Termination of a sale contract providing for the payment by Claimant (Austrian Company), as buyer, of the purchase price by means of a letter of credit. Turkish buyer refuses to accept the letter of credit due to alleged discrepancies and withdraws from the contract / Applicable law in the absence of agreement of the parties / Seat of arbitration fixed by the ICC Court in Rome / Art 13(3) of the ICC Rules / Absence of lex fori of the arbitrator / Application of international private law principles as stated in international conventions / The Hague Convention of December 1986, Art. 8(1) and the Rome Convention of June 1980, Art.4(1) and (2) law set out representative rules of conflict / Application also of ICC Rule 13(5)

'The Contract does not provide for the law applicable to the relations established between the parties.

As provided in Article 13(3) of the ICC Rules of Arbitration, "in the absence of any indication by the parties as to the applicable law, the arbitrator shall apply the law designated as the proper law by the rule of conflict which he deems appropriate".

In accordance with the classical doctrine on conflicts of law, this rule should be determined by the law in force at the place of arbitration (lex fori).

However, this doctrine has been widely criticized, mainly in consideration of the fact that the arbitrator, differently from the national judge, has no lex fori. Therefore, the Arbitral Tribunal considers it more appropriate to apply the general principles of international private law as stated in international conventions, particular those in the field of the sale of movable goods.

The Hague Convention [of December 22, 1986] establishes the principles governing the determination of the law applicable to contracts for the international sale of goods. This Convention provides (Article 8.1) that in case of silence by the parties the law of the State where the seller has his place of business at the time of conclusion of the contract is applicable. This rule of conflict coincides with that provided by the EEC Convention of June 19, 1980 on the law applicable to contractual obligations, which points to the law of the State with which the contract has the most significant connection (art. 4.1). The presumption is that such a State is that in which the party rendering the most characteristic performance has its residence or principal place of business (art. 4.2).

Although neither of these Conventions has been ratified by Austria and Turkey, the rules of conflict therein set out may be considered as representative of the prevailing principles in the field.

The Contract has been concluded and signed in Istanbul and the seller had in Turkey its place of business at the time the Contract was signed. Therefore, the law applicable to the present dispute is the Turkish law. However, in conformity with Article 13(5) of the ICC Rules of Arbitration, the Arbitral Tribunal shall take account also of the provisions of the Contract and of the relevant trade usages.'