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Lawyers, other representatives, expert(s), tribunal’s secretary

Final Award

I. Parties and Background

1.
Claimant is an entity, incorporated under the laws of Japan, mainly engaged in agrochemical and life science business.
2.
Respondent is an entity located in the U.S.A.
3.
Claimant and Respondent are together referred to as the "Parties".
4.
Essentially and in short, Claimant initiated this arbitration on the basis of an arbitration agreement in a purchase contract it had concluded with Respondent. On the merits, Claimant submitted that it has a claim against Respondent due to Respondent’s non-payment of the purchase prize for goods delivered by Claimant to Respondent.
5.
Though having been served with Claimant’s Statement of Claims dated 7 December 2010 (hereinafter: "SoC") and all other relevant communication thereafter by both Claimant and the Sole Arbitrator, Respondent did not participate in this arbitration and thus did not indicate whether and - if so - on what grounds it contests Claimant’s submissions.

II. Amount in Dispute

6.
The amount in dispute is USD 213,500.001 (excluding claims for interest and costs).

III.Procedural History of the Case

7.
On 7 December 2010, Claimant submitted its SoC (including Exhibits C 1 to C 6) to the International Arbitral Centre of the Austrian Federal Economic Chamber (hereinafter: "VIAC), which was received on the same day, and in which it inter alia requested the appointment of a sole arbitrator (cf item 6 SoC).
8.
With its letter dated 10 December 2010, the VIAC forwarded the SoC to Respondent and inter alia invited it to submit a memorandum in reply and to comment on Claimant’s proposal to have a sole arbitrator decide the dispute.
9.
With its letter dated 2 February 2011, the VIAC informed the Parties that in accordance with article 14 (2) of the Rules of Arbitration and Conciliation of the VIAC in Vienna (hereinafter: "Vienna Rules") its Board has determined that a sole arbitrator will decide the dispute and requested the Parties in accordance with article 14 (3) Vienna Rules to agree on a sole arbitrator and to indicate that person’s name and address within 30 days after service of the request.
10.
With its letter dated 3 March 2011, Claimant inter alia informed the VIAC that the Parties could not reach an agreement on a sole arbitrator.
11.
With its letter dated 9 March 2011, the VIAC informed Dr Stefan Riegler on his appointment as the Sole Arbitrator by its Board, as the Parties have not agreed on one.
12.
With its letter dated 25 March 2011, the VIAC informed the Parties that - in light of the Parties’ failure to agree on a sole arbitrator - Dr Stefan Riegler has been appointed as the Sole Arbitrator by its Board (a copy of the letter that Dr Riegler attached to his declaration of independence was attached).
13.
With its letters dated 30 March 2011, Claimant expressly stated that no circumstances exit that could give rise to any doubts as to Dr Riegler’s impartiality and independence.
14.
With its letters dated 18 April 2010, the VIAC forwarded the file to the Sole Arbitrator (who received it on 19 April 2011) and informed the Parties thereof.
15.
With letter dated 5 May 2011, Procedural Order No 1 was issued, in which inter alia Respondent was requested to inform the Sole Arbitrator of its contact details and whether it is represented by outside counsel (cf item I.4), English was determined to be the language of the arbitration (cf item II.6), the arbitration clause on which Claimant relies upon was cited (cf item 111.1), Vienna was determined to be the place of arbitration (cf item III.3) and the further procedure was set out (cf item IV.); in item IV.7 it was noted that in accordance with article 20 (6) Vienna Rules "if one party does not take part in the proceedings, the case must be heard with the other party alone".
16.
On 30 May 2011, Claimant submitted its Memorandum (including Exhibits C 7 to C 13 and CL 1 to CL 13) (hereinafter: "Memorandum").
17.
With its letter dated 31 May 2011, Claimant corrected a clerical error in its Memorandum.
18.
With letter dated 16 June 2011, Procedural Order No 2 was issued, in which the Parties were inter alia informed that the further process will be discussed in a conference call.
19.
On 20 July 2011, a conference call was held; despite respective instructions in Procedural Order No 2 and the Sole Arbitrator's letters dated 27 June 2011 and 12 July 2011, Respondent did not participate in this call or otherwise comment on the topics to be discussed therein.
20.
With letter dated 20 July 2011, the contents of the conference call was summarized (including the clarification that no Party requested an oral hearing to be held) and Procedural Order No 3 was issued, in which the further process was set out, the Parties were asked in reference to article 20 (8) Vienna Rules whether they have any additional further proof to offer, witnesses to be heard or submissions to be made and it was noted that Respondent’s failure to participate in this arbitration will not hinder the Sole Arbitrator from rendering a final award.
21.
On 26 July 2011, Claimant submitted its Submission in accordance with Procedural Oder No 3 (including Exhibits CL 14 to CL 26) (hereinafter; "3rd Submission").
22.
With letter dated 8 September 2011, Procedural Order No 4 was issued, in which the proceedings were - subject to the issue of costs - closed.
23.
On 16 September 2011, Claimant submitted its Cost Submission (including C 14 to C 18) (hereinafter: "Cost Submission"); Exhibit C 15 was replaced by Claimant on the same day.

