Underlying facts of the award
- The Claimant as seller and the Respondent as buyer entered into an EFET (European Federation of Energy Traders) General Agreement Concerning The Delivery And Acceptance Of Natural Gas on 06 August 2018 (hereinafter: the “Contract”).
- Based on the Contract, Respondent ordered from Claimant the delivery of natural gas on two occasions, the terms of which were laid down in two Individual Contracts (“Individual Contract for December” and “Individual Contract for February”). Claimant provided the supply period which lasted a month in both cases; from 06.00 hours on 1 December 2018 to 06.00 hours on 1 January 2019 and from 06.00 hours on 1 February 2019 to 06.00 hours on 1 March.
- The Respondent did not pay the whole fee for the services of Claimant based on the December 2018 Invoice. Moreover, since Respondent was in delay regarding the payment of the order in February as well, Claimant suspended the delivery of natural gas.
Declarations of the parties
- The statement of claim requested the payment of the capital amount with a default interest of 8% and compensation for the Claimant for any and all of its costs. Claimant’s claim was based on the Contract and on the Hungarian Civil Code. Claimant received a letter from Respondent prior to the February order in which Respondent rejected the compensation sought by the Claimant and disputed the measure, i.e. the suspension of delivery imposed upon him for the non-payment of February. The arbitral proceedings started with Claimant’s statement of claim submitted to the Court on 15 November 2019. Respondent did not submit a statement of defence, did not take part in the proceedings in any way and had not contested any of the Claimant’s claims.
- As a consequence, the tribunal decided that it would not hold a hearing in this case, as it had not deemed a hearing necessary and neither Party has requested to hold one.
The arbitral award
- The Court found that the Respondent is obligated to pay the remaining delivery fee for the order of December 2018 to Claimant, however the tribunal rejected Claimant’s statement for compensation for the loss of February 2019.
- Claimant stated in his claim that pursuant to the Contract and to the Hungarian Civil Code he was entitled to suspend delivery of natural gas since Respondent defaulted the payment that was due based on the December and February Invoices of Claimant. However the Court concluded that Claimant had failed to comply with the notice period requirement and had similarly not complied with the form requirement of such notice. Since the notice period requirement has a safeguarding nature, non-compliance with it results in the invalidity of such action.
- Summarising the above, the arbitral tribunal found that the suspension had not been made in accordance nor with the Contract nor with the provisions of the Hungarian Civil Code.
- The tribunal ordered the Parties to pay the costs of the Arbitration in proportion to their losses. The Court constituted its legitimacy on the Contract -that was an arbitral contract- and on Act LX of 2017 (hereinafter: Act of Arbitration).
(Vb/19059)
