Bulgaria.

** Vessela Velkova, LL.B., is a participant in the LL.M. programme, Queen Mary, University of London.

All translations should be verified by cross-checking against the original text.

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Pace Law School Institute of International Commercial Law - Last updated November 18, 2004
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