Data

Date:
00-12-1996
Country:
Arbitral Award
Number:
8482
Court:
ICC Court of Arbitration
Parties:
Unknown

Keywords

APPLICATIONOF CISG - CHOICE OF LAW OF CONTRACTING STATE AS GOVERNING LAW OF THE CONTRACT INTERPRETATION OF PARTIES' INTENTION (ART. 8 CISG)

Abstract

Anagreement for the sale of two engines was undertaken between parties of two different States. Payment was to be made in installments. Although the buyer had fallen behind in the payments for the first engine, the seller completed the product on the contractual date. As the buyer failed to perform, the seller commenced arbitral proceedings.
The Tribunal considered the matter of the applicability of the CISG. It held that when the parties, as in the case at hand, have chosen the law of a contracting State (i.e. "this contract shall be subject to the Swiss law"), the issue of the applicability of CISG has to be solved by interpreting the parties' intention (Art. 8 CISG). Considering that the parties had referred to Swiss law as a "neutral law" to be applied to the contract and had chosen Zurich as the place of arbitration, the Tribunal held that the parties wished to apply the Swiss Code of Obligations and not the CISG.

Fulltext

[…]
Applicable law

1. Art. 8.03 of the Contract provides that 'this contract shall be subject to the Swiss law.

2. The question arises whether the Vienna Sales Convention (United Nations Convention on Contracts for the International Sale of Goods of April 11, 1980) will apply and be part of the law designated by the parties or if the parties, by electing Swiss law, intended the Arbitral Tribunal to apply the Swiss Code of Obligation.

Art. 1(1)(h) of the Vienna Sales Convention does not apply in cases of a contractual election of the law of a contracting state (K. Neumeier, C. Ming, Convention de Vienne sur les contrats de vente internationale de marchandises, CEDIDAC 1993, ad. Art. 6, no. 5 page 87). This issue must be resolved by interpreting the intentions of the parties (Art. 8 of the Vienna Sales Convention).

3. By choosing Swiss law as a neutral law to apply to the Contract and with an Arbitration Clause choosing Zurich as the place of the Arbitration, it may be concluded that the Parties intended the Arbitrators to apply the Swiss Code of Obligation and not the Vienna Convention (using the same argumentation: K. Neurneier, C. Ming, op. cit., ad. Art. 6, no. 6, page 93: Cependant, lorsque le vendeur et l'acheteur ont voulu que leur litige soit tranché par un juge d'un Etat neutre et qu'ils sont convenus en conséquence de l'élection d'un for suisse par exemple, on peut en conclure qu'ils ont voulu que le juge applique son propre droit national, c'est-à-dire le Code des obligations. (Translation However, when the seller and the buyer wanted the litigation to be settled by the judge of a neutral country and therefore agreed upon the choice of, say, a Swiss forum, it can be concluded that they wanted the judge to apply his own national law, i.e. the Code of Obligations.)

This issue, however, need not be resolved here, since the end result of the present Award is no different under the Swiss Code of Obligation or under the Vienna Sales Convention.'}}

Source

Publishedin English (excerpt):

ICC International Court of Arbitration Bulletin, Vol.11, n.2, Fall 2000, 93-103.}}