Slovak Republic 26 May 2006 Supreme Court (Wafers case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060526k1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 4 Obo/40/2005
CASE HISTORY: 1st instance [-]; 2d instance Regional Court in Nitra (16 Cbm/30/2004-99) 23 November 2004 [reversed and remanded]
SELLER'S COUNTRY: Germany (plaintiff)
BUYER'S COUNTRY: Slovak Republic (defendant)
GOODS INVOLVED: Wafers
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
74A [General rules for measuring damages: loss suffered as consequence of breach]
74A [General rules for measuring damages: loss suffered as consequence of breach]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Slovak): Click here for Slovak text of case
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
26 May 2006 [4 Obo 40/2005]
Translation [*] by Juraj Kotrusz [**]
The Supreme Court of the Slovak Republic, deciding in a panel, in the case of Plaintiff S. GmbH, [Seller], with its registered office in N.M., Federal Republic of Germany, represented by attorney JUDr. J.H., versus Defendant C., S.r.o. [Buyer], with its registered office in N., [Slovak Republic], represented by attorney JUDr. M. K., regarding payment of 6,673.21 Euro [EUR] and appurtenances, on appeal of the [Buyer] against the judgment of the Regional Court in Nitra of 23 November 2004, rec. no. 16 Cbm 30/2004 - 88,
h a s d e c i d e d a s f o l l o w s:
The challenged judgment of the Regional Court in Nitra of 23 November 2004, rec. 16 Cbm 30/2004 - 88 is cancelled and the case is returned to the Court for further proceedings.
The Court of First Instance bound the [Buyer] by the challenged judgment to pay to the [Seller] a sum of 6,673.21 EUR and interest of 16.75 % annually for the period from 12 March 2003 until payment and a reimbursement of costs of the proceedings in sum of 44,054.- Slovak koruna [Sk].
The Court justified its decision by stating that the [Seller] qualified its claim as damages emerging from a contract of sale. The Court found from the evidence gathered that the [Buyer] ordered 700,000 wafers with diameter of 70 mm with delivery as soon as possible. The [Seller] reacted by sending a written acceptance of the order on 28 February 2003, where it specified the amount of delivery consisting of 392 cartons per 1,950 wafers with delivery on 11 March 2003. The Court determined that the [Seller] fulfilled its obligation when it produced 700,000 wafers and placed the goods in its premises at the disposal of the [Buyer], thereby fulfilled its obligation under article 31 of the Convention. Since the goods have not been taken over by the [Buyer], the [Seller] still preserves the goods and with reference to their nature of foodstuffs it is not possible to determine whether they are still suitable for their intended usage. The [Seller] claimed damages corresponding to the invoiced price for which the [Seller] bought the goods. The [Seller] referred to article 74 of the Convention and stated that the damages emerging from breach of contract by the [Buyer] correspond to the lost profit suffered by the [Seller], as the [Seller] had to produce the goods and invest in the material and subsequently did not receive money from the intended transaction. The Court of First Instance therefore found the claim of the [Seller] for damages to be justified and also granted to the [Seller] the right to interest where the claimed interest rate was found reasonable.
The [Buyer] filed an appeal against the judgment of the Court of First Instance and argued that the Court did not sufficiently investigate the factual circumstances of the case and made several mistakes in the proceedings. The [Buyer] argued that the [Seller] did not submit enough copies of its evidence and therefore the [Buyer] was not served with the evidence.
The [Buyer] referred to articles 77, 85, 88 and argued that the Court performed no investigation with respect to these issues. The [Buyer] also argued that no contract of sale was concluded with reference to article 18 of the Convention which is analogous to sec. 416 of the Slovak Commercial Code. The [Buyer] also argued that the goods to be delivered were not fabricated by the [Seller] and therefore no loss could have been suffered by the [Seller] with respect to the material used for production of the goods. The action was ambiguous and therefore the [Buyer] asked the Appellate Court to change the challenged judgment and dismiss the action in its entirety.
The [Seller] responded to the appeal of the [Buyer] by its motion of 7 June 2006 and asked the Court to uphold the challenged judgment, alleging that it was substantially correct. The [Seller] stated that the [Buyer] was served with the action and did not react to it and ignored the entire proceedings. With respect to the argument of the [Buyer] referring to article 88(2) of the Convention, the [Seller] stated that it urged the [Buyer] repeatedly to take delivery of the goods where the [Buyer] promised to take over the goods at the specified date and therefore the [Seller] preserved the goods until this date. The goods were not subject to rapid deterioration. With respect to the argument of the [Buyer] that no contract of sale was concluded, the [Seller] stated that the purchase order was received by the [Seller] via telefax on 28 February 2003 (although dated on 23 January 2003) and as the order was confirmed immediately on 28 February 2003, the acceptance was made within a reasonable period after receipt of the offer.
The Supreme Court of the Slovak Republic tried the appeal at the hearing held on 21 March 2006 where the [Seller] affirmed that it did not fabricate the goods; the goods were purchased from another merchant, but it was not yet possible to provide the invoice paid by the [Seller]. The Supreme Court of the Slovak Republic therefore tried the appeal and cancelled the challenged judgment.
The Appellate Court determined from the evidence gathered that the order for purchase of 392 cartons with 1,950 wafers each to be delivered on 11 March 2000 constituted an offer under article 14 of the Convention on Contracts for the International Sale of Goods no. 160/1991 Coll. which was accepted by the [Buyer] in accordance with article 18 of the Convention. The Court of First Instance correctly determined that the contract of sale was concluded in accordance with arts. 18, 23 of the Convention and that the [Seller] fulfilled its obligation under the contract. With reference to the evidence gathered, the Court correctly determined that the [Buyer] has not yet taken over the goods which were placed at its disposal. Therefore, the [Seller] sustained loss by such conduct of the [Buyer] and its claim for damages under article 74 of the Convention is justified. The Appellate Court found that the [Seller] claimed the damages in amount corresponding to the price for which the [Seller] bought the goods from its supplier. As stated by the [Seller], it did not produce the goods but purchased them from a third party. Therefore, the grounds of the [Seller]'s claim are justified but their amount was not yet evidenced.
The Supreme Court of the Slovak Republic therefore cancelled the challenged judgment of the Regional Court in Nitra of 23 November 2004, rec. no.: 16 Cbm 30/2004-88 and returned the case to the Regional Court in Nitra for further proceedings. In the upcoming proceedings the Court will have to determine whether it is possible to qualify the claimed amount of damages under evidence gathered so far and to gather further evidence if necessary. The Court will also decide about the costs of the appellate proceedings in the upcoming proceedings.
Instruction: An appeal against this judgment is not admissible.
Bratislava, 26 May 2006.
JUDr. Jana Zemanikova
Chairman of the Panel
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of the Federal Republic of Germany is referred to as [Seller] and Defendant of the Slovak Republic is referred to as [Buyer]. Amounts in the currency of the Slovak Republic (Slovak koruna) are indicated as [Sk]; amounts in currency of the European Union (Euro) are indicated as [EUR].
** Juraj Kotrusz is a Slovak lawyer who studied law at the University of Trnava, Slovakia, and at the Hague Academy of International Law. He is the Editor of the CISG Slovakia website.Go to Case Table of Contents