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CISG CASE PRESENTATION

Russia 22 January 1997 Arbitration proceeding 155/1996 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/970122r1.html]

Primary source(s) of information for case presentation: Case text

Case Table of Contents


Case identification

DATE OF DECISIONS: 19970122 (22 January 1997)

JURISDICTION: Russian Federation

TRIBUNAL: Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 155/1996

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany (respondent)

BUYER'S COUNTRY: Russia (claimant)

GOODS INVOLVED: Butter


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 18(1) ; 35 ; 74 ; 78 ; 79

Classification of issues using UNCITRAL classification code numbers:

18A [Criteria for acceptance];

35A [Conformity of goods to contract: quality and description required by contract];

74A [General rules for measuring damages: said to be no breach of contract by buyer as buyer had no opportunity to receive the goods due to an impediment beyond his control];

78B [Rate of interest];

79A [Impediment exempting party from liability for damages]

Descriptors: Acceptance of offer ; Conformity of goods ; Damages ; Exemptions or impediments ; 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

English: Unilex database, 1999

CITATIONS TO TEXT OF DECISION

Original language (Russian): Unavailable

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: René Henschel, Conformity of Goods in International Sales Governed by CISG, pdf access at Nordic Journal of Commercial Law, Issue 2004 #1 <http://www.njcl.utu.fi> p. 13; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 228 et seq.

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Russian Federation arbitration proceeding 155/1996 of 22 January 1997

Translation [*] by Yelena Kalika [**]

Translation by Yuliya Chernykh [***]

Facts

On 24 April 1996, Claimant [Buyer] of St. Petersburg, Russia, commenced an action before the Tribunal against Respondent [Seller] of Dortmund, Germany, to recover US $52,234.00. Of the amount sought:

      -   US $33, 800.00 represented the cost of 20 tons of goods delivered to the city of Pskov;
- US $2,020.00 represented the difference between the cost of goods under the contract and the price of margarine;
- US $5,426.00 represented the expenses in connection with the storage of 40.5 tons of the goods, as well as in connection with their loading and unloading;
- US $2,028.00 represented the penalty for the delay in delivery in the amount of 3% of the cost of goods;
- US $1,960.00 represented 7% annual interest for the use of the [Buyer]'s funds as of the date of the claim.

As stated in the complaint, in accordance with the contract of 24 January 1995, the [Seller] was to deliver 300 tons of table butter containing 82% of fat to the [Buyer] within the period of time set forth in the schedule, i.e., two trucks weekly starting on 31 January 1995.

On 26 January 1995, the [Buyer] made an advance payment of US $67,600.00 for the first lot consisting of 40.5 tons of goods (two trucks).

The [Seller] delivered the goods only on 6 March 1995, i.e., there was a 30 days delay of delivery. The goods were also of unacceptable quality because of the contents of fat, salt and intrusions of lead in it which were not allowed. The unacceptable quality of the goods is evidenced by the analysis report No. 1852 of 21 March 1995 issued by the Laboratory of Food Analysis.

In fact, [the [Seller]] delivered a butter substitute, the "Pura" margarine, instead of table butter. The [Buyer] immediately notified the [Seller] of this fact and asked him to dispose of the goods since they did not meet the terms of the contract.

Sixty-four days later, after the goods were placed into storage, i.e., on 10 May of 1995, in accordance with the [Seller]'s instructions 20 tons of the "Pura" butter substitute were sent to the address in Pskov provided by the [Seller]. The remaining 20.5 tons the [Buyer] managed to sell himself, but at a price substantially lower than was set forth in his contract with the original customer who ordered the goods.

In his letter of 18 April 1995, the [Seller] rejected the reclamation submitted by the [Buyer] on 13 April 1995.

On 2 June 1995, the [Buyer] sent the [Seller] a claim in which he demanded the restitution of damages and all the expenses in the total amount of US $55,879.00 incurred by the [Buyer] in connection with the [Seller]'s failure to duly perform his obligations under the contract.

The [Seller] did not satisfy the [Buyer]'s claim. Being of the opinion that his rights were violated, the [Buyer] commenced this action with the Tribunal.

On 13 June 1996 the [Buyer] paid the arbitration fee of US $3,733.00.

The Tribunal notified the [Seller] of the claim brought against him in letter No. 1800-155/2578 of 13 August 1996. The documents regarding the claim were attached [to the letter]. It was also suggested in that letter that the [Seller] choose an arbitrator and file a reply to the claim within thirty days as set forth in the Tribunal's Rules.

