Slovak Republic 29 June 2006 District Court in Nitra (Textile products case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060629k1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 27 Cb/203/2005
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Czech Republic (plaintiff)
BUYER'S COUNTRY: Slovak Republic (defendant)
GOODS INVOLVED: Textile products
APPLICATION OF CISG: Yes.
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
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
29 June 2006 [27Cb/203/2005]
Translation [*] by Juraj Kotrusz [**]
IN THE NAME OF THE SLOVAK REPUBLIC
The District Court in Nitra, deciding by a single judge, Mgr. Bozena Csibranyiova, in the case of Plaintiff J.S.-A. [Seller], with its registered office in K., Czech Republic versus Defendant L.L., S.r.o. [Buyer], with its registered office in Š. ___, N. [Slovak Republic], regarding payment of 754,298.- Czech koruna [Kc] and payment of contractual penalty in amount of 54,838.- Kc
h a s d e c i d e d a s f o l l o w s:
The [Buyer] is obliged to pay to the [Seller] the sum of 754,298.- Kc within three days and a sum of 45,679.- Slovak koruna [Sk] as a reimbursement of costs of the proceedings within three days after the judgement comes into force.
The Court stays the case in the remaining part.
The [Seller] claimed in the proceedings by its action filed with the court on 19 September 2005 its right to payment of the purchase price for the goods delivered to the [Buyer] in amount of 754,298.- Kc and right to payment of contractual penalty in amount of 54,838.- Kc and right to reimbursement of costs of the proceedings.
The [Seller] stated in its action that the parties to the dispute concluded a contract of sale, subsequent to purchase orders made by the [Buyer] on 7 June 2005 and 23 June 2005. The [Seller] delivered to the [Buyer] under this contract textile products on 14 June 2005, 7 July 2005 and 25 July 2005. The [Buyer] received the goods via its employee who affirmed receipt by his signature and office seal of the [Buyer] put on invoices drawn by the [Seller] and delivered to the [Buyer] with each delivery of the goods. The [Buyer] did not pay the purchase price, although it was mutually agreed by the parties and invoiced by the abovementioned invoices. The [Seller] therefore claimed also its right to payment of the contractual penalty in amount of 54,838.- Kc.
The [Seller] appeared before the court at the court proceedings held on 29 June 2006. The [Buyer] was duly summoned in accordance with sec. 48 part 2 of the Slovak Civil Procedure Code (hereinafter referred to as "CPC") but did not appear before the court. The court, with reference to sec. 101 part 2 CPC, therefore tried and decided the case in the absence of the [Buyer].
Under sec. 101 part 2 CPC, the court continues in proceedings also in case of inactivity of parties to the dispute. If the party duly summoned to the proceedings does not appear before the court and did not ask for adjournment for serious reasons, the court can try and decide the case in absence of the parties, taking into consideration court records and gathered evidence.
The [Seller] stated at the oral hearing that it insists on its claim as it was asserted in the action. The [Seller] furthermore stated that it made efforts to an out-of-court settlement of this dispute and visited the registered office of the [Buyer], but no settlement was made. The [Seller] stated that the contractual penalty, as it was asserted, was not agreed by the parties in a written form. The parties to the contract also did not make a choice of law (either Slovak or Czech law) which would govern their mutual relationship.
The court gathered evidence by reading the action, call for payment, call for payment of the claim of 10 July 2005, invoice no. 0591, invoice no. 0585, invoice no. 05072, purchase orders made via telefax rec. no. 12 to 16, record of the [Buyer] from the Companies Register, record of the [Seller] from Trade Register and all other documents submitted and thereby investigated this factual situation and qualified it under applicable legal provisions.
The [Buyer] did not oppose the [Seller]'s statement and it was clear from the submitted documents, that the [Buyer] had ordered delivery of goods from the [Seller] and the [Seller] duly delivered these goods and asserted its right to payment of the purchase price by invoice no. 05091 due on 5 August 2005 for 410,050.- Kc, invoice no. 05085 due on 18 July 2005 for 294,260.- Kc and invoice no. 05072 due on 28 June 2005 for 49,988.- Kc. The [Buyer] received the goods by its employee who affirmed receiving the goods by his signature and office seal of the [Buyer] put on the abovementioned invoices.
The [Seller], citizen of the Czech Republic, conducting business in the Czech Republic and the [Buyer], a corporation with its registered office in Slovakia, concluded subsequent to the purchase order of the [Buyer] a contract of sale, under which the [Seller] delivered the goods to the [Buyer] and invoiced the purchase price for these goods which was not paid by the [Buyer].
Under sec. 1 of act no. 97/1963 Coll. on international private and procedural law as amended, this act prescribes which law is applicable to civil, commercial, labour and other relationships with international aspect, prescribes legal status of foreigners and prescribes procedure of Slovak judicial authorities when regulating these relationships and deciding about them and thereby promoting international cooperation.
Under sec. 2 of this act, the provisions of this act shall be used, if not otherwise provided by an international convention ratified by the Slovak Republic or by a statute issued to implement such international convention.
