Switzerland 30 April 2003 Canton Appellate Court Valais (Furniture case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/030430s1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: C1 03 60
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Italy (plaintiff)
BUYER'S COUNTRY: Switzerland (defendant)
GOODS INVOLVED: Furniture
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]; 78B [Rate of interest]
39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];
78B [Rate of interest]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
German: Schweizerische Zeitschrift für Internationales und Europäisches Recht / Revue suisse de droit international et de droit européen (1/2004) 107
CITATIONS TO TEXT OF DECISION
Original language (French): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/896.pdf>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
Default judgment of 30 April 2003 (C1 03 60)
Translation [*] by Amy Hornitzky [**]
On 18 November 2002 by way of a statement of claim, Plaintiff B... S.r.l. [Seller] brought an action for damages against Defendant M... and l... Sarl [Buyer], alleging that:
|1.||The claim is a legitimate/actionable claim in law;|
|2.||The [Buyer] must pay to the [Seller] the amount of 8,172.38 Swiss francs plus interest at a rate of 10% per annum from 12 November 2001;|
|3.||All costs of the proceedings and the judgment should be borne by the [Buyer] who, in addition to the settlement, should pay the court costs to the [Seller].|
The Judge of the District of Sion passed on the claim/submissions to the [Buyer] on 22 November 2002, instructing [Buyer] that it would be given until 5 December 2002 to file a response.
Upon the [Buyer]`s failure to respond to the first deadline, the District Judge determined a final period of ten days, on 3 February 2003, in which to allow the [Buyer] to respond to the claim, with the consequent penalty of a default judgment should the deadline go unheeded.
On 12 March 2003, the [Buyer] had not responded in any way to the Courtīs warnings, and so the matter was referred to the Cantonal Court for an examination of the circumstances of default, and if necessary to pronounce a default judgment.
Whereupon the Cantonal Court:
1. a) The [Buyer] has not provided a response to the [Seller]'s statement of claim
although the [Buyer] has been on numerous occasions requested to do so in accordance with sections 99 and 129 CPC. The second warning was addressed to [Buyer] setting out express legal consequences upon a second failure to respond (art. 97(1) CPC). Having been notified of the referral of the matter to the tribunal, the non-defaulting party did not abnegate in writing the consequences of default (arts. 100 and 101(5) CPC). Thus, there are grounds to render a default judgment (art. 102 CPC); the disputed validity of 8,172.38 Swiss francs (art. 15(1) CPC) affords the local court jurisdiction to determine the matter at first instance in the Canton.
b) According to article 102(1) CPC, in the case of a default judgment the alleged facts and conclusions submitted by the non-defaulting party are admissible to the extent that they do not render the claim obviously inadmissible or unfounded. "Obviously inadmissible" does not include a request, on the basis of the alleged facts and which imprecision is not established/verified by the file, which permits a legal construction justifying the drawing of conclusions on the basis of time-efficiency. The judge cannot in effect be constrained by rules of procedure and be responsible for an imprecise application of substantive law (RVJ 1995 p. 164 consid. 1c; 1992 p. 205 consid. 1c and cited references; Ducrot, Civil Law of Valais, p. 420).
II. FACTS OF THE CASE
2. The [Seller]'s allegations are not in contradiction to the contents of the file and contain the following facts:
a) [Seller] is an Italian company. Its main activity is the production and restoration of furniture. [Buyer]'s firm is active in the trade of furniture in all respects.
b) On 12 October 2001, [Seller] delivered different furniture pieces to [Buyer] in accordance with a series of furniture orders through a catalogue. Invoice no. 843 of the same day shows 8,172.38 Swiss francs as being due and sets out the conditions of payment: 3% 10J. - 30 J.Net'.
As the delivery took place but not the payment of the account, [Seller] called [Buyer] three times, on 12 December 2001, 28 January 2002 and 18 February 2002. On 5 April 2002, [Seller] then threatened to increase the amount of 8,172.38 Swiss francs with interest at 5% per annum from 12 November 2001. [Buyer] replied in writing on 25 April 2002, claiming to have contacted the [Seller]'s salesman a week after the delivery to inform him of a certain number of malfunctions/flaws affecting the furniture. On 10 October 2002, by post [Seller] denied having received a single notice of the defaults. The [Seller] once again claimed payment in total and the interest for Invoice no. 843. This last request remained unanswered.
III. THE LAW OF THE CASE
3. a) Although the place of business of the Plaintiff [Seller] is in Italy and the Defendant [Buyer]`s place of business is in Valais, Switzerland, the courts of Valais are competent to hear the case (arts. 2 and 5 ch. 1 CL; RVJ 1995 p. 164 consid. 1a)
In respect to the contract that was concluded for the sale of moveable objects between parties with their places of business in different countries (cf. infra consid. 3b/aa), the Vienna Convention of 11 April 1980 on Contracts for the International Sale of Goods (from now on: CISG) is applicable as autonomous law (art. 1(1)(a) CISG; RVJ 1995 p. 164 consid. 2a). The treaty provides for a payment of interest upon default by one of the parties, but does not specify this amount (art. 78 CISG). This point must be examined in accordance with the law assigned by the rules of private international law (art. 7(2) CISG), which specify the applicable law as the law of the country where the vendor usually resides at the moment when he receives the order (art. 117, 118 LDIP, 1 and 3(1) of the Hague Convention on the Law Applicable to the Sale of International Goods, of which the application is dependent upon art. 57 ch. 1 of the Lugano Convention concerning the judicial competence and the execution of decisions in civil and commercial matters; Donzallaz, The Convention of Lugano, vol. I, nn. 213 and 214). In this case, the file does not mention that the order was received anywhere else apart from where the place of business has its registered office. The only address mentioned on the letterhead is located in Italy and the existence of the salesman mentioned in the [Buyer]'s letter of 25 April 2002 is not established. Accordingly the interest rate for the default must be determined pursuant to Italian law.
