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Serbia 18 June 2008 Foreign Trade Court attached to the Serbian Chamber of Commerce (One-day old female chicken case) [translation available] Go to Database Directory || Go to CISG Table of Contents || Go to Case Search Form || Go to Bibliography Search the entire CISG Database (case data + other data) CISG CASE PRESENTATION
Serbia 18 June 2008 Foreign Trade Court attached to the Serbian Chamber of Commerce (One-day old female chicken case) [translation available] [Cite as: http://cisgw3.law.pace.edu/cases/080618sb.html] Primary source(s) of information for case presentation: Text of award Case Table of Contents
DATE OF DECISION: 20080618 (18 June 2008) JURISDICTION: Arbitration ; Serbia TRIBUNAL: Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce JUDGE(S): Unavailable CASE NUMBER/DOCKET NUMBER: T -16/07 CASE NAME: Unavailable CASE HISTORY: Unavailable
APPLICATION OF CISG: Yes [Article 1(1)(a)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles 53 ; 54 ; 59 ; 78 Classification of issues using UNCITRAL classification code
Translation (English): Text presented below CITATIONS TO COMMENTS ON DECISION English: [2009] Vladimir Pavić, Milena Djordjević, Application of the CISG Before the Foreign Trade Court of Arbitration at the Serbian Chamber of Commerce - Looking Back at the Latest 100 Cases, 28 Journal of Law and Commerce 1, 17, 52
Translation [*] by Ivan Cavdarevic Edited by Milena Djordjevic, LLM and Marko Jovanovic [**]
The sole arbitrator A, in a dispute before the Foreign Trade Court of Arbitration attached to the
Serbian Chamber of Commerce in Belgrade, concerning the claim of [Seller] against [Buyer] for
payment of the principal debt in the amount of EUR 13,185.00, upon conducting the arbitration
proceedings and hearings on 21 April 2008, makes the following:
13,185.00 for the principal debt within 15 days from the day of receipt of the Award, subject to court
enforcement in case of non-payment;
2. [Seller]'s claim for interest is granted and [Buyer] is ordered to pay to [Seller] the interest at the
annual rate of 3.25% on the amount of EUR 13,185.00 starting from 23 October 2007 until the final
payment, within 15 days from the day of reception of the Award, subject to court enforcement in case
of non-payment;
3. [Seller]'s claim for reimbursement of costs of arbitral proceedings is granted, and [Buyer] is
ordered to pay to [Seller] the costs of arbitral proceedings in total amount of EUR 1,386 within 15
days from the day of the reception of the Award, subject to court enforcement.
1.	Jurisdiction of the Foreign Trade Court of Arbitration attached to Serbian Chamber of
Commerce and the appointment of the Sole Arbitrator
The Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce in Belgrade
has received [Seller]'s claim with attachments on 11 December 2007. The Jurisdiction of this
Arbitration was agreed upon between the parties in an arbitration agreement in the form of the
arbitration clause contained in Art. 10 of the Contract concluded on 12 September 2007. Since the
Arbitration had received the Statement of Claim on 11 December 2007, the meeting of the Board of
the Arbitration was held on 13 February 2008. The Board examined all documents and papers which
[Seller] had submitted along with its Statement of Claim and established that the arbitration agreement
exists in the Contract for sale concluded between [Seller] and [Buyer] on 12 September 2007. The
said arbitration agreement unambiguously points to the jurisdiction of Foreign Trade Court of
Arbitration attached to the Serbian Chamber of Commerce in Belgrade.
Arbitration has in due time served the claim with attachments to [Buyer], as well as the Rules of the
Foreign Trade Court of Arbitration attached to the Serbian Chamber of Commerce (hereinafter: the
Rules) and the list of arbitrators. In its act of 26 December 2007, the Arbitration has also informed
[Buyer] that in its Statement of Claim of 11 December 2007 [Seller] had suggested […] for a sole
arbitrator, and invited [Buyer] to state its position regarding this suggestion. [Buyer] was left a 30-day
time limit for submitting a statement of defense and the position with respect to the proposal for
appointment of the sole arbitrator. [Buyer] dully received the aforementioned documents, which is
confirmed by a return receipt enclosed in the case file.