IV. Evidence

24.
Claimant relied on Exhibits C 1 to C 18 and CL 1 to CL 26.
25.
Respondent did not offer, let alone provide any evidence.

V. Parties’ Prayer for Relief

A Claimant’s Prayer for Relief

26.
Claimant’s prayer for relief, as included in item VI of its Memorandum, reads:

"Respondent is ordered to pay to the Claimant the sum of USD 213,500.00, plus interest at a rate of 6 % per year on the amount of USD 106,750.00 from 21 March 2009 until 31 December 2009, i.e. USD 5,018.71, plus interest at a rate of 6% per year on the amount of USD 213,500.00 from 1 January 2010 until full and final payment.2

Respondent is ordered to reimburse to Claimant the costs of this arbitration and its legal and other costs, related to the dispute, including its internal costs."

27.
In its Cost Submission Claimant further clarified its relief sought regarding costs as follows:

"Respondent is ordered to pay Euro 16,000.00 plus interest on Euro 2,000.00 at the rate of 6 % p.a. from 7 December 2010 until the date of payment, interest on Euro 6,000.00 at the rate of 6 % p.a. from 2 March 2011 until the date of payment, interest on Euro 8,000.00 at the rate of 6 % p.a. from 15 March 2011 until the date of payment; Euro 9,174.51 plus interest on Euro 8,000.00 at the rate of 6 % p.a. from 13 December 2010 until the date of payment, interest on Euro 1,174.51 at the rate of 6 % p.a. from 15 September 2011 until the date of payment; ¥ 182,000.00 plus interest on ¥ 182,000.00 at the rate of 6 % p.a. from 16 September 2011 until the date of payment."

B Respondent’s Prayer for Relief

28.
As Respondent did not participate in this arbitration, it did not submit any prayer for relief.

VI. Jurisdiction

A Parties’ Position

1. Claimant

29.
Claimant initiated this arbitration on the basis of an arbitration agreement in a contract for the purchase of certain goods (Exhibit C 3), which was entered into between the Parties on 12 February 2009 (hereinafter: "Contract"); item 10 of the Contract reads as follows:

"Any and all claims, disputes, disagreements or differences which may arise while fulfilling this Contract will be settled as far as possible by means of negotiations between the parties. If the parties do not come to an agreement, the matter shall be submitted for settlement Arbitrage Court of Vienna, Austria in accordance with rules and procedures of the said Court. Such decision shall be final and binding for both parties."

