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CISG CASE PRESENTATION

Italy 14 January 1993 District Court Monza (Nuova Fucinati v. Fondmetall International) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/930114i3.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19930114 (14 January 1993)

JURISDICTION: Italy

TRIBUNAL: Tribunale Civile [District Court] di Monza

JUDGE(S): Lapertosa Estensore, Nuova

CASE NUMBER/DOCKET NUMBER: R.G. 4267/88

CASE NAME: Nuova Fucinati S.p.A. v. Fondmetall International A.B.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Sweden (defendant)

GOODS INVOLVED: Ferrochrome


Case abstract

ITALY: Tribunale Civile di Monza 14 January 1993

Case law on UNCITRAL texts (CLOUT) abstract no. 54

Reproduced with permission from UNCITRAL

The plaintiff, an Italian seller who failed to deliver the goods to the defendant, a Swedish buyer, claimed avoidance of the sales contract on the ground of hardship ("eccessica on erositasopravvenuta") since the price of the goods had increased after conclusion of the contract and before delivery by almost 30%.

The court held that CISG was not applicable since at the time of the conclusion of the contract CISG was in force in Italy but not in Sweden (Article 1(1)(a) CISG). The court also excluded the application of the Convention on the ground that the parties had chosen Italian law as the law governing their contract holding that Article 1(1)(b) CISG operates only in the absence of a choice of law by the parties. In the court's opinion, even if CISG applied, the seller could not rely on hardship as a ground for avoidance, since CISG did not contemplate such a remedy in Artice 79 or elsewhere. A domestic court could not integrate into CISG provisions of domestic law recognizing a right of avoidance of the contract in case of hardship since hardship is not a matter expressly excluded in Article 4 CISG from the scope of the Convention.

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Classification of issues present

APPLICATION OF CISG: No [however, the court's ruling contains interpretations of various provisions of the CISG]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 1(1)(a) ; 1(1)(b) ; 4 ; A HREF="/cisg/text/e-text-79.html">79(1) [Also cited: Article 61 ] [Also relevant: Article 6 ]

Classification of issues using UNCITRAL classification code numbers:

1B1 ; 1B2 [Basic rules of applicability: parties in different Contracting States; International law points to Contracting State];

4A ; 4B [Scope of the Convention: issues covered; Issues excluded];

79B [Impediments excusing party from damages]

Descriptors: Applicability ; Choice of law ; Scope of Convention ; Exemptions or impediments ; Hardship

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Editorial remarks

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Citations to other abstracts, case text and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=21&step=Abstract>; see also <http://soi.cnr.it/~crdcs/crdcs/it140193a.htm>

German: Schweizerische Zeitschrift für Internationales und Europäisches Recht (SZIER) / Revue suisse de droit international et de droit européen, 1995, 275

Italian: Diritto del Commercio Internazionale 1993, 657 No. 20

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 246-247

CITATIONS TO TEXT OF DECISION

Original language (Italian): Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=21&step=FullText>; see also <http://soi.cnr.it/~crdcs/crdcs/it140193f.htm>; I Contratti (1993) 580-583; Il Foro italiano (1994 I) 916-923; Giurisprudenza italiana (1994 I) 146-154 [cited as 14 January 1993]; Rivista di Diritto Internazionale Privato e Processuale 30 (1994) 367-372

Translation (English): 15 Journal of Law & Commerce (1995) 153-158 [text presented below]

Translation (Portuguese): CISG Brazil database <http://www.cisg-brasil.net/downloads/casos/nuova_fucinati.pdf>

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-225 [216 n.707 (criticism of implicit exclusion of CISG)]; Bonell/ Liguori, Uniform Law Review (1996-1) 147 [156 n. 52, n. 53]; Klotz, International Sales Agreements (Canada 1997) 6 n.10, 9 n.26, 15 n.55, 202 n.24; Klotz, International Sales Agreements - International (1998) 5 n.10, 8-9 n.27, 22 n.77, 258 n.24; Ferrari, 15 Journal of Law & Commerce (1995) 159-174 [commentary limited to a discussion of applicability issues present]; Rimke, Pace Review of the Convention on Contracts for the International Sale of Goods, Kluwer (1999-2000), Section IV.D.8; Weitzmann, 16 Journal of Law & Commerce (1997) 286-289 [commentary on Article 4 and Article 79 issues]; Murray, 17 Journal of Law and Commerce (1998) 365 [371]; Petrochilos, Arbitration Conflict of Laws Rules and the CISG (1999) n.58; Krüger, Financial force majeure ... remarks on the impact of CISG Art 79 (1999) nn.65-67 [cited as 29 March 1993]; Slater, Inapplicability of the UNIDROIT Principles' Hardship Provisions to CISG, 12 Florida Journal of International Law (1998) 231-262; Southerington, Impossibility of performance and other excuses in international trade (2001) n.131; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) §: 6-19 n.234 [cited as 14 January 1993]; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.796; [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 198; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 79 paras. 30, 31; Carla Spivack, 27 Pennsylvania Journal of International Economic Law (Fall 2006) n.158 [commentary on Art. 79 issues]

