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CISG CASE PRESENTATION

Switzerland 16 December 1991 District Court Locarno (Optical equipment case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/911216s1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19911216 (16 December 1991)

JURISDICTION: Switzerland

TRIBUNAL: Pretore della giurisdizione [District Court] di Locarno Campagna (Canton of Ticino)

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 15/91

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: France (plaintiff)

BUYER'S COUNTRY: Switzerland (defendant)

GOODS INVOLVED: Optical equipment


Case abstract

SWITZERLAND: Pretore della giurisdizione di Locarno 16 December 1991 [cited as 15 December 1991]

Case law on UNCITRAL texts (CLOUT) abstract no. 55

Reproduced with permission from UNCITRAL

The plaintiff, a French seller, claimed the payment of the price of goods, which the defendant, a Swiss buyer, had failed to pay, plus interest at the rate of 6% from July 1990, the time of conclusion of the contract. The [buyer] acknowledged the debt in the course of the proceedings but argued that interest was payable only from August 1991, the time the [buyer] was notified of the [seller's] refusal to accept a returned sample as payment.

Although the [seller] invoked Swiss law, the court, applying Article 118 of the Swiss Federal Act of Private International Law and Article 3 of the Hague Convention on the law Applicable to International Sales Contracts on Movables of 15 June 1955, held that CISG was applicable as the applicable French law. The court granted the [seller] interest on the sum owed from the time of the conclusion of the contract since Article 78 CISG did not refer to any formal or informal notice of default. In order to determine the interest rate, the court applied French law, since CISG does not provide for a specific interest rate, and granted interest at the rate of 6%, as requested by the [seller], on the ground that it was lower than the statutory interest rate under French law.

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(b)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 78 [Also relevant: Article 59 ]

Classification of issues using UNCITRAL classification code numbers:

78B [Interest on delay in receiving price or any other sum in arrears: rate of interest]

Descriptors: Interest

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=42&step=Abstract>

German: Schweizerische Zeitschrift für Internationales und Europäisches Recht (SZIER) / Revue suisse de droit international et de droit européen 1993, 665

Italian: Diritto del Commercio Internazionale (1994) 850-851 No. 31

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 247

CITATIONS TO TEXT OF DECISION

Original language (Italian): Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=42&step=FullText>; [1993] Revue suisse de droit international et de droit européen (RSDIE) 663

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-225 [253 n.1079 (interest issues)]; Behr, 17 Journal of Law and Commerce (1998) 266-288 [abstracts and comments on 29 interest rulings from 10 countries (this case presented at 273-274)]; Koneru, 6 Minnesota Journal of International Trade (1997) 105 [134-135 n.129]; Liu Chengwei, Recovery of interest (November 2003) nn.84, 160, 268; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 9 para. 2 Art. 59 para. 2

Finnish: Huber/Sundström, Defensor Legis (1997) 747 [758 n.51]

Spanish: Perales, Cuadernos Jurídicos 1996 No. 43, 5 [7 n. 29, 9 n.48]

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Pretura di Locarno-Campagna 16 December 1991

Translation by Danijela Luksic [*]

Facts of the case

A. The parties were for years in a business relationship which ended in the summer of 1990.

Various invoices due to be paid by 12 July 1990 in the total amount of fS [Swiss francs] 6,604.45 still remained to be paid by the defendant [buyer].

[Translator's note: For the purpose of this translation we refer to defendant as [buyer] and claimant as [seller].]

B. At the hearing, [buyer] did not plead payment of this amount owing, but [buyer] objected in compensation the value of a sample valued at fS 6,000.00 returned to [seller] on 26 June 1990 (see doc. 1 and 2), but which [seller] refused on 12 July 1990, as it was determened only in the preliminary proceedings, more precisely in the investigation done in August of 1991 at the post office of , which, like the [buyer, also reported that the sample was destroyed (traité comme abandone - see doc. B).

At the final deliberations, [buyer] consequently gave up the offset claim, admitting that [buyer] had to pay the amount [seller] demanded, but with interest starting from last August, when [buyer] first learned about the refusal of [seller] to receive back the sample, and asking the Court to bear in mind, in the judgment on the costs, of this delayed cognizance which could not be imputed to [buyer].