30.
As Claimant tried to obtain the amounts due under the Contract from Respondent by way of negotiations prior to the initiation of this arbitration (cf Exhibits C 5 and C 6), the requirement to settle differences as far as possible by means of negotiations is fulfilled.3

2. Respondent

31.
Respondent did not comment on the issue of and thus did not object to the Sole Arbitrator’s jurisdiction.

B Sole Arbitrator’s Reasoning and Findings

1. General

32.
Respondent’s failure to participate in this arbitration triggers the question of in how far the Sole Arbitrator may or must question the correctness of Claimant's submissions, both with respect to procedure (including jurisdiction) and merits.
33.
While Respondent did not object to the Sole Arbitrator’s jurisdiction, it must nevertheless be examined thoroughly, instead of automatically assuming that Claimant’s submissions in this respect are correct. Based on the VIAC having, in a prima facie manner, assumed the validity of the arbitration agreement in item 10 of the Contract,4 such examination is done pursuant to the laws and rules presumably agreed upon therein; thus, pursuant to Austrian law (i.e. sections 577 et seqq Austrian Law on Civil Procedure, hereinafter: "ZPO"), as the presumed law of the place of arbitration (cf item 48), and pursuant to the Vienna Rules, as the presumed applicable (institutional) rules (cf item 49).
34.
Thus, article 20 (6) Vienna Rules5 and section 600 (2) ZPO6 apply. It is commonly accepted in the context of these provisions that, f a respondent fails to (timely) submit its statement of defense (and also fails to participate in the further proceedings), the arbitral tribunal has to continue the proceedings (ex parte) without treating the failure itself as an admission of claimant’s allegations by respondent. The arbitral tribunal should make its own inquiries and gather evidence through ex parte proceedings (with claimant), if necessary, in order to render an award once it is in a position to decide whether the claims are justified.7
35.
Thus, since the Parties in this case have not agreed otherwise, the Sole Arbitrator does not have the authority to render an award by default.8 He is required to obtain as much information as possible and to evaluate the case in a fair and balanced manner.9
36.
In general, Claimant bears the burden of proof. Just because Respondent did not comment or object to the Claimant’s submissions, be it on procedure or merits, does not mean that the Sole Arbitrator may automatically assume that Claimant’s submissions are correct and true.
37.
While these principles generally apply to issues of procedure and merits in the same way, when it comes to jurisdiction, it is in any case ultimately the arbitral tribunal/sole arbitrator who determines the jurisdiction (cf article 19 Vienna Rules and section 592 (1) ZPO).
38.
Further, it is also followed from article 20 (6) Vienna Rules that - despite the inadmissibility to render a default award - the arbitrator is entitled (and obliged) to proceed with the proceedings and also to render an award.10
39.
In order to grant Respondent sufficient opportunities to participate in this arbitration, it was given various chances to comment on the various topics and it was provided with every communication and document of this file in due time.11 In particular, Respondent was informed in advance on various occasions that the arbitration will be conducted despite its failure to participate and that such failure will not hinder the Sole Arbitrator to render a final award.12
40.
In order to safeguard that the Respondent is indeed provided with all communication, service of the Sole Arbitrator’s communication to Respondent was done by courier. Indeed, there is written proof of delivery for all of this communication. Also, Claimant indicated in all of its communication that it also delivered all such communication directly to Respondent (as indicated in Procedural Order No 1, item II.3 Claimant’s distribution lists are regarded to be complied with so that Respondent is assumed to have been served with all of Claimant’s communication); in particular, Claimant submitted proof that the Memorandum, its letter dated 31 May 2011 and its letter dated 27 June 2011 was delivered to and received by Respondent (cf Exhibits CL 21 to CL 26).13
41.
Thus, both with respect to issues of procedure (in particular jurisdiction) and merits, the Sole Arbitrator has not automatically assumed Claimant’s assertions to be true and correct, but thoroughly examined and questioned Claimant’s submissions and evidence. Nevertheless, and without restricting the principles just described, by not participating in this arbitration and by not offering any evidence, adverse inferences may also be drawn from Respondent’s conduct.14 The inadmissibility of default awards does not exclude that in case of an inactivity of a party the arbitral tribunal accepts allegations of a party as proven if (an) additional element(s) exist.15 Even more so, the arbitrator’s above described duty cannot amount to actively having to consider every theoretically possible objection and argument by a respondent when there is no specific indication in this respect.

