Serbia 30 October 2006 Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce (Trolleybus case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/061030sb.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: T-22/05
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Russian Federation (respondent)
BUYER'S COUNTRY: Serbia (claimant)
GOODS INVOLVED: Trolleybuses
APPLICATION OF CISG: Yes [Article 1(1)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
4B [Scope of Convention (issues excluded): penalty clause regarded as liquidated damages clause and held to be governed by otherwise applicable law] 74A1 [Loss suffered as consequence of breach: includes loss of profit]; 74B [Outer limits of damages: foreseeability of loss]; 78A ; 78B [Interest on delay in receiving price or any other sum in arrears; Rate of interest]; 84A [Seller bound to refund price must pay interest]
4B [Scope of Convention (issues excluded): penalty clause regarded as liquidated damages clause and held to be governed by otherwise applicable law]
74A1 [Loss suffered as consequence of breach: includes loss of profit];
74B [Outer limits of damages: foreseeability of loss];
78A ; 78B [Interest on delay in receiving price or any other sum in arrears; Rate of interest];
84A [Seller bound to refund price must pay interest]
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
English:  Vladimir Pavic, Milena Djordjevic, Application of the CISG before the Foreign Trade Court of Arbitration at the Serbian Chamber of Commerce - Looking Back at the Latest 100 cases, 28 Journal of Law and Commerce 1, cited at pp. 15, 25, 47, 54.Go to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
Award of 30 October 2006 [Proceedings No. T--22/05]
Translation by [*] Marija Skundric
Edited by Dr. Vladimir Pavic, Milena Djordjevic, LL.M. [**]
Claimant (Serbia) [Buyer] v. Respondent (Russian Federation) [Seller]
The arbitral tribunal of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce in Belgrade consisting of [….], in a dispute concerning the claim of the [Buyer] against [Seller] for payment of EUR 318,169.44, upon the conducted arbitration proceedings and a hearing of 30 October 2006, pursuant to Articles 43(3), 49 and 51 of the Serbian Law on Arbitration and Articles 38(2), 47(2) and (3) and 49 of the Rules of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce, makes the following:
|1.||[Buyer]'s claim is granted and [Seller] is ordered to pay to the [Buyer] the amount of EUR
318,169.44 with interest at a 3.3% annual rate from 12 March 2004 until payment.
|2.||2.1 [Buyer]'s claim regarding contractual penalty is partially granted and [Seller] is ordered to
pay to [Buyer] the amount of EUR 132,390.54 with interest at a 3.3% annual rate, from 14 January
2005 until payment.
|2.2 [Buyer]'s claim regarding contractual penalty is partially rejected as unfounded, with respect to the
amount of EUR 851.05 and interest on the said sum.
|3.||[Buyer]'s claim regarding payment of EUR 34,981.68 on the account of actual loss suffered
[damnum emergens] is rejected as unfounded.
|4.||[Buyer]'s claim regarding payment of EUR 31,507.69 on the account of lost profit [lucrum
cessans] is rejected as unfounded.
|5.||[Seller] is ordered to pay to [Buyer] EUR 9,182.73 for registration fee and the costs of the
arbitration proceedings and costs of legal representation in the proceedings.
STATEMENT OF REASONS
I. Jurisdiction; the existence of an arbitration agreement
1. In its Statement of Claim of 18 November 2005, [Buyer] submitted that the Article 10 paragraph 10.4 of Contract no […] for the sale of trolleybuses, concluded between the parties on 23 December 2003, provides that any dispute is to be finally settled "before an International Arbitration attached to the Chamber of Commerce in Claimant's country" and the rules of that arbitral institution will be applied.
2. Respondent [Seller] did not reply to Claimant [Buyer]'s Statement of Claim, which it received on 11 January 2006. Pursuant to Article 15 paragraph 1 of the Rules of the Foreign Trade Court of Arbitration (hereinafter the "Rules"), the jurisdiction of arbitration in this matter was examined by the Board of the Court of Arbitration at the session held on 10 March 2006. The Board determined that the arbitration agreement appears in the form of an arbitration clause contained in the Contract and this clause provides for jurisdiction of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce for disputes between [Seller] and [Buyer].
