Data
- Date:
- 00-00-1993
- Country:
- Arbitral Award
- Number:
- 7399
- Court:
- ICC Court of Arbitration - Paris
- Parties:
- Unknown
Keywords
QUESTIONS OF FORMATION OF CONTRACT (ARTS. 14-24 CISG)- APPLICATION OF CISG
Abstract
This interim award on applicable law was rendered in the course of arbitral proceedings between a Swiss buyer and a US seller.
The Arbitral Tribunal held that CISG was applicable under its Art.1(1)(a). It held that CISG was applicable to all the matters included within its scope and that all the other matters which fell outside its ambit were governed by California law as the domestic law with which the putative contract had the closest connection. In particular, the Arbitral Tribunal stated that CISG applies not only to completed contracts but also to the question of whether or not a contract has been validly concluded (Part II of CISG, Arts. 14-24).
Fulltext
[…]
The parties are in dispute, inter alia, as to the existence of a binding contract, whether there has been a breach thereof and, if so, the nature and extent of any damages payable. By the Terms of Reference in the present arbitration, however, the first issue to be determined is that of which law should be held to be applicable to the merits of the dispute between the parties.
The Claimant maintains that the applicable law is that embodied in the United Nations Convention on Contracts for the International Sale of Goods (1980), to which both Switzerland and the United States of America are signatories and which entered into force as regards the United States on 1 January 1988 and, as regards Switzerland, on 1 March 1991. The Respondent maintains that the applicable law is the law of California.
In my opinion the applicable law for the purposes of deciding whether or not a valid and binding contract was entered into between the parties, whether or not one party has been in breach of such a contract and, if what damages are recoverable, is that embodied in the Convention. The convention was in force at the time of the transactions between the parties. By Article 1 of the Convention it is provided that the Convention applies to contracts of sale of goods between parties whose places of business are in differnet contracting states. That condition is here fulfilled. That the convention applies not only to completed contracts but also to the question whether or not a contract has been validly made is apparent from the fact that the Convenstion contains as section (Chapter 1, Part 11) entitled Formation of the Contract. The contract also includes rules relating to the obligations of, respectively, the seller and the buyer, the remedies for breach of contract and the extent of damages, including the duty of an aggrieved party to mitigate loss. That is to say, the majority of the problems in the present arbitration which arise for decision, as defined by the terms of refernece, are included within the scope of the convention. For the sake of completeness, however, I should add that I am of the opinion that any other substantive matter relating to the issues to be determined as contained in the Terms of Refernece which falls outside the ambit of the Convention is governed by the law of the State of California. This in my opinion is the legal system with which the putative contract has the closest connection. The goods were to be furnished by a company carrying on business in the State of California; payment of the purchase price was to be made in US dollars in the State of California; the language of negotiation was English.
Accordingly, as sole Arbitrator, I decide:
That for the purposes of the present arbitration the questions of whether or not the parties entered into a valid and binding contract, whether or not there has been a breach of such a contract and, if so, the extent of any damages to be paid are governed by the 1980 United Nations Convention on Contracts for the International Sale of Goods. Any other substantive matter covered by the Terms of Reference is governed by the law of the State of California.
[…]}}
Source
Original in English (excerpt):
- ICC International Court of Arbitration Bulletin, Vol. 6, No. 2, November 1995, 68-69}}