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CISG CASE PRESENTATION

Germany 6 December 2005 Appellate Court Hamm (Used motorcar parts case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/051206g1.html]

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

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Case identification

DATE OF DECISION: 20051206 (6 December 2005)

JURISDICTION: Germany

TRIBUNAL: OLG Hamm [OLG = Oberlandesgericht = Appellate Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 19 U 120/05

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

CASE HISTORY: 1st instance Landgericht Münster 8 July 2005 [affirmed]

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: France (defendant)

GOODS INVOLVED: Used motorcar parts


Case headnote

Reproduced from Internationales Handelsrecht [2/2006] 84

"1. The place of performance is to be determined according to Art. 5 No. 1(b)1 [EuGVVO], half sentence, autonomously from the procedural law of the forum state. In a sales contract concerning movables the place of performance is the place where the buyer takes delivery of the goods or was supposed to do so [Art. 57(1) CISG].

"2. If general terms and conditions, and the reference to them, are not phrased in the language of the contract, they do not become part of that contract."

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Classification of issues present

APPLICATION OF CISG: Not resolved

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 8 ; 9 ; 57(1)(a)

Classification of issues using UNCITRAL classification code numbers:

4A ; 4B [Scope of Convention (issues covered / issues excluded): incorporation of general terms and conditions];

8C [Interpretation of party's statement or other conduct: interpretation in light of surrounding circumstances];

9C [Practices established by the parties];

57A [Place for payment: in absence of agreement, payment at seller's place of business]

Descriptors: Scope of Convention ; Standard terms and conditions ; Intent ; Language issues ; Usages and practices ; Payment, place of ; Jurisdiction

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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): Internationales Handelsrecht [2/2006] 84-86; see also <http://www.justiz.nrw.de/nrwe/olgs/hamm/j2005/19_U120_05urteil20051206.html>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Appellate Court (Oberlandesgericht) Hamm

6 December 2005 [19 U 120/05]

Translation [*] by Stefan Dietrich [**]

Edited by Camilla Baasch Andersen [***]

SUMMARY

[Seller]'s appeal against the decision of the Landgericht [District Court] of Münster, which was pronounced on 8 July 2005, is dismissed.

[Seller] has to pay the costs of the appellate proceedings. The decision is provisionally enforceable. [Seller] may avert enforcement by providing security in the amount of 110 % of the enforceable amount, on the basis of the decision, unless [Buyer] provides security in the amount of 110 % in each case of the amount, which should be executed, before enforcement.

REASONING OF THE COURT

I.  With regard to the First Instance statement of the case, reference is directed to the facts of the appealed decision, pursuant to 540(1) No. 1 ZPO (ZPO = German Civil Procedure Order).

The District Court dismissed the claim as unfounded. As reasons it stated:

   -    The international jurisdiction of German courts is not present. Pursuant to Art. 2 EuGVVO (EuGVVO = the Council Regulation of December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters) [Buyer]'s domicile would be decisive for international jurisdiction. This leads to jurisdiction of French courts.
 
   -    The requisites of Art. 23 EuGVVO, whereby the international jurisdiction of the District Court of Münster could be constituted on the basis of an agreement of the parties, are not satisfied. The practice, alleged by [Seller], of imprinting on the reverse side of her accounts her terms and conditions, which contain a jurisdiction clause, is not sufficient in this respect. Also, the international jurisdiction of German courts cannot be derived from Art. 5 No. 1 b) EuGVVO. The place, to which the goods were actually delivered in terms of Art. 5 No. 1 b) EuGVVO or, as the case may be, should have been delivered, would be France.

Against this, the [Seller] appeals. His challenge to the District Court ruling is:

   -    The District Court has stated the [Seller]'s submission concerning the requisites of Art. 23(1) a) or, as the case may be, b) or c) EuGVVO is not substantiated, without justifying this conclusion. The District Court is also judicially in error in assuming that an international jurisdiction does not follow from Art. 5 No. 1 b) EuGVVO.
 
   -    In regard to the place of performance, the actual place of delivery should not be applied. In fact, the place of performance should be determined according to the substantive law, here according to the CISG. Pursuant to Art. 57(1)(a) CISG, D___ [in Germany] would be the contractual place of performance.
 
