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CISG CASE PRESENTATION

Serbia 24 January 2006 Foreign Trade Court attached to the Serbian Chamber of Commerce (Australian wool case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060124sb.html]

Primary source(s) of information for case presentation: Case text

Case Table of Contents


Case identification

DATE OF DECISION: 20060124 (24 January 2006)

JURISDICTION: Arbitration ; Serbia

TRIBUNAL: Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: T-12/04

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Australia (claimant)

BUYER'S COUNTRY: Serbia and Montenegro (respondent)

GOODS INVOLVED: Australian wool


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 59 ; 74

Classification of issues using UNCITRAL classification code numbers:

4B [Issues excluded - limitation period];

59A [Payment due at time fixed or determinable by contract or Convention];

59B [No need for request by seller or other formality];

74A [Loss suffered as consequence of breach]

Descriptors: Payment of price ; Damages

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

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

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Foreign Trade Court of Arbitration
attached to the Serbian Chamber of Commerce in Belgrade

Award of 24 January 2006 (Proceedings No.T-12/04)

Translation by [*] Vanja Vujnovic and Iva Paic

Edited by Milena Djordjevic, LL.M., Marko Jovanovic, LL.M. [**]

Claimant [Seller], Australia vs. Respondent [Buyer], Serbia and Montenegro

The Arbitral Tribunal of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce in Belgrade, composed of Sole Arbitrator […], in the legal matter between [Seller] and [Buyer] concerning the claim in the amount of USD 11.290,50 with interest and fees, upon conducting the proceedings and holding a hearing on 23.12.2005, pursuant to Article 47 of the Rules of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce makes the following

AWARD

  1. [Seller]'s claim is granted and [Buyer] is ordered to pay to [Seller] the amount of USD 11,290.50 as principle debt related to the performance of the sales contract of 29 May 2000, within 15 days from the day of receipt of this Award, subject to court enforcement.

  2. [Buyer] is ordered to pay to [Seller] agreed penalties amounting to the 3% rate per month on the amount of USD 11.290,50 starting from 29 May 2000 until final payment, subject to court enforcement.

  3. [Buyer] is ordered to pay to [Seller] USD 100.00 for the reimbursement of registration fee and USD 902.00 and RSD 83,074.99 for the reimbursement of arbitration costs within 15 days from the day of the receipt of this Award, subject to court enforcement.

STATMENT OF REASONS

Competence, Composition and Appointment of the Arbitrator

1. The claim arises from the contract for sale of 16 tons of Australian wool (types 56 and 57) to be delivered in […], Serbia, concluded on 29 May 2000.

2. Pursuant to the Contract of 29 May 2000 and the IOS form for balancing reciprocal claims as on 31 December 2000, [Seller] submitted the Statement of Claim deriving the competence of the Arbitration from Article 6 of the Contract.

3. In the Statement of Claim submitted on 7 June 2004, [Seller] proposed […] to be appointed as arbitrator. [Seller] also paid the registration fee and the arbitration fee as required by the Rules and in accordance with the instructions from the Arbitration.

4. In the letter of 20 July 2004, the Arbitration informed [Buyer] that the proceedings had been initiated against him and served it with the Statement of Claim and the attachments thereto, instructing it to submit an answer within 30 days, as provided by the Rules. At the same time the Arbitration informed [Buyer] of [Seller]'s proposal for the appointment of […] as the sole arbitrator and called upon [Buyer] to reach an agreement with [Seller] with respect to the appointment of the sole arbitrator, in accordance with Article 27(2) of the Rules. The Arbitration also informed [Buyer] that, if no agreement is reached within 30 days from the day of the answer to the Statement of Claim, the President of the Board of Arbitration shall nominate a sole arbitrator, pursuant to Article 27(3) of the Rules.

5. On 20 July 2004, the Arbitration acknowledged the receipt of the payment for the arbitration costs to [Seller] and informed it that it had forwarded the Statement of Claim with attachments to [Buyer] asking it to respond within 30 days. At the same time, [Seller] was informed that the Arbitration has instructed [Buyer] to reach an agreement with [Seller] on the appointment of the sole arbitrator. Pursuant to Article 27(3) of the Rules, [Seller] and [Buyer] shall inform the Arbitration about their decision within 30 days from the day of the Answer to the Statement of Claim.

