Les parties conclurent un certain nombre de contrats relatifs à la vente, la fourniture, la modification, la maintenance et le fonctionnement de matériels ainsi qu'aux services auxiliaires s'y rapportant. Les contrats furent résiliés à la suite de certains événements survenus dans l'Etat X et des litiges opposaient les parties au sujet des montants réclamés par chacune d'entre elles à l'autre. Une première sentence partielle fut rendue concernant le droit applicable. La majorité des membres du tribunal arbitral estima que les contrats devaient être régis par et interprétés selon les <b>Principes d'Unidroit.</b> Par la suite, une deuxième sentence partielle fut rendue, traitant de questions de fond et visant les articles 1.7, 2.18, 2.4, 2.14, 7.1.3, 7.4.8 et le chapitre 4 des <b>Principes d'Unidroit,</b> suivie d'une troisième sentence partielle, dans laquelle le tribunal statua plus avant sur certaines de ces questions.

<i>Sur le droit applicable (première sentence partielle) :</i>

'This partial award, made in The Hague, The Netherlands, with the affirmative vote of the majority of the Tribunal's members . . . decides in a final way on the law applicable to all the contracts subject to these arbitral proceedings.

The Contracts respectively provide for the resolution of disputes which may arise thereout, as follows:

Contract (i): ICC arbitration in The Hague, The Netherlands . . .

Contract (ii): amicable resolution by the parties . . .

Contract (iii): disputes to be finally settled "according to natural justice" by ICC arbitration in Paris, France . . .

Contract (iv): disputes to be finally settled "according to natural justice" by ICC arbitration in Paris, France . . .

Contract (v): disputes to be finally settled "according to natural justice" by ICC arbitration in Paris, France . . .

Contract (vi): disputes not amicably resolved to be finally settled "according to the laws of natural justice" by arbitration . . . no site indicated for the arbitration;

Contract (vii): disputes not amicably resolved shall be settled "in accordance with natural justice" by arbitration . . . no site indicated for the arbitration;

Contract (viii): disputes not amicably resolved shall be finally settled by arbitration in [State X] . . .

Contract (ix): disputes not amicably resolved shall be settled by arbitration in [State X] as provided in Clause 16 and [Annexe] V, articles 4 and 15 of the latter respectively indicating that (a) when the rules "governing the proceedings" contained in the said [Annexe] are "silent", proceedings shall be governed by ". . . any rules which the parties (or, failing them, the Arbitrator(s)) may settle in accordance with the rules of natural justice"; and (b) "in all matters not expressly provided" in the rules set forth in the said [Annexe] "the Arbitrator(s) shall act in the spirit of these Rules (the ones provided in the [Annexe]) and natural justice and shall make every effort to make sure that the award is enforceable at law".

The parties have agreed to submit all disputes arising from the Contracts to arbitration under the ICC Arbitration Rules (the "ICC Rules") before the same arbitral tribunal sitting at The Hague, The Netherlands. To that extent, then, the clauses in the Contracts have been superseded.

[La position du demandeur sur la question du droit applicable :]

. . . Claimant first adduced in its request for arbitration . . . that (i) there was no "explicit" choice of law in the Contracts; and (ii) the Contracts having been signed in [State X], the laws of [State X] should apply since the rule lex loci contractus is "a long-standing rule in international sales and purchases".

. . . Claimant further clarified its position by pointing out, with respect to Contract (v), that (1) the parties did not "expressly" agree on the applicable law; and (2) references to "natural justice" are too vague since there is no agreement among international jurists on its content and it does not offer to the arbitral tribunal sufficiently precise rules to decide the disputes being the subject matter of this arbitration and would in any case express the parties' will as to the "approach" to be observed by the arbitral tribunal in the course of the proceedings. Claimant insists that the parties wished to have the dispute resolved according to a "law", which law should be [the law of State X] since the Contracts were signed in [State X]; [State X] was the place of contractual performance and this Contract was a part of a large project [for purposes relating purely to State X]. In this submission, Claimant extended the above reasoning only to Contracts (iii), (iv), (v), (vii) and (ix).

[Par la suite, en se référant à l'ensemble des contrats,]Claimant contends that the Contracts should be first scrutinized for determining, according to Art. 13(3) of the ICC Rules, if there is any indication in the Contracts permitting to establish the parties' will as to the substantive law governing them. . . . Claimant isolates four common features to all Contracts which, in Claimant's views, should lead to conclude that the Contracts are governed by general principles of law . . . Against the backdrop of such four considerations, Claimant contends that the following circumstances reflect or indicate the implied intention of the parties to subject the Contracts to general principles of law as proper law: (a) the inter-governmental elements of the transactions between the parties and the fact that the Contracts "are accompanied by the exercise of exclusive powers of the state as sovereign and holder of the public power" . . . (b) the expression "natural justice", found in many of the Contracts would not have the narrow sense ascribed to it under English law referring to certain standards of procedural fairness which would be redundant because such standards are already reflected in the ICC Rules; and (c) the negotiation history of the Contracts would prove that it was the intention of both parties not to accept the law of the country of the other as governing law and that the parties did not select the application to the Contracts of the laws of a third state.

. . . In a nutshell, Claimant's position is that in absence of an explicit or implied choice of law by the parties, the rule of conflict the most appropriate for determining the applicable law pursuant to Art. 13(3) of the ICC Rules would be either (i) general principles of private international law or (ii) [the] private international law [of State X]. In the first case, general private international law principles would lead to the application of general principles of law as proper law of at least 7 of the Contracts, whereas in the second case the Contracts would be governed by [the law of State X]. Claimant argues that the Contracts are "state contracts" or "statetostate" contracts of international character, and that according to the practice of international arbitral tribunals, general principles of law are the proper law of such contracts. It also refers to different authorities favouring the application of general principles of law or lex mercatoria to state contracts and international contracts. Claimant rejects Respondent's arguments that the applicable law to the Contracts should be determined on the basis of the characteristic performance rule, since it would not be a part of the general principles of private international law. Claimant also rejects the application of the European Convention on the Law applicable to International Obligations of 1980, since [State X] is not a party and [the Convention] was ratified by and became effective for the U.K. after the Contracts were made.

Subsidiarily, Claimant contends that the Contracts would be governed by [the law of State X] because [State X] is a party to all of them, all Contracts were made in [State X], and some of them were to be performed in [State X]. Claimant submits that since the Contracts were made in [State X], Article 968 of the Civil Code of [State X], providing that contracts are subject to the laws of the place where made, would govern. Claimant contends that such solution would not be contrary to English conflictoflaws rules, which would give preference to the presumed will of the parties, nor [to] the closest connection test existing in England before its ratification of the European Convention or as contemplated in the latter's Art. 4, all of which would lead to the application of [the law of State X]. Claimant also argues that Dutch private international law does not apply since The Netherlands was not envisaged as arbitration site when the Contracts were made and the application of Dutch conflictoflaws rules would be artificial. . . .

