Slovak Republic 17 September 2008 District Court in Topolcany (Beer and non-alcoholic beverages Case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/080917k2.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 7Cb/82/2007
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Slovak Republic [Defendant]
BUYER'S COUNTRY: Czech Republic [Plaintiff]
GOODS INVOLVED: Beer and non-alcoholic beverages
APPLICATION OF CISG: No
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Slovak): Unavailable
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Queen Mary Case Translation Programme
17 September 2008 [7Cb/82/2007]
Translation [*] by Juraj Kotrusz [**]
IN THE NAME OF THE SLOVAK REPUBLIC
The District Court of Topolcany, decided by a single judge, Marian Mokos, in the case of Plaintiff F.C. [Buyer], with its registered office in T., ___, Czech Republic, …, represented by Mgr. R.S., attorney, versus P.T., a.s. [Seller], with its registered office in T. ___, [Slovak Republic], represented by JUDr. L. J., attorney, on validity of avoidance of contract
has decided as follows:
The Court dismisses the action on invalidity of termination of sale contract no. 80/EX 03 concluded on 31 July 2003 between the parties to the proceedings as amended by amendments no. 1 - 5 done by letter of company T., a.s., __________ [Slovak Republic] on 10 October 2006 and 31 October 2006.
The [Buyer] is obliged to pay the [Seller] the reimbursement of costs of the proceedings amounting to 2,566.93 Euro [EUR], within three days after the judgment comes into force.
The [Buyer] claimed by its action decision on invalidity of termination of contract no. 80/EX 03 concluded on 31 July 2003 as amended by amendments no. 1 - 5 done by letter from [Seller] on 10 October 2006 and 31 October 2006, arguing that the [Buyer] dully performed all its obligations and committed no breach which would justify termination of the contract.
The [Seller] opposed the action and asked the court to dismiss the case, arguing that the [Buyer] did not prove existence of urgent legal interest on such decision and did not prove that it did not breach art. XI part 1 and art. XII part 6 of the contract, i.e. that it did return the packing within 90 days and that it did not use the beer intended for sale in the Czech Republic for further export.
The court initially decided the case by its judgement of 19 May 2008, rec. no.: 7Cb/82/2007-242 whereby it upheld the action in its entirety and bound the [Seller] to reimburse the [Buyer]'s costs of the proceedings. This judgement was cancelled by the resolution of the Regional Court in Nitra of 12 November 2008, rec. no.: 15Cob/180/2008-297 and the case was returned to this court for further proceedings due to the fact that the dispute should have been analyzed under the UN Convention on Contracts for the International Sale of Goods published in the Collection of Acts as no. 160/1991 Coll., but the court should have initially determined the existence of the [Buyer]'s urgent legal interest on such decision with reference to sec. 80 letter c) of the Slovak Civil Procedure Code.
Based on the evidence gathered in the previous proceedings, the court determined that on 31 July 2003 the parties concluded the contract of sale no. 80/EX/03 for the delivery of beer and non-alcoholic beverages produced by the [Seller], which was created for an indefinite period of time and was changed by amendments no. 1 - 5. The [Seller] declared the contract avoided in its letter of 10 October 2006 addressed to the [Buyer] explaining that the [Buyer] breached its obligation under art. XI part 1 of the contract and subsequently insisted on its avoidance in its letter of 31 October 2006, referring to the breach of art. XII part 6 of the contract. The [Buyer] disagreed with the termination of the contract and therefore filed an action with the court demanding a decision on the invalidity of the avoidance of the contract where it justified its urgent legal interest by stating that its further business existence depends on performance of this contract. The [Buyer] explained that upon entering into this contract, it established its own network of distributors and the [Seller] declared the contract avoided without any previous notices and even prior to this avoidance the [Seller] failed to perform deliveries under the contract. The [Buyer] further argued that it did not breach the contractual provision on returning of packings and stated that it had an urgent legal interest on the decision at the time the action was filed and that it is prepared to continue performance immediately after the decision is made. Once the court upholds the action, the [Seller] will be forced to perform its obligation under the contract or a new contract on further business cooperation will be concluded by the parties.
The [Seller] referred to absence of the [Buyer]'s urgent legal interest on the decision of the court on invalidity of termination of the sales contract and stressed that the [Buyer] did not refute the argument on violation of the contract stated in the avoidance of the contract. The [Seller] also pointed out that from the time of avoidance of the contract the [Buyer] did not send a purchase order or perform any other action proving its intent to continue business with the [Seller].
Under sec. 80 letter c) of the Slovak Civil Procedure Code (hereinafter referred to as CPC) the plaintiff can file an action and ask the court to decide on the existence or non-existence of certain rights or legal relationships, once the plaintiff has urgent legal interest on such decision.
With reference to the evidence gathered, the court found that the [Buyer]'s action demanding a decision on invalidity of the avoidance of the contract was ill reasoned since the [Buyer] did not prove its urgent legal interest on such decision and therefore the court dismissed the action in its entirety. Action for decision on the existence of certain rights presents an important form of preventive protection of rights, as it helps to establish legal certainty in legal relationships which seem to be uncertain or threatened. Requirement of the existence of urgent legal interest on such decision must be examined prior to the investigation of the merits of the case; otherwise parties to the proceedings could bother the court with academic disputes having no practical impact on their legal relationship. The party can always sue for performance of certain obligations and thereby avoid the need to prove the existence of an urgent legal interest. The court will therefore always dismiss an action for decision on the existence of rights without examination of the merits of the case, once no urgent legal interest is proved (judgement of the Supreme Court of the Slovak Republic, rec. no.: 1M Cdo/7/2004). The court found that the [Buyer] did not prove the existence of an urgent legal interest on the decision as claimed by its action. Once the court upholds such an action, no change in the [Buyer]'s legal position would occur and the [Seller] would not be forced by such decision to perform its obligations from the contract. therefore, the [Buyer] would, after all, have to file another action for performance of the [Seller]'s obligations. This conclusion is also evidenced by the fact that the [Seller] failed to perform its obligations already in autumn of 2006, i.e. even prior to the avoidance of the contract, and the [Buyer] should have therefore claimed performance by the action at that time. Since the [Buyer] did not prove existence of an urgent legal interest on the decision about the validity of avoidance of the contract, the court dismissed the action without examining the merits of the case and their qualification under the UN Convention on Contracts for the International Sale of Goods published in the Collection of Acts as no. 160/1991 Coll.
The Court ruled on the reimbursement of the costs of the proceedings with reference to sec. 142 part 1 CPC and granted the [Buyer] full reimbursement of its costs, as it was successful in its entire defense.
Instruction: An appeal against this judgment must be filed via this Court within fifteen days of its receipt.
District Court of Topolcany, 20 March 2009.
Marian Mokos, Judge
* 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 [Buyer] and Defendant of the Slovak Republic is referred to as [Seller]. Amounts in the currency of the European Union (Euro) are indicated as [EUR].
** 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.Go to Case Table of Contents