Slovak Republic 11 October 2010 District Court in Michalovce [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/101011k1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 22Cb/152/2010
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Czech Republic (plaintiff)
BUYER'S COUNTRY: Slovak Republic (defendant)
GOODS INVOLVED: [-]
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
7C ; 7C22 ; 7C23 [Gap-filling ; Recourse to general principles on which Convention is based ; Gap-filling by domestic law]; 11A ; 11B [Writing or other formality for conclusion of contract ; Proof of contract by any means, including witnesses]; 30A [Summary of seller’s obligations]; 31A [Contracts involving carriage of goods]; 53A ; 53B [Obligation to pay price of goods ; Obligation to take delivery of goods]; 59A ; 59B [Payment due at time fixed or determinable by contract or Convention ; No need for request by seller or other formality]; 78A [Interest on delay in receiving price or any other sum in arrears]
7C ; 7C22 ; 7C23 [Gap-filling ; Recourse to general principles on which Convention is based ; Gap-filling by domestic law];
11A ; 11B [Writing or other formality for conclusion of contract ; Proof of contract by any means, including witnesses];
30A [Summary of seller’s obligations];
31A [Contracts involving carriage of goods];
53A ; 53B [Obligation to pay price of goods ; Obligation to take delivery of goods];
59A ; 59B [Payment due at time fixed or determinable by contract or Convention ; No need for request by seller or other formality];
78A [Interest on delay in receiving price or any other sum in arrears]
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
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
11 October 2010 [22 Cb/152/2010]
Translation [*] by Juraj Kotrusz [**]
IN THE NAME OF THE SLOVAK REPUBLIC
The District Court of Michalovce, decided by a single judge, JUDr. Igor Ragan, in the case of Plaintiff D., s.r.o. [Seller], with its registered office in C.T., ___, Czech Republic, ___, versus Defendant A. & G., s.r.o. [Buyer], with its registered office in M. ___, [Slovak Republic], regarding payment of 77,600.- Czech koruna [Kc] and appurtenances
h a s d e c i d e d a s f o l l o w s:
|[Buyer] is obliged to pay [Seller] 77,600.- Kc with interest of:|
|-||10.75% annually on the sum of 47,920.- Kc for the period from 5 September 2008 until 31 December 2008|
|-||9.25% annually on the sum of 47,920.- Kc for the period from 1 January 2009 until 30 June 2009|
|-||8.5% annually on the sum of 47,920.- Kc for the period from 1 July 2009 until 31 December 2009|
|-||8% annually on the sum of 47,920.- Kc for the period from 1 January 2010 until payment|
|-||10.75% annually on the sum of 29,680.- Kc for the period from 6 September 2008 until 31 December 2008|
|-||9.25% annually on the sum of 29,680.- Kc for the period from 1 January 2009 until 30 June 2009|
|-||8.5% annually on the sum of 29,680.- Kc for the period from 1 July 2009 until 31 December 2009|
|-||8% annually on the sum of 29,680.- Kc for the period from 1 January 2010 until payment|
|and the reimbursement of costs of the proceedings amounting to 511.02 Euro [EUR], all within three days after the judgment comes into force.|
[Seller] claimed, by its action filed with the court on 26 March 2010, its right to payment of 77,600.- Kc with appurtenances. [Seller] justified the action by stating that the parties to the proceedings have concluded an oral contract under which [Seller] delivered goods to [Buyer]. Upon handing over the goods specified in the invoices no. 280101303 and no. 280101304, [Buyer] was obliged to pay the purchase price but he failed to fulfill this obligation.
On 30 August 2010 the court issued a resolution imposing an obligation upon [Buyer] to respond to the action within 15 days and if it contests the asserted claim, even partially, to provide reasoning for its objection and submit evidence proving its statement. The court instructed [Buyer] that if it fails to respond and does not perform the obligation imposed by the resolution under sec. 114 part 3 of the Civil Procedure Code (hereinafter referred to as "CPC"), the court can enter a default judgement in accordance with sec. 153b CPC.
Under sec. 144 part 3 of the CPC, subject to the nature of the case and circumstances, and without prejudice to sec. 120 part 2 and sec. 153b part 5, the court can by its resolution bind the defendant to respond to the action and if contesting the claim, to provide reasoning and evidence for such objection. The court shall set a time limit for the defendant to react.
Under part 4 of this section, the resolution specified in part 3 of the same section must be personally served to the defendant. Substitute form of service is forbidden, unless serviced to a natural person - entrepreneur in a dispute involving his business relations.
Under part 5 of this section, if the defendant fails to fulfill the obligation imposed by the resolution under part 3 of the same section, the court can decide the case without a public hearing, by a default judgement in accordance with sec. 153b, provided that the defendant was given notice of the consequences of his default. The provisions of parts 1 and 2 a) and c) of sec. 153b do not apply to this case.
Under part 6 of this section, if the defendant has a reasonable excuse for its default with a response, he can file a motion for cancellation of this judgement enclosed with his answer to the action and motion for exception from passing of the period for a response. If the court upholds this motion, it shall cancel the judgement by its resolution and decide the case on its merits in a new proceeding.
[Buyer] did not respond to the action within the prescribed period and received the abovementioned resolution personally on 9 September 2010.
Under sec. 156 part 3 of the CPC, in matters where the court decides the case without a public hearing, it shall publish the date of public declaration of the judgment at least five days prior to this date on the office board.
