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2012 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods

Digest of Article 61 case law [reproduced with permission of UNCITRAL] [*]

[Text of article
Remedies available to the seller (Article 61(1))
Claiming damages in combination with other remedies (Article 61(2))
Refusal of a period of grace (Article 61(3))]

Article 61

(1) If the buyer fails to perform any of his obligations under the contract or this Convention, the seller may:
(a) exercise the rights provided in articles 62 to 65;
(b) claim damages as provided in articles 74 to 77.

(2) The seller is not deprived of any right he may have to claim damages by exercising his right to other remedies.

(3) No period of grace may be granted to the buyer by a court or arbitral tribunal when the seller resorts to a remedy for breach of contract.

Remedies available to the seller (Article 61(1))

1. Article 61(1) describes in general terms the various remedies available to the seller when the buyer does not perform one of its obligations. Where it states that the seller may "exercise the rights provided in articles 62 to 65," article 61(1) (a)merely refers to those provisions: each of the referenced provisions itself authorizes an aggrieved seller to exercise the rights described therein, so that those rights would be available to the seller even in the absence of the reference in article 61 (l) (a). [1] However, in stating that the seller may "claim damages as provided in articles 74 to 77," article 61(1)(b) serves as the legal basis for the seller's right to claim compensation for the loss sustained; articles 74 to 77 merely specify the way in which damages, once they are found to be awardable, are to be measured. It is thus correct to cite article 61(1) (b) as the source of a seller's right to claim damages, as various court and arbitral decisions have done,[2] and not to refer merely to, for example, article 74.

2. Failure on the part of the buyer to perform any one of its obligations is the only prerequisite for recourse to the remedies referred to in article 61(1). Thus, as one decision stated, an aggrieved seller's recourse to such remedies is not subject to the requirement that the seller prove that the buyer was at fault.[3] It follows from this, inter alia, that payment of damages does not require the establishment of wrongful conduct on the buyer's part. However, the buyer can, where applicable, avoid an award of damages if the requirements in article 79 or 80 are met.

3. Article 61(1) mentions only the principal remedies available to an aggrieved seller. Other remedies in addition to those referred to in this provision may be available when a seller suffers a breach of contract by the buyer. These remedies are set out in articles 71, 72, 73, 78 and 88 of the Convention.[4] Unless otherwise agreed, furthermore, the seller additionally has the right, in principle, to retain the goods until the buyer has settled the price (article 58(1) and (2)). Also, the question arises as to whether the Vienna Convention applies to setting-off against the sale price claims that a buyer may have against the seller, such as a damages claim for non-performance by the seller of an obligation owed to the buyer. Since nothing in the Convention addresses this question expressly, most court decisions hold that set-off is subject to national laws.[5]

4. One particular implementation difficulty in regard to article 61(1) arises in cases where the contract of sale imposes on the buyer obligations not provided for by the Convention. As is indicated in article 61(1), failure by the buyer to perform "any of his obligations under the contract or this Convention" gives the seller recourse to the remedies provided in the Convention, even when the failure relates to a contractual obligation created by the exercise of party autonomy. Thus, in these cases, the national law governing the contract on matters not covered by the Convention does not have to be applied in order to determine the seller's remedies, as the approach generally adopted by the courts confirms.[6]

Claiming damages in combination with other remedies (Article 61(2))

5. Article 61(2) states that the seller is not deprived of the right to claim damages by choosing to exercise its right to other remedies.[7] This provision is particularly useful when the seller avoids the contract.[8] CISG articles 75 and 76 indicate how damages are to be calculated in the event of contract avoidance.[9]

Refusal of a period of grace (Article 61(3))

6. Under article 61(3), a judge or arbitrator is deprived of the power to grant the buyer a period of grace for performance of its obligations, including the obligation to pay the price. Periods of grace provided for by various national laws have been judged contrary to the needs of international trade.[10] Only the seller can grant the buyer additional periods of time for performance of contractual obligations.[11] However, it is generally accepted that domestic rules relating to insolvency proceedings remain applicable and thus supersede article 61(3).[12]


