Claims and sanctions. Arbitration

Arbitration is the procedure laid down for the settlement of international disputes. Claim is an assertion of a right; a demand for something as due.

If the counterparties are unable to settle the conflict amicably, they are forced to apply to arbitration. There are two main types of arbitration in the world: national arbitration which acts under the laws of a particular country and international arbitrationwhich settles disputes under the international laws.

If the parties fail to stipulate the legislation in the contract they apply to the international arbitration. The problem is that decisions of the international arbitration do not have a legal power in some countries (including Russia). On the one hand, a national legislation is more precise and detailed. Also, the execution of the decision of the arbitration is obligatory. However, it creates lex fori, i.e. it creates advantages for one of the parties to the contract, for which the legislation is domestic and, consequently, is much better-known. The application of the international legislation creates lex mercatoria, or the law international.Nowadays the international law is set well. It is based on numerous conventions (e.g. Geneva Conventions for Bills of Exchange, or Vienna Convention for the Contract of Sale).It often happens that one of the parties to the contract considers that the other party has infringed the terms of the contract. In such cases the party dissatisfied may think it necessary to send the other party a letter of complaint which often contains a claim, i.e. a demand for something to which the sender of the letter, in their opinion, has the right as, for instance, a claim for damages, etc. If the complaint is justified, the sellers have to make an adjustment, i.e. they have to offer the buyer some form of compensation. There are four possibilities. The sellers invite the buyers to RETURN the goods at the sellers’ expense. The sellers REPLACE the faulty goods at their own expense. In some cases, the goods can be REPAIRED by the sellers or at the sellers’ expense.The buyers keep the goods, but the sellers offer them a price REDUCTION.

If the sellers are late in delivering the goods, the buyers can send one or more reminders and tell the sellers that they will withdraw from the contract if the goods are not delivered by a certain date, the final deadline.

If the buyers fail to fulfill their obligation of paying on time, it is customary to send three reminders. This is a usual claim procedure.

Complaints and claims may arise in connection with inferior quality of the goods, late delivery or non-delivery of the goods, transportation and insurance, storage of the goods and in many other cases.

Contracts usually stipulate that in the case of arbitration each party should appoint its arbitrator and they have to appoint an umpire. All the three constitute an arbitration tribunal whose award is final and binding upon both parties. When the parties refer their dispute to the Arbitration Commission, each party chooses its Arbitrator from among the members of the Commission. These two Arbitrators appoint an Umpire – another member of the same Commission. If the Arbitrators fail to agree on the Umpire, the Umpire is appointed from among the members of the Arbitration by the President of the Foreign Trade Arbitration Commission. The two Arbitrators and the Umpire constitute the arbitration tribunal.

Arbitration clauses in some contracts stipulate that all disputes and differences should be settled by arbitration in a third country, while some other contracts provide for arbitration in the country of the respondent party.

Countries involved Contracts concluded in accordance with the Rules of different trade associations in the United Kingdom provide for arbitration to be held in conformity with these Rules. In contracts for the sale of timber concluded on a standard form adopted by the Timber Trade Federation of the UK and V/O “Exporters”, Russia, it is provided that certain kinds of disputes should be referred for settlement to arbitration in the UK and others – to the Foreign Trade Arbitration Commission at the Russian Chamber of Commerce in Moscow.

The rules of procedure of the Foreign Trade Arbitration Commission at the Russian Chamber of Commerceare as follows:

1) The Foreign Trade Arbitration Commission shall accept for arbitration disputes of every nature arising from foreign trade contracts and, in particular, disputes between foreign firms and Russian trading organisations. 2) The Points of Claim shall contain the following particulars: a) the names of the claimant and the respondent; b) the claimant’s and the respondent’s addresses; c) the claim made stating the facts on which the claim is based and indicating the evidence in support of the claim; d) the name of the member of the Foreign Trade Arbitration Commission whom the claimant appoints as the Arbitrator, or a statement to the effect that the appointment of the Arbitrator is left to the discretion of the President of the Foreign Trade Arbitration Commission. 3) The Points of Claim shall be accompanied by the originals or certified copies of the documents (the contract, correspondence between the parties, etc.) to which the claimant refers in support of the claims. 4) On filing the Points of Claim with the Foreign Trade Arbitration Commission, the claimant shall make payment in advance on account of the fee to cover the expenses of the arbitration proceedings to the amount of 1 per cent of the sum in dispute. 5) The Points of Claim and all accompanying documents shall be filed with the Foreign Trade Arbitration Commission with copies for each respondent. 6) Notification; to choose the Arbitrator. On receipt of the Points of Claim, the Foreign Trade Arbitration Commission shall forthwith inform the respondent that the Points of Claim have been filed, and forward to him copies of the Points of Claim and of all accompanying documents. 7) Where the respondent fails to choose an Arbitrator within the time specified in section above, the President of the Foreign Trade Arbitration Commission shall appoint an Arbitrator from among the members of the Commission. 8) The Arbitrators who have been either chosen or appointed shall be informed thereof by the Foreign Trade Arbitration Commission without delay and invited to choose an Umpire from among the members of the Commission within fifteen days following the receipt of such a notice. 9) Where the Arbitrators fail to agree on an Umpire within the time specified in section above, the Umpire shall be appointed by the President of the Foreign Trade Arbitration Commission from among the members of the Commission. 10) By mutual consent of the parties, the settlement of the case may, in exceptional cases, be entrusted to a sole Arbitrator. 11)If an Arbitrator is unable to take part in the case? Another Arbitrator with be chosen by FTAC within 15 days 12) If an Umpire is unable to take part in the case? Another Umpire with be chosen by FTAC within 15 days 13)The President of the FTAC may deal with the security for the claim 14) The day for the hearing of the case shall be fixed by the President of FTAC.

Date: 2015-12-17; view: 1085