- Arbitral Award
- China International Economic and Trade Arbitration Commission (CIETAC)
CONSTRUCTION CONTRACT (rectius SUB-CONTRACT AGREEMENT OF ENGINEERING, PROCUREMENT AND CONSTRUCTION) - BETWEEN CHINESE AND INDONESIAN POWER PLANT ENGINEERING COMPANIES AND AN INDONESIAN ENGINEERING COMPANY - PARTIES´ CHOICE OF SINGAPORE LAW AS THE LAW GOVERNING THE AGREEMENT - WHEN DISPUTE AROSE NEITHER PARTY ABLE TO PROVE CONTENT OF SINGAPORE LAW WITH RESPECT TO ISSUES AT STAKE - ARBITRAL TRIBUNAL INVOKING ART. 49 (1) OF CIETAC ARBITRATION RULES 2015 APPLIES UNIDROIT PRINCIPLES AS LAW APPLICABLE TO SUBSTANCE OF DISPUTE
NON - PERFORMANCE OF AGREEMENT - RIGHT OF AGGRIEVED PARTIES TO TERMINATE AGREEMENT AND TO CLAIM RESTITUTION IN ACCORDANCE WITH ARTS. 7.3.1 AND 7.3.6 OF UNIDROIT PRINCIPLES - ASSESSMENT OF AMOUNT OF DAMAGES PURSUANT TO ART. 7.3.4 (3) OF UNIDROIT PRINCIPLES - AMOUNT REDUCED PURSUANT ART. 7.4.7 OF UNIDROIT PRINCIPLES SINCE HARM SUFFERED BY AGGRIEVED PARTIES IN PART DUE TO CONDUCT OF AGGRIEVED PARTIES
Applicants (a Chinese Power Plant Engineering Company and an Indonesian Power Plant Engineering Company) concluded with Defendant (an Indonesian Engineering Company) a Sub-Contract Agreement of Engineering, Procurement and Construction for the erection of a power plant in a Province of Indonesia, referring to Singapore law as the applicable law. However, when a dispute arose in the course of performance due to an alleged non-performance of Defendant, neither party could provide sufficient evidence as to the content of Singapore law with respect to the issues at stake.
In view of this situation the Arbitral Tribunal, relying on Paragraph 49 (1) of the CIETAC Arbitration Rules 2015 according to which “The arbitral tribunal shall independently and impartially render a fair and reasonable arbitral award based on the facts of the case and the terms of the contract, in accordance with the law, and with reference to international practices”, announced that it would settle the disputes by international practices, more precisely in accordance with the relevant provisions of the UNIDROIT Principles which in its view “represented the general principles of contract laws”, unless either of the parties could prove that Singapore law was inconsistent with these provisions Since neither of the parties provided such evidence, the Arbitral Tribunal held that in accordance with Article 7.3.1 of the UNIDROIT Principles Applicants were entitled to terminate the contract and to claim restitution in accordance with Article 7.3.6. Moreover, the Arbitral Tribunal assessed the amount of damages at its discretion pursuant to Article 7.4.3 (3), but pursuant to Article 7.4.7 it also reduced their amount since it found that the harm suffered by Applicants was in part due to their conduct.