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Switzerland 7 May 1993 District Court Laufen, Canton Berne (Automatic storage system case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/930507s1.html]

Primary source(s) for case presentation: Case text

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Case identification

DATE OF DECISION: 19930507 (7 May 1993)


TRIBUNAL: RA Laufen des Kantons Berne [RA = Richteramt = District Court]

JUDGE(S): Unavailable


CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Finland (plaintiff)

BUYER'S COUNTRY: Switzerland (defendant)

GOODS INVOLVED: Automatic storage system

Case abstract

SWITZERLAND: Richteramt Laufen des Kantons Berne 7 May 1993

Case law on UNCITRAL texts (CLOUT) abstract no. 201

Reproduced with permission from UNCITRAL

The Finnish [seller] plaintiff, a producer of automatic storage systems, concluded, with a Swiss [buyer] defendant, a metal-works company, a number of agreements, such as a non-disclosure agreement, a license agreement and various contracts, for the supply of goods to be manufactured on or after 1988. In 1992, the [seller] sued the [buyer] for the outstanding balance of the purchase price on several of those agreements.

The court found that the parties had entered into contracts for the supply of goods to be manufactured and thus they were to be considered sales under article 3(1) CISG since, although the [seller] had to furnish a number of different services, these obligations were not preponderant (article 3(2) CISG). Therefore, the court held that the Convention was applicable pursuant to article 1(1)(b) CISG. However, the court stated that, according to Swiss procedural law, it did not have subject-matter jurisdiction and, therefore, dismissed the claim.

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Classification of issues present

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


Key CISG provisions at issue: Articles 3 ; 7(1) ; 78 [Also cited: Articles 2(a) ; 4 ; 74 ; 92 ; 100 ]

Classification of issues using UNCITRAL classification code numbers:

3B [Goods to be manufactured, services: services [not a] preponderant part];

7A11 [Principles of interpretation (international character): autonomous interpretation v. reliance on domestic law];

78B [Rate of interest]

Descriptors: Internationality ; Scope of Convention ; Services ; Interest

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Editorial remarks

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Citations to other abstracts, case texts and commentaries


English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=105&step=Abstract>

German: Schweizerische Zeitschrift für Internationales und Europäisches Recht (SZIER) / Revue suisse de droit international et de droit européen 1995, 277-278

Italian: Diritto del Commercio Internazionale (1995) 451 No. 70


Original language (German): Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=105&step=FullText>

Translation: Unavailable


English: Ferrari, International Legal Forum (4/1998) 138-255 [169 n.269 (effect of Art. 92 declaration)]; Ferrari, [1998] Revue de jurisprudence de droit des affaires (RJDA) 14, 835 n.1; Tuula Ämmälä, 5 Turku Law Journal (1/2003) Sections 3.2; Liu Chengwei, Recovery of interest (November 2003) n.182; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 89

French: Ferrari [1998] Revue de jurisprudence de droit des affaires (RJDA) 14, 835 n.1

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Case text (English Translation) [second draft]

Queen Mary Case Translation Programme

District Court (Richteramt) of Laufen, Canton Berne

7 May 1993

Translation [*] by Tobias Koppitz [**]


[Background facts and contractual agreements of the parties]

2. The business relations between the parties began in the year 1988; more precisely, with the conclusion of the so-called Non-Disclosure Agreement, on 19 January 1988. The commercial long-range objective of the parties, at that point of time, was that the defendant-[buyer] should manufacture and distribute for the plaintiff-[seller] the system [], as mentioned above, in Switzerland under license. In that respect, the Non-Disclosure Agreement constitutes somewhat of a preliminary stage. It sets forth the [seller's] obligation to supply know-how, as far as this seems necessary for the evaluation of a continued and lasting business relation (number 1), and as a corollary the [buyer's] obligation to keep confidential all secrets confided to it (numbers 2 - 6). Number 8 also contains an arbitration clause, wherein the parties submit to an arbitral tribunal having jurisdiction under the rules of arbitration of the International Chamber of Commerce (ICC, Paris), consisting of one arbitrator to be appointed by the Finnish Chamber of Commerce. According to its wording, the arbitration clause is applicable to all disputes arising out of the present agreement. The choice of law in said clause 8 denotes Finnish law as the governing law.

