Russia 14 February 2012 Tenth Arbitration Appeal Court, Moscow
[Cite as: http://cisgw3.law.pace.edu/cases/120214r1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: A41-20318/11
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Germany
BUYER'S COUNTRY: Russia
GOODS INVOLVED: Silicon
RUSSIAN FEDERATION: Tenth Arbitration Appeal Court, Moscow
[No. A41-20318/11] 14 February 2012
Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/145],
CLOUT abstract no. 1364
Reproduced with permission of UNCITRAL
A German trader (the seller) lodged a claim against a Russian State-owned enterprise (the buyer) to recover a debt for products delivered. The court of first instance allowed the claim in full.
In its appeal to the Tenth Arbitration Appeal Court (the court of second instance), the buyer requested the reversal of the decision, citing violations of substantive and procedural law and the fact that it had fully complied with its contractual obligations within the period specified by the additional agreements of the parties. The court of appeal upheld the decision of the court of first instance, on the following grounds.
The seller and the buyer had concluded a series of contracts for the purchase of silicon. However, the buyer had not paid for the delivered goods within the prescribed period. Subsequently, the parties had entered into a number of additional agreements. The goods had been paid for at a later date than was provided for in the contract, and not in full, as confirmed by the parties.
Given that the claimant and the respondent had their place of business in States parties to the CISG, its provisions were applicable to their contractual relationship (article 1(1) CISG). According to article 7(2) CISG, issues not regulated by the Convention are to be settled by the law of the State applicable to the relationship of the parties. In the case at hand, German law was applicable to the issues not regulated by the Convention as the law of the State of the seller, according to the Russian conflict-of-laws rules.
Under article 53 CISG, the buyer must pay the price for the goods and take delivery of them as required by the contract and the Convention. According to 61(1) (a) CISG, if the buyer fails to perform any of its obligations, the seller is entitled to require the buyer’s performance (articles 62-65 CISG).
Since in the case at hand the respondent had not paid in full for the goods delivered to it, pursuant to articles 53 and 62 CISG, the court of first instance had rightly allowed the claimant to recover the debt from the respondent.
Under article 78 CISG, 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 CISG. Despite the fact that the Convention provided for the possibility of recovering interest if the buyer fails to pay for the goods, the court of appeal noted that the Convention does not specify the amount, the method of calculation or the other conditions necessary for the calculation of interest. German national law was thus to be applied to determine the interest. The interest calculation had been checked by the court and found to be correct.
The buyer’s argument concerning the seller’s non-compliance with the complaints procedure for dispute settlement could not be accepted, as neither the disputed contracts nor the Convention contained any provisions for mandatory compliance by the parties with the pretrial complaints procedure for dispute settlement.Go to Case Table of Contents
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:
CITATIONS TO OTHER ABSTRACTS OF DECISION
CITATIONS TO TEXT OF DECISION
Original language (Russian): online database of court judgements <http://kad.arbitr.ru>
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents