Switzerland 26 June 2009 Bundesgerichtshof [Federal Supreme Court] (Graffiti protection coating case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/090626s1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 4A_131/2009
CASE HISTORY: 1st instance Bezirksgericht Hinwil (CG 070028) 24 April 2008; 2d instance Obergerichts des Kantons Zurich 6 February 2009 [affirmed]
SELLER'S COUNTRY: Switzerland (defendant)
BUYER'S COUNTRY: German (plaintiff)
GOODS INVOLVED: Graffiti protection coating
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
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1498&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (German): Swiss Supreme Court website <http://www.bger.ch>; CISG-online.ch website <http://www.globalsaleslaw.com/content/api/cisg/urteile/1908.pdf>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1498&step=FullText>
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
26 June 2009 [4A_131/2009]
Translation [*] by Florian Arensmann [**]
The Federal Supreme Court of Switzerland is represented by Federal Judge Klett (Presidency of the Federal Supreme Court) and the Federal Judges Rottenberg Liatowitsch and Kiss.
This is a dispute between Plaintiff X___ (hereafter referred to as "[Buyer]"), represented by Dr. Felix Fischer und Patrick von Arx, attorneys vs. Defendant Y___ AG [*], represented by Ulrich Aellen, attorney.
[Seller] is a construction agency and commodity trader seated in Germany. In February or March 2005, [Seller] entered into a sales contract for 191 kg of graffiti-preservative with Z.____, painter, plasterer and welder. Z.____ is the legal predecessor of Y___ AG (hereafter referred to as [Buyer]), seated in Switzerland.
[Seller] obligated itself to deliver the graffiti-preservative to Switzerland. According to the delivery note of 13 April 2005, the goods were delivered to the depot of [Buyer]'s legal predecessor at A___ Street in B___ [Switzerland].
By letter of 7 February 2006, [Buyer]'s legal predecessor gave notice to [Seller] of defects in the graffiti-preservative causing blisters on diverse front-areas where it had been applied.
[Buyer]'s legal predecessor filed suit at the District Court (Bezirksgericht) Hinwil, submitting an order of a Justice of the Peace of B___ demanding payment by [Seller] of 162,430.65 Swiss francs [Sfr.] plus 5% interest since 15 April 2007 as well as 357.00 Sfr. for the costs of the order of the Justice of the Peace. [Seller] disputed the jurisdiction of the Court and the proceedings were limited to that issue. In its decision of 24 April 2008, the District Court Hinwil did not accept jurisdiction.
[Buyer]'s legal predecessor appealed to the Court of Appeals of the Canton of Zurich (Obergericht). [Buyer]'s legal predecessor requested the Court of Appeals to repeal the decision of the District Court and to order that Court to admit the claim. By decision of 19 September 2008, [Buyer] was accepted into the proceedings in place of its legal predecessor.
By decision of 6 February 2009, the Court of Appeals granted [Buyer]'s appeal and approved the international and local jursidiction of the District Court. The decision of the District Court Hinwil dated 24 April 2008 was repealed and the District Court was ordered to admit the [Buyer]'s claim.
With an objection in civil matters dated 13 March 2009, [Seller] requests the Federal Supreme Court (Bundesgericht) to reverse the decision of the Court of Appeals of the Canton of Zurich of 6 February 2009 and to approve the decision of the District Court of 24 April 2008. Furthermore, [Seller] asks to grant the objection a suspensive effect.
[Buyer] seeks to have the Federal Supreme Court dismiss the [Seller]'s objection as far as it is to be dealt with at all, and to approve the decision of the Court of Appeals of 6 February 2009.
The Court of Appeals waived a hearing. [Seller] submitted a reply and [Buyer] a rejoinder.
By order of 8 April 2009, [Buyer]'s request for a preliminary decision concerning the admissibility of the objection with regard to Art. 75(1) BGG [*] was dismissed. The [Seller]'s objection was granted a suspensive effect by order of 29 April 2009.
1. The Federal Supreme Court examines ex officio and in free cognition whether a remedy is admissible or not (BGE 135 III 1 E. 1.1).