2. Arbitration Agreement in item 10 of the Contract

42.
Despite Respondent not having argued that the Contract as such or in particular the arbitration clause in its item 10 was invalid, Claimant showed in a sufficient manner that the Contract, including the arbitration clause, was validly concluded. This is obvious from Exhibit C 3 (for a further elaboration on the validity of the Contract of item 65 below).
43.
Further, given that Claimant was apparently represented by its "Regional Manager" and Respondent by its "President", there is no indication that one of the Parties was not sufficiently represented. Again, any lack of authority was not submitted by Respondent.
44.
Despite a prima facie review of the clause by the VIAC, it is nevertheless the Sole Arbitrator who eventually was to confirm its jurisdiction. Given the formal validity of the clause, it is necessary to determine what the Parties specifically agreed upon. The Parties did not use the sample clause proposed by the VIAC. Nevertheless, despite the clause referring to a "Court’ ("...submitted for settlement Arbitrage Court of Vienna, Austria in accordance with rules and procedures of the said Court...") there can be no doubt that the Parties agreed on arbitration and excluded the jurisdiction of state courts; this can be derived from the general wording of the clause, and also from its heading stating clearly "arbitration".
45.
Even the Parties’ choice for the VIAC is obvious: on the one hand, "Arbitrage Court of Vienna, Austria" is in the Sole Arbitrator’s view a reference to this institution, on the other hand, even if one were to argue (which is not the case here) that it might be a reference to the Permanent Arbitral Tribunal of the Vienna Economic Chamber, such argument would ultimately lead to the same result of the VIAC having jurisdiction: The reciprocal differentiation of the competences of the Permanent Arbitral Tribunal of the Vienna Economic Chamber on the one side and the VIAC on the other side is - concurrently -stipulated in both respective rules, namely in the "Schieds- und Schlichtungsordnung für die Ständigen Schiedsgerichte der Wirtschaftskammern" (for the Permanent Arbitral Tribunal of the Vienna Economic Chamber) and in the Vienna Rules (for the VIAC). Articles 1 (2) and 2 (2) of the Schieds- und Schlichtungsordnung für die Ständigen Schiedsgerichte der Wirtschaftskammern and - as their flipside - article 1 (1) and (3) Vienna Rules provide for the competence of the VIAC with respect to arbitral disputes in which not all contracting parties that concluded that arbitration agreement had their place of business in Austria at the time of the conclusion of the arbitration agreement. In particular, article 2 (2) of the Schieds- und Schlichtungsordnung fur die Ständigen Schiedsgerichte der Wirtschaftskammern stipulates (translated into English) that "in case not all parties to the agreement had at the time of the conclusion of that agreement their seat... in Austria, the International Arbitral Centre of the Austrian Federal Economic Chamber [i.e. the VIAC], Vienna ("Federal Chamber Arbitral Centre") is competent...".16 In the present case, there is no indication that any Party has or had at the time of the conclusion of the Contract its seat in Austria. Thus, even if the Parties had agreed upon arbitration before the Permanent Arbitral Tribunal of the Vienna Economic Chamber (which they have not), still the VIAC is the competent arbitral institution having jurisdiction over this arbitration; as a consequence, the Sole Arbitrator being appointed by the VIAC and in accordance with the Vienna Rules does have jurisdiction over this dispute.
46.
Finally, Claimant tried to contact Respondent on various occasions, either by itself or through its legal counsel, prior to the initiation of this arbitration. This is obvious from Exhibits C9 to C 13 and Exhibits C5 and C 6. Insofar, the requirement of negotiations contained in the arbitration clause is fulfilled. Also, Respondent did not argue that it was not fulfilled.
47.
Since there are no doubts as to the validity of the arbitration clause in item 10 of the Contract, and since Respondent has not argued, let alone shown, why this agreement should not be valid, the Sole Arbitrator holds that he does have jurisdiction to decide this dispute (in accordance with the Vienna Rules).