[La position du défendeur sur la question du droit applicable :]

. . . Respondent contends instead that "the proper law of the Contracts is English law or, alternatively, that the tribunal should apply general principles of law".

. . . Respondent contends that according to Art. 13(3) of the ICC Rules . . . the arbitral tribunal should resort to the voie indirecte, that is, selecting the conflictoflaws rule it would deem appropriate, for determining the substantive law(s) applicable to the Contracts. In that connection, Respondent's opinion is that no national rule of conflict (particularly [of State X] or British) should apply exclusively or in tandem, either because the principle and semblance of impartiality would be compromised or because the cumulative application of English and [State X's] conflictoflaws would lead to conflicting results with respect to at least six of the Contracts.

Respondent further argues that if the choice is to be made between the English and [State X's] conflictoflaws rule, the first would be preferable because (1) the place of formation of the contract (the connecting factor determining the proper law according to Art. 968 of the Civil Code [of State X]) is arbitrary and responds only to the convenience of the parties; (2) the English rule (as it was when the Contracts were made) is more consistent with comparative private international law, including modern international conventions; and (3) [State X's] conflictoflaws rule is widely criticized and has never been applied by [State X's] Courts. Respondent is of the view that the conflictoflaws rules of the site of the arbitration (The Netherlands), though consistent with general principles of private international law, should not apply in view of conflicting authorities on the application by arbitral tribunals of the private international law of the country where they sit and the fact that The Hague was chosen as the site of the arbitration after the Contracts were made and was not selected by the parties or originally contemplated by them when contracting.

If choice is not to be made between the English and [State X's] conflictoflaws rules, Respondent contends that general principles of private international law regarding contracts for the international supply of goods or services should apply. In Respondent's view, such principles would be (1) the Contracts are governed by the law of the jurisdiction with which each Contract separately considered is most closely connected; and (2) the proper law is that of the place of habitual residence or central administration of the party whose performance is characteristic to each Contract. By applying any or both of such principles Respondent contends that except for Contract (ix) (which could be governed by [the law of State X]) all Contracts are governed by English law. Respondent also argues that the result would be the same if either Dutch or English conflictoflaws rules were found applicable.

. . . Respondent argues that the expressions "natural justice", "the laws of natural justice" and the "rules of natural justice" have all the same meaning and just refer to principles of procedural fairness and do not have any bearing on the law applicable to the substance of the Contracts. In Respondent's view, the only substantive meaning which may be attributed to such expressions which are not present, Respondent emphasizes, in Contracts (i), (ii) and (viii) is that they refer to principles of equity or morality, which may not be reconciled with the fact that the Tribunal is called to decide by application of the law and not in equity. In any case, Respondent indicates that such principles are deprived of any specific identity or are not sufficiently detailed to permit the resolution of a commercial dispute, circumstances which would negatively affect the enforceability of an award in these proceedings at least in England. Respondent indicates its agreement with Claimant's position, as perceived by Respondent, that general principles of conflictoflaws would be the appropriate conflictoflaws rule for determining the law applicable to the Contracts and that according to such general principles the closest connection test would be such general conflicts rule, but disagrees that such test may lead to the application of general principles of law as the substantive law, or that the characteristic performance test is not a part of generally accepted principles of conflictoflaws. After contesting other aspects of Claimant's arguments, Respondent concludes that it would not be compatible with the expectations of the parties at the moment of contracting to see "such ill-defined principles" become the substantive law applicable to the Contracts. Respondent makes a special point in denying that the place of arbitration (as originally set forth in some of the Contracts before the parties decided to have consolidated arbitration in The Hague under the ICC Arbitration Rules) is a relevant element for determining the jurisdiction showing the closest connection with a contractual transaction, or that arbitration clauses in Contracts (viii) and (ix) render [the law of State X] applicable. Respondent reiterates its position that all Contracts are governed by English law except Contract (ix), which probably would be governed by [the law of State X].

[La position du tribunal arbitral s'agissant d'un choix exprès ou implicite par les parties du droit applicable :]

. . . In the view of this Tribunal, Art. 13(3) of the ICC Arbitration Rules should be interpreted as contemplating both the express and the implied or presumed choice by the parties of the law governing the Contracts. Such interpretation is consistent with the interpretation of similar texts created on the basis of a broad international consensus . . .

In consequence, in absence of express choiceoflaw stipulations in the Contracts, this Tribunal shall proceed to determine whether the parties have made an implicit choice of the law or laws governing the Contracts. To that end, the Tribunal will consider the Contracts not in isolation, but as interrelated expressions of a longterm relationship between the parties spanning more than ten years. Such an approach is also consistent with (1) express statements of the parties in that regard . . . (2) statements of the parties in that sense in the course of the hearing which took place in The Hague, The Netherlands, on . . . (3) the unified approach adopted by the parties to deal with the resolution of disputes arising out of the Contracts; and (4) a certain degree of functional interrelatedness of the Contracts . . .

It is also the view of this Tribunal that indications of the parties as to the applicable law referred to in Art. 13(3) of the ICC Rules should be construed . . . on the basis of an objective test revealing what would have been the reasonable intention and expectations of the parties regarding the applicable law as evidenced by all the circumstances surrounding the negotiation of the Contracts, as well as by contractual terms likely to evidence the applicable law, i.e. a "contextual" approach . . .

In that respect, the question of the applicable law was clearly an important issue in the course of the negotiation of the Contracts, which deserved careful consideration by each party in its efforts to advance the application of its respective national law. Matters closely interrelated, such as the neutrality of the applicable law and of the dispute resolution mechanism, were at the foreground of the parties' concerns and discussions and it is obvious that the way in which they were finally taken care of was at the centre of the carefully negotiated compromises inducing the parties to enter into the Contracts.

Central to the considerations of each party in the course of contractual negotiations was its clear resolve not to accept the application of its counterpart's national law to the Contracts . . .

Six out of nine of the Contracts contain the expressions "natural justice", "rules of natural justice" or "laws of natural justice" in association with the resolution of disputes through commercial arbitration. In five of those Contracts . . . the syntactic insertion of the expression "natural justice" is redolent of the drafting a practitioner would use to refer to the law governing the substance of the relevant transaction . . . [T]he incorporation or exclusion of such terms was brought to bear in connection with discussions between the parties regarding the substantive law which would govern the Contracts and the dispute resolution process regarding controversies which might arise under the Contracts.

