Reproduced with the permission of the author
Joern Rimke [*]
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Only very little case law on Article 79 exists at this stage. In one case, decided upon in 1989 and involving an Egyptian buyer and a Yugoslavian seller, an ICC arbitral tribunal ruled that a 13% rise in the world market price of steel was neither sudden nor substantial nor unforeseeable, and would therefore not exempt the seller from his obligation to perform under Article 79.[117] In another case, which came under the ruling of a Russian arbitral tribunal, a seller claimed that he should be discharged from liability because the manufacturer of the goods contracted for refused to supply them. The tribunal held that the seller should bear liability for failure to fulfil his obligation because he was unable to establish that he could not have been expected to take that obstacle into account, or to avoid or overcome the obstacle or its consequences.[118]
There is only one case that purports to expressly deal with the question of whether instances of hardship fall within the scope of Article 79. This is the decision of the Italian Tribunale Civile di Monza in the case Nuova Fucinati S.p.A. v. Fondmetall International A.B.[119] An Italian seller of metal (Nuova Fucinati) sought to be excused from his sales contract with a Swedish buyer (Fondmetall Int'l) on the grounds of hardship. In terms of the February 3, 1988 contract, the seller was to deliver 1,000 tons of ironchrome. The contract permitted the buyer to choose a delivery date between March 20, 1988 and April 10, 1988.
Between the date the contract was entered into and the date selected by the buyer for delivery, the price of the ironchrome increased by almost 30%. Apparently, the contract did not contain a clause specifically providing for excuse of performance in cases of force majeure. At a hearing before the court, the seller argued that the contract should be avoided because of "supervening excessive onerousness" caused by the market price increase.
The court avoided the contract due to non-performance by the seller, and rejected the request of the seller for dissolution on the basis of supervening excessive onerousness. Although the court held that the Convention did not apply in this case, it concluded that even if Article 79 had applied, it only provided release from a duty made impossible by a supervening impediment, similar to the rule in Article 1463 of the Italian Civil Code. According to the court, Article 79 -- in contrast to Article 1467 of the Civil Code -- does not seem to contemplate the remedy of dissolution of contract for supervening excessive onerousness.
The distinction between "impossible" and "excessively onerous" performance is a crucial one in the court's reasoning, because it highlights the important role of the structure of the Italian Civil Code in the outcome of the case. From the court's first mentioning of Article 79 CISG, Italian domestic law was used as a frame of reference for deciding the meaning of an "impediment" to performance. Even if the court had found that the Convention did apply to the dispute at hand, it would have read the "impediment" term as meaning "impossible" -- that which is suggested by the Civil Code.[120]
This case, which excludes situations of hardship from the scope of application of Article 79, illustrates the . . . danger that judges interpreting Article 79 would refer to similar concepts in their own law.
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FOOTNOTES
* 1999 Submission, Essay Competition, Institute of International Commercial Law of the Pace University School of Law. Study project presented in partial fulfilment of the requirements for the degree of Master of Laws at the University of Stellenbosch, South Africa.
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117. ICC Arbitration Case No. 6281 of 1989 at http://cisgw3.law.pace.edu/cases/896281i1.html
118. Case Law on UNCITRAL Texts, CLOUT abstract no. 102.
119. Tribunale Civile di Monza 14 January 1993 at http://cisgw3.law.pace.edu/cases/930329i3.html
120. Weitzmann, 1997 Jnl. L. & Comm. 265.
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