Switzerland 29 April 2004 Commercial Court St. Gallen (Lenses case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040429s1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: HG.2002.11-HGK
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Switzerland (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Lenses
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
18A21 [Criteria for acceptance of offer (conduct indicating assent): acts of performance]; 63A [Notice fixing additional final period for buyer's performance]
18A21 [Criteria for acceptance of offer (conduct indicating assent): acts of performance];
63A [Notice fixing additional final period for buyer's performance]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/962.pdf>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Queen Mary Case Translation Programme
29 April 2004 [HG.2002.11-HGK]
Translation [*] by dr. Andrea Vincze [**]
Edited by Jan Henning Berg [***]
POSITION OF THE PARTIES
Plaintiff [Seller]'s claim
"To order [Buyer] to pay [Seller] the sum of Euro [*] 27,392 and interest of 5 percent for the amount of Euro 20,872.00 from 3 February 2001 on, and for the amount of Euro 6,520 from 1 March 2001 on; and
"To order [Buyer] to bear all costs and damages."
Defendant [Buyer]'s response
[Buyer] did not present any claim and failed to participate in the written part of the proceedings, nor did [Buyer] appear at the main trial on 29 April 2004.
REASONING BY THE COURT
I. 1. [Seller] is an enterprise situated in St. Gallen, Switzerland, engaged in independent development, production and worldwide sale of highly specialized optical and medical technology products. [Buyer] is a public limited company founded upon French law, having its seat in Corbreuse, France (F; cf. Extract K bis; Annex 1 to [Seller]'s pleading of 29 April 2004).
2. a) In its written order of 23 August 2000, [Buyer] ordered from [Seller] 6 UV-F-Theta lenses in a total value of Euro 39,120 (pursuant to the order, this equals FRF [*] 256,610; cf. [Seller]'s exhibit no. 5 (cf. [Seller]'s exhibit no. 1). Upon the information provided by [Seller], no written contract was then concluded. However, [Seller] confirmed the "order" on 14 September 2000 (cf. [Seller]'s exhibit no. 5). Thereupon, the parties had agreed that a total contract price of Euro 39,120 was to be paid: the first installment of 30 percent of the total value (Euro 110728) was to be paid before the delivery and the remaining 70 percent (equaling Euro 27,392) was to be paid within 30 days after delivery took place (cf. [Seller]'s exhibit no.5). [Buyer] accepted the conditions of sale and payment, which was agreed upon in writing, and this is evidenced by the fact that [Buyer] transferred the first installment of Euro 11,728 to [Seller] on 9 November 2000 (cf. [Seller]'s exhibit no.6).
b) Upon information provided by [Seller], the ordered lenses were delivered to [Buyer] in three separate installments on 22 December 2000 (2 x 1 lens; 1 x 4 lenses), on 3 January 2001 and 1 February 2001 (cf. [Seller]'s exhibits 2-4.).
c) The remaining sum of the total purchase price was due 30 days after the two respective deliveries (3 January 2001 and 1 February 2001), i.e., payment of Euro 20,872 was due on 3 February 2001 and Euro 6,520 was due on 1 March 2001 (equaling Euro 27,392 in total).
d) Payment of the remaining sum was requested by [Seller] in its written communications on 21 August 2001 and 10 September 2001 (cf. [Seller]'s exhibits no. 7-8.). Yet, [Buyer] did not react this time either. This circumstance is significant not only because payment was obviously refused by [Buyer] but also because conformity and quality of the goods were not objected to either.
e) [Seller] requested the Court to order [Buyer] to pay the remaining purchase price and interest on it.
3. In a document on 18 March 2003, the Commercial Court was informed that the Statement of Claim and the summon obliging [Buyer] to submit its response to the Claim was received by Patrick Lafond (PDG [*] at [Buyer]'s business). After no response was submitted to the Commercial Court within the respective period of time, in the document of 2 April 2003 [Buyer] was granted an additional period of ten days to submit its response and at the same time [Buyer] was warned that if it fails to comply with the latter duty, a decision on the merits will still be made (Arts. 61 and 65(2) ZPO [*] ). In his report of 23 July 2003, the person in charge informed the Commercial Court that the latter communication was received on 4 July 2003. No response was submitted within the additional period either, in consequence of which the written procedure was terminated and in the document on 29 October 2003, the parties were invited to the main trial of 29 April 2004. The person in charge evidenced on 2 March 2004 that [Buyer] received the latter invitation on 5 February 2004.
