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

Francesco G. Mazzotta
July 2004

Appendix 13

SWITZERLAND

Courts

BG Bezirksgericht District Court
KG Kantonsgericht District Court
RA Richteramt District Court
HG Handelsgericht Commercial Court
  Pretore District Court
  Tribunal Cantonal Canton Appellate Court
OG Obergericht Appellate Court
ZG Zivilgericht Civil Court
BGer Bundesgericht Supreme Court

Codes

CCP   Swiss Code of Civil Procedure
IPRG Bundesgesetz über das Internationale Privatrecht Swiss Federal Act on International Private Law
LPIL   Swiss Federal Law on Private International Law
BGE Entscheidungen des Bundesgerichts Official Reporter of the Federal Court
ZPO Zivilprozessordnung Swiss Code of Civil Procedure
CC Codice Civile Italian civil code

1. Pretore della giurisidizione di Locarno Campagna, December 16, 1991, available at <http://cisgw3.law.pace.edu/cases/911216s1.html>.

Original language:     
Translation:
Italian
Available

Court (translation):

"The Vienna Convention regulates the problem of interest very briefly in Art. 78, which 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.' This Article sanctions the principle that the run of interest does not depend on arrearage, but rather simply on the lack of payment of the price on time (cf Berner Tage für die Juristische Praxis 1990, Wiener Kaufrecht, page 208).... Art. 78 of the Vienna Convention is the result of compromise which the Contracting States reached after long discussions. However, it was not possible to reach an agreement on the interest rate (cf. Berner Tage für Juristische Praxis 1990, Wiener Kaufrecht, p. 208). In consequence, the interest rate to be applied is the rate prescribed by the law which would be applicable if the Vienna Convention were not applied."

2. ZG Basel, December 21, 1992, available at <http://cisgw3.law.pace.edu/cases/921221s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"Under Article 78 CISG, a claim for interest may be raised if a party fails to pay the sales price or another due sum .... The rate of interest is not provided for in the CISG. The CISG refers to the national law which the previously considered conflict of laws provisions refer to (cf. 2.) [Austrian Law]. Under Para 352 of the Austrian Commercial Code, the rate of interest laid down amounts to 5%. However, this rate of interest only applies if no rate of interest was agreed between the parties (cf. Straube, Commentary to the Commercial Code, N 1 ff. to para. 352). The general terms and conditions of trade of the [seller] which are printed on the back of the carbon copies of the letters of confirmation of 24 February 1989 submitted by the [buyer] to the court .... provide, in Number 4.6, for a rate of interest which exceeds the bank rate of the Austrian National Bank by at least 3.5%. According to the prevailing legal theory in Austria, the general terms and conditions of trade are also valid if reference is first made to these in a confirmation (cf. Code of Commercial Law, edited by Fritz Schoenherr and Gunter Nitsche, Vienna 1981, page 288, E. 1b). The defendant does not in general contend that the General Terms and Conditions of Trade of the [seller] had not become contractual content. That the bank rate of the Austrian National Bank 1989 was 5.5% or more according to the General Terms and Conditions of Trade of the [seller] can, given the interest situation in Austria, be regarded as established. Therefore, it is to be established that the 9% interest claimed by the [seller] was agreed upon. Thus the interest claim of the [seller] can also be awarded in full."

3. RA Laufen des Kantons Berne, May 7, 1993, available at <http://cisgw3.law.pace.edu/cases/930507s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"Only in regard to the determination of the interest in arrears does the national law gain significance, since Art. 78 CISG only constitutes the obligation to pay interest, however, without determining the rate of interest. It is especially controversial in German doctrine, what national law should be applicable to that matter. Following Schlechtriem/Eberstein (Art. 78, para. 3), the law determined by the conflict of laws provisions shall be applicable, whereas following a dissenting and significant opinion, the rate of interest should be determined by the law of the interest-creditor (cf. the references in Schlechtriem/Eberstein, Art. 78, para. 9). However, this controversy is only of significance when the seller is in arrears with his obligation to pay the price, e.g., with the liability for damages for defective goods under Art. 74 CISG et seq.; here, applying the conflict of laws provisions, the rate of interest is determined by the statute of the seller, whereas the rate of interest is determined by the statute of the buyer when applying the law of the interest-creditor. In cases where, as brought forward by the [seller], the buyer is in arrears with his obligation to pay the price, which should be the majority of all cases, the rate of interest is - under both approaches - to be determined by the law of the seller, which in the case at issue is Finnish law. Nevertheless, it is all in all clear that the present case, regarding the matters disputed, is solely governed by the scope of application of the CISG; in other words, on the merits of the case, the CISG is relevant and has to be referred to for the solution of the matter of dispute, and not any pure national Finnish law. Finnish law is presently significant only for the determination of the rate of interest, as far as the [buyer] owes interest at all and this is disputed....

