Poland 8 February 2012 Supreme Court (Coke fuel case)
[Cite as: http://cisgw3.law.pace.edu/cases/120208p1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: V CSK 91/11
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Poland
BUYER'S COUNTRY: Germany
GOODS INVOLVED: Coke fuel
POLAND: Supreme Court 8 February 2012
Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/137],
CLOUT abstract no. 1302
Reproduced with permission of UNCITRAL
The present case is relates to the dispute between a Polish coke fuel producer and a German buyer subject of a previous decision of the Polish Supreme Court in October 2008 (case no V CSK 63/08; CLOUT abstract no. 1306). This time the Supreme Court was presented with different legal issues. The background of the dispute is essentially the same.
The parties concluded a contract for the sale of coke fuel in December 2003. In the second quarter of 2004 the Polish seller refused to deliver part of the coke fuel for the price agreed upon in the contract. Consequently, the German buyer avoided the contract with respect to the part of the undelivered goods and later sued for the damages resulting from the breach of contract, mostly consisting of the reimbursement for the value of undelivered coke fuel as of the day when the notice of avoidance was made.
The reason for the Polish party to refuse the delivery was a considerable and rapid rise in the price of coke fuel, which occurred after the conclusion of the contract. The seller argued that it could not have predicted the extent of the price increase and thus could have not foreseen the loss, nor its extent, which resulted from the breach of contract. This, in the seller’s opinion, exempted it from the liability for the breach under Article 74 CISG. The Court of Appeals endorsed the argument and dismissed the claims of the German buyer. An appeal was brought to the Supreme Court.
The dispute before the Supreme Court revolved around the question whether the foreseeability of loss constitutes a general prerequisite of contractual liability, which, if not satisfied, ousts the remedy under Article 74 CISG, or whether it may only lead to reduction of damages to the extent the harm could not have been foreseen. The question in this case was whether the foreseeability of the price increase of coke fuel should affect the claim as a whole or only the extent to which the damages might be decreased.
The Supreme Court favoured the second proposition. It underlined that the foreseeability of loss under Article 74 CISG cannot be equated with the impediment beyond control, which releases the party in breach from the liability, as long as it could not reasonably be expected to have taken the impediment into account at the time of the conclusion of contract (Article 79(1) CISG).
Because the Court of Appeals did not examine whether the radical rise of the prices of coke fuel could be treated as the impediment beyond control under Article 79 CISG, nor to what extent the party in breach foresaw or ought to have foreseen, at the time of the conclusion of contract, the loss that resulted from the failure to deliver coke fuel, and consequently, to what extent this could affect the compensation under Article 74 CISG, the Supreme Court reversed the decision of the Court of Appeals and remanded the case for further consideration.Go to Case Table of Contents
APPLICATION OF CISG: [-]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
CITATIONS TO OTHER ABSTRACTS OF DECISION
CITATIONS TO TEXT OF DECISION
Original language (Polish): Republic of Poland website <http://www.sn.pl>
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents