Arbitral Award
ICC Court of Arbitration






A Rumanian seller and an Italian buyer entered into a contract for the sale of glass commodities. A dispute arose when the buyer refused to pay for one of the deliveries owing to alleged defects in the goods. The seller argued that the contract did not provide for claims on ground of defectiveness, and anyway the complaint was unacceptable since the buyer had previously approved samples.

The Arbitral Court held that since the parties had their place of business in two different contracting States (Rumania and Italy), CISG was applicable (Art. 1(1)(a)CISG).

As to the merits, the Arbitral Tribunal held that, as set forth by article 53 (CISG) the buyer was obliged to pay the price of sale of the goods, even if it objected defects of the delivered goods, because, according to Arts. 38 and 39 CISG, the buyer should have informed the seller in a shorter period, and not only after more than one month after delivery of the goods, as it actually did.

Therefore the seller was entitled to payment and interest, as provided by Art. 78 CISG.


Becauseof no specification of the applicable law in the above mentioned contract, the Arbitrator determined the applicable law under Art. 13.3 of the ICC Rules of Conciliation and Arbitration, according to which in the absence of any indication by the parties as to the applicable law, the Arbitrator shall apply the law designated as the proper law by the rule of conflict which he deems appropriate. The same principle was established in section E) of he Terms of Reference.
In the mentioned case the Arbitrator deems appropriate to apply the United Nations convention for the International Sale of Goods (Vienna, April 11th, 1980). Pursuant to Art. 1(1) a) of the Convention, the Convention regulates contracts on sale of goods between parties who have their places of business in different countries, if these countries are signatories to the Convention. Romania (where the Claimant has residence) as well as Italy where the Defendant has residence) are signatories to the Convention.
From what has been mentioned above it is obvious that on the basis of the Purchasing contract ... the Claimant (as a seller) had the obligation to deliver the goods to the defendant and to transfer the ownership right to the goods to the Defendant, and the Defendant (as a buyer) had the obligation to take over the goods and to pay the price of same; thus the relation between the Claimant and the Defendant can be deemed a contract of Sale. In this situation the Arbitrator deems appropriate to apply the mentioned convention as the proper law.
From documents submitted by the Claimant in this matter it is obvious that pursuant to the Purchasing Contract ... and pursuant to the Defendant's order dated December 1993, he Claimant delivered to the Defendant the glass [commodities] specified in the packing list N dated January 28th, 1994; the delivery was made on the same date. The price for the said goods was specified by the Invoice Nr. ... at the amount of... According to the Claimant's statements, this price was based on the negotiations between the parties in November 1993 and particularly in December 1993; there was nothing serious to cast any doubts on this matter, hence the amount of. . . can be considered as the relevant price of the goods delivered by the Claimant to the Defendant. From the submitted documents it is apparent that the Defendant has not paid this amount, or any part thereof.
Pursuant to Art. 53 of the United Nations Convention for the International Sale of Goods the buyer is obliged to pay the price of sale for the goods and to take over the delivery in accordance with the contract and with the Convention.
With regard to the above mentioned facts it is obvious that the Defendant as a buyer has not complied with his obligation to pay the price of sale in the amount of. . . and that the Claimant has the entitlement for payment of this amount.
Although the Defendant after delivery objected deficiencies of the delivered goods, his right following from (eventual) deficiencies of the goods cannot he recognized. The Defendant informed the Claimant of the deficiencies of the goods no sooner than by a letter dated March 7th, 1994, i.e. more than one month after the delivery of the goods had been made; the Defendant took over the goods on January 28th, 1994 and it appears to be obvious that he could inspect the goods by that time already. Pursuant to Art. 38(1) of the United Nations Convention for the International Sale of Goods the buyer must inspect the goods or have the inspection done in a shortest possible time according to circumstances. Pursuant to Art. 39(1) of the United Nations Convention for the International Sale of Goods the right of the buyer from the deficiencies of goods shall expire unless the buyer has informed the seller of the character of these deficiencies within a reasonable period of time after he found them or was supposed to find them. It is apparent that the buyer was able to find the deficiencies already at the delivery (besides it was not even found whether the Defendant has provided satisfactory evidence of the deficiencies). In such a case, a period of time which is longer than one month cannot be considered to be reasonable such a period must he considerably shorter. Thus the right of the buyer from the deficiencies of the goods has expired, as not enforced in time [within a period pursuant to Art. 39(1) of the mentioned Convention], and therefore the Defendant is obliged to pay the requested amount of.
Pursuant to Art. 78 of the United Nations Convention for the International Sale of Goods, if a party is in default with payment of the price of sale or of other amount of money, the other party is entitled to interest on the amount in delay, no rights to compensation for damage being thereby affected pursuant to Art. 74 of the Convention.
In the question of the interest the Claimant proposed the Romanian Government's Order Nr. 18 to he applied. With regard to what has already been mentioned about the law applicable to the merits of the dispute, the Arbitrator applies Art. 78 of the mentioned Convention to this question. Since the Claimant has the right for the amount to be paid to him in DEM, the application of Art. 78 of the said Convention implies that a commercially reasonable interest is due to the Claimant. Pursuant to Line (Article) 7 of the Purchasing Contract ... the Defendant had the obligation to pay for the goods which had been delivered within 10 days after the delivery.
The delivery was made on January 28th, 1994, which means that the Defendant was obliged to pay by February 7th, 1994; at that time the commercially reasonable interest on German Marks was 5.4% pa. The Claimant has the entitlement to interest of 5.4% p.a. from February 8th, 1994, until the actual payment. The Defendant has not yet paid the amount of..., he remains in default, and this default shall expire no sooner than upon payment of the said amount.}}


Publishedin English (excerpt):
ICC International Court of Arbitration Bulletin Vol. 11/No.2, 76-77.}}