|
||||||||||||||||||
| Abstract | ||||||||||||||||||
| ||||||||||||||||||
| An Italian seller and a Russian buyer entered into a contract concerning the delivery of a certain equipment which had to be shipped to the latter. The buyer had to carry out an advance payment within a fixed time upon signing of the contract, whereas the performance of a subsequent payment had been made conditional to the presentation, by the seller, within 180 days from the date of the first payment, of a SGS certificate of readiness of the goods for shipment, issued by a neutral controlling authority.The seller, within the 180 days’ deadline, notified the buyer of the readiness of the equipment for shipment and urged the buyer to come to Italy in order to take delivery of the goods. Once in Italy, the buyer refused to sign the acceptance certificate on account of the seller's failure to provide the agreed documents. Yet even after receiving the SGS certificate from the seller,the buyer refused to perform the second payment, because its representative had not been allowed to examine the goods.
Alleging that the seller had breached the contract, the buyer claimed restitution of the advance payment made, with payment of the annual interest allegedly due for using the money of the buyer, as well as recovery of the penalties provided by the contract on account of seller’s delay to deliver the equipment. The seller objected that it had performed its obligations under the contract and that the buyer, refusing to take delivery of the goods, had breached the contract and was thus deprived of the right to recover the advance payment. The parties agreed on the applicability of CISG. The Tribunal found that the seller had not complied with its obligation to provide the buyer, within the contractual’s deadline, with the SGS certificate, and that even the documentation presented by the seller afterwards did not conform with the contracts’ requirements, since it had not been issued upon examination of the equipment (being thus unable to constitute evidence of the equipment’s readiness for shipment and of the conformity of the goods with the quality’s requirements of the contract), but on the basis of the expertise of technical documentation confirming the documentation’s conformity with the requirements of GOST [All-Union State Standard] on safety and sanitary requirements (the standard provided by the contract). According to the Tribunal, the buyer,by giving the seller notice of the lack of conformity after a week after discovering it, did so within a reasonable time as required by Art. 39 CISG and was thus entitled to refuse to take delivey of the goods and - under clause 3.5 of the contract - to receive back the full amount of the advance payment, along with the payment of the penalties as provided for by the contract for each day of delay. The Tribunal however rejected the buyer’s claim to recover the annual interest for the use of its money by the seller, holding that the buyer had not capitalized the amount of annual interest and had not paid arbitration fees for that part of its claim. |