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CISG CASE PRESENTATION

Montenegro 20 February 2007 Appellate Court (Hartman LLC v. Grlic Plus LLC) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/070220mo.html]

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

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Case identification

DATE OF DECISION: 20070220 (20 February 2007)

JURISDICTION: Montenegro

TRIBUNAL: Appellate Court of Montenegro in Podgorica

JUDGE(S): Marija Marinkovic (Presiding Judge); Branimir Femic and Mevlida Muratovic (Members of the Council)

CASE NUMBER/DOCKET NUMBER: Mal.br. 118/04

CASE NAME: Hartman LLC v. Grlic Plus LLC

CASE HISTORY: 1st instance Commercial Court in Podgorica 20 October 2006 [affirmed]

SELLER'S COUNTRY: Croatia (plaintiff)

BUYER'S COUNTRY: Montenegro (defendant)

GOODS INVOLVED: [-]


UNCITRAL case abstract

MONTENEGRO: Appellate Court of Montenegro (Hartman LLC v. Grlic Plus LLC) 20 February 2007

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/103],
CLOUT abstract no. 1019

Reproduced with permission of UNCITRAL

Abstract prepared by Aneta Spaic

This case deals primarily with the seller's obligation to deliver the goods to the buyer by handing them over to the first carrier and with the buyer's obligation to pay the purchase price.

A Croatian company, the seller, entered into a contract with a Montenegrin company, the buyer, for the sale of cardboard boxes for eggs. As the buyer failed to pay the price of the goods, the seller brought action in court claiming the payment of the price of the goods and accrued interest. The evidence and documents submitted confirmed that the parties were in a regular business relationship, and that the seller delivered the goods by handing them over to a carrier, pursuant to the order of the buyer. The buyer, however, alleged that it was not clear to which delivery the sum was related since it had already made payments in advance. As a matter of fact, all obligations relating to the goods delivered were settled and the goods referred to in this particular case were never delivered. The buyer also alleged that, had the goods at hand been delivered, it would have objected to them and contacted the seller for cross-checking the status of accounting and closing of mutual obligations. In its submissions the buyer stressed that the dispatch did not point out who took the goods on behalf of the buyer. The seller disputed the buyer's allegations since the transport of goods was performed by a clearly identified carrier and also pointed out that the buyer signed for the shipment on the day the goods were delivered, and that the account that followed was sealed by the custom house in Koprivnica.

The Commercial Court of Montenegro noted all of the allegations of the buyer. The Court, however, found that those facts did not influence the decision in any manner. The seller presented to the Court evidence of the dispatch of the goods from which it was determined that the buyer signed for the shipment when it received the goods. In addition, the confirmation of the performed forwarding services and the international consignment note showed that the goods were delivered. This is in accordance with Article 31 (a) CISG which states that if the seller is not obliged to deliver the goods at any particular place, its obligation to deliver consists, if the contract involves carriage of goods, in handing over the goods to the first carrier for transmission to the buyer. According to the Convention this amounts to a delivery made to the buyer. Therefore the Court ruled in favour of the seller.

The Montenegrin buyer brought an appeal against this decision. The Court of Appeals, however, rejected it noting that the Commercial Court had correctly applied Article 31 (a) CISG. According to the evidence, the buyer ordered the goods and they were delivered. No evidence that a different delivery of the goods had been arranged or that the debt had been settled through advance payment was provided by the buyer.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 31

Classification of issues using UNCITRAL classification code numbers:

31A1 [Delivery of the goods and handing over of documents (place for delivery): contracts involving carriage of goods (obligation to hand goods to first carrier]

Descriptors: Delivery

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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 (Montenegrin): Click here for Montenegrin text of case

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Prepared by the Department of Commercial Law, Law Faculty, University of Montenegro

Appellate Court of Montenegro

Hartman LLC v. Grlic Plus LLC

Podgorica, 20 February 2007 [Mal.br. 118/04]

