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CISG CASE PRESENTATION

Slovak Republic 4 April 2005 Regional Court in Zilna (Heat exchanger case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050404k1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20050404 (4 April 2005)

JURISDICTION: Slovak Republic

TRIBUNAL: Regional Court in Zilina

JUDGE(S): JU Dr. Zuzana Stolcova

CASE NUMBER/DOCKET NUMBER: 22 Cb/20/2004

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Czech Republic (plaintiff)

BUYER'S COUNTRY: Slovak Republic (defendant)

GOODS INVOLVED: Heat exchangers


Classification of issues present

APPLICATION OF CISG: Yes. However, the opinion discusses only provisions of the Slovak Commercial Code

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles [-]

Classification of issues using UNCITRAL classification code numbers:

Unavailable

Descriptors: Unavailable

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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

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Slovak): Click here for Slovak text of case

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Regional Court in Zilina

4 April 2005 [22 Cb/20/2004]

Translation [*] by Juraj Kotrusz [**]

JUDGMENT
IN THE NAME OF THE SLOVAK REPUBLIC

The Regional Court in Zilina, deciding by a single judge, JUDr. Zuzana Stolcova, in the case of Plaintiff T., a.s. [Seller], with its registered office in Z., C. ___, Czech Republic ..., represented by attorney JUDr. R. J. versus Defendant D.-M., a. s. [Buyer], with its registered office in U., ___, C. [Slovak Republic] ..., regarding payment of 36,320.- Czech koruna [Kc] and appurtenances

h a s   d e c i d e d   a s   f o l l o w s:

The [Seller] is obliged to pay to the [Buyer] a sum in amount of 36,320 Kc and interest of 0.05% daily on this sum for the period from 17 October 2003 until payment and to pay the reimbursement of costs of the proceedings in amount of 2,210.- Slovak koruna [Sk] within three days after the judgment comes into force.

The court dismisses the action in its residual part.

REASONING

The [Seller] claimed in the proceedings by its action filed with the court on 14 April 2004 its right to payment of 36,320.- Kc with interest of 0.05% daily on this sum for the period from 17 October 2003 until payment and to pay the reimbursement of costs of the proceedings. [Seller]'s claim was based on the contract of sale no. K03-0064-00 of 19 August 2003, concluded upon [Buyer]'s purchase order. Under this contract, the [Seller] transferred to the [Buyer] title to the requested goods in value of 68,660.- Kc without VAT and the parties agreed that 50% of the purchase price will be paid after signing the contact upon delivery of the advance invoice with maturity in seven days after its receipt and 50% of the purchase price will be paid after delivery of the goods upon invoice with maturity fourteen days after receipt of the goods. Subsequent to the delivery of the goods, the [Seller] invoiced the purchase price including VAT and carriage fees by invoice no. 030915027 drawn on 30 September 2003 for 36,230.- Kc due on 16 October 2003, which sum emerged from the original purchase price after deducting from it the advance payment made upon the advance invoice no. 030859039 drawn by the [Seller] on 13 August 2003, due on 20 August 2003. The [Buyer] did not pay the invoiced sum in the prescribed period of time. There was a contractual relationship between the parties to the dispute established by concluding a contact of sale under sec. 409 et seq. of the Slovak Commercial Code, under which the [Buyer] was obliged to pay the purchase price to the [Seller]. Since the [Buyer] failed to fulfil this obligation, the [Buyer] claimed its right to payment of the purchase price and of interest.

The court gathered evidence in absence of the parties to the dispute, though duly summoned, by reading submitted documents, i.e., the action, record of the [Buyer] from Companies Register, [Buyer]'s letter of 11 March 2004, [Seller]'s letter of 8 March 2004, bill of lading (rec. no. 10), invoice no. 030915027, advance invoice no. 030859039, contact of sale no. K03-0064-00, purchase order of the [Buyer] of 11 August 2003 and 7 August 2003, ND record of the [Seller] from Companies Register, and thereby determined the factual situation described hereinafter.

