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CISG CASE PRESENTATION

Bulgaria 30 November 1998 Arbitration Case 14/98 (Production of automobiles) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/981130bu.html]

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

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Case identification

DATE OF DECISION: 19981130 (30 November 1998)

JURISDICTION: Arbitration ; Bulgaria

TRIBUNAL: Bulgarian Chamber of Commerce and Industry

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 14/98

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Unknown

BUYER'S COUNTRY: Unknown

GOODS INVOLVED: Elements for production of automobiles


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 55

Classification of issues using UNCITRAL classification code numbers:

55A31 [Open-price contracts: implied agreement on price generally charged for such goods]

Descriptors: Open-price contracts

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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 (Bulgarian): Praktika Bulgarska turgovsko-promishlena palata (BTPP) 1998-1999, No. 4 [15-17]

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Arbitration Tribunal of Bulgarian Chamber of Commerce & Industry

Case No. 14/98 of 30 November 1998

Translation [*] by Bojidara Borisova [**]

SUMMARY

When the contract is valid but the contracting parties did not expressly or implicitly fix or make provision for determining the price, they are considered, in the absence of any indication to the contrary, to have impliedly made reference to the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned.

CASE DECISION

In the course of continuing commercial relations between the parties they concluded a contract according to which the Respondent [seller] is obliged to sell to the Claimant [buyer] and the [buyer] to purchase full elements for the production of automobiles. In the annex to the contract, the parties agreed upon delivery of full elements for automobiles upon condition that the annex will be in effect after the coordination of their plans, the fulfillment of the technical conditions and the accomplishment of positive results from sample tests. The stipulated approximate price is in US dollars, which must be specified after the fulfillment of the coordination. For all other conditions, the contracting parties refer to the provisions of the initial contract.

In accordance with the annex, the [buyer] remitted to the [seller]'s bank account an advance payment in US dollars.

In all of the payment orders, the [buyer] pointed out that the payment is made in fulfillment of the contract; three of the payment orders mention the annex to the initial contract. It is also inscribed that the amounts are remitted in the general framework of an investment contract, which does not have a connection with the relations between the disputing parties, but settles stable production and cooperation between the [buyer] and a third party. The [buyer] remitted the advance payment for the deliveries in the framework of the above-mentioned cooperation. The [seller] accepted the advance payment without having any objections concerning the purpose of the payment orders. Though in the course of the trial the [seller] alleged that, due to questionable bank transactions, the [buyer] did not make the advance payment according to the initial contract and its annex, but that [buyer] executed an obligation resulting from another relation between the same parties.

The Arbitral Tribunal does not accept the [seller]'s objections.

First, the objection is in controversy with the expressly stated purpose of the payment made by the [buyer] in the payment orders.

Second, the [seller] itself in fax-letter of 22 October 1996 sent to the [buyer], confirms that he had received a certain amount of money for the delivery of the goods in question. This was the exact amount that the [buyer] remitted with four of the five payment orders till that date.

Third, with fax-letter from 28 October 1996 the [buyer] informed the [seller] that he had remitted him another amount of money for the delivery of the goods in accordance with the annex. Once again, the [seller] did not objected to the written assertion of the [buyer] concerning the purpose of the advance payment.

Fourth, with fax-letter from 29 October 1996 the [buyer] again listed the amount and the date to each of the five advance payments for the delivery of the goods according to the annex. Once again, the [seller] did not object to the [buyer]'s assertions concerning the purpose of the advance payment. Indeed, the [seller] signed appendix N1 to the annex, which was already signed by the [buyer], and sent it back to [buyer]. Appendix N1 calls for entry in force of the annex from the date of the first advance payment, with the due date penalty calculated from the 90th calendar day of the respective advance payment.

Having considered the above, the Arbitral Tribunal accepted that the conclusion of appendix N1 caused a valid, non-conditional contractual relation for delivery and purchase of the trial goods. The stipulated way of payment is in advance. The [seller] has the alternative choice among three kinds of contractual products in the framework of the advance payment.

The [seller]'s objection that the contractual practice is different is not reasonable. The evidence that the [seller] presented in affirmation of his contention is one of ten contracts that the parties had concluded with the specification applied to it. The issue in this case is about a particular contract in which the parties managed to express in written form their will. The stipulations of the written contract prevail over the established contractual practice between the same parties.

The Arbitral Tribunal does not accept the assertion of the [seller] that when the contractual price is not finally but only tentatively defined there is no valid contract for sale of goods. This is a contract for the international commercial sale of goods which, according to the provisions of article 55 of the CISG, is valid even if the contractual price is not expressly or implicitly defined on condition that the parties rely on "the price generally charged at the time of the conclusion of the contract for such goods sold under comparable circumstances in the trade concerned." This is a principle also adopted in article 326(2) of the Bulgarian Trade Law (BTL). The fact that in his letter of March 1997 the [seller] expresses readiness to deliver a certain number of generators according to the provisions of the annex, confirms the points made by the Arbitral Tribunal concerning the alternative choice that the [seller] had and the definition of the price of the contractual goods. The letter of the [seller] was sent in response to written demand made by the [buyer] for the reimbursement of the advance payments and for payment of penalty. The value of the generators approximately corresponds to the remitted advance payment calculated on the basis of the tentative price provided by the contracting parties in the annex to the initial contract. This is an obligation that the [seller] did not succeeded in fulfilling once again.

The [seller] failed to fulfill its obligations according to the initial contract, the annex and the appendix to the initial contract. Hence bearing in mind the provisions of article 55 of the CISG, [seller] must return to the [buyer] the advance payment. [Buyer]'s claim is reasonable and must be allowed.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Claimant is referred to as [buyer] and the Respondent is referred to as [seller].

** Bojidara Borisova is a candidate for the degree of Ph.D. in Law at Sofia University "ST.Kl.Oxridski", Bulgaria.

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Pace Law School Institute of International Commercial Law - Last updated July 14, 2003
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