NOTES

* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.uncitral.org/pdf/english/clout/CISG-digest-2012-e.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:

   -    To enhance access to contents by computer search engines, we present in html rather than pdf;
 
   -    To facilitate direct focus on aspects of the Digests of most immediate interest, we inserted linked tables of contents at the outset of most presentations;
 
   -    To support UNCITRAL's recommendation to read more on the cases reported in the Digests, we provide mouse-click access to (i) CLOUT abstracts published by UNCITRAL (and to UNILEX case abstracts and other case abstracts); and also (ii) to full-text English translations of cases with links to original texts of cases, where available, in [bracketed citations] that we have added to UNCITRAL's footnotes; and
 
   -    To enable researchers to themselves keep the case citations provided in the Digests constantly current, we have created a series of tandem documents, UNCITRAL Digest Cases + Added Cases. The new cases and other cases that are cited in these updates are coded in accordance with UNCITRAL's Thesaurus.

1. Article 61(1)(a) is, nevertheless, cited in many decisions: [SLOVAKIA Okresný súd Bratislava III, 22 May 2008]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 15 November 2006 (award no. 30/2006)]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 7 April 2006]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 2 June 2005]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 10 February 2005]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 28 June 2004]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 17 June 2004]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 19 March 2004]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 12 March 2004]; [SWITZERLAND Tribunal fédéral, 19 February 2004]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 3 February 2004; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 2 February 2004]; [GERMANY Landgericht Mönchengladbach 15 July 2003]; CLOUT case No. 496 [BELARUS Hosjaistvennyi sud Gomel'skoi oblasti, 6 March 2003]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 17 February 2003]; CLOUT case No. 978 [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 30 December 2002]; CLOUT case No. 629 [SWITZERLAND Kantonsgericht Zug 12 December 2002]; CLOUT case No. 886 [SWITZERLAND Handelsgericht St. Gallen 3 December 2002]; CLOUT case No. 636 [ARGENTINA Cámara Nacional de Apelaciones en lo Comercial de Buenos Aires 21 July 2002 (Cervecería y Malteria Paysandú S.A. v. Cervecería Argentina S.A.)]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 7 June 2002]; CLOUT case No. 539 [AUSTRIA Oberlandesgericht Graz 31 May 2002]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 25 January 2001]; CLOUT case No. 807 [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 30 June 1999]; [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 11 June 1999].

2. See [GERMANY Landgericht München 18 May 2009]; [SWITZERLAND Kantonsgericht Zug 27 November 2008]; [SWITZERLAND Kantonsgericht St. Gallen, 13 May 2008]; [GERMANY Bundesgerichtshof 27 November 2007]; [SWITZERLAND Handelsgericht Aargau 19 June 2007]; [SWITZERLAND Zivilgericht Basel-Stadt 8 November 2006]; CLOUT case No. 826 [GERMANY Oberlandesgericht München 19 October 2006]; CLOUT case No. 930 [SWITZERLAND Tribunal cantonal du Valais 23 May 2006]; CLOUT case No. 721 [GERMANY Oberlandesgericht Karlsruhe 8 February 2006]; CLOUT case No. 746 [AUSTRIA Oberlandesgericht Graz 29 July 2004]; [GERMANY Oberlandesgericht Düsseldorf 22 July 2004]; CLOUT case No. 893 [SWITZERLAND Amtsgericht Willisau 12 March 2004]; [GERMANY Landgericht Berlin 21 March 2003]; [GERMANY Oberlandesgericht Düsseldorf 22 July 2004]; [GERMANY Landgericht München 30 August 2001]; [SWITZERLAND Cour de Justice de Genève 13 September 2002]; [FRANCE Cour d'appel de Colmar 12 June 2001]; [GERMANY Amtsgericht Viechtach 11 April 2002]; CLOUT case No. 986 [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 4 February 2002]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 22 January 2002; CLOUT case No. 361 [GERMANY Oberlandesgericht Braunschweig 28 October 1999]; CLOUT case No. 717 [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 6 January 1999]; CLOUT case No. 288 [GERMANY Oberlandesgericht München, 28 January 1998]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 29 September 1997]; CLOUT case No. 283 [GERMANY Oberlandesgericht Köln, 9 July 1997]; [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 6 August 1996]; CLOUT case No. 376 [GERMANY Landgericht Bielefeld 2 August 1996]; CLOUT case No. 169 [GERMANY Oberlandesgericht Düsseldorf 11 July 1996]; CLOUT case No. 166 [GERMANY Schiedsgericht der Handelskammer Hamburg 21 March, 21 June 1996]; CLOUT case No. 133 [GERMANY Oberlandesgericht München 8 February 1995]; [GERMANY Oberlandesgericht Hamburg 14 December 1994]; CLOUT case No. 281 [GERMANY Oberlandesgericht Koblenz 17 September 1993]; CLOUT case No. 47 [GERMANY Landgericht Aachen 14 May 1993]; CLOUT case No. 227 [GERMANY Oberlandesgericht Hamm 22 September 1992].

