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Switzerland 19 June 2007 Handelsgericht [Commercial Court] Aargau (Railway rails case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/070619s1.html]

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

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Case identification

DATE OF DECISION: 20070619 (19 June 2007)


TRIBUNAL: Handelsgericht [Commercial Court] Aargau

JUDGE(S): Knecht (Präsident); Web, Nauer, Roth, Wissmannn


CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Switzerland (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Railway rails

Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]


Key CISG provisions at issue: Articles 57(1)(a) ; 74 ; 78 [Also cited: Articles 4 ; 7(2) ; 14 ; 18 ; 31 ; 53 ; 61 ]

Classification of issues using UNCITRAL classification code numbers:

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

74A [General rules for measuring damages: loss suffered as consequence of breach];

78B [Rate of interest]

Descriptors: Payment, place of ; Damages ; Interest ; Interest as element of damages

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Editorial remarks

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Citations to case abstracts, texts, and commentaries


(a) UNCITRAL abstract: Unavailable

(b) Other abstracts



Original language (German): CISG-online.ch website <http://globalsaleslaw.com/content/api/cisg/urteile/1741.pdf>

Translation (English): Text presented below



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Case text (English translation)

Queen Mary Case Translation Programme

Commercial Court (Handelsgericht) Aargau

19 June 2007 [HOR.2006.83]

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

Edited by Institut für ausländisches und internationales
Privat- und Wirtschaftsrecht der Universität Heidelberg
Daniel Nagel, editor


1.  1.1 [Seller] is a corporation that is domiciled in R., Switzerland and registered with the commercial register. According to its corporate charter, [Seller] deals in iron, machinery and materials used for the construction of tunnels. [Seller] is also a provider of related professional services.

      1.2 [Buyer] is a limited partnership domiciled in H., Germany. [Buyer] is engaged in the planning, production, sale and leasing of equipment used in the mining industry and of equipment used for the assembly in these fields of business.

2.   2.1 In the beginning of May 2006, [Buyer] ordered from [Seller] 1,008 meters of second-hand "SBB" rails, new "SBB" rail splices and corresponding pins. The parties agreed that [Seller] was to pay for transport and [Buyer] would bear the respective custom duties and taxes (exhibit 3b). On 17 and 29 May 2006, the carrier commissioned by [Seller] delivered these goods to Germany in two consignments as designated in the contract. [Buyer] accepted the delivery of the goods, but refused to pay for the additional VAT which had been charged by the carrier (exhibits 14a, 14b).

      2.2 Apart from that, [Buyer] ordered additional rails, rail splices and track switches in May 2006. Since both of the previous consignments of May 2006 were still unpaid by then, [Seller] chose not to deliver any of these subsequent orders.

      2.3 Although [Buyer]'s CEO had promised an immediate payment of the invoices in May 2006 and despite the fact that [Seller] had sent various reminders, the invoices were not settled. [Buyer] informed [Seller] in August 2006 that it lacked the cash to make the payment. [Buyer] asked [Seller] to defer its claim for payment for another eight months (exhibit 11). However, [Seller] rejected this request (exhibit 12).

3. On 20 November 2006, [Seller] filed an action against [Buyer]. It requested the Court as follows:

[Buyer] should be ordered:

-    To pay Swiss francs [Sfr.] 44,870.00 (equivalent to EUR 28,115.20 at an exchange
rate of Sfr. 1.5960 / EUR) plus 8.125% since 21 June 2006;
-    To pay Sfr. 7,324.30 (equivalent to EUR 4,589.31 at an exchange rate of Sfr.
1.5960 / EUR) plus 8.125% since 16 September 2006; and
-    To compensate [Seller] for all costs incurred in relation to the legal proceedings.

[Seller] bases its action on the asserted claims which had arisen out of the contracts for the sale of rails of May 2006. [Seller] bases the additional claim for interest on the interest rate which it would be obliged to pay to its bank as a consequence of its lack of cash on the account.

4. On 8 December 2006, the Court set [Buyer] a time limit of 20 days to file a statement of defense by order dated 27 November 2006. The action of 20 November 2006 was served on [Buyer] the same day. However, [Buyer] failed to respond. Therefore, another final time limit of 10 days was set by Court order of 29 January 2007, which was served on [Buyer] on 15 March 2007. The Court informed [Buyer] about the possible consequences of its dilatory conduct ( 189 ZPO [*]). Once again, [Buyer] did not file any statement of defense within this second time limit.

