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CISG CASE PRESENTATION

Germany 24 January 1994 Appellate Court Berlin (Wine case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/940124g1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19940124 (24 January 1994)

JURISDICTION: Germany

TRIBUNAL: KG Berlin [KG = Kammergericht = Upper Court Berlin (similar to OLG courts elsewhere in Germany)]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 2 U 7418/92

CASE NAME: German case citations do not identify parties to proceedings

CASE HISTORY: 1st instance LG Berlin 6 October 1992

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Wine


Case abstracts

GERMANY: KG Berlin 24 January 1994

Case law on UNCITRAL texts (CLOUT) abstract no. 80

Reproduced with permission from UNCITRAL

The plaintiff, the Italian assignee of the claim of the Italian seller for payment of the purchase price, sued the buyer, a German company, demanding payment. At issue was whether payment was due in German mark[s], as initially demanded by the seller, or in Italian lira, as agreed in the contract.

The court found that the CISG was applicable as the law of the country where the seller had its place of business. It was held that the application of the CISG could be excluded only if that was the actual and not the hypothetical intention of the parties. With regard to the validity of the assignment, the court applied other Italian law since the CISG did not address assignment.

The court held that, even if the parties had not agreed that payment should be made in Italian lira, the price would still be payable in Italian lira since the place of payment would be the place of business of the Italian seller (CISG 57(1)(a)). In addition, the court held that interest was payable from the time the purchase price became due, even if no notice was given (CISG 58).

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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: Articles 4 ; 7 ; 8 ; 53 ; 57(1)(a) ; 62 ; 78 [Also cited: Articles 6 ; 54 ; 58 ; 74 ]

Classification of issues using UNCITRAL classification code numbers:

4B [Issues covered and excluded: issues excluded (agency issues)];

7C22 [Recourse to general principles on which Convention is based: entitlement to interest does not require formal notice to debtor in default];

8A [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct];

53A [Buyer's obligation to pay price of goods: currency of payment];

57A [Place for payment: in absence of agreement, payment at seller's place of business (determinative of currency of payment)];

62A [Seller's right to compel performance: payment of price in currency specified in contract];

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

Descriptors: Scope of Convention ; General principles ; Agency issues ; Price ; Payment, place of ; Currency issues ; Intent ; 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: 2 European Current Law, Monthly Digest (1995) No. 200 [107] = European Current Law (1995) No. 2049 [799]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=46&step=Abstract>

French: Revue de Droit des Affaires Internationales/International Business Law Journal (1995) 750-751

Italian: Diritto del Commercio Internazionale (1995) 229 No. 47

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 249

CITATIONS TO TEXT OF DECISION

Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/130.htm>; Recht der Internationalen Wirtschaft (RIW) 1994, 683-684; KG Report Berlin 1994, 37; Die deutsche Rechtsprechung auf dem Gebiete des internationalen Privatrechts im Jahre (IPRspr) 1994 No. 25 [65]; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=46&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-255 [215 n.696 (CISG applicability cannot be excluded by hypothetical choice of law), 226 n.791, 226 n.793 (scope of CISG: agency issues/assignment of claims), 253 n.1079 (interest issues)]; Koneru, 6 Minnesota Journal of Global Trade (1997) 136-137 [comments on currency of payment issue]; Karollus, Cornell Review of the CISG (1995) 51 [58, 60, 73, 75] [comments on issues under Articles 4, 62 and 78 in the context of German case law on the CISG]; Boghossian, A Comparative Study of Specific Performance Provisions in the United Nations Convention on Contracts for the International Sale of Goods (1999) nn.248; Liu Chengwei, Recovery of interest (November 2003) nn.91, 186; Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 54 para. 9 Art. 74 paras. 8, 16

Finnish: Huber/Sundström, Defensor Legis (1997) 747 [757 n.47]

French: Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale (L.G.D.J., Paris: 1995) 40 n.67, 80 n.3, 106 n.115

German: Karollus, [österreichisches] Recht der Wirtschaft (öRdW) 194, 387; Schlechtriem, Internationales UN-Kaufrecht (1996) 118 n.152 n.153

Spanish: Perales, Cuadernos Jurídicos 3 (1996) No. 43, 5 [7 n. 29, 9 n. 48] [commentary on Article 78: determination of rate of interest undert the CISG (review of case law)]

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Appellate Court (Kammergericht) Berlin

24 January 1994 [2 U 7418/92]

Translation [*] by Ruth M. Janal [**]

REASONS FOR THE DECISION

The admissible appeal is partially successful.

The [seller]'s assignee, Appellant, is not entitled to demand from the [buyer] payment of Deutsche Mark [DM] 37,143.60. Instead, it may claim payment of Italian Lira [Itú] 26,601,522.