3. Pursuant to Article 15 paragraph 3 of the Rules, the Board determined that the arbitration agreement providing for jurisdiction of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce is valid. Namely, Article 10 paragraph 10.4 of Contract no. […] of 23 December 2003 for the sale of trolleybuses (hereinafter the "Contract") provides for arbitration as a mean of dispute resolution and if dispute arises, the Foreign Trade Court of Arbitration attached to the Chamber of Commerce in Claimant's country will have jurisdiction. In the present case, Claimant [Buyer] is from Serbia and the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce is the only institution to which the formulation from the arbitration agreement can relate to [the only arbitration institution in Claimant's country that resolves disputes arising from international commercial contracts].
II. Appointment of the arbitral tribunal
III. Applicable law, place and language of proceedings
1. 1.1 The Contract between [Seller] and [Buyer] was silent on the issue of applicable substantive law.
1.2 When deciding on applicable law, the Arbitral Tribunal primarily applied the United Nation Convention on Contracts for the International Sale of Goods (Vienna Convention, hereinafter: the CISG), because the application of this Convention stems from its Article 1(1).
1.3 Article 10 paragraph 10.4 of the Contract suggests that rules of the foreign trade court which has jurisdiction over the dispute should be applied. In the present case those are the Rules of the Foreign Trade Court of Arbitration attached to Serbian Chamber of Commerce (hereinafter the "Rules").In accordance with the provisions of Art. 46 para 2 of the Rules and Article 50 para. 3 of the Law on Arbitration of Serbia, the arbitral tribunal applied the substantive law of Serbia to all matters not governed by the CISG. This is because, in the case at hand, the most appropriate conflict-of-laws rules point to the Serbian law, as this law is most closely connected to the dispute (place of conclusion and performance of the contract, etc.).
2. The Contract was silent on the official language of the proceeding. Pursuant to Article 47 paragraph 1 of the Rules, the Tribunal decided that proceedings will be conducted in the Serbian language, while correspondence with the [Seller] will be conducted in English language, which was one of the languages of the Contract.
3. The Parties failed to designate the place of proceedings. Pursuant to Article 36 paragraph 1 of the Rules, the proceedings were held at the seat of the arbitral institution designated in the contract, i.e., in Belgrade.
IV. Arbitral proceedings
2. The Tribunal established that Respondent [Seller] did not participate in the proceeding in any manner -- it failed to reply to Statement of Claim and to other written submissions by Claimant [Buyer]; it failed to respond to documents regarding the proceedings which were duly delivered to it, although it had the opportunity to do so. The Tribunal also established that [Seller] did not attend the hearing for oral argument held on 24 October 2006, although it was duly summoned, and failed to justify its absence.
V. Claim and parties' statements during the proceedings
1. In its Statement of Claim of 18 November 2005 and written submissions of 23 June 2006, [Buyer] asserted that the parties to the dispute concluded a contract no [….] for sale of trolleybuses on 23 December 2003, which was subsequently modified four times, under which the [Seller] was obliged to deliver to the [Buyer] the trolleybuses for the needs of […], as the final user, in precise delivery timeframes. [Buyer] also claimed that [Seller] failed to meet its contractual obligation to deliver the trolleybuses for reasons that make [Seller] responsible for non-performance.
2. [Buyer] indicated that the last (fourth) modification of the Contract was due to [Seller]'s failure to fulfill its contractual obligations as to timely delivery. Said annex of the Contract determined the final delivery dates (January and February 2005) and confirmed the final price for the goods (EUR 1,471,006.08). However, even these deadlines were not met and the trolleybuses were not delivered; hence, [Buyer] had to avoid the Contract.
3. [Buyer] also alleged that it fulfilled its contractual obligations -- it submitted the advance payment of EUR 118,438.48 and it opened the letter of credit which subsequently it had to extend and/or reopen several times. [Buyer] submitted evidence in support of its claim.
4. [Buyer] also pointed out that it was not disputed between the parties that [Seller] was responsible for non-performance of the Contract. This can be evidenced by the preamble to Annex No. 4 where the parties unambiguously acknowledged this fact.
5. [Buyer] asked the Tribunal to order [Seller] to reimburse the advance payment in the amount of EUR 118,438.48 with interest on the said sum from the date of the advance payment.