Dutch: Erauw in: van Houtte/Erauw, het Weens Koopverdrag [HWK] (1997) No. 1.55 [46 n.69], 1.60 [48 n.77]; Claeys, HWK (1997) no. 7, 121 [271 n.190]

French: Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale (L.G.D.J., Paris: 1995), 25-26, 40-41, 109-110; Witz, Dalloz Sirey (1995) 143 [145 n. 21]

German: Ferrari, Zeitschrift für Europäisches Privatrecht (1998) 162-172; Herber in von Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht (2d ed. 1995) 53-54 n. 55 [Art. 1], 86 n.30 [Art. 6]; Piltz, Neue Juristische Wochenschrift (München) 1996, 2768 [2769 n. 19]; Schlechtriem, Internationales UN-Kaufrecht (1996) 10 n.10, 164 n.260; Will, UN-Kaufrecht und internationale Schiedsgerichtsbarkeit (1999) n.6

Greek: Witz/Kapnopoulou, Ellenike epitheorese europaikou dicaiou (1995) 561 [567 n.28]

Italian: Bonell, Giurisprudenza italiana (1994-I) 145-150; De Nova, i Contratti 1 (1993) 584-585; Ferrari, Rivista di Diritto Civile (Padova) (1995) 669-685; Di Paola, Diritto Marittimo (1995) 1059 et seq.; Liguori, Foro italiano (1996-IV) 145 [159 n. 73, n. 74]; Maglio, Contratto e impresa/ Europa (1996) 29-34; Lopez de Gonzalo, Foro Padano 2 (1997/I) 2 et seq.

Spanish: Castellanos, Autonomia de la voluntad y derecho uniforme en la compraventa internacional, thesis, Carlos III de Madrid (1998) 93-98, 116, 150-152, 169-170

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Case text (English translation)

Reproduced with permission from 15 Journal of Law and Commerce 153-158 (1995)

Tribunale di Monza, Sentenza 14 Gennaio 1993 [*]

Laudisio Presidente, Lapertosa Estensore, Nuova

Fucinati S.p.A. (Avv. Bassi, Santamaria) v Fondmetall International A.B. (Avv. Bianchi, Ginelli, Rossi)

[Synopsis by the Court:] The Vienna Convention on Contracts for the International Sale of Goods does not apply pursuant to Article 1(1)(b) when the choice of the law governing the contract is determined by the agreement of the parties instead of by the objective "criteria of connection" (for example, the place where the contract is concluded).

Article 79 of the Vienna Convention provides for release from an obligation made impossible by a supervening impediment not attributable to a party according to a rule similar to article 1463 et seq. of the Civil Code, but it does not seem to contemplate the remedy of dissolution for supervening excessive onerousness of a performance as provided for in article 1467 of the Civil Code for contracts involving performance over time or deferred performance.

On July 20th, 1988, upon petition of [buyer], whose place of business is in Kyrgogatan 44-S-411 15 Goteberg (Sweden), the President of the Tribunal of Monza ordered [seller], whose place of business is in Monza, to deliver to the [buyer] 1000 tons of ironchrome "Lumpy" as ordered in the contract of February 3, 1988 (at the price of Lira 545 per kilo).

[Seller] objected to this injunctive order, notice of which was given on July 25, 1988, and sued the [buyer] in this Tribunal with notice of summons given on September 29, 1988.

The [seller] pled that it was impossible to deliver the goods within the agreed delivery dates (between March 20, 1988 and April 10, 1988) because [buyer] was late in taking delivery of another load of goods (700 cubic meters of ironchrome "Fine") ordered at the same time. [Seller] demanded the repeal of the injunctive order and, as a further claim, argued for the dissolution of the February 3, 1988 contract because of supervening excessive onerousness with respect to the executory portion of the performance. In fact, [seller alleged], between the time the contract was entered into and the date for delivering the ironchrome "Lumpy," the price on the international market rose remarkably and unforeseeably to the point that it upset the balance between the corresponding performances and justified, at least, a price correction that the [buyer] refused to consider.