   -    Moreover, [Seller] and [Buyer] have agreed, in 5 and 9(2) of [Seller]'s sales terms, on [Seller]'s place of business in D___ as the contractual place of performance.

[Seller] applies to have the decision of the District Court of Münster set aside and remanded. [Buyer], in turn, defends the decision of the District Court and applies for dismissal of the [Seller]'s appeal.

II.  APPELLATE RULING

[Seller]'s appeal is permissible but not founded.

The District Court properly dismissed the action. The District Court of Münster does not have international competence in this case

The ruling on the competent court in [Seller]'s action against [Buyer] must be in compliance with Council Regulation (EC) No. 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Abl L 12/01 p. 1), EuGVVO. Pursuant to Art. 66 EuGVVO, the provisions of the EuGVVO apply because the action was filed after its entry to force on 1 March 2002. Art. 76 EuGVVO. This suit concerns a Civil Court matter in terms of Art. 2 EuGVVO. The required cross-border reference also exists: this is an action of [Seller], whose place of business is in Germany, against [Buyer], whose place of business is in France. Pursuant to Art. 2(1) EuGVVO, [Buyer], whose place of business is in G / France, is to be sued in the courts of her state, thus in a French court. International jurisdiction of the District Court of Münster is not constituted either by way of a jurisdiction agreement pursuant to Art. 23 EuGVVO or as a special jurisdiction of the place of performance according to Art. 5 EuGVVO.

      1. A jurisdiction agreement between [Seller] and [Buyer] could only result from 9(1) of [Seller]'s TTV general terms of sale (version December 2001), in which it is said: "Inasmuch as buyer is a qualified merchant, our place of business is the place of jurisdiction ___ [in Germany]." But this cannot be regarded as an effective jurisdiction agreement because it lacks the fulfillment of the formal requisites provided for in Art. 23 EuGVVO.

            a) An agreement in writing pursuant to Art. 23(1) sentence 3 a) 1st alternative

EuGVVO or an oral agreement evidenced in writing according to Art. 23(1) sentence 3 2nd alternative EuGVVO is not present. [Seller] does not bring forward that a document was ever produced in which the applicability of [Seller]'s TTV general terms of sale was stipulated, or that documents were sent on the occasion of the conclusion of a contract, which underlies the deliveries involved in this litigation, such as, for example, offers or order confirmations, in which the applicability of the sales terms was agreed to by the parties.. The sending of terms and conditions in conjunction with accounts is not sufficient. In this respect, a deliberate inclusion of the terms and conditions in the contract conclusion is lacking. This applies all the more if -- as is the case here -- neither the terms and conditions themselves nor the reference to them is referred to in the contractual language.

   -    It is a fact that the Appellate Court adjudicated in a decision of 28 June 1994 - 19 U 179/93 - EwiR 1994, 1189, that a jurisdiction clause, which is contained in terms and conditions, can also constitute a jurisdiction agreement in terms of Art. 17(1) sentence 2, 1st alternative, EuGVÜ (EuGVÜ = Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters) if the opposing party signs a declaration of acceptance, which alludes to the terms and conditions imprinted on the reverse side, although these are composed in a language which the opposing party is unable to understand (that is assumed in the decision of the Appellate Court of 20 September 2005 - 19 U 40/05). But this decision by the Appellate Court is based on the adjudication of the BGH (BGH = Federal Court of Justice), according to which ignorance of the language of the other party only precludes inclusion of the terms and conditions in instances in which the reference to the terms and conditions was made in the language of the negotiation (BGH IPRax 1991, 326; OLG Hamm IPRax 1991, 324, 325).
 
   -    In the instant case, the contractual language was clearly French and a correspondence which documents the respective contract conclusion is not available. In the instant case, all accounts of [Seller] were presented in French. In contrast, the reference on the front of the individual accounts: "Only the terms and conditions and terms of delivery apply that you are familiar with" is set forth in German and English, but not in French.

            b) Additionally, no jurisdiction agreement pursuant to Art. 23(1) sentence 3 b) EuGVVO is present in a form which complies with the usage between business parties. A usage establishing the inclusion of terms and conditions could have originated if there had been an ongoing business relationship in accordance with the terms and conditions. However, the applicability of the terms and conditions must be expressly agreed at least once in the initial phase and the parties must have complied with them in practice. It is not sufficient for the offeror of terms and conditions simply to send accounts which include a reference to them imprinted on the reverse side (BGH BB 04, 853; Hüßtege in Thomas/Putzo, ZPO, 26 ed., EuGVVO, Art. 23 Rn. 10). It must rather be established that the jurisdiction agreement is pursuant to a concurrence of wills within the scope of the ongoing business relationship of the parties. Starting from these principles -- according to [Seller]'s own submission, a jurisdiction agreement pursuant to Art. 23(1) sentence 3 b) EuGVVO was not present.

