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CISG CASE PRESENTATION

Germany 13 April 2005 District Court Bamberg (Furnishings case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050413g1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20050413 (13 April 2005)

JURISDICTION: Germany

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

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 2 O 340/00

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

CASE HISTORY: 1st instance (default judgment) Landgericht Bamberg 11 July 2001 [affirmed in major part]; 3d instance Oberlandesgericht Bamberg 18 October 2005 [affirming]

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Furnishings


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 2(a) ; 12 ; 14 ; 18 ; 53 ; 78 [Also cited: Articles 4 ; 11 ; 58 ]

Classification of issues using UNCITRAL classification code numbers:

2A [Purchases (not) for personal, family or household use];

14A [Criteria for an offer (basic criterion): intention to be bound];

18A2 [Conduct indicating acceptance of offer];

78B [Rate of interest]

Descriptors: Consumer sales ; Offers ; Acceptance of offer ; Interest

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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 (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1402.pdf>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Bamberg

13 April 2005 [2 O 340/00]

Translation [*] by Jan Henning Berg [**]

Edited by Institut für ausländisches und Internationales
Privat- und Wirtshaftsrecht der Universität Heidelberg
Daniel Nagel, editor
[***]

AWARD

  1. The judgment by default in favor of the Plaintiff [Seller] that was rendered by the District Court (Landgericht) Bamberg on 11 July 2001 is upheld and amended so that Defendant [Buyer] is ordered:

    a) To pay [Seller] EUR 12,450.50 plus 5% interest on this sum since 22 October 1999, and
    b) To pay [Seller] EUR 43,898.48 eight weeks after this judgment will have become legally effective.

    With respect to other requests, the judgment by default is repealed and the action is dismissed.

  2. [Buyer] is ordered to bear the costs of the proceedings.

  3. This judgment may be enforced only after effecting a security deposit of 120% of the amount to be enforced.

FACTS

The parties are in dispute about claims for payment of [Seller] from a loan and sales contracts.

[Seller] is a limited liability company under Italian law.

[Seller] relies on a claim for the redemption of a loan of Italian lira [Lit.] 85,000,000 (EUR 43,898.48). In the alternative, [Seller] relies on an assigned claim and refers to an agreement with ... of 11 October 2004 which has the following content:

  1. Preliminary remark

    [Assignor 1] has granted Mr. ... a loan of Lit. 85,000,000 = EUR 43,459.81. The loan sum was handed over on 16 December 1998 in Montecatini Terme, Italy.

    The District Court (Landgericht) Bamberg (Case docket: 2 O 340/00), however, is of the opinion that this loan was not granted by [Assignor 1], but by [Assignor 2].

  2. Therefore, [Assignor 2] hereby assigns any possible claims for redemption against ... to [Assignor 1], who hereby accepts the assignment.

Additionally, the following pieces of furniture were delivered to [Buyer] by [Seller] on 16 November 1998 at a price of Lit. 24,107,520:

   -    1 bookcase with four doors and lock, a shelf with cavity, doors fluted in walnut tree; shelf in stainless steel, breadth 1960 mm, height 1470 mm;
   -    1 table lamp, model stainless steel 850 x 100 mm;
   -    2 desks, each 2300 x 950, fluted in walnut tree;
   -    2 occasional tables in crystal white 830 x 1110;
   -    1 shutter cabinet with three drawers;
   -    1 conference table, oval with crystal plate;
   -    6 chrome chairs, seat and back part in black leather.

With regard to the loan contract, [Seller] asserts that [Buyer] and ..., the former CEO of [Seller], had met at [Seller]'s office in Italy at the end of December 1998. [Buyer] had asked for a loan of Lit. 85,000,000 for he had tax debts. ..., the representative of [Seller], had given his consent and provided these funds on the same day.

The loan was then cancelled during 1999 both orally and in writing on several occasions. However, the loan had never been redeemed.

[Buyer] had also ordered the above furniture at the [Seller]'s store in mid-October. The purchase price had remained unpaid.

On 11 July 2001, the District Court (Landgericht) Bamberg rendered a judgment by default against [Buyer] with the following content:

   -    [Buyer] is ordered to pay [Seller] Lit. 109,107,520 plus 4% interest on Lit. 85,000,000 since 12 December 2000 and 4% interest on Lit. 24,107,520 since 22 October 1999.
   -    This judgment was served on [Buyer]'s procedural representative on 16 August 2001. Thereupon, by letter dated 20 August 2001 which was submitted to the Court on the same day, [Buyer] objected to the judgment.

In order to allow for the legal assessment under Italian law, the Court has obtained a written expert opinion. This expert opinion issued by ... on 10 May 2004 has been introduced to the oral hearing of 28 July 2004, especially those elaborations of the expert according to which under Italian law the judicial determination of a target date for redemption of a loan was necessary.

