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CISG CASE PRESENTATION

Germany 17 June 1996 District Court Hamburg (Shoes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/960617g1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19960617 (17 June 1996)

JURISDICTION: Germany

TRIBUNAL: LG Hamburg [LG = Landgericht = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 417 O 165/95

CASE NAME: Roberto Catinari & Ovaldo Raccosta v. Florencemoda GmbH

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Shoes


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 39(1) ; 74 ; 78 [Also cited: Articles 50 ; 51 ; 54 ]

Classification of issues using UNCITRAL classification code numbers:

39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

74A11 [Damages (loss of profit): computation of, evidence of];

78B [Rate of interest]

Descriptors: Lack of conformity notice, timeliness ; Damages ; Profits, loss of ; Burden of proof ; Proof of damages ; Interest

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

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=230&step=Abstract>

Italian: [1998] Diritto del Commercio Internazionale 1109 No. 216

CITATIONS TO TEXT OF DECISION

Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/240.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=230&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-255 [247 n.1027 (interest issues)]; Perales, Battle of the Forms and Burden of Proof, 6:2 Vindobona Journal (2002) 217-228, n. 23; [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 181; 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]

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court (Landgericht) Hamburg

17 June 1996 [417 O 165/95]

Translation [*] by Jan Henning Berg [**]

FACTS

Plaintiff [Seller] demands the residual purchase price from Defendant [Buyer].

[Seller] is a producer of shoes. [Buyer] is a shoe retailer and is registered in Hamburg, Germany. The parties have had a business relationship for a long time. [Buyer] repeatedly purchased shoes from [Seller]. Company X. acted as sales agent for [Seller] in Germany. Company X. has arranged for the conclusion of the transactions involved in this litigation.

[Seller] demands payment for delivered shoes as follows:

  1. No. 161, 22 July 1994: Italian lire [Lit.] 4,328,960 (remaining sum)
  2. No. 15, 31 January 1995: Lit. 4,937,787
  3. No. 21, 11 February 1995: Lit. 8,026,366
  4. No. 42, 21 February 1995: Lit. 5,983,731
  5. No. 56, 3 March 1995: Lit. 4,851,819
  6. No. 91, 27 March 1995: Lit. 2,974,851

      =  Lit. 31,331,354

Initially, [Seller] had entered on its invoices the subtraction of a 5% discount for immediate payment, because it assumed that [Buyer] would pay in time. [Seller] now demands payment of the full, undiscounted invoice sums. The invoice under item 1 originally referred to Lit. 11,736,385. Prior to the proceedings, [Buyer] had already paid Lit. 7,407,425 on this invoice, meaning that Lit. 4,328,960 remain unsettled. Adding the previous discount reduction, the claimed sum amounts to Lit. 4,556,800.

The shoes under items 2-6 were to be delivered by [Seller] until mid-January 1995. In fact, however, [Seller] delivered the shores under item 2 only by 6 February 1995, item 3 only by 21 February 1995, item 4 only by 3 March 1995, item 5 only by 9 March 1995 and item 6 only by 4 April 1995.

POSITIONS OF THE PARTIES

Position of [Seller]

[Seller] submits that under the contract [Buyer] owed interest 60 days after the date of each invoice. [Seller] was forced to rely on a bank loan for which it was obliged to pay interest of at least 16.5%.

[Seller] requests the Court to order [Buyer] to pay the purchase price of Lit. 31,331,354 with interest.

Position of [Buyer]

[Buyer] requests the Court to dismiss [Seller]'s action.

[Buyer] challenges the international and territorial jurisdiction of the District Court (Landgericht) Hamburg and further contests the power of authority of [Seller]'s sales agent.

[Buyer] further submits:

In relation to item 1:

      [Seller] did not deliver article no. 1897 in conformity with the contract. On that basis, [Buyer] and [Seller] reached an agreement to reduce the purchase price by Lit. 4,328,960 (under consideration of 5% discount).

[Buyer]'s CEO himself has declared during the oral hearing of 17 April 1996 that he agreed with Mr. R.M. and B.C.L. of [Seller] that [Buyer] would need to pay only 50% for any shoes which it successfully resold and that it would be entitled to return any shoes unsold. [Buyer]'s CEO would still explain to the Court whether Mr. F.B. could give testimony in relation to this event. [Buyer] constantly complained to [Seller] about the poor quality.

