Russia 20 November 2001 Arbitration proceeding 241/1999 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/011120r1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 241/1999
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Russian Federation (claimant)
BUYER'S COUNTRY: United States (respondent)
GOODS INVOLVED: Goods
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:
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Russian): Rozenberg, Praktika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda: Haychno-Practicheskiy Commentariy [Practice of the International Commercial Arbitration Court: Scientific - Practical Comments] Moscow (2001-2002) No. 28 [163-166]
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Queen Mary Case Translation Programme
Translation [*] by Yelena Kalika [**]
1. SUMMARY OF RULING
1.1 That the contract made in 1975 stated that disputes shall be arbitrated by the International Trade Arbitration Commission at the USSR Chamber of Commerce and Industry in Moscow, whereas the contract made in 1996 named the Arbitration Court at the Russian Federation Chamber of Commerce and Industry [as an arbitral tribunal], does not preclude the Tribunal's competence to arbitrate the present disputes. The Tribunal takes into consideration the relevant provisions of the Law renaming those arbitral tribunals as well as the law on the Tribunal's succeeding [them].
1.2 Where the hearing has already been adjourned once on the Claimant [Seller]'s motion, the [Seller]'s [second] motion to adjourn the hearing is denied taking into consideration that he did not demonstrate a good cause to do so.
1.3 Since the [Seller]'s claims arising out of two contracts made in 1975 and 1996 were pursued by the [Seller] only in connection with the contract for the international sale of goods made in 1996, the Tribunal -- in the absence of the parties' agreement on the applicable law -- finds that the parties' relationships in controversy should be governed by the CISG. Both Russia and the USA had been CISG Contracting States on the date of the contract and the commercial enterprises of the parties to the contract are located in Russia and the USA.
1.4 In accordance with the Rules of the Tribunal, the reduction of the originally excessive claims by the [Seller] does not serve as a ground for a partial refund of the arbitration fees paid.
2. FACTS AND PLEADINGS
On 28 June 1999, [Seller], a Russian firm, brought a claim against Respondent [Buyer], a U.S. firm, in connection with partial non-payment for the goods delivered under contracts for the international sale of goods. [The contracts] were made on 10 April 1975 and on 15 May 1996. The [Buyer] acknowledged the sum of debt in his letter of 18 May 1999. The [Seller] demanded to recover from the [Buyer] the sum in arrears and expenses incurred in connection with the payment of arbitration fees. The [Seller] further reduced the amount of his claims on two occasions (on 20 January 2000 and on 28 November 2000). The last reduction of [the claims] was made based on the memorandum of negotiations signed by the parties. [The negotiations] took place on 13-19 March 1999. On 22 May 2000, the [Seller] paid the arbitration fees on the sum reduced in accordance with his first motion.
The hearing was scheduled for 5 September 2001. On the [Seller]'s motion (see letter of 30 August 2001), it was adjourned to 20 November 2001. In support of his motion to adjourn the hearing, the [Seller] argued that his lawyer was on vacation and could not take part in the proceeding.
On the day of the proceeding -- i.e., 20 November 2001 -- the [Seller] filed a second motion to adjourn the hearing due to the illness of his lawyer. Upon review of this motion, the Tribunal did not find grounds to sustain it. The CEO of the [Seller]'s firm could either ask another lawyer to participate in the proceeding or take part in the proceeding himself. The second adjournment of the hearing for the reasons given by the [Seller] would unduly delay the arbitration of the dispute.
The materials of the case contain evidence of the [Buyer]'s timely receipt of notice of the hearing (it was received on 17 September 2001). In accordance with Article 28(2) of the Rules of the Tribunal, a party's failure to appear at the proceeding, where this party was duly notified of the time and place of the hearing, shall not preclude the arbitration of the dispute unless the absent party moves to adjourn the hearing for a good cause shown. The [Buyer] has not made such a motion.