6. On 25 May 2004 [Buyer] submitted the Answer to the Statement of Claim to the Arbitration. [Buyer] put forward that [Seller]'s claim was entirely unfounded and informed the Arbitration that it disagrees with the arbitrator proposed by [Seller]. Instead, [Buyer] proposed […] to be appointed sole arbitrator.

7. Considering that the parties failed to reach an agreement on the appointment of sole arbitrator, the president of the Board of Arbitration appointed […] as sole arbitrator on 27 September 2004, pursuant to Article 27(3) of the Rules.

8. In a memo dated 12 October 2004 the Secretary of the Arbitration noted that […] informed the Arbitration by phone that it was unavailable to accept the appointment and assume the duty of arbitrator in the dispute at hand.

9. On 14 October 2004 the president of the Board of Arbitration appointed […] as the sole arbitrator. In the statement of reasons for such decision the president of the Board of /Arbitration invoked the facts that the value of claim was below USD 70,000.00 (Article 26(1) of the Rules), that the parties failed to reach an agreement on the appointment of the sole arbitrator in due time (Article 27(3) of the Rules) and that […], who was previously appointed sole arbitrator, did not accept his appointment. On 15 October 2004 […] was informed of his appointment for sole arbitrator and he accepted the duty on 18 December 2004.

10. On 3 February 2005 [Seller] and [Buyer] were informed of […]'s appointment for sole arbitrator. Pursuant to Article 34(6) of the Rules the sole arbitrator scheduled a hearing for 1 March 2005. The parties were summoned to the hearing and informed that, in case of their absence, the hearing will nevertheless be held in accordance with Article 36(6) of the Rules.

Application of substantive law

11. In assessing the issue of applicable law in connection with Article 46(2) of the Rules, the sole arbitrator took the position that the appropriate provisions of the United Nations Convention on Contracts for the International Sale of Goods adopted in Vienna on 11 April 1980 (hereinafter the CISG) shall be applied.

Namely, Article 1(1)(a) of the CISG states:

"This Convention applies to contracts of sale of goods between parties whose places of business are in different States:

(a) when the States are Contracting States:"

The sole arbitrator noted that both Serbia and Montenegro and Australia are Contracting States to the CISG.

12. The sole arbitrator found grounds for the [Seller]'s claim for purchase price in Article 59 of the CISG which reads:

"The buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or compliance with any formality on the part of the seller".

The sole arbitrator established grounds for the claim for payment of penalties for the delay in payment in Article 74 of the CISG which reads:

"Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages cannot exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract".

Reasons for the Award

13. The sales contract was concluded on 29 May 2005 between [Seller] and [Buyer]. Pursuant to this Contract, [Seller] was obliged to deliver 16 tons of Australian wool (types 56 and 57), while [Buyer] was obliged to pay the price in the amount of DEM 158,008.

14. [Seller] fully complied with its obligation, i.e. it delivered the goods of the agreed type and in the agreed quantity, while, according to [Seller]'s submissions from the Statement of Claim, [Buyer] only partially complied with the obligation to pay the purchase price, i.e. it failed to pay the amount of DEM 25,742.32.

15. The claimed amount of DEM 25,742.32 is based on the fact that on 7 June 2001 [Buyer] sent a letter to [Seller] requesting it to pay the sum owed. In the said letter it was noted that according to the financial documentation of [Buyer] a debt in the amount of DEM 25,742.32 existed on the account 4330 i.e. on the Itemized Statement Form (IOS) (corresponding amount in Serbian Dinars: 772,263.60 according to the exchange rate of 1 DEM = 30 RSD). Consequently, [Buyer] invited [Seller] to confirm this financial calculation on the Itemized Statement Form (IOS) within 10 days, and should [Seller] fail to provide such confirmation within the said timeline, [Buyer] will consider that [Seller] agrees with the [Buyer]'s calculation of the debt according to its business books.

16. [Seller] accepted the state of debt as shown in [Buyer]'s business documentation on 31 December 2000 and claimed the aforementioned amount on 7 June 2004, converting the value of the claim into US dollars, since German marks were no longer used as currency at the time when the Statement of Claim was submitted.

17. The conversion was performed in accordance with the exchange rate on the inter-bank foreign exchange market of the National Bank of Yugoslavia on 7 June 2001, (1 USD = 2,28 DEM). Accordingly, [Seller] claimed the amount of USD 11,290.50 (25,742.32 : 2,28 = 11,290.49 USD).

18. Apart from the principle debt in the said amount of USD 11,290.50, [Seller] requested the payment of penalties which, according to Article 7 of the Contract, amount to 3% per month for the unpaid part of the principle debt from the day on which the payment became due until final payment thereof.