In his letter of 24 September 1996, the [Seller] notified the Tribunal that he chose A as an arbitrator and B as a substitute arbitrator.

On 18 October 1996, the arbitrators appointed by the parties chose C as the Chairman of the Arbitral Panel. They also chose D as the substitute Chairman of the Panel.

On 1 November 1996, the Tribunal received a reply to the claim dated 25 October 1996 from the [Seller]. In his reply to the claim, the [Seller] denied all of the [Buyer]'s claims on the ground that he delivered the goods of the quality and within the period of time set forth in the contract. The quality of the goods was confirmed by the conclusion of the Trade and Environmental Protection Analytical Laboratory (Hamburg) and SGS Controll - Co. (Hamburg) as well as by the Certificate of Compliance issued on the basis [of such conclusion]. Contesting the report issued by the Center of Testing and Certification TEST-St. Petersburg, the [Seller] referred to the complaints that he had filed with the International Representative Office of the International Chamber of Commerce and Industry (the German Representative Office) in the City of St. Petersburg and with the Mayor of St. Petersburg. The [Seller] is of the opinion that he assisted the [Buyer] in resolving of all the issues, including the delivery of 20 tons of goods to the city of Pskov. While denying the [Buyer]'s claims, the [Seller] counterclaimed the expenses of Deutsche Mark [DM] 72,707.00 that he incurred due to the [Buyer]'s fault.

The [Seller] paid an arbitration fee of US $4,221.00 in connection with the counterclaim.

The hearing was scheduled for 22 January 1997. The parties were notified [of that date] by letter No. 1800-155/3825 of 18 November 1996 from the Tribunal.

In his letter No. 271/03 of 31 December 1996, the [Buyer] denied both the [Seller]'s contentions in connection with the claim and his counterclaims. The Tribunal received the letter on 8 January 1997.

During the hearing held on 22 January 1997, the [Buyer]'s representative confirmed the claims. He also pointed out that the ground for the claim was not only the quality of the goods delivered by the [Seller], but also the [Seller]'s delivery of the goods not stated in the contract. Namely, margarine was delivered instead of butter. To justify the annual interest rate of 7% for the use of the [Buyer]'s funds by the [Seller] as of the date of claim, the [Buyer] stated that, according to the information he had, 7% reflected the median annual interest rate in Europe. The [Buyer] also announced that he was going to add an additional claim of US $5,000.00 representing attorneys' fees as well as postal and telephone expenses. The [Buyer] requested the Tribunal, when resolving the dispute, to apply not only the provisions of the contract and the CISG but also Russian substantive law. As to the counterclaim brought by the [Seller], the [Buyer] asked the Tribunal to deny it since not all the expenses were documentary proven and since under the CISG every party had to bear its own expenses. Besides, the [Buyer] stated that his suggestion to send samples to the SGS-Control GmbH was only a recommendation and not an instruction.

During the proceeding, the [Seller]'s representatives disagreed with the arguments stated in the [Buyer]'s claim. In addition to the counter arguments made in a reply to the claim, they pointed out the following.

--   The [Seller] disagreed with the [Buyer]'s determination of the date of shipment since, as follows from the [Buyer]'s letter of 10 February 1995, the parties agreed to postpone the date of delivery to 14 February 1995. The [Seller] argued that there were discrepancies in the English and Russian texts of the contract and that [such discrepancies] were especially important when determining the subject of the contract. As to the delivery of 20 tons of the goods to Pskov, the [Seller] noted that, by doing so and while not being the owner of the goods, he wanted to help the [Buyer] sell the goods since he, the [Seller], found an opportunity to deliver the goods from Pskov to Tashkent via the Russian firm "Service-Complect". The goods were to be delivered to the address of an Uzbek firm along with 60 tons of the same goods owned by the [Seller]. The [Seller] informed the Tribunal that, instead of making a payment in money, the Uzbek firm paid with two excavators which had been in Pskov for a long time and had not been sold.

In the [Seller]'s opinion, the goods were stopped by the St. Petersburg Customs Department due to the [Buyer]'s fault since there was no necessity to test the goods as the Certificate of Compliance could be procured based on the Certificate of Quality which the [Buyer] had in his possession.

In connection with his counterclaim, the [Seller] confirmed his claims at the proceeding. [In particular,] he spent more time on the computations attached to the counterclaim and presented documentary evidence (invoices) to support it. The [Seller], in particular, stated that the customs clearance of the 20 tons of goods in Pskov was carried out by "Service-Complect." The [Seller] stated that samples of goods used to be sent to SGS-Controll-Co. GmbH in accordance with the instructions of the original [Buyer]. Further, the [Seller] requested to recover additional US $10,000.00 of attorneys' fees and presented the contract with the "Leguleus" law firm (Moscow) to the Tribunal.

