(Tiểu luận FTU) TERMS OF PAYMENT IN THE SALE CONTRACT

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS *** INTERNATIONAL TRADE TRANSACTIONS ASSIGNMENTS TOPIC: TERMS OF PAYMENT IN THE SALE CONTRACT NAME: Nguyễn Tùng Sơn CLASS: TMAE302.1 ID: 1711150053 INSTRUCTOR: MSc Trần Bích Ngọc Ha Noi, September 2019 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ii TABLE OF CONTENTS INTRODUCTION 1.1 Definition of terms of payment .2 1.2 Roles in the sale contract 1.3 How can it benefits the players .3 1.3.1 Buyers 1.3.2 Sellers 1.3.3 Rules of payment in the Commercial Law 2005 CHAPTER 1: TERMS OF PAYMENT .5 1.1 Currency .5 1.2 Period 1.2.1 Immediate payment .2 1.2.2 Advane payment 1.2.3 Deferred payment 1.3 Method 1.3.1 Collection method 1.3.2 Documentary credit method 1.3.3 Cash-in-Advance 1.3.4 Open Account 1.3.5 Consignment 1.3.6 Deposits instruments LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii 1.3.7 Remittance .7 CHAPTER 2: LETTER OF CREDIT 2.1 Definition 2.2 Components 2.3 Types of L/C 2.3.1 Based on the irrevocable features 2.3.2 Based on the L/C features 2.3.3 Based on payment term of L/C 2.4 L/C and International Trade Contract 10 2.5 Customs 10 2.6 Transaction process to open L/C 11 2.7 Capital sources to ensure L / C payment .12 2.8 Request to open L / C 13 2.9 Content of L/C 14 2.10 Checking L/C 14 2.11 Reasons to use L/C 14 2.11.1 Seller’s concern 14 2.11.2 Buyer’s concern 15 CHAPTER 3: HOW TO WRITE PAYMENT TERMS BUSINESS CORRESPONDENCE IN INTERNATIONAL SALE CONTRACT 18 3.1 Period of payment .18 3.2 Method of payment .18 3.3 Credit method .19 3.4 Currency .19 3.5 Shipment method 19 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iv CHAPTER 4: ANALYSIS DISPUTES OF PAYMENT TERMS .20 4.1 Mistakes from exporters .20 4.2 Disputes about terms of payment 23 4.2.1 Case Identification .23 4.2.2 Classification of Issues Present 23 4.2.3 Case Text .24 4.2.4 Summary of ruling .24 4.2.5 Facts and Pleadings 25 4.2.6 TRIBUNAL'S REASONING 25 4.2.7 Absence of the [Seller]'s representatives 27 4.2.8 Applicable law .28 4.2.9 Payment of interest for the use of monetary funds .30 4.2.10 Recovery of the expenses for the payment of the arbitration fee .31 CONCLUSION .32 REFERENCES 33 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com v INTRODUCTION The rapid integration of Vietnam with international organizations in the region makes import-export become one of the important elements of the economic sector Since then there have been many trades between Vietnam and countries around the world, the number of contracts through international exchange also increased And one of the issues that I feel is the best and most noticeable is the terms of payment Currently, there are many different payment methods used between buyers (importers) and sellers (exporters), in which the payment method by letter of credit is the most popular Specifically, payment by letter of credit (L/C) has characteristics that make them the most preferred payment method and the factors to be aware of, notes when opening L/C The payment by letter of credit creates many benefits for both parties to the contract such as time, ease of goods exchange, etc However, there are still many disputes about payment through this type So I decided to choose the topic of payment terms and focused on the letter of credit payment method for the report I would like to thank to Mrs Tran Bich when in the last few days you taught, even though you was very busy, but you still enthusiastically guided me so that I could complete the report and get the bonus points Your devotion makes me even more motivated to complete the report in the most completed way I look forward to receiving your comments and suggestions about this payment method So the report has been divided into chapters:  Chapter : Terms of payment  Chapter : Letter of Credit  Chapter 3: How to write payment terms business correspondence in International Sale Contract LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com vi Chapter 4: Analysing the disputes of terms of payment  1.1 Definition of terms of payment To understand more about the terms of payment, first we need look up to the definition of terms of payment What is terms of payment According to businessdictionary.com terms of payment can be known as “Conditions of payment agreed between a buyer and a seller for goods sold or services rendered”, or in the contract they can be defined as by the functions such as “The Buyer will pay the purchase price [ specify e.g., on or before (date) or not later than (number) days before the Delivery date” The payment must be made in [currency] by means of [instrument of transfer] Or maybe you can see the definition in the marketing ways “These are the conditions under which the seller will complete the sale if they are satisfied The terms include the specific period within which the buyer needs to pay off the amount dues, demands related to cash in advance, cash on delivery, 30 days or more deferred payment and similar other provisions It is the conditions under which the