Case abstract
ITALY: Corte di Cassazione 14 December 1999
Case law on UNCITRAL texts (CLOUT) abstract no. 379
Reproduced with permission of UNCITRAL
A company having its place of business in Italy and a company having its place of business in Great Britain entered into an agreement providing for the sale and the distribution of goods. The Italian company sued the British company claiming termination of the agreement due to the latter’s failure to fulfill its obligations thereunder (i.e., to buy and distribute the goods on the British market and to pay the price), as well as damages.
The Supreme Court retained jurisdiction of the Italian Courts pursuant to article 5(1) of the Brussels Convention and to article 4 of the Rome Convention: the first states that jurisdiction belongs to the country where the obligation was or has to be fulfilled, the second leads to the application of Italian law, Italy being the place in which the characteristic obligations of the agreement had to be fulfilled.
However, the Supreme Court also supported its view by way of mentioning article 57(1)(a) of the CISG, according to which the price must be paid at the seller’s place of business and highlighted that this article sets forth a general rule the application of which can only be avoided on the basis of a provision, either legal or contractual, providing for a place of payment other than the seller’s place of business. Accordingly, the decision relied on the assumption that the CISG is applicable not only to sales, but also to distribution agreements, provided that these can be construed as accessory clauses to a sale agreement.
Classification of issues present
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
4A [Scope of Convention (issues covered): framework contract for sale of goods];
57A [Place for payment: in absence of agreement, payment at seller's place of business]
Descriptors:
Editorial remarks
- Unavailable
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=390&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (Italian): Giustizia civile (2000) 2333-2334; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=390&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
Italian: Ferrari, Giustizia civile (2000) 2334-2342
Queen Mary Case Translation Programme
Translation by Eva Kucich [*]
Translation edited by Angela Maria Romito [**]
[…]
1. According to the Brussels Convention of 27 September 1968 which was ratified by the Act
of 21 June 1971 no. 804, art. 5, prf. 1, persons having domicile in the territory of a
Contracting State may be summoned "before a judge of a place where the obligation is, or
must be, accomplished." (The same rule was defined by the Lugano Convention of 16
September 1988, ratified on 10 February 1992 by Act no. 198, art. 5, prf. 1, which states that
a defendant domiciled on the territory of a Contracting State may be summoned before a judge
of a place where the obligation in demand is, or must be, fulfilled").
Referring to international contracts of sale, in order to establish the grounds of an Italian
judge's jurisdiction regarding the claim of the Italian seller for fulfillment of a foreign buyer's
obligation, we need to take into consideration art. 57 of Law no. 218, dated 31 May 1995,
which states that the Rome Convention of 19 June 1980, enforced in Italy by Law no. 975 of 18
December 1984, regulates contracting obligations "without prejudice of other international
conventions also applicable."
Art. 4 of the Rome Convention states that, in the absence of
choice of law by the parties, rights and obligations deriving from a contract are governed by
the law of the country with which the contract has the closest connection. It is presumed that
the contract has the closest connection with the country in which the party who is to effect
the characteristic performance has its habitual residence or its central administration at the
time the contract is concluded. If the contract is signed by a company for its business, the country with which the contract has the closest connection is the country in which the main business office is located.
To determine the "forum destinate solutionis", art. 57 of the Vienna Convention (CISG) of 14 April
1980 (ratified in Italy 11 December 1985 by Law no. 765) is also important. It establishes
that the buyer must tender payment at the seller's place of business ("If the buyer is not bound
to pay the price at any other particular place, he must pay it to the seller at the seller's place
of business"). This article provides a general rule, which does not approve the
payment in any place other than seller's place of business, unless defined otherwise by the
parties, law or convention regulation (Cass. Sez. Un. 7 August 1998, no. 7759).
2. In trial has been deduced the non-accomplishment of the obligations agreed in the contract
of sale and distribution, due to the fact that the buyer has purchased a quantity of products
less than the scheduled minimum, has distributed only one of the three agreed lines of
products, has tendered payments in delay in respect of the prescribed deadline (the payments
should have been made not later than sixty day from the date on the invoice, directly on the
Pozzi Company's [seller's] bank account opened at Banca Commerciale Italiana agenzia Navigli-Milano).
The contract, defined by the parties as an atypical agreement, actually assumes a form of a
sale agreement accompanied by a distribution pact. In truth, the essential object of the agreement,
as can be deduced from the letter dated 5 July 1884, is the sale of products and its subsequent
distribution in the U.K. In fact, the buyer committed itself to purchase and distribute a certain type
of sanitary products and to tender payment on time in Italy, which is the country most closely
connected with the contract that has to be carried out.
3. From the above mentioned statements and according to art. 57 of Law no. 218 of 31 May 1995, the contractual obligations are regulated by the Rome Convention and according to art. 57 of the CISG, the jurisdiction must be asserted to Italian courts.
In fact, Italy is the place where, according to the rules of Italian Private International Law, the demanded obligation must be fulfilled - this rule corresponds with the applied law (regarding the payment of the sold merchandise); Italy is also the place of seller's central administration and the buyer is not bound by any other expressed specific regulation regarding the place of payment.
Taking in consideration the nature of the contract entered into by parties and the place where
the obligation should have been performed; taking in consideration the applicable law coming from the private international law, the applied law - that means the demand of paying the price
and accomplishing the contractual obligation - that should have taken place in Italy; and
evaluating all of these matters, we conclude that the dispute will be settled under the
jurisdiction of Italian courts.
For all these reasons,
The Court deciding the present case, declares the jurisdiction of the Italian Judge.
FOOTNOTES
* Eva Kucich is a graduate of the Faculty of Law, University of Rijeka (2000), enrolled in postgraduate study "Law of European Integrations", employed as a Research Assistant at the Faculty of Law (2001).
** Angela Maria Romito, Associate of the Institute of International Commercial Law, Pace University School of Law. Law degree (cum laude) 1994, University of Bari, Bari, Italy. Admitted to the Bar 1997. LL.M. University of Pittsburgh School of Law 2000-2001. CWES Scholarship. Researcher of European Union Law at the University of Bari. Lawyer at Studio Legale Romito.
All translations should be verified by cross-checking against the original text.
Case text (English translation)
Corte di Cassazione 14 December 1999
Imperial Bathroom Company v. Sanitari Pozzi S.p.A.
Pace Law School
Institute of International Commercial Law - Last updated July 2, 2003
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