The [Seller] is of the opinion that the relationships of the parties should be governed by the CISG as well as by Russia and German substantive law.

Grounds for the award

After reviewing the materials of the case and hearing the arguments made by the parties' representatives, the Tribunal concluded the following.

1. The Contract of 24 January 1995 (clause 13, "Arbitration"), which was submitted to the Tribunal by the [Buyer] along with the claim on 24 April 1996, provides for the arbitration of disputes between the parties at "the International Commercial Arbitrage at the Russian Federation Chamber of Commerce (Moscow)."

Although the language of the said arbitration clause is not exactly correct, it follows from the clause that the parties agreed to arbitrate the dispute at the Tribunal. This agreement is also evidenced by both the parties' participation in the arbitration proceeding held by the Tribunal and by the absence of any objection as to the Tribunal's competence. Therefore, in accordance with the arbitration clause in the contract, the Tribunal is the arbitral tribunal which has competence to arbitrate the present dispute.

2. When turning to the issue of law applicable to the relationships of the parties not settled or partially settled in the contract, the Tribunal finds that in the contract of 24 January 1995 between the parties there is no provision on the applicable law. Besides, the Tribunal ascertained that, according to clause 14.2 of the contract, "when interpreting the present contract, Incoterms-1990 and the CISG should apply."

Since the parties failed to choose the applicable law in their subsequent agreement as well, pursuant to Article 28(2) of the Law on International Commercial Arbitration of 7 July 1993 and pursuant to paragraph 13(1) of the Tribunal's Rules, the Tribunal finds that the conflict of laws provision stated in Article 166(1) of the USSR Principles of Civil Law 1991 should apply. In accordance with [Article 166(1)], in the absence of the parties' agreement on the applicable law, the laws of the State, where the Seller under the contract is incorporated or has its main place of business, should apply. [In this case] it is the law of the Federal Republic of Germany.

3. After reviewing whether the [Seller]'s counterclaim against the [Buyer] may be allowed in the present proceeding, the Tribunal finds that the counterclaim brought by the [Seller] meets the requirements of paragraph 33 of the Tribunal's Rules. [This counterclaim] is a) brought against the claimant in this case, i.e., [under the counterclaim] the creditor is the respondent and the debtor is the claimant; b) the claims brought follow from the same contract and are homogenic with the subject of the [original] claim; c) the respondent paid the registration and arbitration fees in the total amount of US $4,221.00. Thus, the Tribunal finds it has a right to allow the [Seller]'s counterclaim in the present arbitration proceeding.

4. The amount of the claim stated in the [Buyer]'s [original] claim No. 59/03 of 17 April 1996 is US $52,234.00. [This amount] represents the sum of separate claims integrated in the [original] claim, namely:

      -   US $33, 800.00 is the cost of 20 tons of goods delivered to the city of Pskov;
      -   US $2,020.00 is the difference between the cost of goods under the contract and the price of margarine;
      -   US $5,426.00 represents the expenses in connection with the storage of 40.5 tons of the goods, as well as in connection with their loading and unloading;
      -   US $2,028.00 is the penalty for the delay in delivery in the amount of 3% of the cost of goods;
- US $1,960.00 represents the 7% annual interest for the use of the [Buyer]'s funds as of the date of claim.

However, the arithmetic sum of the above stated claims equals US $45,234.00, i.e., US $7,000.00 less than the amount of the claim (US $52,234.00) from which the [Buyer] paid the arbitration fee. The Tribunal concludes that there was a typo made in the [Buyer]'s complaint when stating the difference between the cost of the goods under the contract and the price of margarine, namely, instead of US $9,020.00 they typed US $2,020.00. Thus, it was US $7,000.00 less than the [Buyer] stated in clause 5 of the complaint of 2 June 1995. Taking the above into consideration, when reviewing the claim on the merits in the part concerning the [Buyer]'s claim of the difference between the cost of goods under the contract and the price of margarine, the Tribunal shall base its calculations on the sum of US $9,020.00.