vendor completes the sale.” In the international contracts, you should always specify the acceptable currency and the instrument of payment The currency selected should be strong and stable to allow some protection agains fluctuating exchange rates, and the means of payment should be secure For example may be made by delivery of a documentary letter of credit or documents against payment, by advance payment in cash or wire transfer, or by a line of credit of a specified number of days (Karla C Shippey, 2003) In addition to the price, a sales contract should state the time for payment, the method for payment, and any payment schedule agreed upon However, in the field of international trade, due to cultural differences, financial capacity distinctions, size and currency of payment, the parties may apply professional method and the support from the third party such as credit institutions or banks LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com vii 1.2 Roles in the sale contract Terms of payment is an important part of the international contract because of specific and detailed provisions on payment term, location, method,consequences of late payment and sanctions of late payment are very necessary One of the terms that importers and exporters are most interested in because it is closely related to the benefits of the parties 1.3 How can it benefits the players As we can see that terms of payment can interest the buyer by showing the deadline of payment or currency that they should use But this topic is focusing on the L / C method so let find out what advantages the L / C can bring to the parties Letters of credit are indispensable for international transactions since they ensure that payment will be received 1.3.1 Buyers  The bank will pay the seller for the goods, on condition that the latter presents to the bank the determined documents in line with the terms of the letter of credit;  The buyer can control the time period for shipping of the goods;  By a letter of credit, the buyer demonstrates his solvency;  In the case of issuing a letter of credit providing for delayed payment, the seller grants a credit to the buyer  Providing a letter of credit allows the buyer to avoid or reduce pre-payment 1.3.2 Sellers  The seller has the obligation of buyer's bank's to pay for the shipped goods;  Reducing the production risk, if the buyer cancels or changes his order LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com viii  The opportunity to get financing in the period between the shipment of the goods and receipt of payment (especially, in case of deferred payment)  The seller is able to calculate the payment date for the goods The buyer will not be able to refuse to pay due to a complaint about the goods 1.3.3 Rules of payment in the Commercial Law 2005 Article 50.- Payment The purchaser is obliged to pay for goods and receive goods as agreed upon The purchaser must comply with the payment modes and make the payment according to the agreed order and procedures and the provisions of law The purchaser shall still have to pay for goods in cases where goods are lost or damaged after the time the risk is passed from the seller to the purchaser, except for cases where the loss or damage is caused due to the fault of the seller Article 51.- Suspension of payment for goods Unless otherwise agreed, the suspension of payment for goods is provided for as follows: The purchaser that has proofs of deceit of the seller shall have the right to suspend the payment The purchaser that has proofs that the goods are subject to a dispute shall have the right to suspend the payment until the said dispute is settled The purchaser that has proofs that the seller has delivered goods which not conform with the contract shall have the right to suspend the payment until the seller remedy such inconformity If the proofs produced by the purchaser for the cases of payment suspension mentioned in Clauses and of this Article are unfounded, thus causing damage to the seller, the purchaser must pay compensations for such damage and be subject to other penalties provided for in this Law LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ix CHAPTER 1: TERMS OF PAYMENT 1.1 Currency In international trade, goods can be paid either in the currency of the exporting country or in the currency of the importing country or in the currency of the third country The currency used for payment is called the money of payment The currency of payment may coincide with the currency of calculation (i.e the currency denoting the price) and may not coincide When the currency of payment and the currency of calculation of prices are two different currencies, one must determine the exchange rate to convert those two currencies In particular, people choose:  The exchange rate of the payment instrument (exchange rate of electricity transfer or by mail)  The currency of the market rate (in the exporting country, in the importing country or in a third country)  The buying or selling rate  Trade Agreement rate For their own benefits, exporters