Switzerland 6 February 2009 Obergericht [Appellate Court] Zürich (Graffiti protection coating case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/090206s1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: LN080035/U
CASE HISTORY: 1st instance Bezirksgericht Hinwil (CG 070028) 24 April 2008; 3d instance Bundesgerichtshof 26 June 2009 [affirming]
SELLER'S COUNTRY: Switzerland (defendant)
BUYER'S COUNTRY: Germany (plaintiff)
GOODS INVOLVED: Coating to protect asainst Graffiti
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
31A [Place for delivery: contracts involving carriage of goods]
31A [Place for delivery: contracts involving carriage of goods]
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (German): CISG-online.ch database <http://globalsaleslaw.com/content/api/cisg/urteile/2000.pdf>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
6 February 2009
Translation [*] by Andrea Vincze [**]
Appeal against a judgment of the Hinwil District Court (CG 070028) dated 24 April 2008.
To order Defendant [of Switzerland] (hereinafter "[Seller]") to pay to Plaintiff [of Germany] (hereinafter "[Buyer]") 162,430.65 Swiss francs [Sfr] with 5% interest from 15 April 2007, as well as 357 Sfr for the court order; and
To order the [Seller] to pay all other costs and compensations.
JUDGMENT OF THE HINWIL DISTRICT COURT
1. The [Buyer]'s claim is not admissible.
2. The court fees amount to 4,500 Sfr.
3. The costs must be paid by [Buyer].
4. The court orders [Buyer] to pay to [Seller] a compensation of 11,000 Sfr (incl. VAT).
5. The judgment must be communicated to the parties in writing.
6. (Recourse: appeal)
THE APPELLATE COURT CONSIDERED THE FOLLOWING
1. Facts of the case and procedural history
1.1. The parties concluded a sales contract in February or March 2009 according to consistent information, regarding 191 graffiti protection coatings, i.e., 65 kg Imprgnand WA priming coat and 126 kg matte, transparent Graffinet lacquer with hardener. The parties did not agree on the application of any general conditions of contract (doc. 5/18 p. 5 and 5/21 p.4). Under the contract, [Seller] ordered its branch in C___ (Germany) to take the graffiti protection coatings to Switzerland, which indeed took place according to the shipment document and the order confirmation dated 13 April 2005. The shipping address was the warehouse of the [Buyer] in D___ [Switzerland] (doc. 5/3/6). In a written document dated 7 February 2006, [Buyer] submitted a complaint because of blistering on some facades following application of the graffiti protection coating on the facades.
1.2. In its submission of 28 June 2007 (doc. 5/2) and following submission of the instruction of the Justice of Peace of D___ dated 26 June 2007 (doc. 5/1), [Buyer] instituted legal proceedings regarding the above mentioned request on the same day at the Hinwil District Court. In an order dated 2 July 2007, the court set a deadline for [Seller] to respond to the claim (doc. 5/6). After several extensions of the deadline (doc. 5/7-17), in its statement of defense of 27 November 2007, [Seller] duly submitted an objection to jurisdiction (doc. 5/18). Subsequently, the response to the statement of defense and the response to the latter were restricted to the matter of venue (doc. 5/19 and 5/23). The response to the statement of defense and the response to the latter were submitted within the deadline on 19 December 2007 (doc. 5/21) and 6 February 2008 (doc. 5/25), respectively. Finally, in its judgment on 24 April 2008, the lower court found the [Buyer]'s claim inadmissible (doc. 3).
1.3 The [Buyer] duly filed an appeal against that decision, arguing that:
"The Judgment of the Hinwil District Court of 24 April 2008 must be reversed and the Hinwil District Court must be ordered to rule that the [Buyer]'s claim of 28 June 2007 is admissible;
The [Seller] must be ordered to pay all other costs and compensations."
In an order handed down on 28 May 2008, [Buyer] was ordered to pay a deposit of 11,000 Sfr under Art. 76 ZPO [Swiss Code of Civil Procedure], which it had paid by the deadline, on 2 June 2008 (doc. 7). The response to the [Buyer]'s appeal dated 26 June 2008 was submitted within the deadline that was specified in the order of 5 June 2008 and extended once (doc. 8 and 10). The [response to the appeal] included [Seller]'s request to dismiss the appeal and to order [Buyer] to pay all costs and compensations (doc. 11). The [Seller]'s response to the appeal and the evidence submitted were communicated to [Buyer] by an order of 15 July 2008 (doc. 14).
