Case text (English translation)
Queen Mary Case Translation Programme
Oberlandesgericht Hamm 5 November 1997
Translation [*] by Marko Maljevac [**]
Translation edited by Ruth M. Janal [***]
Facts of the case
[Seller], whose place of business is in Montebelluna, Italy, is a producer of in-line skates and other skating products. [Buyer], whose place of business is in Münster, Germany, distributes such products.
[Translator's overview: This is a case that involves CISG issues and issues separate and apart from the CISG. Seller and buyer entered into a distributorship agreement. Matters sought to be raised included: Was the distributorship properly terminated? Suits were filed in Italian and German courts. Which courts have jurisdiction? Over which issues? This German court proceeding was instituted by seller to collect payment for specific sales of on-line skates. The non-payment was not contested. In defense and by way of set-off and counterclaim, buyer asserted jurisdictional issues, claims associated with termination of the distributorship agreement, and claims related to purchases from seller of other on-line skates and other skating products. CISG issues are ruled upon in connection with seller's demand for payment for specific sales of on-line skates. Buyer's defenses and counterclaims were held to pertain to matters separate and apart from this proceeding and from the CISG.]
During Spring/Summer 1996, [seller] delivered in-line skates and other skating products to [buyer] as ordered. [Seller] issued the following invoices which are the subject of this suit before the German court:
No. 1033 of 30
April 1996, amount: 258,850.32 DM [Deutsche Mark]
No. 1348 of
9 May 1996, amount:
87,413.49 DM
No. 1409
of 27 May 1996, amount:
350,478.46 DM
No. 1771
of 24 June 1996, amount:
15,485.08 DM.
The invoices were due ten days after issuance; the [buyer] held back payments. Taking into account credits given to the [buyer] in the amount of 1,241.60 DM, the [seller] sued in September 1996 for the remaining total under these invoices.
The [seller] requests that the Court order the [buyer] to pay 710,985.75 DM together with 10% interest on the amount of:
257,608.72
DM since 11 May 1996
87,413.49 DM since 20 May 1996
350,478.46
DM since 7 June 1996
15,485.08
DM since 5 July 1996.
[Buyer] asks the Court to dismiss [seller]'s claim. [Buyer] declared a set-off with several claims she allegedly possesses against the [seller]. [Buyer] submits:
Other deliveries made by the [seller], which are not the subject of the present dispute, were of insufficient quantity; because of that, invoices for these deliveries were overpaid in the amounts of 4,020 DM and 7,068 DM. Furthermore, the [buyer] had sent back goods amounting to a total of 4,615 DM, which had been included in [seller]'s other deliveries (also not subject to the present dispute) and which had previously been invoiced by the [seller]. The [buyer] asserts that the [seller] is obligated to refund these amounts.
[Buyer] also sought damages of 1,209,428.25 DM [arising from seller's termination of an exclusive distributorship agreement seller had entered into with buyer in July 1992.]
[…]
The question whether the distributorship agreement of July 1992 was properly terminated and the existence of the damages sought by [buyer] are the issues of declaratory claims filed by the [seller] against the [buyer] before the Tribunale di Treviso [of Italy] in May/June 1996, and filed by the [buyer] against the [seller] before the Landgericht [German District Court (Court of First Instance)] of Münster. Basing its decision on Art. 21(1) of the Brussels Convention [*], the Court of First Instance declined its jurisdiction.
[Ruling by the Court of First Instance of Münster]
The Court of First Instance ruled against the [buyer] and reasoned as follows:
[seller]'s claim for payment of the cited invoices was justified under Art. 53 CISG. The set-off sought by the [buyer] was disregarded because the Court did not possess international jurisdiction to decide upon it. The jurisdiction of the Court of First Instance could especially not be deduced from case law on the so-called secondary payment obligations. This case law concerns instances in which one party requests damages for partial or complete non-fulfilment of the very contract upon which the other party's claim rests. This was not the case. The [buyer] did not present a damages claim regarding the four deliveries for which the [seller] seeks payment in the present dispute. Instead, [buyer]'s damages claim was connected to a breach of the exclusive distribution contract.
