Italy 21 November 2007 Tribunale [District Court] Rovereto (Takap B.V. v. Europlay S.r.l.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/071121i3.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: n. 914/06
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Italy (plaintiff)
BUYER'S COUNTRY: Netherlands (defendant)
GOODS INVOLVED: Special mirrors
ITALY: Tribunale [District Court] di Rovereto 21 November 2007
(Takap B.V. v. EUROPLAY S.r.l)
Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/123]
CLOUT abstract no. 1189
Reproduced with permission of UNCITRAL
Abstract prepared by Maria Chiara Malaguti, National Correspondent
The case concerned a commercial relation between an Italian company, the seller, and a Dutch company, the buyer, for the sale of mirrors. Since the Dutch company had failed to make some payments, the seller sued it before the Italian Court of Rovereto. The Court concluded that the contract was avoided and issued an order of payment in favour of the Italian company.
The defendant objected to the order claiming that the Italian judge did not have the authority to decide the issue at stake, since the forum selection clause in favour of the Dutch Courts, contained in the standard terms incorporated into the contract, applied. The Court dismissed the defendant’s argument stating that the parties had not validly agreed upon a forum selection clause, since none of the criteria set out in Art. 23 lit. (a) and (b) of European Council Regulation n. 44/2001 were met. The Court noted that the clause had never been accepted by the seller in writing, nor was it possible to consider the clause as accepted only on the ground that the seller had executed the buyer’s order (Art. 18 CISG). As a matter of fact, the seller provided evidence that it used to send a written statement confirming the orders received and including its own standard terms, which the other party had to sign and return. According to the Court, this implied that the contract between the parties had been concluded by exchange of written statements and not by the seller’s performance of the order.
Besides, the Court found that the standard terms of the Dutch company were not part of the contract (in particular the forum selection clause). Referring to Arts. 7 and 8 CISG, the Court reasoned that in order to consider the standard terms validly incorporated into a contract, the addressee of the proposal (i.e. the Italian seller) should have been aware of such terms. In the Court’s opinion since there was no proof that the Italian company had knowledge of the buyer’s standards terms, the forum selection clause in favour of the Dutch Courts could not apply. Furthermore, even if the buyer could demonstrate the opposite, the buyer’s signature on the confirmation statement sent to it by the seller (and including the seller’s terms) amounted to an acceptance of a counter offer (Art. 19 CISG) and was binding upon the parties.
For these reasons, the Court confirmed its jurisdiction over the case.Go to Case Table of Contents
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
CITATIONS TO OTHER ABSTRACTS OF DECISION
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1219&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (Italian): CISG-online.ch website <http://www.cisg-online.ch/cisg/urteile/1590.pdf>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1219&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
Translation [*] by Maja Perpar [**]
Translation edited by Pedro Martini [***]
FACTUAL AND PROCEDURAL HISTORY
By a statement of claim the [Buyer] brings its appeal against the decision No. 457/06 dated 8-19 April 2006, by which the Tribunal of Rovereto ordered it to pay the sum of € 129610,75, interest for late payment and the legal costs to [Seller] as payment for the supply of goods documented in commercial invoices.
