This is the final award from an ICC arbitration concerning a seller's suit for the unpaid portion of the purchase price and the buyer's counterclaim for damages caused by nonconformity of the goods. Though neither party to the sales contract had a place of business in a country that had ratified or acceded to the United Nations Convention on Contracts for the International Sale of Goods ("CISG" or the "Convention"), and though the CISG was not otherwise applicable by its terms, the arbitrators applied the CISG provisions concerning the time within which the buyer must give notice of nonconformity. The arbitral tribunal concluded that those provisions of the CISG represent international trade usages.
The published text of the award illuminates little of the context of the dispute. We do not know the names of the parties or the countries where they do business. We also know nothing of the kind of product that was bought and sold, the nature of the defect, or the amount of the damages. Nonetheless, reading the award produces a firm conviction that the result reached by the arbitrators was a just one. The reason is that the tribunal sidestepped a number of serious legal obstacles in order to permit the buyer to recover on the counterclaim. Although, in the end, the tribunal's maneuvers are not convincing, the award demonstrates one reason for lawyers to become familiar with the provisions of the CISG -- and that is that the Convention may be applied virtually anytime an arbitrator believes that it produces the proper result (see footnote 1).
Two issues are particularly troubling about this award: first, the holding that, even outside of its stated sphere of application, the CISG can displace the proper law of the contract, and second, the manner in which the CISG's conformity provisions were applied to the facts of this dispute.