(a) The tribunal rejected claims for damages for bank interest payments and refinancing costs, which the claimant had raised in addition to avoiding the contract when the respondent had failed to deliver the goods. It acknowledged that damages and avoidance in general were concurrent remedies. However, damages for non-delivery based on Articles 45(1)(b), 74 CISG were pre-empted by the valid penalty/liquidated damages (pld) clause in the parties’ contract which provided for ‘full and final settlement’. Furthermore, the tribunal rejected the claimant’s attempt to circumvent the conclusive pld clause by basing the damages claim on an alleged violation of the obligation to make restitution of the amount received under Article 81(2) CISG. The tribunal held that the duties following from avoiding the contract were not ‘obligations under this Convention’ within the meaning of Article 45(1) CISG and could therefore not constitute a solid basis for a claim for damages.

(b) The tribunal’s reasoning does not convince. Article 45(1)(b) CISG applies to the breach of any obligation under the contract or the Convention, which includes both primary and ancillary obligations and also covers violations of the duties following from avoiding the contract. Article 45(1)(b) CISG should not artificially be restricted to breaches of obligations contained in Article 30 et seqq. CISG. Instead, the tribunal could have achieved the same result without doing violence to the system of remedies contained in the CISG by extensively interpreting the pre-emptive effect of the pld-clause in the case at hand.

(a) Under the CISG there is no so-called election of remedies.

(b) As under common law damages are the primary remedy, there is no discussion of election of remedies. The amount that has been paid as purchase price forms part of the damages claim. As under common law the seller is liable for damages without fault, usually no problems arise. The situation is different under civil law. There, a damages claim by the buyer requires fault on the part of the seller. In the absence of fault, the buyer can only reclaim the purchase price after avoidance of the contract. However, historically, it has been held that once the contract has been avoided, damages can only be asked for in the amount of the reliance but not the expectation loss. As for granting expectation loss, there must be a (still valid) contract. Hence, in many civil law legal systems, the buyer must elect whether it wants to claim damages for expectation loss or recover the purchase price in conjunction with damages for reliance loss.