- Arbitral Award
- ICC International Court of Arbitration, Paris 8261
STATE CONTRACTS - BETWEEN AN ITALIAN COMPANY AND A GOVERNMENT AGENCY OF A MIDDLE EASTERN COUNTRY - SILENT AS TO APPLICABLE LAW - ARBITRAL TRIBUNAL DECISION TO APPLY LEX MERCATORIA - REFERENCE TO INDIVIDUAL PROVISIONS OF THE UNIDROIT PRINCIPLES: 4.8 (SUPPLYING OMITTED TERMS); 4.6 (CONTRA PROFERENTEM RULE); 7.4.1 (RIGHT TO DAMAGES); 7.4.7 (HARM DUE IN PART TO AGGRIEVED PARTY); 7.4.13 (AGREED PAYMENT FOR NON-PERFORMANCE)
An Italian company and a government agency of a Middle Eastern country entered into a contract. The contract did not contain any choice of law clause, because both parties had insisted on the application of their own national law.
In a previous partial award on the question of the applicable law, the Arbitral Tribunal had declared that it would base its decision on the terms of the contract, supplemented by general principles of trade as embodied in the lex mercatoria. Subsequently, when dealing with the merits of the dispute, it referred, without further explanation, to individual provisions of the UNIDROIT Principles, thereby implicitly considering the latter a source of the lex mercatoria.
Thus, apart from another partial award on some preliminary questions of substance in which it referred to Arts. 4.8 ("Supplying omitted terms") and 4.6 ("Contra proferentem rule"), in its final award the Arbitral Tribunal invoked Arts. 7.4.1 (Right to damages), 7.4.7 (Harm due in part to aggrieved party) and 7.4.13 (Agreed payment for non-performance) in support of its reasoning.
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