Data
- Date:
- 00-00-2004
- Country:
- Arbitral Award
- Number:
- 11880
- Court:
- ICC International Court of Arbitration 11880
- Parties:
Keywords
BANK GUARANTEE - CONTRACT CONTAINING A CHOICE OF LAW CLAUSE ACCORDING TO WHICH “THE ARBITRATORS SHALL APPLY THE PRINCIPLES OF UNIDROIT AND THE LAWS OF ITALY AS TO ALL MATTERS NOT EXPRESSLY COVERED BY THIS GUARANTY […]”
CONTRACT INTERPRETATION - ARBITRAL TRIBUNAL APPLIES ARTICLE 4.1 - 4.8 OF UNIDROIT PRINCIPLES NOT ONLY BECAUSE IN SUBSTANCE CORRESPONDING TO CORRESPONDING RULES OF ITALIAN LAW BUT ALSO BECAUSE ACCORDING TO ARBITRAL TRIBUNAL UNIDROIT PRINCIPLES “REPRESENT [...] A KIND OF SUMMARY OF THE GENERALLY COMMONLY ACCEPTED PRINCIPLES ON INTERPRETATION DEVELOPED IN THE WESTERN COUNTRIES AND DERIVING FROM THE MAIN CIVIL LAW CODES AND CASE LAW IN THE INTERNATIONAL TRADE.”
Abstract
An international “Guaranty” contract contained a choice-of-law-clause according to which “The arbitrators shall apply the principles of UNIDROIT and the laws of Italy as to all matters not expressly covered by this Guaranty […]”. When a dispute arose as to the meaning to be given to the notion of “non conforming goods” referred to in the “Guaranty” contract, the Sole Arbitrator held that the UNIDROIT Principles contain in Articles 4.1 to 4.8 very detailed rules on the interpretation of a contract, the essence of which is that if the common intention of the parties cannot be established the contract shall interpreted according to the meaning that reasonable persons of the same kind as the parties would give to it in the same circumstances. According to the Sole Arbitrator these rules should be applied in the case at hand not only because the relevant rules of contract interpretation of Italian law does not substantially differ from them but also because the UNIDROIT Principles “represent, at least as far as [contract interpretation] is concerned, a kind of summary of the generally commonly accepted principles on interpretation developed in the Western countries and deriving from the main civil law codes and case law in the international trade.”
Fulltext
“The starting point for solving this issue is of course the Guaranty itself. Nevertheless, the Guaranty does not contain any definition of ‘non conforming goods’ or of any other expressions used in the Guaranty. Therefore the examination of the text of the Guaranty shall only enable to find out which are the possibly relevant ‘tools’ for the interpretation of the meaning of the point at issue.
According to section [X] of the Guaranty ‘The arbitrators shall apply the principles of UNIDROIT and the laws of Italy as to all matters not expressly covered by this Guaranty’ […]. There are no other references to other possible interpretation instruments and particularly there is no renvoi to definitions contained anywhere else, as for instance in other contracts.
Given the above, the interpretation of the clause under dispute has to follow the principles of interpretation set forth in the UNIDROIT principles and in the Italian legal system.
The UNIDROIT principles contain under Chapter 4, articles 4.1 to 4.8 very detailed rules on the interpretation of a contract. The arbitrator renounces to quote them in full. The essence of such rules is that if the common intention of the parties can not be established, the interpretation shall base upon the meaning that reasonable persons of the same kind as the parties would give in the same circumstances. Such relevant circumstances are those indicated under art. 4.3, which, however, does not represent an exhaustive list. Actually, art. 4.3 is the key clause on interpretation whereas the subsequent articles concern specific matters to which we will revert if necessary.
The interpretation of a contract according to Italian law does not differ from the rules indicated in the UNIDROIT principles as actually the latter represent, at least as far as this subject is concerned, a kind of summary of the generally commonly accepted principles on interpretation developed in the Western countries and deriving from the main civil law codes and case law in the international trade.”}}
Source
E. Jolivet, L'harmonisation du droit OHADA des contrats: l'influence des Principes d'UNIDROIT en matière de pratique contractuelle et d'arbitrage, in Unifrom Law Review, p. 127 et seq. (p.149, fn. 50)}}