1.1 The challenged decision by which the Court of Lower Instance ruled that the District Court Hinwil can accept the case is an independently issued preliminary decision concerning jurisdiction. According to Art. 92(1) BGG such decisions can be appealed by filing an objection in civil matters. However, according to the principle of entity of trial the preliminary decision is only subject to appeal if it is also the final decision (BGE 133 III 645 E. 2.2). This applies to the case at hand. Particularly, the required value in dispute (Art. 74(1)(b) BGG) is met since the main issue is a proprietary issue with a value in dispute of 162,430.65 Sfr.
1.2 The sequence of courts must be finished before a cantonal decision can be appealed by the filing of an objection in civil matters, Art. 75(1) BGG. There must not be any cantonal remedies for a complaint before it can be raised by an objection in civil matters (BGE 134 III 524 E. 1.3 p. 527). According to § 281 ZPO/ZH [*], preliminary, partial and final decisions as well as decisions concerning appeals and decisions of renvoi in appeal proceedings can be subject to an action of nullity if the plaintiff argues that the challenged decision is -- to his detriment -- based on:
|-|| a violation of essential principles of trial (No. 1);
|-||an assumption which is contrary to the record or arbitrary (No. 2); or
|-||a violation of distinct substantive law (No. 3).|
However, the action of nullity is precluded if the Federal Supreme Court is able to freely examine a defect (§ 285(2) ZPO/ZH; BGE 133 III 585 E. 3.2 p. 586 f.). [Seller]'s objection that the Court of Appeals of the Canton of Zurich wrongfully and in violation of federal law accepted the international and local jurisdiction of the District Court Hinwil will be examined freely by the Federal Supreme Court. For this reason, the (cantonal) sequence of courts is -- contrary to [Buyer]'s detailed submission -- finished.
1.3 Since the other admission requirements are fulfilled as well, the objection in civil matters is -- apart from submissions by [Seller] exceeding the facts of the case which were determined by the Court of Lower Instance -- admissible.
2. 2.1 The Federal Supreme Court bases its decision on the facts of the case determined by the Court of Lower Instance (Art. 105(1) BGG). According to Art. 105(2) BGG, the facts of the case as determined by the Court of Lower Instance can only be changed or amended by the Federal Supreme Court if they are apparently false or based on a violation of law in terms of Art. 95 BGG. Moreover, it must be essential for the result of the proceedings that the defect is cured (Art. 97(1) BGG). New facts and evidence may only be submitted if the decision of the Court of Lower Instance gives reason to that (Art. 99 BGG).
[Seller], who wants to dispute the facts of the case determined by the Court of Lower Instance, has to substantiate to what extent the requirements for an exception according to Art. 105(2) BGG are fulfilled and in what way the proccedings would have had another result if the facts of the case had been determined correctly; otherwise, facts which deviate from the facts determined in the decision of the Court of Lower Instance cannot be considered. A submission which does not fulfill these requiremensts will not be allowed (cf. BGE 133 III 350 E. 1.3, 462 E. 2.4). In the instant case, the objection of arbitrarily determined facts cannot be considered since a cantonal action of nullity at the Court of Cassation would have been the proper remedy (cf. 1.2.).
2.2 Contrary to the law, [Seller]'s submission deviates significantly from the facts of the case previously determined and amends them. This is, for example, the case if [Seller] submits that it charged [Buyer] an additional fee for the delivery of the goods and thus argues that there was concluded not only the sales contract with [Buyer] but also a separate contract concerning the delivery of the goods. These submissions by [Seller] cannot be considered.
3. In the present case, the international and local jurisdiction of the District Court Hinwil for [Buyer]'s action for damages against [Seller] is in dispute. [Seller] objects that the Court of Lower Instance has wrongfully approved the jurisdiction of the District Court and thus violated Art. 2, Art. 5 no. 1 LugÜ [*], Art. 31 CISG [*], and Art. 74 OR [*] as well as the principle of mutual trust provided by the Swiss Law of Obligations. [Seller] alleges that the claim is subject to the jurisdiction of German courts. In contrast, [Buyer] takes the view that the District Court Hinwil has jurisdiction since the place of performance in terms of Art. 5 no. 1 LugÜ is in B___ [Switzerland].