6. [Buyer] also requested reimbursement of additional expenses caused by [Seller]'s non-performance, in the amount of EUR 34,981.68. These expenses include bank costs of the advance payment, the costs for opening and reopening of the letter of credit and all other costs that [Buyer] incurred while fulfilling its contractual obligations. [Buyer] also requested interest on the said amounts from the date of payment until 28 September 2005. [Buyer] converted the said amount (main debt plus interest) from RSD to EUR at the official average EUR rate of the National Bank of Serbia on that day. As of 28 September 2005 [Buyer] requested interest on the said amount at the rate provided for debts in EUR.
7. [Buyer] also requested the amount of EUR 31,507.69 as a compensation for loss of profit. [Buyer] determined this amount in accordance with its annual profit for 2001, 2002 and 2003 and requested that interest to be added to this amount starting from 28 September 2005.
8. In its submission of 26 June 2006, [Buyer] requested the amount of EUR 133,241.59 with interest from 14 January 2005, as contractual penalty.
9. As evidence of its claim, [Buyer] submitted the following documents […]
10. [Seller] neither replied to [Buyer]'s Statement of Claim nor disputed [Buyer]'s allegations. [Seller] also failed to attend the hearings.
VI. The course of the hearings
1. At the hearing held on 24 October 2006 [Buyer]'s representative reiterated the position stated in its Statement of Claim and later submissions. [Buyer]'s representative underlined that, from the evidence presented to the Tribunal, it is undisputed that [Seller] failed to fulfill its contractual obligation and deliver trolleybuses. On the other hand, [Buyer] duly fulfilled all of its contractual obligations. All [Buyer]'s claims are based on the Contract, and especially on its Annex No. 4, in which [Seller] itself admitted that it failed to perform its part of the contractual obligations.
2. Although duly summoned, [Seller] failed to attend the hearing.
3. The Arbitral Tribunal considered the evidence by reading the documents submitted in support of the Statement of Claim and [Buyer]'s submission of 23 June 2006 (as previously disclosed in point V. 9)
4. 4.1 Expert testimony was also given at the hearing by an economic-financial expert Mr X who commented on:
|-||The amount of expenses that [Buyer] incurred in performance of the Contract no […] of 23 December 2003 and annexes thereto;|
|-||Computation of interest on the said amounts; and|
|-||The manner of calculation of lost profit and contractual penalty,|
all of which were previously provided by the [Buyer]. The evidence was presented by reading of the expert report of 17 July 2006. At the hearing. the expert confirmed the opinion he provided in the written report.
4.2 [Buyer]'s representative did not have any objections to the expert's report.
VII. Reasoning of the Tribunal
1. 1.1 After assessing the evidence, the Tribunal decided that the documents submitted and testimony of the expert witness can serve as a sufficient basis for the decision.
1.2 When rendering the award, the Tribunal took into consideration that Respondent [Seller] did not participate in the proceedings. Therefore, while examining the evidence submitted by [Buyer], the Tribunal bore in mind the objections that [Seller] might have made, but within the boundaries of the rules on burden of proof. The Tribunal decided that an economic and financial expert should provide expert opinion on certain circumstances of the case. On the other hand, the Tribunal did not take into consideration potential claims that [Seller] might have made.
2. 2.1 After examining the evidence, the Tribunal established that the [Seller] did not fulfill its contractual obligation to deliver trolleybuses i.e., that it is responsible for delay in performance of the contract. The Tribunal based this conclusion on the evidence presented and on the contract Annex No. 4, signed by [Seller] itself.
2.2 The Tribunal also established that [Buyer] properly avoided the Contract due to [Seller]'s delay in delivery (notice of avoidance was found in a communication between the parties dated 11 July 2005).
3. 3.2 The Tribunal granted [Buyer]'s claim for reimbursement of the amount of EUR 118,438.48.
3.2 The submitted evidence […] shows that [Buyer] paid this amount as an advance payment, in accordance with the Contract. The Tribunal established that this amount was never returned.
3.3 Since the contract was terminated and [Buyer] partially paid part of the price and [Seller] failed to deliver the trolleybuses to [Buyer], the Tribunal found that [Buyer] has the right to demand the reimbursement of the price, along with interest (Article 214 of Law of Contracts and Torts - LCT). The Tribunal holds that, in such circumstances, the rules on restitution should be applied, rather than the rules on contractual liability, since the legal grounds for payment (sales contract) ceased to exist.
