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CISG CASE PRESENTATION

Austria 24 May 2005 Supreme Court (Grinding stock case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050524a3.html]

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

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Case identification

DATE OF DECISION: 20050524 (24 May 2005)

JURISDICTION: Austria

TRIBUNAL: OGH [ = Oberster Gerichtshof = Supreme Court]

JUDGE(S): Dr. Griss (Vorsitz), Dr. Gitschthaler, Dr. Vogel, Dr. Jensik

CASE NUMBER/DOCKET NUMBER: 4 Ob 80/05a

CASE NAME: Austrian case citations do not generally identify parties to proceedings

CASE HISTORY: 1st instance Bezirksgerichts Völkermarkt (GZ 2 C 1243/02a-45) 28 July 2004; 2d instance Landesgerichts Klagenfurt (GZ 3 R 362/04a-54) 20 January 2005

SELLER'S COUNTRY: Romania (plaintiff)

BUYER'S COUNTRY: Austria (defendant)

GOODS INVOLVED: Grinding stock


Headnote

Reproduced from 5 Internationales Handelsrecht (2005) 6:249

     "The buyer has the burden of proving that he has notified the seller duly and timely of a non-conformity; the seller bears the risk of loss of such notice."

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Case abstract

AUSTRIA: Oberster Gerichtshof 24 May 2005

Case law on UNCITRAL texts (CLOUT) abstract no. 748

Reproduced with permission of UNCITRAL

Abstract prepared by Martin Adensamer, National Correspondent

In reviewing this case, the Supreme Court found that the CISG has to be applied because the claimant had its place of business in Romania and the defendant in Austria. Moreover, the parties had neither excluded the application of the CISG nor chosen a law of a non Contracting Party.

On the question whether a notice under Art. 39 CISG is effective, the Supreme Court stated that any notice of the lack of conformity of the goods has to be given within a reasonable time after the lack has been discovered or should be discovered. The court observed that pursuant to Art. 27 CISG, if the notice does not to reach its destination, this does not deprive that party, who has sent that notice, of the right to rely on the communication. Consequently, the buyer only had to prove that it had actually sent the notice in due time, which, in fact, it had done.

The Supreme Court dismissed the appeal.

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 27 ; 39(1) [Also cited: Article 6 ]

Classification of issues using UNCITRAL classification code numbers:

27A [Dispatch of communication by appropriate means];

39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]

Descriptors: Communications, risk of ; Lack of conformity notice, timeliness

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1050&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (German): Austria Supreme Court website [go to <http://www.ris.bka.gv.at/jus/>, check "jus texte" box, enter "4 Ob 80/05a" as "suchworte", click "suche starten"]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1050&step=FullText>; see also 5 Internationales Handelsrecht (2005) 6:249

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Supreme Court (Oberster Gerichtshof) of Austria

24 May 2005 [4 Ob 80/05a]

Translation [*] by Daniel Fritz [**]

Edited by Todd Fox [***]

HOLDING

The appeal on points of law is dismissed. [Seller] must reimburse [Buyer] the costs of the proceedings in the amount of 665.66 within fourteen days.

REASONS

Contrary to the appellate court ruling, which is not binding on this Court ( 508a (1) ZPO [*]), the appeal is inadmissible since the decision does not involve significant legal issues pursuant to 502 (1) ZPO. The appellate court justified its ruling with reference to the interpretation of 377 (4) HGB [*] (timely dispatch of notice of non-conformity is sufficient), against which commentators express severe concerns, and with the BGH's [*] view of the need of receipt of the notice of non-conformity. In doing so, the court failed to recognize that 377 (4) HGB is not applicable to this case:

Under Art. 1(1)(a) of the United Nations Convention on the International Sale of Goods (CISG), the Convention applies to sales contracts between parties which have their places of business in different Contracting States. The [Seller] has its place of business in Romania, the [Buyer] in Austria. Both States are Contracting States to the CISG, Austria since 29 December 1987, Romania since 22 May 1991. The parties do not claim to have agreed upon an exclusion of, or derogation from, the application of the CISG under Art. 6 CISG. Therefore, the CISG applies to the contract.

Pursuant to Art. 39(1) CISG, the buyer loses the right to rely on the non-conformity of the goods if he fails to give notice thereof, specifying the nature of the non-conformity, within a reasonable time after the non-conformity was discovered or ought to have been discovered. According to Art. 27 CISG, the non-receipt of a notice given by a party does not deprive that party of the right to rely on such notice. Therefore, the [Buyer] has (only) to prove that the notice of non-conformity was sent timely and in an adequate manner; the [Seller] bears the risk of loss of the notice (1 Ob 273/97x = JBl [*] 1999, 252; Karollus in Honsell, Kommentar zum UN-Kaufrecht [Commentary to UN Sales Law], Art 27, para. 16; Kramer in Straube 3 ed. 377, 378 HGB, para. 46).

According to the ascertained set of facts, the [Buyer] communicated the contamination of the grist to the [Seller] on 17 May 2001. Consequently, the [Buyer] can rely on the non-conformity of the goods. The question of whether the application of 377 (4) HGB [*] would lead to another outcome is irrelevant to the case.

The appeal is accordingly dismissed. The decision on the costs is based on 41, 50 ZPO. The [Buyer] had indicated the inadmissibility of the appeal.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff-Appellant of Romania is referred to as [Seller] and Defendant-Appellee of Austria is referred to as [Buyer].

Translator's note on abbreviations: BGH = Bundesgerichtshof [German Supreme Court]; HGB = Handelsgesetzbuch [Commercial Code]; JBl. = Juristische Blätter [Austrian Law Journal]; ZPO = Zivilprozessordung [Austrian Code on Civil Procedure].

** Daniel Fritz is a graduate of the University of Potsdam, currently studying for the LL M degree at the University of Stellenbosch.

*** Todd Fox received his J.D. from Rutgers University and his LL.M. summa cum laude from the University of Freiburg, Germany. A member of the Bar of the State of Pennsylvania, he is an Associate of the law firm of Gleiss Lutz of Stuttgart, Germany, specializing in commercial arbitration. He is also an Associate of the Institute of International Commercial Law of the Pace University School of Law.

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Pace Law School Institute of International Commercial Law - Last updated February 19, 2008
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