In its counterclaim [Buyer], formerly named Repusel BV:
|-||after describing the commercial relationship that have bound [Buyer] as distributor for special type of mirrors, named special mirrors - invented by engineer Righi and protected by patent - first with the company Officine Riunite Ala S.p.A. and afterwards with [Seller] and another company which produced the same mirrors, admitted going through a period of financial difficulties and having € 121.188,47 of debt - less than the ordered sum of € 129610,75 - against [Seller];
|-||although asserting that its relationship with [Seller] should be qualified as "contratto di distribuzione o di concessione di vendita", or in international language, a distributorship agreement - contract common in international commerce, although uncommon in Italian national law - at the same time submitted that it had, after 2003 when the relevant market was invaded by copies of special mirrors, spent € 45.456,16 for legal costs for the protection of the patent for special mirrors "in agreement with eng. Righi and through him with [Seller]"; this expenditure, together with the unfavorable market conditions, caused [Buyer]'s financial difficulties;
|-||despite its financial difficulties [Buyer] paid a back payment of over € 250.000,00 for supplies to [Seller]; at the same time its Dutch lawyers tried to reach an agreement about the reimbursement of the legal costs for patent protection of special mirrors;
|-||[Buyer] later became acquainted with a letter, that [Seller] sent to Dutch clients on 20 January 2006, in which [Seller] informed the clients about the termination of contract with [Buyer] and notified them that the new distributor of special mirrors would be Buko Twente, until then a [Buyer]’s agent; the termination of the contract was communicated to [Buyer] only two months later, in a letter dated 23 March 2006; this happened in spite of the fact that [Buyer], before and after this letter, continued to require - although in vain - supplies of special mirrors; it had guaranteed the payment of new supplies, continued to pay the back payments and even proposed a better price.|
That having been stated, the [Buyer]:
|-||as a preliminary matter, raised the issue of lack of jurisdiction of an Italian judge to hear the case under EC Regulation No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter: the Regulation), in particular under Art. 23 of the Regulation concerning the prorogation of jurisdiction; [Buyer] further submitted that [Seller], by means of executing the contract and albeit being acquainted with the standard conditions of the contract not objecting to them, had accepted such conditions, that were always attached by [Buyer] - throughout the entire duration of the commercial relationship that went on for more than twenty years - on the back of every purchase order and expressly referred to in the text of the same order; among these standard conditions also being a clause conferring the exclusive competence to hear the disputes arising out of the contract on a Dutch judge;
|-||on the merits alleged a lack of "honesty and good faith of [Seller] in the execution of the contract" arising out of the fact that [Seller] refused to take part in the [Buyer]’s debt reduction plan; to fulfill [Buyer]’s orders and to participate in paying the legal costs for the protection of the product; and that it had notified [Buyer]’s clients about the termination of the distribution agreement with [Buyer] and had indicated a new distributor even before formally terminating the contract;
|-||furthermore requested a compensation of its legal costs for the protection of [Buyer]’s products;
|-||and lastly submitted that the termination of the commercial relationship without notice had caused it financial losses and damaged its reputation, for which it demanded compensation by way of a counterclaim.|
In its statement of defense, filed on 30 January 2007 [Seller]:
|-||disputed [Buyer]’s allegations that their commercial relationship had been going on for more than twenty years and submitted that the specific relationship between the two had only begun in 2001 when Mr. Righi, the owner of the patent for special mirrors entrusted the right of distribution of the product exclusively to [Seller];
|-||disputed the allegations that the contractual relationship could be qualified as a distributorship contract and asserted that, in absence of any written or oral agreements that would regulate the ongoing relationship between the two companies, every supply of the mirrors was governed by a different sales contract. The contract terms were always proposed by [Seller] and accepted by [Buyer];
|-||with regard to this, [Seller] argued that the sales contract was not concluded when [Seller] accepted the order sent by [Buyer], but rather when [Buyer] accepted the order confirmation sent by [Seller], which contained [Seller]’s own terms of supply and, as proof, presented some "order confirmations" signed by [Buyer] for confirmation; [Seller] then further argued that it had never seen nor become acquainted with the standard conditions of the contract on the back of purchase orders, since the practice of the negotiations between the parties was that [Buyer] sent orders via fax, without any standard conditions of the contract and therefore without transferring the back of the original purchase order form containing such provisions;
|-||on the merits of [Buyer]’s allegations, [Seller] denied acting in bad faith and submitted that it had in fact always demonstrated ample availability to agree with [Buyer] about the debt reduction, availability which was later on abused by [Buyer]; [Seller] furthermore denied terminating the commercial relationship without due notice and stated that the letter dated 23 March 2006 was just one out of many communications through which [Seller] informed [Buyer] that in case it would not repay its debt, the supplies would be suspended and the commercial relationship interrupted.|
On that basis [Seller] rejected [Buyer]’s objection of lack of jurisdiction of an Italian judge to hear the case, denied agreeing to any prorogation of jurisdiction and stated that in any case the competence of an Italian judge should also be confirmed on the basis of Art. 5 of the Brussels Convention of 27 September 1968 concerning the place of the performance of the obligation submitted to the court.
On the merits petitioned the judge to reject [Buyer]’s demands and objections and to authorize the temporary execution of the payment injunction.
At the first hearing, held on 31 January 2007, the judge rejected to authorize the provisionary execution of the payment injunction, noting that [Buyer] had provided a prima facie written evidence of prorogation of jurisdiction by producing a representative document (doc. 15) of the contractual order containing, on the backside, the mentioned jurisdiction clause; then assigned the deadlines provided for in the Art. 183 of the Italian Code of Civil Procedure.
Only [Buyer] submitted the first admitted supplemental brief, merely stating its final conclusions. Both parties submitted preliminary briefs. The preliminary hearing held on 2 May 2007 resulted in judge acknowledging only certain items of evidence presented by [Seller] about the way in which the pre-contractual phase was carried out, with the aim of determining the question of jurisdiction. After the evidence was collected, at hearing on 18 September 2007, the judge set the date of the next hearing, where the parties would make their final submissions concerning the lack of jurisdiction and authorized the parties to submit short closing briefs.
At a hearing on 20 November 2007 the parties made their final submissions and proceeded with the discussion. The discussion was renewed at today’s hearing, at which the judge upheld the reasoning of the decision.
GROUNDS FOR THE DECISION
[Buyer]’s objection about the lack of jurisdiction was proved to be unfounded and must therefore be rejected.
An Italian judge thus has the jurisdiction to decide the dispute; the case should be referred back to the preliminary hearings.
[Buyer] has raised the issue of "prorogation of jurisdiction" under which the parties conferred the competence to hear the dispute on a Dutch judge pursuant to Art. 23 of the EC Regulation No. 44/2001 of December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the so called Brussels 1 Regulation).
The dispute is subject to this Regulation if it meets the requirements set out in the Regulation, namely:
|a)||the object of the dispute being a "civil or commercial" matter, concerning payments of the commercial supplies (Art. 1 of the Regulation) or any aspects of commercial relationships;
|b)||domicile of the parties being within the territory of the Member States of the European Union (Art. 23 of the Regulation, under which it is sufficient that one of the parties is domiciled in one of the Member States)
|c)||commencement of the proceedings after 1 March 2002 (Art. 66, para. 1 of the Regulation), the date of entry into force of the Regulation (Art. 76).|
Concerning the second requirement for the application of the Regulation, indicated above under point b), the Court notes that [Buyer] is a Dutch company with head office located in Veenendaal, Netherlands and [Seller] is an Italian company with head office in the city of Ala (TN), Italy.
Art. 60 of the Regulation has indeed established an "autonomous" concept of domiciles for companies and legal entities and thus modified the reference to the concept of international private law concerning the domicile, which was set out in Art. 53 of the Brussels Convention of 27 September 1968 (hereinafter: the Brussels Convention), a Convention that the Regulation is explicitly designed to supersede (Art. 68, para 1).
Considering Art. 60, paragraph 2 of the Regulation, [Buyer] is domiciled in Netherlands since, as it can be deducted from its "business entity type" implied in the company's name, [Buyer]'s place of incorporation is in Netherlands. Likewise, [Seller] is domiciled in Italy, where it was constituted.
The issue of jurisdiction must therefore be examined in the light of Art. 23 of the Regulation, on which [Buyer] is basing its objection.
This issue, if founded, could also determine the judgment since, as already affirmed by the Court of Justice when referring to Art. 17 of the Brussels Convention, the content of which was reproduced in Art. 23 of the Regulation, the conventional prorogation of jurisdiction excludes the jurisdiction, based on the general principle of the forum of the defendant, set out in Art. 2, as well as the special competences of Art. 5 (Court of Justice of the European Union- hereinafter Court of Justice-, 20 February 1997, case C- 106/95, Mainschiffahrts-Genossenschaft eb (MSG) v. Les Gravihres RhinanesSARL, available at <http://cisgw3.law.pace.edu/cases/970220eu.html>), which was referred to also by [Seller], albeit with erroneous reference to the derogated Convention. Art. 23 expressly provides that the contractual prorogation of jurisdiction has an "exclusive" effect.