Upon the [Buyer]'s purchase orders from 7 August 2003 and 11 August 2003, the parties to the dispute concluded contract of sale no. K03-0064-00, under which the [Seller] was obliged to deliver to the [Buyer] the subject of this contract defined in article 1 of the contract as:

   -    1 welded heat-exchanger ST 03 1/1 VNZ21, 12 panels
   -    1 welded heat-exchanger ST 03 3/3 VNZ21, 24 panels
   -    1 welded heat-exchanger ST 03 1/1 HNP21, 12 panels
   -    1 welded heat-exchanger ST 03 2/2 VNZ21, 12 panels
   -    1 welded heat-exchanger ST 03 1/1 VNZ09, 24 panels
   -    4 sets of screws 1

The parties agreed in article II of the contract on the amount of the purchase price and on the manner of its payment, whereby the [Buyer] was obliged to pay 50% of the purchase price after signing the contract and receiving the advance invoice (with maturity in 7 days after its receipt of the goods) and 50% of the purchase price after taking over the delivery (with maturity of the invoice 14 days after its receipt). Under article II part 3 of the contract, if the [Buyer] does not pay the purchase price in the manner prescribed in article II part 1, the [Buyer] is obliged to pay interest of 0.05% daily on this sum for the entire period of default.

The [Seller] drew advance invoice no. 030859039 on 13 August 2003 for 34,330.- Sk. The [Seller] drew invoice no. 030915027 on 30 September 2003 for 70,560.- Sk including VAT which corresponds to the purchase price under the contract. After deducting the advance payment invoiced by invoice no. 030859039, the [Buyer] was obliged to pay its residual part in amount of 36,230.- Sk. The [Seller] delivered to the [Buyer]'s registered office the goods specified in the bill of lading (rec. no. 10) as 4 boxes marked as 1765 and the goods marked as 1766, 1 box marked as heat-exchangers ST 03 03V00 1271, 1273, 1274, 1279, set of connectors, heat-exchanger ST 03 12 01V000852 in total weight 70 kg. The [Seller] urged the [Buyer] by letter from 8 March 2004 to pay the invoice no. 030915027 in sum of 36,230.- Sk.

The court investigated the record from Companies Register maintained by the Regional Court in Hradec Kralove, Czech Republic, under sec. B, insert no. ___ and determined identification of the [Seller], as it was recorded on 1 May 1992.

The court investigated the record from the Companies Register maintained by the Regional Court in Zilina, under sec. Sa, insert no. ___/L and determined the identification of the [Buyer], as it was recorded on 4 June 1996.

Under sec. 10 part 1 of act no. 97/1963 on international private and procedural law, if parties have not made choice of law, their contractual relationships will be governed by the law which assures their reasonable solution.

Under sec. 10 part 2 a) of this act, unless a special legal instrument stipulates otherwise, contracts of sale will be usually governed by the law of the country of seller's registered office (domicile) at the time of concluding of a contract.

Under article 1(1) of the Vienna Convention, this Convention applies to contracts of sale of goods between parties whose places of business are in different States when the States are Contracting States; or when the rules of private international law lead to the application of the law of a Contracting State.

Under sec. 409 part 1 of act no. 513/1991 Coll. Commercial Code as amended (hereinafter referred to as "CC") under a contract of sale, the seller undertakes to deliver to a buyer goods determined individually, or at least according to kind, and to assign to the buyer the title to the said goods while the buyer undertakes to pay the purchase price.

Under sec. 450 part 1 first sentence CC, unless the contract stipulates otherwise, the buyer shall undertake to pay the purchase price when the seller, in accordance with the contract and this Act, enables the buyer either to dispose of the goods, or to dispose of the documentation authorising the same.

Under sec. 340 part 1 CC, the debtor is bound to perform the obligation at the time set forth in the contract.

Under sec. 365 first sentence CC, a debtor is in default fulfilling an obligation fully and on time unless such an obligation is duly performed or unless such an obligation is met in another manner.

Under sec. 369 part 1 CC (in force at the relevant time), if a debtor is in default with fulfilment of a monetary obligation or its part, and no rate for paying interest on the sum in arrears has been agreed upon, the debtor is obliged to pay interest on the sum in arrears as stipulated in the contract, otherwise at an interest rate one percent higher than the rate stipulated under sec. 502.

