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CISG CASE PRESENTATION

Switzerland 22 December 2005 Commercial Court Zürich (Retail fashion clothes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/051222s1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20051222 (22 December 2005)

JURISDICTION: Switzerland

TRIBUNAL: Handelsgericht [Commercial Court] Zürich

JUDGE(S): Dr. E. Mazurczak (Präsident), Dr. R. Wuyler, R. Ober, Dr. F. Schwsarzenbach, H. Frischknecht

CASE NUMBER/DOCKET NUMBER: HG 04 0374/U/ei

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: Switzerland (defendant)

GOODS INVOLVED: Retail fashion clothes


Case headnote

Reproduced from Internationales Handelsrecht [4/2006] 161

"For a party to later rely on the court’s or opponent’s statements during settlement negotiations is irreconcilable with the nature of such negotiations, unless a settlement was reached.

"As the CISG lacks provisions for the permissibility and consequences of a set-off, the applicable law is to be determined by the forum state’s conflict of law rules."

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UNCITRAL case abstract

SWITZERLAND: Handelsgericht Zürich (Fashion clothes case) 22 December 2005 [HG 04 0374Uei]

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/90],
CLOUT abstract no. 908

Reproduced with permission of UNCITRAL

Abstract prepared by Thomas M. Mayer

The dispute in the present case related to various deliveries made by a German clothing business to a garment store in Zurich. The German plaintiff asserted claims arising from unpaid invoices. With regard to two of those invoices, the defendant disputed that the contract had been concluded. With regard to others. it asserted a right of set-off against other debts.

The court found that, in accordance with the general principles within the meaning of article 7(2) CISG, the burden of proving the existence of a contract lay with the plaintiff. It concluded that no such proof had been furnished since the plaintiff had documented only the delivery of the goods.

The court assessed the question of the right of set-off, as invoked by the defendant, in accordance with national law as determined by Swiss private international law, i.e., in the present case, German law. In the court's opinion, that law did not allow any right of set-off in the situation described. Also, it already denied any possibility of set-off since the defendant had failed to prove the legal ground of its set-off claim for damages (existence of loss, infringement by the plaintiff of its obligations, causal link). In the case at issue, the question of the burden of proof was also assessed in accordance with the general principles of the CISG.

The plaintiff's claim was partly allowed. The amount awarded yielded interest on arrears at a rate determined in conformity with German law.

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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 4 ; 57(1)(a) ; 74 ; 78 [Also cited: Articles 14 ; 18 ; 54 ; 74 ]

Classification of issues using UNCITRAL classification code numbers:

4B [Scope of Convention (issues excluded): set-off];

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

74A [General rules for measuring damages: loss suffered as consequence of breach];

78B [Rate of interest]

Descriptors: Scope of Convention ; Set-off ; Payment, place of ; Damages ; Burden of proof ; Interest

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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=1139&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1195.pdf>; Internationales Handelsrecht (4/2006) 161-164; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1139&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

French: Claude Witz, Recueil Dalloz (22 February 2007) 534

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Case text (English translation)

Queen Mary Case Translation Programme

Commercial Court (Handelsgericht) of the Canton of Zurich

22 December 2005 [HGO40374/U/ei]

Translation [*] by Mariel Dimsey [**]

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

Christa R. of Germany [...], Plaintiff [Seller] [...] v. P P GmbH (previously S M GmbH), 8002 Zurich, Defendant [Buyer]

RELIEF SOUGHT BY [SELLER]

The [Buyer] is liable to pay the amount of EUR 15,239.95 plus interest of 5% on EUR 112.79 since 12 March 2003, on EUR 3,886.70 since 28 March 2003 and on EUR 11,240.46 since 4 April 2003. Costs and compensation are to be borne by the [Buyer].

REASONING

I. Introduction

      1. The [Seller] runs a fashion store at her residence in Germany under the description "[...] Designermode". The [Buyer], a Swiss limited liability company (GmbH) presently located in Zurich, is a fashion retail company.