For the above stated reasons, and since the materials of the case are sufficient to arbitrate the case on the merits, the Tribunal finds it possible to hold an arbitration proceeding in the absence of representatives of the parties.
3. TRIBUNAL’S REASONING
The Tribunal's award contained the following main points.
3.1 Clause 9 of the parties' contract of 10 April 1975 provides for the arbitration of all disputes arising out of it by the International Trade Arbitration Commission at the USSR Chamber of Commerce and Industry in Moscow. In accordance with Clause 12 of the contract of 15 May 1996, disputes shall be arbitrated by the Arbitration Court at the Russian Federation Chamber of Commerce and Industry.
By Resolution of the Presidium of the USSR Supreme Council of 14 December 1987, the International Trade Arbitration Commission at the USSR Chamber of Commerce and Industry was renamed the Arbitration Court at the Russian Federation Chamber of Commerce and Industry. Pursuant to the Russian Federation Law of 7 July 1993 (Appendix 1 to the Law), the Tribunal is the successor to [the Arbitration Court]. In this connection and taking into consideration that by Resolution of the Russian Federation Supreme Council of 7 July 1993 the Arbitration Court was renamed the Tribunal, the Tribunal concludes that it has competence to arbitrate the dispute arising out of the contracts of 10 April 1975 and 15 May 1996.
3.2 The Tribunal ascertains that the contracts of 10 April 1975 and 15 May 1996 do not provide for the applicable law.
Based on Article 28 of the Rules of the Tribunal, the Tribunal decided to apply the provisions of the CISG when arbitrating the dispute on the merits. Both the USA and the Russian Federation are CISG Contracting States. The USA has been a CISG Contracting State since 1981. The Russian Federation has been a CISG Contracting State since 1991.
3.3 The materials of the case evidence that the [Seller] fulfilled his obligations to deliver the goods to the [Buyer] in accordance with the contracts of 10 April 1975 and 15 May 1996. The [Buyer] only partially paid [for the goods]. In accordance with the [Seller]'s statement of 28 November 2000, the [Buyer]'s debt had amounted to the stated amount and related to the contract of 15 May 1996.
In the memorandum of 13-19 March 1999 signed by the parties, the [Buyer] acknowledged the debt in connection with this contract. The [Buyer] has presented no evidence that the debt was paid off.
Pursuant to Clause 6 of the contract of 15 May 1996 and in accordance with Article 53 CISG, the Tribunal finds that the sum claimed by the [Seller] should be recovered from the [Buyer]. [Article 53 CISG] provides that the buyer must pay the price of goods.
3.4 In accordance with Article 6 of the Regulations on Arbitration Fees and Expenses (Appendix to the Rules of the Tribunal), the Respondent [Buyer] should pay arbitration fees in proportion to the claims sustained.
The Claimant [Seller]'s motion, in which he requested that part of the arbitration fees paid be refunded to him, cannot be sustained. (The motion was filed on 28 November 2000 at the same time with the motion to reduce the amount of claims sought). Pursuant to Article 4 of the Regulations on arbitration fees and expenses, a partial refund of the arbitration fees paid by the Claimant may be made either if the Claimant dropped the claim before notice was sent or if the Claimant dropped the claim after notice had been sent but prior to the date of the first hearing [on the case]. That the Claimant reduced the amount of claims after the payment of the arbitration fees had been made because [the claims] were excessive is not a ground for a refund of the arbitration fees paid.
* This is a translation of data on Proceeding 241/1999, dated 20 November 2001, of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, reported in Rozenberg ed., Arb. Praktika (2001-2002) No. 28 [163-166].
All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of the Russian Federation is referred to as [Seller] and Respondent of the United States is referred to as [Buyer].
** Yelena Kalika, JD Pace University School of Law, has studied at the Moscow State Law Academy, interned with a Moscow law firm, and is an Associate at the Pace Institute of International Commercial Law.Go to Case Table of Contents