- Russian Federation
- Tribunal of Int'l Commercial Arbitration at the Russian Federation Chamber of Commerce
BUYER'S OBLIGATION - PAYMENT OF PRICE (ART. 53 CISG) - REMEDIES FOR BUYER'S BREACH (ART. 61 CISG)
SELLER'S RIGHT TO REQUIRE PAYMENT (ART. 62 CISG)
INTEREST RATE OF INTEREST (ART.78 CISG) - RECOURSE TO DOMESTIC LAW
OFFER - DEFINITE AGREEMENT TO AGREE AS TO PRICE - OFFER NOT DEFINITE (ART. 14 CISG)
A buyer and a seller entered into a contract for the sale of goods. The parties formed a supplement to the contract, whereby the name, quantity, price and time of delivery of the goods was defined. The buyer was also given a one-month option to purchase additional goods. The seller later sent a telex to the buyer, stating a reduction in the price of goods quoted in the supplement, as well as an offer to deliver additional goods in the first quarter of the following year. The price of the additional goods was to be agreed upon by the parties ten days before the beginning of the new year. Acceptance was confirmed four days later. Delivery took place, for the most part, at the contractually settled time. An undelivered portion of the goods was delivered in the first quarter of the following year. The seller, however, refused to deliver the additional goods and claimed impossibility due to the lack of a contractually agreed upon price. The buyer refused to complete payment on the delivered goods and demanded delivery of the additional lot of goods. The seller claimed payment of the delivered goods plus interest.
The Arbitral Tribunal held that CISG was applicable to the matters of the dispute settled by the Convention (Arts. 1(1)(a) and 7(2)). With regard to the principal claim, however, the Tribunal found applicable the law of the seller's country, as the place where an agreement was made to make changes in the supplement by exchange of telexes (Arts. 18(2) and 23) and also the main place of business of the seller.
The seller's demand for payment for the delivered goods and interest was held subject to satisfaction, based upon Articles 53, 61 and 62 CISG. As to the interest rate, the Arbitral Tribunal, noting that the CISG does not provide the rate of interest, made recourse to the provisions of the law of the seller's country.
In addition, the Arbitral Tribunal found that the parties had not concluded a contract for the additional sale of goods, because the seller's proposal was not sufficiently definite in the terms of Art. 14 CISG: the proposal indicated the goods and their quantity but it failed to indicate either the price which was to be agreed upon by the parties at some future date or the mode of its determination.
Original in Russian:
University of Pace Website (http://cisgw3.law.pace.edu/)
Commented on by:
M. Rozenberg, A Case from the Practice of the International Court of Commercial Arbitration at the RF Chamber of Commerce and Industry, in 2 RCL/IPG-LAW (March/April 1995) 10-13;
G. C. Petrochilos, Arbitration Conflict of Laws Rules and the CISG, in Revue Hellenique de Droit International (1999), 191-218.}}