Lamwell’s lawyers successfully represented a Ukrainian state-owned enterprise in arbitration proceedings under the rules of the Dubai International Arbitration Center. The arbitral tribunal granted the Client’s claim in full, ordering the debtor to pay the full amount of the debt, the amount of the penalties for the violation of time limits for settlements in foreign currency incurred by the Client as a result of the debtor’s failure to fulfil its obligations, as well as interest to be accrued until full repayment.
The dispute arose out of a sales contract concluded between a Ukrainian state-owned company as the seller and a company registered in Dubai as the buyer. According to the contract, the payment was to be made after signing of the acts of final acceptance of the goods, but within a certain period. After receiving the goods, the buyer repeatedly asked the seller to postpone the payment deadline, citing various difficulties with the acceptance of the goods, including restrictions imposed due to the COVID-19 pandemic. Ultimately, the buyer refused to pay, alleging poor quality of the goods but failing to provide any evidence.
Lamwell’s lawyers filed a claim with the Dubai International Arbitration Center for the recovery of the debt, as well as additional losses incurred by the Client in connection with the payment of the penalties for breach of time limits for settlements in foreign currency. The respondent opposed the claim. According to the respondent’s interpretation, the signing of the act of final acceptance was a mandatory prerequisite for payment, and the payment deadline specified in the contract was only of secondary importance. The respondent claimed that the act of final acceptance was never signed due to the allegedly inadequate quality of part of the goods.
The arbitral tribunal agreed with the interpretation of the contract insisted on by Lamwell’s lawyers. The tribunal recognized the payment deadline as mandatory in view of the text of the contract itself and the respondent’s numerous requests to extend the deadline. The tribunal rejected the respondent’s reference to the allegedly inadequate quality of the goods due to a lack of evidence. The tribunal also supported the argument of Lamwell’s lawyers that the respondent’s conduct did not meet the requirements of the UAE Civil Code, according to which the parties must act in good faith when executing agreements. In the end, the arbitral tribunal granted the claim in full and placed the arbitration costs on the respondent.