      2. In the present claim for EUR 15,239.95 plus interest and costs, the [Seller] demands from the [Buyer] the payment of the purchase price of various deliveries, as well as the payment of default fees (ex. 1; ex. 13). The [Buyer] refuses to pay the amount of money demanded and alleges that it would be entitled to counterclaims which could satisfy the entire amount claimed by the [Seller] by means of set-off. Furthermore, the [Buyer] disputes -- regardless of the set-off claims -- the existence of two of the partial payments claimed by the [Seller] (ex. 7).

II. Particulars of the proceedings

      1. On 14 October 2004, the [Seller] instituted the legal proceeding set out above, attaching instructions from the Office of the Justice of the Peace in Opfikon-Glattbrugg (ex. 1; ex. 3). After receipt of the [Buyer]'s response to the claim dated 24 November 2004 (ex. 7), an open discussion of the case between the court and the parties (Referentenaudienz) took place on 22 March 2005, on which occasion the parties concluded a settlement, subject to [Buyer]'s right to revoke (mins. p. 5 et seq.). The [Buyer] revoked the settlement before the deadline with its letter dated 29 April 2005 (ex. 10). Thereafter, in accordance with the reply dated 5 September 2005, the proceedings were continued (ex. 13). In the order containing instructions from the judge dated 6 September 2005 -- received on 7 September 2005 (ex. 15) -- a time limit was set for the [Buyer] to draft a rejoinder, accompanied by the notice that, in case of delay, default would be assumed (mins. p. 12). However, the time limit expired without a rejoinder being received and the main proceedings were declared closed by order dated 3 October 2005 (mins. p. 13).

      2. It has been established that, after the conclusion of the main proceedings, the [Buyer] (which had hitherto been operating under the name of S M GmbH and was domiciled in [...]) changed its company name to P GmbH and relocated to Zurich (cf. judgment 17).

      3. The territorial jurisdiction of the Zurich Canton Commercial Court remains undisputed and, in the light of the [Buyer]´s seat in [...] (at the point in time at which the claim became pending) or Zurich (since 28 November 2005), cannot be called into question (Art. 2(1) Lugano Convention in connection with Art. 53(1), sentence 1 Lugano Convention). The subject-matter jurisdiction of the Commercial Court is also present since the [Buyer] is a company registered in the Swiss Commercial Register, the dispute to be decided relates to the fashion trade, and the dispute value needed to submit a claim to the Federal Court has been reached (§ 63 no. 1. GVG [*] in connection with § 62 GVG).

      4. It can be seen from the instructions of the Office of the Justice of the Peace in Opfikon-Glattbrugg dated 4 June 2004 that the [Buyer] had raised a counterclaim of EUR 123,127.50 within the scope of the Justice of the Peace's proceedings (Sühnverfahren) (ex. 3). After the [Buyer] was informed that, under the scope of application of the Lugano Convention, a counterclaim cannot become pending by submission of the Justice of the Peace's instructions and that, therefore, if [Buyer] wanted to file a counterclaim, it would have to be within the scope of the [Buyer]'s response to [Seller]'s claim (mins. p. 2 et seq.). However, the [Buyer] only asserted a set-off (ex. 7 p. 2 et seq.). Therefore, the non-existence of a counterclaim is to be assumed.

III. Reasoning

      1. As an introductory matter, it is established that in the present case the UN Convention on Contracts for the International Sale of Goods of 11 April 1980 (CISG; SR 0.221.211.1) applies, as both the [Seller] and the [Buyer] have their places of business in Contracting States and the parties have not excluded the application of the Vienna Sales Law (Art. 1(1)(a) CISG). The [Seller] rightly referred to this in her reply (ex. 13 p. 2 et seq.).

