An advertising contract was signed between Claimant and Respondent, pursuant to which Claimant would produce and publish a full-page advertisement in favour of Respondent to appear in a weekly newspaper. Following a fire at its worksite, Respondent announced it was unable to fulfil the contract, having to devote its financial resources to repairing fire damage. It proposed renewing negotiations with a view to placing advertisements at a later date. Claimant agreed to revise payment schedule, following which an advertisement was published after receipt by Claimant of signed artwork. Having received no payment, Claimant resorted to ICC arbitration. A sole Arbitrator was appointed, who, in accordance with the advertising contract between the parties and the Terms of Reference (signed only by Claimant), was to act as amiable compositeur and decide the case according to the principles of equity.

Claimant requests payment of the amount initially agreed upon in the advertising contract, plus interest relating thereto and damages for non-fulfilment of the contract. Respondent argues that the fire constituted a case of force majeure preventing it from fulfilling the contract, that the artwork was signed by an unauthorized person, that the published page was not an advertisement but general information, and that, as a further case of force majeure, it was prevented from making any payment, whether in US dollars or roubles, due to the economic situation and legal provisions in Belarus.

The sole Arbitrator examines whether exchanges between Claimant and Respondent testify to the cancellation of the contract. He finds that no demand for termination was made by Respondent and that payment was thus due to Claimant. He does not find any further harm justifying the payment of damages sought by Claimant. As regards the payment of interest, he refers to the <b>Unidroit Principles</b> in fixing the appropriate rate. Defendant is ordered to pay procedural costs, due to its uncooperative attitude.

<i>With respect to the payment of interest:</i>

'The payment of interests, in case of delay, is contractual (art.1.2 of the contract) and has been accepted, as such, by both parties.

The existence of such an increased amount, in the case of delays in settling payments, is above discussion: it is a cornerstone of economic and commercial relations. Therefore, the principle of Respondent having to pay not only the contractual amount of . . . but interests, based on time elapsed since the agreed initial date of payment, cannot be discussed and must be reaffirmed. . . .

The rate of interest is determined by the contract. Therefore it is considered as accepted by both parties. However, with the powers of "amiable compositeur", I wish to make the following remarks:

Respondent's situation, since the fire, is difficult and mutual understanding should lead to take it into account. They certainly have improperly dealt with the consequences of the event and they will have to fulfil their contractual engagements, which they did not formally propose to resiliate [sic]. Later, this silence to the legitimate questions raised by Claimant is surely not acceptable in the spirit of good commercial relations. But they were - and probably still are - confronted with a major accident with important direct and secondary effects.

They warned - even if the manner was neither formal nor strictly rightful - their counterpart, which acknowledged the new situation. Respondent even showed what can be interpreted as a token of good faith in offering . . . as an indemnity.

The contractual interest rate is fixed at a level which is considerably higher than the rates which are usually put in practice in these matters, such as the US Prime Rate, recommended by the Principles of Unidroit.

In deciding a case "according to the principles of equity", my view is that the initial contractual interest rate, if applied to the considered amount and period of time, would be disproportionate with the economic and commercial conditions of this case. I therefore substitute the US Prime Rate to the initial contractual rate of 1.4% per month, for the delayed payment owed to Claimant by Respondent.'