Argentina 6 October 1994 National Commercial Court of First Instance (Bermatex v. Valentin Rius) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/941006a1.html]
Primary source(s) for case presentation: Case text
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 56.179
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Spain and Czechoslovakia (two contracts)
BUYER'S COUNTRY: Argentina (bankruptcy proceeding)
GOODS INVOLVED: Looms and other goods
APPLICATION OF CISG: Yes [Article 1(1)(a)] APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles Classification of issues using UNCITRAL classification code numbers: 6A [Modification of Convention by contract]; 9D2 [Usages and practices impliedly made applicable to contract]; 78A [Interest on delay in receiving price or any other sum in arrears] Descriptors:
Classification of issues present
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue: Articles
Classification of issues using UNCITRAL classification code numbers:
6A [Modification of Convention by contract];
9D2 [Usages and practices impliedly made applicable to contract];
78A [Interest on delay in receiving price or any other sum in arrears]
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CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=178&step=Abstract>
Italian: Diritto del Commercio Internazionale (1997) 728 No. 138
Spanish: CISG-Spain and Latin America database at http://www.uc3m.es/uc3m/dpto/PR/dppr03/cisg/rargen8.htm
CITATIONS TO TEXT OF DECISION
Original language (Spanish): CISG-Spain and Latin America database at http://www.uc3m.es/uc3m/dpto/PR/dppr03/cisg/sargen8.htm; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=178&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
English: Gillette, 39 Virginia Journal of International Law (1999) 707 [715 n.28]; Honnold, Uniform Law for International Sales (1999) 470 [Arts. 9, 78]; Ferrari, 15 Journal of Law and Commerce (1995) 122-125; Kizer, 65 University of Chicago Law Review (1998) 1279-1306 [each contains comments on interest rulings in this case and in other cases]; Liu Chengwei, Recovery of interest (November 2003) nn.254, 261; 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];  Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 9 para. 21
French: Garro, in: Emptio-Venditio Internationales, Neumayer ed. (Basel 1997) 218 n. 14; Zuppi, in: Sebastien Bettschart ed., Les ventes internationales (CDICAC 1998) Vol. 36, 23 
Spanish: Castellanos, Autonomia de la voluntad y derecho uniforme en la compraventa internacional, thesis, Carlos III de Madrid (1998) 166 n.360, 168-169Go to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
6 October 1994
Translation [*] by Juan Manuel Falabella [**]
In re "Bermatex S.r.l.[Buyer], Reorganization Proceedings," Record No. 56.179, to decide upon the claims reported by the trustee on pages 859/990.
[UN Sales Convention applicable to claims by Spanish seller and Czech seller reported, respectively, at paragraphs 9 and 10 below.]
[The Court orders that:]
1. The claims stated at pages 867, 876, 877, 888, 898, 902, 911, 913, 921, 926, 931, 935, 939, 941, 947, 960, 962, 966, 967, 980 and 982, pursuant to the opinion of the trustee, be allowed in the suggested amounts and proportions.
2. The claims reported on pages 865, 869, 879, 891, 894, 904, 906, 909, 914, 922, 928, 937, 943, 953 and 958, pursuant to the opinion of the trustee, be allowed in the suggested amounts and priorities.
3. The claims reported on pages 861, 882, 890 and 900, since they have been challenged, be decided pursuant to what has been stated in each of those decisions, attaching a copy of them hereto.
4. The claims reported on pages 924, 945, 951, 956 and 984, upon the grounds stated by the trustee, which this Court upholds partially, be allowed.
5. In relation to the claims reported on pages 933 and 974, the trustee has reduced the interest, calculating it according to the borrowing rate, whereas the creditor has stated an amount calculated in accordance with the lending rate. The Court considers that the lending rate is applicable; therefore, the claim reported on page 933 be allowed for the amount of AR $15,375 and the claim reported on page 974 be allowed for the sum of AR $6,982.10, upon the calculations made by the Court for the periods informed by the trustee.
6. Claims reported on pages 949 and 964: upon the grounds stated by the Court when deciding the challenge filed by COAFI S.A. -- Record No. 57,023 --, which copy is attached hereto; such claims must be allowed entirely in foreign currency in accordance with the creditor's petition. Therefore, such claims be allowed for the sum of US $53,488.64 in relation to the claim reported on page 949 and for the amount of US $56,823.93, the claim reported on page 964.
7. Regarding the claim reported on page 977, the Court does not share the opinion of the trustee which considers that the credit offset is inadmissible when a credit must be discounted in favor of the Debtor, especially when the creditor expressly stated such petition. Therefore, this claim be allowed for the amount of AR $97,807.42 suggested by the creditor.
