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CISG CASE PRESENTATION

Germany 25 November 2002 District Court Saarbrücken (Clothes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/021125g1.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 20021125 (25 November 2002)

JURISDICTION: Germany

TRIBUNAL: LG Saarbrücken [LG = Landgericht = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 8 O 68/02

CASE NAME: German case citations do not identify parties to proceedings

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: England (defendant)

GOODS INVOLVED: Clothes


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(b)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 78 [Also cited: Articles 1(2) ; 2 ; 3(1) ; 9 ; 53 ]

Classification of issues using UNCITRAL classification code numbers:

74A [General rules for measuring damages: loss suffered as consequence of breach];

78B [Rate of interest]

Descriptors: Damages ; Interest ; Interest as element of damages

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=917&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (German): CISG online database <http://www.cisg-online.ch/cisg/urteile/718.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=917&step=FullText>; see also Internationales Handelsrecht (2/2003) 70

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Saarbrücken

25 November 2002 [8 O 68/02]

Translation [*] by Dr. Andrea Vincze [**]

Edited by Jan Henning Berg [***]

DEFAULT JUDGMENT

FACTUAL BACKGROUND

Plaintiff [Seller] of Germany runs a wholesale clothes store; Defendant [Buyer] runs a clothes shop in England. At the beginning of the business relationship between the parties, [Buyer] was provided with [Seller]'s general conditions of sale in English and in the German language. Pursuant to point 6 of the general conditions, the parties agreed that the court to resolve legal disputes shall be the Court of Saarbrücken. [Buyer] ordered clothing items from [Seller], which were delivered. Altogether, British pounds [] 7,146.67 were charged for the items in 1998. At an exchange rate of Deutsche Mark [DM] 3.016 for one British pound, this amount equals DM 21,588.

On 27 December 1999, [Seller] requested that a default summons be issued for DM 21,588.38 and interest at 12 percent due from 4 May 1998, which was issued on 18 February 2000 and delivered to [Buyer] on 12 May 2000.

On 10 January 2001, [Buyer] paid DM 1,429.50 to [Seller]. [Seller] declared the legal dispute as settled with respect to this amount of money.

[Seller] requests the Court to order [Buyer] to pay EUR 11,022.62 plus interest at 12 percent due from 4 May 1998 reduced by EUR 730.89 which were paid on 10 January 2001. [Buyer] did not present any claim.

REASONING OF THE COURT

[Seller]'s claim is admissible. The international jurisdiction of the German courts, which shall be examined ex officio, is substantiated because the parties agreed upon Saarbrücken as the court to resolve legal disputes. The effect of the provision is governed by Art. 17(1)(a) of the EuGVÜ [*] because it was agreed upon before 28 February 2002 and because Germany and the United Kingdom are signatories to the EuGVÜ and the EuGVVO [*] which entered into force on 1 March 2002 (cf. Art. 66(1) EuGVVO).

The claim is founded on the merits. The legal relationship between the parties is governed by the UN Convention on the International Sale of Goods (CISG) of 11 April 1980 [BGBI [*] 1989 I 1589, corrected by BGBI 1990 II 1699], which entered into force in Germany on 1 January 1991. The CISG is applicable to contracts for the sale of goods concerning delivery of goods when the parties have their places of business in different States at the time of the conclusion of the contract (Art. 1(1), (2) CISG) and in addition the facts of the case substantiate a relationship to at least one of the Contracting States. Such a relationship is present if both of the States in which the seller and the buyer have their places of business are Contracting States or if the rules of private international law lead to the application of the law of a Contracting State (Art. 1(1)(b) CISG). If there is no choice of law, the law applicable to export contracts between a seller having its place of business in Germany and a buyer which does not have its relevant place of business in any of the CISG Contracting States is German law, based on Art. 28 EGBGB [*] and therefore, according to Art. 1(1)(b) CISG, also the CISG itself.