In its submission dated 25 August 2008, Plaintiff [Buyer] announced the joinder of A___, a new Plaintiff, as a result of a change of the litigating parties under Art. 49 ZPO [*] (doc. 15/A/B). Subsequently, a deadline was set for [Seller] on 27 August 2008 to present its opinion (doc. 18), which it did within the deadline in its submission on 11 September. In the meantime, in a document filed on 2 September 2008, the Plaintiffs submitted a request for a change of the parties in the lawsuit (doc. 21). In an order on 19 September 2008, the former [Buyer] was replaced by A___ as [Buyer]-Appellant (hereinafter also referred to as "[Buyer]") and the relating submissions of the parties were communicated to the opposing party (doc. 25).
On 10 June 2008, the lower court waived consultations.
2.1. Jurisdiction at the place of performance under Art. 5(1) Lugano Convention
As [Buyer] has its place of business in Germany, this is an international case under Art. 1(1) IPRG [*], as the lower court also found.
Regarding international jurisdiction and venue, the lower court ruled under Art. 1(2) IPRG that the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 16 September 1988 (hereinafter: "Lugano Convention") is applicable by virtue of Art. 1(1) of that Convention, because both Switzerland and Germany are signatories to the Convention and because [the present dispute] involves [Buyer]'s request for damages arising out of non-conforming performance of a contract involving civil and commercial matters (exhibit 3, p. 3). Considering that the subject matter of the present proceedings is a contractual damages claim, the lower court held that the court at the place of performance of the obligation in question has jurisdiction under Art. 5(1) of the Lugano Convention. According to prevailing opinion, besides the direct contractual obligations, secondary obligations, such as the contractual damages claim enforced in the present dispute, may also be adequate to determine jurisdiction under Art. 5(1) of the Lugano Convention. This includes any contractual obligation which was allegedly not performed or defectively performed. Therefore, in this case, the place of performance of the graffiti protection coating agreed upon in the contract controls. In order to determine the place of performance, the lower court determined that the applicable lex causae is the United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980 (hereinafter: CISG), taking into consideration the supremacy of international treaties set forth in Art. 1(2) IPRG, because the performance in question forms part of an international sales contract concluded undisputedly between the parties, and both Switzerland and Germany are signatories to the CISG. The place of performance is basically governed by Art. 31(a)-(c) CISG if the parties did not agree upon the place of performance. The CISG allows for negotiating such an agreement regarding the place of performance and sets forth no specific formal requirements to it. In particular, the formal requirement regarding agreements on jurisdiction, specified in Art. 17 of the Lugano Convention, is not a validity requirement according to the jurisprudence of the European Court of Justice. Therefore, it is basically allowed that the parties conclude such an agreement in writing, orally or even implicitly (exhibit 3, p. 3 et seq.).
These findings of the lower court have not been disputed and they are correct; therefore, no further discussion is needed.
2.2. Facts relevant to admissibility and justification on the merits
a) The [Buyer]'s contention according to which the place of performance determining jurisdiction on the present case concerns a so-called "fact relevant to admissibility and justification on the merits," was not discussed by the lower court based on the reasoning that [Buyer] based its claim on a defect of the goods; therefore, the place of performance and the agreement on the place of performance was irrelevant in determining whether the claim was founded. The jurisdiction [of the court] at the place of performance did not depend on the nature of the defect of the goods either (the claim submitted). In other words, the relevant place of performance, relevant jurisdiction and the alleged agreement on the place of performance were irrelevant regarding the question on the merits, [i.e.,] whether [Seller] must pay damages to [Buyer] for having delivered defective goods; which means that the facts are relevant to admissibility and justification on the merits in the present case. Therefore, the court must decide upon the question of jurisdiction (exhibit 3, p. 6).
