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CISG CASE PRESENTATION

Slovak Republic 29 May 2008 District Court in Nitra (T.I., S.r.o. v. L.L., S.r.o.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/080529k1.html]

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

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Case identification

DATE OF DECISION: 20080529 (29 May 2008)

JURISDICTION: Slovak Republic

TRIBUNAL: District Court in Nitra

JUDGE(S): Mgr. Bozena Csibraniova

CASE NUMBER/DOCKET NUMBER: 27 Cb/129/2007

CASE NAME: T.I., S.r.o. v. L.L., S.r.o.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Czech Republic (plaintiff)

BUYER'S COUNTRY: Slovak Republic (defendant)

GOODS INVOLVED: [-]


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 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 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 (Slovak): Click here for Slovak text of case

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 in Nitra

29 May 2008 [27 Cb/129/2007]

Translation [*] by Juraj Kotrusz [**]

JUDGMENT
IN THE NAME OF THE SLOVAK REPUBLIC

The District Court in Nitra, deciding by a single judge, Mgr. Bozena Csibranyiova, in the case of Plaintiff T.I., S.r.o. [Seller], with its registered office in N.P., Czech Republic, represented by attorney JUDr. M.J., versus Defendant L.L., S.r.o. [Buyer], with its registered office in Š. ___, N. [Slovak Republic], regarding payment of 64,086.- Czech koruna [Kc] and 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 sum of 59,435.35 Kc within three days after the judgment comes into force.

The [Buyer] is obliged to pay to the [Seller] interest of:

-  8.75% annually on this sum for the period from 5 July 2005 until 31 December 2005;
-  9% annually on this sum for the period from 1 January 2006 until 30 June 2006;
-  9% annually on this sum for the period from 1 July 2006 until 31 December 2006;
-  9.25% annually on this sum for the period from 1 January 2007 until 30 June 2007;
-  9.75% annually on this sum for the period from 1 July 2007 until 31 December 2007;
-  10.5% annually on this sum for the period from 1 January 2008 until 29 May 2008; and

For the period from 30 May 2008 until payment interest on this sum according to the annual repro interest rate prescribed by the National Bank of Czech Republic increased by 7 percent, while in every half-year of the calendar year the interest rate will be calculated for the next six months beginning from the first day of the calendar half-year.

The [Buyer] is obliged to pay to the [Seller] a sum of 7,920.- Slovak koruna [Sk] as a reimbursement of costs of the proceedings within three days after the judgment comes into force on the account of legal counsel of the [Buyer].

The Court stays the case in the remaining part.

REASONING

Czech corporation T., a.s., with its registered office in H. X___, T, Czech Republic, claimed in the proceedings by its action filed with the court on 8 March 2007 its right to payment of 64,186.- Kc with appurtenances as the purchase price for goods delivered to the [Buyer].

[Seller] T., a.s. has its registered office in the Czech Republic. The [Buyer] has its registered office in Slovakia. This constitutes a relationship with international aspect. The court therefore at first had to qualify jurisdiction of Slovak courts and the law applicable to the relationship.

Under sec. 1 of act no. 97/1963 Coll. on international private and procedural law as amended, this act prescribes which law is applicable to civil, commercial, labour and other relationships with international aspect, prescribes legal status of foreigners and prescribes procedure of Slovak judicial authorities when regulating these relationships and deciding about them and thereby promoting international cooperation.

Under sec. 9 part 1 of act no. 97/1963 Coll. on international private and procedural law as amended, parties to a contract may choose the law which will govern their mutual proprietary matters; even without express declaration, if there is no doubt about this will of the parties.

Under sec. 10 part 3 of this act, the contractual relationships, if not otherwise prescribed in other legal instruments, will be governed by the law of the State where both parties have their places of business; if there is no such State and the contract is concluded in presence of both parties, the contract will be governed by the law of the State where the contract was concluded; if the contract was not concluded in presence of both parties, it will be governed by the law of the place of business of the party which accepted a proposal for concluding a contract.

Under sec. 37 of this act, if not otherwise stipulated in subsequent provisions, Slovak courts have jurisdiction to try and decide the case, if the action is filed against the person who has domicile or place of business in Slovakia, or property in Slovakia if the action is concerning proprietary matters.

