Serbia 1 June 2005 Foreign Trade Arbitration Court attached to the Yugoslav Chamber of Commerce in Belgrade, Serbia (Investment case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050601sb.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: T-40/2003
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Serbia and Montenegro (Serbia) (claimant)
BUYER'S COUNTRY: France (Respondent)
GOODS INVOLVED: Money investment
APPLICATION OF CISG: No [Article 3(2)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
3B [Services preponderant part of obligation (art. 3(2)]
3B [Services preponderant part of obligation (art. 3(2)]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Serbian): Click here for Serbian text of case
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
Serbian:  Vladimir Pavić, Milena Djordjević, Primena Becke konvencije u arbitraznoj praksi Spoljnotrgovinske arbitraze pri Privrednoj komori Srbije, Pravo i privreda br. 5-8/2008, cited at pp. 579.Go to Case Table of Contents
Queen Mary Case Translation Programme
Award of 1 June 2005 [Proceeding No. T-40/2003]
Translation [*] by Jovana Stevovic
Edited by Dr. Vladimir Pavic and Milena Djordjevic, LL.M. [**]
Claimant of Serbia and Montenegro vs Respondent of France
The Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce in Belgrade [the Arbitral Tribunal], composed of [...], in a dispute concerning the claim of the [Claimant] against the [Respondent] for payment of EUR 162.432,44 with interest and costs of the procedure pursuant to Articles 46, 47 and 49 of the Rules of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce (hereinafter the Rules), upon having conducted the arbitration proceedings and hearing of 1 June 2005 […], makes the following decision:
V.- Substantive and procedural law
Pursuant to Article 46 paragraph 1 of the Rules arbitrators are obliged to apply, in every particular case, the substantive law that the parties have designated for their contractual relationship.
According to Article 15 of the abovementioned agreement which the Parties have concluded, and which has been attached to the claim, it can deduced that the Parties have agreed "…that the law of Yugoslavia should apply as the applicable substantive law for the settlement of disputes arising from this agreement". Therefore, it is apparent that the Parties have explicitly designated which substantive law should be applied to their dispute, i.e. the Yugoslavian substantive law i.e. as was previously explained, the law of Serbia and Montenegro. The existence and validity of the agreement are not disputed between the Parties, therefore the Arbitral Tribunal has accepted this choice as valid.
When determining which rules of the Yugoslav law should be applied in the present case, the Arbitral Tribunal concluded that they should be primarily those contained in the UN Convention on Contracts for the International Sale of Goods (Vienna 11 April 1980, hereinafter: the Vienna Convention), which was ratified by Yugoslavia on 27 March 1985, and approved by France on 6 August 1982. After ratification, i.e., approval, an international convention becomes lex specialis in relation to national laws and is to be applied directly. The mandatory character and direct application of this Convention, and all other conventions that are ratified and have entered into force, is derived from Article 6 of the Constitution of the Federal Republic of Yugoslavia, which is according to the Constitutional Charter still applicable today in Serbia and Montenegro.
However, pursuant to Article 3(2), the Vienna Convention does not apply to contracts in which the preponderant part of the obligations consists in the supply of labor or other services.
It has been agreed between the Parties in the abovementioned agreement of 9 September 1993, that Claimant shall transfer certain money to Respondent who shall then invest them in a certain business in order to increase its value. The Parties would then share the profit in certain percentages, and would make special joint decisions for each business which would be attached as annexes to the abovementioned agreement. It is evident that the Vienna Convention cannot be applied in this dispute, since it is apparent that the matter of this contractual obligation is - a service, and not the sale of goods. Therefore, the Arbitral Tribunal did not apply it, regardless of the fact that it is a part of the Yugoslav law, and now the law of Serbia and Montenegro and that it is directly applicable.
In accordance with this legal view, the Arbitral Tribunal, as its basic principle regulation in this case has applied the Yugoslavian Law on Contracts and Torts (Official Gazette of SFRY no 29/78 with later amendments, hereinafter: the Law). For those situation which are not foreseen and standardized by this Law, the Arbitral Tribunal has applied other Yugoslavian regulations, the case law of this Arbitration as well as the principle of lex mercatoria, the customs of international commercial law which are specifically provided in the UNCITRAL Model Law on International Credit transfers, which represent standardized commercial customs, which the Arbitral Tribunal should have considered.
|Belgrade, 1 June 2005|
|Minutes taken by: Ms. D.P
* All translations should be verified by cross-checking against the original text.
** Jovana Stevovic is a student at the University of Belgrade Faculty of Law. Dr. Vladimir Pavic is an Assistant Professor in Private International Law and Arbitration, and Milena Djordjevic, LL.M. (U. of Pittsburgh) is a Lecturer in International Commercial Law at the University of Belgrade Faculty of Law.Go to Case Table of Contents