      2. a) The [Seller]´s claims are based upon the following invoices and default notices, which were sent between January 2003 and March 2003 in conjunction with various sales of goods to the [Buyer] (ex. 1 p. 3 et seq.):

Ex. Invoice No./Date Amount EUR Paid EUR Outstanding EUR
4/1 Dated 23 Jan. 2003 16,112.79 16,000.00 112.79
4/4
4/6
No. 100,203 dated 10 Feb. 2003
Default fee
2,348.50
5.00
  2,353.50
4/7
4/9
No. 110,203 dated 11 Feb. 2003
Default fee
1,528.20
5.00
  1,533.20
4/10 No. 40,303 dated 4 Mar. 2003 11,240.46   11,240.46
  Total 31,239.95 16,000.00 15,239.95

            b) The [Buyer] disputed the claim by indicating that it was entitled to two claims for damages against the [Seller] in the total amount of CHF 204,000.00. The [Buyer] could thus allegedly satisfy the claims of the [Seller] by means of set-off. Furthermore, the [Buyer] is of the opinion that, regardless of its set-off claims, there are certain partial payments claimed by the [Seller] which it cannot be required to pay (ex. 7 p. 2 et seq.).

                  (aa) The [Buyer] acknowledges the following invoices of the [Seller] on the merits, but does, however, counteract these with its own counterclaims (ex. 7 p. 3):

Ex. Invoice No./Date Amount EUR Paid EUR Outstanding EUR
4/1 Dated 23 Jan. 2003 16,112.79 16,000.00 112.79
4/10 No. 40,303 dated 4 Mar. 2003 11,240.46   11,240.46
  Total 27,353.25 16,000.00 11,353.25

                  (bb) By way of contrast, the [Buyer] opposes the existence of the following invoices of the [Seller] in their entirety, i.e., regardless of the existence of its set-off claims (ex. 7 p. 3):

Ex. Invoice No./Date Amount EUR Paid EUR Outstanding EUR
4/4
4/6
No. 100,203 dated 10 Feb. 2003
Default fee
2,348.50
5.00
  2,353.50
4/7
4/9
No. 110,203 dated 11 Feb. 2003
Default fee
1,528.20
5.00
  1,533.20
  Total 3,886.70   3,886.70

      3. In the following, the objections of the [Buyer] to the two invoices stated in the last table dated 10/11 February 2003 and the associated default fees will be examined, and thereafter, the set-off claims as asserted by the [Buyer] will be dealt with.

            a) aa) It can be seen from the files that the [Seller] invoiced the [Buyer] for various fashion articles in the total amount of EUR 3,876.70 on 10 February 2003 (invoice no. 100,203) and on 11 February 2003 (invoice no. 110,203) (ex. 4/4 + 7). Subsequently, the [Seller] sent several default letters concerning the outstanding amounts (ex. 4/5+6; ex. 4/8+9). The [Buyer] relies on the argument that these invoices related to so-called "Collectors' Items" (Kollektionsware) and could not be accepted. The [Seller] should explain the invoices (ex. 7 p. 3).

                  (bb) In contrast, the [Seller] has already explained in the statement of claim that the invoices had been issued after the delivery of these goods had taken place. However, the amount in question had not been paid, even after several overdue notices (ex. 1 p. 3 et seq.). The [Seller] confirmed in her reply that the goods listed in the disputed invoices -- as was usual -- had been delivered to the [Buyer] on 12 February 2003 by the commissioned transportation company D... GmbH & Co. KG. The [Buyer] had accepted the goods and never raised objections (ex. 13 p. 4 et seq.).

            b) In civil proceedings, the obligation lies on the party asserting the claim to establish all circumstances upon which it bases its legal plea, to the extent that this is possible and reasonable (Frank/Sträuli/Messmer, Kommentar zur zürcherischen Zivilprozessordnung, 3rd ed., Zurich 1997, § 113 ZPO [*] para 3 et seq.). Therefore, it is a matter for the parties to demonstrate the facts of the case to the court. The party that does not satisfy its obligation to substantiate its claims by the end of the main proceedings is, according to § 114 ZPO, precluded from further assertions. According to § 55 ZPO, if a party does not portray the facts sufficiently, even after the exercise of the judicial duty to question, the court is entitled to make the assumption that the facts in question did not occur and, for this reason, were not asserted (Frank/Sträuli/Messmer, ibid, § 55 ZPO para. 4; § 113 ZPO para 3a; ZR 60 No. 64; ZR 55 No. 71).

