Date: 00.00.1995
Country: Arbitral Award
Number: 8324/1995
Court: ICC Court of Arbitration - Paris
Parties: Unknown
A seller and a buyer concluded a contract for the sale of mineral of manganese. The buyer undertook to resell the goods only to a certain company (the final buyer) within a twelve- month period. A first invoice was forwarded to the buyer and paid accordingly. Some time later, the seller forwarded another invoice to the buyer in connection with the same sale, stating that the first invoice was merely provisional and that the second was the definitive one. The buyer failed to pay. The seller brought an action against the buyer claiming payment of the second invoice.

The Court held that since the parties had chosen French law, under which the contract was to be considered an international sales contract, the contract was governed by CISG as CISG was the 'international sales law of France', a contracting State (Art. 1(1)(b) CISG).

The Court, applying Art. 8(1) CISG, reached the conclusion that the seller's actual intention, as emerged from the parties' statements and the wording of the contract and the further documents they had exchanged, was to establish a merely provisional price subject to revision, and that the buyer could not have been unaware of the seller's intention. As a matter of fact, the contract expressly provided that the price agreed on by the parties was provisional and subject to revision in connection with the price actually obtained by the buyer from the final buyer. Moreover, the first invoice, which was entitled 'provisional invoice' and expressly indicated that the price was provisional, was paid by the buyer with no objections. The Court also observed that the revision of the price is a usage regularly observed by parties to contracts of the type involved in the particular trade concerned (Art. 9(2) CISG), so that the stipulation of a provisional price was justified also on such grounds.

The Court further addressed the question of whether the price was sufficiently definite since the parties had failed to clarify the manner in which the price was to be revised. In interpreting the clause which linked the amount of the definitive invoice to the price actually obtained by the buyer, the Court observed that in the trade concerned there was no market price established by a common exchange institution, but only a mere reference price resulting from the yearly transactions between the Japanese ironmetallurgy industries and the Australian and South-African mining industries. Therefore, it was necessary to refer also to the intention of the parties, by taking into consideration all the relevant circumstances of the case, such as negotiations, practices already established between them, usages and the parties' subsequent conduct (Art. 8(3) CISG). The Court then concluded that the parties intended to refer to the price ultimately fixed net of any discount.