3. CLOUT case No. 281 [GERMANY Oberlandesgericht Koblenz 17 September 1993]; (see full text of the decision).

4. See [GERMANY Landgericht München 18 May 2009] (the decision cites article 61(b) in conjunction with article 78); CLOUT case No. 296 [GERMANY Amtsgericht Berlin-Tiergarten 13 March 1997] (the decision cites article 61 (b)in conjunction with article 78).

5. See the Digest for article 4.

6. See [SLOVAKIA Krajský súd v Nitre 12 November 2008] (obligation to return the packaging of the goods); [SWITZERLAND Kantonsgericht St. Gallen, 13 May 2008] (breach of a re-export prohibition); CLOUT case No. 154 [FRANCE Cour d'appel Grenoble 22 February 1995] (breach of a re-export prohibition) (see full text of the decision); CLOUT case No. 217 [SWITZERLAND Handelsgericht des Kantons Aargau 26 September 1997] (violation of an exclusivity agreement); CLOUT case No. 311 [GERMANY Oberlandesgericht Köln 8 January 1997] (breach of an agreement to correct a lack of conformity within an agreed period of time); CLOUT case No. 104 [ICC Arbitration Court of the International Chamber of Commerce, 1993 (Arbitral award No. 7197)] (failure to open a letter of credit); CLOUT case No. 261 [SWITZERLAND Bezirksgericht der Saane 20 February 1997]; CLOUT case No. 631 [AUSTRALIA Supreme Court of Queensland 17 November 2000 (Down Investments Pty Ltd. v. Perjawa Steel SDN BHD)].

7. See, for a recital of this principle, [GREECE Polimeles Protodikio Athinon 2009 (docket no. 4505/2009)]; [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry 30 May 2001]; CLOUT case No. 261 [SWITZERLAND Bezirksgericht der Saane 20 February 1997].

8. See, as examples, CLOUT case No. 986 [CHINA International Economic and Trade Arbitration Commission, People's Republic of China, 4 February 2002]; [SWITZERLAND Cour de Justice de Genève 13 September 2002]; CLOUT case No. 261 [SWITZERLAND Bezirksgericht der Saane 20 February 1997].

9. See the Digest for article 75 and article 76.

10. United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980, Official Records, Documents of the Conference and Summary Records of the Plenary Meetings and of the Meetings of the Main Committee, 1981, p. 48.

11. [BELGIUM Rechtbank van Koophandel Hasselt 25 February 2004]; [BELGIUM Rechtbank van Koophan del Hasselt 2 June 1999]; [BELGIUM Rechtbank van Koophandel Hasselt 5 May 1999].

12. [BELARUS Vysšij Choziajstviennyj Sud Riespubliki Bielaru, kassacionnoj kolliegii (Supreme Economic Court of the Republic of Belarus, Appeal Committee) 31 July 2006] (application of national measures of financial support in the agricultural sector); CLOUT case No. 187 [UNITED STATES U.S. District Court, Southern District of New York, 21 July 1997] (obiter dictum supporting the applicability of bankruptcy law to sales governed by the Vienna Convention; the case was concerned with a distribution agreement not governed by the Convention).


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