It is clear then that the presence of the expressions "natural justice", "laws of natural justice" and "rules of natural justice", which were undoubtedly the subject of careful consideration and negotiation, may not be ignored for assessing if and to which extent the parties have indicated the laws or principles governing the Contracts. However, to elucidate their meaning it would be inappropriate to have recourse, in bootstrap fashion, exclusively to the legal notions of one of the national juristic systems the application of which is at stake. The fact that the Contracts are drafted in English is not decisive, since the English language has become an international tool for expressing the terms and conditions of sophisticated transactions, even between parties none of which is a national of an English-speaking country or entering into transactions wholly unconnected with any such country. Resorting to English when it comes to exteriorizing in black and white the substance of a deal does not necessarily imply espousing the technical meaning that a specific common law jurisdiction would ascribe to the terms utilized, particularly when English is also the language spoken in other common law jurisdictions to which the expression "natural justice" is unknown or is deprived of the meaning ascribed to it under English law (for instance, such expression, and also expressions such as "rules of natural justice" or "laws of natural justice", are deprived of any technical meaning in the USA, are not currently used in such jurisdiction and may not be even found in Black's Law Dictionary (5th edition, 1979)). Such expressions are then ambiguous, particularly when found in international contracts not expressly submitted to the laws of England, and more specifically with respect to the nonEnglish party not originating the contractual drafts being negotiated and whose legal system is not a common law one.

The determination of the procedural or substantive connotations of the expression "natural justice" and the like shall have an impact on the law or laws applicable to the Contracts and is a part of the choiceoflaw process having as its purpose the determination of such law or laws. On the other hand, five of the six Contracts in which "natural justice" or similar expressions are found were from their inception submitted by the parties to international commercial arbitration. The sixth Contract (Contract (ix)) was submitted . . . to a type of highly delocalized and self-contained form of commercial arbitration comparable to international commercial arbitration, a trait further confirmed by the later conduct of the parties as they submitted Contract (ix) together with the others to a unified form of international commercial arbitration. Therefore, it is appropriate, on the basis of the terms of the Contracts and all surrounding circumstances, to establish the meaning and scope of "natural justice" and similar expressions from the autonomous perspective of both private international law and international commercial arbitration.

It is a general principle of interpretation widely accepted by national legal systems and by the practice of international arbitral tribunals, including ICC arbitral tribunals, that in case of doubt or ambiguity, contractual provisions, terms or clauses should be interpreted against the drafting party (contra proferentem) . . . On the other hand, the meaning to be ascribed to expressions contained in international transactions ab initio submitted to international commercial arbitration should be consistent with the nature and expected role of the dispute-resolution method chosen by the parties and the concomitant impact of such choice not only on procedural aspects but also on the law governing the merits. Finally, it is also a generally accepted practice by international arbitral tribunals, predicated upon elementary notions of coherence and rationality, to assume that the same words or expressions shall have the same meaning throughout the documents containing them . . . This Tribunal finds that, without unduly extending the scope of such principle, it also applies to situations such as the one faced by this Tribunal, in which the same or similar expressions are repeated in different contracts between the same parties showing some noticeable functional interrelation, which, in addition, are to be considered as a whole for the purpose of determining the applicable law to the merits.

Common to such expressions found in six out of nine Contracts . . . is, precisely, the word "justice", which undoubtedly is the predominant element to be taken into account for assessing their meaning and scope. In international commercial arbitration, though it is imaginable that the term "justice" may be utilized only in the sense of procedural justice, i.e. due process and fair trial, it is commonly understood as referring to arbitral justice in a more comprehensive sense, including not only arbitral procedural fairness but also the type of solution regarding the merits - not necessarily the same that would be obtained from national courts - that should be expected by the parties by the very fact of having chosen international commercial arbitration for resolving their contractual disputes. Thus, it is not infrequently stated that often the parties resort to arbitration in order to have access to a "justice" other than that which would be obtained by applying a "national law", particularly when, on account of the discrete circumstances of the case, a national law would not be adapted to the solution of the dispute at stake . . . An obvious confirmation that notions of justice in international commercial arbitration are not merely procedural but are also substantive is that the majority of national statutes dealing with international arbitration, international conventions regarding arbitration not just concerned with the recognition and enforcement of arbitral agreements and awards, and international arbitration rules contain procedural provisions and choiceoflaw provisions, i.e. provisions pointing to choiceoflaw solutions only becoming relevant because the dispute has been submitted to international commercial arbitration and which may well differ from those that would have been otherwise obtained had the decision of the case been left to municipal courts and their private international law systems.

This Tribunal, being confronted, in view of the mandate of the parties, with a choiceoflaw exercise for determining the proper law of the Contracts, also has to consider the meaning of justice in the field of conflictsoflaws. According to one of the classic English private international law texts, the notion of justice has a clearly substantive, and not merely procedural, meaning and, indeed, justice in its substantive sense would constitute the cornerstone of the discipline, since the "dominant motivating principle" of a private international law system like the English system is "the desire to do justice in cases involving a foreign element". More specifically "so far as English law is concerned, the principle is a priori in the statutory sense, in the terms of the oath that every judge must take before he enters on his judicial functions; and secondly, justice appears in the results as well as in the premise. The judge's decision, which itself establishes or applies a rule, converts the postulate of justice into reality". It is clear also that justice is not understood merely as a "conflicts justice" premised upon a blind, mechanical and "neutral" designation of the applicable law through an aseptic conflicts rule which operates on the basis of the geographical localization of the transaction, but is concerned with the results as to fairness derived from the application of this or that substantive rule to the disputed issue at stake (R.H. Graveson, Conflict of Laws. Private International Law, Sweet & Maxwell, 7th ed., 78 (1974)).

Such substantive essence of private international law justice is further illustrated through references to different English court decisions or authorities . . . Balance and convenience regarding the resolution of disputes as to their substance have been widely held as a part of natural justice and of the principle of reasonableness inherent to such notion . . . The trend favouring choiceoflaw processes not indifferent to ensuring the application of substantive laws or norms ensuring the "best" solution for the specific case in view of considerations of fairness, substantive justice, the reasonable expectations of the parties and the fact that the applicable rule being advanced is the best adapted to the circumstances of the case is far from being limited to isolated national private international law systems . . .

There is, then, a clear correspondence between, on one hand, the mandate of international arbitrators of making a fair and just decision adapted to the particular controversy at stake without being tied to precedent or abstract concerns and, as it happens in this case, without the parties' contractual stipulations directing the arbitrators to apply any specific national rule or legal system, and, on the other hand, choiceoflaw methodologies aimed at reaching fair and just results by applying the substantive legal rules and principles which are better adapted to the circumstances of the case . . . From the standpoint of conflictoflaws principles in international commercial arbitration, the notion of justice goes beyond procedural fairness and plays an important role in the determination of the applicable substantive law.

Particularly when associated with international commercial arbitration, choiceoflaw justice is premised on the idea that multi-state cases are imperfectly governed by the laws of a single national jurisdiction, since by their very nature, they constitute a "social and economic unit" for which, in view of the fact that they overlap national frontiers, there is no equivalent comprehensive tailormade "legal unit", sufficiently adapted to the circumstances of the multi-state case and the expectations of the parties, that would provide a fair and just substantive solution for it . . . Choiceoflaw methodologies advancing the application of that type of multi-state substantive rules are then the best adapted to resolve international commercial cases on the basis of the substantive justice and fairness expectations of the parties and the circumstances of the case . . .