4. 4.1 When deciding on the issue of damages for breach of the Contract, the Tribunal applied the rule contained in Article 74 of the CISG and Article 266 paragraph 1 of the LCT -- that the amount of damages that is to be paid by the breaching party consists of a sum equal to the loss, including loss of profit [damnum emergens and lucrum cessans], suffered by the other party as a consequence of the breach.
4.2 The Tribunal found that at the time of the Contract conclusion, [Seller] foresaw or ought to have foreseen [Buyer]'s loss as a possible consequence of the breach of the Contract, as required by the CISG and the LCT.
5. 5.1 The Tribunal found that [Buyer] had proven the actual loss [damnum emergens] it suffered as a consequence of the breach of the Contract. [Buyer] alleged and proved that the loss it suffered consisted of the expenses made to fulfill its part of contractual obligation. Every single expense, such as the opening of the letter of credit was documented and submitted along with the Statement of Claim. The said amounts in RSD with accrued interest [Buyer] were converted to EUR on 28 September 2005. These amounts were confirmed as proper by the expert testimony. The Tribunal accepted the amount specified by [Buyer], i.e., EUR 34,981.68.
5.2 The Tribunal is of the opinion that the [Seller] knew at the time of the Contract conclusion that [Buyer] would have to incur certain expenses in order to fulfill its contractual obligation and that those expenses would represent a loss for [Buyer] in case that [Seller] failed to perform its part of contractual obligations.
6. 6.1 The Tribunal found that [Buyer] also suffered the loss of profit and that there are grounds for compensation: the loss of profit is certain and there are elements enabling its calculation. Namely, the Tribunal established that [Buyer] would have made a certain profit had the trolleybuses been delivered on time and the contract been fulfilled. This profit was lost since [Seller] breached the Contract and [Seller]'s breach was the real cause of [Buyer]'s failure to make the profit out of resale.
6.2 However, while accepting that profit might have been made had the Contract been properly fulfilled, the Tribunal did not accept [Buyer]'s claim for damages in the amount of EUR 31,507.69, i.e., did not agree with [Buyer]'s method of calculation of such profit. Article 189 paragraph 3 of the Law on Contracts and Torts states that when assessing the amount of profit lost, the profit which was reasonably expected according to the regular course of events or particular circumstances, and whose realization has been prevented by an act or omission of the breaching party shall be taken into account. The standard for determining this loss, suggested by [Buyer] (annual income for previous three years), was not acceptable since [Buyer]'s annual income was by no means jeopardized by [Seller]'s breach. The Tribunal concluded that the only relevant loss of profit is the one that creditor suffered because it could not have fulfilled its obligations to a third party due to debtor's breach of contract. In the case at hand, there was a third party in the Contract, company X, that should have been the final purchaser of the trolleybuses. Moreover, the Contract enclosed no […] between the City of […] and Company X, on the one hand, and [Seller] and [Buyer], on the other, clearly specifies that [Buyer]'s commission rate is 1.5% of the value of the trolleybuses (article 4.2. of the said contract). Therefore, since the final value of the goods, specified in Annex No. 4 was EUR 1,471,006.08, the Tribunal found that the loss of profit amounts to EUR 22,065.00 (1.5% of the final value of the Contract).
6.3 The facts of the case show that [Seller] knew about the agreed commission fee since it was one of the signatories of the contract that specified the amount of the commission fee, meaning that, at the time of the contract conclusion, [Seller] could have foreseen such loss as a consequence of its breach of contract.
7. However, although the Tribunal finds that [Buyer] is entitled to claim damages and lost profit for the breach of Contract committed by [Seller] and [Buyer] has proven the amount of damages, and although the loss of profit can be determined from the documents submitted, the Arbitral Tribunal did not grant [Buyer]'s request for reimbursement on these two accounts, bearing in mind that [Buyer] has also claimed a contractual penalty.
8. 8.1 The Tribunal found that [Buyer]'s request for a contractual penalty was grounded.
