Serbia 13 November 2007 Foreign Trade Court attached to the Serbian Chamber of Commerce (Mineral water and wooden pallets case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/071113sb.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: T -25/06
CASE HISTORY: Unavailable
CLAIMANT'S COUNTRY: Serbia
RESPONDENT'S COUNTRY: Macedonia
GOODS INVOLVED: Mineral water and wooden pallets
APPLICATION OF CISG: No [distributorship contract]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
4A ; 4B [Issues covered and excluded: Convention not applicable to distributorship agreement but applicable
to contract of sale under distributorship agreement]; 7B [Materials for interpretation: international case law].
4A ; 4B [Issues covered and excluded: Convention not applicable to distributorship agreement but applicable to contract of sale under distributorship agreement];
7B [Materials for interpretation: international case law].
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Serbian): Click here for case text
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, p. 584Go to Case Table of Contents
Queen Mary Case Translation Programme
Award of 13 November 2007 [Proceedings No. T -25/06]
Translation [*] by Jovana Stevovic
Edited by Dr. Vladimir Pavić, Milena Djordjević, LL.M. [**]
Claimant of Serbia v. Respondent of Macedonia
5. Facts of the case, evidence
Alongside its Statement of Claim, [Claimant] submitted an agreement entitled 'Sales Contract' no. 070/30 concluded with [Respondent] on 27 December 2002, Record of 3 February 2003, and Bills of Lading no. 613 of 7 February 2003, no. 999 of 26 February 2003, no. 84 of 9 January 2003 and no. 421 of 28 January 2003. [Claimant] also included among its exhibits a memo of [a factory] on the prices of wood pallets, in order to substantiate its claim against the [Respondent] regarding the value of its receivables.
[Claimant] and [Respondent] contracted for [Respondent] to purchase bottles of mineral water from the [Claimant]. The bottles of water were to be packaged in plastic carriers; these were then to be further packaged in wooden pallets. According to Article 9 of the Contract:
|-||The [Claimant] was required to issue, at the request of the [Respondent] and, subject to return, one truck of glass packaging (which contained 24 wooden pallets); while
|-||The [Respondent] was obliged to return the packaging which it owed for the period prior to the conclusion of the contract; and
|-||On the occasion of each acceptance of goods, [Respondent] was required to return the packaging which had been previously taken out.|
Since [Respondent] failed to return the pallets it had been taking, it is clear from the evidence that [Claimant] issued many more pallets than had been initially anticipated. According to the Record of 3 February 2003, and Bills of Lading no. 613 of 7 February 2003, no. 999 of 26 February 2003, no. 84 of 9 January 2003 and no. 421 of 28 January 2003, it is evident that [Respondent] failed to duly return the pallets to [Claimant], and the number of the pallets that have not been returned rose to 454.
[Claimant] has provided a memo of [a factory] in which it is stated that the price of the wooden pallets used for packing that were ordered by [Respondent] was 700 dinars (VAT excluded) per pallet starting from 1 June 2005, which amounts to 826 dinars per pallet with VAT.
6. Applicable law
As the parties failed to designated the applicable substantive law in their contract, Article 48(2) of the Rules of the Foreign Trade Arbitration attached to the Serbian Chamber of Commerce stipulates that the Arbitrator will apply the law determined by the conflict of law rules he deems to be most appropriate. The Arbitrator finds that, in this case, it is most appropriate to apply the identical conflict of law rules which are provided for in the laws of the countries of the [Claimant] and the [Respondent], contained in Article 20 of the Law on Resolution of Conflict of Laws with the Provisions of Other Countries (formerly the Federal Law of Yugoslavia), now in force in nearly unamended form in both Serbia and Macedonia.
|-||The conflict of law rule in Article 20 does not provide the solution for a distribution contract. Instead, it stipulates that for all contracts for which there is no particular conflict of law rule, the applicable law will be the law of the place where at the moment of acceptance of the offer the offeror had its domicile or seat, except when specific circumstances of the case point to the application of some other law. In the present case, there is no information indicating who placed the offer.
|-||Ultimately, however, this is irrelevant since all significant circumstances point to Serbian law as applicable This is because, the more important aspects of the contracted performance, the characteristic ones, are on the [Claimant]: the Contract was made in Serbian language; and the parties, apparently having in mind the connection between the Contract as a whole and Serbia, provided for non-exclusive jurisdictions of the Commercial Court in L. [a city in Serbia] and the Foreign Trade Court attached to the Serbian Chamber of Commerce.|
The Arbitrator finds that there is no need to apply the United Nations Convention on the International Sale of Goods (Vienna Convention) on the basis of Article 1(1)(b) of the Vienna Convention, since the agreement of the parties, even though it is entitled 'Sales Contract', in fact represents a distribution contract. Under Article 10 of the Contract, [Respondent] undertook the obligation not to sell the goods beyond certain regions in Macedonia, and [Claimant] had the right to cease cooperation in case [Respondent] sold any goods outside the defined regions. Furthermore, [Respondent] was obliged to follow the realization of sales on markets which were assigned to it, and to send reports to the [Claimant] on the dynamics of sales. The case law of courts and arbitral tribunals regarding the application of the Vienna Convention shows that it does not apply to distribution contracts (OLG Düsseldorf, 11 July 1996; Metropolitan Court of Budapest, 19 March 1996), except when the dispute concerns individual sales within the distribution contract (''Benneton II'', BGH 23 July 1997), which is not the case in the present dispute.
Belgrade, 13 November 2007.
Sole Arbitrator: signed
* 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 Pavić (S.J.D., CEU) is an Assistant Professor in International Private Law and Arbitration and Milena Djordjević, 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