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CISG Article 78: Endless disagreement among
commentators, much less among the courts

Francesco G. Mazzotta
July 2004

Appendix 10

ITALY

Courts

Pretura District court
Tribunale District court
Corte di Appello Court of Appeals

1. Pretura di Torino, November 24, 1989, available at <http://cisgw3.law.pace.edu/cases/891124i3.html>.

Original language:     
Translation:
Italian
Available

Court (translation):

"The Court directs the [seller] to return to the [buyer] the sum of ITú [----] plus legal interest and devaluation from [date of avoidance] until the date of the payment. The Court, however, rejects the [buyer's] request for damages and for immediate enforceability because [buyer] did not prove any of the material elements of these claims."

2. Pretura di Torino, January 30, 1997, available at <http://cisgw3.law.pace.edu/cases/970130i3.html>.

Original language:     
Translation:
Italian
Available

Court (translation):

"The [seller's] demand for payment of greater damage under art. 1224 c.c. [Italian Civil Code] may be further granted, seeing that, should it be proven that the [seller] suffered damages greater than that returned with lawful interest (cf. the interest liquidation tables produced sub 11 by [seller]); the aggregate interest is to be fixed in the measure of 12% and is to run from 13 October 1994 (the [buyer] has not challenged that the parties agreed upon payment thirty days from receipt of the goods)."

3. Corte di Appello di Milano, December 11, 1998, available at <http://cisgw3.law.pace.edu/cases/981211i3.html>.

Original language:     
Translation:
Italian
Available

Court (translation):

"The amount to which the [seller] would be entitled to should be increased by the accrued interest at the Italian legal rate, from the date of the breach."

4. Tribunale di Pavia, December 29, 1999, available at <http://cisgw3.law.pace.edu/cases/991229i3.html>.

Original language:     
Translation:
Italian
Available

Court (translation):

"As far as interest on the sums not paid, it will be observed that the United Nations Convention provides only a general right to interest, without specifying which rate is to be applied. In light of the fact that the drafters of the Convention have intentionally left the problem of the applicable rate unresolved, as one evinces from the travaux préparatoires, it cannot be maintained that this is an issue dealing with one of the areas which, by virtue of Article 7(2) of the Convention, should be governed by the general principles upon which the Convention is based. Instead, it is a question not at all addressed by the Convention and which hence is to be resolved in light of the applicable law, that is to say, in light of [internal] Italian law -- such being the law of the seller, which Art. 3(1) of the Hague Convention of 1955 beckons to. This solution corresponds besides to that adopted by foreign case law (see, for example, Pretore della giurisdizione Locarno-Campagna 16 December 1991 [of Switzerland] which, although not binding, is however to be taken into consideration as required by Art. 7(1) of the CISG. Consequently, interest is determined according to the measure of the legal rate in force in Italy. With respect to the life of the interest, it will be noted that being in default is not required; interest is therefore due from the due date of the invoice to settlement of the debt. Nothing is due by right of greater damages from monetary devaluation because, in the period of time involved here, the legal annual interest rates have always been greater than the rate of inflation. On the other hand, the plaintiff [seller] which has the burden of proving damages (Art. 7(2), Art. 79 CISG), has not proved damages incurred because of the missing payment and the Convention clearly distinguishes between interest and damages (see Art. 78)."

5. Tribunale di Padova, March 31, 2004, available at <http://cisgw3.law.pace.edu/cases/040331i3.html>.

Original language:     
Translation:
Italian
Available

Court (translation):

"The right to interest on the unpaid sum is expressly provided by Article 78 of the Convention, which hereby states: "If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74." From the reading of this provision it is easily ascertained that it does not resolve all the problems related to the interest on the sums not paid. In fact, as is often emphasized from doctrine and judicial decisions, the foretold article only forecasts a "general right to interest" (see the arbitral award of the ICC arbitral tribunal, no. [7585 of 1992], in Journal du droit international, 1995, 1015 et seq.; OLG [Provincial Court of Appeal] Koblenz [Germany], 17 September 1993, in Recht der internationalen Wirtschaft, 1993, 938); other issues were not addressed by the drafters of the United Nations Convention, among those the applicable rate of interest (an important issue relative to the decision in this controversy).

[16] The missing criteria on the base of which the rate of interest is to be determined has generated a dispute in doctrine among those who sustain that the question is dealt with by the Convention, even if not expressly (internal gap), and those who, on the other hand, believe that the determination of the rate of interest is a subject excluded from the scope of application of the Convention (external gap). In the first hypothesis, it is possible to make reference to the general principles of the Convention; meanwhile, in the second, it is necessary to make reference to the rules of private international law, in order to identify the applicable substantive law. This Tribunal is inclined, as are the prevailing doctrine and court decisions, toward the second thesis. The measure of interest must be considered a subject excluded from the Convention, since the [Convention's drafters] were not able to come to any agreement on that point, and therefore intentionally excluded addressing that problem (see also Tribunale di Pavia, [cited above]). It follows that it is not justified, as per Article 7(2), to turn to the general principles on which the Convention is based -- as, on the contrary, some courts have held (see for example RB Koophandel [District Court] Ieper [Belgium], 29 January 2001, published on the Internet at the following site: []; Juzgado Nacional de Primiera Instancia en lo Comercial n. 10 [National Commercial Court of First Instance], Buenos Aires [Argentina], 6 October 1994, published on the Internet at the following site: []; arbitral decisions of the Arbitral Court of the Vienna [Austria] Federal Chamber of Commerce, nos. 4366 and 4318, in Recht der internationalen Wirtschaft, 1995, 590 et seq.) --, the employment of which would give to this question wide discretionary if not even arbitrary solutions, and therefore solutions contrary to that requirement of the certainty of law that is an indispensable condition for the development of international commerce.

In order determine the interest rate, one must then make reference to the law applicable by virtue of the norms of the private international law of the forum (in this sense, see LG [District Court] Saarbrücken [Germany], 25 November 2002, in Internationales Handelsrecht, 2003, 70-71; LG [District Court] Stendal [Germany], [12 October] 2000, in Internationales Handelsrecht, 2001, 30 et seq.; LG [District Court] Darmstadt [Germany], 9 May 2000, in Internationales Handelsrecht, 2001, 27 et seq.; OLG [Appellate Court] Stuttgart [Germany], 28 February 2000, in OLG Report-Stuttgart, 2000, 407 et seq.; Trib. Pavia, [cited above]; OLG [Appellate Court] Koblenz [Germany], 18 November 1999, published on the Internet at the following site: []; KA [District Court] Zug [Switzerland], 21 October 1999, published on the Internet at the following site: [] KG [District Court] Kanton Zug [Switzerland], 16 October 1997, published on the Internet at the following site: []. In this case it is necessary therefore to make reference to the already mentioned norms of the Hague Convention of 1955, that refer back to Italian law as the law of the seller (see Article 3(1) of the Hague Convention of 1955). Consequently, it is necessary to apply the legal rate as per Article 1284 of the Italian Civil Code considering obviously the variations that this has undergone over time."

SUMMARY

Cases involving Article 78: 5
Cases for which an English translation is available: 5
Cases for which only an abstract was available: 0
Cases for which neither translation nor abstract was available: 0


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