Russia 30 May 2003 Arbitration proceeding 145/2002 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030530r1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 145/2002
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Russian Federation (claimant)
BUYER'S COUNTRY: Germany (respondent)
GOODS INVOLVED: [-]
APPLICATION OF CISG: Yes
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): M.G. Rozenberg, Praktika Mezhdunarodnogo kommercheskogo arbitrazhnogo suda pri TPP RF za 2003 g./Sost. [Arbitration decisions rendered by the International Commercial Tribunal at the Russian Federation Chamber of Commerce and Industry in 2003], published by "Statut" (2004), Case No. 15 [97-101]
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
30 May 2003 [Case No. 145/2002]
Translation [*] by Alexander Morari [**]
1. SUMMARY OF RULING
1.1 The Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry [hereinafter Tribunal] did not find that it has the jurisdiction to consider the action brought by the [Seller], a Russian company, against a company that claimed it was the successor of a German company with which the [Seller] concluded a contract containing an arbitration clause in which the parties agreed to refer their disputes to the Tribunal, since the submission concerning the succession has not been confirmed by any documents.
2. FACTS AND PLEADINGS
The action was brought by the[Seller] against [Buyer], a German company, on the basis of an international sales contract of 29 December 2001 in connection with non-payment for several consignments of goods delivered. [Seller's] claims included recovery of the debt and arbitration fees.
2.1 Although the action-related documents were duly handed over to the [Buyer], it failed to communicate a statement of defense and failed to appear at the arbitration hearing. At the same time, the Tribunal received a letter from another company. It was stated in the letter that starting from 31 October 2002 this other company has been a legal successor of the [Buyer], with which the [Seller] concluded the contract of 29 December 2001. This other company explained the non-settlement of [Seller]'s invoices by alleging that the [Seller] committed breaches of the contract, which caused the [Buyer] to suffer damages. As an example of such contract breaches was mentioned delivery of the goods to [Buyer]'s client and invoicing him by-passing the [Buyer], who was an exclusive distributor by virtue of agreements between the [Seller] and the [Buyer].
2.2 The [Seller] stated that it did not have any official information concerning reorganization or dissolution of [Buyer]'s company.
2.3 The Tribunal sent a summons to the [Buyer] as well as to the company that claimed that it was [Buyer]'s successor. In this summons, the Tribunal invited the parties to submit a statement of defense and documents confirming the reorganization and succession, if such took place. However, these companies did not respond. Neither did their representatives appear at the arbitral proceedings.
2.4 In the arbitral proceedings, the [Seller]'s representative repeatedly stated that he has no succession-relating documents at his disposal. Also, he submitted his objections to the allegations that the [Seller] committed breaches of the contract, highlighting the fact that the agreements referred to by the company that claimed that it was [Buyer]'s successor did not ever take place.
3. TRIBUNAL'S REASONING
The ruling of the Tribunal contained the following main points.
3.1 [Jurisdiction of the Tribunal]
Art. 8 of the contract of 29 December 2001 stipulates that all disputes and differences arising out of the contract or in connection with the contract shall be referred to the Arbitration Court at the Russian Federation Chamber of Commerce and Industry in Moscow, Russia according to the rules and usages of this tribunal. Awards by the Arbitration Court are binding on both parties.
In accordance with the Russian Federation Supreme Council Ordinance of 7 July 1993, the Arbitration Court at the Russian Federation Chamber of Commerce and Industry was renamed the International Commercial Arbitration Court at the Russian Federation Chamber of Commerce and Industry (the Tribunal) and is a permanent arbitration body functioning on the basis of the Russian Federal Law "On International Commercial Arbitration" and the Rules of Tribunal. In accordance with section 1(2) of the Rules of Tribunal, the Tribunal has jurisdiction, subject to an agreement between the parties, over disputes arising out of international contractual and other civil-law relationships in case at least one of the parties' places of business is abroad.
Although the arbitration clause contains the name of "Arbitration Court at the Russian Federation Chamber of Commerce and Industry", there is no doubt that the parties actually implied the Tribunal, which is the only international commercial arbitration body at the Russian Federation Chamber of Commerce and Industry. This is supported by the fact that the [Seller] filed the action with the Tribunal and confirmed its jurisdiction in the arbitral proceedings. The [Buyer], having received the action-related documents, failed to submit its statement of defense. The company that claimed that it was [Buyer]'s successor did not contest the Tribunal's jurisdiction in its statement of defense. Therefore, the parties' actions confirmed their contractual intention to actually refer their disputes to the Tribunal. Based on that and in accordance with art. 7(2) of the Russian Federal Law "On International Commercial Arbitration", the Tribunal ruled that it has jurisdiction over the dispute in relation to the [Buyer] as a party to the contract.