The Court of First Instance further explained that even if the [buyer]'s damages claim did constitute a secondary payment obligation, the Court would not possess international jurisdiction. Following Art. 57 CISG, the place of performance for the [buyer]'s payment obligation is at the [seller]'s place of business. Consequently, Art. 5 of the Brussels Convention determines that the Italian court at the [seller]'s place of business has international jurisdiction, both over the [seller]'s claim for payment and the [buyer]'s possible secondary claim for damages. The fact that the [seller], for whatever reason, did not decide to make use of that jurisdiction is irrelevant.
There was a dual basis for the Court’s position that it was not the competent forum for [buyer]'s claim. In addition to the Court’s ruling that the [buyer]'s claim for damages was derived from a contract which had nothing to do with the four deliveries in dispute, the Court of First Instance held that it was not the competent forum for still another reason: the international jurisdiction for [buyer]'s claim had to be determined with regard to the place at which the obligations under that contract were to be fulfilled. Despite the fact that the stipulated exclusive distributorship agreement covered the German territory, the place of performance for the obligation was again the [seller]'s place of business in Italy.
The [buyer] appeals the above decision by the Court of First Instance.
Grounds for the decision by the Appellate Court
[buyer]'s appeal is unfounded.
A. The [seller]'s claim for payment of the purchase price is: (I) justified; (II) it did not lapse as a result of [buyer]'s declaration of a set-off.
I. [seller]'s claim for the payment of the purchase price is based upon Art. 53 CISG; [seller]'s claim for interest is based upon Art. 78 CISG.
1. The CISG, which came into force on 1 January 1988 in Italy and on 1 January 1991 in Germany, is applicable to the legal relationship between the parties insofar as the claim for payment of the purchase price is concerned. This is quite independent from the question which law governs the framework contract of July 1992 regarding the exclusive distribution rights. The framework contract is to be distinguished from the individual and legally independent contracts of sale concluded under it, even if the content of these contracts is partially determined by the framework contract (cf. BGH [*] NJW [*] 1979, 1782; Baumbach/Hopt, HGB [*], 29th ed., overview of § 373 n. 13). Taking into account the legal independence of individual contracts of sale, the applicable law also needs to be determined independently. In the present case, this leads to applicability of the CISG (see OLG [*] Düsseldorf RIW [*] 1996, 958).
2. The [buyer] does not contest the [seller]'s claim for payment of the purchase price, neither regarding its basis nor regarding the requested amount.
The CISG does not fix the applicable interest rate. According to unanimous opinion and the case law of this Court (cf. IPRax [*] 1996, 197), the interest rate is to be settled in conformity with the law applicable by virtue of the rules of private international law. Therefore, the interest rate is to be determined under Italian law, because the seller's performance is the characteristic performance of a sales contract
[Translator's note: According to Art. 28(1) EGBGB [*], the contract shall be governed by the law of the country with which it is most closely connected. Following Art. 28(2) EGBGB, it is presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has his habitual residence.]
Under Italian law, the legal interest rate has been at 10% since 16 December 1990 (cf. Piltz, NJW 1996, 2768, 2772; Kindler, IPRax 1996, 16, 21). The [seller] does not seek a higher rate. The [buyer] did not object to the dates from which the [seller] requests interest.
II. [seller]'s claim has not lapsed due to the set-offs sought by the [buyer].
1. The Court of First Instance correctly decided that it has no international jurisdiction over [buyer]'s claim for set-off and correctly refused to rule upon this claim of the [buyer].
a. Since the decision upon the claim for set-offs is legally binding (§ 322 11 ZPO [*]), German courts can rule on it only if they possess international jurisdiction. This Court follows the case law of the BGH (cf. NJW 1993, 2753; NJW 1973, 421) and the prevailing opinions in the doctrine (cf. Geimer/Schütze, Europäisches Zivilverfahrensrecht, Art. 6 para. 64 et seq.).