[Buyer] failed to submit a statement of defense and the declaration with respect to the appointment of
the arbitrator. [Buyer] has also failed to address the Arbitration in any other way in given time.
In accordance with Articles 20 and 21(3) of the Rules, the president of the Foreign Trade Court of
Arbitration has, considering that the value of the claim in the case at hand is less than US $ 70,000 and
that the parties failed to reach an agreement with respect to the appointment of arbitrator in due time,
appointed A as sole arbitrator in a conclusion dated 13 February 2008.
The decision on the appointment of the sole arbitrator was delivered to A, who has accepted his duty
since he considers himself independent and neutral in relation to parties in dispute.
The Secretariat has delivered the decision on the appointment of the sole arbitrator along with the
statement of independence to the parties in due time. The Parties duly received the abovementioned
documents, as established from return receipt which is enclosed in the case file. Since neither of the
parties had raised an objection with respect to the said conclusion, the sole arbitrator was appointed in
accordance with Article 25(3) of the Rules.
During the entire course of proceedings the sole arbitrator was ex officio valuating whether the
Arbitration was competent for hearing the case at hand, and he estimated that the case was completely
On the basis of all existing and established facts and pursuant to the Rules and the applicable law, it was
determined that the Foreign Trade Court of Arbitration was competent to settle the dispute at hand and
that the sole arbitrator was properly appointed.
Arbitration proceedings began on 11 December 2008, when the Foreign Trade Court of Arbitration
received [Seller]'s Statement of Claim with attachments.
On 25 December 2008, the Arbitration informed [Buyer] that the proceedings were instituted against it
and, in accordance with Article 30(7) of the Rules, served it with the Statement of Claim and the
attachments thereto. [Buyer] was instructed to submit an answer to the Statement of Claim and to
propose the evidence for its submissions. [Buyer] was given 30 days from the day of reception to
submit an answer to the Statement of Claim to the Arbitration. [Buyer] dully received the
abovementioned documents (which is established from return receipt enclosed in the case file), but it
has not sent any brief or in any other way addressed the Arbitration.
In accordance with the Rules and the Tariff, the Arbitration has acknowledged the receipt of the
Statement of Claim on 11 December 2007 and, pursuant to Article 57(2), instructed [Seller] to pay the
registration fee in the amount of RSD 10,820.00. [Seller] complied with this obligation on 12
December 2007 and provided a proof thereof. The Arbitration acknowledged the receipt of the
payment and, at the same time, in accordance with Article 57(1) of the Rules, instructed [Seller] to
make an advance payment of the costs of proceedings in the amount of RSD 75,227.00. [Seller]
complied with this obligation on 25 December 2007 and provided proof thereof.
Since the jurisdiction of the Arbitration was established and the arbitrator was appointed as described
under the point 1 of this Award, none of the parties objected, and [Buyer] failed to submit an answer to
the Statement of Claim in due time, the sole arbitrator scheduled a hearing for 21 April 2008. The
parties were dully summoned to the hearing.
At the scheduled hearing, the attorney […] appeared on behalf of [Seller]. [Buyer] did not appear at
the hearing nor did it send its legal representative.
In the Statement of Claim as well as at the hearing of 21 April 2008 [Seller] submitted that it had
concluded the Contract with [Buyer] on 12 September 2007. Pursuant to the Contract, [Seller]
delivered one-day old female chicken ("HISSEN BROWN" and "HISSEN WHITE") from its selling
program, in quantity, sort and value specified in the documents and invoices attached to the Statement
On the basis of the fixed price for the entire delivery, [Seller] determined the value of its claim for main
debt in the amount of EUR 13,185.00. [Seller] produced the appropriate evidence for this submission.