As for the company that claims that since 31 October 2002 it has been [Buyer]'s successor and changed the company's name and address, the Tribunal states that, despite its request to support this submission by a duly certified extract from the trade register which would determine the legal status of the company as of March-April 2003 with indication of, among other things, authority of the company heads; as well as request to submit any documents confirming the fact of company's succession to [Buyer]'s obligations out of the contract of 29 December 2001, the Tribunal has received no supporting or confirming documents. Therefore, the reorganization and succession is not established. With that in mind, as well as [Seller]'s submission that only the company with which it concluded the contract is the valid Respondent, the Tribunal cannot admit its jurisdiction in relation to the company that claimed that it was [Buyer]'s successor. Therefore, in accordance with sections 1 and 45 of the Rules of Tribunal, the arbitration proceedings in relation to this company shall be terminated.
3.2 [Non-appearance of the Buyer]
As to the absence at the hearing of [Buyer]'s representatives, the Tribunal notes that the case materials contain a postal service notification of 4 November 2002 confirming handing over to the [Buyer] of the case materials. The summons of 24 April 2003 sent by post to the [Buyer] at the same address was returned to the Tribunal with a note by the postal service that there is "no such recipient at the indicated address".
According to art. 3(1) of the Russian Federal Law "On International Commercial Arbitration" and section 12(5) of the Rules of Tribunal, any written communication is deemed to have been received if it is delivered to the addressee's last-known place of business by registered letter or any other means which provides a record of the attempt to deliver it. The Tribunal's Secretariat complied with these requirements of delivery the summons to the [Buyer]. Therefore, in accordance with art. 25 of the Russian Federal Law "On International Commercial Arbitration" as well as section 34(5) and section 28(2) of the Rules of Tribunal, default by a party does not preclude the Tribunal from continuing the arbitral proceedings and making an award unless the defaulting party submits a written application to postpone the proceedings due to a valid reason.
Taking into consideration the above stated as well as the fact that the [Buyer] submitted no application to postpone the arbitral proceedings, the Tribunal finds that it can consider the case in the absence of the [Buyer].
3.3 [The merits of the case]
Turning to the merits of the case, the Tribunal found that the case materials (transport waybills, cargo customs declarations, etc.) confirm the fact that the [Seller] delivered the goods under the contract of 29 December 2001 and in accordance with contractual terms.
The [Buyer] did not complain about the quality or the quantity of the goods delivered, and the statement of action was not contested neither in its substance nor amounts. In such circumstances, the debt for the goods shall be recovered from the [Buyer].
Despite the fact that the company that claimed to be [Buyer]'s successor failed to prove it, the Tribunal decided to consider this company's arguments contained in the letter of 13 December 2002.
The case materials do not confirm allegations by the company that claimed that it was [Buyer]'s successor that the reason of non-payment for goods delivered in 2002 were breaches of the contract committed by the [Seller] by way of delivering the goods to [Buyer]'s client and sending him the relevant invoices. Art. 1 and art. 2 of the contract provide that:
"The recipient of the goods is the company to which the goods are actually delivered. Within two days starting from the day of loading the goods, the Seller shall fax to the Buyer a railroad bill of lading and an invoice. The payment shall be effected against the shipping documents that the Buyer receives at the point of destination by way of a simple bank transfer to the Seller's account in the amount indicated in the invoice".
Contrary to the allegations by the company that claimed to be [Buyer's] successor, all invoices issued by the [Seller] were forwarded to the [Buyer] as was the case with previous deliveries. All payments were performed by the [Buyer] in accordance with the contract except the deliveries in June-August 2002. The [Buyer] indicated a different company in invoice 1907/2001/1 that was attached to the letter. This invoice is not relevant to the contract of 29 December 2001 since this invoice was issued in relation to goods delivered under a different contract. Consequently, the Tribunal concluded that the company that claimed to be [Buyer]'s successor failed to prove its allegations contained in its statement of defense that the [Seller] committed breaches of the contract.
On the basis of the above, and in accordance with provisions of the contract fixing [Buyer]'s obligation to pay for delivered goods and in accordance with art. 53 and 62 CISG, which is applicable to contracts of sales between the parties whose places of business are in states-parties to the CISG, the Tribunal rules that [Seller]'s claim to recover the principal debt shall be granted.
3.4 [Arbitration expenses]
The Tribunal rules that [Seller]'s claim for recovery of arbitration expenses is well-grounded and shall be granted in accordance with section 6(1) of the Rules of Arbitration Costs and Excises (Supplement to the Rules of Tribunal).
* 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]; Respondent of Germany is referred to as [Buyer].
** Alexander Morari, born in the Republic of Moldova; has taken part in a number of international moot courts as a member of Moldovan Team and as the coach of Russian Teams.Go to Case Table of Contents