POSITIONS OF THE PARTIES

Position of [Seller]

[Seller] asks the Court to uphold the judgment by default that was rendered on 11 July 2001 and asks the Court to consider 11 February 2000 as the target date for redemption of the loan. In the alternative, [Seller] requests the Court to consider the time of [Buyer]'s insolvency as the target date. Additionally, in the alternative, a future target date should be appointed.

Position of [Buyer]

[Buyer] requests to have the judgment by default repealed and [Seller]'s action dismissed.

[Buyer] contests having concluded a loan contract with either [Seller] or ... as well as that a corresponding sum of money had been handed over.

With respect to the purchase of furniture, [Buyer] further contests having concluded a sales contract with [Seller]. It was true that it had received the pieces of furniture in question. However, [Buyer] alleges that these were ordered and paid by Company ....

[Buyer] further argues that [Seller] was insolvent, meaning that the requirements of 240 ZPO [*] were fulfilled.

[Buyer] also challenges that [Seller] was entitled to the purported claim and objects to the jurisdiction of the District Court (Landgericht) Bamberg. Finally, [Buyer] relies on a time-bar.

The Court has taken evidence at the hearing of Witness ... on 11 July 2001. Witnesses ..., ..., ..., ..., and ... have been heard on the basis of the resolution on the taking of evidence of 6 February 2002 at the request of the District Court (Landgericht) Bamberg on 25 October 2002. The Court has taken further evidence of Witness ... at the hearing of 30 July 2003 and of Witness ... at another hearing on 28 July 2004.

For details, reference is made to the session protocols, the legal opinion submitted on 19 May 2004 as well as to the letters exchanged.

By resolution of 9 March 2005, the Court has ordered a decision to be made by written procedure according to 128 ZPO with the acknowledgement of both parties. A time limit for the submission of written pleadings was set as 23 March 2005.

REASONING OF THE COURT

A. [Admissibility of Buyer's objection]

[Buyer]'s objection to the judgment by default is admissible. It was filed in proper form and within the applicable time limits.

B. [Admissibility of Seller's initial action]

[Seller]'s action is admissible. In particular, the District Court (Landgericht) Bamberg has jurisdiction and [Seller] has the capacity to sue.

      I. [Jurisdiction of the District Court Bamberg]

      The jurisdiction of the District Court (Landgericht) Bamberg follows from Art. 2 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1968 ("Brussels Convention") in conjunction with 12, 13 ZPO and from Art. 18 Brussels Convention.

            1. [Application of the 1968 Brussels Convention in terms of time]

            The Brussels Convention is applicable in matters of time. It was replaced on 1 March 2002 by Council Regulation (EC) No. 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters ("Brussels I Regulation"). Art. 66(1) Brussels I Regulation provides that the Regulation is applicable only to such actions which have been filed after the Regulation has entered into legal effect on 1 March 2002 (Art. 76 Brussels I Regulation). The present action was commenced on 4 July 2000 and therefore before the Brussels I Regulation entered into legal effect.

            2. [Application of the 1968 Brussels Convention in terms of subject matter]

            The Brussels Convention was applicable to govern the jurisdiction in civil matters before its replacement by the Brussels I Regulation.

                  a) Under Art. 2 Brussels Convention and 12, 13 ZPO, there is a natural forum at the domicile of the defendant. When the present proceedings commenced, this was Bamberg. As is evident from the reception documents of 4 July 2000 (sheet no. 7), [Buyer] was then admitted as attorney at that place. Any subsequent change of domicile is irrelevant (Thomas/Putzo, ZPO, 20th ed., Art. 2 Brussels Convention para. 2).

                  b) Furthermore, a court takes jurisdiction under Art. 18 Brussels Convention whenever [Buyer] accepts the initiated proceedings and if no exclusive forum is established according to Art. 16 Brussels Convention. Such an exclusive forum is not given in this case. Moreover, [Buyer] has accepted the proceedings as such without objections during the hearing of 24 January 2001.

      II. [Seller's capability to appear in court]

      [Seller] is also capable of bringing its claim before the Court. [Buyer] argues that [Seller] was insolvent. In that respect, [Seller] challenged this assertion by submitting an exhibit of the commercial register of the commercial register office Pistoia of 16 November 2004 (sheets nos. 442 et seq.). According to this exhibit, [Seller] was currently in liquidation and Witness ... was appointed as liquidator. Consequently, [Seller] is still capable of bringing the claim.

240 ZPO is not applicable as well since the present case does not constitute a foreign insolvency proceeding which has similar effects to a German insolvency proceeding (cf. BGHZ [*] 95, 256 (270); BGH [*] ZIP [*] 1998, 659). There was no interruption of the proceedings.