In relation to items 2-6:

      [Buyer] had ordered 597 pairs of shoes from [Seller] in total, which should have been delivered by mid-January 1995. However, [Seller] neither delivered the full amount nor in time. Being seasonal goods, the shoes could be resold only by incurring considerable losses. [Buyer] constantly reminded [Seller] about the outstanding deliveries.

In case of late deliveries, [Seller] had granted other purchasers a discount of 50%. Negotiations were conducted with Mrs. E.R. and [Seller]. In accordance with Arts. 50, 51 CISG, the parties also agreed on a reduction of 50% on the invoice sum. Damages could be claimed by [Buyer] in addition. [Seller] delivered only 486 out of 597 pairs of shoes. Two further pairs of shoes were not delivered, as well. Altogether 113 pairs of shoes were not delivered. [Buyer] was entitled to calculate its retail price by assuming a profit margin of 200%. The value of the undelivered shoes was Lit. 11,665,932. Thus, loss of profit amounted to Lit. 23,331,864. Had there been a timely delivery, [Buyer] would have been able to resell all shoes under the customary profit margin. [Buyer] thus properly relied on a claim for damages which should be subject to a set-off with [Seller]'s claim. The sum claimed by [Seller] was to be reduced by Lit. 15,665,677 (price reduction and another Lit. 23,331,864 (set-off). [Buyer] reserved the right to bring a counterclaim in relation to the sum in excess.

It was further agreed between [Buyer] and [Seller] that possible remaining claims on the part of [Seller] should be set-off against [Buyer]'s commission claims against the sales agent Company B. Alternatively and merely by way of precaution, [Buyer] declared a set-off to be made against assigned commission claims on the part of the sales agent.

[Buyer] also challenged [Seller]'s interest claim.

Concerning the further details of the parties' submissions, reference is directed to the exchanged memoranda, their exhibits and to the minutes of the hearings.

The parties have declared their consent for a decision to be made by the Presiding Judge.

REASONING OF THE COURT

I. [Jurisdiction of the Court]

[Seller]'s action is admissible.

The District Court (Landgericht) Hamburg has international and territorial jurisdiction.

1. Contrary to [Buyer]'s view, the Italian Court in Fermo does not have jurisdiction since [Seller] and [Buyer] had not concluded a corresponding agreement conferring jurisdiction at the time of conclusion of the sales contracts subject to these proceedings. It is undisputed that neither of the parties signed an agreement on jurisdiction. However, this is expressly required by [Seller]'s standard business terms. Moreover, Art. 29 Codice di procedura civile (Italian code on civil procedure) provides that an agreement conferring jurisdiction must be made in writing. It follows from Art. 1341 Codice civile (Italian civil code) that under application of Italian law -- which both parties assume to apply here -- the agreement conferring jurisdiction on courts in Fermo has not been validly concluded.

Furthermore, the requirements of Art. 17 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 September 1968 are not fulfilled because the agreement on jurisdiction has not been confirmed in writing by either of the parties (cf. BGH [*] NJW [*] 1986, 2196 and NJW 1994, 2699).

2. Contrary to the opinion of [Buyer], the District Court (Landgericht) Düsseldorf does not have jurisdiction over this dispute because it cannot be ascertained that the parties reached an agreement to that effect. [Buyer] has not coherently argued that such an agreement was concluded. In that respect, the Court refers to its legal information and the explanations provided during the oral hearing of 17 April 1996. Subsequently, [Buyer] has also ceased to maintain its argument on territorial jurisdiction.

Since [Buyer] has its seat in Hamburg, the District Court (Landgericht) Hamburg has territorial and international jurisdiction.

3. Finally, [Seller] is also properly represented in the present proceedings by attorneys-at-law W.PP. This follows from the warrant of authority of 19 April 1996 and the Court's record of the proceedings, as has been determined by court order.

II. [Seller's claim for the purchase price and interest]

[Seller]'s action is well-founded.

Pursuant to Art. 54 CISG, [Buyer] is obliged to pay the agreed purchase price. The conclusion of the sales contracts and the claimed residual sum as such in the amount of Lit. 31,331,354 is not in dispute between the parties.

[Buyer] cannot rely on any defenses against the existence of [Seller]'s claim.

