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CISG CASE PRESENTATION

Slovak Republic 19 June 2008 Supreme Court of the Slovak Republic (Health care products case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/080619k1.html]

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

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Case identification

DATE OF DECISION: 20080619 (19 June 2008)

JURISDICTION: Slovak Republic

TRIBUNAL: Supreme Court of the Slovak Republic

JUDGE(S): JUDr. Anna Markova (Chair); JUDr. Darina Lickova and JUDr. Julia Horska

CASE NUMBER/DOCKET NUMBER: 6 Obo 15/2008

CASE NAME: Unavailable

CASE HISTORY: Earlier instance Regional Court Bratislava (17 Cb/76/03-143) 7 March 2007 [affirmed]

SELLER'S COUNTRY: Germany (plaintiff)

BUYER'S COUNTRY: Slovak Republic (defendant)

GOODS INVOLVED: Health care products


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 4 ; 8 ; 9 ; 18 ; 58 [Also cited: Articles 7 ; 59 ]

Classification of issues using UNCITRAL classification code numbers:

4B [Scope of Convention (issues excluded): statute of limitations];

8A ; 8B ; 8C [Interpretation of party's statement or other conduct: intent of party making statement or engaging in conduct; Interpretation based on objective standards; Interpretation in light of circumstances];

9B [Implied agreement on international usages];

18A3 [Acceptance of offer (time and manner): silence or inactivity in and of itself insufficient];

58A [Buyer to pay when goods placed at his disposal]

Descriptors: Scope of Convention ; Statute of Limitations ; Intent ; Usages and practices ; Acceptance of offer ; Price ; Payment

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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

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

19 June 2008 [6 Obo 15/2008]

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 Chair JUDr. Anna Markova and Members JUDr. Darina Lickova and JUDr. Julia Horska in the case of Plaintiff B. & L. [Seller], with its registered office in B., Federal Republic of Germany, represented by attorney JUDr. R.D., versus Defendant R.L., Spol. S.r.o. [Buyer], with its registered office in B., [Slovak Republic], represented by attorney JUDr. D. F., CSc., regarding payment of US $50,769.90 and appurtenances, on appeal of the [Seller] against the judgment of the Regional Court in Bratislava of 7 March 2007, rec. 17 Cb/76/03-143,

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 Bratislava of 7 March 2007, rec. 17 Cb/76/03-143 is upheld;

The [Seller] is obliged to pay to the [Buyer] a reimbursement of costs of the appellate proceedings in the sum of 38,092.- Slovak koruna [Sk].

REASONING

The Regional Court in Bratislava had dismissed the action of the [Seller] for payment of the sum of US $50,769.90 as the purchase price for goods delivered. The court reasoned its decision by referring to the UN Convention on Contracts for the International Sale of Goods which is applicable to this relationship since the parties to the proceedings did not choose any other law to be applicable to their relationship. The court determined from the evidence that the parties did not agree on the time of payment and, therefore, under article 58(1) of the Convention, the [Buyer] was obliged to pay the purchase price immediately after the goods were placed at the [Buyer]'s disposal.

   -    The court upheld the argument of the [Buyer] that an agreement as to time of payment cannot be automatically derived from the fact that the [Seller] unilaterally prescribed the period between drawing of invoice and its due date as 180 days.
 
   -    The court disagreed with the [Seller]'s argument that the [Buyer] never behaved in a way as to oppose this period and thereby an agreement had been concluded, since under article 18(1) of the Convention silence or inactivity does not in itself amount to acceptance.

The [Seller] also asked the court to observe the trade usages and pointed of that, in the sector of trade in sanitary goods and technology, it is common for foreign suppliers to set a longer period between drawing of an invoice and its due date and it is in a way influenced by belated payments by health insurance institutions.

   -    The [Buyer], however, submitted to the court invoices from other foreign suppliers from the same period of time as it purchased goods from the [Seller]. The date of payment was prescribed differently in each example: e.g., payment at the time of delivery of goods, payment before delivery, and payment at a certain time after delivery of goods.
 