4. HG Zürich, September 1, 1993, available at <http://cisgw3.law.pace.edu/cases/930901s1.html>.

Original language:     
Translation:
German
Unavailable

5. HG Zürich, September 9, 1993, available at <http://cisgw3.law.pace.edu/cases/930909s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The court ordered the buyer to pay the purchase price with interest at the statutory interest rate of the applicable Italian law (Article 78 CISG)."

Unilex abstract:

"The Court awarded the seller the full purchase price plus interest (Art. 78 CISG), at the statutory rate provided for by the law otherwise applicable to the contract (Italian law)."

6. Tribunal Cantonal Vaud, December 6, 1993, available at <http://cisgw3.law.pace.edu/cases/931206s1.html>.

Original language:     
Translation:
French
Unavailable

Unilex abstract:

"The Court further held that the seller was entitled to interest on the price (Art 78 CISG). As CISG does not determine either the time of interest accrual or the interest rate, the Court stated that both questions had to be determined by the law otherwise applicable to the contract (in this case French law). Therefore, interest accrued from the date the seller requested buyer to pay the price. French law was also applicable to determine the rate of interest. However, as the seller failed to prove the relevant rate in France, the Court referred to Swiss law to ascertain the applicable rate."

7. Tribunal Cantonal Valais, June 29, 1994, available at <http://cisgw3.law.pace.edu/cases/940629s1.html>.

Original language:     
Translation:
German
Available

JL&C abstract:

"Article 78 CISG does not fix the rate of interest. Thus this rate is fixed by the law applicable by virtue of private international law. According to Article 117 IPRG (Swiss private international law), if there is no choice of law, a contract is governed by the law with which it is most closely connected. There is a presumption that the country with the most close connection is the country in which the party obliged to the characteristic performance has her residence. In contracts for the sale of goods the performance of the seller is the characteristic performance. According to these rules of private international law, Italian law is applicable as to the rate of interest. Characteristic performance is the performance of delivering furniture, performance of the plaintiff having her place of business in Italy. According to Article 1284 of the Italian Codice Civile the rate of legal interest is 10%. Interest over and above this rate must be contracted to in writing. A contract of this kind is not presented; thus the rate of interest is 10%."

8. KG Zug, September 1, 1994, available at <http://cisgw3.law.pace.edu/cases/940901s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The seller was awarded interest on the unpaid price. As CISG does not determine the interest rate the Court applied the law otherwise applicable to the contract (in the case at hand, German law) and, as the seller had given evidence of having had recourse to bank loans, granted the higher interest rate of 12%."

9. BG Arbon, December 9, 1994, available at <http://cisgw3.law.pace.edu/cases/941209s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The Court held that interest was payable on the sums due to the claimant. As CISG does not determine the interest rate (Art. 78 CISG), the Court stated that it was to be determined in accordance with the domestic law of the creditor's country (Austria)."

10. KG Zug, December 15, 1994, available at <http://cisgw3.law.pace.edu/cases/941215s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The Court further held that the seller was entitled to interest on the price (Art. 78 CISG). In the absence of an express provision in CISG, the Court held that the interest rate was to be determined in accordance with the law otherwise applicable to the contract."

11. Tribunal Cantonal Valais, December 20, 1994, available at <http://cisgw3.law.pace.edu/cases/941220s1.html>.

Original language:     
Translation:
French
Available

Court (translation):

"Art. 78 CISG provides for the payment of default interest without stating the interest rate. The interest rate must be determined in conformity with the law applicable by virtue of the rules of private international law (art. 7(2) CISG). According to art. 117 LPIL , in case of a failure to choose the governing law, the contract is governed by the law of the State to which the contract is mostly related (art. 117(1) LPIL); the contract is deemed to be related to the State in which the party which has to fulfill the principal obligation under the contract has its place of residence, or - if the contract forms part of professional or commercial activities - its place of business (art. 117(2) LPIL); in contracts for the transfer of property, the duty of the owner is crucial for the determination of the governing law (art. 117(3) LPIL).