The court gathered evidence by reading the submitted documents, i.e. the purchase order no. OBVV-2008-000351, no. OBVV-2008-000319, invoice no. 280101304, no. 280101303, bills of lading to these invoices and the proposal for payment schedule, and thereby determined the following factual circumstances of the case:
[Seller] asserted by invoice no. 280101304, due on 5 September 2008 for the sum of 29,680.- Kc and invoice no. 280101303 due on 4 September 2008 for the sum of 47,920.- Kc its right to payment of the purchase price for the goods delivered to [Buyer], who confirmed handing over the goods by signing the bills of lading. The total amount of debt was 77,600.- Kc.
The court determined from the draft of payment schedule of 17 December 2008 that [Buyer] acknowledged its debt with respect to its grounds and amount. The acknowledgement of debt constitutes a rebuttable presumption that the acknowledged debt existed at the time of its acknowledgement in the specified amount. The debtor can rebut this presumption by proving the non-existence of such debt. The debtor can thereby prove that the acknowledged debt did not exist at the time of his declaration, since it never emerged or ceased to exist prior to the declaration.
Under sec. 133 of the CPC the rebuttable presumption is accepted by the court, unless the evidence proves that the presumption was rebutted.
Under sec. 155 part 2 of the CPC, the court may decide a claim in foreign currency, unless it contravenes the facts of the case, and provided that a) the asserted claim in is foreign currency and the party that is obliged to pay the claim is a foreigner and has a bank account in foreign currency, or b) any of the parties to the proceedings is a foreigner.
According to article 1 part 1 of the Vienna Convention on Contracts for the International Sale of Goods, this Convention applies to contracts for the sale of goods between parties whose places of business are in different states a) when the states are Contracting States; or b) when the rules of private international law lead to the application of the law of a Contracting State.
Under article 7 part 2 of the Convention, questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.
Under article 11 of the Convention, a contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.
Under article 30 of the Convention, the seller must deliver the goods, hand over any documents relating to them and transfer the property in the goods, as required by the contract and this Convention.
Under article 31 of the Convention, if the seller is not bound to deliver the goods at any other particular place, his obligation to deliver consists a) if the contract of sale involves carriage of the goods - in handing the goods over to the first carrier for transmission to the buyer.
Under article 53 of the Convention, the buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.
Under article 59 of the Convention, the buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or compliance with any formality on the part of the seller.
Under article 78 of the Convention, if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74.
The court decided the case with reference to the investigated factual circumstances and abovementioned legal provisions:
With reference to the evidence gathered, the court determined that the commercial relationship between the parties has to be qualified under the UN Convention on Contracts for the International Sale of Goods, since [Buyer] has its registered office and therefore also the place of business in the Slovak Republic as a member state of the Convention.
The Convention does not prescribe any formal conditions for concluding the contract and its formation can be evidenced by any means. The contractual relationship was established by an implied agreement upon a purchase order and actual performance of the contract by delivering the goods, as [Buyer] confirmed in the bills of lading, whereby it confirmed agreement on the basic elements of the contract - quality of goods and price - in implied way. The court therefore found that [Seller] fulfilled its obligations under the contract and delivered the goods to [Buyer]. [Buyer] did not perform its obligations, as it did not pay the price or did not prove any payment in the proceedings. [Buyer] failed to pay the invoice in the prescribed period and therefore defaulted with the payment and was obliged to pay the default interest. As the Convention does not prescribe the interest rate, the court decided the interest rate based on the Convention on Applicable Law for Contractual Relationships signed in 1980 in Rome, specifically under its article 4 part 1 and 2.
The parties did not choose the applicable law and therefore the court decided the default interest based on the law of [Seller]'s state, i.e. of the Czech Republic.
Under sec. 369 part 1 of the Commercial Code of the Czech Republic if a debtor is in default of fulfillment of a monetary obligation or part of such obligation, and no rate of interest has been agreed upon, the debtor is obliged to pay interest on the sum specified in the contract or if no such provision is in the contract, the interest rate prescribed by rules of civil law.
Under sec. 1 of the ordinance of the Czech Republic government no. 163/2005 Coll. which amends ordinance no. 142/1994 Coll. prescribing interest rates and interest charges in default under Czech Civil Code, the interest rate shall be the repo rate announced by the Czech National Bank increased by 7 percent. This interest rate, taking effect on the first day of a calendar half-year is in force for the whole half-year.
Since the parties have not agreed on an interest rate, the court decided the default interest by applying the relevant provisions of the Czech law.
With reference to the abovementioned, since [Buyer] did not respond to the resolution which detailed the consequences of his silence, the court decided the case by default judgment in accordance with sec. 114 part 5 of the CPC and sec. 153b of the CPC. The court accepted the facts of the case, as they were claimed by [Seller], since it considered them reliable. [Seller] submitted documents to the court that supported its claim and therefore the court upheld the action in its entirety.
The court declared the judgment without ordering a public hearing on 11 October 2010, as it was announced at the office table on 30 September 2010.
The Court ruled on the reimbursement of the costs of the proceedings with reference to sec. 142 part 1 of the CPC and granted [Seller] full reimbursement of its costs, as it was successful in asserting its claim in its entirety.
Instruction: An appeal against this judgment must be filed via this Court within fifteen days from its receipt.
District Court Michalovce, 11 October 2010
JUDr. Igor Ragan, 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 [Seller] and Defendant of the Slovak Republic is referred to as [Buyer]. Amounts in the currency of the Czech Republic (Czech koruna) are indicated as [Kc] and 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