   -    The [Buyer] alleged that a period of 180 days between drawing of invoice and its due date thus cannot be considered to be a trade usage in the particular trade of sanitary materials and technology, as it was not common in relationships with third parties.

The court therefore concluded that the parties to the contract did not conclude a specific agreement about the date of payment and thus, with reference to article 58 of the Convention, the purchase price was payable on the day when the [Seller] placed the goods at the [Buyer]'s disposal.

The [Seller] was entitled to assert its right to payment of the purchase price for the first time on 13 October 1998, since the goods were delivered on 12 October 1998. The limitation period of four years expired on 13 October 2002. The [Seller] claimed its right before the court on 4 April 2003, i.e., after expiration of the limitation period. The court, therefore, dismissed the action. The [Seller] filed an appeal against that judgment.

The [Seller] asked this court to change that judgment and uphold the [Seller]'s action. The [Seller] justified its appeal by arguing that the court determined an incorrect factual and legal situation from the evidence gathered.

It is not possible to determine from the reasoning of the judgment how the court qualified the testimony of the witness M.V. and why the court qualified the testimony of the executive of the [Buyer] to the effect that no agreement, even implied, was concluded by the parties about the date of payment of the purchase price.

In its answer to the appeal, the [Buyer] asked this court to uphold the challenged judgment as correct. It disagreed with the argument of the [Seller] stated in the appeal that the court determined an incorrect legal qualification of the dispute, since the [Seller] does not specify this argument in any way and therefore it is not possible to examine the objections of the [Seller] against the judgment.

The Supreme Court of the Slovak Republic as an appellate court (sec. 10 part 2 CPC) tried the appeal of the [Seller] under sec. 212 part 1 CPC. After examining the challenged judgment and proceedings preceding it, the court concluded that it is not possible to uphold the [Seller]'s appeal.

The object of the of the appeal was the payment of the purchase price for the goods delivered to the [Buyer], as claimed by invoice no. 187793 of 7 October 1998. The court gathered extensive evidence about the date of payment of the purchase price and commencement of the limitation period, as the [Buyer] had invoked the expiration of the limitation period. The court also interrogated witnesses M.V. and E.V. With reference to their testimony, the court determined that no agreement, written or oral, has been made about the period of 180 days for payment of the invoice no. 187793. The [Seller] prescribed the period by its own decision and it was therefore a unilateral prescription.

The court also found that the [Seller] handed over the goods on 12 October 1998, as they were billed by invoice no. 187793, when the goods were placed at [Buyer]'s disposal. The Court of First Instance correctly applied the UN Convention on Contracts for the International Sale of Goods, as the contract was not concluded in a written form and the parties to the contract did not choose the applicable law. Under article 58(1) of the Convention, if the buyer is not bound to pay the price at any other specific time, he must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and this Convention.

Under article 18(1) of the Convention in fine, silence or inactivity does not in itself amount to acceptance.

Under the cited provisions, it is not possible to conclude that the unilateral act of the [Seller] could cause the purchase price to become due on the day prescribed in the invoice and, therefore, the purchase price became due on the day when the [Buyer] was able to dispose of the goods, i.e., on 12 October 1998 and the limitation period commenced on the next day, i.e., on 13 October 1998 and expired after four years on 13 October 2002. The [Seller] filed the action with the court on 4 April 2003, i.e., after expiration of the limitation period. The Court of First Instance therefore correctly dismissed the action.

The Appellate Court upheld the challenged judgment with reference to sec. 219 CPC being correct in its subject matter. The [Buyer] being successful in the appellate proceedings has a right to reimbursement of costs of the proceedings (sec. 142 part 1 in connection with sec. 224 part 1 CPC.)

Instruction: An appeal against this judgment is not admissible.

Bratislava, 19 June 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 Federal Republic of Germany 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 currency of the United States of America (US dollars) are indicated as [US $].

** 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 March 30, 2009
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