In light of these arguments, [Seller]’s assertion that the judge cannot take into consideration the case law of the Court of Justice on Brussels Convention are contradicted, since the Recital 19 of the Regulation confirms the principle of continuity of interpretation of the provisions of Brussels Convention by the Court of Justice of (at that time) European Community.
Turning to the content of Art. 23 of the Regulation this provision poses certain limits to parties’ freedom to prorogate the jurisdiction and allows for such prorogation, which in that way becomes exclusive, only in three cases, namely when the clause is concluded:
|(a)||in writing or evidenced in writing; or
|(b)||in a form which accords with practices which the parties have established between themselves; or
|(c)||in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.|
The requirement for the application of the provision is therefore that the prorogation clause be in fact "concluded" (on that matter see: Court of Justice, 16 March 1999 in case C- 159/97, Trasporti Castelletti Spedizioni Internazionali Spa).
Once it is found that such clause was in fact "concluded", it will also have to be established, in order for it to be valid and to have an exclusive effect, that it was concluded in one of the three forms, provided for in Art. 23.
The concept of the conclusion of the clause is not defined in Art. 23 nor in any other provision or recital of the Regulation. In all national laws, this concept includes consent of the parties about the content of the prorogation, whilst the modalities of formation of this consent depend on the particular jurisdiction.
This is therefore a concept that is implied in the Regulation, but does not however offer sufficient elements, like for example Art. 5 para. 1.b, to form an autonomous interpretation (see Tribunale di Rovereto, 28 Agosto 2004, in Int’ Lis 2005, p. 121) nor an economical interpretation (see Court of Justice of the European Community 3 may 2007, Color Drack GmbH) of the regulatory provision.
In order to establish the legal concept of "conclusion" of the clause without having the possibility to take into consideration the legal sources of the EU, one has to identify different normative sources of the Regulation. Firstly it has to be established whether this concept can be found among the rules of international private law or uniformed substantive law and especially, this being a case of international sales - and considering that at this point there is no evidence that would confirm [Buyer]'s allegations concerning the distributorship contract - in the United Nations Convention on Contracts for the International Sales of Goods of 1980, ratified [by the Italian Republic] with the law of 11 December 1985 n. 765 and entered into force on 1 January 1988 (hereinafter: the CISG).
The CISG is, as apparent form the documents, applicable to the case at hand since the dispute concerns multiple deliveries of goods between two parties that have places of business in two different States that are parties to the CISG.
This court holds that the CISG should prevail over international private law, since the CISG governs the substantial relationship, and is therefore by definition more specific than the international private law, since it directly resolves the merits, thereby avoiding the two-phase procedure of first determining the applicable law and then applying it (for these concepts see: Tribunale di Vigevano12 Luglio 2000 n. 405, in Giur. It. 2001, 201 e ss.; Tribunale di Rimini, 26 Novembre 2002 n. 3095, in Giur. It. 2003, pp. 896 e ss.).
Reference must therefore be made to the CISG, specifically to part II regarding formation of the contract, which contains the provisions on the formation of contracts, in order to establish whether or not the clause was agreed to by the parties.
This being clear, the application of letter c) of Art. 23 can in any case be excluded, since [Buyer] did not allege the existence of any usage that would in the present case allow for a prorogation of justice. In its judgment in case C- 159/97 on 16 March 1999 the Court of Justice established "that a usage in a relevant branch of trade or commerce exists when a particular course of conduct is generally and regularly followed by operators in that branch when concluding contracts of a particular type".
General and regular observance of a particular course of conduct is a fact that must be alleged and also proved by the party that invokes it (see Corte di Cassazione 27 September 2006 n. 20887).
[Buyer] is instead claiming prorogation under Art. 23(1), letter b of the Regulation, that is "in a form which accords with practices which the parties have established between themselves".