5. By Court order of 23 May 2007, the dispute has been referred to the Commercial Court (Handelsgericht) of Aargau.


1. [Jurisdiction of the Commercial Court and application of the CISG]

      1.1 The parties involved in the present legal dispute are domiciled in different States. The dispute has an international dimension. Thus, the international jurisdiction of the Court must be determined according to the Swiss Code on the Conflict of Laws (IPRG [*], SR [*] 291), unless an international treaty takes priority over the rules contained in the IPRG (Art. 1(2) IPRG).

      1.2 The Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 16 September 1988 (SR 0.275.11) applies. The present case is a commercial litigation with the parties domiciled within the territories of Contracting States (Arts. 1(1) and 53(1) Lugano Convention). There is no place of exclusive jurisdiction as provided in Art. 16 Lugano Convention. Art. 5 No. 1 Lugano Convention states that in matters relating to a contract, a person may be sued in another Contracting State in the competent courts at the place of performance of the obligation in question. The term "obligation" refers to the particular obligation the dispute is concerned with (Vischer / Huber / Oser, Internationales Vertragsrecht, 2nd ed., Berne 2000, para. 226 with further references; Kropholler, Europäisches Zivilprozessrecht, 7th ed., Heidelberg 2002, Art. 5 para. 16).

      1.3 If the parties have not designated a place of performance of the obligation in question, the place of performance is to be determined according to the law applicable to the contract (BGE [*] 122 III 43, E.3.b. 45; Kropholler, Art. 5 para. 16).

            1.3.1 The United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 (CISG; SR is directly applicable to govern international contracts of sale of goods between parties whose places of business are in different Contracting States. Art. 1(1)(a) CISG is an autonomous conflict of laws rule (Vischer / Huber / Oser, 2 paras. 326 et seq.). Both [Seller] and [Buyer] have their place business in a Contracting State of the CISG.

            1.3.2 The CISG applies only if the parties have concluded a contract which obliges one party (the seller) to perform the delivery of goods and the other party (the buyer) to pay the purchase price (Vischer / Huber / Oser, 2 para. 337). [Seller] and [Buyer] have reached an agreement on the delivery of rails, rail splices and corresponding pins for a consideration. These goods constitute movable property which qualifies as goods under the CISG.

            1.3.3 Therefore, the place of performance of the obligation in question must be determined in accordance with the CISG. Art. 57(1)(a) CISG provides that monetary claims must be paid at the seller's place of business if the buyer is not bound to make payment at any other particular place and if payment was not to be performed at the place where the goods have been handed over. Given that the parties have not reached any deviating agreement, claims for payment are to be performed at [Seller]'s (i.e., the creditor's) place of business in R. [Switzerland].

            1.3.4 The Lugano Convention solely governs the issue of international jurisdiction of the Court. Domestic territorial jurisdiction must be resolved according to the applicable domestic law of procedure. According to Art. 113 IPRG [*], jurisdiction is assigned to the courts at the place of performance of claims arising out of a contract. Since monetary claims have to be performed at [Seller]'s place of business in R., the courts of the Swiss Canton of Aargau have territorial jurisdiction over this dispute.

      1.4 Jurisdiction of the Commercial Court (Handelsgericht) Aargau in terms of subject matter follows from 404(1)(a) ZPO [*]. This provision states that the Commercial Court is competent to adjudicate disputes between companies which are registered with the commercial register where the dispute arises in respect to the business of the defendant and if the dispute exceeds the minimum value required to file an appeal before the Federal Supreme Court (Bundesgericht). Both [Seller] and [Buyer] (which is registered with an equivalent foreign commercial register, cf. 405 ZPO) fulfill these requirements. The value of the present dispute exceeds the minimum amount of Sfr. 8,000.00 (Art. 46 OG [*], which has been in effect at the time of filing of the action and is thus relevant for the present proceedings.

2. [Buyer's default]

[Buyer] has failed to submit a statement of defense even within the additional time limit granted by the Court. Therefore, the proceedings have to be continued and be based on the factual assertions made by [Seller] in its statement of claim. Thus the Court has to render a judgment without any oral hearing ( 189(1) ZPO). With one party being in default, [Seller]'s factual assertions are subject to a taking of evidence only insofar as the judge has doubts as to their correctness ( 200 ZPO). However, the law is to be applied ex officio in any event ( 76(1) ZPO).

3. [Claim for the purchase price]

      3.1 [Seller] claims the purchase price of a sales contract concluded with [Buyer]. The agreement has been reached by way of [Buyer]'s offer and [Seller]'s acceptance in accordance with Arts. 14 and 18 CISG. Art. 4. CISG provides that a possible invalidity of the contract is to be assessed according to the applicable domestic law (Honsell, Schweizerisches Obligationenrecht, 8th ed., Berne 2006, p. 133). However, the present case does not provide any indications in this respect.

