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CISG CASE PRESENTATION

Austria 19 January 1999 Supreme Court (Coat hanger case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/990119a3.html]

Primary source(s) for case presentation: Case text


Case Table of Contents


Case identification

DATE OF DECISION: 19990119 (19 January 1999)

JURISDICTION: Austria

TRIBUNAL: Oberster Gerichtshof [Supreme Court]

JUDGE(S): Dr. Schlosser (presiding judge), Dr. Schiemer, Dr. Gerstenecker, Dr. Roherer, Dr. Zechner

CASE NUMBER/DOCKET NUMBER: 1 Ob 294/98m

CASE NAME: Austrian case citations do not generally identify parties to proceedings

CASE HISTORY:1st instance Landesgericht Innsbruck [a regional court] (GZ 1 R 378/98I-8) 19 August 1998

SELLER'S COUNTRY: People's Republic of China

BUYER'S COUNTRY: Austria (plaintiff)

GOODS INVOLVED: Coat hangers


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 74 ; 81

Classification of issues using UNCITRAL classification code numbers:

Unavailable

Descriptors: Unavailable

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Editorial remarks

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Citations to case abstracts, texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (German): CISG-Austria website <http://www.cisg.at/1_29498m.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation)

Queen Mary Case Translation Programme

Austrian Supreme Court (Oberster Gerichtshof)

19 January 1999 [1 Ob 294/98m]

Translation [*] by Veit Konrad [**]

Edited by Institut für ausländisches und Internationales
Privat- und Wirtshaftsrecht der Universität Heidelberg
Daniel Nagel, editor
[***]

RULING (BESCHLUSS)

The extraordinary appeal (ausserordentliche Revision) does not meet the requirements of 528(1) of the Austrian Code of Civil Procedure (Zivilprozessordnung; ZPO) and must therefore be dismissed following 78 and 402 of the Austrian Act concerning the Execution of Legal Titles (Exekutionsordnung; EO) and 526(2), sentence 1, of the Austrian Code of Civil Procedure.

REASONING

Following the order of the Austrian Appellant [Buyer], the Appellee, an Austrian bank, opened an irrevocable letter of credit (unwiderrufliches Dokumentenzahlungsakkreditiv) to the benefit of Seller, domiciled in Hangzhou, People's Republic of China, who is not involved in the present proceedings. The letter of credit covered the amount of US $ (US dollars) 57,960.00 (equivalent to AUS (Austrian schillings) 724,361.70) as purchase price for 289,800 coat hangers, which had been an integral part of a sales agreement between [Buyer] and Seller. [Buyer] and Seller stipulated that the CISG and Incoterms 1990 would govern their contract. They further agreed that following the Regulations of the Austrian Chamber of Commerce (ICC) concerning Dispute Settlement and Arbitration (Schieds- und Vergleichsordnung) an arbitral tribunal in Zurich should adjudicate all disputes arising from the contract.

Before the Court of First Instance, as the established venue under 387(2) of the Austrian Act concerning the Execution of Legal Titles (Exekutionsordnung; EO), [Buyer] sought the following interlocutory injunction (einstweilige Verfügung):

      Within three months, the bank should be prohibited under 382(1) No. 5 of the Austrian Act concerning the Execution of Legal Titles (Exekutionsordnung; EO) from executing the given letter of credit, i.e., from paying the secured amount of US $57,960.00 to Seller, unless the latter can provide a binding title of the ICC's arbitral tribunal, as the agreed venue for this case.

To substantiate its request, [Buyer] submits:

      In accordance with CISG provisions, [Buyer] had given specified notice, that the goods delivered by Seller suffered from evident substantive defects. [Buyer] is therefore entitled to damages under Art. 74 et seq. CISG and may declare the contract avoided under Art. 81 CISG. Therefore, Seller is only entitled to a small part of the contract price and may not call for execution of the letter of credit for the full amount of US $57,960.00. Doing so would constitute a misuse of Seller's rights, which must be prohibited by the Court.

[Buyer]'s request for an interlocutory injunction has been dismissed on two grounds.