C. [Justification of Seller's action on the merits]

[Seller]'s action is also justified to a preponderant part.

      I. [Seller's claims relating to the loan contract]

      [Seller] is entitled to claim the sum of EUR 43,898.48 (Lit. 85,000,000) under Italian law from the loan contract. This sum refers either to a claim from an initially owned right under Art. 1813 Codice civile (Italian Civil Code) following a loan contract concluded with [Buyer] or, alternatively, it refers to an assigned claim following a loan contract concluded between Witness ... and [Buyer].

            1. [Application of Italian law]

            The alleged loan contract is governed by Italian law according to Art. 28(1)(1), (2)(1) EGBGB [*].

                  a) The parties have not made any express or implied choice of law in terms of Art. 27 EGBGB. There has not been any submission by either party in that respect. Furthermore, there are no hints that would indicate a choice of law by the parties.

                  b) According to Art. 28(1)(1) EGBGB, the loan contract is therefore to be assessed under the law of the State to which it is most closely connected. In accordance with the general presumption found in Art. 28(2)(1), that the decisive State is the State in which the party effecting the characteristic performance has its place of business or central administration.

The characteristic performance is the performance which characterizes the type of contract and which serves to differentiate it from other types of contract (Bamberger/Roth/Spickhoff, BGB [*], Art. 28 EGBGB para. 9). A loan contract is characterized by the granting of the loan sum meaning that the characteristic performance is effected by the grantor of the loan (OLG [*] Düsseldorf NJW-RR [*] 1998, 1145 (1146); Staudinger/Magnus, Art. 28 EGBGB para. 235). Therefore, it is presumed that Italian law applies since [Seller] had its place of business in Italy at the time of conclusion of contract. Even if it was assumed that a private loan between Witness ... and [Buyer] was concluded, Italian law would remain applicable. Witness ... was the CEO of [Seller] at that time and therefore also had its residence in Italy.

                  c) The presumption laid down in Art. 28(2)(1) EGBGB is also not refuted by the circumstances of the present case. Under Art. 28(5) EGBGB, all characteristics of the contract in question must be given consideration which might serve as a linking criteria under Art. 28(1) EGBGB. Such particulars of the case which point towards a closer connection to another State, especially Germany, are not given at hand. In that respect, it must be considered that the contract was concluded in Italy and Italian lira was agreed as currency of the contract. In conclusion, the presumption of Art. 28(2)(1) EGBGB is upheld.

            2. [Handing over the loan to Buyer]

            The Court is convinced that ... has handed over a loan sum to [Buyer] of Lit. 85,000,000 which originated from the business account of Company ... This follows from the statements made by Witnesses ..., ..., ..., and ... as well as from the submitted copy of a bank statement of Bank ..., Italy.

                  a) Both Witnesses ... and ... have confirmed [Seller]'s submissions when they were heard by the Court.

                        aa) Witness ... has testified at the hearing of 30 July 2003 that he had handed over a sum of Lit. 85,000,000 to [Buyer] in the offices of [Seller] on 16 December 1998. [Buyer] contacted him at the beginning of December 1998 because he had had problems with the fiscal authorities. He said that he had to fear a public sale of his house. He had asked for a sum of Deutsche Mark [DM] 100,000 and the 16th of December 1998 was agreed as the target date for the handing over of the money. He had noted these facts in his agenda. He had drawn the money one or two days before 16 December 1998 from his bank. It had been put into an envelope. The accountant of Company ..., Witness ..., had also been present during the handing over. There had been a wide basis of trust towards [Buyer] so that nothing was documented in writing.

These statements were confirmed by Witness ... at the hearing of 28 July 2004, in which the alleged surrender of the money was once again discussed in detail.

                        bb) Witness ... stated at the hearing of 11 July 2001 that he had been present during the handing over of Lit. 85,000,000 to [Buyer] in the offices of company Italger. He had not known the reasons for payment. Still, he had been aware that good relations existed between "the grantor of the loan" and "the recipient". On his request as to why ... had not asked for a receipt, the latter answered that he would not consider it necessary as the recipient of the loan was an attorney who acted on his behalf.

                  b) [Seller]'s factual submissions were further confirmed by Witnesses ..., ..., and ... who were heard by the District Court Pistoia, Italy.

                        aa) Witness ... stated before the District Court Pistoia that he had also been present during the handing over of some packets of bank notes in Italian currency which were contained in a paper bag. Afterwards, the people involved had gone to the restaurant ... in ... .

