Data

Date:
10-02-2010
Country:
Belarus
Number:
833/38-09
Court:
International Court of Arbitration at the Belarusian Chamber of Commerce and Industry
Parties:
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Keywords

SELLER'S FUNDAMENTAL NON-PERFORMANCE - BUYER'S RIGHT TO DEMAND TERMINATION OF CONTRACT (ART. 49 CISG)

Abstract

[CLOUT Case no. 1545. Abstract prepared by Jan Iosifovich Funk and Inna Vladimirovna Pererva, National Correspondents].

The dispute between the Spanish seller (the defendant) and the Belarusian buyer (the plaintiff) arose from a contract for the sale of equipment, in accordance with the terms of which the plaintiff transferred to the defendant two advance payments in the combined amount of 80 per cent of the price of the goods under the contract. The defendant, however, exceeded the time limit for that obligation by more than several months.
Thereafter, the plaintiff demanded the return of the advance payments and, not having received them, brought an action before the International Court of Arbitration at the Belarusian Chamber of Commerce and Industry for the return of the advance payments and for the recovery of damages.

Settling the dispute on the merits, the arbitral tribunal was guided by the CISG, as the parties to the contract had their place of business in States Parties to the CISG.

On settling the first of the aforementioned claims, the arbitral tribunal proceeded from the fact that, under Article 49(1) CISG, the plaintiff had sent to the defendant a declaration of avoidance of the contract, as well as a demand for the return of the advance payments. The arbitral tribunal acknowledged that the defendant’s breach of the time frames for delivery of the equipment was a fundamental breach of the defendant’s obligations under the contract, and in that connection acknowledged as well founded the plaintiff’s unilateral avoidance of the contract and, on the basis of those circumstances, satisfied the plaintiff’s claim for the recovery of the advance payments.

With regard to the plaintiff’s claim for the recovery of damages, the arbitral tribunal, pursuant to Article 74 CISG, upheld the claim, proceeding from the fact that the plaintiff’s damages comprised an interest amount under a credit agreement concluded by the plaintiff precisely for the purpose of payment for equipment under the disputed contract for the international sale of goods.

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