b) [Buyer] argued on appeal that, contrary to the ruling of the lower court, the question regarding the place of performance indeed involves facts relevant to admissibility and justification on the merits. That is, the place of delivery/performance was relevant not only regarding international jurisdiction and venue but also for determining whether the liability claims filed were founded. The question whether the contractual liability claim subject to the dispute was founded essentially depends on whether the risk had passed at the place of delivery/performance, and whether the period to give notice of any non-conformity started to run, and, therefore, the conditions of [Seller]'s liability were present (exhibit 2, p. 5). The liability claim submitted was a contractual claim based on Arts. 35(2), 36(1) and 39(2) CISG, which was a prerequisite for the jurisdiction at the place of performance under Art. 5(1) of the Lugano Convention [*]. Consequently, the jurisdiction based on the place of delivery depended on the contractual nature of the claim, contrary to what the lower court ruled. In substantiating the liability claim at issue, [the lower court] based its consideration on the place of performance in D___ (ZH), Switzerland, where the goods were handed over and, consequently, where the risk also passed, because it was only then in a position to assess the suitability of the goods according to [Seller]'s assertion and to assess that the defect was communicated within the two-year deadline under Art. 39(2) [Translator's note: Art. 39(1) in the original text], which consequently incurred [Seller]'s liability under Art. 36(1) CISG. For the latter reasons, the place of performance was, first, dependant on the contractual nature of the liability claim, and, second, as it was the place where the goods were handed over, it was connected with the passing of risk as it was relevant to the [Seller]'s consequent liability. This is how the facts relating to jurisdiction and justification of the claim would be covered. Under the latter circumstances, the lower court based the admissibility of the lawsuit solely on [Buyer]'s presentation of the facts and ruled that [Seller]'s objections could not be verified, consequently, admissibility of the claim should have been initially based on the statement of claim and the claim should have been admitted (exhibit 2, p. 6).
c) The procedural principle, invoked by [Buyer], that the decision on admissibility must be based on the [Buyer]'s claim and its reasoning, and that [Seller]'s relating objections do not have to be considered, applies only if the connecting factor regarding jurisdiction is relevant to the claim as well as the justification of the claim. If that is the case, the so-called fact relevant to admissibility and justification on the merits is examined only in one single step, i.e., in deciding whether the claim is justified on the merits; otherwise, the evidence regarding jurisdiction would coincide with the evidence regarding the merits. However, such an approach cannot possibly be the meaning of the provision on jurisdiction; yet jurisdiction is a prerequisite for the proceedings, the existence of which must be decided upon at the start of the proceedings, rather than only after determining the factual scenario subject to the dispute (BGE 122 III 249 and II 68; Vogel-Sphler, Grundriss des Zivilprozessrechts, 7th ed., Bern 2001, Chapter 4 No. 103b; Guldener, Schweizerisches Zivilprozessrecht, 3d ed., Zürich 1979, p. 106).
The jurisdiction at the place of performance under Art. 5(1) of the Lugano Convention in the present case depends on the contractual nature of the claim. In the present case, jurisdiction of the lower court does not follow from this undisputed fact, but additionally, another connecting factor also has to be decided upon, i.e., the place of performance in D___ [Switzerland] and the respective contractual performance upon which the liability claim is based. The decisive connecting factor regarding admissibility of the claim is, therefore, the disputed place of performance of the graffiti protection coating sold by [Seller] to [Buyer]. On the other hand, the substantive question, whether [Seller] is liable to [Buyer] regarding the graffiti protection coating sold to [Buyer], must be adjudicated independently from the place of performance. The place where the risk passed also goes against [Buyer]'s contention regarding defect of the goods and, therefore, it is irrelevant whether the liability claim is justified. Neither does [Buyer] contend that delivery of the goods was improper or defective. Therefore, the place of performance relevant regarding jurisdiction can be disregarded in confirming the lower court arguments regarding whether the present claim is founded, i.e., there is no fact relevant to admissibility and justification on the merits. The determination of the jurisdiction of the lower court cannot be based solely on [Buyer]'s arguments. Rather, the arguments before the lower court must be evaluated ex officio, first of all, based on the arguments of both parties regarding jurisdiction.
