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CISG CASE PRESENTATION

Slovak Republic 3 April 2008 Supreme Court (Raw materials for women's coats case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/080403k1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20080403 (3 April 2008)

JURISDICTION: Slovak Republic

TRIBUNAL: Supreme Court of the Slovak Republic

JUDGE(S): JU Dr. Anna Markova (Chairman), JU Dr. Julia Horska and JU Dr. Darina Lickova

CASE NUMBER/DOCKET NUMBER: 6 Obo 120/2007

CASE NAME: Unavailable

CASE HISTORY: 1st instance Regional Court Nitra 23 June 2006 [affirmed]

SELLER'S COUNTRY: Czech Republic (plaintiff)

BUYER'S COUNTRY: Slovak Republic (defendant)

GOODS INVOLVED: Raw materials for women's coats


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 53 ; 59 ; 78

Classification of issues using UNCITRAL classification code numbers:

53A [Buyer's obligation to pay price of goods];

59B [Payment due at time fixed or determinable by contract or Convention: no need for request or other formality];

78A [Interest on delay in receiving price or any other sum in arrears]

Descriptors: Price ; Interest

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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

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1362&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (Slovak): Click here for Slovak text of case; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1362&step=FullText>

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

Supreme Court of the Slovak Republic

3 April 2008 [6 Obo 120/2007]

Translation [*] by Juraj Kotrusz [**]

JUDGMENT
IN THE NAME OF THE SLOVAK REPUBLIC

The Supreme Court of the Slovak Republic deciding in a three-member panel composed of the Chairman JU Dr. Anna Markova and Members JU Dr. Julia Horska and JU Dr. Darina Lickova in case of Plaintiff N., a.s. [Seller], with its registered office in K.X., O., Czech Republic, Identification number: X, represented by attorney JU Dr. V.H., M.X., P., versus Defendant E., s.r.o. [Buyer], with its registered office in P.X, Identification number: X, represented by attorney Mgr. M.P., C.X., P.B., regarding payment of 5,474.44 EUR and appurtenances, on appeal of the [Buyer] against the judgment of the Regional Court in Nitra of 23 June 2006, rec. 16 Cb 119/2004-104,

h a s   d e c i d e d   a s   f o l l o w s:

The challenged judgment of the Regional Court in Nitra of 23 June 2006, rec. 16 Cb 119/2004-104 is u p h e l d.

The [Buyer] is obliged to pay to the [Seller] a sum in amount of 7,282.- Slovak koruna [Sk] as a reimbursement of costs of the appellate proceedings.

REASONING

In the challenged judgment, the Regional Court in Nitra obligated the [Buyer] to pay to the [Seller]:

The principal amount of 5,474.44 EUR with interest of:

-   3% annually on the sum of 570.27 EUR for the period from 8 April 2003 until payment;
-   4% annually on the sum of 3,536.87 EUR for the period from 31 July 2002 until payment;
-   3.5% annually on the sum of 3,407.97 EUR for the period from 18 November 2002 until 28 January 2003; and
-   3.5% annually on the sum of 1,367.30 EUR for the period from December 13, 2002 until payment; and

Reimbursement of the costs of the proceedings on account of the [Seller]'s attorney in the amount of 58,759.- Sk.

The Court at the same time denied [Buyer]'s petition for the waiver of court fees.

According to the reasoning of the challenged judgment, the Court of First Instance examined evidence by inspection of invoices no. 2980112, 2980121, 2980159 and of customs declarations. The Court found that:

   -    The parties to the dispute concluded a contract of sale under the UN Convention on Contracts for the International Sale of Goods published as no. 160/1991 Collection of Acts.
 
   -    The [Seller] clearly proved the delivery of goods on 28 June 2002 priced at 1,898.80 EUR, on 16 July 2002 priced at 3,535.87 EUR and 13 September 2002 priced at 1,367.30 EUR. The [Buyer] did not oppose the amount of the purchase price for the delivered goods.
 
