Parties:
Claimant: FR German buyer; Defendant: Thai seller
Published in:
23/82 Jahresbericht 1984, Annex p. 46 = Rechtsprechung kaufmännischer Schiedsgerichte (1988, Vol. 4) D1d no. 27, pp. 83-85 (original in German)
Subject matter:
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legal authorization to sign contract
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llack of proper supervision of employee
The parties concluded a contract through a broker. The negotiations were conducted on the part of the Thai seller by a Mr. P, employee of the seller. A contract supplied by Mr. P on 18 January by the Thai seller was confirmed on the following day by the FR German buyer with some modifications and was accepted by the management of the Thai seller.
The arbitrators held that the Thai seller was validly bound by the contract.
[1] "Defendant, which has its seat in Bangkok, is a major company in the international trade in [specific fruit]; this fact is notorious. In a company of such importance, one may expect the presence of, and the compliance with an established division of responsibilities regulating the employees' authority and
[...]
[5] "The arbitral tribunal, therefore, concludes that defendant granted to Mr. P the legal authority to make the offer of 15 January. It needs not be decided whether defendant gave Mr. P a special authorization for the contract at issue or a general authorization. Once given, this authorization was effective as far as the relationship with claimant is concerned, even if Mr. P did not inform defendant's management of the use he made of this authorization.
[...]