[Buyer] did not appear before the Commercial Court at 2 p.m. on 29 April 2004. Since [Buyer] did not send any written communications beforehand and also failed to attend the main trial on 29 April 2004, the main trial was conducted in the absence of [Buyer] (after a thirty minute waiting period just in case [Buyer] was simply late) (Art. 173 ZPO; sGS [*] 961.2). In the invitation of 29 October 2003, Defendant [Buyer] was explicitly warned about Art. 173 ZPO [*].
II. 4. a) The Commercial Court has territorial jurisdiction because in the instant proceedings [Seller] having its seat in St. Gallen requests [Buyer] to pay the remaining purchase price for the optical instruments [Buyer] ordered (Art. 1(2) IPRG [*] (SR [*] 291), cf. Art. 5(1) LugÜ [*] (SR 0.275.11); Art. 118(1) IPRG, cf. Art. 1(1)(a) CISG (CISG; SR 0.221.211.1); Art. 57(1)(a) CISG, cf. Art. 5(1) LugÜ).
b) Since all conditions set in Art. 14 ZPO were fulfilled, the Commercial Court has jurisdiction to make a decision in the instant case.
c) Substantive issues of the case shall be governed by the CISG. Questions concerning matters governed by this Convention which are not expressly settled in it 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 law applicable by virtue of the rules of private international law. (Art. 7(2) CISG). Pursuant to Art. 117 IPRG [*], if the applicable law was not chosen in the contract, the law of the State having the closest connection with the contract, shall be applied. The closest connection might be with the State in which any of the parties has a place of business which shall perform the characteristic performance concerning trade activities included in the respective contract (Art. 117(2) IPRG). In case of sales contracts, characteristic performance shall be that of the seller (Art. 117(3)(a) IPRG).
Since in the instant case [Seller] was the one carrying out the characteristic performance (delivery of the ordered goods), Swiss law shall be applicable as gap-filling law.
III. 5. Pursuant to Art. 3 CISG, contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. The sales contract does not have to be in any specific form (Art. 11 CISG). [Buyer]'s order in writing on 23 August 2000 qualifies as a placement of order (cf. [Seller]'s exhibit no.1). The actual offer was drafted by [Seller] in its "Confirmation de Commande No. 300847" on 14 September 2000 (cf. [Seller]'s exhibit no. 5; Art. 14(1) CISG). Concerning acceptance of the offer, [Buyer] has no written document on the acceptance. Yet, the bank transfer on 9 November 2000 evidences that [Buyer] complied with the advance payment as it was requested in [Seller]'s offer of 14 September 2000 (the same payment conditions were mentioned by [Buyer] as well in its first written communication; cf. [Seller]'s exhibit no. 1 under the heading "condition de reglement"; 30 percent of Euro 39,120 equals Euro 11,736.00; according to the bank documents, Euro 8 were deducted from this amount for foreign banking costs, cf. [Seller]'s exhibit no.6). Thereupon, agreement of the parties on payment conditions and also the total purchase price is evidenced because the advance payment took place upon common intent of the parties and with regard to the above mentioned total purchase price. Performance of the respective advance amount by [Buyer] could be understood by [Seller] as an act qualifying as acceptance of the offer (Art. 15(1) CISG, cf. Art. 18(1) CISG). Upon determination of the type and quantity of the goods to be delivered, determination of the purchase price and complying with the advance payment, all conditions of concluding the instant sales contract (contract for delivery of goods) effectively were met. The contract for delivery of goods was therefore effectively concluded on 9 November 2000 at the latest (i.e., arrival of the advance payment on [Seller]'s bank account; cf. [Seller]'s exhibit no.6).
6. Under a sales contract, the seller is obliged to deliver the goods and to transfer the property in the goods (Art. 30 CISG).
[Seller] presented that it delivered the 6 UV-F-Theta Lenses that were ordered to [Buyer] in three separate packages along with an appropriate pro forma invoice (cf. [Seller]'s exhibit no. 2-4). [Seller] states that [Buyer] did not raise any objections, not even concerning the goods delivered (cf. Art. 35 et seq. CISG). After [Buyer] had waived its right to participate in the written procedure, it also waived its right to contest the latter statement. The Court shall therefore base its contentions on the fact that there were no defects concerning the goods delivered and that [Seller] complied with all its duties deriving from the contract in all aspects.