According to art. 118 LPIL, sales of goods are governed by the Convention on the Law Applicable to International Sales of Goods, adopted in The Hague on 15 June 1955. Rules of conflict of laws stated in that Convention are applicable even if the law governing the contract is the law of a non-Contracting State (Schwander, Internationales Vertragsschuldrecht - Direkte Zuständigkeit und Objektive Anknüpfung, in Beiträge zum neuen IPR des Sachen-Schuld-und Gesellschaftsrecht, in Festschrift für Rudolf Moser, p. 89; Knoepfler, Le contrat dans le nouveau droit international privé suisse, in Le Nouveau Droit international privé suisse, CEDIDAC, p. 93; Schnyder, Das neue IPR-Gesetz, 2e éd., p. 109).

Art. 3(1) of the 1955 Hague Convention states that sales of goods are governed by the law of the State where the seller has its place of residence at the moment of the receipt of the offer, unless otherwise agreed by the parties.

In the present case, application of those rules of conflict of laws leads to the application of Italian law. This conclusion is also the result of the application of art. 117 LPIL; the principal obligation under the present contract (delivery of blocks of stone) is the [seller's] responsibility, whose place of business is in Italy. According to art. 1284 of the Civil Code of Italy, the rate of default interest is 10%, unless a higher rate is fixed by the parties. The [seller] in the present case claims the default interest at the rate of 8%. Therefore, it is possible to award a higher rate of default interest only if the Court rules ultra petita."

12. HG Zürich, September 21, 1995, available at <http://cisgw3.law.pace.edu/cases/950921s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The court ruled in favour of the [Austrian seller]. With respect to damages, the court explained that the [seller] could ask for higher damages than those under the applicable law by proving that it was paying a higher rate of interest (article 74 CISG). As regards interest, the court found that article 78 CISG was applicable. However, as article 78 CISG does not address the question of the applicable rate of interest, the court applied Austrian law in determining the rate of interest."

Unilex abstract:

"The Court stated that the buyer had to pay the purchase price and furthermore that interest was payable in compliance with Art. 78 CISG; according to the Court, the interest rate had to be determined, absent an express provision in CISG, by applying the private international law rules of the forum, which, in the case at hand, led to the application of Austrian law. Although Austrian statutory interest rate amounted to 5%, the Court held that the seller was entitled to the higher interest rate of 9,75% as further damages (Arts. 78 and 74 CISG). In this respect, the Court observed that the seller had only to prove the recourse to bank loans since it can be assumed that companies normally resort to external sources of credit to finance their activities."

13. HG St. Gallen, September 21, 1995, available at <http://cisgw3.law.pace.edu/cases/951205s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The Court held that the seller was entitled to recover the full contract price. In addition, the seller was awarded interest according to Art. 78 CISG. With respect to the interest rate, the Court applied Swiss private international law rules which led to the German statutory interest rate. The seller was then awarded a higher interest rate as further damages since it provided a bank certificate proving that it had paid interest on bank loans during a specific time period."

14. KG Zug, November 30, 1995, available at <http://cisgw3.law.pace.edu/cases/951130s1.html>. [Second instance: see infra # 21; Third instance: see infra # 36].

Original language:     
Translation:
German
Unavailable

15. Tribunale d'Appello di Lugano, February 12, 1996, available at <http://cisgw3.law.pace.edu/cases/960212s1.html>. [First instance: Pretura Lugano, No. 1315, October 16, 1995]

Original language:     
Translation:
Italian
Available

Court (translation):

"Article 78 of the CISG provides that the buyer, if he fails to pay the price, must pay interest accrued on it. Interest is due since the price is due and not only when a demand for payment has been made (Weber, Vertragsverletzungsfolgen, in: Wiener Kaufrecht, Berna, 1991, page 208). The CISG is silent on the issue of default interest, which results in the application of the law that would otherwise apply absent the Convention (Weber, id.). In the present case, since the parties did not choose the applicable law, the connection criterion must be applied, which leads to the application of the law of the seller (article 117, cpv. lit a LDIP), that is, the Italian law."

16. Tribunal Cantonal Vaud, March 11, 1996, available at <http://cisgw3.law.pace.edu/cases/960311s1.html>, case 01 93 0661.