In respect of transactions like the Contracts, in which (i) there is no express choice-of-law stipulation designating the law of any of the parties or of a third country and where neutrality regarding the applicable law was a paramount concern denoted by the parties' rejection of each other's law and the absence of any explicit or implicit reference to the laws of a third country; and (ii) the parties have buttressed neutrality as to the applicable law by agreeing to submit their contractual disputes to international commercial arbitration, albeit without empowering the Tribunal to act ex aequo et bono or as amiable compositeur, it can only be concluded that no national law was judged adequate or adapted to govern such transactions without the risk of disturbing the balance of neutrality between the parties. In consequence, when the parties negotiated and finally entered into the Contracts they only left room for the application of general legal rules and principles adequate enough to govern the Contracts but not originated in a specific municipal legal system. Such balance of neutrality, which includes neutrality of the applicable substantive law, is an essential part of the substantive justice expected by the parties in connection with the Contracts. Such "negative" choice by the parties commands as much respect as any express choiceoflaw would have commanded, had the parties inserted choiceoflaw stipulations in the Contracts; therefore, in order not to disrupt the parties' common understanding in that regard, this Tribunal must refrain from the choice of any national law as proper law. Through references to "natural justice" and the like, the parties indicated their intention that their Contracts be governed by substantive rules not belonging to any discrete national legal system and appropriately responding to their concerns about neutrality in the applicable law.

Though the parties excluded the application of any national law to the Contracts, it does not follow that they failed to imply the application of any other substantive rules or principles and thus left the decision regarding the designation of the proper law of the Contracts to the happenstance of choiceoflaw methodologies [over] which they had no control, particularly as to their neutrality for determining the applicable law. In this regard, the statement that ". . . wholly neutral principles of conflict-of-laws are an illusion" (A. Lowenfeld, "Lex Mercatoria: an arbitrator's view", in Lex Mercatoria and Arbitration (Carbonneau Ed.) Transnational Juris Publications, Inc. 37, 45 (1990)) is certainly pertinent and acquires special significance.

Such interpretation is particularly appropriate if the only alternative left in absence of express or implied choiceoflaw stipulations would be resorting to supposedly choiceoflaw neutral and dispassionate criteria, such as a talismanic notion of the localization of the characteristic obligation or an amorphous grouping of contacts or the closest connection noticeable in some national legal systems, which would, by the rule-of-thumb and without taking into account the parties' concerns and expectations as to substantive justice, including neutrality as to the applicable law, impose the law of one of the parties or of a third state which would or might defeat the parties' intentions.

. . . five out of nine Contracts contained international arbitration clauses providing for panels not to be integrated with nationals from the country of any of the parties. The other Contracts, though not expressly submitted to international institutional arbitration, both on account of the introduction of expressions such as natural justice or laws or rules of natural justice in connection with the dispute resolution process (as indicated before, such terms have both "procedural" and "substantive" connotations) and the omission of any designation of a national lex arbitrii or procedural law, referred to a form of commercial arbitration highly delocalized irrespective of the seat of the arbitral tribunal. . . . [T]he parties' latter conduct, i.e. their decision to globally submit disputes arising out of the Contracts to international arbitration under the ICC Rules, is clear evidence and confirmation that the parties favoured the delocalization of the dispute resolution system in connection with all the Contracts in consonance with their strong concerns regarding the neutrality of the substantive and procedural legal framework related to their long-term relationship embodied in the Contracts.

Such considerations acquire particular relevance when the transactions at stake, in addition to being commercial and international, are also coloured - as in the instant case - by a certain degree of state or public involvement on both sides. The Tribunal finds that it has not been presented with conclusive evidence showing that the Contracts may be considered state-to-state contracts since it has not been proved that Respondent is organically linked to the British state, vested with any of its functions or otherwise assimilated to the British state so as to acquire a position significantly different from that of a private party. Nevertheless, the Contracts, though commercial in nature, have a state party and have been negotiated, executed, and the obligations of the parties insert themselves, in a context in which state interests and policies are intimately concerned on both sides . . . The Contracts then squarely belong to the category of international commercial contracts (which for the purposes of this award will be hereinafter referred to as "state contracts") being the subject of a resolution of the Institute of International Law on "Arbitration between States, State Enterprises, or State Entities, and Foreign Enterprises" adopted on September 12, 1989 in the course of the Institute's Santiago de Compostela session. Such Resolution was intended to serve as guidance to international commercial arbitrators for, among other matters, determining the laws, rules and principles applicable to the substance of this type of transaction . . .

State contracts show a certain number of paradigmatic characteristics which this Tribunal finds of relevance in connection with the Contracts. Among those, the following are pertinent: (i) the state party should not be allowed to resort to its lawcreating powers not in the general interest but to improve its legal position or to extricate itself from contractual liability . . . (ii) the parties may expressly or implicitly de-localize state contracts to remove them from national legal systems and submit them to transnational legal rules . . . (iii) the applicable law should respect the principle that the substantive "contractual equilibrium" between the parties as agreed at the moment of contracting is not disrupted . . . (iv) detachment of the arbitral process and of the arbitral lex fori at large (including arbitral choiceoflaw methodologies for determining the law applicable to the merits) from the laws of the seat of the arbitration . . . (v) agreeing on international commercial arbitration in connection with state contracts has an impact on the substantive law applicable to the substance of the dispute.

In this latter respect it is pertinent to point out that the parties and the arbitrators enjoy larger autonomy for de-localizing the contract and determining the applicable laws or rules when disputes arising out of a state contract are submitted to international arbitration than otherwise, and, thus, that choosing international commercial arbitration has de-localizing effects as to the applicable law: this may be established, for example, when comparing (i) the Preamble and provisions of the Resolution adopted by the Institute of International Law in its Athens sessions on the Proper Law of the Contract in Agreements between a State and a Foreign Private Person, dealing in general with issues regarding the law applicable to a state contract in principle not necessarily submitted to international commercial arbitration . . . with (ii) the Santiago de Compostela Resolution mentioned above, in particular its Arts. 4 and 6, which exclusively concern the law applicable to state contracts by international commercial arbitrators. The detachment of the choiceoflaw methodology and the substantive applicable law identifiable through it from national legal systems in order to preserve the contracted-for equilibrium between the state and the private parties is then a common feature of state contract arbitration to be taken into account when interpreting such contracts and their surrounding circumstances for determining the governing law.

In the present case, such equilibrium was an integral part of the substantive and dispute resolution justice framework the parties had in mind when entering into the state contracts binding on them. Therefore, references to "natural justice" and "laws" or "rules" of "natural justice" found in the majority of the Contracts should be consistently and uniformly interpreted as referring not only to procedural justice but to the special type of substantive justice the parties had in mind, based on the neutrality of the applicable law to the merits and of the means of dispute resolution mechanisms selected by the parties to effectuate substantive neutrality, this latter aspect further confirmed by the ulterior comprehensive submission by the parties of their disputes arising out of the Contracts to ICC international arbitration.