                        bb) Witness ... also confirmed that [Buyer] received the sum of Lit. 85,000,000 as a loan. He had explained that he needed the money in order to settle personal problems. He, ..., had been present during the handing over of the money which was inside a brown paper bag. Afterwards, there had been a joint dinner in the restaurant ... .

                  c) The Court is convinced of the truth of these witnesses' statements for the following reasons:

                        aa) First, the copy of the bank statement of Italian Bank ... (sheet no. 293) indicates the truth of the statements. It proves that on 14 December 1998 a sum of Lit. 100,000,000 had been drawn from the business account of [Seller], which is not contested by [Buyer]. This transaction was made only two days prior to the meeting on 16 December 1998 as explained by Witness ... and explains the origin of this quite decent sum of money.

                        bb) The Court has furthermore no reason to cast doubt on the credibility of any single witness. Still, Witness ... acts currently as liquidator for [Seller] meaning that a personal interest in the outcome of the dispute can be assumed. Likewise, Witness ... had been engaged as CEO for [Seller]. However, the impression received by the Court did not in any way establish that any of the witnesses was biased. Both testimonies were objective and coherent. They gave a confident impression and the Court had not at any stage indications that their submissions were fictitious or untrue.

Insofar as Witness ... was further required at the hearing of 28 July 2004 on the issue of who was grantor of the loan, these questions had their reason in the ambiguous wording of the letter of termination of the loan. Still, the Court has no doubts concerning the actual handing over of Lit. 85,000,000 as described by both witnesses.

                        cc) One should also consider the testimony of Witnesses ... and ..., who had been heard by the District Court Pistoia. Even given the fact that this testimony is only of limited weight in these proceedings, they need to be considered in order to make the necessary overall assessment.

First, neither Witnesses ... nor ... shows any bias or preference for either of the parties in dispute. Instead, their statements are objective and adhere to the facts. Furthermore, the statements were affirmed under oath meaning that any wrong testimony of both witnesses would have severe consequences under penal law.

In conclusion, four witnesses have independently confirmed that the money had been handed over. Moreover, the witnesses have coherently described various details of the respective meeting, e.g., the fact that the money had been counted before it was handed over and that the persons involved had dinner afterwards.

                        dd) Even though the statements made by Witnesses ... and ... show differences, these refer only to minor side-aspects, e.g., who had been the person counting the money and where exactly the persons were located during the meeting. In the light of the rather long time which has already elapsed, such minor differences may be expected and once again indicate that the witnesses had not made internal arrangements among each other. Such arrangement, however, would have been necessary had a handing over of the money not actually taken place.

                  c) It is not necessary to hear the Witness ... as well as Witnesses ... and ... as [Buyer] requested.

                        aa) In the letter dated 24 September 2004, Witness ... was named in order to prove that the sum of Lit. 85,000,000 had not been handed over to [Buyer] on 16 December 1998 and that he -- being former CEO and shareholder of [Seller] -- had been permanently present at [Seller]'s offices and that he had been aware of all activities of [Seller].

With its letter of 26 October 2004 [Seller] argued by submission of Italian documents that Witness ... had ceased to work as CEO by 18 September 1998 and that he had sold its shares. [Buyer] has not subsequently objected to this, and particularly not within the time limit set by the Court for the submission of written pleadings. Thus, the factual argument made by [Seller] must be considered as conceded by [Buyer] after [Seller] had explicitly contested [Buyer]'s lump allegations, which is an issue uncontested by [Buyer].

Concerning [Buyer]'s offer to bring evidence by way of its witness that no sum of money had been handed over, this offer does not contain a sufficiently specific object of evidence. The object of [Buyer]'s offer is a so-called negative fact. There is no recognizable action or incident which the witness would be able to testify. Instead, the purported negative fact finally constitutes a conclusion from a variety of facts which might indicate that a certain event had not occurred (BGH [*] NJW [*] 1998, 1723 (1726)). It is at any rate necessary for the demonstrator to substantiate his arguments in a way that a specific recognition will be testified to by the witness.

[Buyer] had not fulfilled these procedural requirement, although [Seller] has brought detailed proof that the appointed witness had neither been CEO nor shareholder of [Seller] on 16 December 1998. When [Buyer] now alleges that its Witness ... could testify that the sum in question had not been handed over and that the witness had been permanently present at [Seller]'s office, this constitutes a mere unfounded allegation. The Court is not obliged to pursue such argument. In addition, none of the witnesses heard by the Court stated that witness ... had been present on the day in question.

                        bb) For the same reasons, a hearing of the police officers named was not necessary. In that respect, it is already unclear what these witnesses should have perceived in connection with the issue of a handing over of money at [Seller]'s offices. [Buyer] does not assert that they were even present on the day of the handing over.