Original language:     
Translation:
French
Unavailable

CLOUT abstract:

"The case related to the CISG only insofar as the court had to determine the interest rate (article 78 CISG). Notwithstanding the prevailing case law, the court applied the law at the debtor's (i.e. buyer's) place of business because only the buyer's obligation was in dispute and the parties did not rely on Hungarian or Austrian law, which would have been applicable pursuant to the Swiss rules of private international law."

Unilex abstract:

"The seller was also awarded the interest (Art. 78 CISG) accruing from the expiration of the period of time for payment of the price agreed by the parties. The court observed that according to Art. 78 CISG, the obligation to pay interest for the delay in payment of the price is not subject to a formal request by the seller. Since CISG does not determine the interest rate, the court held that the rate was to be determined in accordance with the domestic law of the buyer's country (Switzerland) as the buyer's obligation was the only disputed performance in the case at hand."

17. Tribunal Cantonal Vaud, March 11, 1996, available at <http://cisgw3.law.pace.edu/cases/960311s2.html>, case 01 93 1061 [163/96/BA and 164/96/BA].

Original language:     
Translation:
French
Available

Court (translation):

"Article 78 CISG provides the principle for the payment of interest on any sums that are in arrears if the buyer delays the payment of the purchase price. The Convention, however, provides neither the rate nor the date for calculation of the interest, their determination being left to the applicable national law (Stoffel, Le droit applicable aux contrats de vente internationale de marchandises, in Les contrats de vente internationale de marchandises, CEDIDAC 20, Lausanne 1991, pp. 39-40; Neumayer/ Ming, op cit., pp. 511 et seq.). The only disputable obligation in the present case is that of the buyer which is established in Switzerland. It is appropriate to refer to the rate applied in the place of establishment of the debtor (Neumayer / Ming, op. cit., p. 514). In these conditions and without Hungarian law being invoked, there are grounds to apply Swiss law. Interest rate, thus, must be fixed according to the Swiss legal rate of 5 percent per annum (Art. 104 para. 1 of the CO [Code des Obligations]).

Regarding the date for the calculation of interest in arrears, the Plaintiff [seller] fixes it thirty days after the date of the last invoice which, like the previous ones, is payable within thirty days. The Vienna Convention contains a rule concerning the principle of interest and damages in case of breach of contract (arts. 74 and 78). Pursuant to this rule, compensation is due as from the moment of occurrence of the damage or of the breach of contract. Therefore, the obligation to pay the interest does not depend on the fact that the defaulting party was put into arrears; it is sufficient that the sum due was not paid within the term of payment (Weber, Vertragsverletzungsfolgen, in Wiener Kaufrecht, Berne 1991, p. 208). Other scholars are of the same opinion (Wiegand, Die Pflichten des Käufers und die Folgen ihrer Verletzung, in Wiener Kaufrecht, op. cit., p. 156; Tercier, Les contrats spéciaux, 2ème éd., 1995, p. 161, n. 1286)."

18. Tribunal civil de la Glâne, May 20, 1996, available at <http://cisgw3.law.pace.edu/cases/960520s1.html>.

Original language:     
Translation:
French
Unavailable

Unilex abstract:

"The Court held CISG applicable to the contract and found the seller entitled to payment of the price plus interest. As CISG does not determine the interest rate (Art. 78 CISG), the Court held that it had to be determined according to the domestic law otherwise applicable to the contract."

19. Zürich Chamber of Commerce, May 31, 1996, available at <http://cisgw3.law.pace.edu/cases/960531s1.html>.

Original language:      English

20. HG Zürich, July 10, 1996, available at <http://cisgw3.law.pace.edu/cases/960710s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"As regards interest, the court determined the interest rate under the law designated by the relevant choice-of-law rule (articles 74 and 78 CISG). Accordingly, the court applied the German law at the seller's place of business (Section 352(1) of the Handelsgesetzbuch). Inasmuch as the seller had to obtain a loan owing to the buyer's refusal to pay the purchase price, the seller was awarded the higher interest rate of 9 percent, which had to be paid on the loan."