Since the goods are not for private use (Art. 1(1)(a), Art. 2, Art. 3(1) CISG), the CISG is not inapplicable. Pursuant to Art. 53 CISG, [Seller] claims the purchase price of DM 21,588.38, which is not disputed by [Buyer].

Because of the fact that an installment of DM 1,429.50 was paid upon submission of the claim, [Seller] declared the legal dispute settled. The claim is also founded concerning the inherent declaratory claim because at the time of the delivery of the statement of claim, the request was fully existent. With regard to the partial payment made, the request amounts to DM 21,588.38 - DM 1,429.50 = DM 20,158.88, equaling EUR 11,037.96 - EUR 730.89 = EUR 10,397.07.

Pursuant to Art. 78 CISG, if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it without any further conditions. The relevant point of time is 4 May 1999 as was requested and laid down in the default summons; the date of 4 May 1998 included in the statement of claim is obviously a clerical error because at that time the goods were neither ordered nor delivered -- the latter took place only between 3 September and 11 December 1998. The CISG includes only the grounds for which interest can be ordered but it is silent on the rate of interest. As far as the parties did not agree on the latter, first of all trade usages as provided in Art. 9 CISG shall be taken into account. Yet, such usages were neither presented by the parties nor could they be otherwise ascertained. Therefore, the rate of interest shall be determined with regard to the statutory law which is applicable, pursuant to the provisions on private international law of the forum, to questions not covered by the CISG. Consequently, based on Art. 28(2) EGBGB [*], German law is applicable.

The contract has the closest links to Germany because Seller, which has its place of business in Germany, carried out the characteristic service. Since the German EGBGB is silent on the question of the rate of interest, Arts. 352 and 353 HGB [*] shall be applied which provide for a statutory rate of interest at 5 percent. The Seller can enforce its further claims for interest exceeding the statutory rate of interest as part of the damages (Arts. 74, 78 CISG). It is sufficient that the Seller drew on credit of a certain amount during the period of time in question, it is irrelevant that drawing on such credit took place as a direct consequence of the Buyer's delay in paying the purchase price. Conditions set by Arts. 74 and 78 CISG are undisputedly fulfilled because [Seller] drew on a bank credit for which it paid interest at 12 percent, therefore the claim is founded.

Since [Buyer] failed to submit a statement of defense within the statutory time limit of four weeks beginning on the day of delivery of the statement of claim, [Seller]'s claim is recognized by a default judgment.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For the purposes of this translation, the Plaintiff of Germany is referred to as [Seller]; the Defendant of the United Kingdom is referred to as [Buyer]. Amounts in German currency (Deutsche Mark) are indicated as [DM] and amounts in European currency are indicated as [EUR].

Translator's note on other abbreviations: BGBI = Bundesgesetzblatt [Official Journal of the Federal Republic of Germany]; EGBGB = Einführungsgesetz zum Bürglichen Gesetzbuch [German Code on Private International Law]; EuGVÜ = Europäisches Gerichtsstandsübereinkommen [European Convention on Jurisdiction of the Courts]; EuGVVO = Verordnung über die gerichtliche Zuständigkeit und die Anerkennung und Vollstreckung von Entscheidungen in Zivil- und Handelssachen [Ordinance on Jurisdiction of the Courts and Recognition and Enforcement of Civil and Commercial Decisions]; HGB = Handelsgesetzbuch [Commercial Code of Germany].

** Dr. Andrea Vincze received her law degree from the University of Miskolc, Hungary, in 2002. Currently, she is a Ph.D. candidate at the same university, working on her research project on international commercial arbitration and ICSID arbitration. She has also dealt with cross-border and Internet-related copyright issues.

*** Jan Henning Berg is a law student at the University of Osnabrück, Germany and participated in the 13th Willem C. Vis Moot with the team of the University of Osnabrück. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis Moot and 4th Willem C. Vis (East) Moot.

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Pace Law School Institute of International Commercial Law - Last updated June 11, 2007
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