Switzerland 3 November 2004 Appellate Court Jura (Building materials case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/041103s1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: Ap 91/04
CASE HISTORY: 1st instance Tribunal de première instance 8 September 2004
SELLER'S COUNTRY: France (plaintiff)
BUYER'S COUNTRY: Switzerland (defendant)
GOODS INVOLVED: Building materials (sand, masonery sand, corrugated iron sheets, gravel sand)
SWITZERLAND: Cantonal Court of Jura (Building materials case) 3 November 2004 [Ap 91/04]
Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/90],
CLOUT abstract no. 904
Reproduced with permission of UNCITRAL
The case under consideration concerned the delivery, by a French company, of building materials to a Swiss farm. The seller instituted an action in the lower court, seeking payment of the sale price.
Referring to its general conditions of sale, the seller sought to apply French domestic law. The court acknowledged a choice of law in favour of French law, but without excluding the application of the CISG within the meaning of its article 6, since the parties had not stated their position on the matter in their correspondence. Nevertheless, the jurisdiction of the lower court before which the case had been brought was contested, pursuant to the law of the forum, since the amount in dispute exceeded 20,000 Swiss francs.Go to Case Table of Contents
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:
6B [Choice of law: when not excluded Convention applies to sales contract between parties with relevant places of business in Contracting States]; 8A [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct]; 10A [Relevant place of business: definition of]
6B [Choice of law: when not excluded Convention applies to sales contract between parties with relevant places of business in Contracting States];
8A [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct];
10A [Relevant place of business: definition of]
CITATIONS TO OTHER ABSTRACTS OF DECISION
CITATIONS TO TEXT OF DECISION
Original language (French): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/965.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
3 November 2004 [Ap 91/04]
Translation [*] by Julia Hoffmann [**]
Parties: APPELLANT: Joseph C... "[Buyer]", represented by Me. Hubert Theurillat, barrister at the Porrentruy bar RESPONDENT: C... S.A. "[Seller]", represented by Me. Jean-Marc Christe, barrister at the Delémont bar.
A. By judgment dated 8 September 2004, the Civil Judge of the Local Court (Tribunal de première instance) determined that he was competent to preside over the demand for payment filed on 19 February 2004 by [Seller], against [Buyer]. In short the judgment on appeal, delivered in application of Articles 2 ch. 4 and 5 al. 2 Cpc. determined that a contract of sale was at the origin of the proceedings initiated by [Seller]. As [Seller] was located in France, article 118 LDIP was held applicable. This provision refers to the Hague Convention of 15 June 1955 on the Law Applicable to International Sales of Goods (RS 0.221.211.4), and in particular to Article 55 al. 3. Therefore, the Local Court held French law applicable and not the United Nations Convention on Contracts for the International Sale of Goods concluded in Vienna on 11 April 1980 (RS 0.221.211.1). Based on the applicability of French law, the competence of the Civil Judge at first instance was established by virtue of article 2 ch. 4 Cpc. Where the amount in dispute is more than 20,000 Swiss francs, the competence of the Local Court must be refused, as the dispute may only be subject to an appeal to the Federal Tribunal pursuant to Article 43a al. 1 litt. A OJ of which the admissibility is limited to the question of the application of foreign law designated by Swiss international private law. Therefore, according to article 5 al 2 Cpc, a claim before the Local Court, as the sole jurisdiction, is not possible except on the condition that the judgment can be brought before the Federal Tribunal by way of an appeal pursuant to Article 43 OJ.
B. By submissions dated 20 September 2004, [Buyer] argued that on this basis the Civil Judge of the Local Court was not competent to determine the dispute against [Buyer], and therefore that the court file should be sent back. [Buyer] alleges that he did not conclude a contract of sale with [Seller], with whom he had never had any contractual or pre-contractual relations. As a consequence, the Hague Convention was not applicable, to the effect that the Federal Court is the only competent court in this case. On the other hand, [Buyer] acknowledges that a works contract was concluded between M. L... M... E... and [Buyer], and that it was M. L... M... E... who had ordered, in [Buyer]'s name, from [Seller] the materials that M. L... M... E... used for the work that he carried out on [Buyer]'s farm. There was never any question between the parties to the works contract of any purchase of materials by [Buyer]. As [Buyer] had not concluded the contracts of sale with [Seller], the Hague Convention was therefore inapplicable, and only Swiss Law could be applied.