VII. Procedural Issues

48.
As already indicated in Procedural Order No 1, item III.3, in light of Claimant’s SoC (including it relying on item 10 of the Contract) and Respondent not having submitted a memorandum in reply, Vienna, Austria, was determined to be the place of arbitration pursuant to article 2 Vienna Rules.
49.
Given the place of arbitration being Austria, and the wording of the arbitration agreement, this arbitration is governed by the Vienna Rules and sections 577 et seqq ZPO.
50.
As already indicated in Procedural Order No 1, item II.6, the language of the arbitration is - pursuant to article 20 (2) Vienna Rules and section 596 ZPO - English. Given the apparent lack of an agreement by the Parties on this issue, the Sole Arbitrator considered English to be the appropriate language in light of Claimant’s considerations in item 5. of its SoC and Respondent, situated in the US, not having objected thereto.
51.
The Parties did not request an oral hearing to be held.17 The Sole Arbitrator did not consider an oral hearing to be necessary either.18

VIII. Merits (including Substantive Law and Interest)

A Parties’ Position

1. Claimant

1.1 Facts

52.
On 12 February 2009 the Parties entered into a contract for the delivery of certain goods (Exhibit C 3), which were enumerated in appendix 1 (Exhibit C 4) thereof (hereinafter: "Contract").19
53.
Under the Contract, Claimant sold agrochemical products to Respondent, namely 4 tons Nissorun 10 WP (purchase price USD 144,000.00), 0.5 tons Mospilan 20 WP (purchase price USD 27,500.00), 2 tons Ortus 5 SC (purchase price USD 32,000.00) and 0.5 tons Applaud 25 WP (purchase price USD 10,000.00) (hereinafter: "Goods") (Exhibits C 3, C4 and C 7). The total purchase price agreed upon between the Parties was thus USD 213,500.00, which Respondent had to pay in two equal installments; the first one (in the amount of USD 106,750.0020) was due on 20 March 200921, the second one (in the same amount) on 31 December 2009. Respondent failed to make any payment.22
54.
The Goods had to be delivered on 10 April 200923 FOB Kobe, Japan.24 Claimant indeed delivered the Goods to Respondent, they were shipped to Uzbekistan (which is why Claimant and its local representatives tried to collect the outstanding amount by contacting the representative of Respondent’s subsidiary in Uzbekistan) (Exhibits C 3 and CL 14 to CL 20).25 Claimant attempted over a long period of time to reach an amicable solution (Exhibits C 9 to 13).26
55.
On 25 May 2009 Respondent (through its president) even acknowledged that as of 30 April 200927 it owed USD 213,500.00 to Claimant (Exhibit C 8).28 Similarly, in email correspondence, Respondent’s representative in Uzbekistan made promises to the effect that the outstanding amounts will be paid (Exhibits C 9 to 13).29
56.
Since these attempts failed, Claimant’s lawyers in the U.S.A. sent a reminder to Respondent which was left unanswered (Exhibit C 5). Further, counsel for Claimant in this arbitration sent a further reminder before initiating this arbitration, which was also left unanswered (Exhibit C 6).30 Respondent did not pay any outstanding amount.

