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CISG CASE PRESENTATION

Germany 12 November 1996 Lower Court Koblenz (Shoes case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/961112g1.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISIONS: 19961112 (12 November 1996)

JURISDICTION: Germany

TRIBUNAL: AG Koblenz [AG = Amtsgericht = Petty District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 16 C 1056/96

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

CASE HISTORY: Earlier instance AG Düsseldorf 13 July 1995; parallel proceedings AG Bottrop

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 issues: Articles: 53 ; 62 ; 74 ; 78

Classification of issues using UNCITRAL classification code numbers:

53A [Buyer obligated to pay price of goods];

62A [Seller may compel performance of any of buyer's obligations];

74A [General rules for measuring damages (loss suffered as consequence of breach): interest rate of credit taken from a bank allowed as damages];

78B [Rate of interest]

Descriptors: Price ; Specific performance ; 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 abstracts: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (German): cisg-online.ch <http://www.cisg-online.ch/cisg/urteile/400.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Liu Chengwei, Recovery of interest (November 2003) nn.104, 288; 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]; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 561

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Case text (English translation)

Queen Mary Case Translation Programme

Amstgericht Koblenz 12 November 1996

Translation [*] by Jarno Vanto [**]

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

[Seller's] claim is justified.

For his delivery according to [buyer's] order, the seller is entitled to receive the total purchase price of IT£ [Italian Lira] 1,918,900.-, resulting from the invoices of 4 April 1995 in the amount of IT£ 3,837,800.- and of 26 April 1995 in the amount of IT£ 1,918,900.-. After the [buyer] had fulfilled her obligation to pay the purchase price, the parties unanimously declared the case settled in the hearing before the Court on 22 December 1996. With respect to this part of the claim, the Court only needs to make a decision regarding the cost of the proceedings.

The [seller's] claim for interest on the purchase price at a rate of 16.5% applicable to both invoices is legitimate on the basis of CISG Article 78 and Article 1284 of the Italian Civil Code.

The United Nations Convention on Contracts for the International Sale of Goods (CISG) governs the sales contract between the parties by virtue of its Arts. 1(1)(a) and 100(2). Both Italy and Germany are Contracting States to the Convention. According to Art. 78 CISG, a party who fails to pay the price or any other sum in arrears is liable for interest to the other party.

It is undisputed that at the time of the conclusion of the contract the parties had agreed on the terms of payment. The terms provided that payment within ten days entitled the buyer to a 3% discount, and that payment within 60 days meant a net payment. The period of payment for the purchase price consequently was 60 days from the billing date; therefore, for payment of the invoice of 4 April 1996, the date of payment was 5 June 1995; while payment of the invoice of 26 April 1995 was due on 27 June 1995.

Contrary to German law, the only prerequisite for a claim for interest under Art. 78 CISG is the maturity of the sum in arrears.

Because Article 78 does not define the applicable rate of interest, Article 28 EGBGB [*] leads to the application of Italian law. According to Article 128 of the Italian Civil Code, the statutory interest rate starting from 16 December 1990 is 10%. Nevertheless, the [seller] is entitled to the higher interest rate of 16.5% he requested. Article 78 does not exclude the possibility to demand reimbursement under Art. 74 CISG for losses suffered through a bank credit at a higher rate than the statutory interest rate. In the parallel proceeding before the AG [*] Bottrop [Germany], the [seller] submitted a bank certificate which proves that he is taking credit from his house bank in amounts exceeding the purchase price at an interest rate of at least 16.5%.

The [seller] is therefore entitled to interest at the rate of 16.5% regarding the invoice of 4 April 1995 for IT£ 3,837, 800 from its maturity on 5 June 1995 until 26 June 1995 and regarding the two invoices of 4 April 1995 and 26 April 1995 for the total sum of IT£ 5,756,700 from 27 June 1995 until the objection submitted by [buyer's] legal representative on 2 August 1996. In this brief, the [buyer] for the first time unconditionally submitted that she performed her obligations under the contract.

After the parties unanimously declared the dispute regarding the claims for the purchase price settled in the hearing of 22 October 1996, the Court uses its discretion under §§ 91(1), 91a(1) ZPO [*] to order the [buyer] to bear the costs of the proceeding.

The [buyer] submits that she already fulfilled her obligations regarding the two invoices of 4 April 1995 and 26 April 1995 by effecting payment to the [seller's] commercial agent. This payment was allegedly settled by the attachment order of the AG [*] Düsseldorf of 13 July 1995 against a claim the [seller's] commercial agent possessed against him. However, these events do not lead to performance of the [buyer's] obligations under the contract according to §§ 362(2), 364 BGB.[*]

The [seller] correctly points out that the [buyer] initially responded to the [seller's] attorney's request for payment on 24 January 1996 with a letter of 31 January 1996. In this letter, [buyer] declared a reduction in the purchase price because the [seller's] delivery had allegedly been delayed. Only with [buyer's] brief arguing her objection on 2 August 1996 did the [seller] become aware of the fact that [buyer] no longer had reservations as to [seller's] alleged right to remedies regarding the amounts that were the issue of the attachment order by the AG [*] Düsseldorf. It is true that on 15 March 1996 [seller] sent a letter to the [buyer] according to which the [seller] was willing to consider customers' payments of up to IT£ 35,000,000 made to [seller's] commercial agent as performances towards himself. However, due to the [buyer's] above-mentioned written reservation in her letter of 31 January 1996, [seller's] letter failed to give the [buyer's] payments to [seller's] representative a retroactive effect of performance. Until that point in time, the [buyer's] payments to the [seller's] representative were completely undetermined and not known to the [seller]. For the first time, these amounts were sufficiently defined in the [buyer's] brief of 2 August 1996. It was only then, that is after the [seller's] claim was filed, that the [buyer's] obligation to pay the price was performed under § 364 BGB. The [seller's] claim for interest at a rate of 16.5% is therefore justified in its entirety.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Italy is referred to as [seller]; the Defendant of Germany is referred to as [buyer]. Amounts in Italian currency (Italian Lira) are indicated as [IT£].

Translator's note on other abbreviations: AG = Amtsgericht [German Local Court]; BGB = Bürgerliches Gesetzbuch [German Civil Code]; EGBGB = Einführungsgesetzbuch zum Bürgerlichen Gesetzbuche [German Code on the Conflict of Laws]; ZPO = Zivilprozeßordnung [German Code on Civil Procedure]

** Jarno Vanto is an LL.M student at the University of Turku, Finland. He is currently working on his thesis on damages under the CISG.

*** Ruth M. Janal, LL.M. (UNSW) is a Phd. Candidate at Albert-Ludwigs-Universität Freiburg.

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Pace Law School Institute of International Commercial Law - Last updated February 20, 2007
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