7. The buyer is obliged to pay the purchase price at the deadline agreed and to take delivery of the goods. In lack of a contrary provision in the contract, place of performance shall be the Seller's place of business (Art. 53, cf. Art. 59 CISG; Art. 57(1)(a) CISG).
It is unknown when and how [Buyer] took delivery of the goods. After [Buyer] waived its right to participate in the written procedure, it also waived its right to submit any contentions with regard to the latter issue. Therefore, the Court shall base its contentions on the fact that the goods delivered by [Seller] were taken over by [Buyer].
In consequence of waiving the right to participate in the written procedure in which it could have objected to the claim, the Court shall base its conclusions on [Seller]'s submission that [Buyer] failed to pay the remaining purchase price until this day and that [Buyer] failed to comply with its duty to pay deriving from the contract of 9 November 2000.
8. Based on the payment conditions jointly agreed upon by the parties, [Buyer] should have paid the remaining purchase price in Euro within thirty days after receipt of the invoice (cf. [Seller]'s exhibit no. 5; on the backside: "conditions de paiements"). The invoices are dated 3 January 2001 (for one piece and four pieces; cf. [Seller]'s exhibits no. 2 and 3) and 1 February 2001 (for one piece, cf. [Seller]'s exhibit no. 4). It is not included in the documents submitted by [Seller] when these invoices were received by [Buyer]. However, this date is essential for determining the due date of the remaining purchase price and for calculation of interest.
Since [Buyer] did not participate in the written procedure and consequently it also waived its right to object to the date of receipt of the goods as stated by [Seller], the Court shall base its conclusions on the fact that the respective invoices were handed over to [Buyer] upon the usual delivery period. If one contends that the delivery period is two weeks at the most, the respective invoices should have been received by [Buyer] approximately mid-January 2001 and mid-February 2001. The remaining purchase price was, therefore, due mid-February 2001 and mid-March 2001 at the latest.
In the document of 21 August 2001 and referring to Art. 63(1) CISG, [Seller] called upon [Buyer] to pay the remaining purchase price and granted a last deadline until 31 August 2001 ([Seller]'s exhibit 7; Art. 63(1) and (2) CISG). According to information submitted by [Seller], [Buyer] did not react to this communication (cf. [Seller]'s exhibit no. 8). This evoked [Seller]'s rights set in Arts. 61, 64 and 74 CISG from 1 September 2001 on. In its claim submitted on 22 February 2002, [Seller] requests payment of the remaining purchase price (Euro 27,392) and 5 percent interest on the delay (cf. Arts. 74 and 78 CISG). All buyers must know that, as far as the opposing party did not default in performing the contract, they are obliged to pay the purchase price agreed upon and that the seller is entitled to receive interest in case of payment delay (cf. Art. 74 CISG). Therefore, the whole amount of the present claim (Euro 27,392, i.e., the total purchase price equaling Euro 39,120 reduced by the advance payment of Euro 11,728) and the requested 5 percent interest for delay are both justified. (Art. 78 CISG; Art. 104(1) OR [*] (SR 220); cf. U. Magnus, in: H. Honsell (ed.), Kommentar zum UN-Kaufrecht, Berlin et al. 1996 para 7 et seq. And para 12 on Art. 78 CISG; H.H. Eberstein, in: Caemmerer/Schelchtriem (ed.), Kommentar zum Einheitlichen UN-Kaufrecht, Munich 1990, para 9 et seq. on Art. 78 CISG). Payment of the remaining purchase price concerning the delivery of 5 lenses on 3 January 2001 was due mid-February (cf. [Seller]'s exhibit no. 2 and 3). This installment of the remaining purchase price amounts to 5/6 of the total remaining purchase price; i.e., equaling Euro 22,826.67. Payment of the remaining purchase price concerning one lens was due mid-March (cf. [Seller]'s exhibit no. 4). This installment of the remaining purchase price amounts to 1/6 (one sixth) of the total remaining purchase price; i.e., equaling Euro 4,565.33. Thereupon, [Seller] is entitled to receive 5 percent interest on Euro 4,565.33 from 15 March 2001 on. [Seller]'s request for interest exceeding this amount shall be rejected.