3. On 2 June 1990, the parties concluded a further agreement, the so-called License Agreement. Its central content is constituted by clause 2, wherein the licensee-[buyer] is given the exclusive right to the use, manufacture and sale of the licensed products in Switzerland, as defined in clause 1(c). The licensee commits itself to the payment of a basic license fee and a professional license fee, dependent on success. The substantial and characteristic main constituent is therefore the license-contractual element, understood as the licensor-[seller's] non-gratuitous, territorially limited waiver of the exercise of the exclusivity and the enforceability rights towards the licensee, as derived from the European patent law. In executing this agreement, the parties regard it as the "result of the hitherto existing evaluation of possibilities;" it represents the parties' target since the conclusion of the Non-Disclosure Agreement of 19 January 1988. Thus, in clause 26 number 3, under the heading "Integration", the view is expressed that "this agreement contains the entire understanding between the parties regarding the incorporated matter" and that it "combines all previous discussions". Further, the license contract includes under the heading "Technology Transfer" in clause [] a pre-contractual obligation of the licensee for the future order of single components (clause 5 number 2), which are listed by sort; it deals in particular with [] and with [], whereby prices and terms of payment are governed by Appendix 2 of the contract. Specified orders of work which go beyond this pre-contractual obligation of the licensee / defendant-[buyer] for the order of the said components, listed by sort, are, however, not mentioned in the license contract.


[Ruling of the Court]

Violation of Federal law

Under OG [*] Art. 43 and Art. 55(1)(c), it can be maintained with an appeal that a decree is based on the violation of Federal law, including an international treaty as concluded by the Federal Government. Under OG Art. 43a(1)(a), a violation of the IPRG [*] can also be maintained. However, an appeal is excluded if the decree (in accordance with the IPRG) correctly applies foreign law, but applies this foreign law in a manner that violates it. As a consequence, the [seller] reasons that in the case at hand an appeal is excluded (Statement of Claim II. 2.)

aa. The law applicable to the present case

Decisive for the determination of the applicable law is again the IPRG. Art. 118 IPRG para. 1, does not answer the question directly, but, for the sale of movables, refers to the Convention on the Uniform Law on the International Sale of Goods, The Hague, 15 June 1955. It is undisputed that the case at hand is essentially concerned with the sale of movables in that sense, as contracts for work and materials are also governed by it. Art. 3 of the Hague Convention lays down that for lack of choice of law by the parties, the applicable law is the law of that State in which the seller, at the time he receives the order, has his ordinary residence. Since there has been no choice of law (in contrast to the Non-Disclosure and the License Agreement) and since the seller had his ordinary residence in Finland at the time of the receipt of the order, Finnish law is applicable.

bb. Applicability of the CISG

Furthermore, the question whether the CISG (Convention on Contracts for the International Sale of Goods, 11 April 1980) is applicable needs to be answered. Thus, the Convention's scope of application as regards the subject matter and the time of the contract have to be examined (cf. v.Cammerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht, München 1990).

      aaa. Scope of application as regards the time

The CISG was ratified in Finland on 15 December 1987 and entered into force on 1 January 1989. It is undisputed and undisputable that the contracts for work and materials in question were concluded after that point of time (cf. Arts. 2 and 3 of the Statement of Claim with the evidence presented). Therefore, those contracts fall under the scope of the Convention as regards the time according to Art. 100 CISG.

      bbb. Scope of application as regards the subject matter

According to Art. 1(1)(b) CISG, this Convention applies to contracts of sale of goods between parties whose places of business are in different States when the rules of private international law lead to the application of the law of a Contracting State. It was submitted that the rules of the IPRG (Art. 118 IPRG para. [] in connection with Art. 3 of the Hague Convention) lead to the application of the law of Finland and that Finland was, at the time of the conclusion of the contract, a Contracting State to the CISG. It is just as evident that the parties have their places of business in different States. Consequently, the court had only to examine whether the contract of sale in the case at hand was a contract of sale in the terms of the CISG. Under the contract-autonomous term "contract of sale", every contract in which goods are traded against the payment of the price is understood as such (Reinhart, UN-Kaufrecht, Kommentar zum Übereinkommen der Vereinten Nationen vom 1. April 1980 über Verträge über den internationalen Warenkauf, Heidelberg 1991, Art. 1 lit. f ). It should be undisputed that both the transaction [] and [] as well as the prospective delivery are such countertrade transactions. According to Art. 3(1) CISG, contracts for the supply of goods to be manufactured or produced are to be considered sales unless the party who orders the goods undertakes to supply a substantial part of the materials necessary for such manufacture or production. In the case at hand, the [seller] committed itself to the delivery of two specific and yet to be manufactured products and for that purpose it had to keep the whole working material ready. The [buyer], however, does not have to deliver a substantial part of the raw materials or intermediate products for the manufacture of the products. The contract is therefore a contract for work done and materials supplied in the sense of Art. 3(1) CISG, and is to be considered a sales contract. According to Art. 3(2) CISG, the Convention does not apply to contracts in which the preponderant part of the obligations of the party who furnishes the goods consists in the supply of labor or other services. With this provision, contracts primarily for the performance of work services are to be excluded. In the case at issue, the [seller] committed itself to the performance of works and other services, however, these secondary obligations do not outweigh the primary obligation to deliver goods. Since there are no other obvious provisions which could exclude the factual scope of application of the CISG regarding the contracts to be evaluated (e.g., Art. 2(a) CISG: exclusion of consumer purchases), both the contract for work done and materials supplied regarding projects [] and [], as well as the contract of sale regarding the prospective delivery are to be evaluated in accordance with the provisions of the CISG.