            c) In the present case, the [Seller] claims payment of the purchase price for the delivery of various fashion articles and payment of the associated default fees. [Seller] states, with respect to the disputed invoices dated 10/11 February 2003, that the previous manager of the [Buyer] ultimately acknowledged both of these amounts -- as well as the other invoices -- on the merits, i.e., subject to the [Buyer]'s set-off claims, at the open discussion of the case between the court and the parties (Referentenaudienz) (ex. 13 p. 4). This argument cannot be followed. The [Seller] relies on the settlement negotiations dated 22 March 2005, in which the [Buyer] had acknowledged the claim within the scope of the settlement that was revoked before the deadline (mins. p. 8 et seq.). It is incompatible with the nature of settlement talks that one party subsequently relies on statements of the opposing party or of the court, if no express agreement has been reached. This very protection from the risk of later reference allows the greatest possible openness between the parties and towards the court and is, in addition, a requirement for the judge's competence to propose an acceptable solution for all sides (cf. ZR [*] 96 No. 35). Hence, the [Seller] cannot rely on this argument.

            d) (aa) According to what has been stated, it is to be assumed that the [Buyer] disputes, with respect to the invoices dated 10/11 February 2003, the basis for the [Seller]'s claim, namely the conclusion of a sales contract, which obviously must also apply in the light of the circumstance that [Buyer] defaulted in its rejoinder. Thus the [Seller], as the party claiming the purchase price, bears the burden of proving the elements of the claim, namely that a sales contract exists and that the further requirements for the claim of the purchase price, namely, that the payment was due, have been satisfied (Schlechtriem/Schwenzer, Kommentar zum Einheitlichen UN-Kaufrecht, 4th ed., Munich 2004, Art. 4 CISG para. 48 et seq., Art. 14 CISG para. 2). Consequently, the [Seller] should have established in detail that the delivery of goods invoiced on 10/11 February 2003 was based on an agreement with the [Buyer]. Therefore [Seller] would have had to establish, precisely and for each invoice specifically, who made which offer in what form when and to whom, and who expressed which acceptance in what form when and to whom. In addition, it would have been for [Seller] to provide the basis for the type and extent of each payment claimed, first and foremost, the agreement on the amount of the purchase price. [Seller] has been informed of the need to do this at the open discussion of the case between the court and the parties (Referentenaudienz) on 22 March 2005 (mins. p. 5 et seq.; cf. also mins. P. 10).

                  (bb) According to the statements of the [Seller], which are not in dispute, it can be assumed that the goods invoiced on 12 February 2003 were handed over to the [Buyer] (ex. 13 p. 4 et seq.; ex. 14/1-5). Contrary to the view of the [Seller], however, the mere issuance of an invoice or delivery of the goods does not constitute, in itself, an acceptance of a sales agreement, especially because it is not apparent from the delivery notice submitted who, on behalf of the [Buyer], ordered the goods from the [Seller] when and at what price (cf. ex. 14/4). The objections of the [Buyer], stating that a collection of goods was at issue, is thus not refuted. Whether the [Buyer] objected to the goods does not have any legal significance in these circumstances. The reference to sales transactions that had previously taken place between the parties is just as unhelpful. In contrast in the light of the claims in the present case, the [Seller] was bound to argue specifically that the delivery of the goods in question took place on the basis of a contract and that the amount invoiced corresponded to a price agreed upon between the parties. Despite this, in the present case, the [Seller] has completely omitted to describe the basis of the claim in more detail, which also leads to the exclusion of a potential determination of the price under Art. 55 CISG, as the assumption of such an implicit agreement on the market price, according to the wording of the provision in question, requires the conclusion of a valid contract. It is worth mentioning that the [Seller] states neither when and which declarations of intention were exchanged, nor the content of any such declarations. In addition, in the legal claim, [Seller] not only fails to describe which contract arose, and on which terms, but also solely generally states in her reply that the price would correspond to the catalogue price minus 50% (ex. 13 p. 4). Which catalogue price the [Seller] is actually referring to is not known. Furthermore, simply attaching a catalogue would not have been sufficient to establish the conclusion of a contract and the associated consensus on the amount of the purchase price, as, even in such a case, it would have at least been necessary to explain to what extent the [Buyer] assumed, at the time of expressing its intention, that the prices provided were correct and consented to the purchase price contained in the invoice. Such specification would have been necessary to enable a substantiated objection of the [Buyer] and the examination of the claims in potential evidentiary proceedings. Therefore, the [Seller]'s arguments appear to be insufficiently substantiated in this regard.

