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| Abstract | ||||||||||||||||||
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| In November 1988 a German seller and a Syrian buyer concluded a contract for the sale of steel bars according to which there could be a weight variation of +/- 5%. After delivery of six shipments, the buyer alleged non-conformity of some of the goods received and asked the seller to cease delivery, take back the goods and refund the price paid. The parties agreed to submit the dispute to arbitration.
The court held that as the parties had chosen French law, and under French law the contract was to be considered an international sale, the contract was governed by CISG which was the 'international sales law of France', a contracting State. The court observed that Arts. 35 and 36 CISG provide for a unified notion of non-conformity, unlike French domestic law which distinguishes between non-conformity and defects ('garantie de conformité' and 'garantie des vices'). The court held that as CISG does not expressly determine who has to prove the non-conformity, the question was to be decided according to French law. The court found that some of the lots of steel bars delivered were of non-conforming weight, and entitled the buyer to partial avoidance of the contract and a refund of the price already paid for the non-conforming lots. In accordance with Arts. 78 and 84 CISG the buyer was awarded interest on the price to be refunded, accruing from the date of payment for each non-conforming lot of steel bars. The court held that Art. 84 CISG does not require a formal request for payment of interest. In the opinion of the court, even if Art. 84 CISG were considered not to settle this issue, the same result would be reached applying French law as the 'subsidiary law of the contract'. The court finally held that as CISG does not determine the rate of interest, the applicable rate was to be the one currently used in international trade with respect to eurodollars, the currency in which payment had to be made. The court applied the annual London International Bank Offered Rate (LIBOR). |