Case text (English translation)
Queen Mary Case Translation Programme
Russian Federation arbitration proceeding 269/1998 of 27 October 1999
Translation [*] by Yelena Kalika [**]
Translation edited by Mykhaylo Danylko [***]
1. SUMMARY OF RULING
1.1 Since the commercial companies of the parties to the contract for the international sale of goods are located in Russia and the USA respectively - Contracting States to the UN Convention on Contracts for the International Sales of Goods (Vienna, 1980), [hereinafter CISG] - the provisions of this Convention should be applied to settlement of this dispute.
1.2 Failure to deliver the goods, for which the Respondent, [seller], received the advance payment, within the time period set forth in the contract, taking into attention the facts of the case, is found to constitute a fundamental breach of the contract (Article 25 CISG) which gives the Claimant, [buyer], a right to avoid the contract pursuant to Article 49(1)(a) CISG.
1.3 Since the [buyer] has proved with documents that the [seller] delivered only a part of the goods which had been paid for in advance, and since the [seller], although properly notified of the place and time of the hearing of the case, has not appeared before the Tribunal and has not presented objections to the action, the Tribunal concluded that the [seller] has not objected to the amount of the [buyer]'s claim against him. Accordingly, the Tribunal granted the [buyer]'s claim for refund of the advance payment made to the [seller] for the undelivered goods.
2. FACTS AND PLEADINGS
The action was brought by [buyer], a Russian company, against [seller], a U.S. company, in connection with partially non-delivery of the goods for which the [buyer], in accordance with the terms set forth in a contract for the international sale of goods, has paid their price to the [seller] in advance. Pursuant to Articles 49, 51 and 81 CISG, the [buyer] argued that, in relation to the undelivered goods, the contract should be declared avoided; [buyer] claimed refund of the part of advance payment paid to the [seller] for the undelivered goods.
3. TRIBUNAL'S REASONING
The ruling of the Tribunal of International Commercial Arbitration Tribunal of International Commercial Arbitration [at the Russian Federation Chamber of Commerce and Industry (hereinafter Tribunal)] contained the following main points:
3.1 [Jurisdiction competence of Tribunal]
The competence of the Tribunal to arbitrate this dispute directly follows from the arbitration clause of the contract concluded between the parties on 30 November 1994.
3.2 [Proper Claimant identified]
The Russian company which brought the action has proved with documents that it is the proper claimant.
3.3 [Hearing absente reo]
Non-appearance of the representatives of [seller] before the Tribunal does not preclude the hearing of the dispute by this Tribunal, because the action materials and summons on the hearing of the case were served on the [seller] in due time, proof of that is preserved in the materials of the case.
3.4 [Applicable law]
Since the commercial companies of the parties to the contract are located in Russia and the USA respectively, Contracting States to the CISG, the provisions of this Convention should be applied to settlement of this dispute (Article 1(1)(a) CISG).
3.5 [Avoidance of the contract]
Taking into consideration that the [seller], who received the advance payment for the goods, not only failed to deliver a significant part of the goods within the time period set forth in the contract, but also failed to complete this delivery despite [buyer]'s repeated requests which were left without response, the Tribunal found that the [seller] committed a fundamental breach of the contract (Article 25 CISG), which gives the [buyer], who suffered substantial loss, a right to avoid the contract pursuant to Article 49(1)(a) CISG. Accordingly, the Tribunal granted [buyer]'s claim for avoidance of the contract for the future in relation to the undelivered part of the goods.
3.6 [Recovery of advance payment]
On the basis of the documents submitted by the [buyer] along with her statement of action, which have not been contested by the [seller], who has received them, the Tribunal granted the [buyer]'s claim for recovery of the sum of advance payment against which the [seller] had not delivered goods.
FOOTNOTES
* This is a translation of data on the award in Proceeding 269/1998, dated 27 October
1999, of the Tribunal of International Commercial Arbitration at the Russian Federation
Chamber of Commerce and Industry, reported in: Rozenberg ed., Arb. Praktika 1999-2000 [164-165]. All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of the Russian Federation is
referred to as [buyer]; Respondent of the United States 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.
*** 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.
Pace Law School
Institute of International Commercial Law - Last updated July 30, 2004
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