[Seller] also requested the interest on the main debt, as well as the reimbursement of the costs of
arbitration proceedings, according to scale of costs, which it had enclosed at the hearing. At the same
time, [Seller] requested the payment to be made within 15 days, subject to court enforcement.
At the hearing, counsel for [Seller] reaffirmed the submissions made in the Statement of Claim of 11
December 2007. Counsel for [Seller] further defined the Statement of Claim in the part dealing with the
quantity of delivered goods, sort of goods as well as period and interest rate.
When asked by the sole arbitrator whether there were conditions for alternative dispute resolution,
counsel for [Seller] declared that those conditions did not exist.
[Buyer] remained passive until the hearing, it failed to submit an answer to the Statement of Claim.
Furthermore, [Buyer] failed to address the Arbitration in any way until the end of proceedings. It did
not appear at the hearing (which was scheduled and held) even though it was dully summoned, and
failed to justify its absence. The Arbitration has duly delivered a copy of a record from the hearing
(which was held on 21 April 2008) to [Buyer]. [Buyer] was given 15 days to submit remarks with
respect to the facts stated at the hearing, but it remained passive and failed to address the Arbitration in
any other way until the end of the proceedings.
The Jurisdiction of this Arbitration was established in the arbitration agreement concluded between the
parties on 12 September 2007. Apart from Article 7(2) of the Contract (which provides that the seller
has the right on interest for overdue payments, at the interest rate applicable in FYR Macedonia), the
Contract does not specify applicable substantive and procedural law.
Therefore, the arbitrator had to determine the applicable substantive and procedural law in accordance
Considering that this is a dispute from a contract for international sale of goods and that the parties have
their registered offices in countries which had acceded to United Nations Convention on Contracts for
the International Sale of Goods (CISG), the arbitrator established that the conditions for the application
of this Convention in the case at hand are met (Article 1(1) CISG). Since the respective countries in
which [Seller] and [Buyer] have their registered offices are signatories of the CISG, the parties could
have excluded or restricted the application of the CISG (opting out). In the case at hand, the parties
failed to exercise this right, so it should be presumed that the CISG is applicable.
The arbitrator has established that the additional criterion for indirect application of the CISG is also
satisfied, because the provision of the Law on Resolution of Conflicts of Laws with Regulations of other
Countries, which is in force in the respective countries where the parties have their registered offices,
states that the applicable law for purchase agreements concerning the movables is the law of the
country where seller had his registered office at the moment of acceptance of the offer. In the case at
hand, [Seller] has its registered office in the Republic of Serbia, which has ratified the CISG, so the
CISG represents a part of Serbian legislation in force. Therefore, the CISG should be deemed
With respect to the issue of interest, the arbitrator gave consideration to the principle of party
autonomy. In their Contract the parties had provided that "…the seller is entitled to interest for overdue
payments, at the interest rate applicable in FYR Macedonia". Consequently, the Macedonian Law on
Default Interest Rate ("Official Gazette of the Republic of Macedonia" 65/92, 70/93) is the applicable
Alongside the abovementioned applicable substantive law, the arbitrator has determined the necessity
for additional application of trade usages, as well international arbitral jurisprudence.
Additionally, the parties failed to designate the applicable procedural law in case of a dispute. In the
absence of agreement on arbitration proceedings, the arbitrator has firstly resorted to the Rules. Article
45 thereof states that the proceedings before arbitration are governed by the Rules. If the Rules do not
contain provision which regulates certain issue, the arbitrator can establish the appropriate rule, in
accordance with the Serbian Law on Arbitration. The application of the Rules does not only stem from
Article 45, but it is also mandatory pursuant to Article IV(1)(a) of European Convention on
International Commercial Arbitration (Geneva, 1961), as well as Article V(1)(d) of Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (New York, 10th of June 1958).
a)	the amount of EUR 13,185.00 for the main debt b)	the interest on the main debt
In its Statement of Claim [Seller] contends that [Buyer] owes him the amount of EUR 13,185.00 as the
main debt for delivered goods.