1. [Applicable law]

The legal relationship between the parties is governed by Italian law, that is, by the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the Codice civile [*]. The sales contracts between the parties regarding the delivery of wine were concluded in the year 1990. At that point in time, the CISG was not effective in the Federal Republic of Germany. The Convention did not enter into force for Germany until 1 January 1991. Up until then, the Uniform Law on the International Sale of Goods (ULIS) was in effect. However, Italy ceased being a Contracting State to ULIS on 31 December 1987 (cf. Soergel/Lüderitz, Kommentar zum BGB [*], 12th ed., Art. 1 ULIS n. 6), and was already a Contracting State to the CISG at the time of the formation of contract between the parties (cf. Soergel/Lüderitz, op. cit., Art. 1 CISG n. 4). The law governing international contracts is primarily determined by the parties' choice of law (Art. 27 EGBGB [*]). The parties to the present case did not make an explicit choice of law. In the absence of a choice of law clause, the law at the seller's place of business is decisive according to Art. 28(2) sent. 1 EGBGB (cf. OLG [*] Frankfurt, RIW [*] 1991, 591 [also available online at <http://cisgw3.law.pace.edu/cases/910613g1.html>]; Erman/Hohloch, Kommentar zum BGB, 9th ed. 1993, Art. 28 EGBGB n. 29; Palandt/Heldrich, Kommentar zum BGB, 53rd ed., Art. 28 EGBGB, n. 8). Therefore, Italian law principally applies to the dispute, because both the [seller] and the [seller]'s assignee have their places of business in Italy. The CISG is part of the Italian legal regime (cf. v.Caemmerer/Schlechtriem/Herber, Kommentar zum CISG, Art. 6 n. 16). Consequently, the Convention also applies if it is in effect in one Contracting State (cf. OLG [*] Frankfurt, RIW [*] 1991, 591 [also available online at <http://cisgw3.law.pace.edu/cases/910613g1.html>] and Asam/Kindler, RIW 1989, 942). In order to exclude the applicability of the Convention, it is necessary that such an exclusion correspond to the actual intentions and not solely to the hypothetical intentions of the parties (cf. v.Caemmerer/Schlechtriem/Herber, Art. 6 n. 13). This is not the case in the present dispute, as the [seller]'s assignee also discussed the application of the CISG.

2. [...]

      a. [Currency of payment of purchase price]

[Seller]'s assignee changed its claim in the second instance and now requests payment of the purchase price in Italian currency. The [seller]'s assignee was not entitled to demand payment of the purchase price in Deutsche Mark. The invoices state the amount in Italian Lira. The question in which currency the purchase price needs to be paid is primarily determined by the agreement between the parties. In the absence of such an agreement, payment is to be rendered in the currency of the place of payment (cf. v.Caemmerer/Schlechtriem/Hager, Art. 54 n. 8; Piltz, Internationales Kaufrecht, 1993, par. 4, n. 126; Enderlein/Maskow/Strohbach, Internationales Kaufrecht, 1991, Art. 78 n. 2.1). The content of the [seller]'s invoices indicates that, under the parties' agreement, payment was to be effected in the Italian currency. In case such an agreement was not reached, the [seller's] place of business in Florence is decisive, following Art. 57(1)(a) CISG.

      b. [Agency and assignment issues]

[...]

As the CISG does not settle the question of representative authority, the Codice civile [*] applies to the agency for the assignment of the purchase price on 3 September 1992. The power of agency is governed by the law of the country in which the agency takes effect (cf. v.Caemmerer/Schlechtriem, Art. 1 n. 11). In the present case, this is Italy. Under Arts. 2315, 2296 C.c. [*], the personally liable partner of a limited partnership may take all legal actions that fit the purpose of the partnership. Mr. M. was able to validly accept the assignment of the claim. The written declaration of the [seller] as the assignor and Mr. M.'s declaration for the assignee were sufficient, as an assignment does not require a specific form under Italian law (Arts. 1260, 1350, 1352 C.c.).

      c. [...]

      d. [Interest]

To the extent stated in the decision's tenor, the [seller]'s assignee may claim interest on the purchase price as compensation under Arts. 78 and 74 CISG, from the time payment was due according to Art. 58 CISG. A payment reminder notice was not necessary for this claim to arise. According to the parties' agreement, the purchase price was due sixty days after the date on which the invoice was issued. The interest rate is determined by the national Italian law and its prerequisites (cf. v.Caemmerer/Schlechtriem/Eberstein, Art. 78 n. 11 and Asam/Kindler, op. cit.). It follows from the bank certificate that [seller]'s assignee had to pay interest on the amount stated in the decision.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Defendant-Respondent of Germany is referred to as [buyer]; the Plaintiff-Appellant is assignee of [seller] of Italy. Amounts in the currency of Italy (Italian Lira) are indicated as [Itú]; amounts in German currency (Deutsche Mark) are indicated as [DM].

Translator's note on other abbreviations: BGB = Bürgerliches Gesetzbuch [German Civil Code]; C.c. = Codice civile [Italian Civil Code]; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on Private International Law]; OLG = Oberlandesgericht [German Court of Appeals]; RIW = Recht der Internationalen Wirtschaft [German Law Journal].

** Ruth M. Janal, LL.M. (UNSW), is a Ph.D. candidate at Albert-Ludwigs-Universität Freiburg. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia.

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Pace Law School Institute of International Commercial Law - Last updated September 14, 2006
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