1.2 Applicable Law and Legal Considerations

57.
The Contract does not contain an explicit choice of law. Pursuant to article 24 Vienna Rules, the Sole Arbitrator shall apply the legislation considered by him as appropriate. Japanese law and/or the CISG are appropriate in this case (if one would assume that Austrian or US law would be applicable, the result would be the same, since both states ratified the CISG and thus the CISG is incorporated into national law; thus, article 1 (a) CISG would be applicable and lead to the application of the CISG).31
58.
Japanese law applies since Japan was the place of delivery (the Goods were handed over in Kobe). Article 555 Japanese Civil Code (which was cited by Claimant) is fulfilled and the Contract came into effect by the Parties promising each other a transfer of a property right and the payment of a purchase price. Since Claimant fulfilled its obligation under the Contract (by delivering the Goods to Respondent in Kobe on 10 April 2009) and Respondent did not, Respondent is in breach of the Contract and has thus to be ordered to pay the purchase prize.32
59.
Even tough the CISG entered into force in Japan only on 1 August 2009, i.e. after the Contract was signed, the Sole Arbitrator may nevertheless apply these internationally accepted rules of law in accordance with article 24 (2) Vienna Rules. The Contract is a "contract of sale" under the CISG, and the Parties have their places of business in different states (i.e. Japan and the U.S.A.). Claimant has fulfilled its obligation under the Contract (as required), thus Buyer must pay for the goods and take delivery of them as required under the contract (article 52 CISG), in particular buyer must pay the price on the contractually specified date (article 59 CISG). Thus, also under the CISG Claimant is entitled to request Respondent to pay the purchase prize (in accordance with article 62 CISG).33

In any case, the pacta sunt servanda principle is worldwide accepted.34

1.3 Interest

61.
In accordance with Claimant s position regarding the applicable law, also as to interest, Japanese law and the CISG apply.
62.
According to article 514 Japanese Commercial Code, the interest rate is 6 % per annum if the parties have not provided for an interest rate, as is the case here. Thus, Claimant is entitled to interest in this amount on the amount due from the day following the day the purchase price was due (i.e. 6 % p.a. on the amount of USD 106,750.00 from 21 March 2009 until 31 December 2009, i.e. USD 5,018.71), and 6% p.a. on the amount of USD 213,500,000 from 1 January 2010 until full and final payment.35
63.
Claimant is entitled to interest pursuant to article 78 CISG. While the CSIG is silent on the applicable rate, this should be determined by the domestic law applicable in accordance with the conflicts rules of the forum state, i.e. Austria. Since Japan has the closest link to the facts of the case pursuant to article 1 Austrian International Private Law Act, the Japanese interest rate in the amount of 6 % applies.36

2. Respondent

64.
Respondent did not comment on the various substantive issues; Respondent in particular did not argue that Claimant may not claim the purchase prize in USD, costs in Euro and internal costs in ¥, as included in Claimant's prayer for relief.