Under sec. 10 part 2 a) of this act, with reference to the abovementioned, contracts of sale and work contracts will be usually governed by the law of the country of seller's or constructor's registered office (domicile) at the time of concluding of a contract.
Under sec. 37 of this act, if not otherwise stipulated in subsequent provisions, Slovak courts have jurisdiction to try and decide the case, if the action is filed against the person who has domicile or place of business in Slovakia, or property in Slovakia if the action is concerning proprietary matters.
A contract of sale both in domestic and international trade presents the most important and most frequently used type of contract used by merchants. Under this contract, the goods are transferred for money.
The legal regulation of sales contract prescribed in Slovak Commercial Code is analogous to provisions of the UN Convention on Contracts for the International Sale of Goods, created at the diplomatic conference in Vienna in 1980 (hereinafter referred to as "Vienna Convention" published as Notice of Ministry of Foreign Affairs no. 160/1991 Coll.) Both Slovakia and Czech Republic are parties to this Convention.
Under article 1(1) of the Vienna Convention, this Convention applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State.
The parties to the contract may exclude the application of the Vienna Convention to their mutual relationship. If they intend to perform such exclusion, it is recommended to expressly prescribe that they exclude application of the Vienna Convention or its particular provisions.
With reference to the evidence gathered, the court found no sign of parties' intent to exclude the provisions of the Vienna Convention. The court therefore qualified this contract under the Vienna Convention.
Under article 4 of the Convention, this Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract.
As it was already mentioned, the parties to the dispute concluded a contract of sale in accordance with the Vienna Convention.
The [Seller] delivered to the [Buyer] the goods ordered and the [Buyer] was obliged under article 53 of the Vienna Convention to pay the purchase price in accordance with the contract, but it failed to do so. The court therefore upheld the [Seller]'s claim with respect to payment of the purchase price, since it found the claim justified and therefore bound the [Buyer] to pay the sum of 754,298.- Kc as the purchase price for the goods delivered.
The [Seller] claimed in the proceeding beside its right to payment of the purchase price also its right to payment of the contractual penalty in amount of 54,838.- Kc due to breach of [Buyer]'s duty to pay the purchase price on time. The parties to the contract did not agree on the contractual penalty in a written form.
The abovementioned Vienna Convention does not regulate the concept of a contractual penalty. The court therefore qualified [Seller]'s claim in accordance with act no. 97/1963 Coll. on international private and procedural law.
Under sec. 10 part 1 of this act, if parties have not made such choice of law, their contractual relationships will be governed by the law which assures their reasonable solution.
Under sec. 10 part 2 a) of this act, unless a special legal instrument stipulates otherwise, contracts of sale will be usually governed by the law of the country of seller's registered office (domicile) at the time of concluding of a contract.
According to sec. 1 part 2 of the Czech Commercial Code, legal relationships enumerated in part 1 of this section are governed by provisions of this statute. If certain legal issues cannot be resolved under provisions of this act, they will be issued under provisions of civil law.
Under sec. 544 part 1 of the Czech Civil Code, if parties agree on payment of contractual penalty in case of breach of certain obligation, the breaching party is obliged to pay the contractual penalty also in case when no harm occurred to the other party from this breach.
Under sec. 544 part 1 of the Czech Civil Code, a contractual penalty shall be agreed in written form and must specify its amount or a manner of ascertaining this amount.
As it was already mentioned, the [Seller] claimed in the proceedings also its right to payment of the contractual penalty in amount of 54,838.- Kc. The parties to the contract with reference to the abovementioned legal provisions did not prescribe this contractual penalty in a written form and the court therefore denied this [Seller]'s claim as unjustified.
The court decided about the reimbursement of the costs of judicial proceedings under sec. 142 part 2 CPC. The [Seller] claimed its right to reimbursement in amount of 53.115 which corresponds to the court fee paid by the [Seller]. The court upheld the [Seller]'s claim for payment of purchase price in amount of 754,298.- Kc (presents 93% of the whole financial amount claimed) and the [Seller] was successful in this part of its claim. The court denied the [Seller]'s claim for payment of contractual penalty in amount of 54,838.- Kc (presents 7% of the whole financial amount claimed) and the [Seller] was not successful in this part of its claim. The court therefore granted reimbursement of the costs to the [Seller], as a successful party in the proceedings, in 86% of the claimed reimbursement (93% - 7%), i.e., 45,679.- Sk.
Instruction: An appeal against this judgment must be filed with the Regional Court in Nitra via this court within fifteen days of its receipt.
District Court in Nitra, 29 June 2006
Mgr. Bozena Csibranyiova, Judge
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of the Czech Republic is referred to as [Seller] and Defendant of the Slovak Republic is referred to as [Buyer]. Amounts in the currency of the Czech Republic (Czech koruna) are indicated as [Kc]; amounts in the currency of the Slovak Republic (Slovak koruna) are indicated as [Sk].
** Juraj Kotrusz is a Slovak lawyer who studied law at the University of Trnava, Slovakia, and at the Hague Academy of International Law.Go to Case Table of Contents