Unilex abstract:

"The seller was finally entitled to recover interests. Since CISG does not determine the interest rate, the Court applied the statutory interest rate provided by German law, as the law otherwise applicable to the contract (Art. 78 CISG). The seller was also a higher interest rate as further damages according to Art. 74 CISG, at the rate it was actually charged for a bank loan obtained after the buyer's refusal to pay the purchase price. "

21. HG Aargau, December 19, 1996, available at <http://cisgw3.law.pace.edu/cases/961219s1.html>.

Original language:     
Translation:
German
Unavailable

22. HG Zürich, February 5, 1997, available at <http://cisgw3.law.pace.edu/cases/970205s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The court stated that, although in principle the buyer would have been entitled also to interest on the loss of profit according to Art. 74 of CISG, in the case at hand the buyer lost its right to interest as it did not give sufficient evidence as to the time in which the profits would have been made. The court awarded the buyer the restitution of the advance payment plus interest (Art. 78 CISG). As to the applicable rate of interest, the court applied the interest rate of the sellers' place of business, that being the place in which the sellers usually invest their money."

23. BG Unterrheintal, April 11, 1997, available at <http://cisgw3.law.pace.edu/cases/970411s1.html>.

Original language:     
Translation:
German
Unavailable

24. BG St. Gallen, July 3, 1997, available at <http://cisgw3.law.pace.edu/cases/970703s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The interest rate was fixed based on the law applicable pursuant to the forum's rules of private international law, which led to Dutch law. However, the court mentioned the possibility of determining the rate of interest in application of the law at the debtor's place of business, pointing out that it was the debtor who could profit from the fact that the purchase price had not been paid."

Unilex abstract:

"The court awarded the seller the price indicated on the corrected invoice plus interest (Art. 78 CISG). With respect to the interest rate, although the court pointed out the two leading theories on the determination of the interest rate under CISG (interest rate to be determined according to the domestic law governing the contract in the absence of CISG or according to the domestic law of the debtor's place), it awarded the Swiss rate of interest, as that was the rate requested by the seller in the judicial complaint to which the buyer did not raise an objection during the court proceeding."

25. HG Aargau, September 26, 1997, available at <http://cisgw3.law.pace.edu/cases/970926s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The interest rate was determined based on the German law as the seller's place of business (352 Handelsgesetzbuch), applicable pursuant the forum's rules of private international law."

Unilex abstract:

"Finally, the court awarded the seller interest on the price of the unsold goods and the accrued damages. As to the applicable interest rate, in the absence of CISG the court held that the interest rate had to be determined according to the 1955 Hague Convention on the international sales of goods, which led to German law, being Germany the country where the Seller has its principal place of business."

26. KG Zug, October 16, 1997, available at <http://cisgw3.law.pace.edu/cases/971016s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The interest rate was determined based on the law applicable pursuant to the forum's rules of private international law, which led to German law (352 Handelsgesetzbuch)."

Unilex abstract:

"The seller was entitled to interest since the buyer had failed to pay the purchase price (Art. 78 CISG). The interest rate was determined by German law which was applicable in accordance to the Swiss private international law."

27. Tribunal Cantonal Valais, October 28, 1997, available at <http://cisgw3.law.pace.edu/cases/971028s1.html>.

Original language:     
Translation:
French
Unavailable

CLOUT abstract:

"The interest rate was determined in application of the forum's rules of private international law, which led to Italian law."

Unilex abstract:

"The seller was entitled to payment of the full purchase price, plus interest (Art. 78 CISG) accruing from the due date of payment fixed by the contract. With regard to the interest rate, the Court considered this to be a matter governed but not expressly settled by CISG (Art. 7(2) CISG) and applied the statutory rate of the State whose law would have been the governing law of the contract in the absence of CISG (Italy). However, the Court awarded interest at the rate expressly referred to in the seller's counterclaim (5%) which was lower than the Italian statutory rate (10%)."

28. KG Nidwalden, December 3, 1997, available at <http://cisgw3.law.pace.edu/cases/971203s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The interest rate was determined on the basis of Italian law. The court also determined the period for which the buyer had to pay interest based on Swiss law, which provides that a debt only becomes due and interest starts to accrue after a reminder by the seller (article 102(1) Swiss Code of Obligation)."

Unilex abstract:

"The Court decided in favor of the seller and awarded the seller the contract price plus interest according to Art. 78 CISG. Since CISG does not determine the interest rate, the Court applied the Swiss law as the law otherwise applicable to the contract and applied the statutory interest rate of Switzerland."