The choice of international or de-localized arbitration to resolve any potential disputes, which is explicit from their very inception in most of the Contracts but was later extended to all of them, should then be understood as an additional element to further support and maintain such substantive justice balance. Such choice plays a "localizing" role in the case of international and commercial state contracts not having an express choiceoflaw stipulation, since it denotes the exclusion of choice-of-law criteria normally applicable by national courts, which would lead to the exclusive application of national laws, and therefore points by exclusion to a tertium genus or general principles of law which may be only defined in the negative as such rules and principles not exclusively belonging to a single national legal system . . . Being international and commercial state contracts, reference in the Contracts to natural justice or the like, together with the absence of reference to any national law, can then be only reasonably construed as pointing to the application of such substantive legal rules and principles adapted to the Contracts and the facts and circumstances surrounding them, which, by not belonging to any discrete national legal system, satisfy the parties' concerns as to the neutrality of the applicable proper law. Substantive rules and principles fulfilling such requirements may only be general legal rules and principles regarding international contractual obligations and enjoying wide international consensus.

. . . the Tribunal concludes that the reasonable intention of the parties regarding the substantive law applicable to the Contracts was to have all of them governed by general legal rules and principles in matter of international contractual obligations such as those arising out of the Contracts, which, though not necessarily enshrined in any specific national legal system, are specially adapted to the needs of international transactions like the Contracts and enjoy wide international consensus.

In addition, this Tribunal estimates that its mandate . . . requires that, to the extent possible at this stage, some precisions be given as to the substance of such legal rules and principles. It should be noted that both Claimant and Defendant, at different stages of their successive argumentations, have expressed their concern either about the vagueness of general principles of law or the possibility (at least with respect to English courts) that an award rendered on the basis of such principles might not be enforceable before national courts.

Taking into account such circumstances, the discussions held in such connection with the parties . . . and also the requirement that arbitrators ". . . should do no less than is required to exercise their authority completely . . ." (Institute of International Law, Santiago de Compostela Resolution cited above, art. 1, 63-II International Law Institute Yearbook 326 (1990)), this Tribunal finds that general legal rules and principles enjoying wide international consensus, applicable to international contractual obligations and relevant to the Contracts, are primarily reflected by the Principles of International Commercial Contracts adopted by Unidroit (the "Unidroit Principles") in 1994 . . . In consequence, without prejudice to taking into account the provisions of the Contracts and relevant trade usages, this Tribunal finds that the Contracts are governed by, and shall be interpreted in accordance [with], the Unidroit Principles with respect to all matters falling within the scope of such Principles, and for all other matters, by such other general legal rules and principles applicable to international contractual obligations enjoying wide international consensus, which would be found relevant for deciding controverted issues falling under the present arbitration.

The reasons why this Tribunal considers the Unidroit Principles to be the central component of the general rules and principles regarding international contractual obligations and enjoying wide international consensus, which constitute the proper law of the Contracts, are manifold: (1) the Unidroit Principles are a restatement of international legal principles applicable to international commercial contracts made by a distinguished group of international experts coming from all prevailing legal systems of the world, without the intervention of states or governments, both circumstances redounding to the high quality and neutrality of the product and its ability to reflect the present stage of consensus on international legal rules and principles governing international contractual obligations in the world, primarily on the basis of their fairness and appropriateness for international commercial transactions falling within their purview; (2) at the same time, the Unidroit Principles are largely inspired [by] an international uniform-law text already enjoying wide international recognition and generally considered as reflecting international trade usages and practices in the field of the international sales of goods, which has already been ratified by almost 40 countries, namely, the 1980 Vienna Convention on the International Sale of Goods; (3) the Unidroit Principles are specially adapted to the Contracts being the subject of this arbitration, since they cover both the international sale of goods and supply of services; (4) the Unidroit Principles (see their Preamble) have been specifically conceived to apply to international contracts in instances in which, as it is the case in these proceedings, it has been found that the parties have agreed that their transactions shall be governed by general legal rules and principles; and (5) rather than vague principles or general guidelines, the Unidroit Principles are mostly constituted by clearly enunciated and specific rules coherently organized in a systematic way . . .

The precisions given by this Tribunal in preceding paragraph . . . should suffice to dispel any concerns as to the enforceability of an award made in these proceedings on the basis of the general legal rules and principles applicable to international obligations on account of the vagueness or lack of precision of such principles. . . . [L]earned opinions . . . indicate that the present trend in England points towards the admissibility and enforceability in that jurisdiction of arbitral awards based on lex mercatoria or general principles of law, particularly when the award has not been rendered in England or is not subject to English law and the laws of the national jurisdiction in which the award is made do not render invalid an award made on such terms . . .

[La position du tribunal arbitral sur le droit applicable en l'absence d'un choix exprès ou implicite par les parties :]

The above conclusions would not have been different had the Tribunal not found that the parties made an implicit choice of the applicable law to the Contracts. First and foremost, it should be noted that it is commonly accepted in comparative private international law that there is no clear delimitation between the tests to determine the implicit choice-of-law made by the parties with respect to the substance of contractual obligations and those to be observed in absence of choice and in fact the boundaries between such tests are often blurred . . . The same objective circumstances, such as, in this case, the intention of the parties not to submit the Contracts to each other's laws or to the laws of a third country and yet their will to have their disputes decided according to legal rules and not ex æquo et bono, the nature of the relationship between the parties (state contracts) and their concerns regarding the neutrality as to the applicable law as revealed, for instance, by contractual negotiations, the insertion of terms such as "natural justice" or "laws of natural justice" or "rules of natural justice" and the submission of all disputes to international commercial arbitration also militate in favour of concluding that the general legal rules and principles regarding international contractual obligations enjoying a broad international consensus would have been found to be the law governing the Contracts even in absence of an implied contractual stipulation to that end.

Such conclusion would have been reached by the Tribunal by resorting either to the voie directe or the voie indirecte. . . .

. . . the determination of the applicable law is an exercise which may not remain indifferent to the substantive outcome of the choice-of-law process. If projected to the field of international commercial arbitration and the interpretation of the relevant part of Art. 13(3) of the ICC Arbitration Rules, the necessary conclusion is that the very distinction between voie indirecte and voie directe becomes blurred and on the verge of fading away, since both would pursue the same ends through essentially the same means, namely, the application of the "better law", i.e. the substantive rules, laws and principles best adapted to a just and fair decision of the dispute on the basis of the circumstances of the case and the parties' expectations by directly taking into account, for so doing, the contents of the substantive rules and principles to be applied. . . . [W]ith respect to the Contracts such "better law" is found in the general rules and principles regarding international contractual obligations enjoying wide international consensus. Since such rules and principles are deemed to become directly applicable, in absence of a choice-of-law, to transactions characterized as commercial and international state contracts, their application may be also explained in terms of the voie indirecte, because such characterization is precisely a conflicts rule, though differing from traditional ones in that its operation does not depend on the geographical localization of a connecting factor . . .