2.3. The place of performance under Art. 5(1) of the Lugano Convention
a) Regarding the concept of the place of performance, the lower court stated that a clear distinction must be made between the place of delivery and the delivery instruction. The place of delivery is the destination of the goods. [The place of delivery] can be freely determined by the parties, without any further legal consequences, i.e., concerning jurisdiction of the courts. The place of delivery can but does not have to coincide with the place of performance in legal terms, and usually this is not the case either. The place of performance is a place where the goods are supposed to get out of the seller's sphere of influence, whereby, the risk passes to the buyer. An obligation regarding a specific item is basically an obligation to be performed at the place of the debtor [Holschuld]. In accordance with that, Art. 31 (a)-(c) CISG, that is the applicable lex causae, provides that the place of delivery is either the place of dispatch or the seller's place of business. Therefore, the seller is obliged to deliver the goods to the buyer, and it does not assume the risk for the goods during transportation. A different agreement on the place of performance can be made legally as long as it includes the parties' agreement regarding significant issues. Thus, it is for the party enforcing such an agreement, to plead that far-reaching consequences, i.e., regarding justification of the jurisdiction and the passing of risk, were identified by the parties and they reached a consensus on those (exhibit 3, p. 5).
In [Buyer]'s submissions, no substantiated arguments could be found regarding when, where and how an agreement had been concluded regarding the place of performance that would substantiate jurisdiction of the court at that place, and the latter issue could not be proved either. The [Buyer]'s evidence was basically limited to a reference to the bill of delivery and [Seller]'s invoice. Yet, these documents showed only that the delivery address was [Buyer]'s warehouse in D___ (Switzerland). No further written agreement is included in these documents. Although an agreement on the place of performance could be implied as well, here again, [Buyer] failed to provide the necessary evidence. In order to state that there was an agreement on the place of performance, it is not enough to make a mere reference to it, especially if the place of delivery was not exactly the same as the place of performance under legal terms. [Buyer] did not present any factual arguments that could be qualified as an objection to an agreement on the place of performance; therefore, it is unnecessary to perform any relating examination. In addition, approval of an agreement having huge disadvantages to a party should not be implied in a frivolous manner. In any event, [Buyer] should not have stated that [Seller] approved the agreement on the place of performance, based on an agreement on the place of delivery. In lack of such an agreement, the place of delivery must be determined in accordance with Art. 31(a)-(c) CISG. Under those provisions, the place of performance was not in Switzerland but in Germany. Therefore, [Seller]'s argument regarding lack of jurisdiction must be admitted and the [Buyer]'s claim must be rejected (exhibit 3, p. 6-8).
b) In this respect, before the lower court, [Buyer] submitted an assessment of the facts that was arbitrary and contrary to the record, and violated the right to a court hearing when it refused to conduct the taking of evidence (exhibit 2, p. 4). The ruling of the lower court, according to which the place of performance of the contractual obligation regarding the graffiti protection coating was in Germany, was apparently contrary to the record, yet the fact that the place of delivery agreed upon in the contract was D___ in Switzerland follows from [Seller]'s written offer of 9 February 2005, which the then general manager, Antonio Curcillo, accepted on the phone under the condition that the goods must be handed over in D___ (delivery free of charge [franco]). Therefore, the parties concluded a contract for the delivery of goods, with the place of performance being D___, under Art. 118 IPRG [*] in connection with Arts. 1, 3 and 4 CISG. [Seller] transported the graffiti protection coating in accordance with the agreement, as an obligation to be performed at the creditor's place [Bringschuld], cleared the customs at the border and finally delivered the goods to D___. [Seller] confirmed this agreement in writing in the order confirmation on 13 April 2005 under the note "Delivery address: Warehouse D___" as well as in the invoice of 18 April 2005 under the note "Delivery: 13 April 2005, free of charge [franco] at the warehouse" (exhibit 2, p. 3). On page 8 of the appealed judgment dated 24 April 2008, the lower court indicated that the agreement on delivery of the goods in D___ (ZH) [Switzerland] is [an agreement on] the place of delivery, yet it drew the wrong legal conclusion from this, [i.e.,] that the agreement on a place of delivery is not synonymous with the conclusion of an agreement on the place of performance. However, the lower court ignored that the place of delivery under the CISG is the place where the seller must deliver the goods, i.e., where the seller must perform its contractual obligation. If the seller carries the goods with its own transport vehicle or through performance agents, as [Seller] did in this case, the seller bears the risk during the carriage. An agreement under the first sentence of Art. 31 CISG allows passing of the risk to the buyer only if the goods are located at the place agreed upon. When the seller's duty to deliver was part of the contract, as it was in this case, it is not governed by the first sentence of Art. 31(a) CISG, where the seller hands over the goods to a carrier, but rather it is a Bringschuld according to which the seller must deliver the goods to a specific place (place of delivery). Therefore, the place of delivery agreed upon (D___) is also the place of performance regarding the obligation to be performed by [Seller] (exhibit 2, p. 9 et seq.). An agreement on a place of performance (place of delivery) can be concluded without any formal requirement. Under Art. 11 CISG, a relevant oral agreement can be proved by any means, including witnesses. By its refusal to conduct the taking of [relating] evidence, the lower court violated the right to a court hearing and the right to present evidence (exhibit 2, p. 10).