      3.2 On 17 and 29 May 2006, [Seller] delivered the rails, rail splices and pins to [Buyer] in Germany in conformity with the contract. While transport costs were to be borne by [Seller], there was an agreement which provided that the goods were to be delivered with taxes and custom duties unpaid. This meant that [Buyer] was obliged to bear these expenses (exhibit 3b). [Seller] has properly performed its obligation to deliver under Arts. 31 et seq. CISG. Thus, [Buyer] was obliged to pay the purchase price under Art. 53 CISG according to the requirements contained in the contract. Moreover, [Buyer] has generally acknowledged the existence of [Seller]'s claim for the purchase price when it requested the latter to defer payment (exhibit 11). Thus, [Seller] is entitled to claim the purchase price.

4. [Claim for compensation of VAT expenses]

Furthermore, [Seller] claims a compensation for the VAT which it had paid to the shipping company.

      4.1 The CISG governs not only the primary obligations arising out of a contract. It also applies to the ancillary obligations stipulated by the parties (Schlechtriem / Schwenzer, Kommentar zum Einheitlichen UN-Kaufrecht, 4th ed., Munich 2004, Art. 4 margin number 11).

      4.2 Pursuant to the contract, [Buyer] was obliged to bear the VAT (exhibit 3b). Since [Seller] was obliged to arrange for transport, [Seller] has inter alia made an advance payment on the VAT in favor of the carrier. However, [Buyer] has not complied with its additional obligation to pay any VAT expenses incurred by the carrier. This constitutes a breach of an ancillary obligation under the contract for the sale of goods with [Seller]. After the carrier has claimed a compensation for its VAT expenses from [Seller] as a consequence of [Buyer]'s breach, [Seller] is now entitled to claim damages from [Buyer] as provided by Art. 61(2)(b) in conjunction with Art. 74 CISG. Therefore, the Court allows the claim for compensation with respect to the VAT expenses.

5. [Currency applicable to [Seller]'s claim]

It must be considered that [Seller] claims a sum in Swiss francs, while the original obligation was owed in Euros. An exchange rate of Sfr. 1.5960 / EUR has been proposed. Claims in foreign currency are to be claimed as such. Generally, it is only the debtor who has a right to offer alternative performance (Art. 84 OR [*]). The creditor has no such right (Rüetschi / Stauber, BlSchK [*] 2006, 44 et seq.). As a result only the amounts designated in [Seller]'s statement of claim in brackets could be allowed. A statement of claim which has been drafted in this manner is open to interpretation. Procedural statements of claim are to be interpreted according to the general rules applicable to the interpretation of declarations of intent, which means that its perceptible sense must be identified (cf. Rüetschi / Stauber, pp. 46 et seq.). With regard to objective criteria, [Seller]'s claim cannot be understood in any other manner than meaning that it requests the Court to adjudicate the asserted claim in Euros in the alternative. [Buyer] is therefore obliged to pay EUR 32,704.51.

6. [Claim for default interest]

      6.1 Moreover, [Seller] requests an additional default interest of 8.125% per year. According to Art. 78 CISG, the seller is entitled to claim interest if the buyer fails to pay the price or any other sum that is in arrears. In the present case, the claim for interest is not only based on the failure by [Buyer] to pay the purchase price, but is also based on the claim for damages which has arisen as a consequence of [Seller]'s compensation vis-à-vis its carrier for VAT expenses. This can be seen from the fact that the claim for damages refers to an exact amount (cf. Schlechtriem / Schwenzer, Art. 78 para. 6).

      6.2 The CISG does not contain any rule on the appropriate interest rate. Moreover, the parties have not reached any agreement to that effect. Art. 7(2) CISG provides that, in this case, the question is to be settled in conformity with the law applicable by virtue of the rules of private international law. Under Art. 118(1) IPRG, the sale of movable goods is governed by the Hague Convention on the Law Applicable to International Sale of Goods of 15 June 1955 (Hague Convention; SR Art. 3(1) of the Hague Convention states that in default of a law declared applicable by the parties, a sale shall be governed by the domestic law of the country in which the vendor has his habitual residence at the time when he receives the order. Since [Seller] has its habitual residence in Switzerland, the interest rate is governed by Swiss law.

