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CISG CASE PRESENTATION

Slovak Republic 15 December 2006 District Court in Galanta [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/061215k1.html]

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

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Case identification

DATE OF DECISION: 20061215 (15 December 2006)

JURISDICTION: Slovak Republic

TRIBUNAL: District Court in Galanta

JUDGE(S): JUDr. Marianna Hostovecka

CASE NUMBER/DOCKET NUMBER: 17 Cb/7/2006

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: France (plaintiff)

BUYER'S COUNTRY: Slovak Republic (defendant)

GOODS INVOLVED: [-]


UNCITRAL case abstract

SLOVAK REPUBLIC: Okresný súd Galanta, 15 December 2006

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/94],
CLOUT abstract no. 945

Reproduced with permission of UNCITRAL

Abstract prepared by J. Steincker, National Correspondent

A French seller and a Slovak buyer concluded an oral contract pursuant to which the seller was obliged to deliver the goods to the buyer and this latter was obliged to pay the agreed purchase price as specified in the invoices raised by the seller. The buyer failed to comply with its obligation after the goods were delivered.

The Court applied the CISG by virtue of the domestic Slovak Act on Private and Procedural International Law. In the absence of a choice of law by the parties, Section 10 of the Act stipulates that contracts shall be governed by the law which assures their reasonable solution. With reference to contracts of sale, these will be usually governed by the law of the country of the seller at the conclusion of the contract. Consequently, the Court stated that the legal relationship between the parties should be governed by the law of the French Republic, a Contracting State to the CISG. The Court, mentioning article 1(1)(a) of the Convention, further stated that the CISG applies to parties whose places of business are in different States when the States are Contracting States.

Due to the fact that the Slovak buyer had failed to pay the purchase price, the seller, according to article 78 CISG, was entitled to interest on the sum in arrears. Since the amount of interest rate is not expressly settled in the CISG, the Court referred to article 7(2) of the Convention according to which questions on matters not expressly settled in the CISG are to be settled in conformity with the law applicable by virtue of the rules of private international law. In the present case the issue was resolved according to French law.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 7(2) ; 53 ; 78

Classification of issues using UNCITRAL classification code numbers:

Unavailable

Descriptors: Unavailable

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Slovak): Click here for Slovak text

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court Galanta

15 December 2006 [17 Cb/7/2006]

Translation [*] by Juraj Kotrusz [**]


JUDGMENT
IN THE NAME OF THE SLOVAK REPUBLIC

The District Court of Galanta, deciding by a single judge, JUDr. Marianna Hostovecka, in the case of Plaintiff L. I., [Seller], with its registered office in I.O., Republic of France, represented by Mgr. T.R., attorney, versus Defendant P., S.r.o. [Buyer], with its registered office in H., ___, [Slovak Republic], regarding payment of 54,577.06 Euro [EUR] with appurtenances

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 principal and appurtenances consisting of:

-    7,663.80 EUR with interest of 9% annually on this sum for the period from 26 February 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%;
 
-    6,838.76 EUR with interest of 9% annually on this sum for the period from 11 March 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%;
 
-    5,485.31 EUR with interest of 9% annually on this sum for the period from 25 March 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%;
 
-    7,904.92 EUR with interest of 9% annually on this sum for the period from 15 April 2005 until payment;
 
-    10,409.79 EUR with interest of 9% annually on this sum for the period from 29 April 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%;
 
-    6,563.17 EUR with interest of 9% annually on this sum for the period from 16 May 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%;
 
-    6,408.02 EUR with interest of 9% annually on this sum for the period from 3 June 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%;
 
-    3,304.01 EUR with interest of 9% annually on this sum for the period from 17 June 2004 until 31 December 2005, interest of 9.25% annually on this sum for the period from 1 January 2006 to 30 June 2006 and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid on the first day of the respective half-year raised by 7%; and
 
-    Reimbursement of costs of the proceedings consisting of the paid court fee amounting to 121.506 Slovak koruna [Sk] and reimbursement of the costs of legal aid amounting to 242,626.13 Sk, all within three days after the judgment comes into force.

REASONING

The [Seller] claimed in the proceedings its right to payment of amount as prescribed in the judgment.