In addition, it was stated already before the lower court in the statement of claim dated 28 July 2007 (no. I.3 and I.6) as well as in the answer dated 19 December 2007 (no. 4.3) that the parties had agreed upon an actual place of performance in D___ that establishes jurisdiction, under the first sentence of Art. 31 CISG. In this respect, it was also presented in the answer dated 19 December 2007 (no. 4.5) that the then General Manager, Antonio Curcillo, accepted on the phone [Seller]'s offer to deliver goods, dated 9 February 2005, under the condition that the goods are handed over (performance) by [Seller] on 13 April 2005 in D___ (delivery free of charge [franco]), which was laid down in writing in the order confirmation on 13 April 2005 under the note "Delivery address: Warehouse D___" as well as in the invoice of 18 April 2005 under the note "Delivery: 13 April 2005, free of charge [franco] at the warehouse". Thus, [Buyer] argued that [Seller] confirmed the delivery order indicating D___ as the place of performance in writing in the order confirmation of 13 April 2005. In particular, it referred to the signature of General Manager Antonio Curcillo regarding the confirmation of receipt and inspection, from which it is apparent that handing over and visual inspection of the goods had taken place and the risk had passed in the warehouse in D___. In addition, [Buyer] explained before the lower court that [Seller] took care of customs clearance and carriage, regarding which and the goods an invoice was sent on 18 April 2005, and [Seller] did not contest the latter. Thereupon, [Seller] itself proved the above-mentioned agreement on delivery of the goods and on the handing over of the goods in D___, thereby also [the agreement] on the Bringschuld through the [Seller]'s order confirmation dated 13 April 2005, and admitted on the record, under the note "Delivery address: Warehouse D___" as well as under the note "Delivery: 13 April 2005, free of charge [franco] at the warehouse" in [Seller]'s invoice dated 18 April 2005. As additional evidence, the witness statement of Antonio Curcillo and the [Seller]'s original customs documents dated 13 April 2005 were offered. The questioning of Antonio Curcillo showed that he requested on the phone delivery of the goods to D___, i.e., also the handing over and the examination of the goods were supposed to take place there, and [Seller] agreed to this. Thereby, [Buyer] presented statements of fact duly justified under the law against the contrary findings of the lower court, regarding which the evidence offered could have been accepted. However, the lower court wrongly rejected these statements of fact and the evidence offered, without sufficient justification (exhibit 2, p. 7).
For the above reasons, local jurisdiction of the lower court [i.e., venue] must be affirmed in the present case, in the alternative, a relating procedure of taking evidence is still to be performed (exhibit 2, p. 10).