The legal ground of [Seller]'s claim is the Contract concluded with [Buyer] on 12 September 2007, as
well as documents of delivery of goods (invoices, customs documents) and the rules of applicable law.
From factual standpoint, [Seller] stated that it had duly and in accordance with the Contract fulfilled its
obligation to deliver the goods while [Buyer] had neither paid the purchase price for the received goods
nor tried to argue this submission in any way. On the other hand, [Buyer]'s obligation to pay the price
within the time set by the Contract is undisputable, since the price represents the agreed pecuniary
equivalent for the value of the goods received.
That obligation is also provided by the CISG (Articles 53, 54 and 59) which is applicable law in this
According to Article 3 of the Contract, is the parties agreed that [Seller] would deliver goods in two
parts, and according to Article 6, [Buyer] is obliged to pay for the received goods in three installments
in the following order: the first installment was to be paid within 25 days limit from the day of reception
of the goods, the second installment within 55 days from reception and the third installment within 85
days from reception. Article 7 of the Contract provides that, in case [Buyer] does not pay the first or
the second installment as agreed in Article 6, […] the whole amount of debt starting from the day of the
delivery of goods will immediately become due. Since [Buyer] failed to perform its obligation to pay the
first installment in the amount of EUR 4,395.00 within 25 days from the day of reception of little
chicken (i.e. until 17 November 2007), [Seller], in a letter of 21 November 2007, notified and warned
[Buyer] that its debt became due, as provided by Article 7(2) of the Contract. At the same time,
[Seller] requested from [Buyer] to pay the amount of the whole debt (EUR 13,185.00) within 8 days
from the day of reception of the said letter. Since the [Buyer] failed to reply to [Seller]'s letter and did
not comply with its obligation to pay the price, [Seller] submitted a Statement of Claim on 11December
2007 and requested the Arbitration to order [Buyer] to pay EUR 13,185.00 for the main debt with
interest starting from 19 October 2007 (the day of reception of little chicken), within 15days, subject to
[Seller] has proposed evidence for its submissions that it duly performed its contractual obligations,
namely that the goods were delivered in the agreed time, quality and quantity. Additionally, [Seller]
suggested the evidence that the delivery and the acceptance of the goods were performed in
accordance with the provisions of the Contract. On the other hand, [Buyer] neither had any objections
with respect to the amount claimed, the quality or other features of the goods, nor did it have any
objections with respect to the time and the way of delivery or any other objections whatsoever.
In Article 3 of the Contract the parties agreed that the total quantity of the goods would be delivered in
two parts. In accordance with the Contract, [Buyer] received the delivery in two parts:
The first part was delivered on 19 October 2007, at 3 pm (Art. 3(1)(2) of the Contract), and [Buyer]
received 10.585 little chicken, which is established from duly produced documents (cited bellow),
enclosed to the case file:
a)	"Notice of reception of little chicken" completed on 19 October 2007, at 3 pm; b)	Invoice from 18 October 2007, no. 08/IZ/07; c)	Bill of lading no. 69/2007 from 18 October 2007; d)	Customs documents from 18 October 2007;
The second part was delivered on 23 October 2007 as agreed(Art. 3(1)( 2) of the Contract), and
[Buyer] received 10.500 little chicken, which is established from duly produced documents (cited
bellow), enclosed to the case file:
a)	"Notice of reception of little chicken" completed on 23 October 2007, at 1.30 pm; b)	Invoice from 18 October 2007, no. 09/IZ/07; c)	Bill of lading no. 70/2007 from 22 October 2007; d)	Customs documents from 22 October 2007.
Sole arbitrator was presented with relevant evidence that Claimant had submitted to the Arbitration and
produced at the hearing.