5. After reviewing the [Buyer]'s claims on the merits, the Tribunal ascertains the following:

     a) Pursuant to the contract No. BO-1140/1-31/95003 of 24 January 1995 submitted by the [Buyer] with the claim, the Seller sold and the Buyer purchased the goods in accordance with Appendix No. 1 to the contract. In Appendix No. 1 the goods are referred to as "butter" in Russian and as "table butter" in English. Amendment No. 1 to the contract of 6 February 1995 contains the same references to the goods in Russian and English. Appendix No. 2 to the contract, which lists the quality characteristics of the goods, states the following both in Russian and English: "table butter, with added fat; fresh; fat contents of 82%." In the invoices issued by the [Seller] on 7 February 1995, the goods are named as "animal butter." In his letter of 9 February 1995, the [Seller], referring to the difficulties experienced in connection with the delivery of the butter made in Belgium, suggested to ship two trucks (40 tons) of "absolutely equal English butter." The specification for that butter was attached to the letter. As it was established during the proceeding and confirmed by the parties' representatives, the specification was issued by the British firm named "Pura Foods" for the goods it manufactured. [The goods] were referred to in the specification as "PURA SUB BUTTER", a butter substitute containing 80% of fat and 0.5-0.7% of salt. The [Buyer], while he had the specification for the "Pura" butter substitute in his possession, could not have left unnoticed the fact that both the name and some characteristics of the goods offered differed somewhat from the specification of goods stated in Appendix No. 2 to the contract. However, in his letter of 10 February 1995 the [Buyer] agreed to take delivery of the goods offered by the [Seller] (40 tons) and did not raise an issue of price reduction. According to the [Buyer], he received 20.5 tons of goods from the customs warehouse on 25 May 1995 and sold them in Russia.

In such circumstances, pursuant to Article 35 CISG and article 459 of the German Civil Code, the Tribunal finds no grounds to satisfy the [Buyer]'s claim to recover US $9,020.00 of the difference between the cost of goods under the contract and the price of margarine from the [Seller]. Besides, the Tribunal took into account that, according to the reply No. 506748A/110 of 28 February 1995 from the Trade and Environmental Protection Analytical Laboratory (Hamburg), both the goods stated in Appendix No. 2 to the contract and the "Pura" butter substitute represented "margarine for domestic use (standard quality)."

     b) The Tribunal finds that pursuant to the contract, on 6 March 1995 the goods named in the shipping documents as "the "Pura" butter substitute" were placed into a customs warehouse in St. Petersburg under the waybills No. 6367750 and 6367751. The goods received were submitted to the Testing and Certification Center of the Russian Federation Standardization, Metrology and Certification Committee for the City of St. Petersburg ("TEST-St. Petersburg") to determine whether or not they were safe for consumption. As follows from the testing protocol No. 1852.00 of 21 March 1995, samples were chosen by the state inspector. Upon reviewing the results on 22 March 1995, the issuance of the Certificate of Compliance was denied. By Order No. 03/90 of 27 March 1995 the sale of the goods was prohibited due to the high contents of lead salts. The goods were left in the warehouse under the customs control. The said documents were sent to the [Seller].

The [Seller] later contested the conclusions of TEST-St. Petersburg and submitted the conclusion issued by the Trade and Environmental Protection Analytical Laboratory (Hamburg) on 10 April 1995, the conclusion No. NA 957314 of 19 May 1995 issued by SGS Controll-Co. GmbH and the Certificate of Compliance issued on 30 May 1995 based on it. In the Tribunal's opinion, these documents cannot undermine the results of the test performed by the TEST-St. Petersburg since the samples received by the Analytical Laboratory contained no specific markings evidencing that the sample was taken from the lots of goods delivered to St. Petersburg. As stated in the Results of laboratory testing of 10 April 1995, the samples were not sealed. The [Seller] explained that the Analytical Laboratory numbered the samples and divided them in two parts. The other part was sent to SGS. This circumstance explains why in the certificate issued by SGS Controll-Co. GmbH there was no reference to the numbers of the waybills under which the goods were delivered to St. Petersburg. In such circumstances, in the Tribunal's opinion, the conclusions issued by the Analytical Laboratory and SGS Controll-Co. GmbH cannot evidence whether or not there was a high level of lead salts in a certain lot of goods.

Besides, as follows from the Order issued by TEST-St. Petersburg and the current procedure, the ban of any sale of the goods could be lifted only upon receipt of the results of the second test performed by the same [testing] organization. As follows from the letter of 15 July 1995 received from TEST-St. Petersburg, there were no disagreements in connection with the tests performed and the conclusions issued.