c) The CISG, being the applicable lex causae in the present case, provides in Art. 31 where the seller has to deliver for the purposes of a proper performance (place of delivery) and what the seller has to do in order to deliver the goods (meaning of the duty to deliver). Thereby, contrary to its wording, Art. 31 CISG does not determine the place where the duty to perform arises [Erfolgsort] or the destination of the goods, but rather the place of performance that is relevant to determine the jurisdiction, [i.e.,] where the seller must perform the acts of performance [Leistungshandlung]. The place of delivery under Art. 31 CISG is also regulated parallel to the passing of the price risk, and, according to prevailing theory and jurisprudence, it is relevant to international jurisdiction under the Lugano Convention [*] and the IPRG [*] (Brunner, UN-Kaufrecht - CISG, Bern 2004, Art. 31 nos. 1 and 15; Honsell-Karollus, Kommentar zum UN-Kaufrecht, Berlin etc. 1997, no. 43 on Art. 31). Yet, the places of delivery regulated by the law under Art. 31(a)-(c) CISG are only subsidiary, [i.e., they apply] when the seller is not obligated to deliver to a specific place (first sentence of Art. 31 CISG). Thereupon, a place of performance relevant for international jurisdiction can also be determined based on an agreement on the place of delivery under the first sentence (Schraner, Zrcher Kommentar, Obligationenrecht, Art. 74 no. 42).
Interpretation of the contract is necessary in order to determine whether the parties in the present case intended to set a place of performance relevant to international jurisdiction as well when they undisputedly agreed upon the place of delivery being [Buyer]'s warehouse in D___ [Switzerland]. The interpretation cannot be based solely on the text, and in particular, it cannot be the starting point that the legal notions of the place of delivery and the place of performance are correctly kept apart in everyday language and business language. Rather, the presumed intent of the parties must be established based on the principle of good faith. As the lower court pointed out correctly, there are no formal requirements regarding an agreement on the place of delivery that is relevant to jurisdiction; therefore, in the present case the express as well as the implied intent of the parties is relevant. This is how, in certain circumstances, a place of performance relevant to jurisdiction may also be determined by way of a provision setting forth the place of delivery, depending on whether the parties wanted to agree upon a Bringschuld, or a so-called Schickschuld or Versendungsschuld [the place of performance is the debtor's place of business but the act of performance takes place at the creditor's place of business] (Brunner, UN-Kaufrecht - CISG, Bern 2004, Art. 31 no. 15; Schraner, Zürcher Kommentar, Obligationenrecht, Art. 74 no. 42). [Buyer] actually argued a situation which could possibly be qualified as an agreement on the place of performance.
In the present case, regarding the assumption that a Bringschuld was agreed upon, it is decisive that, in addition to the duty to transfer possession and property [of the goods], [Seller] also agreed to deliver the graffiti protection coating itself, i.e., by its own staff and its own transport vehicle, to one of the places of business of the then [Buyer] in D___ (exhibit 5/26/1-4). Such agreements are common in practice but they must be distinguished from the so-called distance sales, because in case of distance sales the seller agrees to ship the goods through a third party and by a common means of transport such as by post, railway or boat to the buyer's place of business or to another place specified by the buyer. This is called a Schickschuld or Versendungsschuld which may also be described as a modified Holschuld. As the lower court pointed out correctly, an agreement on a distance sale does not, by itself, supposedly change the place of performance, because the seller performs its obligation by dispatching the goods for shipping or handing over the goods to the first carrier for transporting it to the buyer, although the performance, i.e., the transfer of possession and property of the goods occurs only at the buyer's place of business when the buyer takes delivery of the goods (place of performance). However, if the seller's performance consists of several acts (so-called units of performance), as is the case here, the applicable law is that of the place where the last act of performance must take place. According to that, in case of the seller's additional duty to deliver the goods, the place of performance relevant to jurisdiction is supposed to be the location where the seller must transfer possession and property of the goods. Thus, contrary to the finding of the lower court, the seller's additional obligation to deliver the goods itself may not be subsumed under the terms Versendungsschuld or Schickschuld. Rather, a respective good faith agreement between the parties must be understood as an agreement upon Bringschuld (Giger, Berner Kommentar, Obligationenrecht, Bern 1979, Art. 189 no. 16; Valloni, Der Gerichtsstand des Erfllungsortes nach Lugano- und Bürsseler-bereinkommen, Dissertation, Zürich 2004, p- 271). Contrary to the ruling of the lower court, it follows from the agreement of the parties that the seller itself must deliver the goods that, at the time of the agreement on the place of delivery, the parties also intended to determine the place of performance relevant to jurisdiction.
