Award No 13492/2006,
In 2004, a Swiss company (Claimant) agreed to sell iron ore to a Chinese company (Respondent) pursuant to a contract governed by the 2000 Incoterms® rules and the 1980 United Nations Convention on Contracts for the International Sale of Goods. Claimant sought reimbursement of demurrage costs incurred at the port of arrival due to Respondent’s delay in taking delivery of the goods. Respondent argued that it was not given proper notification of the shipment and that under the applicable Incoterms® rule demurrage costs were to be borne by the seller, which was ‘liable for the chartering of vessel’. The parties agreed that references to CNF in their contract were to be interpreted as an adulteration of C&F, which corresponded to DFR under Incoterms® 2000.
‘Respondent’s obligation to take delivery of the Goods and to pay demurrage charges
137. It is clear that Respondent was under an obligation to take delivery of the [Goods] upon arrival of the [ship] in the Port of. …, including making all required arrangements for discharging the Goods. As submitted by Claimant, this conclusion follows from the CISG and the Incoterm CFR.
138. Article 53 CISG provides:
The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.
139. Article 60 CISG provides:
The buyer’s obligation to take delivery consists:
(a) in doing all the acts which could reasonably be expected of him in order to enable the seller to make delivery; and
(b) in taking over the goods.
140. Pursuant to Article 53 CISG, Respondent had the general obligation to take delivery of the Goods. Article 60(b) CISG provides that this obligation consists of taking over the Goods, that is, by physically accepting them.
141. The Incoterm CFR also sets out the seller’s and buyer’s obligations with respect to delivery of the Goods:
A4. Delivery. The seller must deliver the goods on board the vessel at the port of shipment on the date or within the agreed period.
B4. Taking delivery. The buyer must accept delivery of the goods when they have been delivered in accordance with A4 and receive them from the carrier at the named port of destination.
142. At the hearing, Respondent admitted that the buyer has ‘the obligation to take delivery of the goods” (Tr. p. 15). Respondent added that it did ‘[take] delivery of the goods’ (Tr. p.12) and discharged the cargo on 1 June 2004 (Tr. p. 20).