[Seller] alleged that the TTV terms and conditions were imprinted on the reverse side of all documents of [Seller], in particular on all accounts and credit items and that [Buyer] would have agreed to their applicability. However, there is no concrete submission to show that in the initial phase of the business relationship between [Seller] and [Buyer] the TTV terms and conditions were once expressly agreed on, furthermore, that the contracting parties complied with them in practice. The fact that [Seller], when processing the first delivery, sent an account that included the reference, "Only the terms and conditions and terms of delivery do apply, that you are familiar with" and that [Buyer] did not contradict the applicability of the terms and conditions, does not satisfy the required concurrence of wills. Irrespective thereof, that the above mentioned reference on the accounts does not clearly allude to the [Seller]'s TTV terms and conditions, because it is referenced to "the terms and conditions and terms of delivery that you are familiar with", but not to "the TTV terms and conditions imprinted on the reverse side", thus the reference on the front side of the accounts is already -- as shown above -- not sufficient, as it was only composed in German and English, but not in the language of negotiation, namely French. A reference by the District Court regarding [Seller]'s not substantiated submission was not required -- contrary to [Seller]'s opinion.

The question of the international jurisdiction of the District Court of Münster on the basis of Art. 23 EuGVVO is a central issue of the District Court's ruling. Even if a reference could have been expected, it is also not precisely brought forward regarding the relevant inclusion of the terms and conditions into the respective contractual relationship in the justification of the appeal, so that still no satisfactory facts for a jurisdiction agreement are asserted.

            c) Finally, no jurisdiction agreement by a commercial usage pursuant to Art. 23(1) sentence 3 c) EuGVVO is at hand. That a commercial usage exists, whereupon in sales of used motorcar parts jurisdiction at the place of business of the seller is deemed to be agreed upon, [Seller] does not bring forward, nor is that apparent.

      2. The District Court of Münster is also not internationally competent as a special jurisdiction of the place of performance pursuant to Art. 5 No. 1 EuGVVO. Location D___ [in Germany] was neither effectively agreed upon between [Seller] and [Buyer] as the contractual place of performance, nor as the place where contracts that were concluded between the parties were fulfilled or should have been fulfilled.

            a) The contracts between [Seller] and [Buyer] are a contracts for the sale of movable goods in terms of the special regulation of Art. 5 No. 1 b) 1st clause EuGVVO. The contracts are directed at the transfer of goods in return for payment of money. The "security agreement", which is contained in the contracts, is a matter of a simple agreement that [Buyer] on her part is entitled to sell not-processed used motorcar parts to [Seller] at a specific price. If [Buyer] makes use of this right, [Buyer]] transfers the used part to [Seller] and in return the agreed price is credited to [Buyer] or, as the case may be, is paid off. A "security" is not imposed on the used part, processed by [Seller]. Conceptually, this would presume that an integral part of the used part itself, sold by [Seller], is returned to [Seller], which is not the case.

            b) [Seller] and [Buyer] did not effectively agree upon location D___ [in Germany] as the place of performance, so that a determination in terms of Art. 5 No. 1 b) 1st clause EuGVVO is not present.

                  aa) An explicit agreement to the effect that [Seller]'s place of business should have been the place of performance is not brought forward by [Seller] and does not arise from the accounts under consideration. Even if, with the term "FRANCO", which is present in the accounts of [Seller] under the note "Condition de Livraison", the term "ex warehousing" was meant, as [Seller] asserts, this does not indicate, that [Seller]'s warehousing in location D___ was agreed on as the place of performance. "Ex warehousing" simply constitutes a cost of carriage clause for the mail order sale.