The arbitrator applied Articles 53, 54 and 59 of the CISG on established facts. According to these
provisions, buyer's main obligation is to pay the price and to take delivery of goods in the way
provided in the contract and in the Convention. Buyer's obligation to pay the price implies both
assuming the measures and completing the formalities provided in the contract or the rules of applicable
law in order to enable the payment. The buyer is obliged to pay the price in the way and within the time
provided in contract.
In the Contract of 12 September 2007, is the parties agreed that the payment would be made by bank
transfer in three installments in the following order: the first installment within 25 days from the day of
reception of little chicken, the second installment within 55 days from reception of little chicken and the
third installment within 85 days from reception of little chicken (Art. 6 of the Contract). However, in
Article 7 of the Contract, it is provided that, in case [Buyer] does not pay the first or the second
installment within the agreed time, the whole debt would immediately become due, i.e. on the day of
delivery of goods - 19 October 2007 for the first part of delivery or on 23 October 2007, when the
delivery was completed and [Buyer] received the second part of the goods. Since [Buyer] failed to
perform its contractual obligation and pay the price, [Seller] sent a letter dated 21 November 2007 in
which it warned and notified [Buyer] that its debt became due (according to Art.7(2) of the Contract)
and requested the payment of the whole amount without delay. Considering that [Buyer] failed to
answer to [Seller] or comply with its obligation to pay the price, [Seller] initiated the arbitral
According to the Contract, [Buyer] was obliged to pay for the duly received goods in the way and
within the time provided in the Contract. Since it is undisputedly established that [Buyer] failed to
comply with this obligation, and [Seller] refused the initiative for alternative dispute resolution with
[Buyer], the sole arbitrator granted [Seller]'s claim for the main debt and ordered [buyer] to pay the
main debt to [Seller], as stated in the point 1 of the operative part of this Award. 4.2	The issue of interest
On the basis of the documents and evidence presented with the Statement of Claim, which [Buyer] has
not challenged, the sole arbitrator established that [Seller] delivered goods in two successive part. In
each of the invoices which followed goods, [Seller] indicated the price of the goods in euros, as
required by the Contract concluded with [Buyer].
Article 7(2) of the Contract provides that "in case [Buyer] does not pay the first or the second
installment, [Seller] is entitled to claim interest on overdue payments, at the interest rate applicable in
FYR Macedonia, from the day of reception of little chicken until the day on which the payment has
been transferred to [Seller]'s account". [Buyer] remained completely passive even after the warning in
written form which [Seller] had directed to it on 21 November 2007. In that letter, [Seller] warned
[Buyer] about the consequences that might arise from the application of Article 7 of the Contract,
including […], the time limits for payment of the debt and the right to claim interest. [Buyer] failed to
comply with its obligation in the additional time period of 8 days that [Seller] fixed for the payment of
the debt. Consequently, [Seller] initiated arbitral proceedings and requested [Buyer] to pay the main
debt with interest on overdue payments starting from 19 October 2007, in accordance with Article 7(2)
of the Contract. At the hearing held on 21 April 2008, counsel for [Seller] modified the claim for
interest by changing the day on which the obligation to pay the price started to run from 19 October
2007 to 23 October 2007, the day when the second installment of little chicken i.e. the aggregate
amount of agreed goods was delivered (in accordance with Art.3 of the Contract). Also, [Seller]
requested the interest at the annual rate of 3.25 %, which, as the domiciled interest, corresponded to
the average interest rate in relevant period for fixed financial deposits in euros with the European
The Arbitration has delivered the minutes of the hearing held on 21 April 2008 to [Buyer]. [Buyer] duly
received the minutes, which was established by receipt of delivery enclosed to the case file. [Buyer]
failed to make any submissions with respect to the facts presented at the hearing. Furthermore, [Buyer]
did not object to the modification of the starting day for calculation of interest which Claimant has
defined on hearing (23 October 2007) and which was, in comparison to the starting day indicated in the
Statement of Claim (19 October 2007), more favorable for [Buyer]. Finally, [Buyer] did not object to
interest rate of 3.25% par annum, which was also more favorable for it in comparison to the interest
rate provided in the relevant provision of the Contract, i.e. the interest rate on overdue payments
applicable in FYR Macedonia.