Legal reasoning

      1. The parties, a French and a Swiss company, concluded an international sales contract. It is therefore necessary to determine the applicable law.

The Hague Convention of 15 June 1955 (cf. RS 0.221.211.4) is applied to international sales agreements regarding mobile goods, pursuant to art. 1(2) LDIP, international contracts are in fact always included.

Article 2 of this Convention expresses the principle of the election of law. According to the jurisprudence of the Federal Tribunal ( DTF 87 II 94 and 91 II 44), the parties are free to choose the law applicable to an international contract; however, this choice has to be cognizable and voluntary.

The election of the law has to result,without a shred of doubt from the contract or from the circumstances; the parties have to be aware of the existance of a problem in relation to the applicable law and need to have expressed their choice in a clear way.

In this case, the recall of Art. 1 e ssCO done by [buyer] cannot be considered to be an expressed choice since it never emerged in the investigation that the parties were aware of the existance of a problem related to the applicable law.

According to Art. 3 cpv of the Hague Convention, "when there is no declaration of the parties as to the applicable law according to the premises in the previous article, the sale is regulated by the internal laws of the country where the seller has his habitual residence at the time he takes the order ...".

It is therefore evident that in this case, French law is to be applied.

France adopted the Vienna Convention [CISG] of 11 April 1980 which regulates the international sale of goods (cf. RS 0.211.211).

Art 1 of the CISG prescribes that: "This Convention applies to contracts of sale of goods between parties whose places of business are in different States: b) when the rules of private international law lead to the application of the law of a Contracting State."

Therefore, in this case, the Vienna Convention is applicable and not the French Civil Code.

      2. The Vienna Convention regulates the problem of interest very briefly in Art. 78, which states: "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."

This Article sanctions the principle that the run of interest does not depend on arrearage, but rather simply on the lack of payment of the price on time (cf Berner Tage für die Juristische Praxis 1990, Wiener Kaufrecht, page 208).

In this case, [buyer] had to pay fS 6,604.45 by 12 July1990 (see doc. B); the interest ran therefore starting from this date on.

The fact that [buyer] had returned the goods to [seller], as well as [seller's] refusal to take the goods back and the consequent destruction of the package by the post office, do not modifiy anything in that respect, since [seller] obviously could not bear the consequences of either an unclear order done by [buyer] to the post office or a misunderstanding between [buyer] and the post office.

      3. Art. 78 of the Vienna Convention is the result of compromise which the Contracting States reached after long discussions. However, it was not possible to reach an agreement on the interest rate (cf. Berner Tage für Juristische Praxis 1990, Wiener Kaufrecht, p. 208). In consequence, the interest rate to be applied is the rate prescribed by the law which would be applicable if the Vienna Convention were not applied.

According to Art. 1153 of the French Civile Code, the interest rate is equal to the legal rate, prescribed in Art. 1907 which sends back to the respective Law No. 75-619 of 11 July 1975.

Pursuant to Art. 1 of this Law, the legal interest rate is fixed for the duration of the civil year; it is equal to the discount rate used by the Bank of France the 15th of December of the previous year.

It could be determined from information gained by this judge from a banking institution that the present interest rate used by the Bank of France is 9.25 %.

Therefore, the request of [seller] can be accepted for the capital, as well as for the interest at 6%, since this rate is inferior to the rate prescribed by law.

For these reasons

With recall also to Art. 147 ss CPC and the LTG, the Court brings the following

Judgment

     1. The [seller's] claim is accepted; [buyer] is obliged to pay to [seller] [] the amount of fS 6,604.45 with interest at 6% starting from 12 July 1990.

     2. The costs and the court tax of fS 200.00, already paid in advance by [seller] are to be covered by the [buyer], which will also have to refund to the [seller] fS 700.00 for recoverable costs.

     3. Notification to the parties.


FOOTNOTE

* Danijela Luksic is a Legal Trainee at Sihtar Attorneys at Law.

All translations should be verified by cross-checking against the original text.

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Pace Law School Institute of International Commercial Law - Last updated August 15, 2005
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