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CISG
number


LEGISLATIVE HISTORY
1980 Vienna Diplomatic Conference

G. Report of the First Committee
[Outline of committee proceedings]
Document A/CONF.97/11 [Original: English 7 April 1980]

(. . .)

78, 84
Article 69(1) [became CISG article 84(1) ]
[Article 73 bis [became CISG article 78 ]]

A. UNCITRAL text [1978 draft]
B. Amendments
C. Proceedings in the First Committee
D. Subsequent proceedings
E. Overview comments

A. UNCITRAL text

1. The text of the [1978 draft of the ] United Nations Commission on International Trade Law provided as follows:

"Article 69 [became CISG article 84 ]

"(1) If the seller is bound to refund the price, he must also pay interest thereon from the date on which the price was paid.

"(2) The buyer must account to the seller for all benefits which he has derived from the goods or part of them:

"(a) if he must make restitution of the goods or part of them; or

"(b) if it is impossible for him to make restitution of all or part of the goods or to make restitution of all or part of the goods substantially in the condition in which he received them, but he has nevertheless declared the contract avoided or required the seller to deliver substitute goods. "

[Go to Secretariat Commentary on the above text]

[See also pre-Conference observations and proposals by Governments and International Organizations]

B. Amendments

2. In connection with article 69 [became CISG article 84 ], the First Committee also considered some amendments submitted on the issue of interest on sums that were in arrears.

3. Amendments were submitted to article 69 [became CISG article 84 ], and on the issue of interest on sums that were in arrears, by Denmark, Finland, Greece, Sweden (A/CONF.97/C.1/L.216), Czechoslovakia (A/CONF.97/C.1/L.218), Japan (A/CONF.97/C.1/L.222), Pakistan (A/CONF.97/C.1/L.225) and United Kingdom (A/CONF.97/C.1/L.226/Rev.1).

4. These amendments were to the following effect:

[ARTICLE 73 bis] [became CISG article 78 ]

(i) Denmark, Finland, Greece, Sweden (A/CONF.97/C.1/L.216):

Add a new article 73 bis [concordance: CISG article 78 ] to read as follows:

"If a party fails to pay the price or any other sum as is in arrears, the other party is entitled to interest thereon at the customary rate for commercial credits at his place of business."

As a consequence the title "Section IV. Damages" should be amended to read "Section IV. Damages and interest".

[Withdrawn: see Consideration, 14, below.]

(ii) Czechoslovakia (A/CONF.97/C.1/L.218):

Add a new article 60 bis [concordance: CISG article 78 ] to read as follows:

"(1) If the breach of contract consists of delay in the payment of the price, the seller is in any event entitled to interest on such sum as is in arrears at a rate equal to the official discount rate prevailing in the country where the buyer has his place of business, at the time of delay increased by one per cent or, if there is no such a rate, at the rate applied to unsecured short term international commercial credits increased by one per cent.

"(2) The seller may claim damages as provided in this Convention, if the loss is not covered by interests."

[Withdrawn: see Consideration, 14, below.]

(iii) Japan (A/C0NF.97/C.1/L.222):

Add a new article 73 bis [concordance: CISG article 78 ] to read as follows:

"If a party has failed to pay the price or any other sum that is in arrears, the other party is presumed to have suffered damages equivalent to the amount calculated at the interest rate for [unsecured short-term commercial credits prevailing] at his place of business."

[Withdrawn: see Consideration, 14, below.]

(iv) Pakistan (A/CONF.97/C1/L.225):

The following sentence may be added at the and of paragraph (1) of article 69 [became CISG article 84 ]:

"The rate of interest would be the one current at the seller's place of business."

[Withdrawn: see Consideration, 14, below.]

(v) United Kingdom (A/CONF.97/C.1/L.226/Rev.1):

The following proposal should replace that made in A/CONF.97/C.1/L.226:

Delete paragraph (1) of article 69 [became CISG article 84 ].

New article in Part I.

Insert in Part 1, chapter I (sphere of application), a new article to read as follows:

"This Convention does not affect any right of the seller or buyer to recover interest on money."

[Withdrawn: see Consideration, 14, below.]

C. Proceedings in the First Committee

(i) Meetings

5. The First Committee considered [article 73 bis] [became CISG article 78 ] at its [28th meeting, 29th meeting and 34th meeting] on 28 and 31 March and 3 April 1980 respectively. [The First Committee considered article 69 [became CISG article 84 ] at its 28th meeting, 29th meeting and 34th meeting]. [See also 37th meeting of First Committee for both articles].

