- Arbitral Award
- World Intellectual Property Organization Arbitration and Mediation Center (Geneva)
LONG-TERM CONTRACTS - LICENSING AND JOINT RESEARCH AGREEMENT - BETWEEN A FRENCH INVESTOR AND A GERMAN MANUFACTURING COMPANY - SWISS LAW AS GOVERNING LAW - REFERENCE TO UNIDROIT PRINCIPLES
UNJUSTIFIED TERMINATION OF AGREEMENT - COMPENSATION OF LOSS OF A CHANCE - TO BE PROPORTIONATE TO THE PROBABILITY OF ITS OCCURRENCE (ARTICLE 7.4.3(2) UNIDROIT PRINCIPLES)
HARM DUE IN PART TO THE AGGRIEVED PARTY - AMOUNT OF DAMAGES TO BE REDUCED PROPORTIONALLY (ARTICLE 7.4.7 UNIDROIT PRINCIPLES)
Claimant, a French inventor claimed damages from Defendant, a German manufacturing company, for an unjustified termination of the licensing and joint research agreement. The contract was governed by Swiss law.
The Arbitral Tribunal granted damages, but not to the extent claimed on account of the uncertainty surrounding the turn over Defendant could have made with the new product. In this regard, the Arbitral Tribunal referred to Article 7.4.3 (2) of the UNIDROIT Principles of International Commercial Contracts, providing that the loss of a chance be compensated “in proportion to the probability of its occurrence”. Furthermore, the Arbitral Tribunal, noting that the harm due to the termination of the contract was due in part to acts and omissions by Claimant, held that also for this reason the reduction of the damages claimed was justified and in this respect referred to Article 7.4.7 according to which “where the harm is due in part to an act or omission of the aggrieved party […] the amount of damages shall be reduced to the extent that these factors have contributed to the harm, having regard to the conduct of each of the parties”.