Based on these considerations, in the present case, the place of delivery, that was undisputedly agreed upon by the parties as being in D___ [Switzerland], must be qualified as the place of performance under Art. 5(1) of the Lugano Convention. This also corresponds with the reasoning regarding jurisdiction of the court at the place of performance, according to which the place of jurisdiction that must be made accessible to the [Buyer] is the one that represents a real alternative to that of the [Seller] and has the closest possible relationship to the dispute. Thus, regarding approval of the recourse for the claim submitted, the lower court has international and local jurisdiction [i.e., venue] based on Art. 1(2) IPRG [*] in connection with Art. 1(1) and Art. 5(1) of the Lugano Convention [*], therefore, the [Buyer]'s claim must be admitted.
3. Costs and compensations on appeal
3.1. The court fees in a property law dispute, as is the present case, must generally be calculated based on the amount in dispute, in accordance with the Court Fee Regulation of the Cantonal Appellate Court dated 4 April 2007 (Art. 4(1) of the Regulation). However, under Art. 4(2) of the Regulation, it can be reduced by up to one-third of the amount, which is available in the present case, because in the present appeal it was not necessary to rule on the merits, only on jurisdiction. Considering the amount in the present dispute (162,430.65 Sfr), the relevqant court fee is 7,500 Sfr (Art. 4(1) and (2) of the Regulation, in comparison with Art. 13(1) and (2) of the Regulation).
3.2. Based on the outcome of the procedure, the costs of appeal must be paid by [Seller] (Art. 64(2) ZPO [*]).
3.3. As [Buyer] provided security for the costs of the appeal under Art. 76 ZPO (exhibit 6), the costs of appeal to be borne by [Seller] must be drawn in advance from the security provided in the amount of 11,000 Sfr, subject to granting [Buyer]'s relating right of recourse against [Seller] (Art. 67(3) ZPO).
3.4. According to the Regulation, [Seller] is ordered to pay to [Buyer] a procedural compensation of 7,000 Sfr (Art. 12(2) of the Regulation).
THE COURT RULES AS FOLLOWS
|1.||The [Buyer]'s appeal is granted, the judgment of the Hinwil District Court of 24 April 2008 is
reversed, and the lower court is ordered to admit the claim.
|2.|| The court fee on second instance is 7,500 Sfr.
|3.||[Seller] shall bear the costs of the appeal. The costs payable by [Seller] in the amount of 7,500 Sfr
will be drawn from the security provided by [Buyer], which sum must be shifted from [Seller] to
|4.|| [Seller] is ordered to pay to [Buyer] a procedural compensation for the appeal in the amount of
|5.||[This judgment] is communicated to the parties and the Hinwil District Court with a certificate of
receipt. The files from the first and second instance shall be sent to the lower court after the deadline to
appeal expires and no appeal is filed within that period.
|6.||Pursuant to Art. 281 of the Code of Civil Procedure (ZPO), against this decision, a complaint for annulment on cantonal level may be filed within 30 days upon receipt, with the Zrich Supreme Court (P.O. Box, 8022 Zrich), in two copies and meeting the formal requirements set forth in Art. 288 ZPO. Admissibility and conditions of a complaint under federal law against this decision are governed by the provisions of the federal law on the Supreme Court (BGG, in particular, Art. 72 et seq., Art. 90 et seq. and Art. 113 et seq.). A possible complaint must be filed with the Swiss Federal Supreme Court in Lausanne within 30 days. If no complaint for annulment is made on cantonal level, the deadline to submit a complaint against the decision on federal level starts to run only after the decision of the [cantonal] Supreme Court is issued.|
* All translations should be cross-checked against the original text. For purposes of this translation, Plaintiff-Appellant of Germany is referred to as [Buyer] and Defendant-Appellee of Switzerland is referred to as [Seller]. Amounts in Swiss currency (Swiss francs) are indicated as [Sfr].
Translator's note on other abbreviations: IPRG = International Private Law of Switzerland; Lugano Convention = Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 16 September 1988; ZPO = Swiss Code of Civil Procedure.
** Andrea Vincze is a Fellow of the Institute of International Commercial Law of the Pace University School of Law. She received her law degree from the University of Miskolc, Hungary, and her LL.M. at Pace Law School. She is working on her Ph.D. on ICSID arbitration, and is researching international commercial law and ADR.Go to Case Table of Contents