. . . Art. 13(3) of the ICC Arbitration Rules does not impose on the arbitrators the obligation to follow generally accepted conflict-of-laws rules or, for that matter, any specific national or anational conflict-of-laws rules . . . In these proceedings, it has been sufficiently and convincingly argued that the cumulative method, i.e. the application of the conflict-of-laws systems of the national jurisdictions of the parties to the dispute would not have been useful because the private international laws of England and [State X] would have led to incompatible, rather than coincident, solutions as to choice-of-law in connection with most of the Contracts. On the other hand, in view of the diversity of private international law systems in the world, a comparative law research would fail in identifying generally accepted private international law principles enjoying wide international consensus for determining the applicable law to international contracts in absence of express or implied parties' choice . . .

It might be adduced, however, that when it comes to determining the substance of such general rules and principles applicable in absence of an implied stipulation by the parties, the application of the Unidroit Principles is not possible, since the Preamble to the Principles indicates that they may be applied "when the parties have agreed that their contract be governed by general principles of law, the lex mercatoria and the like". The original draft version of the Unidroit Principles, which was not finally approved by the Unidroit Council in this respect, provided (Art. 1.2 (b)) that such principles also apply "when the parties have not chosen any law to govern their contract" . . . This provision was excluded from the text of the Unidroit Principles as finally approved and is not a part of their Preamble because the Unidroit Council felt, in absence of a choice by the parties, that it would be conducive to pre-empting the application of the domestic law of the national legal system rendered applicable by private international law rules . . .

Nevertheless, on the basis of at least two grounds, this Tribunal would not have been thereby prevented from referring to the Unidroit Principles as a part of the law applicable to the Contracts in absence of an express or implicit choiceoflaw stipulation: (i) . . . the Contracts are governed, as a result of a preliminary finding, by general rules and principles regarding international contractual obligations enjoying wide international consensus, i.e. they are not governed by any discrete domestic or national law. In consequence, in the present case, no clash between any discrete municipal law and the Unidroit Principles is possible; and (ii) the application of the Unidroit Principles does not depend on their selfgiven criteria of application, but on the powers vested with this Tribunal under Art. 13(3) of the ICC Arbitration Rules, which are not limited to the voie indirecte and authorize it to directly determine the applicable law it deems more appropriate to govern the merits, i.e., in this case, the general legal rules and principles regarding international contractual obligations enjoying wide international consensus, including, without limitation, the Unidroit Principles as an adequate restatement and expression of such general legal rules and principles. The application of the Principles in case of absence of choice then rests upon Art. 13(3) of the ICC Arbitration Rules and the mandate conferred on this Tribunal to find and determine the law applicable to the Contracts.

. . . This Tribunal then concludes by a majority . . . that, without prejudice to taking into account the provisions of the Contracts and relevant trade usages, the Contracts shall be governed by, and interpreted according to, the general legal rules and principles regarding international contractual obligations enjoying a wide international consensus, including the Unidroit Principles, with respect to all such matters falling under the scope of such principles.'

Arbitre minoritaire :

'… a reluctance for psychological or political reasons on the part of each negotiating party to be seen expressly to agree to apply the law of the other negotiating party is not the same as a determination by the parties that in no case shall the law of either of them apply. A fortiori it is not a determination by them of the law that is to be applied to the merits of the dispute. . . .

Thus in my view the attitude attributed to the negotiating parties was not tantamount to an agreement excluding the application of the laws of either of them. It was simply a reflection of the unwillingness of each negotiator to be seen expressly to concede that the law of the other would or might apply. That is a very different thing, entirely compatible with recognition on both sides that, failing agreement, the dispute would need to be resolved by applying the "accepted legal rules for deciding the law which would need to be applied if . . . a dispute needed to be formally resolved". The "accepted legal rules for deciding the law which would need to be applied" are the rules of conflict of laws. . . .

A determination of the law not to be applied . . . is not a determination of the law which is to be applied. For the latter, the parties must positively pick their winner, not merely limit the field of choice.

Perhaps to pre-empt such objections, it was next argued (in the alternative) on behalf of Claimant that the wording of the Contracts did indeed point to a positive determination, or choice, by the parties. They had, it was contended, determined that the law to be applied to the merits of the dispute was to be the "general principles of law". It is my understanding that this contention derives from an inference, said to be reasonable, drawn from the reference in some of the Contracts to "natural justice", coupled perhaps with the fact that Claimant is a sovereign State entity. . . .

A "determination" must presumably determine something. It must, however informally expressed, indicate with reasonable certainty what has been determined. In the present case I can find nothing equivalent to a pronouncement that the law applicable to the merits shall be "general principles of law" (a pronouncement itself not conspicuous either for precision or for predictability of its consequences) . . . such references as can be found to "natural justice" do not in my opinion attempt to determine anything about the law applicable to the merits, let alone dictate that "general principles" of law are to be so applicable. . . . The researches of counsel have produced no instance of any case where a contract calling for disputes to be settled by arbitration in accordance with natural justice was held thereby to be defining the substantive law applicable to the merits of the dispute, as opposed to the decision-making procedures to be adopted.

That some of the Contracts here do contain a reference to "natural justice" seems to me to indicate only a desire on the part of the framers of those Contracts to stress that all arbitral procedures adopted, and all steps taken by the arbitral tribunal or any of its members, must be consistent with the rules of natural justice - understandable enough, since otherwise there is a real risk that any award would be vulnerable to attack in many countries as being unenforceable, in the same way as would a foreign judgement arrived at after a similarly defective process. A requirement that the arbitrators are to . . . proceed in accordance with natural justice may be said to be rather more specific than the provision in Article 26 of the ICC Rules that the arbitrators are to make every effort to make sure that their award will be enforceable in law. In Contract 9 the phrase is expressly referable to "the rules governing the proceedings"; it is agreed that those rules may include (if certain identified procedural rules are silent) rules "which arbitrator(s) may settle in accordance with the rules of natural justice". This cannot, in my view, suffice to allow the arbitrator(s) to "settle" provisions of substantive law - i.e. effectively to write into the Contract provisions of law which will govern the substantive bargain of the parties.

Moreover, the opening sentences of Article 13(3) of the ICC Rules, and of Article 1054(2) of the Netherlands Code, contemplate a determination, or choice, by the parties of the rules of law to be applied to the merits of the dispute - i.e. the "proper" law. Now, it may be possible for the parties effectively to provide in express terms in their contract that it is to be governed by "Unidroit Principles" or by "general principles of law". A court or an arbitrator would in that type of case doubtless strive to do their best to interpret, and give effect to, such language. But that is not the question here. The parties said nothing about "general principles of law", still less about which of the countless principles of law to be found in the world's legal systems (principles often irreconcilable with each other) were to be selected. They said nothing about "Unidroit Principles". Indeed, the Unidroit Council itself declined to provide that the Unidroit Principles should apply where contracting parties had not chosen any law to govern their contract, since to have done so "would be conducive to pre-empting the application of the domestic law of the national legal system rendered applicable by private international law rules" . . .

