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CISG CASE PRESENTATION

Germany 20 September 2006 District Court Krefeld (Charcoal case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060920g1.html]

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

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Case identification

DATE OF DECISION: 20060920 (20 September 2006)

JURISDICTION: Germany

TRIBUNAL: LG Krefeld [LG = Landgericht = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 11 O 151/05

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

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Argentina (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Charcoal


IHR headnote

Reproduced from Internationales Handelsrecht [4/2007] 161

"1. The CISG, as a convention, takes precedence over the conflict to law rules of the forum state.

"2. If the parties agree on an advance payment the jurisdiction of the court is determined by Art. 57(1)(a)."

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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 31(1) ; 57(1) ; 58(1)

Classification of issues using UNCITRAL classification code numbers:

31A [Delivery of the goods and handing over of documents: place for delivery (contracts involving carriage of the goods];

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

58A ; 58B [Time for payment: buyer to pay when goods placed at buyer's disposal; Contracts involving carriage]

Descriptors: Delivery ; 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): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1459.pdf>; Internationales Handelsrecht (4/2007) 161-162

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

District Court (Landgericht) Krefeld

20 September 2006 [11 O 151/05]

Translation [*] by Jan Henning Berg [**]

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

AWARD

Plaintiff [Seller]'s action is inadmissible and therefore dismissed. [Seller] bears the costs of the proceedings. The judgment is provisionally enforceable against a security deposit of EUR 1,500.

The value of the dispute is EUR 34,431.59.

FACTS

Defendant [Buyer] ordered from [Seller], a producer of charcoal domiciled in Argentina, loads of charcoal at various occasions during 2003. Delivery was effected by ship to Germany while [Seller] bore the shipping costs. The parties had agreed upon a date for payment being 60 days after successful delivery in Germany, respectively 85 days after the commencement of shipping in Argentina. Transport documents were supposed to be surrendered to the involved savings bank against the obligation to accept the bills of exchange issued by [Seller].

[Seller] had received from [Buyer] three drawn bills of exchange which, however, were not honored. This caused costs of EUR 390 that are now claimed by [Seller]. Moreover, [Seller] requests payment of the unsettled invoice no. 5-155 worth EUR 9,630.56, invoice no. 5-156 worth EUR 11,316.95 as well as invoice no. 5-158 worth EUR 13,094.

[Seller] credited the sum of EUR 14,905.68 in favor of [Buyer] following a defective partial delivery. This sum has been credited in full with respect to invoice no. 5-147 and to a partial sum of EUR 2,291.19 with respect to invoice no. 5-155.

[Seller] further requests reimbursement for half the charge expended for pre-trial attorney's fees in the amount of EUR 559.50. These fees occurred because the attorney demanded payment from [Buyer] in vain by his letter of 13 September 2005 in which he set a time limit until 26 September 2005.

[Seller] argues that the deliveries in dispute were properly processed. The invoiced sums reflected the prices agreed upon. [Buyer] had not provided any notice of non-conformity.

POSITIONS OF THE PARTIES

Position of [Seller]

After [Seller] had requested payment of EUR 34,041.59 in the first place, it now requests that [Buyer] be ordered to pay the sum of EUR 34,431.59 plus 8% interest above the prime lending rate since 1 July 2004 and another EUR 559.50 as extra-procedural attorney's fees.

Position of [Buyer]

[Buyer] asks the Court to dismiss [Seller]'s action.

[Buyer] contests the international jurisdiction of the District Court (Landgericht) Krefeld and argues that a uniform price of EUR 0.84 per briquette of 3 kgs including paper sack had been agreed upon. [Buyer] alleges that a partial delivery of two containers was totally drenched and that it had given notice of this lack of conformity. Each day, [Buyer] had conducted telephone calls with the CEO of [Seller]. The latter had asked [Buyer] to employ all necessary measures in order to save the rest of the delivery. The course of processing and extended stand-still periods had allegedly caused additional costs of EUR 3,657 which [Buyer] had to pay to the unloading company. The drenching of further containers caused had further demurrage charges of EUR 545.20 and additional expenses of EUR 15,988.55. [Seller]'s CEO had promised to pay for all of these extra costs. Furthermore, [Seller] had collected defective goods worth EUR 8,905.68 which had already been invoiced. The delivery of April 2003 had never arrived. After the end of the season, another five containers had arrived which [Buyer] had rejected for the delivery was effected too late. The CEO of [Seller] had affirmed the rejection and had accepted the bills of exchange that were returned. Not until 2004 was delivery of these goods accepted. However, contrary to the information provided on the marking stamp, the goods had not complied with DIN [*] regulations. Hence, [Buyer] had to agree to a settlement with its sub-customer, additional costs of EUR 14,883.25 were caused. Furthermore, the goods were delivered in an insufficient amount (weight). [Buyer]'s damage amounted to EUR 5,846.40. With respect to all defects, [Buyer] had given proper notices of non-conformity and had been in constant contacts with [Seller]'s CEO. [Buyer] thus relied on a set-off.