often want to choose the currency of payment that is less likely to depreciate, either easily exchanged for other currencies or easily exchanged for gold And the mindset of importers is the opposite According to Article 52 of Commercial Law 2005 ( Determination of prices) stating that “ Where there is neither agreement on goods price or on the pricedetermining method nor other price indexes, the goods price shall be determined according to the price of such type of goods under similar conditions on mode of goods delivery, time of goods purchase and sale, geographical market, payment LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com x mode and other conditions which affect the prices” so we have another way to choose the currency 1.2 Period Usually in transactions, the parties usually pay in advance, pay immediately or pay later Many times, people use all three types of payment, for example, in shipping contracts: 15% of the order value is paid right after signing the contract; 25% after the ship's launch, 55% after the buyer has received the vessel; 5% after the warranty period expires (Vu Huu Tuu, 1996) 1.2.1 Immediate payment In international trade, immediate payment in advance is understood as an act of payment before or during the time when the exporter places the goods documents or places the goods themselves under the buyer's responsibilty Prompt payment may be made by full payment at a time, or by partial payment The full payment of the goods at once requires the buyer to pay the full value of the goods in one of the following conditions: upon receipt of the exporter's notice of readiness to ship the goods; upon receipt of the carrier's notice of completion of loading at the place of shipment; when all the documents specified in the contract are handed over to the buyer; after a certain number of days or a number of favorable hours since the whole documents are given to the buyer The partial payment requires the buyer to pay the goods in a number of installments agreed upon in the contract, based on the conditions of delivery or the availability of the goods The partial payment based on delivery conditions may be prescribed as follows: the buyer must pay the seller a substantial part (80 - 95%) of the goods when the seller has sent the goods or has sent proof from goods, the rest (5 - 20%) will be paid when the buyer has received the goods or when the warranty period ends LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxvii the currency of payment at the place of payment Other LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxviii CHAPTER 4: ANALYSIS DISPUTES OF PAYMENT TERMS Once you’ve established that a letter of credit is the best form of payment for shipping your goods internationally, you must pay special attention to make sure you’re correctly completing not only the letter of credit, but the entire process Sometimes, there are ome of the common mistakes exporters make when completing letters of credit 4.1 Mistakes from exporters Not understanding the real purpose of a letter of credit This is the starting point for avoiding any errors on the document If you don’t understand the real purpose of a letter of credit, you probably won’t understand how or if you’re meeting its requirements You may accidentally complicate (or simplify) details Solution: Take time to really understand what a letter of credit is, how it works, and what it does We also have more than 70 articles on the International Trade Blog that address letters of credit issues Choosing a letter of credit when another method of payment is preferable At the beginning of this article, we posited that you have already determined that the letter of credit is the best form of payment for your export However, according to Novak, it’s crucial to make sure you take the time to actually consider this step If you’re blindly choosing a letter of credit as your method of payment, you could be making an expensive mistake Solution: Make sure you’ve researched all of the options before you settle on complex letters of credit, because there may be a different option that is better suited to your needs Failing to negotiate the terms of a letter of creditduring the negotiation of the contract LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxix If you don’t negotiate all the terms upfront, you’re exposing yourself to potential issues that you may be legally bound to, even if they aren’t in your best interest This is especially important if you’re working with a sales team who just wants to sell and may not be particularly interested in the details of how they are going to get paid Solution: Begin discussing the terms of your letter of credit before it is even received You can avoid mistakes and ensure a smooth transaction by addressing what you want the letter of credit to say from the outset You can find out more in our article Not making sure the proforma invoice and contract agree If you’re unaware of what has been agreed upon in the eyes of your buyer, or you’re unaware of regulations, you could