Slovak Republic 20 March 2009 District Court in Topolcany (Beer case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/090320k1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 7 Cb/82/2007
CASE HISTORY: 1st instance District Court Topolcany (7 Cb/82/2008) 19 May 2005; 2d instance Regional Court Nitra 12 November 2008 [reversing and remanding]
SELLER'S COUNTRY: Slovak Republic (defendant)
BUYER'S COUNTRY: Czech Republic (plaintiff)
GOODS INVOLVED: Beer
APPLICATION OF CISG: Yes, but case dismissed without ruling on the merits
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): Click here for Slovak text of case
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
20 March 2009 [7 Cb/82/2007]
Translation [*] by Juraj Kotrusz [**]
IN THE NAME OF THE SLOVAK REPUBLIC
The District Court of Topolcany, deciding 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 the validity of [Seller]'s avoidance of contract
h a s d e c i d e d a s f o l l o w s:
The Court dismisses the [Buyer]'s action on the invalidity of the termination of sale contract no. 80/EX 03 concluded on 31 July 2003 between the parties to the proceedings and modified by amendments no. 1 to 5 done by letters of [Seller] of 10 October 2006 and 31 October 2006.
The [Buyer] is obliged to pay to 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.
By its action, the [Buyer] sought a ruling that the termination of contract no. 80/EX 03 concluded on 31 July 2003 and modified by amendments no. 1 to 5 done by letters [Seller] of 10 October 2006 and 31 October 2006, was invalid, stating that the [Buyer] had duly performed all its obligations and had committed no breach that would justify termination of the contract.
The [Seller] opposed the [Buyer]'s action and asked the Court to dismiss it, arguing that the [Buyer] did not prove the existence of an urgent legal interest on the part of the [Buyer] in such a decision and did not prove that the [Buyer] did not breach art. XI part 1 and art. XII part 6 of the contract, i.e., that [Buyer] return the packing within 90 days, and that [Buyer] did not use the beer intended for sale in the Czech Republic for further export.
The Court initially decided the case in its judgment of 19 May 2008, rec. no. 7 Cb/82/2007-242 whereby it upheld the [Buyer]'s action in its entirety and bound the [Seller] to reimburse the costs of the proceedings of the [Buyer]. However, this judgment was overruled by the resolution of the Regional Court in Nitra of 12 November 2008, rec. no. 15 Cob/180/2008-297 and the case was returned to this Court for further proceedings due to the fact that the dispute should have been qualified under the UN Convention on Contracts for the International Sale of Goods published in the Collection of Acts as no. 160/1991 Coll., and the Court should have initially determined the existence of an urgent legal interest of the [Buyer] in such a decision, with reference to sec. 80 letter c) of the Slovak Civil Procedure Code.
With reference to the evidence gathered in the previous proceedings, the Court determined that the parties to the contract concluded on 31 July 2003 (contract of sale no. 80/EX/03 on delivery of beer and non-alcoholic beverages produced by the [Seller]), which was entered into for an indefinite period of time and was changed by amendments no. 1 to 5. The [Seller] declared the contract avoided by its letter of October 2006 addressed to the [Buyer] reasoning that the [Buyer] breached its obligation under art. XI part 1 of the contract and subsequently insisted on its avoidance by its letter of 31 October 2006 referring to the breach of art. XII part 6 of the contract.
The [Buyer] disagreed with termination of the contract and therefore filed an action asking the Court to rule that the avoidance of the contract by the [Seller] was invalid. The [Buyer] 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 that the [Seller] declared the contract avoided without any previous notices and that, even prior to this avoidance, the [Seller] had failed to perform deliveries under the contract. The [Buyer] further alleged that it did not breach the contractual provision on returning of packings and stated that it had an urgent legal interest in the decision at the time of the filing of the action and that it is prepared to continue performance of the contract immediately after the decision is made. Once the Court upholds the [Buyer]'s action, the [Seller] will be forced to perform its obligation under the contract or enter into a new contract on further business cooperation will be concluded by the parties to the proceedings.
The [Seller] alleged the absence of an urgent legal interest on the part of the [Buyer] 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 any purchase orders or perform any other action proving its intent to continue in business with the [Seller].
Under sec. 80 letter c) of the Slovak Civil Procedure Code (hereinafter referred to as CPC), a plaintiff can demand from the Court by its action to decide on the existence or non-existence of a certain right or legal relationship, once it is shown tht the plaintiff has an urgent legal interest in such decision.
With reference to the evidence gathered, the Court found that the action of the [Buyer] demanding a decision on the invalidity of the avoidance of contract was ill-reasoned, as the [Buyer] did not prove its urgent legal interest in such decision. The Court therefore dismissed the [Buyer's action in its entirety. An action for decision on the existence of a certain right must present 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. The requirement of the existence of an urgent legal interest in such a decision must be examined prior to investigation of the merits of the case, as otherwise parties to the proceedings could bother the Court with academic disputes having no practical impact on their legal relationship. A party can always sue for performance of certain obligations and thereby avoid the need to prove existence of urgent legal interest. The Court will therefore always dismiss an action for decision on the existence of a right without examination of merits of the case, where no urgent legal interest is proved (judgment 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 its urgent legal interest on the decision claimed by the action, since assuming the Court were to uphold such action, no change in the legal position of the [Buyer] would occur and the [Seller] would not be forced by such a decision to perform its obligations under the contract. Therefore, the [Buyer] would, after all, have to file another action for performance of [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 the existence of an urgent legal interest in a decision on the validity of [Seller]'s avoidance of the contract, the Court dismisses the [Buyer]'s action without examination of 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 to the [Seller] full reimbursement of its costs, as it was successful in its defense in its entirety.
Instruction: Any appeal against this judgment must be filed via this Court within fifteen days from 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