[Buyer] denied the factual foundation of [seller's] arguments [seller] to the injunction. [Buyer] also opposed dissolving the contract for supervening excessive onerousness by arguing that this remedy was unavailable under Article 79 of the April 11, 1980 Vienna Convention on Contracts for the International Sale of Goods, adopted in Italy by Law No. 765 of December 11, 1985. For these reasons, [buyer] demanded that [seller's] objections and claims be rejected, and urged that its opposition be ordered to pay damages for non-performance of the contract.

After the parties exchanged memoranda and submitted documents, the court held a hearing on March 1, 1990 at which counsel gave their statement of conclusions.

To investigate the possibility that the contract was governed by the April 11, 1980 Vienna Convention on Contracts for the International Sale of Goods, the Court issued an order on March 6, 1990 holding that it was necessary to ascertain if and when Sweden had ratified the Convention. It therefore reopened the judicial inquiry to acquire proper information. [The court thereafter acquired the necessary information and, after several delays, a final hearing was held on January 14, 1993.]

Reasoning: At the final hearing the [seller] relied primarily on the argument that its obligation to deliver 1000 metric tons of ironchrome "Lumpy," confirmed by order no. 002/88 of February 3, 1988, had become excessively onerous, thus justifying [seller's] non-performance. The argument upon which it had originally relied, based on [buyer's] failure to take delivery of 700 tons of ironchrome "Fine" ordered on the same date but under a different confirmation number (003/88), was relegated to subordinate importance.

The [buyer], in turn, availed itself of the ius variandi provided for by Article 1453(2)[1] of the Civil Code and demanded dissolution of the contract as well as the damages already claimed in connection with its original petition for performance.

We must first determine whether Article 1467 of the Civil Code [excusing performance of a contract where one party's obligations have become "excessively onerous"] applies to the contract between these parties.

The theory that the contract should be dissolved for supervening factors that upset the original economic balance between corresponding performances has been contested by the [buyer] both as a matter of law [i.e., because of the preemption by Article 79 of the Sales Convention] (as recalled in the synopsis) and for factual reasons related to the requirements of Article 1467 of the Civil Code.

Since the case involves an international sale of goods between an Italian corporation (seller) and a Swedish corporation (buyer), the first question to resolve is whether the contract is subject to the Vienna Convention of April 11, 1980, adopted in Italy by Law No. 765 of December 11, 1985 and effective as of January 1, 1988. This question is anything but insignificant since that Convention, which applies only to international sales of goods, does not seem to contemplate the remedy of dissolution of contract for supervening excessive onerousness. Article 1467 of the Civil Code, in contrast, provides for this remedy with respect to contracts involving continuous or periodic or deferred performance - criteria that fit the contract under discussion (formed on February 3, 1988) because it permitted the buyer to choose a delivery date between March 20 and April 10, 1988.

The Convention, ratified by both Italy and Sweden, provides in Article 79 that a party who fails to perform any of his obligations is not liable "if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract [or to have avoided or overcome it or its consequences]."

This provision, however, governs a different case - release from a duty made impossible by a supervening impediment not ascribable to a party, according to a rule similar to Article 1463 of the Civil Code. Article 61, et seq., of the Convention governs the seller's remedies for breach of contract by the buyer, providing in particular for the remedy of avoidance ("dissolution" in the terminology of our Civil Code) for breach of contract. These rules parallel those in Article 45 et seq. [of the Convention] governing [a buyer's remedies for] breach of contract by the seller.

Under the Convention the remedy of dissolution is associated with breach, whereas the excessive onerousness doctrine does not fit within the structure of the Convention when invoked either as a defense or as a reason to avoid (rectius: dissolve) the contract.

It is clear that, if the Convention applied to the contract in this case, one could not as a matter of law defend on the basis of the supervening excessive onerousness of the seller's obligation to deliver, whether or not the factual requirements of that doctrine were met. Article 4 of the Vienna Convention states that "[t]his Convention governs only the formation of the contract of sale and the rights and obligations of the seller and the buyer arising from such a contract," and it specifies that "except as otherwise expressly provided in this Convention, it is not concerned with (a) the validity of the contract" or "(b) the effect which the contract may have on the property in the goods sold."

Dissolution of the contract for supervening excessive onerousness affects neither the validity of the contract nor the property in the goods (except indirectly, by removing the obligation to deliver and thus affecting the transfer of title by preventing the identification of particular goods to the contract). [I.e., dissolution for excessive onerousness is a matter within the scope of the Convention]. Because the Convention is "special" law [i.e., one that applies to specific types of transactions] we must conclude that, if it were applicable to the case, it would preempt the general law of Article 1467 et seq. of the Civil Code.