   -    [Buyer]'s extraordinary appeal (ausserordentliche Revision) is not admissible, as the case does not touch upon a point of law of vital importance.
 
   -    Under 378(1) of the Austrian Act concerning the Execution of Legal Titles (Exekutionsordnung; EO), a court may issue an interlocutory order even before regular proceedings have been commenced. However, in this case, the court, according to 391(2) of the Austrian Act concerning the Execution of Legal Titles (Exekutionsordnung; EO), must set an appropriate time wherein the regular claim has to be brought before a court.

The latter implies that the party pursuing the injunction must specify the nature of its forthcoming claim in advance (see EvBl 1976 page 114 et al.; RIS-Justiz RS0004861). As an established principle, the interlocutory order must not exceed what will be sought within the party's regular claim, (see SZ 47/109; SZ 58/81; ÖBA 1995,311 (Konecny); 6 Ob 59/97p and many others; RIS-Justiz RS0004861) as such an interlocutory order is meant to provisionally preserve legal positions, which eventually are to be decided upon within regular proceedings. The injunction is therefore always related to a subsequent regular claim. Hence, such an interlocutory injunction can only secure a legal position, which will be pursued within the subsequent regular claim (ÖBA 1995, 311; 6 Ob 59/97p; 10 Ob 120/97p = ÖBA 1998, 480; RIS-Jusitz RS0004904; Konecny, Der Anwendungsbereich der einstweiligen Verfügung, page 309). As a cause of action is always confined to the parties of the trial within regular proceedings, it follows that -- in general -- a party cannot bring an interlocutory injunction against a third person, that is not party of the regular proceedings. Exceptions to this rule concern interlocutory orders, which prohibit a third party from exerting rights which are genuinely derived from rights of the defendant at the regular trial (see ÖBA 1995, 311 with further references). These exceptions do not apply to the present case. The interlocutory injunction that [Buyer] pursued was not meant to hinder the ability of the Chinese seller, as the Defendant in the regular proceedings, from executing rights previous to a final award being rendered by the agreed arbitral tribunal. On the other hand, the regular arbitral proceedings only involve the Chinese seller, and not the bank, which had opened the letter of credit.

Despite strong scholarly opposition (see Konecny, in: ÖBA 1995, page 312 with further references in footnotes 2 to 4 and 6), the present case does not support divergence from the principle as established above. The explicit wording of the relevant law demands that both, the requested interlocutory order and the party's regular claim, must concern the same legal positions. The rulings (6 Ob 619/91 = ÖBA 1992, 1035 (Avancini)); 4 Ob 366/97w = ÖBA 1998, 563) cited by [Buyer] only concern cases, in which an interlocutory order had been brought against the defendant at the regular proceedings, but only affected a third party in respect to its function as debtor [or obligor] (Drittschuldner). They do not apply to the present case. To prohibit an undue execution of the letter of credit, [Buyer] first would have had to pursue an interlocutory order against the Chinese seller, who is the defendant in the regular proceedings. In this action [Buyer] would have then been entitled to bring an injunction against Defendant-Appellee preventing the bank from paying the credited amount (see ÖBA 1995, 311). Based on these premises, the courts of first and second instance rightfully refused to enquire into the questions of whether the execution of the letter of credit had been abusive or under what conditions an interlocutory order might be brought to secure legal positions, which are to be decided upon by a foreign arbitral tribunal ( 594(1) of the Austrian Code of Civil Procedure (Zivilprozessordnung; ZPO) and 1 No. 16 of the Austrian Act concerning the Execution of Legal Titles (Exekutionsordnung; EO).

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the requesting party / appellant of Austria is referred to as [Buyer].

** Veit Konrad has studied law at Humboldt University, Berlin since 1999. During 20012002 he spent a year at Queen Mary College, University of London, as an Erasmus student.

*** Daniel Nagel has been a law student at Heidelberg University since October 2002 and an exchange student at Leeds University in 2004/2005.

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Pace Law School Institute of International Commercial Law - Last updated July 24, 2007
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