            3. [Valid assignment of claims]

            The issue of whether the loan formed a private loan concluded with Witness ... or a commercial loan concluded with [Seller] need not be resolved. In its written statement of 11 October 2004 (exhibit K15), the witness assigned any possible claims arising out of the loan contract to [Seller].

                  a) The validity of the assignment is to be asserted under Italian law. It follows from Art. 33(2) EGBGB [*], that the prerequisites of a valid assignment are provided by the law applicable to the assigned claim. Therefore, the loan contract is governed by the law applicable to the obligations arising out of the contractual relationship that forms the basis of the claim (BGH [*] NJW [*] 1990, 242 (244); Palandt/Heldrich, BGB, 64th ed., Art. 33 EGBGB para. 2). As set out above (B.I.1) the claim arising out of the loan contract is governed by Italian law. Consequently, Italian law also applies to the assignment in question.

An assignment under Italian law requires according to Art. 1260(1) Codice civile a contractual agreement between the former and the new creditor which in general may be concluded without any form requirement and without any mandatory cooperation by the debtor (OLG [*] Düsseldorf IHR [*] 2004, 203 (208 et seq.)). Nevertheless, under Art. 1264(1) Codice civile the claim is assigned with effect against the debtor only if the assignor or the assignee has formally informed the debtor of the assignment or if the debtor has affirmed the assignment (OLG Düsseldorf, ibidem (209)).

                  b) These prerequisites are met here. According to the declaration of assignment whose authenticity is not in dispute, Witness ... and [Seller] have agreed on the assignment of a claim to which Witness ... had been entitled against [Buyer] over Lit. 85,000,000 from a loan contract. The assignment was also properly communicated in terms of Art. 1264(1) Codice civile by [Seller]'s relying on the communication under submission of the assignment agreement (OLG Düsseldorf, ibidem (209)).

                  c) It is true that the Court assumed in the first place that the assignment was to be considered under German law as can be seen from the information to the parties dated 17 December 2004 (sheet no. 452). However, the Court has also pointed out that it assumed the validity of the assignment. Any updated indication was therefore not necessary after the legal assessment has not changed in its result with the consequence that there was no different situation turned out for the parties concerning the further taking of evidence.

                  d) It is not necessary to have additional evidence taken on the question of who was the actual grantor of the loan. On the grounds set out above, the Court is convinced that the alleged sum of Lit. 85,000,000 had been actually handed over by Witness ... Therefore, the grantor of the loan could only be [Seller] or Witness ... In either scenario, [Seller] would have a claim arising out of the loan contract.

            4. [Effective conclusion of loan contract]

            The requirements of an effective loan contract under Italian law are fulfilled.

                  a) First, it should be indicated that the Court has obtained expert opinion from ... for the legal assessment according to Italian law. This opinion dated 19 May 2004 does convincingly and in sufficient detail refer to all questions raised by the Court under consideration of Italian jurisprudence and scholarly materials. There are no indications to cast doubt on the correctness of the expert's opinion and such doubts have also not been raised by either party. Consequently, the Court bases its following reasoning on the expert opinion as submitted by ...

                  b) The loan contract is a contract obliging only one party in accordance with Art. 1813 Codice civile. The borrower is obliged to redeem the sum after having received it plus any possibly interest agreed upon by the end of the stipulated duration (expert opinion, p. 10). The loan contract may be concluded for a consideration or not, Art. 1815(1)(1) Codice civile (expert opinion p. 13). A certain form is not required (expert opinion p. 13).

Pursuant to Italian law, each party has to prove favorable facts. Therefore [Seller] has to prove the existence of the loan contract (expert opinion p. 26).

Following the taking of evidence, the Court is convinced that the sum of Lit. 85,000,000 had been handed over to [Buyer] as a loan. The witness statements first indicate that the sum had been handed over. Furthermore, they also indicate that the handing over of the money was made on the basis of a loan agreement. The respective testimony which the Court also considers as credible, is sufficient to meet the requirements in order to prove that a loan contract had been concluded under Italian law (expert opinion p. 29).

It is true that Italian law provides in Art. 2721(1) Codice civile for the prohibition of proof by witnesses for contracts whose value exceeds Lit. 5,000 (expert opinion pp. 27 et seq.). However, Art. 32(3)(2) EGBGB [*] provides that all pieces of evidence admissible under German procedural law may be used to prove the existence of a certain legal transaction (expert opinion p. 28 with reference to Palandt/Heldrich, Art. 32 EGBGB para. 9).

                  c) Under Italian law the determination of a target date for redemption forms another characteristic of a loan contract. A corresponding agreement was not reached in the present case. In fact, the contract remains valid even if failing such agreement. However, Art. 1817(1) Codice civile then provides for the Court to appoint a target date for redemption (expert opinion p. 15).