C. In its response on appeal, [Seller] argued to the contrary of each of the conclusions made by [Buyer]. [Seller] claims, to the contrary of the judge at first instance, that a contract of sale was properly concluded, even if the other party to the contract is not properly identified at this stage, such identification not being necessary to determine the applicable law. According to Article 2 of the Hague Convention, [Seller] considers, in view of the nature of the general conditions that it has established and which notably make reference to the express provisions of French law concerning the reservation of title that it must be admitted that [Seller] intended to apply French law and that this was acknowledged by [Buyer]. Furthermore, on the basis of the contracts of sale attested to by the invoices produced, it must be admitted that there was an election of French law in this case. If this is not sufficient, Article 3 of the Hague Convention is applicable, in that the sale is governed by the internal law of the country where the vendor has its permanent residence at the moment that he receives the order; therefore, as [Seller] had its registered office in France, the French law is applicable where there is no choice of law. Thus it is not only in the substantive proceedings that it is necessary to examine the legal nature of the claim that [Seller] makes as to the existence of a contract of sale concluded between the parties, the same applies to [Buyer]'s arguments which deny its passive submission to the jurisdiction.
HOLDING AT LAW
1. The appeal was filed within the requisite time. It is now appropriate to consider the substance of the dispute.
2. The judge at first instance, rightly determined and without it being necessary to go back over his reasoning referred to above (consid. A), that the competence of the civil jurisdiction in the Jura canton, Civil Judge or Civil Court, is determined in consideration of the applicable law in the case where the amount in dispute is equal to or greater than 20 000 Swiss francs. If it be Swiss law or a law directly applicable in Switzerland, the Civil Court is competent. If a foreign law is to be applied, the Civil Judge is competent. It is therefore necessary to determine the applicable law in this case, it being understood that it is enough in order to do so, at this stage of the proceedings, to note that [Seller], the Claimant in the proceedings at first instance, bases its claim for the payment of 33,178.60 Swiss francs on contracts of sale which it claims were concluded with [Buyer]. To determine whether [Buyer] was really a party to these contracts so as to base its passive submission to the jurisdiction is a substantive question, or more precisely a preliminary substantive question, which is outside the scope of the present proceedings of which the object is to decide the admissibility of the claim before the Civil Judge.
3. In the case of a sale of an international nature, the applicable law can be determined on the basis of internal laws of international private law which resolve conflicts of laws, that is to say, on the basis of the Swiss Federal Law on International Private Law of 18 December 1987 (LDIP), or on the basis of international treaties or alternatively on the basis of a law chosen by the parties (choice of law).
Article 1, al 2 LDIP is expressly reserved for international treaties. This reservation is applicable to the whole of the domain governed by the LDIP, even after the entry into force of the LDIP (ATF 118 II 9 = JT 1993 I 620; cf. also ATF 120 II 87, consid. 2 ab initio). Article 1 al. 2 LDIP consecrates the preeminence of international conventions in international private law. It reserves in particular the conventions that bring uniform laws into the domain of substantive law, for example the United Nations Convention on the International Sale of Goods of 11 April 1980 (Dutoit, Commentaire de la loi federale du 18 decembre 1987, 3d ed., 2001, nos. 6 and 9 ad art. 1), known as the Vienna Convention (CISG). The CISG plays a primary role in the matter of international sales. Unlike the Hague Convention of 15 June 1955 (the Convention on the Law Applicable to International Sales of Goods), the Vienna Convention does not contain any rules regarding the determination of the applicable law, only uniform rules of substantive law. These rules apply instead and in the place of common law where the conditions for the application of the Vienna Convention are satisfied. Where the two parties to the contract have their places of business in Contracting States, the CISG overrides Article 118 LDIP for the questions determined by the said convention. In this case, it is not necessary to determine the applicable law on the basis of conflict of law rules, given that the material uniform laws of the convention are directly applicable. The CISG which contains rules of the same nature as articles 184 et seq. CO, are an integral part of Swiss Law and apply to the judge on the same basis as internal law and not as a foreign law. It is only in relation to questions that are not covered by the CISG that article 118 LDIP recovers its empire (Dutoit, op. cit., n. 9 ad art.119; Bucher/Bonomi, Droit international privé, 2d ed., 2004, p. 270 and 271; Tercier, Les contrats speciaux, 3d ed., 2003, n. 1337)
In this case, it is not appropriate to apply the Hague Convention which defers to Article 118 al. 1 LDIP, if the conditions for the application of the Vienna Convention are satisfied.
