- Arbitral Award
- ICC International Court of Arbitration ICC-FA-2020-004
SERVICE CONTRACT - BETWEEN AN ASIAN PARTY AND A NORTH AMERICAN PARTY - PARTIES' CHOICE OF ENGLISH LAW AND UNIDROIT PRINCIPLES AS THE LAW APPLICABLE TO THE CONTRACT
IMPLIED OBLIGATIONS - ARISING UNDER THE APPLICABLE LAW (UNIDROIT PRINCIPLES 2004) - OBLIGATION OF REASONABLE CARE AND SKILL AND OBLIGATION TO SUPPLY GOODS OF SATISFACTORY QUALITY AND FIT FOR PARTICULAR PURPOSE KNOWN BY BOTH PARTIES - ALL ARISING FROM ART. 5.1.2 UNIDROIT PRINCIPLES
IMPLIED OBLIGATIONS - STEMMING FROM THE NATURE AND PURPOSE OF THE CONTRACT, GOOD FAITH AND FAIR DEALINGS AND REASONABLENESS (ART. 5.1.2 letters a) c) d) UNIDROIT PRINCIPLES)
The dispute arose from a contract for the supply of services concluded between an Asian party and a North American party. The parties had chosen English law and UNIDROIT principles as the law governing their contract.
The Arbitral Tribunal found that Claimant was under a number of implied obligations that arose either from the express terms of the contract, or were implied by the applicable law.
In particular, according to Art. 5.1.2 UNIDROIT Principles, the nature and purpose of the contract concluded between the parties implied an obligation that the services will be carried out with reasonable care and skill. Also the requirements of good faith and reasonableness were likely to imply such an obligation into the contract. Consequently, the Arbitral Tribunal affirmed that, first, ‘[c]laimant had an obligation under the Agreement to provide its services, including in choosing and appointing subcontractors, with reasonable care and skill and, further, to ensure that any subcontractors appointed also carried out their services with such reasonable care and skill’. Second, Art. 5.1.2 UNIDROIT Principles implied an obligation to supply goods of satisfactory quality and, third, those goods had to be fit for a particular purpose as known by both parties.
The final decision on this point remains unpublished.