8. The claim reported on page 968 -- regarding the amount of US $607,961.01 requested by the creditor, upon the same grounds stated by the Court when deciding the challenge presented by COAFI S.A., Record No. 57,023 -- and the claims reported on pages 949 and 964 be allowed entirely in foreign currency in accordance with the creditor's petition. On the other hand, in relation to the amount in Argentine pesos, the trustee has reduced the interest calculating it according to the borrowing rate, whereas the creditor has stated an amount calculated in accordance with the lending rate of the Bank of the Argentine Republic for discount transactions. The Court considers that the lending rate is applicable; therefore, this claim be allowed for the sum of US $607,961.01 and AR $ 7,884.26 as requested by the creditor.
9. The claim reported on page 986, pertaining to the [Spanish Seller], has been filed by the Creditor domiciled at Spain for the amount of PTS [*] $15,003,743 plus interest, i.e., a total amount of PTS $18,151,916 with a pledge priority, as a credit balance in relation to the price for the international sale of goods owed by Debtor. This is evidenced by the proof of claim and the submitted documents which have the trustee required and which are attached hereto.
The trustee has informed, on page 986, a different proof of claim for another cause and amount and an unsecured character. Hence, the ancillary proceedings, from page 1048, should be attached hereto in view of the confusion arising in relation to such claim.
Upon the analysis of the proofs by the Court, it is considered that the claim for the amount of PTS $15,003,743 -- corresponding to the 6 six-monthly installments in which the balance of the price was financed -- be allowed, as evidenced by the chattel mortgage contract. The Convention on Contracts for the International Sale of Goods done at Vienna on 11 April 1980, enacted in Argentina through Act No. 22,765 and in force in Argentina since 1 January 1988 and in Spain since 1 August 1991 is applicable to this case. The Convention adopts the concept of the autonomy of the parties in its broadest sense (article 6), to the extent that the parties may exclude the application of any of the provisions of the Convention partly or totally. Therefore, it is considered that the annual interest rate of 24% agreed on the chattel mortgage contract must be allowed, but the Court has recalculated it from the date of maturity of each of the four installments due before the petition until 22 March 1994, date in which the reorganization was filed, resulting in the amount of PTS $2,220,628. Then, the claim in relation to the capital and interests amounts to PTS $17,224,371, sum for which the claim must be allowed, with the stated security.
Therefore, claim No. 52, reported on page 986, be allowed for the amount of PTS $17,224,371, with a pledge priority (article 265 sub-article 7º, L.C. [*]).
10. The claim reported on page 988 must further be allowed not only for the capital amount but also for the annual interest rate of 12%, rate which this Court finds reasonable in accordance with international business practices. In fact, the claim filed by the [Czech Seller] domiciled at Vsetin, Czech Republic, results from the balance of the price of a sale of goods -- fabrics -- entered into by [Buyer], which is evidenced in a bill of exchange for US $24,634 with a maturity date on 12 December 1993. The creditor has submitted, in addition to the copy of the bill of exchange, a copy of the commercial invoice and of the bill of lading; therefore, the cause of the claim is duly evidenced.
International business practices allow an annual interest rate of 12%, especially when there is an obligation in arrears and the parties have agreed, as a financing mechanism, an annual interest rate of 9%, as evidenced by the invoice. The Convention on Contracts for the International Sale of Goods done at Vienna on 11 April 1980, already mentioned, has been in force in the Czech Republic -- then Czechoslovakia -- since 1 April 1991 and is applicable to this case. Although the Convention does not state any interest rate, it does impose the application of international business practices, to which a higher hierarchy is ascribed over the very provisions of the Convention (article 9), which results in the admission of the requested interest rate.
Therefore, the Court calculates the interest over the amount of the bill of exchange of US $24,634, at the annual interest rate of 12% from 12 December 1993 until 22 March 1994 in the sum of US $812.93 which, added to the capital, amounts to US $25,446.93. As a result, the claim reported on page 988 be allowed for the sum of US $25,446.93.
Mario J. Tamburaino Seguí
* All translations should be verified by cross-checking against the original text. For purposes of this translation, debtor of Argentina, Bermatex S.r.l., is referred to as [Buyer or Debtor]; petitioner-creditor of Spain, Valentín Rius Clapers S.A., is referred to as [Spanish Seller or Creditor]; and petitioner-creditor of Czech Republic, Zbrojovkr Vsetin S.A., is referred to as [Czech Seller or Creditor].
Translator's notes: PTS = Pesetas [former Spanish currency]; L.C. = Ley de Concursos y Quiebras, [Argentine Reorganization and Bankruptcy Proceedings Act No. 24,522].
** Juan Manuel Falabella was a participant in the 16th annual Willem C. Vis International Commercial Arbitration Moot representing the School of Law, Universidad de Buenos Aires. He has attended the Summer Institute in International and Comparative Law, Stetson University; the Summer Law Program, Southwestern Law School; and he has Sworn Legal Translation credentials, School of Modern Languages, Pontificia Universidad Católica Argentina. He is currently a Legal Assistant at the Buenos Aires law firm of Hope, Duggan & Silva.Go to Case Table of Contents