inadvertently create conflicting documents Solution: At the end of the day, if an exporter does his or her homework upfront, and all questions are answered at the beginning of the process, it will result in fewer errors That’s why negotiating the terms immediately is of huge importance There’s no room to guess or assume when creating contracts, the proforma invoice, or any export document You can read more about how to make sure your documents pair seamlessly in our article Improper review or lack of review of a letter of credit when it is received A bank will look at a letter of credit from its own perspective, so sellers need to look at the letter of credit from their perspective The bank will ensure that everything is consistent on its end, but it is up to the exporter to make sure what they review and approve matches what was discussed in the agreement, proforma invoice, or contract If not, fixing a discrepancy or getting an amendment could take time, which delays your payment Solution: Review your letter of credit to make sure it matches what was discussed in the proforma invoice and earlier agreements LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxx Not being able to meet all terms and conditions of the letter of credit You need to make sure that when you’re reviewing a letter of credit, you can truly agree to and satisfy the terms and conditions How you know what those terms and conditions are? Solution: Work with your partner in your bank’s international office to make sure the document you’re reviewing is advantageous to you Many banks offer instructions that can help you review it to make sure you can comply with the terms and conditions Also, remember that the checklists your bank provides are only guides, and that due to the individual nature of every transaction, it’s likely your specific letter of credit will be different than anyone else’s letter of credit (or a template) It is your responsibility as the seller to make sure you’re seeking help if and when you have questions about reviewing a letter of credit Letting someone who is inexperienced prepare the documents under the letter of credit You wouldn’t trust just anyone to handle your finances, settle your legal disputes, or take care of your family So why would you hand off the responsibility of your letter of credit to just anyone? You shouldn’t! Solution: Make sure the person who is preparing the documents under the letter of credit (even if that person is you) has all of the background information and resources available to this correctly Here are some things you should consider about who prepares your letter of credit:  Are they experienced with letters of credit and exporting in general?  Do you have a plan in place for how these people (or this person) will be trained?  What standard will they use to prepare documents?  Are the documents doubled checked for accuracy after completion? Every company is different While multinationals might have a department of experienced people to help generate the documents regarding overseas shipment, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxi small and mid-size businesses might not have resources allocated for these employees If you it yourself or even hire a third party for assistance, you must make sure you’re asking questions that can help you guarantee they will it the right way (You should also be asking what happens if something goes wrong) Correctly completing your export documentation isn’t limited only to letters of credit. Every single export form you use should be held to exacting standards of accuracy Shipping Solutions software helps exporters reduce the amount of data entry required to complete their export documents, which improves accuracy and expedites the process 4.2 Disputes about terms of payment 4.2.1 Case Identification Date of Decision:  October 27, 2005 Arbitral institution:  Ad Hoc Arbitration Case number / Docket number: 132/2004 Seller(s)' country: Russian Federation Buyer(s)' country: Turkey 4.2.2 Classification of Issues Present Application of CISG: Yes - Article 1(1)(b) UNCITRAL thesaurus:   7C22 Recourse to general principles on which Convention is based  Article 30 Summary of Seller's Obligations  Article 78 Interest LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxii  Article 84 Restitution of Benefits Received Descriptors:   Gap-filling by convention  Interest  Restitution of benefits received Key provisions of CISG mentioned:   Article 7(2)  Article 30  Article 78  Article 84 4.2.3 Case Text Queen Mary Case Translation Programme Russian Federation arbitration proceeding 132/2004 of 27 October 2005 4.2.4 Summary of ruling In addition to claiming against the [Seller], the [Buyer] sought to claim against a third party which had guaranteed the fulfillment of the obligations of the [Seller] The Tribunal ruled that it does not have competence to adjudicate the dispute between the [Buyer] and the third party since there does not exist an arbitration agreement between the [Buyer] and this party on the adjudication of the