29. HG Aargau, December 19, 1997, available at <http://cisgw3.law.pace.edu/cases/971219s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"If a debtor does not pay an amount due, he, without a further demand being necessary, becomes obligated to pay interest according to Art. 78 CISG in connection with Art. 59 CISG (v.Caemmerer/Schlechtriem, "Kommentar zum Einheitlichen UN-Kaufrecht" [Commentary on the Uniform UN Sales Law], Munich 1990, Art. 59 at 2; Reinhart, "Einheitliches UN-Kaufrecht" [UN Sales Law], Heidelberg 1991, Art. 59 at 2). Thus, the "Fashion House ..." company was in arrears as regards the sales price 60 days after the dates of the invoices. The [CISG] stipulates in Art. 78, that a buyer, who is in arrears in payment of the purchase price, must pay interest, but without stating the interest rate.

According to Condition V.4 of the [seller's] sales conditions, [seller] is entitled to demand interest of 5% above the discount interest rate determined by the Deutsche Bundesbank [German Federal Reserve]. The seller has reserved the right to offer proof for the interest rate, but has not furnished it. Under these circumstances, the interest rate must be determined according to the German law applicable to the contract by the parties (choice of law in Condition XI.2 of the general conditions of sale of the [seller] according to Art. 116(1) IPRG [German Code of Private International Law]. According to 352 of the German HGB [Commercial Code] the legal interest rate among merchants is 5% ..... In addition to the right to interest, a seller is also entitled to further damages according to Art. 74 CISG (Art. 78 [CISG])."

30. Tribunale d'Appello di Lugano, January 15, 1998, available at <http://cisgw3.law.pace.edu/cases/980115s1.html>. [First instance: Pretore di Lugano, June 12, 1997, reversed]

Original language:     
Translation:
Italian
Available

Court (translation):

"On these amounts are due interest counted from the day of payment (Art. 84(1) CISG), that is to say, from 8 June 1994 for the sale price; the same date has also to be employed for the expenses previously incurred as far as thus requested by [buyer]. The rate of the interest is not governed by the Convention, and must therefore be determined by internal law resulting from the application of the pertinent rules of conflict of laws (Honsell, op. cit., n. 10 to Art. 84 CISG), that is, according to Art. 188(1) LDIP, from the law of the country where the seller has his habitual residence, and therefore from Swiss law. The interest is consequently to be set at the rate of 5% (Art. 93(1) CO; Giger, Commentario Bernese, n. 25 to art. 208), there being no sufficient proof of the fact that [buyer] had for the whole depended upon a bank credit at 9.25% (cf. the undecipherable indication at the bottom of doc. L), and not even of the fact that, the relationship being between merchants, the discount rate in Switzerland was at the moment greater than 5% (Art. 104(3) CO)."

31. OG Zug, March 24, 1998, available at <http://cisgw3.law.pace.edu/cases/980324s1.html>. [First instance: KG Zug, November 30, 1995, supra # 14; third instance: BGer, October 28, 1998, infra # 36]

Original language:     
Translation:
German
Unavailable

32. Tribunal Cantonal du Valais, June 29, 1998, available at <http://cisgw3.law.pace.edu/cases/980629s1.html>.

Original language:     
Translation:
French
Unavailable

CLOUT abstract:

"The interest rate on the purchase price was determined by application of the law governing the contract, which in this case was Italian law (article 7(2) CISG)."

Unilex abstract:

"The Court awarded the Italian seller interest on the sum in arrears, in accordance with Art. 78 CISG. The Court observed that, pursuant to Art. 7(2) CISG, the interest rate should be determined in accordance with the law otherwise applicable to the contract. As the Swiss rules of private international law led to the application of Italian law, the Court applied the Italian statutory interest rate."

33. Tribunal Cantonal du Valais/Kantonsgericht Wallis, June 30, 1998, available at <http://cisgw3.law.pace.edu/cases/980630s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The Court finally found that the seller was entitled to interest on the unpaid price (Art. 78 CISG). With respect to the interest rate, as CISG does not determine the interest rate, the Court applied the law otherwise applicable to the contract (in the case at hand: the law of Italy) and awarded interest at the Italian statutory rate."

34. BG Unterrheintal, September 16, 1998, available at <http://cisgw3.law.pace.edu/cases/980916s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"Finally, the buyer had to pay interest according to Art. 78 CISG, which was calculated according to the applicable German domestic law."

