Russia 25 April 1996 Arbitration proceeding 72/1995 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/960425r1.html]
DATE OF DECISIONS:
CASE NUMBER/DOCKET NUMBER: 72/1995
CASE HISTORY: Unavailable
SELLER'S COUNTRY: France (respondent)
BUYER'S COUNTRY: Russia (claimant)
GOODS INVOLVED: Unavailable
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issues:
Classification of issues using UNCITRAL classification code numbers:
78B [Rate of interest] 84A [Seller bound to refund price must pay interest]
78B [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 (Russian): Rozenberg ed., Arbitrazhnaja praktika za 1996-1997 gg. [Arbitration practice in the years 1996-1997], Moskva (Statut) 1998, No. 19 [70-72]
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: Djakhongir Saidov, 7 Vindobona Journal of International Commercial Law and Arbitration (1/2003) 1-62 at n.258Go to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
Translation [*] by Mykhaylo Danylko [**]
1. SUMMARY OF RULING
1.1 Notwithstanding some imprecision in the arbitration clause of the contract, the Tribunal of International Commercial Arbitration (hereinafter Tribunal) found that it was competent to arbitrate the present dispute basing it on the Claimant [Buyer]'s arguments as evidence that at the time of conclusion of the contract the intent of the parties was hthe Arbitration Tribunal, the successor of which is the present Tribunal. [The Tribunal also considered the fact] that the Respondent [Seller] did not object to its competence.
1.2 At the conclusion of the contract, the places of main business activity of the parties were in the territories of Contracting States of the CISG (Soviet Union and France) and thus the Convention is applicable to the parties' relations. According to the Russian Federation Civil Code 1964 Art. 566, which was in force at the conclusion of the contract, the Russian civil law should be applied subsidiary, because the contract was concluded in the territory of Russia.
1.3 The [Buyer] is entitled to annual interest, which is based on CISG Arts. 78 and 84. Calculation of the interest has been done according to the procedure prescribed in Art. 66(3) of the Fundamentals of Civil Law 1991.
2. FACTS AND PLEADINGS
The action was brought by the [Buyer], a Russian company, against the [Seller], a French company. Under the contract concluded between the parties on 26 November 1991, the [Buyer] wired to the [Seller]'s account the sum in dispute as a prepayment for the goods to be delivered from France. The [Seller] did not deliver the goods and did not return the prepayment. The [Seller] did not present any explanations to the Tribunal. Since the arbitration clause contained language providing that the competent arbitration court to arbitrate the disputes is the Court of Arbitration at the USSR Chamber of Trade, the Tribunal, according to its Rules, proposed to the [Buyer] to prove the competence of the Tribunal to arbitrate the present dispute.
The [Buyer] presented the following arguments to confirm his belief that the parties had in mind to submit disputes to the Tribunal of Arbitration at the USSR Chamber of Commerce and Trade:
|-||The Court of Arbitration at the USSR Chamber of Trade, similar to the current Court of Arbitration at the Russian Federation Chamber of Commerce and Trade, did not exist at all at the time of conclusion of the contract;
|-||The Tribunal of Arbitration at the USSR Chamber of Commerce and Trade was a permanent Court of Arbitration;
|-||The Tribunal of Arbitration at the USSR Chamber of Commerce and Trade at that time was the only authority to arbitrate disputes arising from international contracts;
|-||The parties meant the USSR Chamber of Commerce and Trade in the arbitration clause instead of the Chamber of Trade.|
3. TRIBUNAL'S REASONING
The ruling of the Tribunal contained the following main points.
3.1 [Jurisdiction and competence of the Tribunal]
The competence of the Tribunal to arbitrate the present dispute follows from the arbitration clause of the parties' contract, even though it is stipulated there that the authority to arbitrate disputes is a Court of Arbitration at the USSR Chamber of Trade. The Tribunal believes that he parties had in their minds the Tribunal of Arbitration at the USSR Chamber of Commerce and Trade. [The Tribunal found] the [Buyer]'s arguments reasonable and the [Seller] did not challenge the competence of the Tribunal.
3.2 [Proper claimant]
The materials presented by the [Buyer], among others a certificate from the State Tax Office of 6 March 1996, in the Tribunal's view give reasonable grounds to believe that the company, which brought the action, is a successor of the party, which concluded the contract as a buyer, and therefore it should be considered as a proper claimant in this dispute.
3.3 [Applicable law]
Because both the Russian Federation and France were Contracting States of the CISG at the time of conclusion of the contract, the Tribunal found that the CISG is applicable to the relations of parties.
According to Art. 7 of the CISG, all issues not governed by the Convention should be regulated by the general principles, on which the Convention is based, or when such principles do not exist, according to the law applicable by virtue of rules of international private law.
According to Art. 566 of the Russian Federation Civil Code, the rights and obligations of the parties to an international sales contract should be defined under the laws of the place of conclusion of the contract [lex loci actus]. Since the contract was concluded in the territory of Russia, the Tribunal found the civil law of Russia applicable to the dispute.
3.4 [The merits of the case]
From the documents presented by the [Buyer], it follows that under the contract provisions (clause 5) the [Buyer] made a prepayment in the amount involved in this dispute, however, the delivery of the goods had not been made. The [Seller] did not present any explanations and did not challenge the [Buyer]'s claim to recover the paid sum. Therefore, the [Buyer]'s claim to recover the prepayment sum is reasonable.
3.5 [Annual interest]
As to the [Buyer]'s claim to recover annual interest on the sum in arrears, the Tribunal found that this right is specified in CISG Arts. 78 and 84. Since the Convention does not specify the interest rate, it should be defined under the laws of Russia. According to Art. 66(3) of the Fundamentals of Civil Law 1991, when the financial obligation is delayed the creditor is entitled to claim a 5 percent annual interest to be calculated on the sum in arrears. Considering this, the [Buyer]'s claim to recover from the [Seller] an annual interest for the period since 3 August 1992 till 3 August 1994 shall be granted.
* This is a translation of data on Proceeding 72/1995, dated 25 April 1996, of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, reportred in Rozenberg ed., Arb. Praktika (1998) No. 19 [70-72].
All translations should be verified by cross-checking against the original text. For purposes of this translation Claimant of Russia is referred to as [Buyer]; Respondent of France is referred to as [Seller].
** Mykhaylo Danylko is a Partner with the law firm Danylko, Kushnir, Soltys & Yakymyak, Attorneys & Counselors at Law, Kiev, Ukraine <http://www.dksylaw.com>. He holds a Masters of Laws (European Studies Program) from the Law School of International Science and Technology University, Kiev, Ukraine (July 2000); a Master of Management in Business of the Business School of International Science and Technology University (June 2002); and has received his LL.M. in International and Comparative Law at the Pace University School of Law.Go to Case Table of Contents