            e) Accordingly, the [Seller]'s claim in the amount of EUR 3,886.70 (including default fees) is dismissed.

      4. a) In the following, the admissibility of the set-off as asserted by the [Buyer] will be examined. It has to be established initially that the [Buyer] acknowledges the two remaining invoices of the [Seller] (invoice dated 23 January 2003; invoice no. 40,303 dated 4 March 2003) in the total amount of EUR 11,353.25 on the merits (cf. in this regard 2.b/aa above). Therefore, the only concern is to assess the alleged counterclaims of the [Buyer], with which it intends to satisfy the main claims of the [Seller] by means of set-off.

            b) (aa) With respect to the two partial claims generally acknowledged by the [Buyer], the [Buyer] bases its right to set-off on the fact that it was entitled to two damage claims against the [Seller]. [Buyer] alleges that the [Seller], at its own discretion, supplied the [Buyer] with "inSein goods" for the warehousing business. However, the goods in question turned out to be too expensive and were no longer accepted by the clientele. Nonetheless, the [Seller] did not show any willingness to solve the associated problems within a reasonable time. This led to the [Buyer] suffering a decline in sales in the amount of CHF 195,000.00. In addition, the [Buyer] had also simultaneously ordered the "soWas goods" from the [Seller] for the upcoming Autumn/Winter collection 2003/2004. However, the [Seller] had refused to deliver the goods without an advance payment. Such an advance payment obligation did not correspond to the trade practices in the fashion branch and was also never agreed upon by the parties. Furthermore, the [Seller] was not able to deliver the ordered goods at all. Thereby, the [Buyer] alleges further damage of approximately CHF 9,000.00 (ex. 7 p. 2 et seq.).

                  (bb) The [Seller] disputes the counterclaims asserted by the [Buyer] in their entirety. The [Seller] states that she did not have an obligation to deliver goods to the [Buyer]. In addition, she was, indeed, entitled to make the delivery of new goods dependent on an advance payment from the [Buyer]. Finally, the [Seller] relies on the argument that the set-off declaration of the [Buyer] is inadmissible owing to the lack of congruency between the claims (ex. 1 p. 4; ex. 13 p. 5 et seq.).

            c) (aa) In order to be able to set-off, the alleged claims for damages against the claimed payment of the purchase price, the [Buyer] has to prove not only that a contract existed between the parties, but also the existence and extent of the damages and the causal link with the contractual breach establishing the basis for liability (Schlechtriem/Schwenzer, ibid, Art. 74 CISG para. 51 et seq.). Such proof requires -- as the requirements for liability are disputed by the [Seller] -- concrete allegations that are able to be examined in potential evidentiary proceedings. Within the scope of the open discussion of the case between the court and the parties (Referentenaudienz) on 22 March 2005, the [Buyer] was requested to indicate the factual basis for its claims for damages. In particular, with respect to the claim of CHF 195,000.00 (lost profits), [Buyer] was required to substantiate the contractual basis upon which it would have been under an obligation to accept the "inSein goods" delivered by the [Seller] at its own discretion for the warehousing business. In addition, the breach of contract that the [Seller] was supposed to have committed in this context, as well as the damage that was thereby caused, should be set out specifically and completely. Furthermore, the [Buyer] must show a causal link between the breach of contract and a lack of care, on the one hand, and between the breach of contract and the damage, on the other. In this context, it must observe that, in the case of damage that is based upon an alleged decline in sales, the evidence of causality also requires a detailed portrayal of the internal business situation as well as the market situation and other factors influencing sales. With respect to the claim of a further CHF 9,000.00 (retained goods), the [Buyer] is therefore required to substantiate the contract that would provide information as to which party was actually required to make advance performance. Furthermore, it must also precisely set out the contractual provision allegedly breached by the [Seller]'s apparent retention of the goods. Finally, the [Buyer] must demonstrate in detail the damages and their calculation factors as well as the required causal link between the alleged breach of contract of the [Seller] and the occurrence of the damage (mins. p. 5 et seq.; cf. also mins. p. 10).