35. HG Zürich, September 21, 1998, available at <http://cisgw3.law.pace.edu/cases/980921s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"[The court also ordered interest paid with the rate determined by the otherwise applicable law]."

Unilex abstract:

"The seller was thus granted payment and interest on it under Art. 78 CISG. Absent an express provision in CISG, the Court held that the interest rate was to be determined in accordance with the law otherwise applicable to the contract, that is Italian law."

36. Schweizerisches Bundesgericht, October 28, 1998, available at <http://cisgw3.law.pace.edu/cases/981028s1.html>. [First instance: supra # 14; Second instance: supra # 31]

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The Court finally held that the sellers were entitled to recover interests. Since CISG does not determine the interest rate (Art. 78 CISG), the Court applied the statutory interest rate provided by German law, as the law otherwise applicable to the contract. The sellers were also awarded a higher interest rate as further damages pursuant to Arts. 78 and 74 CISG, since they provided sufficient evidence of recourse to bank loans."

37. HG Zürich, November 30, 1998, available at <http://cisgw3.law.pace.edu/cases/981130s1.html>.

Original language:     
Translation:
German
Unavailable

Unilex abstract:

"The seller was further awarded interest on the price (Art. 78 CISG), without the need of a formal request by the seller, accruing from the date the price was due (Arts. 58 and 59 CISG) and at the rate determined by the domestic law otherwise applicable in the absence on CISG (in the case at hand, Swiss law)."

38. HG Zürich, February 10, 1999, available at <http://cisgw3.law.pace.edu/cases/990210s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"Under Art. 78 CISG, interest is due on any sum in arrears based on a sales contract governed by the Convention. ..... Following established opinion, the interest rate is determined by the applicable national law, in the present case by Italian law (Honsell, op. cit., Art. 78 n. 12). Under Art. 1284(1) C.c , the legal interest rate in Italy is 10%. Contractual interest is calculated at the same rate, unless the parties have agreed upon a different interest rate, which has not submitted by either party to the present dispute (Art. 1284(2) C.c.; see also v.Caemmerer/Schlechtriem, op. cit., p. 672 et seq.)."

39. KG Zug, February 25, 1999, available at <http://cisgw3.law.pace.edu/cases/990225s1.html>.

Original language:     
Translation:
German
Unavailable

CLOUT abstract:

"The court held that the seller was entitled to default interest according to article 78 CISG, the amount of which had to be determined by German domestic law as applicable under private international law provisions."

Unilex abstract:

"The seller was awarded payment of the price plus interest according to Art. 78 CISG, accruing from the time indicated in the seller's pleadings. The interest rate was determined by the domestic law otherwise applicable to the contract, absent an express provision in CISG."

40. KG Zug, October 21, 1999, available at <http://cisgw3.law.pace.edu/cases/991021s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"According to Art. 78 CISG, 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, from the due date. Interest accrues from the due date for claims of damages as well, i.e., from the original date of breach. It is a uniform opinion that the interest rate is governed by the law of the country which the rules of conflict of laws refer to as law of the contract (Magnus, in: Honsell, op. cit., at n.5, 9 and 12 on Art. 78 CISG). Under Art. 117(1) IPRG, in the absence of a choice of law, the contract is governed by the law of the country to which the contract has the closest connection. Under Art. 117(2) and (3) IPRG, this country is Germany in the present case; therefore the interest rate is to be determined under German law. As both parties are undoubtedly businesspeople, as provided in Art. 1 of the German Commercial Code (hereinafter HGB), the interest rate is to be adjusted by this source of law. According to Art. 352(1) HGB, the rate of interest in bilateral commercial transactions is 5% per annum.

 ....

As mentioned above, under Art. 78 CISG the obligation to pay interest arises at the due date of any payment; payment for a claim of damages for breach of contract is due from the date of the breach. [Buyer] claims interest only since 29 November 1994 (Appendix 18, p. 1), therefore, [buyer] is entitled to 5% interest on the amount of US $50,000 (Art. 54 ZPO)."

41. KG Schaffhausen, April 23, 2002, available at <http://cisgw3.law.pace.edu/cases/020423s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"The [buyer] never made any submissions regarding the point in time from which interest is claimed; the rate of interest claimed is within the usual frame."