4. 4.1 In Switzerland, the Vienna Convention has applied since 1 March 1991 and in France since 1 January 1988. Switzerland and France are therefore Contracting States for the purposes of Article 1(1)(a) of the CISG. The CISG regulates the international sale of goods, which is defined as a contract by which the seller agrees to deliver the goods and transfer the property in the goods to the buyer, who for its part agrees to pay the price for the goods and take delivery of them (arts. 30 and 53 CISG). This definition also covers civil sales to the same extent that it covers commercial sales (Tercier, op. cit. n 1361). The sale is subject to the Vienna Convention if the parties have their places of business in different Contracting States, which means the place of their permanent, stable and regular place of the commercial activity, that is to say, the usual place for the production of goods or services (Neumayer/Ming, Commentaire de la Convention de Vienne sur les contrats de vente internationale de merchandises, CEDIDAC, 1993, p. 41; Tercier, op, cit., n 1366). The seller and buyer must be conscious, at the latest at the conclusion of the contract, of the international nature of the sale, that is to say that their places of business are located in different States. (Neumayer/Ming, op. cit., n. 10 ad art 1er.)
In principle, the CISG does not apply to sales of goods bought for personal, family or household use (art. 2(1) CISG). Therefore, consumer purchases are outside the scope of its application, for example, purchases by tourists, border inhabitants, or by mail order for the purposes of personal, family or household use. On the other hand, the purchase of goods by an individual for commercial or professional purposes remains subject to the Convention. If, at the time of the conclusion of the contract, the seller has no reason to think that the goods are purchased for personal, family or household use, namely, where the quantity of the goods, the delivery address or any other circumstance of the transaction are not standard for a consumer sale, the acquisition remains subject to the Convention (Neumayer/Ming op. cit., pp. 52 to 56). Finally, according to Article 4, the CISG does not govern the effect which the contract may have on the property in the goods sold. It regulates in particular the formation of a contract of sale ( extrinsic problems of consent, i.e., the mechanism of formation of the contract by the meeting of the offer and acceptance), it does not govern the consequences of vitiating factors on the validity of the contract (Tercier, op. cit., n. 1364; Neumayer/Ming, op. cit., pp. 71 and 72), nor the consequences of a breach of an lawful restriction on the validity of the contract; the regime of contracts that are contrary to public policy is also excluded by the Convention (Neumayer/Ming op. cit., p.p 68 to 70).
4.2 In this instance, where even the existence of the contract of sale linking [Buyer] is contested, this point does not affect the validity of the contract in the sense of Article 4 CISG but its formation between the parties to the proceedings, which is an issue that is expressly covered by articles 14 to 24 CISG. Given the international character of the relationship alleged by [Seller], it is agreed: the seller has its registered office in France and the sought after buyer, the designated debtor of the service for payment, has its place of business in Switzerland. The international character of the transaction could not be ignored by [Buyer], given that [Buyer] admitted that it had retrieved the goods from customs. [Buyer] operates a farm. The material that [Seller] claims to have delivered to [Buyer], being sand, palettes of masonry sand, corrugated iron sheets and a mix of gravel-sand, does not constitute goods purchased for personal, family or household use, but instead for a professional purpose on [Buyer]'s farm. This is not a case of a purchase of consumer goods. Finally, the action of [Seller] seeking payment by [Buyer] of an amount representing the value of the goods sold, is such that it makes applicable the obligations of the purchaser pursuant to articles 4 and 54 of the CISG (payment of price).