[Buyer] alleges that the prorogation clause had always been attached on the back of every purchase order, throughout the entire duration of the commercial relationship with [Seller], which had always executed the orders. This kind of conduct of the parties had therefore established a method for the conclusion of the prorogation clause, which was constantly in use by the two parties.
[Buyer]'s contention, if proven, would indeed indicate a prorogation of jurisdiction (on the validity of the prorogation clause contained in invoices, standard conditions of sales or confirmations of orders when such documents are issued within the framework of a continuing or well-established trading relationship, in the sense that the party that did not include the prorogation clause but has in the past executed orders without contesting the prorogation clause cannot in good faith deny the existence of the clause, see: Court of Justice, 14 December 1976, case 25/76, Galeries Segoura SPRL v Société Rahim Bonakdarian; similarly: Court of Justice, 19 June 1984, case 71/83, Partenreederei ms
Tilly Russ ja Ernest Russ v NV Haven- & Vervoerbedrijf Nova NV Gemine Hout; Corte di Cassazione SS. UU 26 Aprile 1995 n.4625).
CISG provides that a conduct of the offeree indicating assent to an offer is an acceptance (Art. 18): executing a written purchase order by delivering the goods required in that order, is in fact a conduct that amounts to an acceptance.
[Buyer]'s contention is, however, inconsistent with the facts. [Seller] produced documents (doc. 3) and witness statements, demonstrating that [Seller] did not directly execute the offer, but rather sent a written confirmation of order - containing some standard conditions of the contract - which was then countersigned by [Buyer] and returned to [Seller].
The above version of the facts, stated by [Seller] in its Statement of Defense, was not only confirmed by the presented evidence but was also never expressly contested by [Buyer] in its subsequent briefs.
[Seller] thus proved, that the contractual agreement was, in the trading practice of the parties, not formed by means of concluding actions but rather in writing.
[Buyer]'s objection of lack of jurisdiction must therefore be examined in the light of Art. 23 letter a) and not b).
The case at hand particularly requires the judge to determine when the standard conditions of the contract can be considered a part of the international sales contract, bearing in mind that in the practice of international trade the party taking the initiative (the offeror) often tries to include its own standard conditions of contract in the content of the agreement. This issue does not impose any particular problems to the application of the CISG, since the conclusion of the standard conditions of the contract, albeit not expressly governed by part II of the CISG, can be considered to fall within the general mechanism of the formation of the contractual agreement, consisting of offer and acceptance.
In this perspective, it must be first clarified whether the attachment of general clauses on the back of a written offer in cases in which such clauses are referred to in the document containing the body of the offer can be considered an integral part of that offer.
A positive answer to this question has been provided by the Court of Justice (judgment of 16 March 1999 in case C- 159/97) and the Italian Court of Cassation (most recently: Cass. SS.UU. 27 Settembre 2006) with reference both to Art. 17 of the Brussels Convention and Art. 23 of the Regulation as well as by the case law of the countries, parties to CISG on Art. 8 and 14 of the CISG (V. AG Nordhorm, 14 June 1994, available at http://www.cisg-online.ch/cisg/urteile/259.htm). In all these cases, courts have held that the standard conditions of the contract, printed on the back of an order form that on the front page contains express reference to these conditions, can be considered an integral part of the offer.
Pursuant to the case law on CISG, it is also not necessary, for the purposes of completeness of the offer, that the standard conditions are "highlighted" in the contract. Instead, a reference to the document containing the standard conditions in the text of the offer is considered sufficient (see: Bundeserichthof, 31 October 2001, available at: <http://cisgw3.law.pace.edu/cases/011031g1.html>).
In the present case there are also some controversies concerning the facts.
Firstly, [Seller] claims it has never received nor seen the standard conditions of the contract, attached to the back of [Buyer]’s offer and submits that it has received such orders via fax, without any accompanying standard conditions, and provides documentary evidence (copies and faxes) and statements on this matter.