dispute by the Tribunal LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxiii  With respect to the [Buyer]'s claim against the [Seller], in the absence of the agreement of the parties to the international sale contract on the applicable law, the Tribunal applied the conflict of laws norms of the Civil Code of the Russian Federation on the basis of which it was determined that relations of the parties were governed by the Russian law as the law of the seller's country In view of this it is found that Vienna Convention of 1980 is the main statute and the civil legislation of the Russian Federation is the subsidiary statute 4.2.5 Facts and Pleadings The claim was lodged by the [Buyer], a Turkish firm, against the [Seller], a Russian company, in connection with an underdelivery of goods for which an advance payment was carried out under the contract concluded by the parties on 24 October 2002 The [Buyer] sought:  Return of the advance payment sum for the non-delivered goods;  Payment of interest for the use of another's monetary funds;  Recovery of the expenses for the arbitration fee In the letter it sent to the Tribunal after the action was brought, the [Buyer] petitioned for the involvement in the trial of a German firm as second respondent The German firm had issued a guarantee for the repayment of the monetary funds paid by the [Buyer] to the [Seller] in case of the partial delivery of the goods The [Seller] has not presented its statement of defense and its representatives did not participate in the Tribunal's session The German company stated that the Tribunal lacks competence to consider claims against it since there does not exist an arbitration agreement between this company and the [Buyer] LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxiv 4.2.6 TRIBUNAL'S REASONING The award of the Tribunal contained the following basic points 4.2.6.1 The competence of the Tribunal The dispute between the [Buyer] and the [Seller] has originated from the contract concluded by the parties on 24 October 2002 Para 8.2 of this contract provides that "in case of the impossibility to settle disputes and disagreements, they shall be submitted to the adjudication at the International Commercial Arbitral Tribunal at the Chamber of Commerce and Trade of Russia, city of Moscow, in accordance with the Rules and Procedures of the Tribunal …" The [Seller] has not contested the Tribunal's competence to adjudicate the dispute between it and the [Buyer] Taking into consideration the above and following para 1(3) of the Rules of the Tribunal, according to which the Tribunal is competent to adjudicate the dispute in the presence of the agreement between the parties on the submission of disputes which have arisen or may arise for the adjudication by the Tribunal, the latter rules that it is competent to adjudicate the dispute between the [Buyer] and the [Seller] 3. However, considering the issue of the Tribunal's competence to adjudicate the dispute between the [Buyer] and the German company which has arisen because of the [Buyer]'s petition for the engagement of that company as second respondent in the proceedings and the objections by that company to the Tribunal's competence, the Tribunal found the following:  The guarantee of 29 October 2002 issued by the German company in order to secure fulfillment of the [Seller]'s obligation to deliver the goods under contract #275 is an independent transaction Claims brought against the guarantor by the [Buyer] are not within the scope of the arbitration agreement contained in para 8.2 of the contract; LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxv  The guarantee of 24 October 2002 is also an independent transaction; it does not contain agreement of the parties on the consideration of disputes by the Tribunal There does not exist an arbitration agreement for consideration by the Tribunal of the dispute between the [Buyer] and German company The Tribunal believes that [Buyer]'s reference to the fact that the letter of the German company of 21 January 2005 sent to the Tribunal with a request for an additional term for selection of the arbiter and deputy arbiter should be regarded as confirmation of the Tribunal's competence to adjudicate the present dispute is unfounded, since, as it is envisaged in art 16(2) of the Law of Russian Federation "On International Commercial Arbitration", participation of a party in the arbiter selection does not deprive the party of the right to make a statement on the lack of the arbitration tribunal's competence to adjudicate the dispute Taking into consideration the above and following para 1(5) of the Rules of the Tribunal, the Tribunal ruled that adjudication of the dispute between the [Buyer] and the German company is not within the scope of the Tribunal's competence In view of that, the Tribunal holds that [Buyer]'s petition of December 2004 for the involvement of the German company in the proceedings in the case as second respondent shall not be satisfied 4.2.7 Absence of the [Seller]'s representatives Considering the