Russia 11 November 2002 Arbitration proceeding 52/2002 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/021111r1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 52/2002
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Austria (claimant)
BUYER'S COUNTRY: Russian Federation (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. 75 [445-447]
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 bankruptcy proceeding in connection with the Respondent [Buyer] was started does not preclude the arbitration of the dispute by the Tribunal in accordance with the arbitration clause in the contract because the Claimant [Seller] had brought his claim prior to the beginning of the bankruptcy proceeding.
1.2 That the parties' contract provides for a recipient (addressee) of the goods other than the buyer does not mean that the addressee becomes a party to the contract and to the arbitration clause in it. Thus, the addressee is excluded from the list of Respondents against whom the [Seller] brought his claim.
2. FACTS AND PLEADINGS
[Seller], an Austrian firm, brought a claim against two Russian firms in connection with non-payment for the goods delivered by the [Seller] to one of the Respondents (the addressee) under a contract for the international sale of goods. The [Seller] and the [Buyer] entered into [their contract] on 6 July 2001. The [Seller] demanded the sum in arrears and arbitration fees. The [Seller] submitted a letter from the [Buyer], according to which [the Buyer] was not able to fulfill his obligations and suggested other ways of settling [the dispute]. The [Buyer] also suggested that it was possible that he would go bankrupt. At the hearing, the [Seller] stated that, according to the Resolutions of the Moscow Arbitration Court of 16 April and 10 July 2002, the bankruptcy proceeding in connection with the [Buyer] was initiated and a temporary manager was appointed.
The [Buyer] has submitted no reply to the claim.
3. TRIBUNAL’S REASONING
The Tribunal's award contained the following main points.
3.1 Clause 8 of the contract of 16 July 2001 contains a provision stating that the Tribunal shall arbitrate all the disputes arising out of [the contract]. Based on this [provision], the Tribunal finds that it has competence to arbitrate the present dispute.
3.2 The materials of the case contain receipts evidencing that both Respondents received the materials of the claim on 30 April 2002 and 8 May 2002. The materials of the case also evidence that on 7 August 2002 they received notice that [the hearing would take place] on 1 October 2002. The Respondents have made no statements [suggesting that there are] circumstances precluding the arbitration of the case. Therefore, pursuant to Article 28(2) of the Rules of the Tribunal, the Tribunal finds it possible to arbitrate the dispute in the absence of the Respondents.
3.3 Turning to the issue of the applicable law, the Tribunal notes that the parties to the dispute are [two] Russian companies and an Austrian firm. [It also notes] that both Russia and Austria are CISG Contracting States and, thus, the parties' relationships should be governed by the CISG. Pursuant to Article 7 CISG, questions not expressly settled in the CISG are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law. Therefore, the Tribunal is of the opinion that questions concerning the parties' relationships, which are not settled in the CISG, should be subsidiary governed by Russian law based on Clause 8.2 of Chapter 8 of the contract dated 16 July 2001.
3.4 In connection with the [Seller]'s statement regarding the Moscow Arbitration Court's proceeding on finding the buyer's firm bankrupt (insolvent), the Tribunal comes to the conclusion that, although the bankruptcy proceeding in connection with the [Buyer]'s firm has already begun, it should be taken into account that the present claim was filed with the Tribunal on 2 April 2002. The Moscow Arbitration Court's Resolution on the application of the outside management procedure in connection with the [Buyer]'s firm was rendered on 16 April 2002. Thus, the rendering of the Resolution by the Moscow Arbitration Court does not preclude the arbitration of the present case by the Tribunal.
3.5 The Tribunal notes that the claim to recover the price of the goods delivered was brought against two Respondents. In accordance with the terms of the contract of 16 July 2001, one of the Respondents is a buyer and payor. The other Respondent is named in the contract as an addressee, i.e., not a party to the contract for the international sale of goods in controversy. [The addressee] is not a party to the arbitration clause in the contract. Therefore, this firm should be excluded from the list of the Respondents.
3.6 The materials of the case evidence that the [Seller] fulfilled his obligations to deliver the goods for the amount claimed. They also evidence that the [Buyer] did not pay for the goods notwithstanding the fact that he received the materials of the claim and notice [of the hearing scheduled for] 1 October 2002. The [Buyer] failed both to reply to the claim and to appear at the hearing. In accordance with the terms of the contract and based on Article 53 CISG, which establishes the buyer's duty to pay for the goods, the Tribunal finds that the [Seller]'s claim to recover the debt must be sustained.
3.7 Pursuant to Article 6(1) of the Regulations on Arbitration Fees and Expenses, the losing party shall pay the arbitration fees. Since the claim is sustained in full, the Claimant [Seller]'s claim to recover the arbitration fees paid should be sustained in the amount paid by him.
* This is a translation of data on Proceeding 52/2002, dated 11 November 2002, 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. 75 [445-447].
All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of Austria is referred to as [Seller] and Respondent of the Russian Federation 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