All payments had only been effected upon instruction given by [Buyer]'s CEO. The bills of exchange had not been presented since the CEOs of both parties had agreed that claims should first be set-off against any existing counter-claims.

For further facts and details of this dispute, reference is made to the written pleas submitted by the parties and to. their exhibits.

REASONING OF THE COURT

The action is inadmissible since the District Court (Landgericht) Krefeld does not have the international jurisdiction to consider the dispute. Pursuant to Art. 57(1)(a) CISG, the court at the seller's place of business has jurisdiction. In the present case, this is an Argentine court.

The CISG applies to govern the legal relations between the parties. Both parties have their places of business in different Contracting States and they have concluded contracts of sale of goods (Art. 1 CISG). The CISG as a set of unified law takes priority over any conflict of laws rules and rules of private international law (cf. Schlechtriem/Schwenzer/Ferrari, Kommentar zum Einheitlichen UN-Kaufrecht, 4th ed., vor Artt. 1-6 para. 34; OGH [*] (Austria), decision of 29 March 2004, 5 Ob 313/03).

It is irrelevant for the assessment of this dispute whether the parties agreed upon delivery according to INCOTERMS 2000 "CFR" or -- being the more probable agreement according to the parties' statements before the court -- "delivery ex ship". [Seller] has argued that "CFR" was stipulated. Given this, delivery and the passing of risk would have occurred already in Argentina by loading of the goods. In turn, [Seller] would have performed its obligations pursuant to Art. 31(1) CISG at this point in time. The contractual consideration -- being payment of the purchase price -- should be effected 85 days after the commencement of shipping according to the contractual agreements. The parties would have stipulated the duty on [Seller] to perform in advance. According to the statements made by [Buyer], delivery and surrender of the goods onboard the ship would have been effected at the time of arriving at the port of destination. In this case, it was agreed upon payment to be effected within 60 days after successful delivery in Germany. Again, this scenario implied a duty on [Seller] to perform in advance because handing over of the goods would not be linked to payment (cf. to this Art. 58(1) CISG).

Therefore, Art. 57(1)(a) CISG has to be considered in order to determine jurisdiction of the court. Hence, the purchase price is due at the seller's place of business.

Contrary to [Seller]'s opinion, jurisdiction is not determined by Art. 57(1)(b) CISG. This holds true even if it was assumed that documents should be surrendered only against acceptance of the bills of exchange presented before the savings bank in Krefeld. At this point in time, the goods had already been handed over to [Buyer] which in turn constituted the duty to perform in advance. Such duty, as has been shown, follows from the contract between the parties.

A different interpretation can also not be inferred from Art. 58(2) CISG which provides that the seller may dispatch the goods on terms whereby the goods, or documents controlling their disposition, will not be handed over to the buyer except against payment of the price if the contract involves carriage of the goods. This provision puts goods on the same legal level as transport documents. According to [Seller]'s argument, it had linked the surrender of documents to the acceptance of bills of exchange. However, the goods were handed over at previous occasions without calling for such condition. As [Seller] has not made use of the provision intending its protection, a duty to perform in advance is in existence (cf. Schlechtriem/Schwenzer/Hager, Art. 58 para. 8).

The decision on costs is based on 91(1) ZPO [*]. The decision on provisional enforceability follows from 709 ZPO.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Argentina 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].

Translator's note on other abbreviations:

DIN = Deutsches Institut für Normung [German institute for standardization]; OGH = Oberster Gerichtshof [Austrian Federal Supreme Court]; 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. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis and 4th Willem C. Vis (East) Moot.

*** 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 September 25, 2007
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