Russia 25 March 1998 Arbitration proceeding 491/1996 [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/980325r1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 491/1996
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Bulgaria (claimant)
BUYER'S COUNTRY: Russian Federation (respondent)
GOODS INVOLVED: Goods
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
78B [Rate of interest]
78B [Rate of interest]
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CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Russian): Rozenberg, Practika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda: Haychno-Practicheskiy Commentariy [Practice of the International Commercial Arbitration Court: Scientific - Practical Comments] Moscow (1998) No. 24 [90-91]
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: Liu Chengwei, Recovery of interest (November 2003) n.259; Djakhongir Saidov, 7 Vindobona Journal of International Commercial Law and Arbitration (1/2003) 1-62 at p. 53
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Translation [*] by Serge Lapine [**]
Translation edited by Mykhaylo Danylko [***]
1. SUMMARY OF RULING
1.1 The UN Convention on Contracts for the International Sale of Goods 1980 (hereinafter Vienna Convention 1980) and, as a subsidiary, Bulgarian law as the law of the country of Seller were found to be applicable to the contract of international sale of goods concluded between a Russian company and a Bulgarian company.
1.2 Although the [seller] did not produce any evidence to justify the rate of the annual interest which he sought, the Tribunal of International Commercial Arbitration (hereinafter the Tribunal) decided to grant his claim bearing in mind that the rate sought by the [seller] did not exceed the LIBOR rate usually applicable in international trade relations.
1.3 The claim was satisfied in the part for which the arbitration fees were paid. The remaining part of the claim, for which the arbitration fees were not paid, was left without consideration.
The claim was brought by a Bulgarian company [seller] against a Russian company [buyer] in connection with incomplete payment for the goods delivered under a contract concluded between the parties in June 1994. The [seller]'s claims included recovery of the amount of principal debt and recovery of interest prescribed by law. The [seller] paid only part of the arbitration fees. The [buyer] did not submit his objections to the Tribunal.
3. THE AWARD
The ruling of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry included the following main positions:
3.1 [Proper Claimant identified]
The Claimant [seller] with a name different from that of the Bulgarian company which signed the contract is its successor which is confirmed by the City Tribunal of Sofia. Taking into account the evidence which the [seller] submitted, he is considered to be the proper Claimant in this dispute.
3.2 [Jurisdictional competence of the Tribunal]
The contract between the parties provided that their disputes must be settled -- with the exclusion of competence of common jurisdiction courts -- by arbitration at the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry. Taking into consideration that the Decree of the Supreme Council of the Russian Federation [Russia's Parliament] changed its name from Arbitration Tribunal into the Tribunal of International Commercial Arbitration [at the Russian Federation Chamber of Commerce and Industry], the Tribunal found itself competent to hear the present case.
3.3 [Applicable law]
The Vienna Convention 1980 is applicable to the relations between the parties (Article 1(1)(a)). The issues not covered by the Convention are regulated by the law determined on the basis of the rules of international private law (Article 7). Since the parties did not determine which law must be applied to their relations the Tribunal pursuant to Article 28 of the Law of the Russian Federation on the Tribunal of International Commercial Arbitration when choosing the applicable law, based [its decision] on Article 166 of the Fundamentals of Civil Law [USSR] of 1991. According to this rule, the law that must be applied is the law of the country of seller, where the seller to the sales contract is established or has the main place of business, i.e., Bulgarian law in this case.
3.4 [Merits of the case]
3.4.1 [Recovery of principal debt]
The fact that the delivery was made by the [seller] in accordance with the provisions of the contract is confirmed by the case materials and is not disputed by the [buyer]. The [seller] has also produced a copy of a financial document proving that the [buyer] transferred an additional sum to the [seller]. For these reasons and taking into consideration the absence of any objections from the [buyer], the Tribunal finds that the [buyer] must pay the remaining part of the sum to the [seller].
3.5 [Recovery of annual interest]
According to Article 78 of the Vienna Convention 1980, if a party fails to pay the price in time, the other party is entitled to recover interest on the sum in arrears. The [seller] claims the sum which constitutes the annual rate of 5% of the sum of principal debt from 1 January 1995 till 31 December 1996. In his letter of 10 February 1998, the [seller] bound himself to justify the interest rate that he claims in the Tribunal hearing. But during the hearing his representative was absent. No written explanations on the interest rate calculated according to Bulgarian legislation were produced [by the seller].
Taking into account the fact that the annual rate of 5% which the [seller] claims does not exceed the LIBOR rate usually applicable in international trade relations, the Tribunal found it possible to grant the [seller]'s claim.
3.6 [Part of the claim to be granted]
Since the arbitration fees, paid by the [seller] do not cover all of his original and subsequently supplemented claims, the Tribunal granted the claims only in the part covered by the arbitration fees. The remaining part of the claim was left without consideration.
3.7 [Time period for annual interest]
The Tribunal granted the claim concerning recovery of the annual interest until the complete recovery of the principal debt from the date of delivery of the judgment till the date of payment of the sum of principal debt at the annual rate of 5%.
* This is a translation of data on Proceeding 491/1996, dated 25 March 1998, of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, reported in Rozenberg ed. Arb. Praktika 1998, No. 24 [90-91].
All translations should be verified by cross-checking against the original text. For purposes of this presentation, Claimant of Bulgaria is referred to as [seller]; Respondent of the Russian Federation is referred to as [buyer].
** Serge Lapine is a 5th year student at the Law Faculty of Nizhny Novgorod and at the same time at the Interpreters' Faculty of Nizhny Novogorod Linguistic University.
*** 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