Chapter VII. Decisions and Advisory Opinions of International Tribunals

International Chamber of Commerce Court of Arbitration

Food and Agriculture Organization of the United Nations v. BEVAC

Company: Arbitral award (Case No. 5OO3/JJA) of 29 July 1986 Dispute arose in connection with a purchase contract—Conditions governing the sale as stipulated in the ' 'Request for bids and purchase orders, general conditions"—Settlement of disputes arising in connection with the contract— Rules of Conciliation and Arbitration of the International Chamber of Commerce—Law applicable in the case

On 3 August 1978, by means of a purchase order ("FAO (United Nations) purchase order") the Organization ordered electric equipment from BEVAC Company, Switzerland, which was to be sent to the Resident Representative of the United Nations Development Programme at Delhi. The conditions governing the sale had been stipulated in the attached form headed "Request for bids and purchase orders, general conditions" (hereinafter referred to as "the General Conditions"). The cases containing the consignment arrived in India damaged and the equipment could not be used. Part of the equipment sent by the Organization back to Switzerland to be repaired suffered further damage.

FAO submitted its request for arbitration on 16 May 1984 in accordance with article VII of the General Conditions, which provided arbitration by the International Chamber of Commerce. The ICC Court of Arbitration, at its session on 21 August 1984, appointed as sole arbitrator Mr. Serge Lazareff, Legal Counsel, and notified each of the parties of the appointment.

Before dealing with the merits, the Arbitral Tribunal had to decide on the terms of reference, including the law applicable in the case. In connection with that, the Tribunal referred to paragraphs VII and VIII of the General Conditions, which stipulated as follows:

"VII. ARBITRATION CLAUSE: All disputes arising in connection with the present contract shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the Rules.

"If the present contract is performed in the United States, all disputes arising in connection therewith shall be finally settled by arbitration conducted in accordance with the rules of the American Arbitration Association.

VIII. Nothing contained in this agreement shall be deemed a waiver, express or implied, of any privilege or immunity which the Food and Agriculture Organization may enjoy...