In FYR Macedonia the issues of the interest rate and the calculation of interest on overdue payments
are regulated by the Law on Default Interest Rate. According to that Law, the interest on overdue
payments is calculated on annual basis and corresponds to the discount rate of the National Bank of
FYR Macedonia, increased for a specific percentage (Art.1). Since the discount rate of the National
Bank of FYR Macedonia in the period starting from 23 October 2007, was on the annual level of
6.5%, it is clear that the annual interest rate of 3.25% - the rate which [Seller] requested at the hearing,
is lower than the interest rate for overdue payments applicable in FYR Macedonia. In considering this
issue, the arbitrator limited its attention to the fact that the application of the interest rate provided for in
the Contract would be less favorable for [Buyer] and did not examine other details of implementation of
the interest on overdue payments.
Considering that [Buyer] failed to pay the price of the delivered goods indicated in the invoices, the
arbitrator applied Article 7 of the Contract, as well as Article 78 of the CISG, according to which, "If a
party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on
it…". The arbitrator ordered [Buyer] to pay the interest for the main debt of EUR 13,185.00, which
represents the basis for calculating the interest.
The implementation of annual interest rate of 3.25%, which is considered legitimate because of the
abovementioned reasons, on the amount of EUR 13,185.00 as the basis for calculation, will represent
the sum that [Buyer] owes to [Seller] on the basis of interest for the time period starting from 23
October 2007, as the first day of its calculation, until the final payment to [Seller].
On the basis of the evidence gathered and the circumstances of the case, the sole arbitrator has
rendered the decision on the issue of interest as stated in point 2 of the operative part of this Award.
In its Statement of Claim [Seller] requested the reimbursement of the costs it incurred with respect
these proceedings. Counsel for [Seller] presented the calculation of costs, which is enclosed to the case
file, and, on that account, he requested the reimbursement of:
a)	registration fee in the amount of RSD 10,820, which corresponds to an equivalent of EUR 136
according to the exchange rate on the day of payment;
b)	arbitration fee in the amount of RSD 75,227 which corresponds to an equivalent of EUR 960
c)	costs of preparing the Statement of Claim in the amount of RSD 11,000 which corresponds to
an equivalent of EUR 139 according to the exchange rate on the day of rendering of this Award;
d)	attendance at the hearing in the amount of RSD 12,000 which corresponds to an equivalent of
EUR 151 according to the exchange rate on the day of rendering of this Award.
In the arbitrator's opinion, the costs in the total amount of EUR 1,386, as presented and specified in the
calculation presented by [Seller], were reasonable and necessary for [Seller]'s participation in this
proceedings. Since [Buyer]'s claims were fully granted, it is entitled to reimbursement of the total amount of costs it
incurred in the proceedings. Because of these reasons, in point 3 of operative part of this Award, sole
arbitrator has fully granted [Seller]'s request for reimbursement of costs which it incurred in this
Pursuant to Article 56 of the Rules of the Foreign Trade Court of Arbitration attached to the Serbian
Chamber of Commerce, as well as the Law on Arbitration, this Award has the force of a final decision
of a court. It is final and not subject to appeal. By accepting the jurisdiction of this Arbitration, the
parties committed themselves to enforce this Award.
Belgrade, 18 June 2008 [signed]
** Ivan Cavdarevic is a student at the University of Belgrade Faculty of Law. Milena Djordjevic,
LL.M (U. Pittsburgh) and Marko Jovanovic are lecturers at University of Belgrade Faculty of Law.