      6.3 The general provision on the default interest rate under Swiss law is contained in Art. 104 OR. Art. 104(3) OR provides that default interest may be calculated using a higher rate, if the usual bank discount rate at the place of payment exceeds 5%. [Seller] and [Buyer] are both registered with the commercial register, which means that the additional provisions of commercial law must be taken into account, as well. With respect to the bank discount, the applicable interest rate is to be calculated on the basis of the rate which is acknowledged by private banks for discounting first class bills of exchange. (BGE 116 II 140 E.5 pp. 140 et seq.; BK/Weber, Art. 104 OR margin number 8; Gauch / Schluep / Schmid / Rey, Schweizerisches Obligationenrecht Allgemeiner Teil, 8th ed., Zurich 2003, margin number 2994). Contrary to [Seller]'s assertions, the appropriate interest rate is not calculated on the basis of the usual interest rate for unsecured account current debts. As a result, [Seller] is only entitled to claim default interest of 5% per year.

      6.4 The additional damages claimed by [Seller] are to be assessed in accordance with Art. 74 in conjunction with Art. 61(1)(b) CISG, as set out in Art. 78 CISG. The respective costs for [Seller]'s loan constitute a damage which has been caused by the debtor's delayed performance and must be compensated by the latter (Schlechtriem / Schwenzer, Art. 74 para. 16). An identical result would follow from Art. 106(1) OR in case the CISG were not applicable with respect to the asserted interest claim. The debtor is obliged to compensate the creditor for the credit costs which the latter has incurred (BK / Weber, Art. 106 OR paras. 39 et seq.; BSK / Wiegand, Art. 106 OR para. 2).

      6.5 [Seller] has proven that it has taken out an account current loan with its bank in the amount of Sfr. 193,712.00 at an annual interest rate of 7.125% plus credit commissions of 0.25% per quarter (exhibit 15). Consequently, [Seller] has successfully proven that it suffered additional loan costs. In this respect, [Buyer] is obliged to compensate [Seller] at a rate of 8.125%.

7. [Ancillary decisions]

[Buyer] has to bear the costs of the proceedings ( 112(1) ZPO). Moreover, [Seller] is entitled to claim a reasonable compensation for the expenses it incurred in order to conduct the present proceedings.


  1. [Seller]'s alternative request is allowed. [Buyer] is ordered to pay EUR 28,115.20 plus 8.125% interest since 21 June 2006 as well as EUR 4,589.31 plus 8.125% interest since 16 September 2006.

  2. [Buyer] is ordered to bear the court fees of Sfr. 4,322.00 in total.

  3. [Buyer] is ordered to compensate [Seller] for its expenses in relation to the proceedings of Sfr. 5,950.30 (VAT included).

The judgment will be served to [Seller] and [Buyer].

The Court advises the parties of their right to appeal against this judgment (Arts. 72 et seq. and 90 et seq. BGG [*]). Within a time limit of 30 days after the serving of the judgment on the parties, an appeal may be filed before the Swiss Federal Supreme Court (Schweizerisches Bundesgericht). The statement of appeal must be submitted in written or electronic form to the Swiss Federal Supreme Court. It must be drafted in one of the official languages and must contain a reasoned legal claim, indicate the pieces of evidence and bear a signature or acceptable electronic signature. The reasoned submission must indicate in a concise manner how and why the contested decision was rendered in violation of the law (Arts. 95 et seq. BGG). The appellant has to submit any relevant documents, provided that these are in its possession. Moreover, a copy of the contested decision must be submitted, as well (Art. 42 BGG).


* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Switzerland 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]. Amounts in the currency of Switzerland (Swiss francs) are indicated as [Sfr].

Translator's note on other abbreviations: BGE = Bundesgerichtsentscheidung [Reported decisions of the Swiss Federal Supreme Court]; BGG = Bundesgerichtsgesetz [Swiss Federal Supreme Court Act]; BlSchK = Blätter für Schuldbetreibung und Konkurs [Swiss law journal]; IPRG = Bundesgesetz über das Internationale Privatrecht [Swiss Code on the Conflict of Laws]; OG = Bundesgesetz über die Organisation der Bundesrechtspflege [Swiss Act on the Organization of the Federal Courts; predecessor to the Swiss Federal Supreme Court Act]; OR = Obligationenrecht [Swiss Code on the Law of Obligations]; SR = Systematische Sammlung des Bundesrechts [Official database of Swiss federal legislation]; ZPO = Zivilprozessordnung [Code on Civil Procedure of the Swiss Canton of Aargau].

** Jan Henning Berg has been a law student at the University of Osnabrück, Germany and at King's College London. He 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.

*** Ph.D. candidate Daniel Nagel has studied law at the University of Heidelberg and at the University of Leeds.

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