As stated in the letter of 14 March 1995, utilizing his right to make such a decision, the [Seller] instructed the St. Petersburg Customs Department to [release] 20 tons of goods to be shipped to Pskov. At the same time, the [Seller] stated that the [Buyer] had still been the owner of the goods. The [Buyer] argued that neither he nor the recipient of the goods had become the owner of the goods since the customs department was prohibited from releasing the goods due to the high contents of lead salts. The Tribunal concludes that the [responsibility for] the said lot of goods was still on the [Seller] as evidenced by the following.

  1. The change of the name of the recipient of the goods to the Service-Complect firm (Pskov) was done in the waybill No. 6367750 in accordance with the instructions given by the [Seller] to the Customs Department on 4 May 1995.
  2. The goods were shipped to Pskov to fulfill the [Seller]'s obligations before Service-Complect under the sale contract No. 2 of 12 December 1994.
  3. No third party could receive the cost of the goods sold under the contract No. 2 from Service-Complect without the [Seller]'s specific instructions and Service-Complect's agreement. As follows both from the materials of the case and from the parties' oral arguments, no such instructions were given.

In such circumstances, the [Seller] should have refunded the cost of the goods shipped to Pskov immediately after shipping [the goods]. However, the [Seller] claims that he did not receive a payment from Service-Complect and, thus, can retain the [Buyer]'s money. The Tribunal cannot agree with such argument since the goods were shipped under the contract No. 2 without any partial payment required by clause 5 of the contract No. 2. Thus, the [Seller] should bear all the unfavorable consequences of such a risky transaction, including the risk of receiving no payment from the new customer.

For the above reasons, the Tribunal concludes that the [Buyer] is entitled to recover the cost of 20 tons of the goods from the [Seller] in the amount of US $33,800.00. The [Buyer] is also entitled to recover] the expenses in connection with loading and unloading of the goods in the amount of US $350.00 as well as the expenses in connection with placing 40.5 tons the goods into a customs warehouse in St. Petersburg as per the [Seller]'s request of 14 March 1995. [Such storage expenses amounted to] US $5,076.00. The total amount of recovery shall be US $39,226.00.

     c) Pursuant to Appendixes No. 1-3 to the Contract, the [Seller] promised to ship the goods to the [Buyer] beginning Week 5. At the same time, the parties' understanding of the date of the first delivery was different. The [Buyer] thought that the weeks should be counted from the beginning of the year as stated in the Russian text [of the contract]. The [Seller] argued that, as followed from the English text of the contract, the weeks should be counted from the date of signing of the contract. The Tribunal finds that there is no substantial difference in the procedure of determining the first date of delivery stated both in the Russian and English texts. Pursuant to the uniform international usage, in the absence of a provision to the contrary, the weeks are counted from the beginning of a calendar year. Consequentially, the first delivery should have been made from 31 January to 6 February 1995. Besides, the Tribunal notes that the counting of weeks from the date of signing the contract cannot be correct also because clause 14.5 of the contract states that it becomes binding on the date of receiving of the advance payment by the [Seller].

After analyzing the correspondence of the parties presented, the Tribunal concludes that there was no postponement of the date of delivery under the contract by the parties. Pursuant to clause 7 of the contract, the payment of the cost of goods was to be made by an advance payment for each 40 tons of the goods ready for shipment. On 26 January 1995, such payment in the amount of US $67,600.00 was made as evidenced by the transfer statement No. 0644 and not contested by the [Seller].

The goods were delivered CIP St. Petersburg. According to the marking on the waybills No. 6367750 and 6367751, the goods were shipped on 20 February 1995 and not during the period of time from 31 January to 6 February 1995 as was required by the contract. Therefore, the delay in shipment of the goods constituted fourteen days. The Tribunal finds reasonable the [Buyer]'s claim to recover penalties for the delay in shipment of goods for the period stated in the amount of US $946.40 at the rate of 0.1% for each day of delay but not exceeding 3% as set forth in clause 11.1 of the contract.

     d) After reviewing the [Buyer]'s claim to recover 7% annual interest from the [Seller] for the use of the funds as of the date of the claim, the Tribunal finds that such question is not settled in the CISG. [Thus,] Article 352 of the German Civil Code should apply to the parties' relationships in this part. The said rule of law sets forth the 5% annual interest for a delay in performing one's monetary obligation under a bilateral contract in which the rate of interest is not stated. Pursuant to the said rule, the Buyer is entitled to 5% annual interest on the sum of US $33,800.00 from 1 February to 2 June 1995. [Such interest amounts to] US $574.60.

     e) The Tribunal did not decide the [Buyer]'s claim to recover his legal expenses since the tribunal has received no evidence that services of an attorney were used in this case. Nor has it received [the documents] evidencing the postal and telephone expenses.