In my view, the first sentences of Article 13(3) of the ICC Rules and Article 1054(2) of the Netherlands Code are applicable only if the parties themselves designate the rules of law to be applied by the arbitrator to the merits of the dispute. The parties do not do that - (a) by designating rules to be applied by the arbitrators, not to the merits of the dispute, but to the dispute-resolving procedures prescribed or adopted by them; or (b) by inserting, in a number of these formal Contracts framed in English, a reference to "natural justice" - a legal expression which in its ordinary usage is employed with reference to rules designed to ensure the fair trial of the merits, as opposed to rules of substantive law designed to be applied in deciding which of the disputants has the better case on the merits; or (c) by leaving it to the arbitrators to apply to the merits of future disputes any principles of law that the arbitrators may deem appropriate.

Hence I have not been able to accept the arguments on behalf of Claimant that the parties here have themselves determined, either "negatively" or "positively", the rules of law to be applied to the merits of the dispute. The parties never did "determine the law to be applied by the arbitrators to the merits". At best, if Claimant is right, they purported to leave that determination to the arbitrators charged with resolving future disputes, if any. The failure of the parties to make a determination would seem to me to bring into play the second sentence of Article 13(3), requiring the arbitrators to proceed by way of deciding upon a rule of conflict that they deem appropriate, being a rule of conflict which in turn designates the proper law (the provisions of which are to apply to the merits).

I therefore come to the second sentences of Article 13(3) of the ICC Rules and Article 1054(2) of the Netherlands Code. The parties having ex hypothesi failed to determine the proper law for themselves, the arbitrators must make the selection in accordance (directly or indirectly) with what they consider to be "appropriate". The second sentence of Article 1054(2), viewed in isolation, arguably might be said to permit "direct" selection of the substantive law, rather than "indirect" selection via the selection of an appropriate rule of conflict. Prima facie it seems to me to be doubtful if that sentence, even viewed in isolation, would permit the arbitrators to deem appropriate, as applicable to the substance of the dispute, unspecified "general principles of law". Moreover here the second sentence of Article 1054(2) is not to be viewed in isolation. On the contrary, Section VI, paragraph 2 of the Terms of Reference provides that the rules governing the procedure are to be the ICC Rules, and that only where the latter are silent will the Articles of the Netherlands Code apply.

. . . Applying Article 13(3) of the ICC Rules, the arbitrators must apply to the merits of the dispute the law designated as the proper law by the rule of conflict of laws which they deem appropriate. Among numerous threshold questions here is whether they may "deem appropriate" a rule of conflict (if such there be) which does not itself designate any particular system of proper law, but merely leaves the arbitrators free to pick, as needs arises, from differing legal systems or sources, a selection of whatever rules of proper law they may deem appropriate.

I do not think that the latter would satisfy the provisions in question. Article 13(3) seems to me to direct the arbitrators to arrive at the proper law via a rule of conflict which itself designates that proper law. The role of the rule of conflict is to designate the substantive proper law. The arbitrators are to select the rule of conflict, and the rule of conflict so selected is in turn to designate the substantive proper law. The second sentence of Article 13(3) basically tells the arbitrators that they are not obliged to apply the rules of conflict of e.g. the forum or seat of arbitration, if they consider other rules of conflict to be more appropriate. But a so-called rule of conflict that purports to prescribe merely that the arbitrators may or shall hereafter designate principles of substantive proper law to be applied postulates that the substantive proper law remains undesignated by that rule of conflict itself. Such a "rule" is not in truth a rule of conflict at all. To say that the arbitrators may deem appropriate a "rule" that would merely refer back to the arbitrators themselves the designation of the proper law is a circular way of saying that the "rule" does not designate any proper law. As well as multiplying the uncertainties of the outcome, this seems to me to be contrary to the underlying concept. Article 13(3) by its nature is a provision which will apply to the countless international bargains subject to the ICC Rules in which the parties themselves (whether purely commercial entities or sovereign States) have made no specific determination as to the law to be applied to the merits. My own surmise is that most would expect their arbitral tribunals to do their best to apply "the generally accepted legal rules for deciding the law which would need to be applied" . . . That would result in the selection of a particular system of law as the proper law, the classic role of any system of conflict of laws. Article 13(3) seems to me to be designed for such parties. More adventuresome parties who prefer something more sophisticated cannot reasonably complain if they are required to specify expressly what they have in mind.

For the above reasons I conclude: (a) that the parties here never themselves determined the law to be applied to the "merits of the dispute"; (b) in particular, that they at no time purported to determine that such law was to consist of "general principles of law"; that if they had purported to do the latter that would not have been a determination qualifying as such under the first sentence of Article 13(3) of the ICC Rules, which calls for a determination by the parties of the proper law which is to be applied to the merits by the arbitrators, and not merely for an indication by the parties that if a dispute arises, the arbitrators are left free to choose any rules or proper law that they may think appropriate; (d) that accordingly the first sentence of Article 13(3) is not satisfied here; that nevertheless, by reason of the foregoing and the second sentence of Article 13(3), the arbitrators here have a wide discretion to select, from any existing rules of conflict designed to identify a proper law, the rule of conflict which they consider to be the most appropriate; and (f) that having done so, they should thereafter proceed to apply to the merits of the dispute the system of proper law identified by that rule of conflict. . . .

But what conflict rule is "appropriate" here? . . . I take the view that the present Contracts. . . are all most closely connected with England . . . Under conflict rules familiar in numerous legal systems, including those of English law and of The Netherlands (the agreed seat of this arbitration) a permissible approach would be to seek the law which had the "closest connexion" with the Contracts. That appears to me to point to English law. The widely favoured "principle of characteristic performance", which today has the endorsement of an impressive number of countries, including again England and The Netherlands, would point strongly in the same direction. . . .

Accordingly, I would have held, in the case of Contracts Nos. 1-8 inclusive, that the law to be applied to the merits of the dispute was the law of England, being the law designated as the proper law by the rules of conflict of, inter alia, the Netherlands and England, which rules I would deem more "appropriate" than any other in the present case. I would not have been disposed to contest, however, that in relation to Contract No. 9 (having regard to the obligations of the parties performable by [State X] thereunder), the proper law could be held to be that of [State X], as being the system designated as the proper law by the rules of conflict above mentioned calling for the ascertainment of the law with which the relevant Contract might be said to have the closest relation.'

<i>Sur le moyen de défense soulevé par le défendeur et selon lequel les demandes présentées par le demandeur seraient prescrites (deuxième sentence partielle) :</i>

'Claimant first argued that Respondent is "estopped from raising a limitation defence by its own conduct" . . .

The argument is based, inter alia, on the principle venire contra factum non concedit and on Articles 1.7 (principle of good faith), 2.18 (no-oral modification clause) and 2.4 (reliance theory) of the Unidroit Principles. . . .

The Tribunal considers that Respondent is not estopped from raising a time-bar defence. . . . The defence based on limitation/unreasonable delay is therefore admissible.

It is Respondent's position that the question of limitation ought to be resolved by application of the lex causae. Claimant concurs with this position.