4. 4.1 Due to the domicile of [Seller] being in Germany, the issue is an international one in terms of Art. 1(1) IPRG [*]. According to Art. 1(2) IPRG, the Lugano Convention on Forum and Execution [LugÜ] is applicable to the determination of international jurisdiction. As the Court of Lower Instance rightly discovered, the LugÜ is both factionally and personally applicable. This is not disputed by either party. This is the case since the present dispute -- an action for damages out of contract -- is a civil and commercial issue in terms of Art. 1 LugÜ. Moreover, [Seller] is domiciled in a Contracting State to the LugÜ.
4.2 According to Art. 5 no. 1 LugÜ, [Buyer] is entitled to claim damages from [Seller] for the delivered graffiti-preservative being allegedly defective at the jurisdiction of the place of performance. If a contract or a claim arising out of a contract is the subject-matter, Art. 5 no. 1 LugÜ enables the plaintiff ([Buyer] in this case) to sue the defendant ([Seller] in this case) -- alternatively to the place of general jurisdiction according to Art. 2 LugÜ -- at the court of the place where the obligation has been or should have been fulfilled (BGE 133 III 282 E. 3.1 p. 285; 124 III 188 E. 4a p. 189).
The obligations arising out of a contract comprise not only general duties such as payment and performance but also obligations which substitute for a contractual obligation not being performed as provided in the contract, e.g., claims for damages.
Apart from that, in a legal dispute concerning the consequences of a breach of contract in which damages are claimed, consideration is to be given to the primary main obligation which has not been fulfilled according to the contract (cf. Judgment 4C.100/2000 of 11 Juli 2000 E. 4c. with further references). In the instant case, the relevant primary main obligation of [Seller] is the delivery of the graffiti-preservative free of defects.
4.3 According to the governing law, the place of performance in terms of Art. 5 no. 1 LugÜ is not determined autonomously, but by the law which is applicable to the contractual obligation (lex causae; BGE 124 III 188 E. 4a; 122 III 43 E. 3b p. 45, 298 E. 3a p. 300, each with further references). The term of the place of performance will only be determined autonomously with Art. 5 no. 1 lit. b revLugÜ of 30 October 2007 [*] coming into effect.
The Court of Lower Instance considered the place of performance at hand to be determined by the CISG. The application of the CISG as lex causae is not disputed by the parties and is confirmed, Art. 1(1)(a) CISG.
4.4 [Seller] considers inapplicable the understanding of the Court of Lower Instance that a place of performance -- which is is decisive for the international jurisdiction -- can be determined by an agreement concerning the place of delivery in terms of Art. 31 CISG. In [Seller]'s view, the Court of Lower Instance violated Art. 31 CISG by concluding that [Buyer]'s depot in B___ [Switzerland], undisputedly agreed upon to be the place of delivery, was also to be qualified as the place of performance in terms of Art. 5 no. 1 LugÜ.
4.4.1 Art. 31 CISG specifies -- as long as there are no special agreements between the parties, usages or practices established between themselves -- the place to which the seller has to deliver the goods for a proper performance (place of delivery) and which arrangement regarding the delivery of the goods the seller has to make (content of the obligation to deliver) (Brunner, loc. cit., Art. 31 CISG para. 1; Karollus, in: Honsell, Kommentar zum UN-Kaufrecht, 1997, Art. 31 CISG para. 4; Staudinger/Magnus, Kommentar zum Bürgerlichen Gesetzbuch, Wiener UN-Kaufrecht, 2005, Art. 31 CISG para. 1; cf. Art. 6 and 9 CISG as well).
The place of delivery determined by Art. 31 CISG can also be an indication for provisions of procedural law which are linked to the place of performance (Brunner, UN-Kaufrecht - CISG, 2004, Art. 31 CISG para. 15; Karollus, loc. cit., Art. 31 CISG para. 4; Alexander R. Markus, Tendenzen beim materiellrechtlichen Vertragserfüllungsort im internationalen Zivilverfahrensrecht, 2009, p. 50; Helga Rudolph, Kaufrecht der Export- und Importverträge, Kommentierung des UN-Übereinkommens über internationale Warenkaufverträge mit Hinweisen für die Vertragspraxis, 1996, Art. 31 CISG para. 5e; Staudinger/Magnus, loc. cit., Art. 31 CISG para. 2; Widmer, in: Schlechtriem/Schwenzer, Kommentar zum Einheitlichen UN-Kaufrecht, 5th ed., 2008, Art. 31 CISG para. 87).