The Vienna Convention came into force in Italy on January 1, 1988 - prior to the conclusion of the contract on February 3, 1988 (the date of the order confirmation that functioned as an acceptance sent by the [seller, an] Italian corporation to the [buyer, a Swedish] corporation) and prior to the March 7, 1989 [sic - March 7, 1988] telex declaring March 20 as the [first] date for delivering the goods. The Convention nevertheless cannot apply in this case because in Sweden it came into force (with a few reservations not relevant in our case) on January 1, 1989 [i.e., after the confirmation and telex mentioned above], as appears from the documentation procured in the recent judicial inquiry.

Now it is true that the law applicable to the contract is Italian law, by virtue of the explicit provision inserted in the order confirmation ("law: Italian law to apply"); and it is also true that, because the Vienna Convention at this time was in force in the national system, it must be considered a law like any other law of this State.

Nevertheless, because of the conditions that this "law" [i.e., the Convention] fixes for its application, we must consider the fact that the Convention came into force in Sweden after the conclusion of the contract as an obstacle to its application.

Article 1 of the Convention limits its sphere of application to contracts for the sale of goods between parties whose places of business are in different States (in this case, Italy on one side and Sweden on the other) when one of the following alternative possibilities exists: a) both States are Contracting States; or b) the rules of private international law lead to the application of the law of a Contracting State.

The second possibility does not fit the case at hand. This is not because under Article 25 of the Preliminary Provisions to the Civil Code the rules of private international law would lead to the application of the laws of Sweden (where, at the time the contract was concluded (Article 1326(1) of the Civil Code), the Convention had not yet come into force). Rather, the rules of private international law cannot apply when the parties negotiate the law applicable to an international contract, in which case only the public order principles in Article 31 of the Preliminary Provisions to the Civil Code limit private autonomy.

Thus this case is governed by the first of the two alternatives provided for by Article 1, under which the Convention applies if the sale occurs between parties whose places of business are in different Contracting States.

A Contracting State is one that has not only agreed to the Convention, but one in which the Convention has come into force (as specified in Article 100(2), under which the Convention applies to contracts concluded after the Convention has entered into force in the Contracting States referred to in Article 1(1)(a)[2]). We therefore conclude that the Vienna Convention does not apply to the contract under consideration, which was concluded before the Convention entered into force in the country where one of the contracting corporations had its place of business.

Thus, because the special law [i.e., the Convention] does not apply, the parties' choice of Italian law leads to the application of the general law, Article 1467 et seq. of the Civil Code. As a result, the remedy of dissolution for supervening excessive onerousness is available, both as a defense and a claim. See Corte di Cassazione, December 13, 1980, No. 6470; for the view that dissolution for excessive onerousness cannot be asserted as a defense [i.e., it can only be asserted as an affirmative claim], see Corte di Cassazione, June 8, 1984, No. 3450 and Corte di Cassazione, April 28, 1986, No. 2926. This conflict in views is irrelevant to the case at bar because the [seller] requested dissolution as a claim.

The [seller] based its claim on the ground that, between February 3, 1988 (the date on which the contract was formed) and April (the delivery date, according to [seller's] argument) the international market price of ironchrome advanced 43.71%, rising from Lire 1,496 per Kg/chrome (equal to US$ 0.545 per lb./chrome as estimated in the contract) to Lire 2,150. These facts, even though documented, do not justify the legal conclusions that the alleging party seeks to establish.

[The court rejected Plaintiff-seller's arguments based on supervening excessive onerousness and alleged breach by the Defendant-buyer.]

As a result this Tribunal renders a non-definitive decision lifting the contested injunction, declaring the contract dissolved for non-performance by the [seller], and rejecting every defense and contrary request of the latter. We submit the suit to the examining judge for further judicial inquiry into the [buyer's] request for compensatory damages.

P.Q.M. [per tutti questi motivi (for all these reasons)]

The Tribunal, not definitively pronouncing on the suit brought by [seller] by notice of summons served September 29, 1988 on [buyer] decrees as follows:

1) It lifts the injunction of July 20, 1988 ordered by the President of the Tribunal of Monza in favor of [buyer] against [seller];

2) it declares the dissolution of the contract for sale due to non-performance by the [seller];

3) it rejects the request of [seller] for dissolution based on supervening excessive onerousness and non-performance.


FOOTNOTES

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

Translated by Alessandra Michelini, Dottorato in Legge (cum laude) 1994, University of Milan, Milan, Italy; LL.M. candidate at the University of Pittsburgh School of Law, 1995-96.

1. [Article 1453(2) of the Italian Civil Code provides that "[d]issolution can be demanded even when an action has been brought to demand performance ...." A.M.]

2. [Following ratification by the first ten countries, the Convention enters into force one year after the first of the month following ratification. Article 99(2) of the Convention. Ed.]

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Pace Law School Institute of International Commercial Law - Last updated May 22, 2014
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