- Arbitral Award
- Tribunal of International Commercial Arbitration at the Russian Federation
CONTRACT FOR SUPPLY OF GOODS AND SERVICES - SUPPLY OF LABOUR OR OTHER SERVICES NON CONSTITUTING PREPONDERANT PART OF SELLER'S OBLIGATIONS - CISG APPLICABLE (ART. 3 (2) CISG)
BUYER'S OBLIGATION TO PAY THE PRICE (ART. 53 CISG)
A German seller and a Russian buyer entered into a contract for the supply a certain equipment as well as performance of some specific services (construction work, balancing and commissioning, geodetic work and so on). According to a subsequent agreement, the entire contract price had to be split into two parts, one for shipment of equipment (which amounted to more than 50 % of the whole price) and the other for services.
Following the buyer’s refusal to pay the price, the seller commenced arbitral proceedings, claiming payment of the price.
The Tribunal held that the contract was governed by CISG pursuant to Art. 3(2), since the price of the goods (i.e. equipment) amounted to more than 50% of the entire contract price. In reaching this conclusion, the Tribunal denied the validity of the choice of law clause agreed by the parties in favour of “international law provisions”, due to its vagueness, and held German law as the law applicable to the contract.
As to the merits, the Tribunal rejected the buyer’s argument that the seller had not properly performed the contract. Since the buyer’s representative had signed a certificate of acceptance confirming that the equipment had been put into operation without mentioning any defects of the goods, it follows that the equipment had been accepted by the buyer. Therefore, the buyer had to pay the price under Art. 53 CISG.
Original language (Russian)
Rozenberg, Practika of Mejdunarodnogo Commercheskogo Arbitrajnogo Syda: Haychno-Practicheskiy Commentariy [Practice of the International Commercial Arbitration Court: Scientific - Practical Comments] Moscow (1999-2000) No. 54 [264-266]}}