## Facts

- A Syrian state trading organization (buyer) contracted on August 15, 1979 with a Ghanaian state enterprise (seller) to purchase 5,000 m³ of plywood and 5,000 m³ of blockboards of specified quality and Ghanaian origin.
- The contract required staged shipments tied to opening a confirmed, irrevocable letter of credit and included: (i) a 5% performance guarantee to be provided immediately before opening the letter of credit, (ii) delay penalties, (iii) ICC arbitration, (iv) incorporation of the buyer’s general conditions, and (v) a force majeure clause requiring notice and excluding currency fluctuation and price rises.
- The performance guarantee was confirmed on November 22, 1979; two confirmed letters of credit were opened on November 26, 1979 and expired on February 22, 1980. Based on the timetable, final shipment was due by about March 22, 1980.
- The buyer arranged marine insurance and appointed a German inspection company.
- On December 14, 1979, the seller stated by telex it could not ship per schedule due to heavy rains, fuel shortage, and other disturbances.
- A vessel departed Ghana on December 16, 1979 with only a small fraction of the contracted quantities; further revised shipment proposals followed.
- The buyer treated the seller’s failure to meet the shipment schedule as breach and sought damages.
- The buyer first initiated proceedings in Syria; the dispute proceeded to ICC arbitration under Terms of Reference fixing Paris as the seat and French international arbitration law as the procedural law. The contract did not contain an express choice-of-law clause on the merits.

## Issues

1. In an ICC arbitration seated in Paris with no express choice-of-law clause, what law governed the merits of the sales dispute?
2. Must the arbitrator apply a national conflict-of-laws system, or may the arbitrator directly select the applicable substantive rules?
3. Did the seller’s asserted impediments (heavy rains, fuel shortage, other disturbances) excuse delay or non-performance under the contract’s force majeure clause?

## Decision

- The sole arbitrator held that, under French international arbitration law, the tribunal was not required to apply the conflict-of-laws rules of the seat or any other state.
- Using a direct method, the arbitrator selected English law to govern the merits of the dispute.
- The arbitrator rejected the seller’s force majeure defense as insufficient under the contract and the governing law and held the seller liable for failure to perform the shipment obligations; damages were awarded in principle (quantum not disclosed in the published extract).

## Legal Principles

- In international arbitration seated in France, an arbitrator may determine the law governing the merits without applying any single state’s conflict-of-laws rules.
- The applicable law may be selected directly by reference to the transaction’s commercial context and relevant connecting factors, rather than formal territorial factors such as the place of signature.
- The place where an international contract is signed is not, by itself, decisive for the law governing the merits in arbitration.
- Force majeure clauses are construed according to their terms; where notice requirements and exclusions are stated, the party invoking force majeure bears the burden to show an excusing event within the clause, and generalized logistical difficulties may be inadequate absent proof of an exceptional, uncontrollable impediment.

## Conclusion

The award is primarily cited for confirming that, in ICC arbitrations seated in Paris, tribunals may directly choose the substantive law governing the merits; applying that approach, the arbitrator chose English law and found the seller’s asserted operational disruptions did not excuse late or deficient shipment under the contract’s force majeure framework.


Award in ICC Case No. 4237, 10 Y.B. Com. Arb. 52 (Int’l Ct. Arb. ICC 1985)