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Date:   7 July 2011
Court:   The Arbitration Court of Latvian Chamber of Commerce and Industry
Local case reference:   2011/144
CISG Nordic ID:   110707LV
Country of decision:   Latvia
Buyer's country:   Estonia
Seller's country:   Latvia
Goods involved:   Petroleum
Case history:   n/a
Original language:   Latvian
Provisions cited:   CISG articles 1, 6, 7, 53, 78
Original court document:   n/a
Rapporteur:   Aleksandra Vasiljeva
Case citations:   n/a

 

Abstract

by Aleksandra Vasiljeva

The plaintiff (Latvian seller) sued the buyer (an Estonian company) for payment of the purchase price and lawful interest on arrears.
The Seller entered into a contract with the Buyer for the sale of petroleum. The contract implied a series of petroleum deliveries from the Seller to the Buyer. The Seller stated that the petroleum was delivered to the Buyer between 15 September 2009 and 16 October 2009. Additionally, the Buyer accepted all the deliveries. Two and a half years after the goods were delivered, the Seller notified the Buyer regarding the default payment. The plaintiff demanded the purchase price of the goods that were delivered to the Estonian company.
The case was referred to the Arbitration Court of Latvian Chamber of Commerce and Industry pursuant to the arbitration clause included in the sales contract.
The Arbitration Court stated that there is no dispute between the parties whether goods were delivered to the Buyer. An invoice and a bill accompanied the delivered petroleum. According to the Commission Regulation (EC) No 31/96 of 10 January 1996 on the excise duty exemption certificate, the Buyer’s representative should have signed the received bills in order to acknowledge that the goods were delivered to the customs warehouse. The Arbitration Court ascertained that there was a signature of the Buyer’s representative on every bill that was issued to the Buyer.
The Arbitration Court noted the fact that parties stated in their contract that the agreement was concluded and its provisions should be interpreted according to the law of Latvian Republic. For this reason, the dispute between parties should be settled in accordance with Latvian law and the UN Convention on the International Sale of Goods (CISG). According to Article 1(1)(a) of the CISG, the Convention applies to contracts of sale of goods between parties whose places of business are in different states, when the states are contracting states. Latvia is a contracting state of the CISG as of 1 August 1998. Estonia is a contracting state as of 1 February 1996. The parties did not exclude the application of the CISG pursuant to Article 6.
According to the contract, the Buyer was obliged to pay the purchase price on the day when the bill was received. According to Article 53 of the CISG, the Buyer must pay the price for the goods and take delivery of them as required by the contract and the Convention. According to Article 2033 of the Latvian Civil Code, the Buyer should pay the purchase price before the goods are received. For this reason, the Arbitration Court held that the Seller had a claim for the purchase price.

The court awarded interest pursuant to article 78 CISG. With regard to the interest rate, the court pointed out that Article 78 CISG expressly permits the award of interest without, however, stating the rate. According to Article 7(2) of the CISG, matters which are not expressly settled in the Convention should be settled in conformity with the general principles. In the absence of such principles, the interest rate determined according to the law applicable by virtue of the rules of private international law. The Arbitration Court stated that there are no international principles for the determination of the interest rate. The Arbitration Court took into consideration that the parties agreed to apply Latvian law and therefore applied the interest rate according to Article 1765(2) and (3) of the Latvian Civil Code.

 

 

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