The [Seller] justified its claim by stating that it concluded with the [Buyer] (in its former business name R., Spol. S r.o.) several contracts of sale within the period from 1998 until 2004 and delivered the goods as specified in the invoices attached to the action and that the [Buyer] was obliged to pay the purchase price for the goods delivered as specified in the invoices.

The goods were delivered to the premises of the [Buyer] where the [Buyer] took possession of them and received invoices. Since 2004, the [Buyer] has refused to pay the invoices for the goods delivered. The [Buyer] thereby did not pay the purchase price for the goods delivered amounting to 54,577.06 EUR on the due dates prescribed in the invoices. The [Seller] repeatedly urged the [Buyer] to pay the purchase price, e.g., by letter dated 3 August 2004. The [Buyer] confirmed receipt of the call by its letter of 30 August 2004 and recognized its debt amounting to 54,577.06 EUR by stating "... we hereby confirm our obligation towards the company L.F..." This constitutes recognition of the debt by the [Buyer] under the French Civil Code.

The [Buyer] also set-off claims against the [Seller] against the unpaid invoices, but the [Seller] challenged these claims and considered them unjustified, as the [Buyer] did not prove legal grounds despite being called upon for such proof.

The [Seller] called for payment of the sum of 54,577.04 EUR with appurtenances by a letter sent to the address of the [Buyer] prescribed in Companies Register. This letter was not delivered to the [Buyer], as the [Buyer] was unknown at that address.

The [Seller] attached to its action the following documents:

   -    Invoice no. 1090 of 26 January 2004 for the purchase price amounting to 7,663.08 EUR;
   -    Invoice no. 1815 of 9 February 2004 for the purchase price amounting to 7,239.56 EUR;
   -    Invoice no. 190210 of 9 February 2004 (credit note) for the sum amounting to 400.80 EUR;
   -    Invoice no. 2575 of 23 February 2004 for the purchase price amounting to 5,485.31 EUR;
   -    Invoice no. 3636 of 15 March 2004 for the purchase price amounting to 7,904.92 EUR;
   -    Invoice no. 4364 of 29 March 2004 for the purchase price amounting to 10,409.79 EUR;
   -    Invoice no. 5239 of 15 April 2004 for the purchase price amounting to 6,563.17 EUR;
   -    Invoice no. 6272 of 3 May 2004 for the purchase price amounting to 6,408.02 EUR; and
   -    Invoice no. 7021 of 17 May 2004 for the purchase price amounting to 3,304.01 EUR.

The [Seller] also submitted the record of the [Seller] from the Companies Register in C. of 13 November 2005; calls for payments from 1 July 2004, 8 August 2004, 30 August 2004; and the letter of 14 September 2005 asking the [Buyer] to present documents proving its claims against the [Seller] which was not delivered to the [Buyer], since [Buyer] was unknown at the address stated in the Companies Register.

The court issued an order to pay on 4 October 2006, rec. no. 17 Cb 7/2006-153 which was not delivered to the [Buyer]. The court therefore cancelled the order to pay with reference to sec. 173 part 1 of the Slovak Civil Procedure Code (hereinafter referred to as "CPC")

The court ordered a hearing on 15 December 2006 which was attended by the legal counsel of the [Seller]. The [Buyer] did not appear before the court, since the summons was served to the [Buyer] at its address prescribed in the Companies Register and it was returned by the postal services to the court on 23 November 2006 as undelivered with the statement that the [Buyer] was unknown at that address. The court considered the summons as having been delivered to the [Buyer] in accordance with sec. 48 part 3 CPC on 26 November 2006. Since the [Buyer] did not appear before the court and did not ask for adjournment of the proceedings, the court tried the case in its absence with reference to sec. 101 part 2 CPC and, taking into consideration the evidence gathered, the court determined the factual situation.

The [Seller] is a corporation established and registered under the law of the Republic of France, as is evidenced by the official translation of record from the French Companies Register in C. The [Buyer] is an entrepreneur under Slovak law and has its registered ofiice in H. ___, P. U., as is prescribed in the Companies Register.

