Final Arbitral Award rendered in 1999 in case 53/1998
Observations by Alexei Kostin
(1) Arbitrability of tax issues.
(2) Liability to compensate for VAT for services rendered by a foreign company on Russian territory.
(3) Interest rate: alternative claims regarding the accrual dates.
(1) The issue to be determined in this arbitration is simply whether or not Respondent is obligated to pay certain amounts to Claimant on the basis of the Agreement. Such issues clearly fall under the arbitration clause.
(2) The Agreement expressly provides that the price for Claimant’s works is “excluding custom duties, import tax and VAT to be paid in Russia according to present legislation”. This provision must be understood to mean that it is incumbent upon Respondent to reimburse Claimant for any custom duties, import tax or VAT levied upon Claimant by the Russian authorities.
(3) Claimant was awarded interest at the rate which follows from Swedish law from the date of the Award, based on Section 4 paragraph three of the Swedish Interest Act.
Parties: Claimant: X, Construction company (Finland) Respondent: Y,