   -    There was no evidence of the breach of the contract proved in the proceedings, which would deny the [Seller]'s right for payment of the purchase price (according to Art. 62 of the Convention).
 
   -    The Court regarded the [Buyer]'s argument that the [Seller] invoiced the purchase price also to the Company L.T., s.r.o. as irrelevant, since the [Buyer] did not provide any evidence thereof.
 
   -    The [Buyer] also did not provide any evidence that eventual payment to the third party would discharge him of his obligation to pay the purchase price.

The [Buyer] was therefore not discharged of his obligation to pay the purchase price under Art. 53 of the UN Convention for the goods delivered. The Court upheld [Seller]'s right to interest with reference to Art. 78 of the UN Convention, taking into consideration the maturity date of invoices and partial payments. The court ruled on the reimbursement of costs of the proceedings according to sec. 142 part 1 of the Civil Proceedings Code (hereinafter referred to as "CPC") by granting [Seller] the right to reimbursement for seven acts of legal services, compensation for loss of time and reimbursement of travel costs.

The [Buyer] appealed against this judgment.

The [Buyer] argued that the examination of evidence proved that the action was brought without justification. He claimed that the [Seller] previously withdrew an action against him twice (for payment of 987.20 EUR and 2,380 EUR). He claimed that the [Buyer] concluded a contract with an Austrian business company to supply final goods (women coats) to it and he therefore concluded several contracts for delivery of raw materials thereto. The [Seller] was one of these contractors. Because of the impossibility of repayment of the VAT on these goods, this supply for export turned out to be unprofitable for the [Buyer] and he therefore cancelled all these agreements. The deliveries under these agreements were subsequently transferred to the business company L.T., s.r.o., P., which thereafter produced final goods for the Austrian business company and delivered them. Therefore the [Seller] should have invoiced the payments to this company (L.T., s.r.o., P.). The [Buyer] also pointed out that the [Seller] drew invoice no. 2980159 on the [Buyer] for the sum of 1,367.30 EUR on September 13, 2002 but on September 16, 2002, the [Seller] cancelled this invoice. The [Seller] drew invoice no. 298161 to L.T., s.r.o., P. for the sum of 1,367.30 EUR and [Seller] thereby invoiced the delivery of raw materials in the same quality and amount as [Seller] previously invoiced to the [Buyer] by the cancelled invoice. The [Buyer] therefore argued that the [Seller] claimed his right to payment from two subjects at the same time. [Buyer] also argued that the Court did not take into consideration the fact that an employee of the [Seller], Mr. Ch., received cash payments in February and March 2003. The [Buyer] therefore asked the Appellate Court to dismiss the [Seller]'s action as being unjustified.

In appeal against the decision denying the [Buyer]'s petition for the waiver of court fees, the [Buyer] argued that his corporation has been operating at a loss since 2004 and has not been conducting business activities since 31 June 2004 because of its executive's, Ing. I.L., maternity leave. The corporation has no finances to pay the court fees and has several debts that it is unable to honor. The [Buyer] therefore asked the Appellate Court to waive the court fees.

The [Buyer]'s attorney did not appear at the appellate hearing despite the fact that he was summoned duly and in advance. He justified his absence by a conflict with another judicial proceedings. At the same time, he agreed to have the hearing continued in his absence in accordance with sec. 101 part 2 CPC and to have the case decided on the basis of records and evidence already examined.

The Supreme Court of the Slovak Republic, as the Appellate Court (sec. 10 part 2 CPC), heard the case in the manner prescribed by the appeal according to sec. 212 part 1 CPC and sec. 214 part 1 CPC and decided that the [Buyer]'s appeal was unjustified.

The [Seller] claimed by the action filed with the Court on 14 December 2000 the right to payment of the principal in amount of 5,474.44 EUR and 3% interest. [Seller] derived his right to payment from the delivery of goods made to order of the [Buyer].