B Sole Arbitrator’s Reasoning and Findings

65.
The Parties validly concluded the Contract, an agreement for the purchase of certain goods listed in its annex 1. Despite Respondent not having argued that the Contract was invalid, Exhibit C 3 may be qualified as an unobjectionable document, which was signed by a manager of Claimant and Respondent’s "President" (i.e. Mr Osherov) and which additionally shows both Parties’ corporate stamps.37 The same is true for its Annex 1 (Exhibit C 4). There is no indication that the Contract was not validly concluded.
66.
The Contract is a straight forward purchase agreement, under which the Claimant as the Seller is obliged to deliver certain goods and Respondent as the buyer to pay the purchase prize. In this very case, Claimant was obliged to deliver the Goods "under the terms FOB Kobe, Japan by April 10, 2009".38
67.
Despite Respondent not having argued that Claimant had not fulfilled its contractual obligations, Claimant itself showed sufficiently that it indeed delivered the Goods as agreed upon. This can be derived from Claimant’s invoice (Exhibit C 7, which refers to the Contract and lists the Goods), a corresponding bill of lading (Exhibit CL 14), a corresponding certificate of origin issued by the Tokyo Chamber of Commerce and Industry (Exhibit CL 15) and a corresponding packing list (Exhibit CL 16). Whether this shipment was done on 10 April 2009 or maybe, as indicated on Exhibit C 7, "on or about April 14, 2009" does not have a particular relevance. There is on the other hand no indication that Claimant did not deliver the Goods as agreed upon.
68.
Under the Contract, Respondent is obliged to pay USD 106,750.00 by 20 March 2009 and the same amount again by 31 December 2009.39 These obligations are due, even more so given that Claimant fulfilled its contractual obligations. Had Respondent already paid the purchase prize, it would presumably have said so in the arbitration.
69.
Even more so, Respondent itself confirmed through its "President Mr Osherov, that it indeed owes for "Account Receivables Trade" an amount of USD 213,500.00 to Claimant (Exhibit C 8).
70.
Given these facts and the straight forward purchase agreement on the one hand, and Respondent’s failure to submit any objections on the other hand, Respondent’s obligation to pay the purchase prize cannot depend on the question what substantive law should be applicable. Therefore, the Sole Arbitrator holds that pursuant to item 4.2 of the Contract Respondent was and still is obliged to pay USD 106,750.00 by 20 March 2009 and USD 106,750.00 by 31 December 2009.
71.
For the sake of good order, the issue of the governing (substantive) law is nevertheless briefly addressed. In light of the Contract’s lack to determine the law, the Sole Arbitrator determines the law in accordance with article 24 (2) Vienna Rules40 and section 603 (2) ZPO41. While the Sole Arbitrator is not bound by conflicts of laws principles at the place of arbitration, they may be a guideline. Under article 4 (1) a) of the Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations) "a contract for the sale of goods shall be governed by the law of the country where the seller has his habitual residence". In the present case, the Seller (i.e. Claimant) has its seat in Japan (also, the Goods were delivered in Japan, thereby generally establishing the closest link to Japan). Thus, Japanese law is applicable. Claimant cited article 555 of the Japanese Civil Code to read: "a sale shall become effective when one of the parties promises to transfer a certain real rights to the other party and the other party promises to pay the purchase money for it." (Exhibit CL 2). This supports the finding and conclusion that Respondent was obliged to pay USD 106,750.00 by 20 March 2009 and the same amount again by 31 December 2009. There is thus no further need to elaborate on the CSIG (including its possible application), even though it has to be stated that also under the CISG, in particular articles 53, 59 and 62, Respondent was obliged to pay USD 106,750.00 by 20 March 2009 and the same amount again by 31 December 2009.
72.
As to interest, the law governing the Contract also governs the issue of interest; the law applicable to interest determines which rate applies and from which point in time interest has to be paid; in the present case article 514 of the Japanese Commercial Code provides for a rate of 6 % per year (Exhibit CL 10). Thus, Respondent is obliged to pay interest in the amount of 6 %per year on the amount of USD 106,750.00 from 21 March 2009 until 31 December 2009 (i.e. USD 5,018.71) and 6 % per year on the amount of USD 213,500,000 from 1 January 2010 until full and final payment. Even if one were to argue that interest would be an issue of procedure, and Austrian law (as the law of the place of arbitration) would be applicable, the rate for interest would be even higher than the claimed 6 %.

IX. Costs

A Parties’ Position

1. Claimant

73.
Claimant declared that it has incurred costs and expenses for registration fee/deposit in the amount of Euro 16,000.00 (including Respondent’s share of the deposit). Further, its legal counsel, ARP Andreas Reiner & Partners, has issued invoices in the amount of Euro 9,174.51 (VAT not included) (Exhibits C 14 and C 15). Finally, Claimant’s legal department was occupied with this arbitration, which amounted to costs of ¥ 182,000.00, which are a direct result of the arbitration, and which should be awarded under article 32 (b) Vienna Rules (Exhibit C 18).
74.
Additionally, Claimant claims interest on costs at the rate of 6 % per annum from the date of the payment, i.e. the day on which Claimant has actually incurred the costs until the date of payment of Respondent (as to internal costs, interest is claimed only from the day the cost submission is due, i.e. 16 September 2011).