                  (bb) Regardless of its obligation to substantiate, the [Buyer] subsequently failed to file a rejoinder. And, owing to [Buyer]'s brief arguments in the response to the claim, it cannot be assessed whether and, if so, to what extent, contractual liability for damages exists on the part of the [Seller]. In any case, sufficient allegations on the relevant facts are lacking in their entirety. If a party does not set out its version of the facts in a sufficiently definite manner, then, these facts are to be treated as having not been proven. Therefore, the [Buyer]'s set-off claims are not justified.

            d) (aa) Furthermore, it must be taken into account that the Vienna Sales Law does not contain a conclusive regulation of the set-off of a purchase price against counterclaims by the purchaser. Consequently, in the absence of provisions under public international law, in order to judge the effects of a set-off and its admissibility, including any potential hurdles, only the law that can be applied under the rules of private international law of the forum state can be relied upon (Schlechtriem/Schwenzer, ibid, Art. 4 CISG para 39 with further references; Reithmann/Martiny, Internationales Vertragsrecht, Cologne 1996, p. 537 et seq.; Witz/Salger/Lorenz, International Einheitliches Kaufrecht, Heidelberg 2000, Art. 4 CISG para. 29). In respect to set-off claims, Art. 148(2) IPRG [*] refers to the law of the claim whose satisfaction is intended with the set-off, in the present case, namely, to the [Seller]'s claim for payment of the purchase price. To the extent that the parties have not reached an agreement on a choice of law, the [Seller]'s claim for the purchase price, which is to be satisfied by means of set-off, is subject to the domestic law of the country in which the seller was domiciled at the time of receipt of the order, according to Art. 118(1) IPRG and Art. 3(1) Hague Convention on the Law Applicable to International Sales of Goods dated 15 June 1955 (SR 0.221.211.4). In the present case, no choice of law is alleged by the parties. Since the [Seller] had, at the time of conclusion of the contract, and still has, her place of residence in Germany, substantive German law must consequently be applied to the question to be judged here.

                  (bb) Contrary to the Swiss case law, which generally allows a set-off with foreign currency claims (BGE [*] 63 II 391 et seq.; BSK [*]-Peter, Art. 120 OR para. 10; BK [*]-Weber, Art. 84 OR para. 341), monetary claims in different currencies are not deemed to be of the same type under the applicable German law and therefore, under § 387 BGB [*], are not able to be set off unless the debtor exercises its right to substitute the foreign currency for Euros (Ersetzungsbefugnis) under § 244(1) BGB (Palandt, Bürgerliches Gesetzbuch, 63rd ed., Munich 2004, § 387 BGB para. 9).

                  (cc) In the present case, the main claim (the payment of the purchase price) is to be fulfilled at the place of residence of the [Seller] in Germany (Art. 57(1)(a) CISG) in Euros (cf. Schlechtriem/Schwenzer, ibid, Art. 54 CISG para. 9). In contrast, the set-off claim (the damages claim brought by the [Buyer]) is in Swiss francs (Schlechtriem/Schwenzer, ibid, Art. 74 CISG para. 30) and, according to case law, is to be satisfied in Switzerland under the applicable German law (cf. Schlechtriem/Schwenzer, ibid, Art. 57 CISG para. 25 with further references). As § 244(1) BGB only gives the debtor of a foreign currency obligation the possibility of setting off against a claim in Euros (Palandt, ibid, § 245 BGB para. 20), but the [Buyer] in the present case wants to set-off based on a claim in Swiss francs and, therefore, from the German viewpoint, would not be classified as a foreign currency debtor. The exception provision mentioned does not apply in the present case. The set-off asserted by the [Buyer] is thus inapplicable.