Under sec. 37a letter d) of this act, Slovak courts have jurisdiction to try and decide the case also if it is concerning other types of contracts, where the goods were delivered or the services were provided in Slovakia, or place of performance of the contract was in Slovakia.

Under sec. 48 of this act, Slovak courts try the case in accordance with Slovak procedural law and all parties to the dispute are equal in the proceedings.

Under sec. 84 of the Slovak Civil Procedure Code (hereinafter referred to as "CPC"), the universal court of the defendant has jurisdiction to try the case.

Under sec. 85 part 4 of CPC, the universal court of the defendant in commercial matters is the court where the defendant has its registered office, or if there is no such court, where the defendant has its place of business. If the defendant has no such place of business, the universal court of the defendant is the court where the defendant has its residence.

The [Buyer] has its registered office in Slovakia, in the circuit of the District Court in Nitra. Therefore, the case shall be tried and decided by the District Court in Nitra.

After initiation of the proceedings, a petition of bankruptcy was filed against Plaintiff corporation T., a.s. [Seller] by a resolution of the Regional Court in Hradec Kralove, Czech Republic, rec. no. 41 K 12/2007-456 from 15 March 2007 and the court appointed JUDr. J.O. as its receiver in bankruptcy.

Under sec. 14 part 1 letter c) of act no. 328/91 Coll. on bankruptcy and repayment, judicial and other proceedings which are dealing with property forming assets in bankruptcy or with claims referring to these assets, the receiver in bankruptcy can file or initiate such proceedings, or proceedings can be initiated against the receiver and in case of claims specified in sec. 20, also these proceedings can be initiated also in accordance with sec. 23 and 24.

Under sec. 14 part 1 letter g) of act no. 328/91 Coll. on bankruptcy and repayment, all claims and obligations concerning assets in bankruptcy become due at the time of filing of the petition of bankruptcy.

With reference to the abovementioned, the court considered JUDr. J.O., receiver in bankruptcy of T., a.s. [Seller], to be acting as a plaintiff, since the receiver asked to continue in the proceedings by his motion from 14 September 2007.

The court replaced JUDr. J.O., receiver in bankruptcy of T., a.s. for T.I. s.r.o. [Seller], with its registered office in N. P., ___, P. - N.M., Czech Republic, … [Seller] in a position of plaintiff by its resolution from 16 January 2008, rec. no. 27 Cb 129/2007-68 which came into force on 25 March 2008.

The court set the date of the court proceedings on 29 May 2008 and duly summoned the parties. The [Buyer] was duly summoned in accordance with sec. 48 part 2 CPC but did not appear before the court. The [Seller] apologized for its absence at the court proceedings via its legal counsel in letter from 28 May 2008 and did not ask for adjournment of the proceedings. The court with reference to sec. 101 part 2 CPC therefore tried and decided the case in the absence of the parties.

Under sec. 101 part 2 CPC the court continues in proceedings also in case of inactivity of parties to the dispute. If the party duly summoned to the proceedings does not appear before the court and did not ask for adjournment for serious reasons, the court can try and decide the case in absence of the parties, taking into consideration court records and gathered evidence.

The court gathered evidence by reading submitted documents provided by the [Seller] and thereby investigated this factual situation and qualified it under applicable legal provisions.

The initial plaintiff, T., a.s. [Seller], claimed in the proceedings its right to payment of the purchase price under oral contract of sale, where it delivered goods to the [Buyer]. As it was already mentioned, the receiver in bankruptcy succeeded into the rights and obligations of T., a.s. acting as seller. The court investigated from the gathered evidence that T., a.s. acting as seller fulfilled its duties under the contract of sale and delivered the goods to the [Buyer]. It claimed the right for payment of the purchase price in amount of 64,186.- Kc by invoice no. 26570009 due on 4 July 2005. The court found no evidence that the [Buyer] fulfilled its obligation to pay the purchase price. The obligation of the [Buyer] was in amount of 64,186.- Kc.

Under sec. 9 part 1 of act no. 97/1963 Coll. on international private and procedural law as amended, parties to a contract may choose the law which will govern their mutual proprietary matters; even without express declaration, if there is no doubt about this will of the parties.

