Supreme Court Belarus invalidates arbitration agreement in CISG contract

On 7 April 2020, the Supreme Court of the Republic of Belarus rendered a decision concerning a disputed arbitration clause in a CISG-contract. A Lithuanian seller sued his buyer before the Economic Court of the City of Minsk for payment of the remaining purchase price. The delivery of the goods and the partial non-payment by the buyer were not disputed by the parties. The Economic Court of the City of Minsk ordered the buyer to pay the remaining part of the purchase price in the original proceedings and in the appeal proceedings under Articles 53, 59, 62 CISG. 

In the appeal proceedings before the Supreme Court of the Republic of Belarus, the main defense necessitating discussion was the arbitration agreement in clause 7 of the contract. The clause provided for the resolution of any arising disputes by arbitration before the Federal Economic Chamber, Vienna. The Economic Court of the City of Minsk had found this to potentially refer to either the International Central Arbitration of the Austrian Federal Economic Chamber or the Vienna International Central Arbitration (VIAC). The Supreme Court accepted this reasoning and consequently declared this arbitration agreement to be inoperative under Art. II(3) New York Convention 1958. According to the Supreme Court, thus, Belarusian courts had jurisdiction to hear the case. 

When interpreting the arbitration agreement, the Supreme Court did not cite its legal ground for the interpretation. Specifically, it remains unclear whether Article 8 CISG was applied to interpret the (invalid) arbitration agreement as to whether the arbitral institution and the differing procedural rules were designated unequivocally.

Czech Republic
Imprecise designation of arbitral institution case
Высший суд Республики Беларусь (Supreme Court of the Republic of Belarus)
Belarus, 07 April 2020 – 189-6/2019/64A/336K, CISG-online 5254