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A/CN.9/SER.C/ABSTRACTS/213

United Nations

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Distr.: General 25 January 2022 English Original: English/French

United Nations Commission on International Trade Law CASE LAW ON UNCITRAL TEXTS (CLOUT)

Contents Page

Cases relating to the United Nations Convention on Contracts for the International Sale of Goods (CISG) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Case 1954: CISG 39(2) – France: Court of Cassation, Commercial Chamber, No. 19-13260, Appeal No. 18-22216, Caterpillar Energy Solutions GmbH v. Allianz IARD (17 June 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Case 1955: CISG 39 – France: Court of Cassation, Commercial Chamber, Appeal No. 19-13.260 (P), Bois et matériaux v. Ceramiche, (3 February 2021) . . . . . . . . . . . . . . . . .

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Case 1956: CISG 1(1), 4, 30, 53, 57(1)(a), 59, 78 – Greece: Monomeles Protodikeio Thessalonikis, Case No. 17162/2017 (3 November 2017) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Case 1957: CISG 7(1); 39 – Italy: Corte Suprema di Cassazione, sezione seconda civile, No. 1605/2021, Decopress Printing GmbH v. DEA S.p.A. in AS (26 January 2021) . . . . . . . . . . . .

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Case 1958: CISG 7(1); 71(2); 71(3) – Norway: Høyesterett, HR-2019-231-A, Genfoot Inc. v. SCHENKERocean Ltd. (6 February 2019) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Case 1959: CISG 8(2); [58(1)]; 74 – Switzerland: Kreisgericht Rheintal (Court of First Instance Rheintal), No. OV.2011.4-RH3ZK-REU, Party names, (6 November 2012) . . . . . . . . . . . . . . . . . . .

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Case 1960: CISG 8; 9; [53; 54] – Switzerland: Tribunale d’appello Ticino (Court of Appeal of the Canton Ticino), No. 12.2018.110 (3 February 2020) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Case 1961: CISG 39; 50 – Switzerland: Bundesgericht/Tribunal fédéral (Federal Supreme Court), No. 4A 493/2020 (4 January 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Case 1962: CISG 45(1)(b); 74 – United States of America: U.S. [Federal] District Court for the Middle District of Pennsylvania, No. 1:20-cv-01764, Minh Dung Aluminum Co., Ltd. v. Aluminum Alloys Mfg. LLC, 2021 WL 3290686 (2 August 2021) . . . . . . . . . . . . . . . . . . . . .

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Cases relating to the United Nations Convention on Contracts for the International Sale of Goods (CISG) and to the Convention on the Limitation Period in the International Sale of Goods (1980, amended text) (Limitation Convention) . . . . . . . . . .

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Case 1963: CISG 7(2); Limitation Convention (3) – Russian Federation: Judicial Chamber on Economic Disputes of the Supreme Court of the Russian Federation, 308-ЭС20-18927 (11 March 2021) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Introduction This compilation of abstracts forms part of the system for collecting and disseminating information on court decisions and arbitral awards rela ting to Conventions and Model Laws that emanate from the work of the United Nations Commission on International Trade Law (UNCITRAL). The purpose is to facilitate the uniform interpretation of these legal texts by reference to international norms, which are consistent with the international character of the texts, as opposed to strictly domestic legal concepts and tradition. More complete information about the features of the system and its use is provided in the User Guide (A/CN.9/SER.C/GUIDE/1/Rev.3). CLOUT documents are available on the UNCITRAL website at: https://uncitral.un.org/en/case_law. Each CLOUT issue includes a table of contents on the first page that lists the full citation of each case contained in this set of abstracts, along with the individual articles of each text which are interpreted or referred to by the court or arbitral tribunal. The Internet address (URL) of the full text of a decision in its original language is included in the heading to each case, along with the Internet addresses, where available, of translations in official United Nations language(s) (please note that references to websites other than official United Nations websites do not constitute an endorsement of that website by the United Nations or by UNCITRAL; furthermore, websites change frequently; all Internet addresses contained in this document are functional as of the date of submission of this document). Abstracts on cases interpreting the UNCITRAL Model Law on International Commercial Arbitration include keyword references which are consistent with those contained in the Thesaurus on the Model Law, prepared by the UNCITRAL Secretariat in consultation with National Correspondents. Abstracts on cases interpreting the UNCITRAL Model Law on Cross-Border Insolvency also include keyword references. The abstracts are searchable on the database available on the UN CITRAL website by reference to all key identifying features, i.e. country, legislative text, CLOUT case number, CLOUT issue number, decision date or a combination of any of these. The abstracts are prepared by National Correspondents designated by their Governments, by individual contributors, or by the UNCITRAL secretariat itself. It should be noted that neither the National Correspondents nor anyone else directly or indirectly involved in the operation of the system assumes any responsibility for any error or omission or other deficiency.

