Claims and Sanctions. Arbitration

Arbitration is the procedure laid down for the settlement of international disputes.

Claim is an assertion of a right; a demand for something as due.

There are two main types of arbitration in the world: national arbitration which acts under the laws of a particular country and international arbitration which settles disputes under the international laws.

The decisions of the international Arbitrageurs court have only the power of a piece of advice, so they are not obligatory to be effected. A national legislation is more precise and detailed. Also the execution of the decision of the arbitration is obligatory.

A sales contract defines rights and liabilities of the parties involved. The seller’s liabilities are to deliver the goods on time and in perfect condition and to ensure that the title to the goods is transferred to the buyer. The buyers’ liabilities are to accept delivery of the goods and to pay for the goods within the time agreed. If the complaint is justified, the sellers have to make an adjustment, they have to offer the buyer some form of compensation. There are four possibilities: RETURN the goods at the sellers’ expenseREPLACE the faulty goods at the sellers’ expense REPAIR by the sellers or at the sellers’ expense. price REDUCTION

Complaints and claims may arise in connection with inferior quality of the goods, late delivery or non-delivery of the goods, transportation and insurance, storage of the goods and in many other cases. If the buyers fail to fulfill their obligation of paying on time, it is customary to send three reminders. This is a usual claims procedure. If the sellers fail to deliver the goods by the date due, he is penalized. The rate of penalty is fixed in the Penalty Clause. If the delay is longer than two months, the buyer has the option of cancelling the contract altogether but the seller is to compensate for the loss incurred. The sellers may inflict penalties on the buyers if there is a default in payment.

Contracts usually stipulate that in case of arbitration each party should appoint its arbitrator and they have to appoint an umpire. All the three constitute an arbitration tribunal whose award is final and binding upon both parties.

Disputes between Russian organizations and foreign firms arising out of foreign trade transactions are very often settled by the Foreign Trade Arbitration Commission at the Russian Chamber of Commerce. The judicial system in Russia includes arbitration courts that enjoy the status of federal courts. The arbitration courts in Russia administration justice by way of settling economic disputes and examining other cases referred to their competence. Such claims include tax, land and other disputes arising out of administrative, financial and other legal relations. They also hear disputes with participation of foreign persons. The system of arbitration courts is organizationally divided into four levels. The first leve l is made up of the federal arbitration courts of the subjects of the Russian Federation. The second leve l is represented by arbitration appellate courts. The third level is formed by 10 federal district arbitration courts, each of which functions as a court of cassation with regard to a group of arbitration courts making up one court circuit. The fourth level is represented by the Supreme Arbitration Court of the Russian Federation that is the superior judicial body for deciding commercial disputes, and other cases handled by the arbitration courts; it supervises their activity and issues explanations on matters of judicial practice. The activity of the arbitration courts in the Russian Federation is based on the principles of legality, independence of judges, the equality of organizations and individuals before law and court, adversary character and legal equality of parties, the openness of hearings, etc.