19. In its Statement of Claim [Seller] submitted that, for the "real arrears" in the repayment of the principle debt in the amount of DEM 132,265.68, i.e. USD 58,011.20, calculated from the day on which the payment became due date until the day of payment of every individual installment, it will calculate the amount of damages after the collection of relevant information, by applying agreed penalties from Article 7 of the Contract, i.e. that it will in that way make its claim for the penalties contained in the Statement of Claim precise. [Seller] failed to do so until the conclusion of the hearing.

20. In its answer to the Statement of Claim [Buyer] stated that the claim was entirely unfounded, i.e. that [Buyer] met all its obligations vis-à-vis [Seller], which, if needed, can be confirmed through expertise.

21. Furthermore, [Buyer] stated that the claim is, in any case is obsolete, since the period of limitation has ran out.

22. In its Answer to the Statement of Claim, [Buyer] especially stated that upon the decision of the Government of the Republic of Serbia - Privatization Agency, a restructuring process of its firm was initiated and that the creditors were under the obligation to register their claims in a manner prescribed by the Decree on the company restructuring procedure, by 19 January 2004, at the latest. In that context, [Buyer] proposed the suspension of the arbitral proceedings until the restructuring process is finalized, after which the claim should be refused, i.e. rejected.

23. At the first hearing held on 1 March 2005, [Seller] stated that it is taking part in the privatization of [Buyer] in the capacity of a possible buyer. Its decision regarding the continuation of the arbitration proceedings will depend on whether it would be successful in buying a share in [Buyer]'s company. Furthermore, [Seller] proposed the suspension of the arbitration proceedings until 30 April 2005, after which date it would inform the Arbitration about its position regarding the continuation of proceedings.

24. At the first hearing [Buyer] stated that it agrees with [Seller]'s proposal to postpone the hearing until 30 April 2005. It further stated that, should the proceedings continue, it will not change its submissions from the Answer to the Statement of Claim. It also stated that it would propose expertise of the financial documentation to prove that it has met all of its obligations vis-à-vis [Seller], but during the hearing it was unable to identify the financial documentation it referred to.

25. Pursuant to the equivocal proposals of [Seller] and [Buyer] the hearing was postponed until 30 April 2005, until the finalization of the privatization of [Buyer] i.e. until possible acquisition of the company by [Seller]. [Seller] was instructed to inform the Arbitration and [Buyer] about the continuation of the proceedings by 30 April 2005. [Buyer] was instructed to supply the Arbitration with evidence, i.e. financial documentation, about the amounts paid within 15 days from the day of the receipt of the information about the continuation of the proceedings.

26. On 9 May 2005, acting upon the conclusion rendered at the first hearing, [Seller] informed the Arbitration that the sale of [Buyer] has not been finalized because of the upcoming changes and amendments of applicable regulations. [Seller] also stated that it would continue the proceedings but suggested that the hearing should not be scheduled before the end of June 2005, because it expected that the privatization of [Buyer] would be completed by that time.

27. At the second hearing held on 30 June 2005, [Seller] submitted that the sales procedure of [Buyer] was still in progress and that it cannot precisely predict when the privatization would be completed. It said that there were some information from [Buyer] that the privatization could be finalized in July 2005.

28. At the second hearing [Buyer] confirmed that the privatization was underway and that some progress has been achieved, primarily in adopting the necessary additional legislation, and that, in this context, it would not be unrealistic to expect that the privatization of [Buyer] will be finalized in July 2005. As for the evidence, i.e. financial documentation challenging the claim, [Buyer] stated that it continues to stand by the proposal from the first hearing related to expertise of the documentation, despite the fact that it failed to act upon the instruction of the Arbitrator at the first hearing to submit the documentation on the basis of which it claimed that it had met its obligation vis-à-vis the Claimant.

29. Acknowledging the statements of [Seller] and [Buyer], the Arbitrator postponed the hearing until 1 September 2005 and called upon [Seller] to inform the Arbitration at any time before the specified deadline if the conditions to finally declare whether or not the dispute would continue are met. The Arbitrator also took note of the fact that [Buyer] failed to act upon the orders from the previous hearing and did not submit sufficient evidence or financial documentation that could prove the performance of its contractual obligations vis-à-vis [Seller]. [Buyer] was instructed to produce relevant evidence for its submissions and which would help assessing the need for expertise within 30 days from the day of the hearing. If [Buyer] fails to produce evidence within the said time limit, it will be precluded from doing so in the rest of the proceedings.