Under sec. 10 parts 1 and 2 of act 97/1963 Coll., if the parties have not made a choice of law, their contractual relationships will be governed by the law which assures their reasonable solution. With reference to the abovementioned, contracts of sale will be usually governed by the law of the country of seller's or constructor's registered office at the time of concluding of a contract. Therefore, the relationship in question shall be governed by the law of the Republic of France, which is a Contracting State of the UN Convention on Contracts for the International Sale of Goods of 11 April 1980 (hereinafter referred to as "Convention"). Art. 1(1)(a) of the Convention prescribes that the Convention applies to contracts for the sale of goods between parties whose places of business are in different States when the States are Contracting States.

The [Seller] and the [Buyer] concluded an oral contract of sale under which the [Seller] was obliged to deliver goods and the [Buyer] was obliged to pay the purchase price prescribed in the invoices issued by the [Seller]. The [Seller] delivered the goods to the address prescribed in the Companies Register where the [Buyer] took possession of the goods and received the invoices. As stated by the [Seller], the [Buyer] had been fulfilling its obligations during the period from 1998 until it changed its business name from the original R. S.r.o. with its registered office in B. P. to the present P., S.r.o. with its registered office in P.U., H. The [Buyer] has not been fulfilling its obligation to pay the purchase price for the goods delivered since 2004 and thereby did not pay the purchase price in total sum of 54,577.06 EUR as documented by:

   -    Invoice no. 1090 of 26 January 2004 for the sum of 7,663.08 EUR due on 25 February 2004;
   -    Invoice no. 1815 of 9 February 2004 for the sum of 7,239.56 EUR due on 10 March 2004;
   -    Invoice no. 190210 of 9 February 2004 (credit note) for the sum of - 400.80 EUR due on 10 March 2004;
   -    Invoice no. 2575 of 23 February 2004 for the sum of 5,485.31 EUR due on 24 March 2004;
   -    Invoice no. 3636 from 15 March 2004 for the sum of 7,904.92 EUR due on 14 April 2004;
   -    Invoice no. 4364 of 29 March 2004 for the sum of 10,409.79 EUR due on 28 April 2004;
   -    Invoice no. 5239 of 15 April 2004 for the sum of 6,563.17 EUR due on 15 May 2004;
   -    Invoice no. 6272 of 3 May 2004 for the sum of 6,408.02 EUR due on 2 June 2004; and
   -    Invoice no. 7021 of 17 May 2004 for the sum of 3,304.01 EUR due on 16 June 2004.

Under article 78 of the Convention, if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74. The interest rate is not expressly prescribed in the Convention. Under article 7(2) of the Convention, questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law, i.e., by the French law.

Under the French law, unless the parties to the contract choose otherwise, a creditor has a right to interest corresponding to the interest rate prescribed by the European Central Bank valid before the first day of the half-year when the default lasts raised by 7%. The interest rate of the European Central Bank was 2% for period from 6 January 2003 until 5 December 2005 and 2.25% for period from 6 December 2005. The default with respect to particular invoices commenced from February to June 2004. The [Buyer] is therefore obliged to pay interest of 9% annually from the first day of default until 31 December 2005, of 9.25 % annually from 1 January 2006 until 30 June 2006 and and in the following half-years with respect to the interest rate prescribed by the European Central Bank valid to the first day of the respective half-year raised by 7%.

The court found to be proved that the parties to the dispute concluded a contract of sale, under which the [Seller] fulfilled its obligation to deliver goods and the [Buyer] failed to fulfil its obligation to pay the purchase price. The [Buyer] is thereby in default in payment of the purchase price and the court therefore granted to the [Seller] right to payment of interest as prescribed by relevant provisions.

The court ruled on the reimbursement of the costs of the proceedings with reference to sec. 142 part 1 CPC and granted to the [Seller] full reimbursement of its costs, as it was successful in its entire claim.

Instruction: An appeal against this judgment must be filed via this court within fifteen days from its receipt.

District Court Galanta, 22 February 2008.

JUDr. Marianna Hostovecka, Judge


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of the Republic of France is referred to as [Seller] and Defendant of the Slovak Republic is referred to as [Buyer]. Amounts in the currency of the European Union (Euro) are indicated as [EUR] and 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. He is the Editor of the CISG Slovakia website.

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Pace Law School Institute of International Commercial Law - Last updated November 1, 2013
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