Final Award in ICC Case No. 18203
ICC Arbitration Tribunal
XLI Y.B. Comm. Arb. 276 (2016)
Two companies from the United Arab Emirates (UAE) entered into a distribution agreement under which one company (the distributor) (defendant) was to act as the exclusive distributor of the other company’s (the manufacturer’s) (plaintiff) products in certain countries. The agreement provided for International Chamber of Commerce (ICC) arbitration of any disputes. The agreement also included a choice-of-law clause providing that the agreement “shall be governed by the laws as defined by the EEC (European Economic Community).” Although the EEC existed when the parties entered into the agreement, the EEC was incorporated into the European Union in 1993 and no longer existed when the parties’ dispute arose. During arbitration proceedings brought by the manufacturer against the distributor, the arbitrator had to decide which substantive law applied to the parties’ dispute. The manufacturer argued that the applicable law was the Convention on Contracts for the International Sale of Goods (CISG) and principles derived from the CISG, including the duty of good faith, principles of contractual liability by a breaching party, and a duty to fully compensate a nonbreaching party for harm. However, the UAE had not ratified the CISG.
Rule of Law
Holding and Reasoning ()
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