                        aa) A determination of a target date for redemption is not necessary if the debtor has entered insolvency proceedings or if such a time has already elapsed since the conclusion of contract which would exceed any tolerance limits (expert opinion pp. 17 et seq.). These alternatives are not applicable to the case at hand. There is no specific submission made by [Seller] in order to assert [Buyer]'s insolvency. Based on the circumstances of the case, it can also not be considered that a period of time had elapsed which would have exceeded any tolerance limit. In that respect, consideration must be given to the fact that no target date for redemption had been designated which indicates that a short term for redemption was not intended. Indeed, the loan sum is quite high. This, however, must also be seen under the circumstance that the granting of the loan was effected on very short notice and without written documents involved. In the light of all relevant circumstances, the expired time period of six years may not be regarded as unacceptable.

                        bb) The requirement for the designation of a target date is furthermore not dispensable due to the written termination declared by [Seller]. If no target date for redemption was specified, it is for the grantor of the loan to effectuate a judicial redemption through Art. 1817 Codice civile (expert opinion p. 16). If the grantor omits to do so, any possible acts by the grantor that are aimed at placing the borrower in arrears will not establish the maturity of the loan (expert opinion p. 16).

                        cc) It is true that an action for the determination of maturity of a certain claim is not familiar to German law. This however does not imply that such determination could not be undertaken. A respective prohibition would be considerable only if the requested activity had fallen completely out of the functional scope of the courts (expert opinion p. 23 with reference to BGHZ [*] 47, 324 (333 et seq.)). As can be seen in 315(3)(2) BGB [*], this is not the case here. This provision states that an action may be directed at the performance which would have been owed under a provision considering reasonableness and equity. Moreover, the assertion of a claim aimed at the rescinding of a contract prior to the German modernization of the law of obligations shows certain parallels. The filing of an action for performance with the request for redemption of the loan at a date to be specified by the court is therefore admissible.

                        dd) The determination of a target date for maturity constitutes a decision in the discretion of the Court made through interpretation of the contract terms (expert opinion p. 21). At any rate, the target date must be set in the future in order to grant the debtor some time for reflection (expert opinion p. 22).

In the present case, it must be considered that a significant amount of money is involved which will take some time for [Buyer] to acquire. It is also to be seen that [Seller] had not insisted on a quick redemption of the loan. The Court therefore considers a period for redemption of the loan of eight weeks after this judgment will have become legally effective as appropriate.

            5. [No limitation of Seller's claim]

            [Seller]'s claim is also not time-barred. Italian law provides a limitation period of ten years (expert opinion p. 30), which had begun to run on 16 December 1998 at the earliest, namely at the time when the loan was handed over (expert opinion p. 33). Consequently, the claim is not subject to a time-bar.

            6. [No interest claims]

            Since the claim for redemption of the loan has not yet become mature, any interest claims may not be awarded. In that respect, [Seller]'s action was to be dismissed and the judgment by default was to be repealed. The same applies to the request for determining a target date for redemption prior to the date proposed by the Court.

            7. [Italian currency]

            It does not matter that [Seller]'s request was based on Italian lira as currency. Given an official exchange course of 1 EUR = Lit. 1,936.27, the sums of money mentioned in the judgment's operative provisions can be properly identified without the need for an amendment of the request for relief.

      II. [Seller's claims relating to the purchase of furniture]

      [Seller] is also entitled to receive a payment of EUR 12,450.50 on the basis of Art. 53 CISG.

            1. [Scope of application of CISG]

            The CISG applies to this dispute.

                  a) The subject-matter scope of application is given according to Art. 1(1) CISG for contracts of sale of goods, which is the case at hand.

                  b) The territorial and personal scope of application is given under Art. 1(1)(a) CISG. [Seller], who relies on the conclusion of a contract with [Buyer], has its place of business in Italy at the time of conclusion of contract. [Buyer] has its place of business in Germany. The CISG entered into force for Italy on 1 January 1988 (Schlechtriem/Schwenzer, CISG, 4th ed., appendix I, p. 917), for the Federal Republic of Germany on 1 January 1991 (BGBl [*] II, p. 1477).

                  c) The application of the CISG is also not excluded by way of Art. 2(a) CISG, which provides that the Convention does not apply to sales of goods bought for personal, family or household use. The pieces of furniture in question were, undisputedly, intended to be used in the law firm offices of [Buyer] and were therefore not bought for personal use.

                  d) The question of whether [Seller] is entitled to claims under the CISG against [Buyer] falls within the subject-matter scope set out by Art. 4 CISG.

            2. [Conclusion of a contract on the sale of furniture]

            The parties have concluded a valid contract on the sale of furniture at a price of Lit. 24,107,520 (EUR 12,450.50).

The conclusion of contract is governed by Art. 14 et seq. CISG. These provisions state that a contract is concluded by the two corresponding declarations of intent, being the offer (Art. 14 CISG) and the acceptance (Art. 18 CISG). Pursuant to Art. 11 CISG, these declarations do not require a certain form. Since it is undisputed that the pieces of furniture in question had been delivered by [Seller] to [Buyer] under the invoice submitted as exhibit K7, it is of relevance to determine who had bought the furniture on whose name and on whose account.