30. [Buyer] acted upon the orders from the second hearing of 30 June 2005 and with a delay of 8 days, i.e. on 8 August 2005, it sent a written submission to the Arbitration attaching to it the financial documentation - a copy of the analytics cards of payments made to [Seller]. In this submission [Buyer] stated that the presented copies of the analytics cards proved that it had made direct payments, as well as payments via _____, and therefore it believes that by these payments it settled its debt to [Seller]. Furthermore [Buyer] stated that it considered necessary and appropriate for a financial expertise to be made, and that for the correct determination of the facts the expert should have the insight into the original and complete financial documentation related to the subject-matter of this dispute. At the expert's request [Buyer] would be willing to make available other relevant financial documentation which it has in its possession. Finally, [Buyer] put forward that so far the Parties were not able to resolve the dispute in any other way or to reach an agreement on the subject-matter of the dispute.

31. On 26 August 2005 [Seller] sent a written submission to the Arbitration in which it reaffirmed its submissions and claims contained in the Statement of Claim, thereby maintaining the proposal to continue the arbitral proceedings. [Seller] further stated that it received [Buyer]'s submission with the attached analytic cards and challenged [Buyer]'s submissions as entirely unfounded and untrue. [Seller] also stated that the analytic cards contradict the statement of open facts that [Seller] had previously delivered to [Buyer] for compliance, and that it was undisputed for [Buyer] that on the day of issuing the statement it owed to [Seller] DEM 25742,32. [Seller] also points to the fact that [Buyer] failed to fully comply with its obligation from Article 7 of the Contract, i.e. to pay the penalties for the cumulative value of goods, considering that the payment was delayed for more than a month. [Seller] does not oppose [Buyer]'s proposal for presenting the evidence in front of an expert, after which it would further specify the value of its claim.

32. At the third hearing held on 22 September 2005, [Seller] started off by stating that the formal requirements for the continuation of the privatization process were fulfilled and that [Seller] and the Privatization Agency discussed the possible options concerning the way, the price and other terms of takeover of the entire firm of [Buyer] or a part of. At the same time [Seller] handed over a submission attaching to it the report on the state of its accounts in an Australian bank which show that on 25 August 2000 it received a payment from abroad in the amount of AUS$ 79.515,41 and that on 29 August 2000 it received another payment from abroad in the amount of AUS$ 25.793,41, which makes a total of AUS$ 105.309,24. It then stated that, considering the exchange rate between DEM and AUS$ that was applicable at the time of the aforementioned money transfers were made, [Buyer] paid the amount of about DEM 130.000,00. [Seller] further submitted that on 15 June 2001 [Buyer] submitted a request for settling the debt in the amount of DEM 25.742,32. In its submission [Seller] highlights that the amount of the recognized outstanding debt according to [Buyer]'s Itemized Statement Form (IOS) form of 7 June 2001 (DEM 25.742,32) and the amount of AUS$ 105.309,24 make the sum of DEM 158.008,00, which equals the purchase price of the Contract concluded on 29 May 2000.

33. [Seller] further pointed out that, as far as the analytics cards and allegations that [Buyer] has indirectly made the payments through companies […] and […] are concerned, such payments from [Seller]'s relationship with [Buyer] from the contract of 29 May 2000have never been made. [Seller] added that its relationship with the company […] was defined by a representation agreement, so consequently the company […] was not authorized to receive any kind of benefits or assets related to the disputed contract. [Seller] also stated that between it and the company […] there are no ownership or property relations, and that from its perspective the owners of the company […] are unknown natural persons. Finally [Seller] submitted that it will present more information on the legal status of the company […]and [Seller]'s relation with it later during the proceedings.

34. At the third hearing [Buyer] submitted that it agrees with [Seller] that since June the conditions for the continuation and completion of the privatization of [Buyer] were created and that the negotiations between the Privatization Agency, [Seller] and [Buyer] regarding the take over of the whole or just a part of [Buyer] by [Seller] were under way. It then stated that the Privatization Agency has is in the meantime announced another call for the creditor claims against the subject of privatization i.e. [Buyer]. [Buyer] indicated that it would present a special written submission on this matter at a later point. [Buyer] then alleged that it was unable to determine which part was paid directly from the accompanying analytics cards that were put as a proof of payment, but as far as the payments made via […] are concerned, it maintains its submissions. Furthermore, [Buyer] stated that it was unable to comment whether there exist any ownership or business relations between [Seller] and the company […].