Respondent argued that the Unidroit Principles are the lex causae, that these Principles are silent as to any applicable period of limitation and that, therefore, there was a need for the Tribunal to "fill a gap" in the Principles.

According to Respondent, the gap should be filled by resorting to the domestic laws that are most relevant in this arbitration, i.e. English law and [the law of State X], possible Dutch law and French law or, alternatively, to domestic laws in general. . . .

Respondent invoked the 1974 New York Convention on the International Sale of Goods (Article 8) under which the limitation period is four years, Article 23 providing that the "overall limitation for bringing legal proceedings" is ten years.

. . . Respondent submitted a comparative analysis of the limitation period under 119 domestic laws with respect to contractual disputes under international commercial sales contracts, contending that such analysis demonstrates that the great majority of the legal systems reviewed had limitation periods between three and ten years. Ten years would be, Respondent argued, an appropriate limitation period in the present case under the circumstances. . . .

Claimant's position is that domestic laws are irrelevant for the determination of the limitation issue.

In Claimant's submission, reference has to be made to general principles of law, including Unidroit Principles, as held by the Tribunal in Partial Award No. 1 . . .

According to Claimant, there is no general principle of law which sets a specific time limit for bringing an action, and, failing any such time limit, the only general principle of law applying to the issue under review is the principle that claims must be pursued without unreasonable delay. . . .

As to the 1974 New York Convention, Claimant denied that it constitutes the expression of a widely recognized and accepted principle, pointing out that neither the United Kingdom nor [State X] has signed the Convention. . . .

The Tribunal notes that there is no provision in any of the Contracts dealing with limitation periods . . .

The Tribunal has not found that a fixed limitation period results from trade usages in contracts for the sale and supply of goods or services.

It is common ground that the Unidroit Principles do not deal with limitation periods and, therefore, the Tribunal has to determine whether there are general legal rules enjoying a wide international consensus that contain the principle that an action is time-barred after a fixed period of time has lapsed.

The Tribunal does not consider that the 1974 New York Convention . . . incorporates any such widely recognized principle.

It is the Tribunal's view that the solution to the question does not have to be derived from the domestic laws, and that a comparative approach such as the one suggested by Respondent does not reveal a generally accepted principle as to the length of an extinctive limitation period.

. . . the Tribunal rejects Respondent's defence that Claimant's claims are time-barred on the basis of any fixed limitation period.

. . . Alternatively to the limitation defence, Respondent argued that if the lex causae includes no rules prescribing a fixed limitation period (or if the applicable limitation period exceeds 11 years and 10 months), then, as a matter of general principle, the Tribunal should still reject Claimant's claims, the initiation of which has been unreasonably delayed by Claimant.

Reference is made by Defendant to Article 1.7(1) of the Unidroit Principles, according to which: "each party must act in accordance with good faith and fair dealing in international trade". . . .

Claimant's position is that, under the circumstances of the present case, the delay in bringing suit has not been "unreasonable".

. . . the Tribunal has concluded that it was not unreasonable for Claimant, in all the circumstances, not to launch arbitration proceedings so long as there seemed to be a prospect of arriving at an agreement on the terms of a settlement. Making due allowance for the fact that the internal political upheavals consequent upon [events in State X] were not conducive to speedy decision making, the Tribunal considers that the claims which Claimant pursues in this arbitration are not time-barred for unreasonable delay and that they are therefore admissible.'

<i>Sur le paiement de matériel de remplacement et le droit de réserve s'y rapportant (deuxième sentence partielle) :</i>

'The Contract . . . contains no provision dealing with the situation . . . Consequently, the solution has to be found in generally accepted legal principles enjoying a wide recognition (Partial Award No. 1), including Unidroit Principles.

It is a principle of law widely accepted that if a buyer does not perform its obligations as to payment of the balance of the price when due, the seller may, in the absence of an express contractual provision to the contrary, suspend performance of its obligation to arrange for shipment and/or delivery. The civil law concept of exceptio non adimpleti contractus corresponds to the principle laid down in the Unidroit Principles 7.1.3. . . .

The Tribunal is of the opinion that Respondent was entitled to retain . . . until it received full payment therefor.'

<i>Sur la vente de matériel par le défendeur suite à une longue période d'entreposage (deuxième sentence partielle) :</i>

'This conduct, the Tribunal finds, is entirely consistent with the generally accepted principle of the mitigation of harm, as expressed in Article 7.4.8 of the Unidroit Principles.'

Dissenting opinion by a member of the Arbitral Tribunal:

'I fail to understand the Majority's reasoning in invoking Article 7.4.8 of the Unidroit Principles. I see nothing in that Article which could possibly be construed to entitle one party to dispose of property of the other party without its consent. . . . This article does certainly entitle the aggrieved party to recover from the other party reasonable expenses incurred in its attempt to preserve the goods and reduce the harm. It does not give a right to the aggrieved party to go beyond it and sell or otherwise dispose of such goods.'

<i>Sur la force obligatoire à l'égard du demandeur d'une clause de résiliation (deuxième sentence partielle) :</i>

Claimant argues that 'the termination clause . . . has to be interpreted in accordance with the principles set out in Chapter 4 of the Unidroit Principles and, in the instant case, as the clause is deficient, terms have to be supplied (or implied) in the termination clause . . .

The Tribunal does not find that the record supports Claimant's argument that the [documents] contained "manifest errors" or that they were "grossly unreasonable", nor does it find Claimant's reliance on the Unidroit Principles to be of assistance, if only because in the Tribunal's judgment Claimant has adduced no evidence to establish that the [documents] are erroneous or unreasonable.

The Tribunal does not consider that [the clause] is unclear and requires interpretation.'

<i>Sur l'expédition de matériel (deuxième sentence partielle) :</i>

'Once goods had been accepted, Respondent had the obligation to arrange transport and shipment to [State X]. However, at the time of termination . . . Claimant was in default of paying monies due . . . Consequently, Respondent was entitled, under the general principle of the exceptio non adimpleti contractus, which has been adopted under Article 7.1.3 of Unidroit, to withhold performance of its obligation to dispatch the goods and, thus, to retain the Accepted Goods and the Returned Goods.'

<i>Sur l'utilisation par le défendeur de matériel retourné ou accepté par le demandeur (deuxième sentence partielle) :</i>

'The Tribunal finds that Respondent's conduct under the circumstances was entirely consistent with the generally accepted principle of the mitigation of harm, as expressed in Article 7.4.8 of the Unidroit Principles.'

Cf. dissenting opinion quoted above.

<i>Sur la validité d'une redevance prévue dans une lettre d'avenant (deuxième sentence partielle) :</i>

'The Tribunal finds that, in the Side Letter of . . . , the Parties had agreed on the principle of a licence and of a levy, and on the amount of such levy, i.e. the essential terms of a licence . . . The circumstance that the Parties have left certain contractual terms to be agreed upon . . . does not prevent the agreement from coming into existence (see Unidroit Principles, Article 2.14).'