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CISG CASE PRESENTATION

Serbia 15 October 2008 Foreign Trade Court attached to the Serbian Chamber of Commerce (Mercantile wheat Case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/081015sb.html]

Primary source(s) of information for case presentation: Text of award

Case Table of Contents


Case identification

DATE OF DECISION: 20081015 (15 October 2008)

JURISDICTION: Arbitration ; Serbia

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: T-18/07

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Serbia (claimant)

BUYER'S COUNTRY: Bosnia and Herzegovina (respondent)

GOODS INVOLVED: Mercantile wheat


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 59 ; 78

Classification of issues using UNCITRAL classification code numbers:

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

78A ; 78B [Interest on delay in receiving price or any other sum in arrears; Rate of interest]

Descriptors: Payment of price ; Interest

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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 15 October 2008 [Proceedings No. T -18/07]

Translation by [*] Boris Radojcic

Edited by Milena Djordjevic, LLM and Marko Jovanovic [**]

Claimant (Serbia) [Seller] v. Respondent (Bosnia and Herzegovina) [Buyer]

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 [Buyer] against [Seller] for payment of EUR 4.740,20 with interest and expenses, upon having conducted the arbitration proceedings and hearing of 16 September 2008, pursuant to Article 49 of the Rules of the Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce (hereinafter the Rules), makes the following

AWARD

1. The [Seller]'s claim is granted and [Buyer] is ordered to pay the amount of EUR 4.740,20 as a compensation for the main debt, pursuant to the Framework agreement from 25 May 2007 and the annex thereto from 25May 2007, within fifteen days from the day of receipt of this Award.

2. [Buyer] is ordered to pay to [Seller] the interest at the discount rate determined by the European Central Bank:

-    for the amount of EUR 3.493,00 starting from 22 November 2007 until 7 July 2008;
-    for the amount of EUR 2.493,00 starting from 8 February 2008 until 25 March 2008;
-    for the amount of EUR 1.493,00 starting from 26 March 2008 until the final payment, and
-    for the amount of EUR 3.247,20 starting from 23 November 2007 until the final payment.

3. [Buyer] is ordered to pay to [Seller] compensation for the cost of proceedings in the amount of Serbian dinars [RSD] 69.462,00 within fifteen days from the day of the receipt of this Award.

STATEMENT OF REASONS

Jurisdiction, composition and appointment of the arbitrator

1. [Seller] bases its claim on the Framework agreement on sale concluded on 25 May 2007, annex no. 1 thereto from 25 May 2007, invoices and receipts, dispatch note and international waybills concerning the delivery of five hundred tons of mercantile wheat.

2. [Seller] submits that the jurisdiction of this Arbitration is provided for in an unambiguous manner in the Framework agreement from 25 May 2007, as well as in the Article 4 of the Annex no. 1 to the Framework Agreement.

3. [Seller] submitted the Statement of Claim on 26 December 2007, paid the costs of the registration fee and arbitration costs.

4. By a letter of 11 January 2008 the Court of Arbitration has notified [Buyer] that a claim has been raised against it and served it with the claim and the accompanying evidence material. Pursuant to the Rules, the Court of Arbitration instructed [Buyer] to submit and answer to the Statement of Claim within 30 days and informed it that the dispute will be resolved by the sole arbitrator, pursuant to Article 21 of the Rules. For this reason, [Seller] and [Buyer] should agree on appointing the sole arbitrator within 30 days from the day of receipt of the answer to the Statement of Claim. Pursuant to Article 34(7) of the Rules, the proceedings shall continue if a duly summoned Respondent fails to submit an answer to the Statement of Claim or refuses to take part in the proceedings.

5. On the same day the Court of Arbitration informed [Seller] that it received the payment of arbitration costs, sent the claim and the accompanying documents to [Buyer] and instructed [Seller] to agree with [Buyer] on appointing the sole arbitrator, pursuant to Article 21 of the Rules. Failing such agreement, the sole arbitrator shell be appointed by the President of the Court of Arbitration, pursuant to Article 21(3) of the Rules.