35. In a decision following this hearing the arbitrator ordered a financial expertise of all documents.

36. In the decision and the minutes of 17October 2005, the Arbitrator entrusted Mr. […], a sworn expert in economic and financial matters related to foreign trade and banking, with the task to perform financial expertise, namely:

  1. to determine whether [Buyer] has made a payment of the whole price agreed under the contract of 29 May 2000., when the payment was made and how, and

  2. if the Respondent failed to make a payment of the price in the full amount, to determine which part of the contract price was not paid to [Seller] and to calculate the entire amount of [Buyer]'s debt on the day on which the expertise has been performed.

37. In the decisions dated 17 October 2005 [Buyer], being the one who requested the expertise, was ordered to make the advance payment of RSD 100.000 for the costs of expertise, on the grounds of Article 255 and in relation to Article 248 of the Serbian Code of Civil Procedure. The payment was to be made immediately or at latest within 8 days from the day of receipt of the decisions. In the decision [Buyer] was also warned that if it gives up on the expertise or does not pay the specified amount within the deadline set, the Arbitrator would, in terms of Article 148(4), consider all the circumstances of the case, and evaluate in his own opinion the relevance of the expertise.

38. On 19 October 2005 [Buyer] received the record of the decision on the appointment of the expert and the notice of its obligation to make the advance payment of expenses for the expertise with payment instructions.

39. [Seller] received the record of the decision on the appointment of the expert on 19 October 2005.

40. Since [Buyer] failed to act upon the decision ordering the expertise, the Arbitrator scheduled a fourth hearing pursuant to Article 34(6) of the Rules. The hearing was scheduled for 23 December 2005. [Buyer], although duly summoned by the letter of 29 November 2005, did not appear at the hearing, but instead informed the Arbitration in a letter of 22 December 2005 that, due to the lack of funds, it is unable to attend the hearing on 23 December 2005. [Buyer] also stated in its letter that, due to the lack of funds and blockage of its accounts, it was unable to make the advance payment of the expenses for the expertise. [Buyer] therefore suggested that the hearing scheduled for 23 December 2005 should be delayed. Such a delay would, in [Buyer]'s view, be meaningful especially because the process of restructuring and privatization of [Buyer] is in its final phase, and that [Seller] appears as the most interested in purchasing and taking over [Buyer]. Therefore, the completion of this process might resolve the subject of the dispute.

41. In compliance with Article 36(6) of the Rules and [Seller]'s proposal, the Arbitrator opened the hearing. At the hearing [Seller] stated that it maintains all the submissions put forward in the Statement of Claim and during the previous course of the proceedings. [Seller] suggested that the expertise should be performed on the basis of the findings made so far. Furthermore, [Seller] stated that it expected the privatization process to be soon completed since the bid for selling [Buyer] was to take place on 15 January 2006.

42. The Arbitrator refused [Seller]'s proposal for expertise. Pursuant to [Buyer]'s written submission dated 22 december 2005, the Arbitrator further established that [Buyer] withdrew its proposal for expertise and that neither [Seller] nor [Buyer] propose new evidence. In the Arbitrator's view, it is clear that [Seller] and [Buyer] are putting off this case by referring to the possible [Seller]'s purchase of [Buyer] in the privatization process. The Arbitrator concluded that the order for expertise made at the previous hearing was no longer in force, assessed that all the necessary elements for reaching the decision on the merits of the case have been established so far and concluded the hearing.

43. After a comprehensive review and evaluation of all relevant facts in this dispute, all the submissions made in the Statement of Claim and its appendices, statements in response to the claim and submitted evidence, and arguments made in the hearings, the Arbitrator concluded that the claim was founded.

44. The sales contract shows that [Seller] was required to deliver the contracted goods, which it did, and [Buyer] never challenged this. Therefore, the Arbitrator considers this fact as undisputed.

45. What was also undisputed was the fact that [Buyer]'s obligation to pay the price for the received goods was not fully honored. Namely, [Buyer]'s financial documentation or the release of Itemized Statement Form (IOS) shows that on 7 June 2001 [Buyer] admitted that it owed the amount of DEM 25.742,32, which was claimed by [Seller] in the equivalent amount of USD 11.290,50.