1. It cannot be determined that [Seller] and [Buyer] reached an agreement to reduce the purchase price in relation to item 1 by Lit. 4,528,960. First, [Buyer]'s submissions are not substantiated in that it fails to set out when and with whom of [Seller] a corresponding agreement had been concluded. Second, its submissions are in contradiction to the statements made by its own CEO during the oral hearing of 17 April 1996. Mr. F.B. cannot be heard as witness because it is not for witnesses to compensate for a lack in the parties' submissions before the court. Additionally, [Buyer] has -- contrary to its commitment -- not clarified whether it was still relying on this witness and which submissions he would be able to testify.

Assumed that the Court was asked to consider the deviating statements by [Buyer]'s CEO, [Buyer] would still not have offered any evidence for the circumstance that [Seller]'s employees R.M. and B.M.L. were actually authorized to enter into the respective agreement. Apart from the fact that [Buyer] failed to comply with its promise to announce whether it relied on evidence given by Mr. F.B. in relation to the alleged agreement, any declarations are irrelevant for so long as it remains undetermined that they were at all able to impose obligations on [Seller]. Finally, [Buyer] does not clarify how many shoes it has successfully resold and how many it has allegedly returned to [Seller].

2. Since no such agreement between [Seller] and [Buyer] has been established, it is decisive whether the shoes had the asserted defects and whether [Buyer] succeeded in retaining its rights against [Seller] in accordance with the CISG.

[Buyer] has comprehensibly explained the lacks of conformity. However, it may remain undecided whether the defects actually existed. [Buyer] has not sufficiently demonstrated that it also notified [Seller] about the defects within the time required. [Buyer] merely argues on the legal consequence, without proving the corresponding underlying facts. Thus, according to Art. 39 CISG, [Buyer] has lost its right to rely on a lack of conformity in relation to the shoes.

3. It is undisputed that [Seller] deliveries in relation to items 2-6 were late, and that certain parts were considerably in delay. However, it cannot be established that [Buyer] may reduce the purchase price by Lit. 15,665,677 on that basis.

      a) The fact that [Seller] granted third-party purchasers a price reduction is without legal relevance for the transaction between [Seller] and [Buyer] because the former is not restricted in its contractual freedom. No violation of either 26 GWB [*] or Art. 85 (now Art. 81) EC Treaty to the detriment of [Buyer] is apparent. At least, [Buyer] has not made any submissions to that effect.

      b) [Buyer]'s submissions are entirely unsubstantiated when it asserts that there was an agreement with [Seller] to a price reduction of 50% (in the amount of Lit. 15,665,677). A hearing of witness R. cannot be considered because it is not for witnesses to compensate for a lack in the parties' submissions.

      c) [Buyer] does not claim damages. Moreover, no claim for damages would follow from Art. 74 CISG.

4. It is indeed possible that [Seller] failed to make full deliveries in relation to items 2-6. Nevertheless, it is not established that [Buyer] suffered consequential damages in the amount of Lit. 23,331,864 in order to be subject to a set-off.

[Buyer] has not sufficiently demonstrated its possible losses. [Buyer] failed to state how many customers had at the time requested the shoes of [Seller] but could not be supplied. It is also unknown how many of these customers did not purchase substitute shoes from [Buyer] as a consequence. [Buyer] even failed to set out its turnover development throughout the preceding and succeeding years in order to make discernible a possible reduction in turnover.

5. Finally, [Buyer] cannot rely on a set-off with commission claims against Company B. Apart from the fact that [Buyer] failed to demonstrate a corresponding agreement with [Seller], it did not prove the existence of its alleged claim for commission.

The interest claim follows from Art. 78 CISG. [Seller] has sufficiently proved its interest losses by furnishing of its bank statement.

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Germany is referred to as [Seller] and Defendant of Italy is referred to as [Buyer]. Amounts in the former currency of Italy [Italian Lira] are indicated as [Lit.].

Translator's note on other abbreviations: BGH = Bundesgerichtshof [German Federal Supreme Court]; GWB = Gesetz gegen Wettbewerbsbeschränkungen [German statute against restraints of competition]; NJW = Neue Juristische Wochenschrift [a German law journal].

** Jan Henning Berg has been a law student at the University of Osnabrück, Germany and at King's College London. He participated in the 13th Willem C. Vis Moot with the team of the University of Osnabrück. He has coached the team of the University of Osnabrück for the 14th Willem C. Vis and 4th Willem C. Vis (East) Moot.

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Pace Law School Institute of International Commercial Law - Last updated February 25, 2008
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