With reference to the abovementioned provisions and the factual situation determined by the evidence, the court upheld the action in its entirety and bound the [Buyer] to pay to the [Seller] a sum of 36,230.- Kc with appurtenances.

The court found to be proved by the evidence examined that the parties to the dispute concluded the contract of sale no. K03-0064-00 on 19 August 2003 under which the [Seller] delivered to the [Buyer] the goods specified in article 1 part 1 of the contract. The parties to the dispute were concluding the contract as entrepreneurs. It is clear from the contract that the parties agreed on type, amount and price of the goods that were delivered to the [Buyer]. It was therefore a contract of sale under sec. 409 et seq. CC which established a commercial relationship between the parties. It was proved in the proceedings by the bill of lading and bills of expedition no. E 4300146, E 4300147, that the [Seller] delivered the goods to the [Buyer] and thereby fulfilled its obligation under this contract. The [Buyer] only partially fulfilled its obligation to pay the purchase price under article II of the contract by payment of the advance invoice no. 030859039 in amount of 34,330.- Sk but [Buyer] failed to fulfil its obligation to pay the residual part of the purchase price called for by invoice no. 030915027 amounting to 36,230.- until the date of maturity on 16 October 2003. The [Buyer] therefore was in default over payment of this sum. The [Seller] therefore has a right to interest with reference to sec. 365 and 369 part 1 CC. The interest rate was prescribed in article II part 3 of the contract as 0.05% daily from the sum in arrears. A special method of determining the maturity of the purchase price was prescribed in article II part 1 of the contract, where 50% of the purchase price is due in 14 days after receipt of the goods by the [Buyer], as it was prescribed in the invoice. The [Buyer] did not evidence the payment of this sum in the proceedings. By failing to pay the purchase price, the [Buyer] breached its obligation under the contract of sale with reference to sec. 447 and 448 CC. As a result, the [Buyer] was in default over payment of the purchase price. The [Seller] is therefore entitled to interest under sec. 369 part 1 CC. The contractual relationship was qualified by the court under sec. 409 et seq. CC as a commercial relationship, since the parties were acting as entrepreneurs. The [Seller] fulfilled its obligation to deliver the prescribed amount and type of the goods. The [Buyer] failed to fulfil its obligation to pay the purchase price for the goods delivered and thereby was in default over payment of this sum. The [Seller] is therefore entitled to interest on the sum in arrears with reference to sec. 365 and 369 part 1 CC. With reference to the abovementioned, the court upheld [Seller]'s claim for payment of the purchase price for the goods delivered and for interest on it, being justified in its entirety.

The court decided about the reimbursement of the costs of judicial proceedings under sec. 142 part 1 CPC in and granted to the [Buyer] as a successful party a full reimbursement of its costs, which corresponded to the paid court fee amounting to 2,510.- Sk.

The [Seller] claimed by its action also a right to reimbursement of the costs of legal aid provided by Dr. R.J., with its office in H.B [Czech Republic] in sum of 3,500.- Sk. The court dismissed this claim with reference to sec. 2 of act no. 132/1990 Coll. as amended, under which an attorney (advocate) is a person who is registered in the Slovak Bar Association. The [Seller] did not prove that Dr. J. is an advocate registered in the Slovak Bar Association and with reference to act. no. 132/1990 Coll. as amended in connection with ordinance no. 163/2002 Coll. the [Seller] has no right reimbursement of the costs of legal aid provided by this person.

Instruction: An appeal against this judgment must be filed with the Supreme Court of the Slovak Republic via the Regional Court in Zilina within fifteen days of its receipt in two versions.

Regional Court in Zilina, 4 April 2005

Mgr. Zuzana Stolcova
Chairman of the Panel


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of the Czech Republic is referred to as [Seller] and Defendant of the Slovak Republic is referred to as [Buyer]. Amounts in the currency of the Slovak Republic (Slovak koruna) are indicated as [Sk]; amounts in the currency of the Czech Republic (Czech koruna) are indicated as [Kc].

** Juraj Kotrusz is a Slovak lawyer who studied law at the University of Trnava, Slovakia, and at the Hague Academy of International Law.

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Pace Law School Institute of International Commercial Law - Last updated December 3, 2008
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