- Arbitral Award
- Arbitration Court of the Lausanne Chamber of Commerce and Industry
SATELLITE CONTRACT - PLURALITY OF PARTIES OF DIFFERENT NATIONALITIES (TURKISH, WEST INDIAN, PHILIPPINE) - CONTRACT CONTAINING CONFLICTING PROVISIONS AS THE THE APPLICABLE LAW (ENGLISH LAW OR SWISS LAW) - AT THE BEGINNING OF THE ARBITRAL PROCEEDINGS PARTIES AGREED ON APPLICATION OF THE UNIDROIT PRINCIPLES.
RIGHT TO DAMAGES FOR NON-PERFORMANCE - COMPENSATION DUE FOR HARM CAUSED BY NON-PERFORMANCE - AMOUNT OF COMPENSABLE HARM TO BE REDUCED IF HARM IN PART DUE TO AGGRIEVED PARTY (ARTICLES 7.4.2 AND 7.4.7 OF THE UNIDROIT PRINCIPLES).
RIGHT TO INTEREST (7.4.9 AND 7.4.10 OF THE UNIDROIT PRINCIPLES).
A Turkish company and a company incorporated in Anguilla, West Indies, with an office in the Philippines, entered into an agreement concerning highly sophisticated equipment. The contract contained two provisions on the choice of law, which however appeared to contradict each other, since one was in favour of English law and the other in favour of Swiss law.
A dispute arose and the parties agreed to submit it to an ad hoc arbitration governed by the UNCITRAL Arbitration Rules.
In view of the uncertainties as to the applicable substantive law the arbitral tribunal suggested to the Parties to choose the UNIDROIT Principles as the applicable law. The Parties agreed, also in view of the fact that the application of the UNIDROIT Principles was not seen as precluding the application of the English law if applicable as maintained by one Party and the Swiss law if applicable as proposed by the other Party.
After having rendered on 17 May 2002 a Partial Award finding that one of the parties had not properly performed its obligations arising from the contract, the arbitral tribunal rendered a final award determining the amount of damages due by the non-performing party. In so doing the arbitral tribunal referred to Arts. 7.4.2 and 7.4.7 of the UNIDROIT Principles, in order to justify a reduction of the compensable harm in view of the fact that part of the harm was due to the conduct of the aggrieved party, and to Arts. 7.4.9 (2) and 7.4.10 of the UNIDROIT Principles, in order to grant interests on the amount due.
In a thourough dissenting opinion one of the arbitrators asserted that reference to Art. 2.16 [Art. 2.1.16 of the 2004 edition] of the UNIDROIT Principles was appropriate to determine the extent of the duty of confidentiality, but disagreed with the conclusion reached by the majority of the arbitral tribunal. The same dissenting opinion also cited Art. 4.1 of the UNIDROIT Principles in order to reach a correct interpretation of the contract.