                  bb) However, 9(2) of the TTV terms and conditions defines [Seller]'s place of business and thus location D___ as the place of performance. But the TTV terms and conditions in turn -- according to the insofar authoritative German law -- were not effectively included into the respective acts of sale between [Seller] and [Buyer], because [Seller] did not allude to their applicability in French, which was the contractual language. According to the AGBG (AGBG = former German Law of terms and conditions) as well as according to 305 et seq. BGB (new version), an express reference to the terms and conditions of the user, which must be understandable for the foreign party, is necessary for the inclusion (Hamm NJW 83, 524; Palandt-Heinrichs, BGB, 64th ed., 305 Rn. 59). If the negotiations are held in a foreign language it must be referenced to the terms and conditions in this language (Palandt-Heinrichs, l.c. Rn. 42).

            c) According to the special provision of Art. 5 No. 1 b) 1st clause EuGVVO, the place of performance is to be ascertained -- contrary to the former EuGVÜ -- procedurally autonomous, i.e., considering the objective and the systematics of the EuGVVO (comp. Hüßtege in Thomas / Putzo, l.c., preliminary note Art. 1 Rn. 14). The respective obligations are not to be determined in isolation according to the international law of the Member State Court, but rather according to purely factual or pragmatical criteria (Kroppholler, Europäisches Zivilprozessrecht, 7th edit., Art. 5 Rn. 38).

Authoritative for all claims out of the contractual relationship, particularly in regard to the pecuniary claims or, as the case may be, compensation claims, is the place at which the movable goods were delivered under the contract or or should have been delivered or, as the case may be, where the services were performed or should have been performed. Thus the forum contractus is consistently the place of the "characteristic contract performance" (Baumbach/Lauterbach/Albers/Hartmann, ZPO, 63rd ed., EuGVVO, Art. 5 Rn. 7; Zöller /Geimer, ZPO, 25th ed., EuGVVO, Art. 5 Rn. 4; Kroppholler, l.c.; Hager/Bentele IPRax 2004, 73). In regard to a contract for the sale of movable goods, the determination of the place at which the goods would have to be delivered under the contract, raises difficulties, in particular regarding a mail order sale. This could be the place of performance of the contractual obligation of the seller or the place of the occurance of the success of the performance at the buyer. Starting from the pragmatical interpretation of the notion of the place of performance, however, in the literature it is increasingly believed - an opinion this Court supports -- that this place is to be regarded as the place of perfomance at which the buyer accepted the goods or should have accepted them (Hager/Bentele, l.c. with a detailed rationale; Hüßtege in Thomas/Putzo, l.c., Art. 5 Rn. 7). This place is [Buyer]'s place of business in G /France.

            d) Accordingly it can be left unanswered whether the CISG is applicable or, as the case may be, the applicability of the CISG through the [Seller]'s TTV terms and conditions was effectively excluded, whereat the parties argue. Because jurisdiction at the place of payment regarding [Seller]'s purchase price claim cannot be derived from Art. 57(1)(a) CISG, which determines the place of business of seller as the place of payment of buyer. Whether a jurisdication was established at the place of payment with the provision of Art. 57(1)(a) CISG, has been controverted within jurisprudence and literature (Schach IPRax 1986, 82, 84; Schwenzer IPRax 1989, 274). But the combination of the place of payment and jurisdiction had practical relevance particularly for Art. 5 No. 1 EuGVÜ, which standardized jurisdiction as at the place of performance. When determining the place of performance according to the lex causae of the UN-Sales Law, thus a jurisdiction pursuant to Art. 57(1)(a) CISG resulted at the seller's location. But, with the entry into force of Art. 5 No. 1 b) EuGVVO, a reorganization of the place of performance in regard to the sale of movable goods was created; hence the place of performance -- as shown above - is now determined autonomously: Also in regard to [Seller]'s claim for the purchase price, the place of delivery is authoritative.

III. The order as to costs is based on 97(1) ZPO; the order on provisional enforceability is based on 708 No. 11, 711 sentence 1 ZPO. The Court did not allow the revision as the requisites in this regard of 543(2) ZPO are not present.


FOOTNOTES

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

** Stefan Dietrich, Dipl. iur University of Bochum, LL.M. University of London (2004/2005). His fields of law are International Commercial Law and Corporate Law. Since January 2006 articled clerk with the Higher Regional Court (OLG) Hamm.

*** Camilla Baasch Andersen, Lecturer in International Commercial Law, University of Leicester; Fellow of the Institute of International Commercial Law, Pace; Visiting Lecturer at University of London.

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