Under sec. 11 of this act, the applicable law chosen by the parties governs also changes and securing of obligations and effects of non-performance, unless other solution emerges from character of the parties or subject-matter of the relationship.

A contract of sale both in domestic and international trade presents the most important and most frequently used type of contract used by merchants. Under this contract, the goods are transferred for money.

Legal regulation of sales contract prescribed in the Slovak Commercial Code is analogous to provisions of the UN Convention on Contracts for the International Sale of Goods, created at the diplomatic conference in Vienna in 1980 (hereinafter referred to as "Vienna Convention" published as Notice of Ministry of Foreign Affairs no. 160/1991 Coll.) Both Slovakia and Czech Republic are parties to this Convention.

Under article 1(1) of the Vienna Convention, this Convention applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State.

The parties to the contract may exclude the application of the Vienna Convention to their mutual relationship. If they intend to perform such exclusion, it is recommended to expressly prescribe that they exclude application of the Vienna Convention or its particular provisions.

With reference to the evidence gathered, the court found no sign of parties' intent to exclude the provisions of the Vienna Convention. The court therefore qualified this contract under the Vienna Convention.

   -    Under article 4 of the Convention, this Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract.
 
   -    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.

As it was already stated, the parties concluded a contract of sale under the Vienna Convention.

Initial plaintiff, T.,a.s., acting as a seller delivered to the [Buyer] the goods ordered and the [Buyer] was obliged under article 53 of the Vienna Convention to pay the purchase price in accordance with the contract, but it failed to do so. The court therefore upheld the [Seller]'s claim, being justified. The court also found that the receiver in bankruptcy replaced the initial plaintiff [Seller] in the proceedings because of the contract of sale of enterprise from 24 September 2007 (rec. no. 38) concluded by JUDr. O., receiver in bankruptcy of T., a.s. and the [Seller], while this enterprise included also the claim asserted in these proceedings in amount of 59,435.35 Sk. The court therefore upheld [Seller]'s claim with respect to this part and stayed the proceedings with respect to residual part.

The [Seller] claimed in the action also its right to interest.

The abovementioned Vienna Convention regulates the right to interest only with respect to its existence and does not specify its amount. The court therefore qualified this legal issue under act no. 97/1963 Coll. on international private and procedural law, as amended.

Under sec. 10 part 1 of this act, if parties have not made such choice of law, their contractual relationships will be governed by the law which assures their reasonable solution.

Under sec. 10 part 2 a) of this act, unless a special legal instrument stipulates otherwise, contracts of sale will be usually governed by the law of the country of seller's registered office (domicile) at the time of concluding of a contract.

Under sec. 369 part 1 of the Commercial Code of the Czech Republic if a debtor is in default in fulfilment of a monetary obligation or its part, and no rate for paying interest on the sum has been agreed upon, the debtor is obliged to pay interest on the sum specified in the contract or if no such provision is in the contract, in interest rate prescribed by rules of civil law.

Under sec. 1 of the ordinance of the Czech Republic government no. 163/2005 Coll. which amends ordinance no. 142/1994 Coll. prescribing interest rates and interest charges in default under Czech Civil Code, the interest rate shall be the repo rate announced by the Czech National Bank increased by 7 percent. This interest rate in effect on the first day of a calendar half-year is in force for the whole half-year.

Since the [Buyer] is in default with payment of the purchase price, the court granted to the [Seller] right to payment of interest in amount prescribed by the abovementioned legal provisions, which are notorious to the court from its previous jurisprudence.

The court decided about the reimbursement of the costs of judicial proceedings under sec. 142 part 3 CPC and granted a full reimbursement of the costs to the [Seller] in amount of 7,920.- Sk, since the [Seller] was not successful in its claim only in its marginal part. The [Seller] was granted right for reimbursement of court fee for the action in amount of 4,692.- Sk and reimbursement of legal aid in amount of 3,228.- Sk…

Instruction: An appeal against this judgment must be filed with the Regional Court in Nitra via this court within fifteen days of its receipt.

District Court in Nitra, 29 May 2008

Mgr. Bozena Csibranyiova, Judge


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 Czech Republic (Czech koruna) are indicated as [Kc]; 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.

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