(ii) Consideration

6. At the 29th meeting, an ad hoc working group composed of the representatives of Argentina, Czechoslovakia, Ghana, Greece, India, Italy, Pakistan and Sweden was established to consider the amendments relating to article 69 [concordance: CISG article 78 ] and the issue of interest on sums that are inarrears.

7. At the 34th meeting, the ad hoc working group submitted the following text:

Ad hoc Working Group on interest composed of Argentina, Czechoslovakia, Ghana, Greece, India, Italy, Pakistan and Sweden, assisted by Denmark, United States of America and Yugoslavia (A/CONF.97/C.1/L.247):

Matter of interest
(sums that are in arrears)

Article 73 bis [concordance: CISG article 78 ]

Alternative I:

"If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest thereon at the rate for a short-term commercial credit or at another similar appropriate rate prevailing in the main domestic financial centre of the party claiming payment."

Alternative II:

"If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest thereon at the rate for a short-term commercial credit or at another similar appropriate rate prevailing in the main domestic financial centre of the country of the party in default, or, in case the other party's actual credit costs are higher, at a rate corresponding thereto but not at a rate higher than the first said rate in his own country. "

Alternative III:

"If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest thereon at the rate for a short-term commercial credit or at another similar appropriate rate prevailing in the main domestic financial centre of the party in default. However, in case the party claiming interest is not fairly compensated by such rate, he may claim interest up to the first said rate in his own country."

(Restitution of price)

Article 69 [became CISG article 84 ]

Paragraph (1).

Add at the end of paragraph (1) of article 69 [became CISG article 84 ] the following:

"at the rate as set out in article 73 bis [concordance: CISG article 78 ] in the country of the seller's place of business."

8. At the 34th meeting, a motion to close the debate on the proposals submitted by the ad hoc working group A/CONF.97/C.1/L.247 was adopted by 19 votes in favour and 16 against.

9. Alternative I of the proposals submitted by the ad hoc working group A/CONF.97/C.1/L.247 was rejected by 17 votes in favour and 22 against.

10. An oral amendment was submitted to delete from Alternative II of the proposals submitted by the ad hoc working group the words "or, in case of the other party's actual credit costs are higher, at a rate corresponding thereto but not at a rate higher than the first said rate in his own country". This oral amendment was rejected by 9 votes in favour and 16 against.

11. An oral amendment was submitted to delete from Alternative III of the proposals submitted by the ad hoc working group the words "However, in case the party claiming interest is not fairly compensated by such rate, he may claim interest up to the first said rate in his own country." This oral amendment was rejected by 8 votes in favour and 15 against.

12. Alternative II of the proposals submitted by the ad hoc working group as unamended was adopted by 20 votes in favour and 14 against, and referred to the Drafting Committee. An oral amendment to add the word "normal" before the word "rate" in the phrase "rate for a short-term commercial credit" was adopted by 9 votes in favour and 6 against.

13. The proposal of the ad hoc working group in regard to paragraph (1) of article 69 [became CISG article 84 ] was adopted by 26 votes in favour and 8 against, and referred to the Drafting Committee. The UNCITRAL text of article 69 [became CISG article 84 ] was adopted subject to this amendment.

14. The proposals of Denmark, Finland, Greece, Sweden (A/CONF.97/C.1/L.216), Czechoslovakia (A/CONF.97/C.1/L.218), Japan (A/CONF.97/C.1/L.222), Pakistan (A/CONF.97/C.1/L.225) and the United Kingdom (A/CONF.97/C.1/L.226/Rev.1) were withdrawn.

[D. Subsequent Proceedings]

[For subsequent Conference material on the development/approval of the final text of CISG article 78, go to Plenary Conference 10th meeting and 11th meeting; see also Plenary Conference 7th meeting and 8th meeting]

[For subsequent Conference material on the development/approval of the final text of CISG article 84, go to Plenary Conference 11th meeting]

[E. Overview Comments]

[English translation of report on the significance of the deliberations on this article at the Diplomatic Conference: prepared by Peter Schlechtriem, based on notes taken at the conference and published shortly thereafter]

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Pace Law School Institute of International Commercial Law - Last updated October 11, 2000
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