Source: http://cisgw3.law.pace.edu/cases/980609r1.html
Timestamp: 2019-04-22 18:08:12+00:00

Document:
"[T]he seller delivered only part of the goods. The buyer in turn performed its obligation by making a down payment of ninety percent of the contract price. The Tribunal held that, by virtue of Articles 49, 51(2) the contract was avoided, and the seller was under an obligation to return the amount paid the buyer.
"In the synopsis of the case, there is no discussion of whether the buyer's failure to deliver all the goods amounted to a fundamental breach. However, since Article 51(2) provides that the contract may he avoided in its entirety only if the failure to make delivery completely amounts to a fundamental breach, the decision seems to imply such a conlusion." Djakhongir Saidov, 7 Vindobona Journal of International Commercial Law and Arbitration (1/2003) 1-62 at 32.
1.1 Based on the document of the Registration Chamber at the place of business of Respondent, stating that the address of Respondent did not change, with reference to Art. 12(5) and Art. 28(2) of the Rules of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry [hereinafter, the Rules], the Tribunal has held that the notice of appointment of the hearing, which was returned by post service with a note, that the letter could not be delivered, since the recipient is not found at the address provided, should be regarded as if the notice were received by Respondent.
1.3 Since the States where the commercial companies of the parties are situated are Contracting States of the UN Convention on Contracts for the International Sales of Goods (Vienna, 1980), [hereinafter CISG], the CISG is applicable to the contractual relationship between the parties, and law of the Russian Federation is applicable to the issues not regulated by the CISG, since Russia is a place of business of seller.
Having received the claim and claim materials, Respondent [seller] did not choose an arbitrator and did not provide a responce to the claim. The notice of appointment was returned by the post service with a note that the recipient was not found at the address provided. At the hearing Claimant [buyer] presented to the Tribunal a document of the Registration Chamber at the place of business of Respondent, where it was stated that Respondent's address did not change.
Having reviewed the issue of absence of Respondent's representatives at the hearing, the Tribunal had found that, in accordance with Art 23(1) of the Rules of the Tribunal, the notice of appointment of time and place of the hearing was sent to Respondent on 15 April 1998 to the last known address of Respondent. The notice of appointment was returned by the post service with a note that the recipient was not found at the address provided.
However, Claimant [buyer] had presented to the Tribunal a document of the Registration Chamber at the place of business of Respondent [seller], issued on 18 March 1998, where it was stated that Respondent's address did not change.
Therefore, based on Art 12(5) of the Rules of the Tribunal, which states that any written notification is considered to be received, if it were sent to the latest known address of the party by the means, which include registration of the attempt to deliver the notification, with reference to Art 28(2) of the Rules, the Tribunal has decided that the absence of Respondent's representatives at the hearing does not preclude the hearing on the dispute.
In accordance with paragraph 11.2 of the contract between the parties, all disputes between the parties should be resolved by arbitration, and arbitration should be held at the Court of Arbitration of the state, where Respondent is situated.
At the time when the contract was concluded, both the Russian Federation and Bulgaria were parties to the Moscow Convention of 1972, which provides that all disputes between the economical organizations of the Contracting States to the Convention arising from contractual relationships in the process of economical cooperation, should be resolved by Arbitration at the Chamber of Commerce at Respondent's Contracting State.
At the time when the contract was concluded on 20 September 1996, in accordance with the Law of the Russian Federation "On International Commercial Arbitration", the arbitration body at the Russian Federation Chamber of Commerce and Industry was the Tribunal of International Commercial Arbitration body at the Russian Federatioin Chamber of Commerce and Industry. Thus, the Tribunal came to a conclusion that it is competent to resolve the dispute presented.
Bulgaria and the Russian Federation are Contracting States of the CISG since 1991.
In accordance with Art 7(2) of the CISG, questions concerning the matters governed by the CISG which are not expressly settled in it and cannot be resolved in accordance with its general principles, should be resolved in conformity with the law applicable by virtue of the rules of private international law.
At the time when the contract was concluded, the Fundamentals of Civil Law of USSR 1991  [hereinafter, the Fundamentals], which came into force on 3 August 1992, were in force.
In accordance with Art. 166(1) of the Fundamentals, in the absence of agreement on applicable law between the parties to the international economical contract, the applicable law is law of the country, where the party, who is the seller in the contract for the sale of goods, is incorporated, or where seller has his main place of business.
Therefore, the law applicable to the contractual relationship between the parties includes the civil law of the Russian Federation, including the Civil Code of the Russian Federation,  which came into force on 1 January 1995.
Having reviewed the merits of the case, the Tribunal came to a conclusion that Claimant [buyer] had performed his contractual obligations by advance payment to Respondent [seller], in sum of 90 per cent of the total price of the contract.
Due to partial delivery of goods by [seller] and non-refund of unused part of the advance payment to [buyer], the basic debt of [seller] at the time of the hearing amounted to the sum, stated in the claim of [buyer]. This sum is to be paid to [buyer] in accordance with Art. 51(2) and Art. 81(2) of the CISG.
Paragraph 7.1 of the contract between the parties provides for payment of a penalty by seller in case of delay in delivery beyond the term of delivery, provided for in the contract between the parties (within seven months from the date of transfer of the advance payment). Since the advance payment was made by [buyer] on 23 September 1996, [seller] was obliged to deliver the goods no later than April 23, 1997. However, [seller] made partical delivery of goods in May 1997, and the goods for most of the sum of the advance payment were not delivered at all.
The Tribunal considers the claim of [buyer] for [seller] to pay the penalty for delay of delivery of goods to be well-grounded.
[Buyer] demanded recovery of the annual interest on the sum of the basic debt for unlawful use of [buyer]'s funds. However, the Tribunal did not resolve the dispute on this issue, since [buyer] has failed to present either evidence on the amount of bank-rate at the place of business of creditor (Art 395 of the Civil Code of the Russian Federation), or, in the absence of information on above-mentioned bank rate, information on the rate on short-term currency credit at the place of business of creditor. Further, Claimant [buyer] failed to provide the Tribunal with necessary calculations, and did not pay the arbitration fee for the claim for annual interest.
The Tribunal had found it appropriate to grant the claim of [buyer] for avoidance of contract, based on Art. 49 of the CISG.
* This is a translation of data on Proceeding 263/1997, dated 9 June 1998, of the Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, reported in: Rozenberg ed., Arb. Praktika 1998, No. 36 [124-126].
All translations should be verified by cross-checking against the original text. For purposes of this presentation, Claimant of Bulgaria is referred to as [buyer] and Respondent of the Russian Federation is referred to as [seller].

References: Art. 12
 Art. 28
 Art 23
 Art 12
 Art 28
 Art 7
 Art. 166
 Art. 51
 Art. 81
 Art. 49