Secondly, [Seller] has demonstrated, by means of documents and witnesses that it had responded to the offer by sending a written confirmation that contained, at the bottom, [Seller]'s own particular standard conditions, which was later signed by [Buyer], when it accepted the confirmation.
The first of the two problems considered above actually already includes the second one that relates to a theoretical problem, known to the commentators of CISG as battle of forms.
The judge finds that in the light of the CISG, in the present case there has been no complete offer, insofar as it refers also to the standard conditions of the contract, and consequently there has been no acceptance of those standard conditions.
This problem has to be addressed in the terms of Art. 8(1) of the CISG, which provides that: "for the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what that intent was".
This provision should in the present case be interpreted in the sense that an inclusion of the standard conditions is efficient if, firstly, the will of the offeror to include its own standard conditions in the contract is recognizable to the recipient of the offer and secondly, if the recipient is able to get acquainted with these standard conditions, since the acquaintance or rather the possibility to get acquainted with these conditions is a precondition for a conscious acceptance.
In the present case, the first of the two conditions, namely the recognizable will of the offeror to include the standard conditions in the contract, is evident from the document, including the contractual offer in which the [Buyer]’s will to include its own standard conditions of sale to the contractual relationship is expressly manifested.
What is lacking, or at least has not been demonstrated with regard to [Seller]’s objection is, however, the second condition, that is the fact of [Seller] sending its own standard conditions or making them available in some other suitable way.
According to the CISG an offer is an act that becomes effective when the recipient becomes acquainted with it (reception theory). It is therefore not relevant if it would be possible for the recipient of the offer to eventually retrieve these general terms, since, as affirmed by both the authorities as well as the case law, recipient is under no obligation to inquire about the general terms. According to the general duty of cooperation and information between the parties, arising out of the general principle of good faith, on which the CISG is based, it is rather the offeror who is obliged to make the document containing the standard conditions "accessible to the recipient of the offer" (see Bundesgerichthof, 31 October 2001, available at: <http://cisgw3.law.pace.edu/cases/011031g1.html>), whether in the language of the contract, of the other party or in the language known to the latter.
In light of these arguments the Court finds [Buyer]’s assertion, that due to the recurrent reference to the standard conditions in the offer, [Seller] is obligated to take action to get acquainted with them, to be unfounded.
Consequently, the prorogation of jurisdiction in favor of a Dutch court, contained in the standard conditions, has not been concluded. [Buyer]’s objection is therefore rejected.
The Court nevertheless observes that it would come to the same conclusion even in case [Buyer] had proven that the prorogation clause was concluded in one of the forms provided for in the Regulation, since [Seller] presented documents and witness statements, proving that the established practice between the parties was that [Seller] replied to [Buyer]’s offer by sending a confirmation of order containing its own standard conditions and that [Buyer] accepted such confirmation by signing it.
The order confirmation, which modified the original offer, should in the light of Art. 19 of the CISG be considered as a new offer which leads to the formation of an agreement in the moment it is accepted.
It has therefore been proven that [Buyer] accepted [Seller]’s counteroffer, which determined the content of the contract and that this acceptance constituted an agreement between the parties.
It should also be noted, that the [Buyer]’s standard conditions are in collision with those of [Seller], and that pursuant to Art. 19(2) and (3) of the CISG the standard conditions of [Seller] are capable of "substantially" altering [Buyer]’s offer.
For this reason, the Court holds that even if [Buyer] demonstrated that it had made its standard conditions available to the recipient of the offer, those conditions would not become part of the content of the contract, since the content of the contract was nevertheless determined by a different counteroffer of the recipient that has "substantially" altered the content of the original offer; this counteroffer was then finally accepted by [Buyer].
FOR THESE REASONS
Rejects the objection of lack of jurisdiction of the Italian court, raised by [Buyer] and as a separate order refers the parties back to this same Court.
* All translations should be verified by cross-checking against the original text.
** Maja Perpar studied law at University of Ljubljana, was a participant at 18th and a coach at 19th Willem C. Vis Moot.
*** Pedro Martini is a Brazilian legal practitioner in the field of domestic and international commercial arbitration.Go to Case Table of Contents