Translation by [*] Aneta Spaic and Milan Keker [**]

On behalf of the Commercial Court in Podgorica, Judge Nevenka Popovic, in the matter of Plaintiff "Hartman" LLC [hereinafter "Seller"] of Koprivnica, Croatia, represented by attorney Goran Krncevic, lawyer from Novi Sad, who was replaced by Vera Ostojic lawyer from Podgorica, against Defendant "Grlic Plus " LLC [hereinafter "Buyer"] of Niksic, Montenegro, represented by attorney Sonja Kasalica, lawyer from Niksic, involving a claimed indebtedness of 4,522.00 €, after considering the dispute and holding public hearings on 28 September 2006, in the presence of the [Seller]'s representative and in the absence of the duly invited representative of the [Buyer], on 20 October 2006 handed down the following

VERDICT

[Buyer] shall pay the [Seller] the principal debt in the amount of 4,522.00 € with the corresponding interest:

REASONING

The [Seller] claimed, at the hearing and on the basis of written submissions and credible documents (accounts #423 of 17 May 2004. and accounts #41427 of 17 December 2004), that [Buyer] owes [Seller] a total amount of 4,522.00 €.

[Seller] alleged that this is a debt for delivered and unpaid goods. [Seller disputed the allegations in [Buyer]'s demurrer on the grounds that the transport of goods was performed by the company "Bis Transport", Koprivnica, by order of the [Buyer]. The [Seller] noted that the [Buyer] signed for the shipment on 17 November 2004 when [Seller] delivered the goods, and that the account that followed the goods was sealed by Custom-house in Koprivnica.

[Seller] submitted its claim in the amount of 4,522.00 €, with interest and relevant indebtedness in the amount of 70.00 €, starting from 25 May 2004 and to the amount of 4,452.00 €, starting from 25 November 2004 to payment day. [Seller] also claimed for the expenses of jury trial in the amount of fees f or the complaint and the decision of the Court, the composition of the lawsuit, confirmatory submissions, and attending to the hearings held and delayed.

[Buyer] in a response of 10 November 2005, contested the merits of [Seller]'s case, alleging that it is not clear to which delivery the debt was related considering that the payments have been made in advance. [Buyer] further alleged that [Seller] and [Buyer] were in constant business relations, but that all obligations for goods delivered are settled; that the accounts in the matter were never delivered; that [Buyer] would object to them and contact the [Seller] for cross-checking the status of accountings and closing of mutual obligations. In its submissions of 11 July 2006 [Buyer], stressed that the dispatch does not point out who took the goods at issue on behalf of the [Buyer]. The [Buyer], however, did not contest the debt in the amount of 70.00 €, per account #423 of 17 May 2004.

[Buyer] was absent from the session held for the main hearing of 28 September 2006, although the [Buyer] had been duly summoned. Accordingly, discussions were held and concluded in [Buyer]'s absence pursuant to the provisions of article 298, paragraph 4. LCP, without handing down a final decision.

In the proceedings, the Court considered the following evidence: the insight into account #423 of 17 May 2004, receipt of goods no. 212273 of 17 November 2004, customs declaration of the same date, confirmation on performed forwarding services and customs representation 0004831 of 22 November 2004, international consignment note CMR KO824155 of 17 November 2004, and dispatch #244021 of 17 November 2004.

Appreciating the stated positions of the parties and the contents of the evidence submitted, the Court found that the [Seller]'s claim was cogent in its entirety for the following reasons:

Commercial Court in Podgorica
20 October 2006
        Nevenka Popovic mp


PROCEEDING BEFORE:

Appellate Court of Republic of Montenegro [BA No. 638/06] 20 February 2007

The Appellate Court of the Republic of Montenegro in Council composed of Judges, Marija Marinkovic, as Presiding Judge, and Branimir Femic and Mevlida Muratovic, as Members of the Council, in the matter of Plaintiff "Hartman" LLC [Seller] of Koprivnica, Croatia represented by Goran Krncevic, lawyer from Novi Sad, who was replaced by Vera Ostojic, lawyer from Podgorica against the Defendant "Grlic Plus" LLC [Buyer] of Niksic, Montenegro, represented by attorney Sonja Kasalica, lawyer from Niksic, for debt of 4,522.00 €, deciding on the appeal lodged against the Verdict of the Commercial Court in Podgorica (Mal.br. 118/06) of 20 October 2006, in plenary session, held on 20 February 2007 hands down the following

VERDICT

The [Buyer]'s appeal is rejected as arbitrary and the Verdict of the Commercial Court of Podgorica (Mal.br. 118/06) of 20 October 2006 is confirmed.

REASONING

In the Verdict of the Commercial Court in Podgorica (Mal.br. 118/06) of 20 October 2006, it was decided that [Buyer] shall pay the [Seller] the principal debt amount of 4,522.00 € with a corresponding interest:

Against this Verdict, the [Buyer] alleges significant violations of the provisions of law on civil proceedings, wrongly and incompletely determined facts, and incorrect application of substantive law. In support of its appeal, [Buyer] states that during the first instance procedure, it was not proven that the [Buyer] was in delay; that when the [Seller] delivered the goods, which were on agreed terms of delivery and payment, it was not proven whether the forwarding agent received goods authorization paper issued by the [Buyer]; as well as whether the goods were delivered at all. [Buyer] asked the Appellate Court to reverse the contested verdict and to remand the case to the first instance court to re-process.

The Appellate Court holds that the [Buyer]'s complaint about the Verdict of the first instance court was arbitrary.

In the procedure that preceded the contested Verdict, there were no major violations of Article 367 Art. 2 paragraphs 3, 7 and 12 of LCP, on which this Court watches for ex officio and the complaint in particular does not point to any violation of civil proceedings.

From the written evidence, it has been indisputably demonstrated that:

Article 31(a) of the United Nations Convention on the International Sale of Goods stipulates that if under the contract of sale, goods are to be transported, and if the seller is not obliged to deliver goods to a particular place, for delivery to the buyer, the first instance court properly concluded that, in this case, the handing over of the goods to the carrier was a delivery made to the buyer.

The [Buyer] did not rebut the conclusion of the main hearing before the court of first instance by providing evidence that a different delivery of the goods was arranged, or that the debt was settled through the advance payment, as the [Buyer] claimed during the first instance procedure, which [Buyer] was obliged to do in terms of Article 219 LCP.

The evidence clearly shows that the [Buyer] ordered the goods, and that they were delivered. And the first instance court correctly applied the substantive law when it named the provisions of Article 262 1 Law on Obligations, as obliging the [Buyer] to pay to the [Seller] total amount of 4,522.00 €, with corresponding interest rate starting from the maturity day of each individual account, to payments.

It is found that [Buyer] has alleged incorrectly and incompletely established facts and without legal basis, since Article 454 paragraph 1 of LCP stipulates that decisions or solutions that end proceedings in disputes of small value can be challenged only where there are significant violations of provisions for litigation proceedings under Article 367, paragraph 2 of this law and for incorrect application of substantive law.

Therefore, the appeal of the [Buyer] is rejected as arbitrary and the contested verdict shall be confirmed.

The above is decided in accordance with Article 382 LCP.

Appellate Court of Montenegro
Podgorica, 20 February 2007


FOOTNOTES

* All translations should be cross-checked against the original text. For purposes of this translation, Plaintiff-Appellee of Croatia is referred to as [Seller] and Defendant-Appellant of Montenegro is referred to as [Buyer].

** Aneta Spaic, Ph.D., is an Associate Professor at the Law Faculty of the University of Montenegro. Milan Keker is a student at the Department of Commercial Law of the Law Faculty of the University of Montenegro.

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Pace Law School Institute of International Commercial Law - Last updated March 18, 2011
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