Data

Date:
02-02-2000
Country:
Russian Federation
Number:
71/1999
Court:
Tribunal of International Commercial Arbitration at the Russian Federation
Parties:
--

Keywords

F.O.B CONTRACT - SELLER'S FAILURE TO LOAD PART OF THE GOODS - BUYER HAS NO RIGHT TO WITHHOLD PAYMENT

OBLIGATION TO MITIGATE LOSS (ART. 77 CISG)

Abstract

A Russian seller and an Italian buyer entered into a sales contract containing a F.O.B. clause. Due to adverse weather conditions, the seller loaded only three-quarters of the goods on the vessel, while the remainder, which was later refused by the buyer, was left at the port and subsequently sold to third parties. This substitute sale caused the seller additional losses. Since the buyer withheld part of the payment, the seller commenced an action claiming the partial payment of the goods.

The Tribunal of International Commercial Arbitration at the Chamber of Commerce and 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).

As to the merits, the Tribunal held that the buyer was not entitled to withhold payment as compensation of its counterclaims against the seller. Therefore the Tribunal granted the seller the right to recover the full purchase price, while the buyer was anyway entitled to commence a separate legal action against the seller.

The Tribunal considered that under the F.O.B. clause, the seller had to pay for the loading of the goods; nevertheless, the contract did not specify which party should bear the risk of any unfavourable consequences of the loading. Therefore the Tribunal, making reference to Art. 77 CISG, decided that the buyer had to bear half of the losses suffered by the seller in selling the goods that were not loaded.

Fulltext

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Source

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. 42 [204-206]}}