Germany 2 November 2005 District Court Heidelberg (Natural stones case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/051102g1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 3 O 169/04
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Poland (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Natural stones
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:
4B [Scope of Convention (issues excluded): assumption of debt]; 53A [Buyer's obligations: obligation to pay price of goods]; 78B [Rate of interest]
4B [Scope of Convention (issues excluded): assumption of debt];
53A [Buyer's obligations: obligation to pay price of goods];
78B [Rate of interest]
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/1416.pdf>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation)
Queen Mary Case Translation Programme
2 November 2005 [3 O 169/04]
Translation [*] by Jan Henning Berg [**]
Edited by Institut für ausländisches und Internationales
Privat- und Wirtshaftsrecht der Universität Heidelberg
Daniel Nagel, editor [***]
[Seller] relies on claims for the purchase price from deliveries of natural stone to [Buyer].
[Seller] supplied [Buyer] with natural stone in the course of a lasting business relationship. In the time between February 2001 until July 2001 [Seller] issued to [Buyer] ten invoices over a total sum of Deutsche Mark [DM] 89,796. For these invoiced sums, a sum of EUR 26,766.85 has remained unsettled. By a letter dated 30 August 2001, [Buyer] accredited a partial sum of DM 42,409.93 (= EUR 21,683.85). For the relevant details, reference is made to the copies of this correspondence in the documents (exhibit K3). In this respect, [Buyer] proposed a settlement with the content described in exhibit K3, which meant that company ... would bear the unsettled invoice sums. The parties are in dispute about the conclusion and the validity of this settlement.
[Buyer] was reminded by letter dated 19 May 2003 (exhibit K5) to pay the partial sum of EUR 21,683.85. A time limit was set until 2 June 2003.
[POSITION OF THE PARTIES]
The letter of 30 August 2001 did not form a validly concluded settlement between the parties. It was contested that the debtor had changed with respect to the Company ... Moreover, [Seller] contests that it had ever expressly agreed to the change of debtor. At any rate, the change of debtor would not be valid under either German or Polish law. Under Polish law, an assumption of a debt required a specific contract between [Buyer] and Company ... . Such a contract had not been concluded. And, even if such a contract had been concluded, it would have been void because [Buyer] as a former member of the board of Company ... had concluded it. It 1s provided in Art. 210 of the Polish Commercial Code (applicable at that time), that the contract between [Buyer] as a board member of Company ... could only have been validly concluded through an authorized person who would have had to be appointed beforehand by the general meeting of Company ... Additionally, the contract would have required notarization in order to be valid.
[Seller] requests that [Buyer] be ordered to pay [Seller] EUR 26,766.85 plus 5% interest above the prime lending rate since 3 June 2003 with respect to EUR 21,683.85 and with respect to EUR 5,083 since service of the action.
Position of [Buyer]
[Buyer] requests dismissal of [Seller]'s action.
The settlement proposal made by [Buyer] of 30 August 2001 had been accepted by [Seller]. The fact that Company ... had not signed the agreement did not hinder its validity under Polish law. Company ... only had to be informed about the settlement. As [Buyer] and the CEO of Company ... were identical, this was properly undertaken. Moreover, it was referred to the submitted statement made by the board of Company ... (Resolution of 24 October 2001, [Buyer]'s exhibits pp. 3-5). Therefore, the claim was properly assumed by Company ... as the new debtor implying that [Buyer] was no longer the debtor. Thus, the action should be dismissed.
Regarding the further argument by the parties, reference is made to the written pleadings exchanged and the attached exhibits which have been submitted to the Court through the date of closing of the final oral hearing.
Concerning the legal assessment of the present dispute under Polish law, the Court has obtained two written expert opinions from the Institute for Eastern Law. With respect to the relevant issues, reference is made to the resolution of 23 September 2004 (pp. 73-81) and to the additional resolution of 17 March 2005 (pp. 155-157). In regard to the results, the Court refers to both written expert opinions of 17 February 2005 (pp. 119-137) and of 28 July 2005 (pp. 179-189).
