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CISG CASE PRESENTATION

Denmark 7 March 2002 Eastern High Court, Appellate Court (Internet website development case)
[Cite as: http://cisgw3.law.pace.edu/cases/020307d1.html]

Primary source(s) of information for case presentation: CISG Nordic website

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Case identification

DATE OF DECISION: 20020307 (7 March 2002)

JURISDICTION: Denmark

TRIBUNAL: Østre Landsret [Eastern High Court = Appellate Court]

JUDGE(S): M. Levy, Karsten Bo Knudsen, Mai Ahlberg

CASE NUMBER/DOCKET NUMBER: U.202.1370Ø

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Denmark (plaintiff)

BUYER'S COUNTRY: Switzerland (defendant)

GOODS INVOLVED: Development of Internet website


Classification of issues present

APPLICATION OF CISG: No

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 3 [Also relevant: Article 57 ]

Classification of issues using UNCITRAL classification code numbers:

3B [Goods to be manufactured, services: services preponderant part of obligation]

Descriptors: Services

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Editorial remarks

Excerpt from CISG-Denmark website

"This case involves the Lugano Convention, Article 5, stk 1, in relation to CISG Art. 57, although CISG was not directly applicable in the case at hand. The case also illustrates the problem of development of software - which the High Court regarded as the provision of a service - and the sale of software (which some CISG commentators regard as a sale of goods subject to the Convention), see case commentary by Professor dr. jur. Lookofsky [presented below]."

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Danish): CISG Nordic website <http://www.cisgnordic.net/020307DK.shtml>; see also Ugeskrift for Retsvæsen 2002.1370 Ø.

Translation: Unavailable

CITATIONS TO OTHER COMMENTS ON DECISION

Unavailable

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Case commentary

Reproduced with permission of CISG-Denmark website

Denmark, 7 March 2002, Eastern High Court (Østre Landsret) [1]

Joseph Lookofsky
November 2004

Although this decision by the Danish Eastern High Court did not involve CISG application (neither party argued the CISG applied), the case seems noteworthy in the present context, because it illustrates the sometimes elusive distinction between "sales of goods" (which are covered by the Convention) and contracts for the provision of services (which are not).[2]

The case arose when a Danish company (D) brought an action in Denmark against a Swiss-based company (S), claiming sums due for services rendered in connection with D's development of an Internet website for S.

Quite apart from the merits of the case, S sought to have the action dismissed for lack of jurisdiction. According to Article 5(1) of the Lugano Convention, which regulates the jurisdiction of a Danish court in a situation like this,[3] a (Swiss) company can be sued, inter alia, at the "place of performance" of the (contractual) obligation in question, i.e., the obligation which forms the main basis of the proceedings.[4]

To determine that "place" the High Court first needed to determine the applicable law.[5] In this connection (and apparently without objection from either party), the Court elected to characterize the obligation to develop a web-site as the provision of a "service" (tjenesteydelse). It then applied the EU Rome Convention (on the Law Applicable to Contractual Obligations) to determine whether Danish or Swiss substantive law should be applied to determine the place of performance of that kind of obligation. Then, regarding D's software development as the contract's "characteristic obligation" in relation to the "presumption" in Article 4(2) of the Rome Convention, the High Court held that the contract was most "closely connected" to Denmark.[6] This meant that Danish domestic law determined the place of performance, which, in turn, meant that S was obligated to make payment in Denmark. For this reason, the High Court found it had jurisdiction (under the Lugano Convention) to decide the merits of case.

The distinction between the development of software -- which the High Court regarded as the provision of a service -- and the sale of software (which some CISG commentators regard as a sale of goods subject to the Convention), might seem elusive.[7] But even if the High Court had characterized this case as a "sale of software" (instead of a contract for the provision of a service), the Court would have had jurisdiction under the Lugano Convention nonetheless, since the default place-of-payment rule in CISG Art. 57 accords with the general Danish (domestic law) rule,[8] and since the relevant (Danish) PIL rule for a non-CISG software sale would, in all likelihood, be the same (Rome Convention) rule which the High Court applied to determine the applicable (domestic) law as regards the place of performance.[9]


FOOTNOTES

1. Judgment published in Danish in Ugeskrift for Retsvæsen 2002.1370 Ø. Full text in Danish also available at <http://www.cisg.dk>.

2. See Joseph Lookofsky, Understanding the CISG in Scandinavia (2d ed. Copenhagen 2002) 2-5.

3. See Joseph Lookofsky and Ketilbjørn Hertz, Transnational Litigation and Commercial Arbitration (2d ed. 2003) Ch. 2.3.

4. See id., Ch. 2.2.2.

5. Had the Court elected to deal with this as a CISG case, there would have been no need for a choice of law (since Denmark and Switzerland have the same CISG rule-set), so CISG Article 57 could have "solved" the place-of-payment obligation without further ado.

6. See id. Ch. 3.2.1(B).

7. See Lookofsky, supra n. 2. See also Joseph Lookofsky, In Dubio Pro Conventione? Some Thoughts about Opt-Outs, Computer Software and Preëmption Under the CISG, 13 Duke J. Int. & Comp. L. 258, also available at <http://www.law.duke.edu/journals/djcil/> and at  <http://cisgw3.pace.edu>. As regards software as goods (løsøre) under Danish domestic law, see Joseph Lookofsky, Køb (2nd ed. Copenhagen 2002) Ch. 2.3.a.

8. I.e., the payment place would be Denmark irrespective of whether such a "sale of goods" were dealt with as a CISG transaction or as a transaction governed by Danish domestic sales law rules.

9. I.e., Article 4(2). If the transaction had been seen as a sale, but not a CISG sale, the High Court would have needed to determine the applicable domestic law. Although a Danish court would ordinarily apply the 1955 Hague Convention on the Law Applicable to International Sales of Goods as the relevant (lex specialis) PIL rule-set in an international sale of "goods", Article 1 of the official (French) version of the Hague Convention would seem to limit that Convention's applicability to sales of "tangibles" (objets mobiliers corporeles).

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Pace Law School Institute of International Commercial Law - Last updated October 1, 2013
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