- Arbitral Award
- ICC International Court of Arbitration, 15956
CONSTRUCTION CONTRACT - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THAT SOLUTION ADOPTED UNDER APPLICABLE DOMESTIC LAW (UNKNOWN) IS IN CONFORMITY WITH INTERNATIONAL STANDARDS
CONTRACTUAL TERMS TO BE INTERPRETED IN THE LIGHT OF THE WHOLE CONTRACT - REFERENCE TO ART. 4.4
CONTRACTUAL TERMS TO BE INTERPRETED SO AS TO GIVE EFFECT TO ALL THEM RATHER THAN TO DEPRIVE SOME OF THEM OF EFFECT - REFERENCE TO ART. 4.5
The dispute arose from the termination of a FIDIC contract (construction contract) by the Employer due to Contractor's failure to comply with the contractual obligations.
In relation to this dispute and according to the contract, was appointed a DAB (Dispute Adjudication Board) on the sole initiative of the Contractor, since the Employer refused to cooperate.
The DAB decided that Employer's notice of termination was invalid and therefore the Contractor was entitled to damages for wrongfully termination of the contract.
Subsequently the Employer referred the dispute to arbitration, arguing that the DAB’s decision was invalid, while the Contractor challenged the arbitral tribunal’s jurisdiction and requested a partial award enforcing the DAB’s decision.
In a Partial Award the Arbitral Tribunal ruled on its jurisdiction and whether the DAB’s decision was valid and binding. It held that the issue at stake concerned the correct interpretation of two apparently conflicting provisions of the contract.
In deciding in favour of the Contractor, the Arbitral Tribunal referred to the rules of contract interpretation contained in the law applicable to the contract (unknown), according to which "when a clause has two meanings, it shall be construed in the meaning that may have an effect, not in the meaning producing none" and "all the clauses of agreements are mutually explanatory, each of them being assigned the meaning resulted from the whole document". The Arbitral Tribunal added that the rules in question were consistent with general principles of contracts interpretation and may be found in various provisions of international contracts law, such as Articles 4.4 and 4.5 of the 2004 UNIDROIT Principles.
The Arbitral Tribunal then found that, although the Employer had refused to sign the DAA (Dispute Adjudication Board Agreement), the DAB had been validly constituted in compliance with the contract and therefore the Employer had to pay to Contractor the sum established by the DAB.
Published in English (excerpt):
- in ICC International Court of Arbitration Bulletin 2015, Issue No. 1, pp. 44-56}}