8.2 In Article 8 paragraph 1 of Contract no […] of 23 December 2003 the parties stipulated a contractual penalty for delays in delivery of the trolleybuses amounting to 0.05% of the price for the trolleybuses and spare parts not being delivered on a daily basis for the first month of the delay and 0.25% on a daily basis for the second month of the delay, while the total amount of contractual penalty cannot exceed 9% of the contract price. Annex No. 4 of the Contract in Article 4 paragraph 1 confirmed the right of the aggrieved party's right to a contractual penalty in the amount specified in Article 8 of the Contract. Article 5 paragraph 6 of the same annex stipulated that if the damages caused by the delay exceed the amount of the penalty, the [Buyer] has the right to request compensation for the difference.
8.3 When deciding on [Buyer]'s claim for contractual penalty, the Tribunal took into consideration that the purpose of this penalty is to give an advance assessment of the amount of the damages for breach of contract. In other words, the creditor does not have to prove the existence of loss and its amount but only that the debtor failed to fulfill its obligation - it is on debtor to prove that it was not liable for the breach (this is the underlying idea of Article 275 paragraph 1 of the Law on Contracts and Torts).
8.4 The Tribunal is of the opinion that the contract clause providing for different amounts of contractual penalty for the period of delay is allowed by the Law. Likewise, the Tribunal is of the opinion that the legal nature of the clause on contractual penalty is not changed by the use of the words "penal" in the Contract for such a clause, or by the language employed in the contract specifying the buyer's right for price reduction in case of delay in delivery. Given that the contractual penalty represents an advance assessment of the parties of the amount of damages that may be suffered as a consequence of the breach of contract, in this case, regardless of the terms used, the contents of this premise are clearly expressed in the Contract.
8.5 The Tribunal established that [Buyer] avoided the Contract and that in its notice to the [Seller] no […] of 14 January 2005 it demanded payment of the contractual penalty. The Tribunal found that [Buyer] cannot lose the right to request a contractual penalty for delay in delivery just because it has avoided the contract. [Buyer]'s right to avoid the contract was stipulated in the Contract alongside the provisions on contractual penalty (Article 8 paragraph 2 of Contract and Article 5 paragraph 2 of Annex No. 4 of the Contract). Hence, the Contract stipulated both contractual penalty for the delay in delivery and the party's right to avoid the Contract due to debtor's delay in delivery. The Tribunal also established that it would be unreasonable not to apply the contractual penalty clause when delay in delivery was the reason why the Contract was avoided in the first place.
8.6 However, the [Buyer] cannot have both the contractual penalty and compensation for loss (damages), as requested in its claim by the [Buyer]. According to Serbian substantive law, if the damage suffered by the creditor exceeds the amount of contractual penalty, it has the right to request compensation of the difference (Article 275 paragraph 2 of the Law on Contracts and Torts). This rule also implies that the creditor cannot request both the damages and the contractual penalty. The reason for inserting the contractual penalty clause is to replace the need for calculation of damages. In the present case, the Contract itself implemented this rule by stating that if the amount of actual damages exceeds the amount of contractual penalty, the creditor may request compensation up to the full amount of damages (Annex No 4, Article 5 paragraph 6). Therefore, even if the law did not forbid the possibility of requesting a contractual penalty and damages cumulatively, the Contract excludes such an outcome.
8.7 Nevertheless, even though the Tribunal did not allow [Buyer]'s cumulative request for damages (both contractual penalty and compensation for loss), it established that [Buyer] still has the right to choose which of these remedies it will use. Since the amount of contractual penalty surpasses the amount of actual loss and loss of profit, the Tribunal established that [Buyer] would prefer payment of the contractual penalty. Therefore, the Tribunal rejected [Buyer]'s request for compensation of actual loss and loss of profit in the amount of EUR 66,489.37 (EUR 34,981.68 on behalf of actual loss and EUR 31,507.69 on behalf of loss of profit) and granted the amount of the contractual penalty. When establishing the amount of contractual penalty, the Tribunal took into consideration the economic and financial expert's testimony which suggested that the amount should be corrected to EUR 132,390.54. [Buyer]'s representative did not object to this testimony and the Tribunal partially rejected the [Buyer]'s request for contractual penalty in the amount of EUR 851.05.
8.8 The Tribunal did not take into consideration the potential reduction of contractual penalty since this request must be put forth by [Seller], which did not take part during the proceedings.