issue of hearing the case in the absence of the [Seller]'s representatives, the Tribunal held the following: The summons with the date of the hearings of 14 September 2005 was sent to the address of the [Seller] and was returned to the Tribunal by the courier service with a note: "Addressee is not registered by the indicated address" LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxvi The action materials as well as other correspondence which was repeatedly sent by the Tribunal's Registry to two known addresses (factual and postal) were returned to the Tribunal with a note: "Addressee is not registered by the indicated address" The Tribunal stated that the [Buyer] has taken all the reasonable measures in accordance with para 12(5) of the Rules of the Tribunal to obtain the specific address of the [Seller] and presented relevant information to the Tribunal in time (letters of the [Buyer] of December 2004 and of 16 February 2005, extract from the Unified States Companies Registry of February 2005) As it follows from para 12(5) of the Rules of the Tribunal, any written notification is regarded as received if it is sent to the last known location of the business company or to the mailing address of the party by registered letter or in any other way foreseeing registration of the attempt to deliver this notification Thus, taking into account that reiterated attempts to notify the [Seller] by means of the courier service at two addresses known to the Tribunal as well as taking into consideration the [Buyer]'s opinion expressed in its letters of 22 March and August 2005, the Tribunal, following para 12(5) and para 28(2) of the Rules of the Tribunal, believes that the [Seller] may be regarded as having been duly notified of the date, time and place of the arbitration proceedings Based on the above and following para 28(2) of the Rules of the Tribunal according to which non-appearance of a party that was duly notified of the date, time and place of the hearing does not impede the proceedings in the case and passing of the award, the Tribunal concluded that absence of the [Seller]'s representatives does not hamper the proceedings in the case and the passing of the award 4.2.8 Applicable law The applicable law was not determined by the parties Following art 28(2) of the Law of the Russian Federation "On the International Commercial Tribunal" and para 13(1) of the Rules of the Tribunal, the Tribunal holds that it is appropriate to LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxvii apply the conflict of laws norms of Russian law, in particular art 1211 of the Civil Code of Russian Federation in order to determine the applicable law According to art 1211(1) of the Civil Code of the Russian Federation, in the absence of the agreement on applicable law, the law of the State with which the contract is most closely linked shall apply Following assumptions of paras and 3(1) of art 1211, this law is the law of the country where the place of business of the company carrying out fulfillment of the acts of decisive importance for the contract is located The seller is regarded as the party which carries out such fulfillment under a sales contract (the Russian company in this case) Based on the above, the Tribunal concluded that Russian law is to be applied to this dispute Taking into account that the Russian Federation is a Contracting State to the Vienna Convention which according to art 15(4) of the Constitution of the Russian Federation and art of the Civil Code of the Russian Federation is a constituent part of the legal system of the Russian Federation and that provisions of the international agreement predominate over the norms of the national law, following art 1(1)(b) of the Vienna Convention, the Tribunal holds that the Vienna Convention shall be applicable to the relations in the present dispute By virtue of art 7(2) of the Vienna Convention, questions which are not expressly settled in the Convention are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the Russian law 4. Having considered [Buyer]'s claim for the recovery of the main sum in arrears from the [Seller], the Tribunal found the following: In accordance with the conditions of the contract of 24 October 2002, the [Buyer], on the basis of invoices #275/01 and 275/02 of 24 October 2002 that were billed by the [Seller], transferred to the [Seller] payment for the first consignment of the goods as an advance payment in the amount specified in the action, which is LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxviii confirmed by the bank documents of and 12 November 2002 and is not contested by the [Seller] The [Seller] has delivered to the [Buyer] only part of the goods with delay, which is confirmed by the bills of lading of 15 March and April 2003 and is not contested by the [Seller] Hence, in contravention to art 30 of the Vienna Convention, the [Seller] incompletely delivered to the [Buyer] the goods to the amount of the US dollars repayment of which the [Buyer] claims having carried out advance payment for the