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Cases relating to the United Nations Convention on Contracts for the International Sale of Goods (CISG) Case 1954: CISG 39(2) France: Court of Cassation, Commercial Chamber No. 19-13260, Appeal No. 18-22216 Caterpillar Energy Solutions GmbH v. Allianz IARD 17 June 2020 Original in French Available from Légifrance at www.legifrance.gouv.fr and the CISG France database at www.cisg-france.org, Decision No. 312 Commentary: JCP G 2020, 1000, Droit du commerce international, p. 1545, obs. Cyril Nourissat Abstract prepared by Claude Witz, National Correspondent In August 1999, a company based in Germany (C) delivered two generators to a company based in France (X). The generators began to malfunction in December 2001. In January 2003, French buyer X brought legal proceedings against German seller C before the Commercial Court of Meaux in order to obtain compensation for the damage suffered. In a decision rendered on 27 June 2014, the Paris Court of Appeal upheld the judgment whereby the buyer’s claim had been accepted (CISG France No. 265). The seller filed an appeal before the Court of Cassation, which overturned that judgment on the ground that article 39(2) of the CISG and the rules governing the limitation period had been violated (Court of Cassation, Commercial Chamber, 21 June 2016, No. 14-25359, CISG France No. 272, CLOUT No. 1633). The case was referred back to the Paris Court of Appeal with a different composition. The Paris court’s ruling (Paris Court of Appeal, 4 Ma y 2018, No. 16/20799, CISG France No. 288) was the subject of a second appeal filed by the seller on a point of law. This appeal, too, was successful. The Court of Cassation, in its decision of 17 June 2020, overturned the judgment delivered by the Paris Court of Appeal, on two grounds. The first ground was procedural. In dismissing the respondent’s argument that the claim was time-barred, the Paris Court of Appeal had based its ruling, ex proprio motu, on article 200 of the German Civil Code (BGB), without first inviting the parties to present their observations. The Court of Cassation noted that “the judge must, in all circumstances, observe and ensure observance of the adversarial principle”, citing article 16, paragraph 3, of the Code of Civil Procedur e. The Court of Cassation gave as its second ground for overturning the judgment the violation of article 39(2) of the Vienna Convention, observing that “according to this text, the buyer, in any event, loses the right to rely on a lack of conformity if h e does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer.” It ruled that the Paris Court of Appeal had violated the Convention by declaring the claim admiss ible on the sole ground that the limitation period had not expired, even though the Court of Appeal had previously noted in its judgment that “the goods were delivered in August 1999 and the claim based on lack of conformity had been brought on 6 and 20 January 2003”. While the reasons given for the decision were brief, its message was clear. The Paris Court of Appeal should have declared the buyer’s claim inadmissible on the basis of the buyer’s loss of right pursuant to article 39(2) of the Vienna Convention. The case was referred back to the Paris Court of Appeal with a different composition.

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Case 1955: CISG 39 France: Court of Cassation, Commercial Chamber Appeal No. 19-13.260 (P) Bois et matériaux v. Ceramiche 3 February 2021 Original in French Published in the digital bulletin of judgments rendered by the civil chambers of the Court of Cassation, February 2021, pp. 95–98 Available from Légifrance at www.legifrance.gouv.fr and the CISG France database at www.cisg-france.org, Decision No. 313 Commentary by Jean-Denis Pellier, available at www.dalloz-actualite.fr/flash/ soumission-de-l-action-recursoire-du-vendeur-final-contre-son-fournisseurconvention-de-vienne Abstract prepared by Claude Witz, National Correspondent, and Björn Schümann The decision was rendered by the Court of Cassation in the context of a lo ng-standing dispute between a company A, based in Italy, and its French distributor company B, to which, on 18 April 2003, company A had sold tiles of which it was the manufacturer. Company B had resold the goods on 9 May 2003 to two private individuals (a couple) residing in France (C). Claiming that the tiles were defective, the buyers (C) sued their seller (B) for compensation, whereupon B proceeded against the Italian manufacturer A as guarantor. The dispute was settled in two successive proceedings as a result of which the Bordeaux Court of Major Jurisdiction rendered two decisions, the first relating to the claim brought by end buyers C against their seller B (judgment of 29 September 2009) and the second relating to the claim filed by French company B against Italian company A (judgment of 24 January 2012). Italian company A appealed the judgment of 24 January 2012 before the Bordeaux Court of Appeal. The decision of the appeal court 1 was the subject of an application for judicial review. The Court of Cassation overturned the decision 2 and the case was referred to the Poitiers Court of Appeal. In a decision rendered on 13 March 2018, 3 the Poitiers Court of Appeal first ruled on the admissibility of Company A’s claim against Company B, accepting the claim’s admissibility on the basis of European Directive No. 1999/44/EC of the Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees, article 4 of which states that “the person or persons liable against whom the ... seller may pursue remedies...shall be determined by national law.” The Court of Appeal also ruled on the merits of the claim. Whereas the parties had debated the application of article 39(2) and article 40 of the Vienna Convention, the Court ruled out the application of both provisions. According to the Poitiers judges, those two articles did not apply because the appeal “was based not on the lack of conformity but on the claim brought by the consumer” (buyers C) against the final seller (company B). The Court added that while the Vienna Convention “regulates the contractual relations between seller and buyer, includ ing in the case of non-conformity, for example, in the event of a problem arising before (the) resale to a consumer within the meaning of the Directive, [it] does not regulate the final seller’s right of recourse against his own seller.” The Italian company A applied for judicial review of the decision of the Poitiers Court of Appeal. In its appeal it alleged, inter alia, a violation arising from the misapplication of Directive 1999/44/EC, on the grounds that company B was a professional seller and not a consumer within the meaning of the Directive. The Court of Cassation rejected that allegation because under article 4 of the Directive, the final seller is entitled to pursue remedies against the person or persons liable in the contractual chain. With regard to the merits of the claim, the appellant complained __________________ 1 2