42. OG Luzern, July 29, 2002, available at <http://cisgw3.law.pace.edu/cases/020729s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"The [seller]'s pleadings (including the basis and the calculation) regarding interest on arrears and damages for default in the form of interest on debts were also not disputed by the [buyer]. In the absence of a substantiated denial by the [buyer], the interest on arrears and the additional damages for interest on debts was granted to the [seller] as requested."

43. HG Aargau, November 5, 2002, available at <http://cisgw3.law.pace.edu/cases/021105s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"If the buyer fails to pay the purchase price when due, the seller is entitled to interest on it "without prejudice to any claim for damages recoverable under Art. 74." (Art. 78 CISG). The amount of interest is not laid down in the UN Sales Law. It is controversial, whether one must aim for automous contract gap-filling and a uniform solution or if recourse must be made to national law. In regard to national law, the mainly recommended recourse, it is again uncertain how the determination of that law within the scope of the conflicts of law is supposed to take place (Schlechtriem/Bacher, op. cit., note 27 and 32 to art. 78 CISG). The doctrine convincingly postulates that to determine the relevant national law, it is the connection to the currency that is decisive for the primary claim. (Schlechtriem/Bacher, id., note 33 to Art. 78 CISG). Decisive in this connection is the rule of the amount of the interest on arrears that is reached by the concerned system of laws (Bacher, id., note 34 to Art. 78 CISG).

In the present case, the primary claim is owed in Swiss francs. Thus, Swiss law is the applicable law for the determination of the amount of interest owed on arrears. Since the [seller] did not prove or demand a discount rate that would exceed the usual 5% percent (Art. 194 para. 3 OR [*]), the statutory interest on arrears of 5% is owed (Art. 104 para. 1 OR).

In the CISG's sphere of application, even the default of payment on the date of maturity creates a dereliction of duty, so that the need of payment of interest sets in immediately with the maturity (Schlechtriem, op. cit., note 319). As the maturity started off on 20 June 2000 (see 6a, supra), the [seller] is entitled to interest to the amount of 5% from this date on.

Proceeding on that assumption, the [buyer] is fully liable to pay the cost ( 112 para.1 ZPO."

44. KG Zug, December 12, 2002, available at <http://cisgw3.law.pace.edu/cases/021212s1.html>.

Original language:     
Translation:
German
Available

Court (translation):

"The [seller] furthermore claims interest at a rate of 10.5% from 23 January 2001. During the main proceedings, the [seller] argued that the interest on arrears of 10.5% corresponded to the interest on debts which the [seller] had to pay at the time concerned for [seller]'s US Dollar account with the UBS bank in Geneva. 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 Art. 74 (Art.78 CISG). Consequently, the fact that a sum is in arrears is the only requirement for interest on arrears; a culpable delay in the meaning of Swiss law with all its prerequisites is not necessary (cf. v.Caemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht, 3rd ed., Munich 2000, Art. 78 n. 7 et seq.). The [seller]'s claim was due by the latest on 23 January 2001. The [seller] claimed interest from 23 January 2001, which is why the interest is to be granted from this point in time onwards. The "Vienna Sales Law" does not provide for the applicable interest rate. Therefore, the interested rate determined by the respective national law is owed (cf. v.Caemmerer/Schlechtriem, op. cit., Art. 78 n. 26 et seq.). The interest rate in the present case is determined by German law (Art. 117(1) and (3)(a) IPRG). Under 352(1) HGB, the interest on arrears for commercial transactions is 5%. A higher interest is only owed if the creditor proves that he was in fact - due to the debtor's delay - obliged to pay interest on debts at this rate, or that he lost this amount in interest on investments (cf. Baumbach/Hopt, Handelsgesetzbuch, 29th ed., Munich 1995, 352 HGB n. 5). The [seller] asserts that the interest on arrears claimed at the rate of 10.5% corresponds to the interest on debts payable at the time for [seller]'s US Dollar account with the UBS bank in Geneva. The [buyer] did not dispute this submission. Therefore, the interest rate payable on the [seller]'s claim from 23 January 2001 lies at 10.5%."

SUMMARY

Cases involving Article 78: 44
Cases for which an English translation is available: 16
Cases for which only an abstract was available: 23
Cases for which neither translation nor abstract was available: 5


Pace Law School Institute of International Commercial Law - Last updated November 16, 2004
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