- Arbitral Award
- International Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation
SERVICE CONTRACT - BETWEEN A RUSSIAN COMPANY AND A GERMAN COMPANY - CONTRACT PROVIDING FOR APPLICATION OF BOTH GERMAN LAW AND RUSSIAN LAW AND OF THE “GENERAL PRINCIPLES OF THE LEX MERCATORIA“ – APPLICATION OF THE UNIDROIT PRINCIPLES.
INTERPRETATION OF CONTRACT – NATURE OF THE CONTRACT AND INTENTION OF THE PARTIES (ARTICLES 4.1 AND 4.3 OF THE UNIDROIT PRINCIPLES).
INTEREST PAYABLE ON AMOUNT DUE – MONETARY CLAIM IN EURO – APPLICATION OF THE INTEREST RATE APPLIED BY RUSSIAN BANKS FOR LOANS STIPULATED IN EURO (ARTICLE 7.4.9 OF THE UNIDROIT PRINCIPLES).
Under an agreement between claimant (a Russian company) and respondent (a German company), the former undertook to render commercial services to the latter on Russian territory relating to the marketing of goods produced by respondent. In performing the agreement, claimant found a potential buyer for respondent’s goods in Russia and assisted respondent in drafting the contract of sale, which was subsequently signed between respondent and the buyer of the goods. Respondent later signed an act of acceptance of the work performed by claimant under their agreement.
Buyer later terminated the contract and returned the goods to respondent. On that basis, the latter refused to pay to claimant the fee stipulated in their agreement, arguing that it was obliged to pay the fee only in the event of a successful sale and that, failing such a successful outcome, claimant had no right to remuneration for its commercial services. Claimant insisted on payment, arguing that the agreement did not contain an express provision that the fee was payable only in the event of success, and that the fact that respondent was unable to meet buyer’s requirements should not affect the right to be paid for services rendered.
The agreement provided that all disputes arising out of it were to be resolved in accordance with the general principles of the lex mercatoria. A further provision stipulated that all the terms of the agreement were subject to the legislation of both Germany and the Russian Federation. In its submission to the arbitration court, claimant referred to the UNIDROIT Principles in support of its arguments.
The Tribunal interpreted the contract provisions designating the applicable law and concluded, in particular, that the parties’ reference to both their legal systems was tantamount to the absence of any choice of national law. It concluded that in the instant case, it would be sufficient to apply the general principles of law and the terms and conditions of the agreement to settle the dispute and decided to apply the UNIDROIT Principles as an expression of the general principles of the lex mercatoria.
The Tribunal holding that the dispute had arisen out of differing interpretations of the text agreed by the parties, concentrated on this point and applied Articles 4.1 and 4.3 of the UNIDROIT Principles. Since the agreement contained quite a detailed description of the commercial services to be rendered by claimant and did not make any reference to the sales contracts to be concluded in performing the agreement, the Tribunal held that neither the nature of the agreement nor the intention of the parties included an understanding that payment of the fee for services rendered by claimant was conditional upon the successful performance of the contracts concluded through the intermediary of claimant.
The Tribunal also applied the UNIDROIT Principles to another point in the Award. Claimant had expressed its monetary claim in Euro and in awarding it the interest on respondent’s debt, the Tribunal referred to Article 7.4.9 of the Principles, applying the interest rate that Russian banks charged for loans stipulated in Euro.
Summary based on an article by Professor M. ROSENBERG, published (in Russian) in Economy and Life - Lawyer, 2002, No. 39.
Summary kindly supplied (in English) by Professor Alexander Komarov.}}