- Arbitral Award
- ICC International Court of Arbitration
INTERNATIONAL SALES CONTRACT SILENT AS TO THE APPLICABLE LAW – CISG APPLICABLE ACCORDING TO ART. 1(1)(A), THOUGH ONLY WITH RESPECT TO PART I AND III (ART. 92 CISG) – ARBITRAL TRIBUNAL’S DECISION TO APPLY THE UNIDROIT PRINCIPLES WITH RESPECT TO THE FORMATION OF THE CONTRACT AS WELL AS TO OTHER RESPECTS ACCORDING TO ARTS. 7 AND 9 CISG.
A sales contract entered into between a Finnish company and a French company was in its English version silent as to the applicable law, while its Russian version according to Claimant made reference to “legislation of Sweden and generally accepted standards of international trade”. When a dispute arose, Claimant invoked the application of “Swedish substantive law” and Respondent argued in favour of the application of the CISG which was adopted in both Finland and France. The Sole Arbitrator, after pointing out that the CISG was also part of Swedish law though, like in Finland, without its Part II on Formation, announced that he would apply the CISG supplemented if necessary by “general principles of law” such as the UNIDROIT Principles. In the Terms of Reference the question of the applicable law was expressly left to the Sole Arbitrator to decide. The Sole Arbitrator ultimately decided to apply Part I and Part III of the CISG and that the UNIDROIT Principles should govern the formation of the contract as well as supplement the CISG also in other respects according to Arts. 7 and 9 CISG.
The Sole Arbitrator held:
“The Contract in its English version is silent on the question of governing law. According to the Claimant the Russian version contains reference to ‘legislation of Sweden and generally accepted standards of international trade’. The Claimant therefore initially argued that Swedish substantive law should govern the Contract, whilst in the same submission (dated […] and commenting on the respondent’s Reply to the request for arbitration) the Claimant made references to the UN Convention on Contracts for the International Sale of Goods (hereinafter “CISG”). The Respondent argues that since CISG is enacted both in Finland and in France it should govern the Contract.
Before the Preparatory Meeting the undersigned informed the parties that CISG is also Swedish law, albeit the articles regarding formation of the contract (Articles 14-24) are not enacted in Sweden, as is the case in Finland. During the Preparatory Meeting the parties were informed that to the extent found necessary or useful the Sole Arbitrator intended to apply general principles of law in the form of the UNIDROIT ‘Principles of Commercial Contracts’ (hereinafter ‘the UNIDROIT Principles’) a copy of which was handed to each of the parties. In the terms of Reference the matter of ‘Applicable laws’ was left ‘for the Sole Arbitrator to decide’. In their respective submissions made after the Terms of Reference were established both parties made references to the UNIDROIT Principles.
My conclusion and decision is that CISG Parts I and II shall govern the Contract and that the UNIDROIT Principles shall govern as far as the formation of the Contract is concerned, and – in a supplementary fashion – also in other respects as foreseen in Articles 7 and in Article 9 of CISG.”}}
E. Jolivet, L'harmonisation du droit OHADA des contrats: l'influence des Principes d'UNIDROIT en matière de pratique contractuelle et d'arbitrage, in Unifrom Law Review, p. 127 et seq. (p.135 fn 22)}}