[Seller] bears the burden to prove the existence of an order placed by buyer which would constitute an offer in terms of Art. 14 CISG (Bamberger/Roth/Saenger, Art. 14 CISG para. 8; MünchKomm/Gruber, BGB, 4th ed., Art. 14 CISG para. 38).

On the basis of the evidence taken, the Court is convinced that [Buyer] had ordered the furniture in question from [Seller] on its own account. This follows directly from the statements made by Witnesses ..., ..., ... and ...

                  a) Witness ... testified that Witness ... had ordered two desks. One of them was delivered to [Buyer] and another one was delivered to Mallorca.

                  b) Witness ... stated that he had been employed since the end of August 1998 for about one year at Company ..., being an import and export company. He confirmed having delivered furniture by truck "Ducati 2500 TD" to the address of [Buyer]'s law firm.

                  c) Witness ... stated that he had been CEO of Company ... during 1998. It had delivered all necessary furniture for the establishment of the [Seller]'s seat of business. In other respects he did not have any business relationship with any of the disputing parties. He stated that he had gotten to know [Buyer] at [Seller]'s offices and that he had explained the technical characteristics of the furniture which he had delivered to the [Seller]. As he had not been able to deliver the same furniture to [Buyer], he had referred [Seller] to the company of Witness ... which distributed similar furniture. After ... had placed his order for the pieces of furniture, he had travelled with Witnesses ... and ... with a delivery van of [Seller] to the offices of [Buyer] in order to effect delivery.

                  d) Witness ... identified before the District Court Pistoia that [Buyer] had personally ordered furniture from him after his inspection and selection at the furniture works ... . Then, he had been informed by the van drivers of Company ... and by the proprietors of that company about the fact that transport and delivery of the furniture had been effected at [Buyer]'s law firm offices in Frankfurt.

                   e) When assessing these statements, the Court has to consider that the witnesses were heard by an entrusted foreign court which means that the Court had not opportunity to obtain a personal impression of the witnesses themselves. For example, Witness ... testified that the furniture was bought by [Buyer]. It is not clearly identifiable from the hearing protocols of the District Court Pistoia to which extent his statements are based on his own perceptions or whether they might be a mere assumption. Therefore, the Court cannot clearly consider these statements for either of the existing possible interpretations.

However, the Court is convinced that the furniture had been ordered by [Buyer] from [Seller] on its own account for the following considerations:

                        aa) Witness ... has clearly identified during his hearing before the District Court Pistoia that [Buyer] himself had placed the order. Other than is the case for Witness ..., the wording of his testimony leaves no room for interpretation.

                        bb) The Court furthermore sees no indication to cast doubt on the credibility of Witness ... First, his testimony is supported by that of Witness ..., who declared that [Buyer] had expressed its interest in the pieces of furniture. Additionally, none of the remaining witnesses had mentioned Company ... in any way. Hence the circumstances of the purchase transaction in itself support that [Buyer] had placed the order personally.

                        cc) It was not possible to hear Witness ... who had been nominated by [Buyer] in order to prove that the furniture was in fact ordered by Company ... Even after [Buyer] had been pointed to the requested payment in advance of fees for the hearing of the witness, it remained unpaid. [Buyer] also failed to submit a disclaimer by the witness in respect of the fees.

                  f) Therefore, it must be assumed that [Buyer] had placed the order for the furniture and that it was delivered by [Seller]. As a result, there are two corresponding declarations of intent according to Arts. 14, 18 CISG. In particular, the acceptance of an offer may also be given impliedly under Art. 18 CISG. This has been the case by having effected delivery of the furniture.

            3. [Existence of claim for purchase price, Art. 53 CISG]

            [Buyer] is obliged to pay the purchase price under Art. 53 CISG. The amount of the purchase price claim follows from [Seller]'s invoice (submitted as exhibit K7), which has not been contested during the present proceedings.

The claim for the purchase price has also become mature, Art. 58(1)(1) CISG, since the goods have already been delivered and any different agreement by the parties has neither been asserted nor has such agreement been evident to the Court.