      ccc. Complex of regulations

Even though the present case lies within the scope of application of the CISG as regards the subject matter and the time of the contract, there still remains room for the pure national law of the proper law of the contract under certain circumstances. According to Art. 4 CISG, the Convention governs the formation of the contract of sale and the rights and obligations of the parties arising from such a contract. In that respect, Finland has, however, made a reservation in accordance with Art. 92 CISG, under which Part II of the Convention, which governs the formation of the contract, shall not be binding for Finland. Presently, the conclusion of the contract is not disputed by either party, so that the applicability of Part II of the Convention, or instead the national Finnish law, is not a matter of dispute. Furthermore, Art. 4(a) CISG excludes from the Convention questions of the validity of the contract. But even those questions are not at issue. As far as questions regarding the construction of the content of the contract should be concerned, however, the CISG provides rules of construction for that (Arts. 8-13 CISG, which are fully applicable for Finland). Particularly, the Convention governs the effects of the contract, the provisions regarding the breach of contract and their consequences. In that respect, the CISG contains the applicable provisions for the obligation to pay the price, the obligation to pay interest and the liability for damages, which is why there is no room for the Finnish law as claimed by the [seller] (cf. especially Art. 6 of the Statement of Claim). Only in regard to the determination of the interest in arrears does the national law gain significance, since Art. 78 CISG only constitutes the obligation to pay interest, however, without determining the rate of interest. It is especially controversial in German doctrine, what national law should be applicable to that matter. Following Schlechtriem/Eberstein (Art. 78, para. 3), the law determined by the conflict of laws provisions shall be applicable, whereas following a dissenting and significant opinion, the rate of interest should be determined by the law of the interest-creditor (cf. the references in Schlechtriem/Eberstein, Art. 78, para. 9). However, this controversy is only of significance when the seller is in arrears with his obligation to pay the price, e.g., with the liability for damages for defective goods under Art. 74 CISG et seq.; here, applying the conflict of laws provisions, the rate of interest is determined by the statute of the seller, whereas the rate of interest is determined by the statute of the buyer when applying the law of the interest-creditor. In cases where, as brought forward by the [seller], the buyer is in arrears with his obligation to pay the price, which should be the majority of all cases, the rate of interest is - under both approaches - to be determined by the law of the seller, which in the case at issue is Finnish law. Nevertheless, it is all in all clear that the present case, regarding the matters disputed, is solely governed by the scope of application of the CISG; in other words, on the merits of the case, the CISG is relevant and has to be referred to for the solution of the matter of dispute, and not any pure national Finnish law. Finnish law is presently significant only for the determination of the rate of interest, as far as the [buyer] owes interest at all and this is disputed.

cc. CISG as Finnish Law or as a treaty concluded by the Federal Government in the sense of OG Art. 43(1)?

Switzerland has also ratified the CISG on 21 February 1990. It entered into force on 1 March 1991, thus, obviously before the time of filing the action. The Convention is thus an international treaty concluded by the Federal Government in the sense of OG [*] Art. 43(1). The court therefore has to answer the question whether the matter of dispute at issue could yet be appealable.

Strictly formally, the IPR rules refer to Finnish law whose component, the CISG, would then be applicable under Art. (1)(a) CISG. Thus, strictly formally, Finnish law would be applicable, which is why the civil law appeal to the Federal Supreme Court would have to be denied according to OG Art. 43(1). However, it has to be considered that this Finnish law is materially congruent to all points with Swiss law, should this be held applicable. Despite the fact that this is formally foreign law, the court holds that there are significant reasons in favor of the appealability.