[…]
b. It is a fact that, the international jurisdiction of the Court of First Instance to decide upon [buyer]'s counterclaim would have to be affirmed – even under the above opinion – if the German courts had jurisdiction over an independent action filed the [buyer] regarding those claims. However, this is not the case.
[…]
The [buyer] apparently seeks a reduction of the purchase price (Art. 50 CISG) because of allegedly insufficient quantities regarding deliveries already paid for and not in dispute. Insofar as [buyer] wishes to set-off her corresponding claims for a refund of DM 4,020 and DM 7,068, the place of performance for that obligation is also in Italy following Art. 5 No. 1 of the Brussels Convention. In instances in which a buyer seeks a reduction in the price she has already paid, she may claim partial restitution (Art. 81(2) CISG) before the Court which is the general forum for the seller or which is the forum for the delivery obligation (cf. Huber in v. Caemmerer/Schlechtriem, CISG, 2nd ed., Art. 45 n. 63 and Art. 50 n. 16). In both cases, the Italian courts have international jurisdiction, because the [seller]'s place of business is in Italy and because – regarding the place of performance for the [seller]'s delivery obligation – the [seller] undisputedly handed over the goods to the first carrier in Italy (Art. 31(a) CISG).
Insofar as the [buyer] claims restitution of the purchase price for goods which were sent back, but had already been paid (4,615 DM), the international jurisdiction lies also with the Italian courts. If the [buyer] bases her claim upon Art. 81(2) CISG, this follows from the reasoning above. If the [buyer] instead wanted to base her claim upon unjustified enrichment – for which Art. 5 No. 1 of the Brussels Convention is not applicable (cf. Geimer/Schütze there Art. 5 para. 32) – the result is the same according to the general forum provision of Art. 2(1) of the Brussels Convention.
[…]
2. Even if one accepted the international jurisdiction of the Court of First Instance contrary to the Court's opinion, the [buyer]'s appeal is unfounded. The set-off would also be unsuccessful on its merits, as is shown by the following (supplementary) considerations:
a. Italian law is applicable to the prerequisites for and the effect of the set-off.
[…]
b. Regarding her other counterclaims, the [buyer] obviously seeks to exercise the rights provided by Art. 45(1)(a) in connection with Arts. 46 to 52 CISG – in particular a right to a reduction of the price under Arts. 50, 51 CISG could be considered, alternatively a claim for unjustified enrichment. The Court can easily and quickly decide not to take these claims into account, because the [buyer] has not provided evidence, before either instance, for the supposedly insufficient quantity or for the alleged previous payment of the returned goods.
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Italy is referred to as [seller]; the Defendant of Germany is referred to as [buyer]. Also, monetary amounts in German currency (Deutsche Mark) are referred to as [DM].
Translator's note on other abbreviations: BGH = Bundesgerichtshof
[highest German Federal Court]; Brussels Convention [Convention on Jurisdiction
and Enforcement of Judgments in Civil and Commercial Matters, done at Brussels
27 September 1998]; C.c. = Codice civile [Italian Civil Code]; EGBGB = Einführungsgesetz
zum Bürgerlichen Gesetzbuch [German Private International Law Act,
Introduction to the Civil Code]; HGB = Handelsgesetzbuch [German
Commercial Code]; IPRax = Praxis des internationalen Privat- und
Verfahrensrecht [German legal periodical]; NJW = Neue Juristische
Wochenschrift [German legal periodical]; OLG = Oberlandesgericht
[Provincial Court of Appeal]; RIW = Recht der internationalen Wirtschaft
[German legal periodical]; ZPO = Zivilprozessordnung [German Civil
Procedure Code].
** Marko Maljevac is a Research Assistant at the Law Faculty, University of Rijeka.
*** Ruth M. Janal, LL.M (UNSW) is a Phd candidate at Albert-Ludwigs-Universität Freiburg.
Pace Law School
Institute of International Commercial Law - Last updated November 17, 2006
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