46. During the proceedings [Buyer] failed to provide any evidence before the arbitration that could show a connection between the allegedly performed payment to companies […] and […] and the contract of 29 May 2000 with [Seller]. There is no doubt that [Buyer] was obliged under the contact to pay for the received goods. Namely, Article 2 of the contact states that: "payment of 100% of the price is to be made 7-14 days before taking over the goods." The Arbitrator concluded that [Seller] is entitled to claim the purchase price pursuant to Article 59 CISG, since it made the conforming delivery.

47. Pursuant to Article 2 of the Contract, the deadline for the payment of the debt has expired. Article 7 of the Contract governs [Buyer]'s obligation to pay "penalties up to 0.1% daily on the owed amount (3% per month)" to [Seller] in case of delay. The Arbitrator concluded that, pursuant to Article 74 CISG, [Seller] is entitled to damages, which are in this case the contractual penalties for delay, since [Buyer] failed to pay a part of the agreed purchase price.

48. In its Answer to the Statement of Claim, [Buyer] stated that the limitation period for claiming the debt has expired. The CISG, which applies to the contracts for international sale of goods concluded between the parties having their places of business in the Member States, i.e. Australia and Serbia and Montenegro in the case at hand, does not govern the issue of limitation period. Therefore, the Arbitrator applied to this issue the provisions of Articles 374 and 387 of the Serbian Law on Contracts and Torts (LCT). Pursuant to Article 374 LCT, mutual claims of legal entities arising out of contracts for trade in goods and services expire in a period of three years. Article 387(1) reads that the limitation period stops running in the moment when the debtor acknowledges its debt. The Arbitrator found that [Buyer] blatantly and unambiguously acknowledged the debt by issuing the Itemized Statement Form (IOS) on 7 June 2001 in its memorandum with a signature and a stamp. Considering that the claim in this legal matter was submitted on 7 June 2004, the Arbitrator concluded that [Buyer]'s objection was unfounded.

49. In its Answer to the Statement of Claim, [Buyer] put forward that the Privatization Agency decided to initiate the restructuring process of [Buyer] pursuant to Article 7 of the Regulation on the procedure and method of restructuring companies and other legal entities ("Official Gazette of the Republic of Serbia" 1/02). The Privatization Agency set a deadline of 30 days from the date of announcement of the opening of the restructuring procedure to report any claims held against [Buyer], with a note that claims that are not reported in the manner prescribed by the decision would be deemed inadmissible. [Buyer] therefore requested that [Seller] presents evidence that it has properly and timely registered its claims during the restructuring process.

50. The UN Convention on Contracts on International Sales of Goods is to be applied on the disputed matter between [Seller] and [Buyer]. Article 16 of the Constitutional Charter of State Union of Serbia and Montenegro states that all ratified international treaties and generally accepted rules of international law shall have primacy over the law of Serbia and Montenegro and the laws of Member States. Given the said provision, the Arbitrator finds that [Buyer]'s allegation is not indicative of a different decision that might be reached in this dispute.

Compensation of costs

51. Since [Seller] succeeded in this dispute, it is entitled to the compensation of the following amount:: USD 100.00 for the reimbursement of registration costs, USD 902.00 for reimbursement of arbitration costs, RSD 8250.00 for reimbursement of costs of drafting the Statement of Claim, RSD 24.750,00 (3 x 8.250,00) for reimbursement of costs for drafting written submissions accompanied by the statement of reasons, RSD 12.375,00 (4 x 4.125,00) for reimbursement of costs for drafting written submissions not accompanied by the statement of reasons, RSD 36.000,00 (4 x 9.000,00) for the costs of participation at the hearings and RSD 1.700,00 for the costs of the sworn court interpreter for English language (in total: 83.074,99 dinars). [Buyer] is ordered to reimburse the said costs in the manner set forth under point 3 of the operative part of this Award.

Finality of the award

52. Pursuant to Article 54(1) of the Rules, this award is final and not subject to appeal. It has the force of a final decision of Serbian court.

Done in Belgrade on 24 January 2006

  ---/signed/---   (Minute taker)     ---/signed/---   (Sole Arbitrator)


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of Australia is referred to as [Seller] and Respondent of Serbia and Montenegro is referred to as [Buyer].

** Vanja Vujnovic and Iva Paic are students at the University of Belgrade Faculty of Law. Milena Djordjevic, LL.M. (U. of Pittsburgh) is a Lecturer in International Commercial Law at the University of Belgrade Faculty of Law. Marko Jovanovic, LL.M. is a Lecturer in Private International Law at the University of Belgrade Faculty of Law.

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