6. As [Seller] and [Buyer] failed to reach an agreement regarding the appointment of the sole arbitrator, on 7 May 2008 the President of the Court of Arbitration appointed Mr. X as sole arbitrator in the dispute at hand. When appointing the sole arbitrator, the President of the Court of Arbitration acted pursuant to Article 20(1) of the Rules (which provides that the the proceedings in cases where the value of the dispute does not exceed US$ 70.000 shall be conducted by a sole arbitrator) and Article 21(3) of the Rules (which provides that, failing an agreement between the parties, the sole arbitrator shall be appointed by the President of the Court of Arbitration). The sole arbitrator was informed of his appointment on 8 May 2008 and he accepted to act as arbitrator in this dispute.

7. On 18 August 2008 the Court of Arbitration informed [Seller] and [Buyer] that Mr. X will act as sole arbitrator and that he, acting pursuant to Article 35(6) of the Rules, scheduled the hearing for oral argument for 16 September 2008. The Parties are summoned to this hearing and warned that, in case they fail to appear, the proceedings will nevertheless resume and the hearing may be conducted in their absence.

APPLICABLE LAW

8. When determining the applicable law pursuant to Article 48(2) of the Rules, the arbitrator concluded that the UN Convention on Contracts for the International Sale of Goods concluded in Vienna on 11 April1980. [the CISG] is applicable the dispute at hand.

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 arbitrator notes that both Serbia and Bosnia and Herzegovina are Contracting States of the CISG.

9. For the purposes of deciding whether [Seller]'s claim for payment of the purchase price is founded, the arbitrator applied Article 59 of the CISG which states:

"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."

10. For the purposes of deciding whether [Seller]'s claim for payment of the interest is founded, the arbitrator applied Article 78 of the CISG, which states:

"If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74."

REASONS FOR THE AWARD

11. The Framework agreement no. 296/07 and Annex no. 1 thereto are concluded between [Seller] and [Buyer]. These documents created a business relation between [Seller] and [Buyer]. In the course of this business relation, [Seller] sent the below-stated invoices to [Buyer], pursuant to which [Buyer] was to pay the amount of EUR 6.750,00. These invoices are:

   Invoice no.     Value (in EUR)
 
fa100310/296/07         3.493,00
fa100314/296/07         3.247,20

12. The subject-matter of the Framework agreement no. 296/07 of 25 May 2007 [hereinafter: the Contract] was the delivery of 500 tons of mercantile wheat at the market price in the moment of delivery. The goods were to be paid for through remittance within ninety days. The annex no.1 attached to the Contract established a new time period for payment through remittance. Pursuant to the Annex No. 1, the payment was to be made within 177 days from the day of the exportation customs clearance of goods was obtained.

13. The Contract provides that the Parties will subsequently agree upon the prices and parity and that for that reason every invoice is to be considered an integral part of the Contract.

14. Performing its contractual obligations, [Seller] delivered 24.950 kg of mercantile wheat to [Buyer] on 28 May 2007. The value of the delivered goods was EUR 3.490,00 and for that delivery [Seller] issued the invoice no. fa100310/296/07 with parity of delivery [...]. The goods were loaded onto a truck and the bill of lading no. 100310/296/07 was signed by the carrier of [Buyer] [...]. The shipment of the goods was followed by the international CMR waybill no. 150933 of 28 May 2007. The goods exported were custom cleared at the Customs Department in Sombor, on 28 May 2007.

15. [Seller] performed a second delivery of 24.600 kg of mercantile wheat on 28 May 2007. The value of the delivered goods was EUR 3.247,20 and for that delivery [Seller] issued the invoice no. fa100314/296/07 with parity of delivery [...]. The goods were loaded onto a truck and the bill of lading no. 100314/296/07 was signed by the carrier of [Buyer] [...]. The shipment of the goods was followed by the international CMR waybill no. 150939 of 29 May 2007. The goods exported were custom cleared at Customs Department in Sombor, on 29 May 2007.

16. The arbitrator takes note of the fact that [Buyer] took over the goods as provided for by the parity and issued the documents referred to paragraphs 14 and 15 of this Award.

