at Russian
Institute
of Modern
Arbitration
at Russian
Institute
of Modern
Arbitration
A dispute for the recovery of a penalty for a delivery time violation and for delay of provision of security for the performance of the contract. Both Parties agreed with the fact of delivery delay but argued about the exact moment the products were considered delivered, since the moment the Parties signed the consignment note in most cases did not coincide with the date of actual delivery. Regarding the second claim, the Respondent's argument that the penalty should be calculated on the value of products delayed on delivery, but not on the basis of the total price of the contract, was rejected by the Arbitral Tribunal as not based on the provisions of the contract. The Respondent's argument that the penalty cannot be charged after the products have been completely delivered was also rejected, since even after the delivery of all the products, the Buyer could have quality requirements of the products, which should also have been secured. The arbitral tribunal reduced the penalty for the delay in the provision of security for the performance of the contract since by the moment of the dispute resolution, the penalty size exceeded the amount of the security itself by four times. Initially, the claim to recover a penalty for the delay in the provision of security of the contract was submitted till the day of the issuance of the award, but in the course of arbitration, the Claimant amend the end of the recovery period to a specific calendar day. For the purposes of determining the arbitration fee, the value of such a claim has been recalculated till the date the Claimant was no longer submitting the claim. As a result of such an amendment, the value of the claims decrease and the arbitration fee in the relevant part was borne by the Claimant in accordance with Paragraph 5 of Article 15 Rules on Fees and Costs.
27.07.2022