In view of the above, the Vienna Convention is applicable to the dispute between the parties to these proceedings, unless, as alleged by [Seller], the parties had agreed to the application of another law, in this case French law.
5. According to article 6, the parties can effectively totally or partially exclude the application of the CISG.
[Seller] seeks application of French law. In view of the contents of the general conditions of sale that it has established which notably refer to the express provisions of French Law concerning the reservation of property, [Seller] submits that it intended to apply French Law and that this was accepted by [Buyer].
The Vienna Convention being dispositive law, the parties have the possibility to choose the law of a Contracting State as the applicable law (Tercier, op. cit., n 1373). The total or partial exclusion of the CISG can be provided for in the form of an express disposition in the contract of sale or by the insertion of such a clause in the general conditions validly incorporated into the agreement. They may be agreed from the start of negotiations, at the time of the conclusion of the sale, or even in the context of legal proceedings up until the decision of the superior tribunal of fact, by an agreement for the purposes of modifying the contract in this way. The tacit exclusion of the Convention either partially or totally is equally possible. It is necessary to determine the real joint intention of the parties, the search for a purely hypothetical intention does not come into consideration; the implicit exclusion is generally accepted where the parties have chosen the law of a non-Contracting State as governing their contract or where they have agreed to certain contractual conditions that are incompatible with the Convention. Accordingly, it follows from this principle that where the parties have agreed to a choice of law in favor of a Contracting State; even if some academic authors lean in favor of the CISG which is equally a part of the internal law of a Contracting State, it is appropriate to determine on a case by case basis the true intention of the parties, as there is no presumption in the Convention in favor of uniform laws in that case. Where there is doubt, the parties' choice in favor of the law of a Contracting State signifies that they have had the specific intention of setting to one side the Convention in favor of internal law (Neumayer/Ming, op. cit., pp. 83 to 89, in particular n. 5 ad art. 6 and ref. cit.; cf. also Tercier, op. cit., n. 1376 and ref. cit.)
In this particular matter, the court file does not contain any written agreement in which the parties declare the exclusion of the CISG's application. Furthermore, no document specifies the choice of applicable law in the case of a dispute. If it is correct that the invoices that [Seller] sent to [Buyer] assert a reservation of title according to article 121 al. 2 of French law n. 85/98 of 25 January 1985, this condition appearing on an invoice does not amount to an agreement as to the application of French law. As to the general conditions of sale, it must be noted that these conditions appear on the back of invoices and were not incorporated into the contract. No document, other than the invoices has been produced that would allow the court to consider that [Buyer] had declared to opt for French law.
Therefore, it follows that the parties did not exclude the application of the Vienna Convention.
6. In view of the above, the Vienna Convention is applicable to the dispute between the parties. Where the provisions of the Convention apply in the place of the Code des obligations and they are to be considered as Swiss law from the point of view of the appeal to the Federal Tribunal, given that, amongst other things, the amount in dispute is more than 20,000 Swiss francs, the competence of the Civil Judge to determine the dispute is not granted, such that the judgment at first instance must be annulled. [Seller] is to bear the costs and disbursements.
FOR THESE REASONS
THE CIVIL COURT determines that the Civil Judge is not competent to hear the dispute. The judgment at first instance is annulled, and the costs of the appeal of 800 Swiss francs are to be paid by [Seller] and are taken up by the court on the security for costs payments made by the parties. The court orders [Seller] to reimburse [Buyer]'s security for costs payment of 400 Swiss francs and to pay the disbursements of [Buyer] on appeal taxed to 800 Swiss francs. The Court returns the matter to the Civil Judge for taxation of the costs and disbursements at first instance.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Defendant-Appellant Joseph C... of Switzerland is referred to as [Buyer], Plaintiff-Respondent C... SA of France is referred to as [Seller]
** Julia Hoffmann, BA, Dip. Lang, LLB (Hons) (Adel.). LLM (Paris I), Solicitor of the Supreme Courts of New South Wales and South Australia.Go to Case Table of Contents