            4. [No limitation of Seller's claim]

            [Seller]'s claim for the purchase price is not subject to a time-bar.

                  a) The question of limitation is to be considered according to Art. 32(1) No. 4 EGBGB [*] in conjunction with Art. 28(2)(1) EGBGB and therefore under Italian law. The CISG itself does not govern the issue of limitation of claims and Art. 32(1) No. 4 EGBGB points to that law which is applicable under Art. 27 et seq. EGBGB to a contract. In case of a sales contract, it is generally that law applicable which applies at the domicile or place of business of the seller because he is the party effecting the characteristic performance (Schlechtriem/Schwenzer, Kommentar zum CISG, 4th ed., Art. 4 para. 35). Consequently, Italian law applies to the question of limitation.

                  b) Art. 1946 Codice civile provides for a general limitation period under Italian law of ten years. Italian law does not stipulate a shorter limitation period for contractual claims (KG Berlin [*] RIW [*] 1986, 905; LG [*] Baden-Baden RIW 1986, 905; Kindler, Einführung in das italienische Recht, 1993, 10 para. 2). After the sales contract had been concluded in 1998, [Seller]'s claim for the purchase price is not yet time-barred.

            5. [Seller's claim for interest]

            The claim for interest follows from Art. 78 CISG in conjunction with 288(1)(1) BGB [*] (old version), Art. 229 1(1)(1) EGBGB.

                  a) The obligation to pay interest is generally governed by Art. 78 CISG. However, there is no provision on the interest rate itself (Staudinger/Magnus, CISG, 1999, Art. 78 para. 1; Schlechtriem/Schwenzer/Bacher, Art. 78 para. 2). Therefore, the seller is entitled to interest if the buyer fails to settle the mature purchase price. As has been elaborated, maturity of the purchase price claim is governed by Art. 58 et seq. CISG. Since any particular agreement has not been reached by the parties, the delivery of the goods must be taken into account according to Art. 58(1) CISG. According to the uncontested submissions of [Seller] delivery was effected on 16 November 1998. This date is crucial for [Seller]'s interest claim which does not depend on any additional requirements apart from maturity and non-performance, especially the issuing of a reminder is not necessary (Bamberger/Roth, Art. 78 CISG para. 3; Schlechtriem/Schwenzer/Bacher, Art. 78 para. 17). As requested by [Seller], an interest claim existed since 22 October 1999.

                  b) It is in dispute which provisions are applicable to determine the interest rate, as the CISG itself does not govern this issue. While recourse is often made to the domestic law applicable in accordance with conflict of laws rules at the forum (in that respect OLG [*] Hamm NJW-RR [*] 1996, 1271; unresolved by OLG Düsseldorf IHR [*] 2004, 215), others prefer recourse to general principles in favor of a unified solution (cf. for the relevant opinions Schlechtriem/Schwenzer/Bacher, Art. 78 paras. 27 et seq.). The Court hereby adheres to the solution engaging a uniform standard which establishes a link to the notion of adjustment of profit and which determines the interest rate according to the usual interest rates applied at the habitual residence of the debtor (Bamberger/Roth/Saenger, Art. 78 para. 5; Neumayer, RIW [*] 1994, 99 (106)).

Consequently, the interest rate follows from 288 BGB [*]. The statutory interest rate is laid down in accordance with 288(1)(1) BGB (old version), which applies pursuant to Art. 229 1(1)(3) EGBGB [*] to claims having become mature before 1 May 2000. This interest rate amounted to 4% on 16 November 1998 and thereby corresponds with the interest rate proposed by [Seller] in its request. The claim for interest is therefore affirmed in full.

D. [Ancillary decisions]

The decision on costs and expenses follows from 92(2) No. 1 ZPO [*] because the action was dismissed only with respect to the target date for redemption of the loan and with respect to the corresponding interest claim.

The decision on the provisional enforceability is based on 709(1)-(3) ZPO.


FOOTNOTES

* 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 Germany is referred to as [Buyer]. Amounts in the uniform European currency (Euro) are indicated as [EUR]. Amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM]. Amounts in the former currency of Italy (Italian lira) are indicated as [Lit].

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGBl = Bundesgesetzblatt [German Federal Law Gazette]; BGH = Bundesgerichtshof [German Federal Supreme Court]; BGHZ = Entscheidungen des Bundesgerichtshofes in Zivilsachen [Officially reported decisions of the German Federal Supreme Court in Civil Matters]; EGBGB = Einführungsgesetz zum Bürgerlichen Gesetzbuche [German Code on the conflict of laws]; IHR = Internationales Handelsrecht [German journal on international commercial law]; KG = Kammergericht [Appellate Court of Berlin, Germany]; LG = Landgericht [German District Court]; NJW = Neue Juristische Wochenschrift [a German law journal]; OLG = Oberlandesgericht [German Appellate Court]; NJW-RR = Neue Juristische Wochenschrift Rechtsprechungsreport [German law journal]; RIW = Recht der Internationalen Wirtschaft [Journal on international commercial law]; ZIP = Zeitschrift für Wirtschaftsrecht [German journal on commercial law]; ZPO = Zivilprozessordnung [German Code on Civil Procedure].

** 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.

*** Daniel Nagel has been a law student at Heidelberg University since October 2002 and an exchange student at Leeds University in 2004/2005.

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