non-delivered goods On the basis of the above, the Tribunal, following art 30 of the Vienna Convention, finds that the [Buyer]'s claim for the recovery of the indebtedness from the [Seller] should be satisfied 4.2.9 Payment of interest for the use of monetary funds As to the issue of the recovery of the interest from the [Seller] for the use of another's monetary funds, the Tribunal found the following: Initially, the [Buyer]'s claim contained a request for the recovery from the [Seller] of the interest for the use of another's monetary funds which were accrued in accordance with art 78 and art 84(1) of the Vienna Convention as well as art 395 of the Civil Code of Russian Federation, in particular for the period starting on the date of the prepayment by the date when the action claim was lodged on the basis of the discount rate of the bank interest at the creditor's location which amounted to 7% and was confirmed as of November 2004 by the reference of the respective Turkish bank In its application for the clarification of the interest sum of December 2004, the [Buyer] presented the calculation of the reduced interest sum accrued for the period starting from the date of the prepayment by the date of the arbitration hearing based on the reduced rate in the amount of 3.7% use of which reduced the amount of the LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xxxix claimed sum In confirmation of the applied rate, the [Buyer] presented the publication from the "Komersant" newspaper of 14 September 2005 # 172 ("Marker" section) containing the information about the lending rates LIBOR in US dollars The [Seller] has not presented any objections to the submitted calculation Taking into consideration the above and following art 78, art 84(1) of the Vienna Convention and art 395 of the Civil Code of the Russian Federation, the Tribunal finds that [Buyer]'s claim for the recovery from the [Seller] of the interest for the use of another's monetary funds is to be satisfied in the claimed amount 4.2.10 Recovery of the expenses for the payment of the arbitration fee Having considered the [Buyer]'s claim for the recovery from the [Seller] of the amount of the arbitration fee paid by the [Buyer], the Tribunal, following para 6(1) of the Regulation on the Arbitration Fees and Expenses (Supplement to the Rules of the Tribunal) envisaging that the arbitration fee should be imposed on the party against which the award was passed, ruled that the [Seller] was obliged to reimburse the [Buyer] the amount of the arbitration fee expenses paid by it in US dollars LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xl CONCLUSION Through the research process, I gained a better understanding of terms of payment and more specifically about letter of credit Each method has a unique advantage for the seller or the buyer By offering the most optimal payment, both parties can achieve what they want in a way that is convenient for both parties And more specifically, the LC payment method has shown the variety and abundance of this type of payment, but LC still has many shortcomings, making transactions still a bit difficult But I believe LC is still the most effective method in most types of contracts My topic is Terms of payment and I hope to hear your comments and suggestions LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xli REFERENCES IICL (2005), Restitution of benefits received Available at: https://iicl.law.pace.edu/cisg/case/27-october-2005-tribunal-internationalcommercial-arbitration-russian-federation-chamber [Accessed 27 August 2019] Karla C Shippey, J.D, International Contract: Drafting the international Sales contract, 2rd edition, Chap 4,8 Nguyễn Thị Liên (2018), Điều khoản toán hợp đồng thương mại [Online] Available at: http://luathopdong.vn/dieu-khoan-thanh-toan-tronghop-dong-thuong-mai/n1338.html [Accessed 27 August 2019] Phòng tư vấn pháp luật (2017), SOẠN THẢO ĐIỀU KHOẢN THANH TOÁN HỢP ĐỒNG THƯƠNG MẠI [Online] Available at: http://luat247.vn/Soan-thao-dieu-khoan-thanh-toan-hop-dong-thuong-mai3A9231C0.html [Accessed 27 August 2019] Wayne, Jonathan, and Karla C Shippey A Short Course in International Contracts World Trade Press, 2003 WORLDLawDirect, INTERNATIONAL IncWHAT ARE TRADE LETTERS [Online] OF CREDIT Available IN at: http://www.worldlaw.eu/article/530/what-letters-credit-internationaltrade.html [Accessed 27 August 2019] Vietnam Commercial Law 2005 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... Analysing the disputes of terms of payment  1.1 Definition of terms of payment To understand more about the terms of payment, first we need look up to the definition of terms of payment What is terms. .. 1: TERMS OF PAYMENT 1.1 Currency In international trade, goods can be paid either in the currency of the exporting country or in the currency of the importing country or in the currency of the. .. Absence of the [Seller]'s representatives Considering the issue of hearing the case in the absence of the [Seller]'s representatives, the Tribunal held the following: The summons with the date of the