Furthermore, it is to be considered that the lower courts have a tendency to lack the ability to survey the international jurisdiction. This could lead to decisive uncertainty in law for Swiss companies dealing in international trade if foreign companies file a claim against them under the CISG and if the former could not gain access to the Federal Supreme Court on grounds of a formalistic argument. For the rest, there is no argument evident that companies of the Swiss export-trade - requiring the competence of the Swiss courts - should gain access to the Federal Supreme Court, although those of the import-trade should not gain this access, especially since in both cases the CISG will be materially applicable.

Moreover, regard is to be had to the rationale of OG [*] Arts. 43 and 43a, which essentially flows out of the original concept of the Federal Supreme Court as an instrument for judicial restraint and supervision. The Federal Supreme Court shall not and cannot review a violation of foreign law essentially on two grounds:

The fact that the CISG provides a uniform, final and autonomous Sales Convention, which is not intended to be bindingly attached to the law of one State, but is effective on its own instead, is displayed by Art. 1(1)(a) CISG. Accordingly, the CISG is applicable when the parties have their places of business in different States and when those States are Contracting States to the Convention. The determination of this scope of application lacks any point of contact to the law of a certain State; the CISG is autonomously applicable regardless of the intra-governmental regulation concerning the conflict of laws provisions, without being State-specifically qualified. Assuming, purely hypothetically, that the agreements in question in the present case had been concluded prior to the effectiveness of the Convention on 1 March 1991, the said provision would come in effect, since it regularly precedes the "Pre-Solution" of Art. 1(1)(b) CISG (Reinhart, Art. I, N. 2 f); this is why the CISG is applicable to all contracts concluded by the Swiss import-trade after 1 March 1991 as provided in Art. 1(1)(a) CISG. In this case, the Convention does not come in the formal shape of national Finnish law, but as a part of the material private international law. It is obvious that now the appeal would be admissible according to OG [*] Art. 43(1), as the case at hand is indisputably concerned with an international treaty concluded by the Federal Government. If one were to deny the appealability of CISG disputes where the Convention becomes applicable pursuant to the Pre-Solution of Art. 1(1)(b) CISG, this would lead to a differentiation regarding the question of appealability which could not be objectively explained and which can factually simply not be reasoned and which cannot be upheld in the court's opinion.

Finally, even the anticipated objection, that for the determination of the rate of interest one would have to have recourse to Finnish law, does not change in the least the result that the matter of dispute in the case at hand is appealable.

[Synopsis of ruling]

In summary and in condensed form, it will be made clear why the appealability of the matter of dispute at issue has to be affirmed: Claims under delivery transactions whose subject are services in the nature typical to the contracts here and whose judicial constellations and problems in the presently disputed manner are to be authoritatively disentangled, fall under the factual and temporal scope of application of the CISG. This conclusion takes effect due to formal views according to Finnish law. However, today and already at the time of filing the action (bound to the proceedings according to ZPO [*] Art. 160), the rules of the mentioned international Convention not only represent, but in a decisive way also respect Swiss private law. Therefore, it cannot depend on the coincidence of the point of time of its effectiveness as a result of the temporal assertion of our jurisdiction, whether a civil matter of dispute is appealable or not. If the validity and applicability of formally existing and effective Swiss law throughout the whole litigation yields to the reference of a foreign system of law, this merely coincidental moment does not change in the least the need for protection of the interest in the ability to review through the Federal Supreme Court because of violation of Swiss private law and its qualification and determination for that.


* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Finland is referred to as [seller]; the Defendant of Switzerland is referred to as [buyer].

Translator's note on abbreviations: BGE = Entscheidungen des Bundesgerichts [Official Reporter of the Federal Court, the highest Swiss court in civil matters]; OG = Bundesgesetz über die Organisation der Bundesrechtspflege [Swiss Federal Code on Court Organization]; IPRG = Bundesgesetz über das Internationale Privatrecht [Swiss Federal Act on International Private Law, which came into force on January 1, 1989]; ZPO = Zivilprozessordnung [Swiss Code of Civil Procedure].

** Tobias Koppitz is a student of law at Humboldt University Berlin, preparing for his state examination. With the team of Humboldt University Berlin, he won the Frédéric Eisemann Award for third place in the 8th Willem C. Vis International Commercial Arbitration Moot 2000/2001. He was coach to the team of Humboldt University Berlin in the 9th Willem C. Vis Moot 2001/2002. Tobias Koppitz is a member of the Moot Alumni Association (MAA). The second-iteration redaction of this translation was by Dr. John Felemegas.

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