Data
- Date:
- 04-04-1998
- Country:
- Russian Federation
- Number:
- 387/1995
- Court:
- Tribunal of Int'l Commercial Arbitration at the Russian Federation Chamber of Commerce
- Parties:
- Unknown
Keywords
BUYER'S OBLIGATION TO PAY THE PRICE (ART. 53 CISG) - PERFORMANCE ACCORDING TO THE CONTRACT AND CISG - BUYER UNILATERALLY MAKING PAYMENT CONDITIONAL ON GUARANTEE FOR FULL PERFORMANCE BY THE SELLER - BUYER'S FUNDAMENTAL BREACH OF CONTRACT (ART. 25 CISG) - SELLER'S RIGHT TO CLAIM PAYMENT AND AVOID CONTRACT
RIGHT TO INTEREST ON UNPAID SUMS (ART. 78 CISG) - NOT IMPAIRED BY A CONTRACTUAL CLAUSE EXPRESSING PARTIES' INTENT NOT TO CLAIM EACH OTHER FOR DAMAGES, FINES AND PENALTIES CONCERNING THE CONTRACTUAL PERFORMANCE
Abstract
The Russian seller contracted with the UK buyer whereby the seller was bound to deliver 5,000 tons of coal at option up to 10,000 tons to be exercised within one month after signing of the contract. The payments under the contract had to be effected no later than of 90 days after the bill of lading date. The seller's obligations were considered to be fulfilled after delivery of the coal in the quantity stipulated by the contract and the buyer's after full payment of the price. At the same time the parties concluded a confidential agreement containing their intent not to claim each other for damages, fines and penalties concerning the contractual performance.
In his claim the seller insisted on the buyer's payment for the coal delivered to him and interest. The buyer submitted a counterclaim asking for damages suffered as a consequence of the seller's failure to deliver the coal in the quantity required by the contract. In response the seller stated that the buyer had not exercised his right to the quantity option up to 10.000 tons of the goods.
The arbitration tribunal confirmed the seller's plea demanding payment for the coal shipped to the buyer stating that pursuant to the contract the seller had undertaken to deliver 5,000 tons of coal at the buyer's option up to 10,000 tons to be exercised within one month, while the seller proved that the buyer had not exercised the option. The tribunal held that the conduct of the buyer, who had made the payment for the goods conditional to the seller's guarantee for complete performance of the contract and had refused to pay for the goods, sharply contradicted the contract and provisions of the CISG (Art. 53), under which the payment for the goods is an unconditional obligation of buyer. The buyer's breach of his obligations could be regarded therefore as a fundamental breach of contract pursuant to Art. 25 CISG and provided the seller with a right to declare the contract avoided.
The arbitration tribunal held the right of the seller to interest on the overdue sum on the ground that interest could not be regarded neither as penalties nor like damages according to Art. 78 CISG under which the creditor is entitled to interest, without prejudice to any claim for damages recoverable under Art. 74 CISG.
Fulltext
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Source
Original in Russian:
- Unpublished
Abstract:
- Alexej G. Doudko}}