9. Costs of the proceedings shall be determined upon the fact of winning or losing the case. In the instant case, [Seller] exclusively won the case, thereby [Buyer] shall bear all costs of the proceedings (judicial costs and remuneration of costs incurred by the winning party).
a) Judicial costs at the Commercial Court shall be calculated upon the judicial cost tariffs (GKT [*]; sGS 941.12; sGS 941.12) depending on the height of the amount in dispute (para 304 cf. Para 332 GKT). Considering FRF 50,000 as the amount involved in the dispute, judicial costs shall be FRF 5,000. [Seller] shall be paid back FRF 1,000 for the initial registration costs.
b) Thus, [Buyer] shall compensate for all of [Seller]'s procedural expenditures. Since [Buyer] was represented by a lawyer, compensation by the other party shall be governed by the Law on Attorney's and Legal Representative's Fees (HonO [*]; sGS 963.75). If the amount in dispute is between FRF 20,000 and 50,000, the average fee for participation in the whole proceedings (i.e., engagement in the whole written process and the main trial) shall be FRF 1,850 plus 12.3 percent of the amount in dispute (Euro 27,392); plus Euro 3,369.216 and FRF 5,313.49 (Art. 14 c) HonO); equaling altogether approx. FRF 7,100. A further 20 percent shall be added for the proceedings before the Commercial Court (FRF 1,420; Art. 15 HonO). The latter was, however, was only partly conducted because [Buyer] did not participate in the written procedure, thereby the total amount of the average fee shall be reduced to 60-70 percent of the original amount (Art. 27 HonO). In addition, 7.6 percent VAT and a lump sum of 4 percent of the fee for cash expenditures shall be added (Art. 29 bis HonO). Consequently, [Buyer] shall pay [Seller] FRF 6,500 to compensate for its procedural expenditures.
The Commercial Court therefore decided that:
1. [Buyer] shall pay [Seller] Euro 27,392 and 5 percent interest on Euro 22,826 from 15 February 2001 on and 5 percent interest on Euro 4,565.33 from 15 March 2001 on. The part of the claim exceeding the latter amount shall be rejected.
2. [Buyer] shall bear all judicial costs equaling FRF 5,000. [Seller] shall be compensated for the registration fee of FRF 1,000.
3. [Buyer] shall compensate for [Seller]'s procedural expenditures in the amount of FRF 6,500.
|President of the Commercial Court|
Prof. Christoph Leuenberger
|Registrar at the Commercial Court
* All translations should be verified by cross-checking against the original text. For the purposes of this translation, the Swiss [Seller] is referred to as [Seller]; and the French Defendant is referred to as [Buyer]. Amounts in former French currency (French Francs) are indicated as [FRF] and amounts in European currency (Euros) are referred to as [Euro].
Translator's note on abbreviations: GKT = Gerichtskostentarif [judicial cost tariffs]; HonO = Honorarordnung für Rechtsanwälte und Rechtsagenten [Swiss Law on Attorney's and Legal Representative's Fees]; IPRG = Bundesgesetz über das Internationale Privatrecht [Swiss Code on the Conflict of Laws]; LugÜ (Lugano Convention) = EC EFTA Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters - Lugano, 16 September 1988; OR = Bundesgesetz vom 30. März 1911 betreffend die Ergänzung des Schweizerischen Zivilgesetzbuches (Fünfter Teil: Obligationenrecht) = [Swiss Code on the Law of Obligations]; PDG = Président Directeur Général [General Director]; sGS = Systematisches Gesetzessamlung [Sysrematical Collection of Swiss Acts]; SR = Systematische Sammlung des Bundesrechts [Systematical Collection of Swiss Federal Law]; ZPO = Zivilprozessordnung [Code of Civil Procedure].
** Dr. Andrea Vincze is a Fellow of the Institute of International Commercial Law of the Pace University School of Law. She received her law degree from the University of Miskolc, Hungary, in 2002. Currently, she is a Ph.D. candidate at that university, working on her research project on international commercial arbitration and ICSID arbitration.
*** 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.Go to Case Table of Contents