Russia 4 June 2003 Arbitration proceeding 175/2002 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030604r1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 175/2002
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Russian Federation (claimant)
BUYER'S COUNTRY: Cyrus (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:
53A [Buyer's obligations: obligation to pay price of goods]
53A [Buyer's obligations: obligation to pay price of goods]
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. 17 [104-107]
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 The discrepancy in the name of the arbitral tribunal in the arbitration clause of the contract does not serve as a ground for finding the Tribunal incompetent [to arbitrate the dispute]. First, the Claimant [Seller] stated that [the parties] intended [to submit their disputes] to the Tribunal and the [Seller] did submit his claim with this Tribunal. Second, the Respondent [Buyer] received copies of all the materials of the case as well as notice of hearing but made no objections. Third, it was stated in the arbitration clause of the contract that the International Commercial Arbitral Tribunal at the Chamber of Commerce and Industry (Moscow) was competent to arbitrate disputes [between the parties]. Only the Tribunal at the Russian Federation Chamber of Commerce and Industry has such a name.
2.2 In the absence of a choice of law provision in the contract, Russian laws were found to be applicable based on Article 166 of the USSR Principles of Civil Laws 1991. Thus, the CISG applies as a [component] part of Russian laws.
2. FACTS AND PLEADINGS
A Russian firm brought a claim against a Cypriot firm in connection with partial non-payment for the goods delivered under a contract for the international sale of goods made by the parties on 5 July 1999. The [Seller]'s claims included the payment of the sum in arrears and contractual penalties for the delay in payment.
The [Buyer] received the materials of the case and notice of hearing. However, he failed to submit his explanations concerning the claim. Nor did his representatives appear before the Tribunal.
3. TRIBUNAL'S REASONING
The award rendered by the Tribunal contained the following main points.
3.1 Clause 11.2 of the contract between the parties of 5 July 1999 set forth that all disputes in connection with the present contract, which could not be settled by the parties, should be arbitrated by the International Commercial Arbitral Tribunal at the Chamber of Commerce and Industry (Moscow).
Since the arbitration clause does not contain a provision stating that the tribunal intended is the Tribunal at the Russian Federation Chamber of Commerce and Industry, it was suggested that the [Seller]'s representatives explain their position regarding the intent of the parties in connection with Clause 11.2 of the contract.
The [Seller]'s representatives argued that, when drafting the arbitration clause, the parties intended the Tribunal at the Russian Federation Chamber of Commerce and Industry, and that there was no other tribunal with the same name in Moscow. The omission of the words "Russian Federation," thus, was a technical error.
The [Buyer] received a copy of the claim and notice of hearing but made no objections.
Taking into consideration the parties to the dispute, their location, and the subject of the claim, had there been an arbitration clause, one of the following two arbitration tribunals at the Chamber of Commerce and Industry in Moscow would have had jurisdiction to resolve the present dispute, i.e., either the Tribunal at the Russian Federation Chamber of Commerce and Industry or the Arbitrage at the Moscow Chamber of Commerce and Industry. However, only the Tribunal at the Russian Federation Chamber of Commerce and Industry has a name of the International Commercial Arbitral Tribunal. The tribunal at the Moscow Chamber of Commerce and Industry has had various different names.
For the above stated reasons, the Tribunal concludes that, when stating the name of the arbitral tribunal in the contract, the parties intended the Tribunal at the Russian Federation Chamber of Commerce and Industry (Moscow). Thus, the Tribunal concludes that it has competence to arbitrate the present dispute.
3.2 In their contract the parties failed to set forth the applicable law governing their relationships.
Based on the conflict of laws provision in Article 166 of the USSR Principles of Civil Laws 1991, which had been in force at the time when the parties made their contract, the Tribunal finds that Russian laws govern the parties' relationships as the law of the seller's state. In accordance with Article 15 of the Russian Federation Constitution and Article 7 of the Russian Federation Civil Code, international treaties and conventions of the Russian Federation are a component part of the Russian laws. Therefore, the CISG should apply, as the Russian Federation is a CISG Contracting State.
3.3 According to the materials of the case, in 1999 the [Seller] delivered goods under a contract that he made with the [Buyer] on 5 July 1999. The [Buyer] paid only for a portion of the goods.
The fact of delivery of the goods is evidenced by copies of customs declarations and railroad way bills submitted by the [Seller]. The shipping documents contained references to certain additional agreements containing the name, brand, and quantity of the goods to be delivered as well as their price, country of destination and date of delivery. The information contained in the shipping documents and additional agreements is identical.
In accordance with Article 53 CISG, it is a buyer's primary obligation to pay the price for the goods delivered to him.
The [Buyer] failed to submit evidence denying the [Seller]'s claims in connection with partial non-payment for the goods that [the [Buyer]] received.
In such circumstances, the Tribunal is of the opinion that the [Seller]'s claim to recover the sum in arrears from the [Buyer] should be granted.
3.4 Based on Clause 9.2 of the contract, the [Seller] has a right to recover from the [Buyer] penalties for the delay in payment of the price of goods in the amount of 3% of the sum in arrears. Therefore, the said claim should be granted.
3.5 In accordance with Article 6(1) of the Regulations on arbitration expenses and fees (see Appendix to the Rules of the Tribunal), the arbitration fees paid by the [Seller] should be recovered from the [Buyer].
* This is a translation of data on Proceeding 175/2002, dated 4 June 2003, of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, reported in Rozenberg ed., Arb. Praktika (2003) No. 17 [104-107].
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 Cyprus 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