The place of delivery agreed upon by the parties in terms of Art. 31 CISG can basically also be the place of performance where the latter has its place of jurisdiction (Brunner, loc. cit., Art. 31 CISG para. 15; Rudolph, loc. cit., Art. 31 CISG para. 8 and 5e). Particularly, the place where the seller has to surrender the goods to the buyer in case of a debt to be discharged at the creditor's domicile can simultaneously be the place of performance in terms of Art. 5 no. 1 LugÜ (Valloni, Der Gerichtsstand des Erfüllungsortes nach Lugano- und Brüsseler-Übereinkommen, 1998, p. 271; cf. also Brunner, loc. cit., Art. 31 CISG para. 15 no. 731).
4.4.2 As the Court of Lower Instance correctly determined, the parties at hand agreed upon a debt to be discharged at the creditor's domicile by [Seller] having obliged itself to deliver the graffiti-preservative to the place of [Buyer]'s depot. Consequently, the Court of Lower Instance correctly concluded that the place of performance, in terms of Art. 5 no. 1 LugÜ, is in B___ [Switzerland] and thus, the District Court Hinwil has international and local jurisdiction.
4.5 [Seller]'s further objections that the Court of Lower Instance has violated Art. 75 OR as well as the principle of mutual trust provided by the Swiss Law of Obligations (more precisely: the rules of interpretation of Art. 8 CISG) are unfounded. It cannot be seen and is neither explained in detail by [Seller] to what extent the Court of Lower Instance may have violated the principle of mutual trust while interpreting the contract. [Seller] only contrasts the convincing interpretation of the contract by the Court of Lower Instance with its own assertion that the parties had agreed upon a separate contract concerning the delivery of the goods. However, these submissions cannot be considered (see above 2.2.). By complaining that Art. 75 OR has been violated, [Seller] misjudges the applicability of that provision to the instant case, since the place of performance is to be determined by reference to the CISG.
5. For these reasons, the [Seller]'s objection in civil matters is dismissed as far as it is to be dealt with. For this result of the legal proceeding, [Seller] becomes liable to pay the costs and compensation (Art. 66(1) and Art. 68(2) BGG).
The Federal Supreme Court therefore orders:
|1.||The objection in civil matters is dismissed as far as it is to be dealt with;
|2.||The court fees of 4,000.00 Sfr. are imposed on [Seller];
|3.||[Seller] is obliged to pay [Buyer] compensation in the amount of 5,000.00 Sfr.;
|4.||Written notice of this judgment will be given to the parties and to the Court of Appeals of the Canton of Zurich.|
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Seller] and Defendant of Switzerland is referred to as [Buyer].
Translator's note on other abbreviations: AG = Aktiengesellschaft [corporation]; BGG = Bundesgerichtsgesetz [Swiss Federal Supreme Court Act]; CISG = United Nations Convention on Contracts for the International Sale of Goods; IPRG = Bundesgesetz über das internationale Privatrecht [International Private Law of Switzerland]; LugÜ = Luganer Gerichtsstands- und Vollstreckungsübereinkommen vom 16 September 1988 [Lugano Convention on Forum and Execution]; OR = Obligationenrecht [Swiss Law of Obligations]; revLugÜ = Revision des Luganer Gerichtsstands- und Vollstreckungsübereinkommens vom 30. Oktober 2007 [revised edition of Lugano Convention on Forum and Execution]; Sfr. = Swiss francs [currency of Switzerland]; ZPO/ZH = Gesetzes des Kantons Zürich über den Zivilprozess vom 13. Juni 1976 [Civil Procedure Code of the Canton of Zurich].
** Florian Arensmann is a law student at the University of Osnabrück, Germany, and participated in the 13th Willem C. Vis International Commercial Arbitration Moot with the team of the University of Osnabrück.Go to Case Table of Contents