b) aa) The sales agreement, according to the CISG, is the contract which obliges the vendor to deliver the goods and to transfer their ownership to the purchaser, which commits the buyer to accept delivery and to pay the price for the goods (Tercier, Special Contracts, 2d ed., n. 1128). This reflects the situation in the current matter, since the [Seller] was engaged/contracted to deliver the furniture items in a series to the [Buyer] in return for payment for the goods.
bb) In the absence of another agreement, the buyer has defaulted upon payment of the price of the goods upon their delivery (arts. 58(1) and 59 CISG; RVJ 1995 p. 164 consid. 2b/bb). For his part, the vendor is required to deliver those goods which were specified in the contract (art. 35(1) CISG). However the transferee/buyer of the goods loses his right to appeal/challenge a lack of conformity if he does not notify the vendor within a reasonable period of time after he has discovered or should have discovered the lack of conformity (art. 39(1) CISG), but in all cases within two years of the date when the goods were handed over to the buyer (art. 39(2)).
In this matter, the goods were delivered on 12 October 2001. The question of conformity of the delivered goods with those ordered which was raised by the [Buyer] in its letter of 25 April 2002 has no additional relevance to the outcome of the matter. The [Seller] denies having been informed of the existence of any faults before having received the letter on 25 April 2002. This allegation does not contradict the cause of action and must be retained (art. 102(1) CPC).
Consequently, to the extent to which [Buyer] had knowledge of the lack of conformity - the existence of which is not established - affecting the goods in the week following their delivery, the opinion which they sent to [Seller] six months later was late (cf. RVJ 1998 p. 140 consid. 4c; Ferrari, Contract of International Sales, p. 178 to 180). [Buyer] must accordingly forfeit the right to make use of the letter.
The conditions of payment can be determined from that shown on the invoice of 12 October 2001, that the parties or vendor provided for a delay in payment of 30 days (a more favorable scenario for the buyer than payment upon delivery as specified in article 59 CISG). In any event, this appears to be how the [Seller] interpreted the clause since it only claims interest for delayed payment from 12 November 2001.
According to the above reasoning, [Buyer] has been in default of payment to [Seller] for the amount of 8172.32 Swiss francs since 13 November 2001.
c) A buyer who defaults on payment owes interest for the delay as soon as payment for the goods is due, without the need for any additional request from the seller (arts. 59 and 78 CISG; Neumayer/Ming, the Vienna Convention on Contracts for the International Sale of Goods in CEDIDAC no. 24, p. 385; Plantard, Rights and obligations of the buyer in the Vienna Convention of 1980 on the international sale of goods, p. 114; Tercier, Rights and obligations of the buyer in the Vienna Convention of 1980 on the International Sale of Goods, p. 131). The applicable rate according to Italian law being in this matter that provided in section 1284 of the Italian Civil Code (3.5%: Ministerial Decree on Finances and Economy of 11 November 2000). Thus [Buyer] must pay [Seller] the amount of 8,172.38 Swiss francs with interest of 3.5% from 13 November 2001.
4. As the claim for payment is a legitimate cause of action, the court costs and the costs to the [Seller] are to be borne by the [Buyer] (art. 252(1) and 260(1) CPC).
a) In view of the value of the matter in this litigation (art. 14(1) LTar), which does not present complex judicial problems, and having regard to the default by the [Buyer] during the initial correspondence stages (arts. 111(1) and 12(1) LTar), the court costs amount to 400 Swiss francs, disbursements included (arts. 2(1) and 3 LTar). This amount will be deducted from the [Seller]'s advance payments and the [Buyer] will need to reimburse the [Seller]. The Court will refund the outstanding advance payment to [Seller]
b) The costs of [Seller] include the costs of its attorney (art. 3(1) and 3 LTar), who prepared a statement of claim including eleven annexes and two summary letters. The attorney's fees, having regard to the amount litigated, are expected to be between 1,400 Swiss francs and 2300 Swiss francs (art. 32(1) LTar). Due to the default by the [Buyer], these costs must however be reduced (art. 28(3) LTar). Considering the extended activity, they may be determined at 650 Swiss francs, to which 50 Swiss francs are added for all-inclusive disbursements ( art. 3(3) and 26 LTar). The costs of the [Seller] are thus fixed at 700 Swiss francs.
For these reasons,
1. [Buyer] will pay [Seller] 8,172.38 Swiss francs with interest at 3.5% from 13 November 2001.
2. The court costs of 400 Swiss francs are to be borne by [Buyer] who will pay 700 Swiss francs to [Seller] for disbursements, and 400 Swiss francs for the reimbursement of advance payments.
Determined at Sion, on 30 April 2003.
By the Cantonal Court
The President, The Registrar
Relief from the judgment. The Defendant/responding party is made aware of the fact that it may demand relief from the present judgment, within a period of ten days from notification of the judgment, by summoning the opposing party to attend the Court and present themselves before the Judge who presided over the case in order to determine the costs of the proceedings, including those costs for the appearance in court concerning the demand for relief and being admitted to pursue the matter. If the party requesting the relief proceedings does not appear before the Court, the judgment is final. If the request for relief is allowed, the matter is taken to be at the same stage as when the Defendant ceased pursuing/being involved in the case.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Italy is referred to as [Seller] and Defendant of Switzerland is referred to as [Buyer].
** Amy Hornitzky has completed her Arts (languages) and Law degrees in Australia. She is currently interning at a law firm in Germany and will commence her LL.M. in the Netherlands in 2008.Go to Case Table of Contents