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18 September 2013

Sayenko Kharenko successfully defended the client in tort arbitration before the Russian ICAC

Sayenko Kharenko’s international arbitration team successfully represented a leading Ukrainian manufacturer of medical package (the “Client”) in tort arbitration before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation.

The arbitral proceedings were initiated by the Russian buyer over the alleged unjust enrichment related to the sale contract with the Client. The issues in dispute included the scope of arbitration clause in the sale contract, possible joinder of the banking institutions involved in factoring operations, the law applicable to the contractual and non-contractual relations between the parties, as well as lis pendens and res judicata effect of another arbitral proceedings between the parties, initiated earlier by the Client before the ICAC at the Ukrainian Chamber of Commerce and Industry under the same sale contract. The case was also complicated with the setoff of the penalty claims made by the Client prior to arbitration proceedings, but disputed by the Russian buyer in view of ambiguous wording of the penalty provisions in the Contract.

The Arbitral Tribunal agreed with the Client’s interpretation of the penalty provisions and held that the Client duly set off his penalty claims to the Russian buyer, as the latter failed to buy out the agreed volume of the goods under the contract. In view of that, the arbitral award confirmed the Client’s rights to retain the money received from the Russian buyer and dismissed respective buyer’s claims.

Sayenko Kharenko’s team included partner Tatyana Slipachuk, counsel Olena Perepelynska and junior associate Tetyana Makukha.

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