8.9 A practical consequence of the rule that the compensation for loss suffered due to breach of contract is always a monetary obligation (and contractual penalty represents damages of a sort) can be seen in the creditor's right to interest. The creditor is entitled to interest on the amount of contractual penalty from the moment when it acquired the right to damages for the breach of the Contract. Therefore the Tribunal found that interest on the amount of contractual penalty is to start from 14 January 2005, as requested by the [Buyer]. Namely, the Tribunal found that this is the date when the [Buyer] requested from the [Seller] payment of contractual penalty ([Buyer]'s request no. [..] of 14 January 2005]. According to Annex No. 4 (Article 4 paragraph 1) in case of delay in delivery in the additional period of time, it shall be deemed that the delivery has not been made at the times originally stipulated by the Contract. Consequently, it is clear that at the time of [Buyer]'s request for payment of contractual penalty the [Seller] was already in delay and that such a delay allowed [Buyer] to request the full amount of contractual penalty -- i.e., 9% of the contract price.
9. 9.1 In its Statement of Claim, [Buyer] submitted that European Central Bank's interest rate for EUR should be applied in the case at hand. […]
9.2 Serbian law does not specify the amount of interest rate to be paid on a debt in foreign currency. Serbian court practice, as well as Foreign Trade Court of Arbitration's practice, has an established policy of determining the rate of interest rate on a debt in foreign currency -- being the domiciliary interest rate. The Tribunal is of the opinion that the [Buyer] when specifying its claim for interest actually had such domiciliary interest rate in mind for the debt in EUR.
9.3 The Tribunal found that the domiciliary rate for EUR is the interest rate set by the European Central Bank for term-deposits of its clients. European Central Bank publishes these interest rates in its Statistical Bulletin, and at the Reuters information system. As a domiciliary interest rate for EUR, the so-called EURIBOR interest rate, can also be taken into account, which represent an interbank interest rate for deposits in EUR, published by the association of banks in the European Union (Banking Federation of the EU) at the Reuters information system and represents an average of the daily quotations of the interest rates amongst reference banks for a certain period of time. After examining the data on these two interest rates, the Tribunal found them to be of the identical amount.
9.4 The Tribunal started from the established practice of the Foreign Trade Court of Arbitration to determine the precise amount of the interest rate for foreign currency debts (in order to avoid difficulties in enforcement of the awards that invoke application of the 'domiciliary' interest rate, which is particularly troublesome when it comes to debts in EUR). After examining the data regarding interest rates of both European Central Bank and European Banking Federation, the Tribunal determined that the average interest rate for EUR in the first three trimesters of 2006 amounted to 3.3% per year and it applied that interest rate to [Seller]'s debt.
9.5 Regarding the costs of the proceedings, the Tribunal followed the 'loser pays' rule and found that [Seller] is obliged to compensate [Buyer] for the amount of the paid registration fee (RSD 14,733.00) and arbitration costs (RSD 620,490.00). The Tribunal also accepted [Buyer]'s request for compensation of costs of representation in the amount of RSD 102,150.00, which were specified in accordance with the Tariff of Attorneys' Legal Fees. Hence the total amount of RSD 737,373 (EUR 9,182.73) is to be paid by [Seller] to [Buyer].
9.6 When converting RSD amounts to EUR, the Tribunal used the official middle exchange rate set by the National Bank of Serbia on the date of the making of the award (1 EUR = 80.30 RSD).
VIII. Finality of the award
1. Pursuant to Article 10 paragraph 10.4 of Contract no. […] for the sale of trolleybuses concluded between [Seller] and [Buyer] on 23 December 2003, the parties have stipulated that the decision of the arbitral tribunal shall be deemed final. Pursuant to Article 54 paragraph 1 of the Rules, this award is final, is not subject to appeal and has the force of a final decision of a state court. Pursuant to article 64 paragraph 1 of the Serbian Law on Arbitration, this decision is final and has the force of a final and binding decision of a state court.
2. Given the abovementioned provisions of the Law and the Rules, and given the parties' intent not to provide for an appeal against this award or its setting aside, this award is final and has the force of a final and binding decision of a state court.
In Belgrade, 30 October 2006
Arbitral tribunal (signed)
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of Serbia is referred to as [Buyer] and Respondent of the Russian Federation is referred to as [Seller].
** Marija Skundric is a graduate of the University of Belgrade Faculty of Law where she is currently attending Master Studies in Commercial Law. Dr. Vladimir Pavic is an Associate Professor in Private International Law and Arbitration 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.Go to Case Table of Contents