As is shown in the examined evidence, the [Seller] as the supplier of the invoiced goods delivered the goods in the months from June to August 2002 and transferred title to the [Buyer]. The [Seller] proved the delivery of goods by the customs declarations.

With reference to Art. 59 of the UN Convention on Contracts for the International Sale of Goods (no. 160/1991 Coll.), the [Buyer], as the purchaser, was obliged to pay the purchase price on the date fixed by or determinable from the contract without the need for any request or compliance with any formality on the part of the [Seller].

Concerning the [Buyer]'s argument in his appeal, which stated that the [Seller] should have invoiced the purchase price to the third party to whom the [Buyer] transferred his right for supplying the goods to the foreign corporation, it is clear from the abovementioned article that this argument is irrelevant from the legal point of view and contradicts the fact that the [Buyer] actually received the goods from the [Seller]. The obligation to pay the purchase price is not subject to the drawing of an invoice. The abovementioned article is identical with sec. 450 part 1 of the Slovak Commercial Code, according to which, unless the contract stipulates otherwise, the buyer shall undertake to pay the purchase price when the seller, in accordance with the contract and this act, enables the buyer either to dispose of the goods, or to dispose of the documentation authorizing the same. Furthermore, the [Buyer] did not claim or prove the concluding of an agreement on assumption of his debts with the third party either with the consent of the creditor (sec. 531 of the Civil Code) or without his consent (sec. 533 of the Civil Code). The [Buyer] also did not prove the payment of the purchase price to the [Seller].

The Court of First Instance decided the case correctly by imposing the obligation on the [Buyer] to pay the purchase price for the goods after the [Seller] proved the transfer of the title to the [Buyer]. For this reason, the Supreme Court of the Slovak Republic upholds its judgment with reference to sec. 219 CPC.

During the judicial proceedings before the Regional Court in Nitra, the Court granted to the [Buyer] a waiver of the fee for the appeal in amount of 12,150.- Sk by its resolution of 23 April 2007, rec. 16 Cb 119/2004-166 and, for this reason, the [Buyer]'s appeal in this matter turned out to be irrelevant.

The [Seller] was successful in the appellate proceedings and is therefore entitled, with reference to sec. 224 part 1 CPC in connection with sec. 142 part 1 CPC, to the reimbursement of the costs of the appellate proceedings. The costs of the appellate proceedings were enumerated by the [Seller] in his motion of 8 April 2008.

After examining the enumeration, the Appellate Court approved the costs of the [Seller] used for the justified enforcement of his claims (sec. 142 part 1 CPC). The [Seller]'s costs emerged from the representation by an attorney. The attorney is entitled to compensation for representation of the [Seller] at the appellate hearing (3 April 2008) in the amount of 6,050.- Sk (5,474.44 EUR = 177 377,- Sk under the actual exchange rate 1 EUR = 32.401 Sk), he is entitled to the flat rate on expenses in amount of 190,- Sk for each act, compensation for the loss of time of two and one-half hours x 317.- Sk (one sexagesimal of the calculating unit) totaling 634.- Sk, reimbursement of traveling expenses by a car MAZDA 6 for a trip from P. to Bratislava and back, i.e., 2 x 22 km x 6.20 Sk + 39.40 Sk (fuel price) x 0.078 (fuel consumption per 1 km) x 22 km, totally 408.- Sk. The costs of legal representation amounted to 7,282.- Sk (sec. 10 part 1, sec. 14 part. 1 d), sec. 16 part 3 of the ordinance no. 655/2004 Coll.).

An appeal against this judgment is not admissible.

Bratislava, 3 April 2008

JU Dr. Anna Markova
Chairman of the Panel


FOOTNOTES

* 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 Slovak Republic (Slovak koruna) are indicated as [Sk]; amounts in European currency are indicated as [EUR].

** Juraj Kotrusz is a Slovak lawyer. He studied law at the University of Trnava, Slovakia and at the Hague Academy of International Law.

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Pace Law School Institute of International Commercial Law - Last updated June 4, 2009
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