REASONING OF THE COURT
The admissible action is justified on the merits. According to Art. 53 CISG, [Seller] is entitled to recover the purchase price from the [Buyer] in the amount of EUR 26,766.85 as requested. The purchase price claim as such and its amount are not in dispute between the parties. [Buyer] has merely argued that with regard to a partial sum of EUR 21,683.85 there had been an assumption of debts by Company ... by virtue of a settlement agreement reached on 30 August 2001. Therefore, it is argued that [Buyer] was relieved from its former debt. This settlement agreement must be considered under Polish law. The CISG, which is the law applicable to the sales contract according to its Art. 1 because the States in which the parties have their places of business are Contracting States to the CISG (Germany since 1 January 1991 and Poland since 1 June 1996), does not apply to agreements concerning the assumption of debts (Bamberger/Roth/Saenger, CISG, Art. 4 para. 27). Instead, one must apply the domestic law which is applicable to the contract by way of conflict of laws rules. As the parties have not made a choice of law, Art. 28(2) EGBGB [*] provides for the application of Polish law since [Seller], who effected the characteristic performance through its delivery of natural stones, is domiciled in Poland.
Pursuant to Polish law, however, an assumption of debts as intended in the letter of 30 August 2001 is not valid. This follows from both expert opinions obtained by the Court. The agreement reached on 30 August 2001 must be considered under Polish law and under the Polish legal basis concerning the validity of an assumption of debts because the change of debtor forms the major content of the contract according to the joint intent of the parties as contained in the "settlement" of 30 August 2001 (cf. expert opinion of 28 July 2005, p. 185). The validity of an assumption of debts is to be assessed under Polish law and its Art. 519 § 2 ZGB [*]. A valid contract for an assumption of debts could have been concluded only between [Seller] and Company ... with subsequent acknowledgement by [Buyer] or between [Buyer] and the Company ... with subsequent acknowledgement by [Seller] according to the results of the expert opinion. Art. 522 ZGB provides that a contract for the assumption of a debt must be concluded in writing in order to avoid its invalidity. However, the agreement reached on 30 August 2001 lacks the required signature by Company ... In accordance with the expert opinion, any lack of signature can not be cured by the identity of [Buyer] with the CEO of Company ... Instead, a signature by Company ... would have had to be identified by its company stamp. Moreover, an additional signature for Company ... would have been required in any case (p. 187). The expert opinion states that a Polish judge would conclude that the required form for an assumption of debts was not fulfilled and that the consequence would be the contract's invalidity due to a lack of form according to Art. 522 ZGB in conjunction with Art. 73 § 1 ZGB (cf. expert opinion p. 187). Therefore, Company ... did not effectively assume the [Buyer]'s debt. [Buyer] remains debtor of the purchase price claim. The [Seller] is thus entitled to claim the purchase price from the [Buyer].
The claim for interest on the sum of EUR 21,683.85 since 3 June 2003 follows from Art. 78 CISG. Pursuant to this provision, one party is entitled to interest if the other party fails to pay the price or any other sum that is in arrears. However, it is in dispute how the interest rate should be determined. The Court adheres the position which favors a special link to the law that applies at the place of business of the debtor (cf. Stoll, Internationalprivatrechtliche Fragen bei der landesrechtlichen Ergänzung des Einheitlichen Kaufrechts, in: Heldrich (ed.), Festschrift für Murad Ferid zum 80. Geburtstag, Frankfurt am Main 1988, pp. 495 et seq. (510)). It seems convincing to the Court that the debtor operates with the money by profitably investing the sum to which the creditor is entitled in its own country instead of paying the sum to the creditor as required by the contract. Consequently, a special link must be drawn to that law which is applicable at the place of business of the debtor. Therefore, German law is applicable, meaning that the interest rate follows from § 288(1) BGB [*]. With regard to the partial sum of EUR 5,083, the corresponding claim became mature with service of the judicial reminder on 20 November 2003 at the latest. As [Seller] requests interest only since service of the action, but an action has not been commenced here and, instead, the dispute was initiated by the service of a judicial reminder, [Seller]'s request must be interpreted in a way that interest was claimed at least since service of the judicial reminder. According to § 308 ZPO [*], interest may not be awarded for periods of time prior to the time mentioned in the request. These interest claims are awarded on the basis of Art.78 CISG, as well.
The decision on costs and expenses follows from § 91(1) ZPO. The decision on preliminary enforceability is based on §§ 709(1), (2), 108 ZPO.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Poland 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].
Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; EGBGB = Einführungsgesetz zum Bürgerlichen Gesetzbuche [German Code on the conflict of laws]; ZGB = Polnisches Zivilgesetzbuch [Polish Civil Code]; 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.Go to Case Table of Contents