      5. In summary, the [Seller]'s claim in the amount of EUR 11,353.25 is allowed; for the remaining amount, it is dismissed.

      6. a) The [Seller] claims interest at a rate of 5% on the claimed partial amount, staggered according to time (ex. 1 p. 4). The [Buyer] requests the total dismissal of the claim, which also includes the [Seller]'s request for interest, but does not make further comments in this respect (ex. 7 p. 1 et seq.).

            b) In accordance with the [Seller]'s undisputed version of the facts, the [Buyer] would have had to pay the allowed partial claim of EUR 112.79 (invoice dated 23 January 2003) until 12 March 2003 and the allowed partial claim of EUR 11,240.46 (invoice no. 40,303 dated 4 March 2003) until 4 April 2003. This is sufficient to trigger the obligation on the debtor to make default interest payments under Art. 78 CISG. A particular default notice is not necessary in this regard (cf. on this point SZIER [*] 3 [1993] p. 665). In addition, the interest rate requested appears to be in conformity with the German law applicable here (§ 288(2) BGB [*]). The level of the interest rate and the commencement of the period for accruing interest are thus established. Therefore, the [Seller] is allowed default interest of 5% from 12 March 2003 on EUR 112.79 and from 4 April 2003 on EUR 11,240.46.

IV. Costs and Compensation

      1. As a rule, costs are borne by the losing party. If neither party is entirely victorious, then the costs are distributed proportionally (§ 64(2) ZPO [*]). Each party has to compensate the opposing party for the extra-judicial costs and expenses in the same proportion in which the costs are distributed (§ 68(1) ZPO).

      2. The [Seller] was approximately 75% victorious. In the light of this outcome, the costs are to be borne 75% by the [Buyer] and 25% by the [Seller]. In addition, the [Seller] is awarded reduced process compensation.

Judgment

1.     The [Buyer] is liable to pay EUR 11,353.25 plus 5% interest since 12 March 2003 on EUR 112.79, as well as 5% interest since 4 April 2003 on EUR 11,240.46. The [Seller]'s remaining claim is dismissed.
2. The court fees are fixed at CHF 3,300.00; the further costs amount to CHF 547.00 correspondence fees; CHF 380.00 delivery fee; CHF 90.00 summons fee.
 
3. The costs are borne 75% by the [Buyer] and 25% by the [Seller].
 
4. The [Buyer] is liable to pay a reduced process compensation of CHF 2,500.00.
 
5. This judgment will be communicated to the parties in writing, with confirmation of receipt.

[...]

Commercial Court of the Canton of Zurich

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Seller] and Defendant of Switzerland is referred to as [Buyer]. Amounts in European currency (Euro) are indicated as [EUR]; amounts in the currency of Switzerland (Swiss francs) are indicated as [CHF].

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; BGE = Entscheidungen des Bundesgerichts [Official Reporter of Cases of the Swiss Supreme Court]; BK = Berner Kommentar; BSK = Baseler Kommentar; GmbH = Gesellschaft mit beschränkter Haftung (limited liability company); GVG = Civil Procedure act of the Canton of Zurich]; IPRG = Bundesgesetz über das internationale Privatrecht [Swiss Code on the Conflict of Laws]; OG = Bundesgesetz über die Organisation der Bundesrechtspflege [Swiss Federal Code on Court Organization]; SR = Swiss systematic collection of federal law; SZIER = Schweizerische Zeitschrift für internationales und europäisches Recht [Swiss Journal of International and European Law]; ZPO = Swiss Civil Procedure Act; ZR = Blatter für zürcherische Rechtsprechung [Zurich case law series].

** Mariel Dimsey, LL.M., is a Research Assistant and Teaching Assistant at the University of Basel, Switzerland.

*** 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 May 7, 2010
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