ICC Arbitration Case No. 9771 of 2001 (Commodity contract case) [excerpt from award available]
[Cite as: http://cisgw3.law.pace.edu/cases/019771i1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 9771 of 2001
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Cyprus (respondent)
BUYER'S COUNTRY: Russian Federation (claimant)
GOODS INVOLVED: Commodity contract
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
74A [General rules for measuring damages: loss suffered as consequence of breach]; 78B [Rate of interest]
74A [General rules for measuring damages: loss suffered as consequence of breach];
78B [Rate of interest]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (English): Collection of ICC Arbitral Awards 2001-2007. Wolters Kluwer Law & Business (2009) 187-205
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text [excerpt]
" ... Russian law should be applied. The 1980 UN Convention on Contracts for the International Sale of Goods is in force in Russia since 1 September 1991 ... Thus the 1980 UN Convention is to be applied.
" Under Art. 7 of the Convention questions concerning matters governed by the Convention, which are not expressly regulated therein, are to be determined in conformity with the law applicable by virtue of the rules of private international law. From this follows that the appropriate substantive rules of Russian law shall apply subsidiarily in the arbitration."
[Quantum of Damages]
" The sole arbitrator awarded claimant the amount that it had effectively claimed, including interest taking into account that defendants had already settled approximately one third of the purchase price and that they should be credited for the additional payment of the remaining 10% ... Regarding claimant's claim for 'other damages', the sole arbitrator held as follows:
" 'Finally, the clamant has claimed "other damages" for the loss of reputation to be determined in these proceedings. The claimant has requested the sole arbitrator to resolve this issue on the basis of ex aequo et bono.
" 'According to the ICC Rules an arbitrator may not base any decision on the principle of ex aequo et bono unless expressly authorized. This is furthermore repeated in the Terms of Reference agreed and signed between the parties in these proceedings. No such agreement has been made. In addition, no other damages or loss of reputation has been presented or evidenced in these proceedings either in the amount or otherwise. In any arbitration it is a fundamental principle that each party shall have the possibility to present its case and to respond to any claim made against it. Should the sole arbitrator award other damages then the defendant would clearly not have been given such opportunity. The sole arbitrator therefore has no basis on which to determine or even less award, any damages under this heading. The claim for "other damages" is thererore denied'."
[Law Applicable to Interest]
" Art. 78 of the 1980 Vienna Convention (as applicable in this case) stipulates that if a party fails to pay the price or any other sum that is in arrears such as damages in this case, the other party is entitled to interest on it. As a consequence, the claimant is also entitled to interest on the damages, which is part of the compensation for the breach of contract. The 1980 Vienna Convention does not specify the interest rate to be used. The general view in Sweden [the situs of the arbitration] (as elsewhere) is that the matter of interest is an issue of substance and thus is governed by the applicable substantive law. The latter is thus to be determined under the appropriate provisions of the internal Russian legislation ..."
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