2. Respondent

75.
Respondent neither filed a cost submission, nor commented on Claimant’s Cost Submission.

B Sole Arbitrator’s Reasoning and Findings

76.
The decision as to costs is based on articles 31 et seqq Vienna Rules and section 609 ZPO. In particular, the Sole Arbitrator shall state the costs of the arbitration fixed by the Secretary General in accordance with article 34 (1) Vienna Rules, shall determine the amount of costs of the parties and shall state who should bear the costs of the proceedings or the proportion in which the costs of the proceedings are to be shared.
77.
The Sole Arbitrator considers the "costs follow the event"-principle to be appropriate in order to decide on who has to bear the costs. In line with this principle, Respondent is obliged to bear the costs in full, given that Claimant is awarded its relief sought in its entirety. Also, by not participating in this arbitration, Respondent - to a certain extent - caused costs.
78.
The costs of the arbitration fixed by the Secretary General on 22 December 2011 in accordance with article 34 (1) Vienna Rules amount to Euro 12,381.40. This amount includes administrative charges in the amount of Euro 3,903.00, the Sole Arbitrator's fees in the amount of Euro 7,805.00 (no VAT included), costs for courier services paid by the VIAC in the amount of Euro 300.00 and costs for courier services paid by the Sole Arbitrator (i.e. cash outlays) in the amount of Euro 373.40. Given that Claimant paid Registration fee and advances on costs for both Parties in the amount of Euro 16,000.00, Claimant will receive a refund from the VIAC in the amount of Euro 3,618.60.
79.
The amount of costs claimed by Claimant is - having due regard of article 32 b) Vienna Rules - appropriate, both with respect to legal fess in the amount of Euro 9,174.5142 (no VAT included) as well as costs of Claimant’s legal department in the amount of ¥ 182,000.00 (14 hours per ¥ 13,000.00) (which are increasingly - and in the Sole Arbitrator’s view correctly so - considered to be reimbursable)43. These costs and expenses were sufficiently proven through Exhibits C 14, C 15 and C 18.
80.
While Claimant claimed interest on costs, such claim and its legal basis was not sufficiently argued and shown. Claimant relied on article 31 (and presumably article 32) Vienna Rules, however, it did not cite authority in this respect; indeed, it seems that interest on costs under this provision is not, at least not commonly, accepted. Further, Claimant did not argue in a substantiated manner that under Japanese law such claim is justified. Finally, in an Austrian context (as the place of arbitration)44, section 54a ZPO - while being in principle applicable to arbitral awards45 - could possibly be a basis for interest on costs from the date of the decision on costs (but not, as partially claimed by Claimant, from the day on which it incurred costs); however, this is a statutory sanction of default, the enforceable title does not have to state the default interest, it applies by automatic operation of law.46 In conclusion, the Sole Arbitrator does not find interest on costs to be appropriate costs/expenses in this case and thus does not award such interest on costs/expenses.
81.
Therefore, the Sole Arbitrator holds that Respondent is obliged to reimburse Claimant Euro 9,174.51 and ¥182,000.00 for Claimant’s appropriate legal and other costs, and Euro 12,381.40 as the costs of the arbitration fixed by the Secretary General.

X. Award

82.
Based on the foregoing considerations and reasons, the Sole Arbitrator renders the following

FINAL AWARD

and holds as follows:

1. Respondent May Enterprises, Inc. shall pay to Claimant Arysta LifeScience Corporation USD 213,500.00.

2. Respondent May Enterprises, Inc. shall pay to Claimant Arysta LifeScience Corporation interest in the amount of 6 % per year out of USD 106,750.00 from 21 March 2009 until 31 December 2009, and interest in the amount of 6 % per year out of USD 213,500.00 from 1 January 2010 until full and final payment.

3. Respondent May Enterprises, Inc. shall bear the costs of this arbitration.

(i) Respondent May Enterprises, Inc. shall pay to Claimant Arysta LifeScience Corporation Euro 12,381.40 as the costs of the arbitration, including administrative charges and the Sole Arbitrator’s fees.

(ii) Respondent May Enterprises, Inc. shall pay to Claimant Arysta LifeScience Corporation Euro 9,174.51 and ¥182,000.00 for Claimant’s appropriate legal and other costs.

4. All other claims and requests are rejected.

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