Thus, the total sum of the main debt, which the [Seller] must pay to the [Buyer] pursuant to subparagraphs a)-e) of the present award, constitutes US $40,747.00.

6. As to the arbitration fee, pursuant to paragraph 6(2) of the Schedule on Arbitration Fees and Costs, in case of a partial sustaining of the claim the arbitration fee shall be apportioned between the respondent and claimant. The respondent shall pay the fee in proportion to the claims sustained. The claimant shall pay the fee in proportion to the claims denied.

When filing the claim, the [Buyer] paid US $3,733.00. Taking into account the claims sustained and denied, the [Seller] must pay US $2,912.00 to the [Buyer].

Counterclaim

After reviewing the materials of the case in connection with the [Seller]'s counterclaim and after hearing the parties' arguments and taking into consideration the conclusions made in connection with the main claim, the tribunal concludes the following.

Two important conclusions follow from the provisions of article 74 CISG and they should be taken into account when deciding an issue of recovery of the parties' losses incurred in connection with a sale contract. First, it is a breach of the terms of a contract by the other party. Second, it is the loss suffered by the other party as a consequence of the breach.

The tribunal finds that the [Buyer] did not breach the contract. He paid for the goods within the period of time stated in the contract. He also took all the steps necessary to receive the goods and made an advance payment for the customs clearance. However, due to circumstances beyond his control, he could not accept the goods since his application for the Certificate of Compliance was denied due to the high contents of lead salts [in the goods].

Pursuant to the provisions of Appendix 1 to the Russia State Customs Department Order No. 612 of 12 December 1992, when importing butter and margarine into the Russian Federation, it was necessary to confirm their safety [for consumption]. The terms of the contract did not provide for the procedure of receiving the Certificate of Compliance. The current procedure in the Buyer's State allowed application to the Testing and Certification Center in St. Petersburg to test the goods. The Buyer did so. The Seller disagreed with the conclusion issued by TEST-St. Petersburg stating that there was a high level of the lead salts in the goods and suggesting the Seller's fault in this connection. However, [the Seller] did not contest [such conclusion] by the methods prescribed. In such circumstances, the Tribunal not only cannot ignore the testing protocol No. 1852.00 of 21 March 1995 but also cannot question the testing procedure itself.

In the Tribunal's opinion, any expenses in connection with business trips, loss of working time, telephone conversations and legal fees are reasonable business expenses in connection with carrying out any commercial activities both by the Seller and by the Buyer of the goods. The [Seller]'s expenses in connection with the shipment of 20 tons of goods to Pskov should be refunded to the [Buyer] by Service-Complect as the buyer of goods since no other agreements were made with the [Buyer].

For the above reasons, the Tribunal concluded that since there was no fault on the [Buyer]'s part, the [Seller] cannot claim the recovery of losses in connection with the shipment of the goods under the waybills No. 6367750 and 6367751 as well as in connection with the legal fees.

Pursuant to paragraph 6(1) of the Schedule on Arbitration Fees and Costs, the arbitration and registration fee in the amount of US $4,221.00 shall be fully paid by the claimant in the counterclaim (i.e., the original [Seller]) as the party against whom the award was rendered.

Conclusion

For the above stated reasons and pursuant to paragraph 34 of the Tribunal's Rules, the Tribunal

HOLDS:

  1. The [Seller] shall pay US $40,747.00 to the [Buyer]. It also shall reimburse the arbitration fees in the amount of US $2,912.00.

  2. The rest of the [Buyer]'s claim is denied.

  3. The counterclaims in the amount of DM 72,702.00 brought by the [Seller] against the [Buyer] are denied.

  4. The [Seller] shall pay the arbitration fees in connection with the counterclaim in the amount of US $4,221.00. (This amount has been received in advance).


FOOTNOTES

* For purposes of this translation, Claimant of Russia is referred to as [Buyer] and Respondent of Germany is referred to as [Seller].

** Yelena Kalika, a law student at the Pace University School of Law, has studied at the Moscow State Law Academy, interned with a Moscow law firm, and is a Research Assistant at the Pace Institute of International Commercial Law.

*** Yuliya Chernykh graduated from the National University of Kyiv-Mogyla Academy (Ukraine, 2004) and Stockholm University (LL.M. in International Commercial Law, 2005), Intern at UNCITRAL (2005).

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