17. In Article 2 of Annex 1 to the Contract the Parties have stipulated that the payment is to be made within 177 days from the day in which the goods have obtained the exporting custom clearance. [Buyer] failed to pay for the goods within the designated period of time and it is therefore in default.

18. At the hearing for oral argument held on 16 September 2008 the arbitrator established that [Buyer] was properly summoned, but it failed to appear. Upon [Seller]'s proposal and in accordance with Article 37(6) of the Rules, the arbitrator decided to hold the hearing in absence of [Buyer].

19. [Seller] reaffirmed its submissions contained in the Statement of Claim of 26 December 2007 and presented a written submission which shows that in the meanwhile [Buyer] made two payments to [Seller], each of the payments amounting to EUR 1.000,00. The first payment of EUR 1.000,00 was made on 07 February 2008, while the second payment of EUR 1.000,00 [Buyer] was made on 25 March 2008. In light of these facts [Seller] modified its claim with respect to the amount of the main debt and the interest.

20. On the basis of the main debt for the invoice no. 100310/296/07 of 28 May 2007, [Seller] claims the amount of EUR 1.493,00. On the basis of the main debt for the invoice no. 100314/296/07 of 29 May 2007 [Seller] still claims the amount of EUR 3.593,20. Consequently, [Seller] claims the sum of EUR 4.740,20 as the total amount of the main debt.

21. With respect to the claim for interest, [Seller] requests the following: for the amount of EUR 3.493,00 [Seller] claims the interest from 12 June 2007 until 07 February 2008; for the amount of EUR 2.493,00 [Seller] claims the interest from 08 February 2008 until 25 March 2008; for the amount of EUR 1.493,00 [Seller] claims the interest from 26 March 2008 until final payment; for the amount of EUR 3.247,20 [Seller] claims the interest from 13 June 2007 until final payment.

22. [Seller] suggested that the evidence should be produced by reading the documents stated above.

23. Upon thorough and careful consideration of all the relevant facts in the case at hand, [Seller]'s submissions presented in the Statement of Claim and the evidence gathered, the arbitrator concluded that the [Seller]'s claim was founded.

24. The Contract shows that [Seller] undertook to deliver the stipulated goods. [Seller] undoubtedly fulfilled this obligation, which was proved by the signed bills of lading and the waybills of the shipping agent.

25. It was also established that [Buyer] partially complied with its obligation to pay for the goods. This partial compliance was also performed with delay. The Contract shows that [Buyer] undertook to pay for the received goods within 177 days from the day in which the goods have obtained custom clearance. The arbitrator concludes that, pursuant to Article 59 of the CISG, [Seller] is entitled to claim the purchase price, since it delivered the goods.

26. The period of time set for payment of the purchase price has elapsed. Considering that the Contract did not contain any provisions regarding the interest, [Seller] claimed the interest at the domiciliary rate for the respective amounts of debt for each particular delivery. The arbitrator concluded that, pursuant to Article 78 of the CISG, [Seller] is entitled to interest if the [Buyer] is in delay with the payment of the price. As far as the rate itself is concerned, the arbitrator deems appropriate to set it at the value of the domiciliary interest rate of the State in which currency is used, pursuant to the Contract from 25 May 2007.

REIMBURSEMENT OF EXPENSES

27. Considering that [Seller]'s claim is granted, it is entitled to reimbursement of registration fees in the amount of RSD 11.250,00; costs of arbitration in the amount of RSD 44.462,00 and the costs of legal representation in the amount of RSD 13.750,00. [Seller] is therefore entitled to the reimbursement of RSD 69.462,00 in total.

FINALITY OF THE AWARD

28. Pursuant to Article 56(1) of the Rules, this Award is final and is not subject to appeal. It has the force of a final court judgment of a court in the Republic of Serbia.

  In Belgrade, 15 October 2008
[signed]               


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation.

** Boris Radojcic an associate with Belgrade law firm Nikolic, Kokanovic & Otaševic. 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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Pace Law School Institute of International Commercial Law - Last updated October 24, 2011
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