Date: 00.07.1999
Country: Arbitral Award
Number: 9448
Court: ICC Court of Arbitration - Zurich
Parties: Unknown
A framework contract for the supply of products within the US market was concluded between Swiss manufacturers of roller bearings (the sellers) and a US exclusive representative (the buyer). When, after about two years, the buyer refused to pay for the received deliveries, the sellers started arbitral proceedings claiming payment and interest. The buyer on its part claimed set-off, alleging its right to obtain damages for breach of contract by the sellers.
As to the applicable law, the Arbitral Tribunal qualified the contract at hand as one for the sale of goods according to Art. 3(1) CISG, since it implied successive sales and deliveries of goods. Moreover, it held CISG applicable as part of the substantive law of a Contracting State, since the contract contained a choice of law in favor of Swiss law (Art. (1)(1)(a) CISG).

With respect to the buyer's defence, the Arbitral Tribunal firstly held that the buyer could not rely on Art. 50 CISG claiming lack of conformity of goods delivered, since the alleged defectiveness referred to deliveries different than those whose payment was claimed by the sellers.

Moreover, the Arbitral Tribunal denied that the buyer was entitled to set-off for either partial or late delivery. In order to reach this conclusion, the Tribunal pointed out that neither Art. 51 CISG nor Art. 73 CISG (as to delivery by installments), both applicable in the case at hand, provide for withholding of payment as a remedy for delivery of a quantity lower than that agreed upon. Nor could the buyer be entitled to withhold performance under Art. 71 CISG, since deliveries had been already received by him.

Finally, the sellers were awarded interest (art. 78 CISG) at the rate determined in accordance with the domestic law governing the contract (i. e. Swiss Law).