RAC Practice

William Hogarth

Bambridge on Trial for Murder by a Committee of the House of Commons, 1729

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  • 1.
    1. Arbitral Award

    Under the contract the Respondent pledged to perform certain works at the request of the Claimant in four stages. When the second stage works were not completed, the Respondent notified the Claimant about the impossibility to perform the work due to the fault of the subcontractor. The Claimant refused to perform the contract and filed a claim for the recovery of a penalty for the second stage work performance delay, minus the sum of a bank guarantee. In objections, the Respondent requested a reduction in the penalty, considering that (1) the Claimant himself interfered with the performance of the contract, (2) the penalty is disproportionate to the amount of work performed, (3) the liability of the Parties under the contract is unequal, (4) the amount of the penalty is disproportionate to the consequences of the breach of obligation, (5) the Respondent himself is in financial hardship. The Arbitral Tribunal concluded that none of the Respondent's listed statements is supported by evidence, the discrepancies in the provisions on the liability of each of the Parties to the contract are not relevant to the resolution of this dispute, the disproportionate penalty for the cost of work performed is not one of the grounds for reducing the penalty, and the basis for reducing the penalty is its disproportion to the consequences of the breach of contract and not the severity of the burden of paying it for the debtor.

    17.12.2021

    Arbitrator
    Shirvindt Andrey
    Seat of arbitration Russia, Moscow
    Procedure standard
    Applicable rules domestic disputes
    Rules edition 21.01.2019
    Economic sector Construction
    Tags COVID-19, forfeit reduction
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