A Russian seller and a German buyer entered into a contract. A dispute arose between the parties concerning the payment of the purchase price. Since the buyer, alleging non-conformity of the goods (the lack of quality), denied payment, the seller commenced an action against the buyer claiming avoidance of the contract, payment of the price and damages.
The Tribunal of International Commercial Arbitration at the Chamber of Commerce & Industry of the Russian Federation affirming its competence, held that the contract was governed by CISG, since the parties had their places of business in contracting States (Art. 1(1)(a) CISG). Furthermore, the Tribunal stated that, as provided by Art. 81(1), avoidance of the contract could not affect any of its provisions for the settlement of disputes. As to the questions not expressly settled by CISG, the Tribunal referred to Russian law as the otherwise applicable law (Art. 7(2) CISG).
As to the merits, the Tribunal held that since the seller had proved the exact performance of its obligations as to the shipment of the goods and as the buyer had failed to provide evidence of the alleged lack of conformity, the seller was entitled to recover the purchase price pursuant to Art. 53 CISG. Moreover, as provided by Art. 81(1) CISG, since avoidance of the contract does not affect any of its provisions governing the rights and obligations of the parties consequent upon the avoidance of the contract, the Tribunal awarded the seller damages.
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