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Bordeaux Court of Appeal, 12 September 2013; CISG France No. 216; CLOUT case 1508 . Court of Cassation, Commercial Chamber, No. 14-22144, 2 November 2016; CISG France No. 307; CLOUT case 1715. Available from CISG France, Decision No. 322. V.22-00259

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that the Court of Appeal had rejected the argument, based on article 39 of the Vienna Convention, that the buyer had lost the right to rely on a lack of conformity of the goods. The Court of Cassation accepted the appellant’s argument on that point and, on the basis of article 39 of the Vienna Convention, ruled that “the Court of Appeal violated said text by rejecting its application”. In other words, the Poitiers Court of Appeal should have applied the Vienna Convention to the claim brought by French company B against Italian company A. Consequently, the Court of Cassation overturned the Poitiers judgment, except insofar as it declared the claim brought against the Italian seller admissible, and referred the parties to the Bourges Court of Appeal. Case 1956: CISG 1(1), 4, 30, 53, 57(1)(a), 59, 78 Greece: Monomeles Protodikeio Thessalonikis Case No. 17162/2017 3 November 2017 Original in Greek A Danish seller and Greek buyer entered into two agre ements for the sale of professional refrigerators (“products”), with the second contract being concluded two months later. Pursuant to the agreements, the buyer had to pay the price of EUR 39,372 within 90 days from when the two commercial invoices were i ssued by the seller. Despite prompt delivery to the buyer, it only paid EUR 12,872 as partial payment of the first invoice. The seller sought redress before the Greek courts for the judicial recognition that the buyer had a contractual obligation to pay the remaining balance of EUR 26,500 immediately after expiration of the 90-day period or alternatively upon the notice of lawsuit, temporary enforceability of the court’s judg ment, and payment of legal fees incurred. The Single-Member Court of First Instance of Thessaloniki (the Court) first addressed the issue of jurisdiction in light of the Brussels I Regulation (Reg. No. 44/2001), the Brussels I Regulation recast (Reg. No. 1215/2012), and the 1968 Brussels Convention with its amending Protocols and concluded that it had international jurisdiction to resolve the dispute. The Court stated that pursuant to CISG article 1(1), the Convention governs all sale of goods contracts whereby the seller and the buyer maintain their place of business in different contracting States. Alternatively, the private international law rules of the forum indicate that the laws of a contracting State would apply. The Court also noted that the applicability scenario of CISG article 1(1)(a) constitutes a self-executing regulation, which does not enshrine private international law rules, but, rather, directly applicable substantive rules, which on the basis of article 28(1) of the Greek Constitution prevail over the private international law mechanism of identifying the applicable law. Turning to the obligations of the contracting parties, the Court recalled the obligations of the parties under the CISG, namely, that the price must be paid without any request or compliance with any formality on the part of the seller (CISG article 59), and in the event of delay in the payment of the price, the buyer had the right to claim interest on the delayed balance without the need for request, or fault of the buyer, or even damage to the seller (CISG articles 59, 78, and 79). Due to the defendant’s absence in the hearing, the Court rendered its judg ment in absentia in favour of the seller. In its ruling, the Court recognized the seller’s right to seek payment of the outstanding balance, including legal interest 4 calculated from the expiration of the 90-day period for each commercial invoice. The Court

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also condemned the losing party to pay EUR 850 as legal costs of the seller under articles 176 and 191(2) of the Greek Code of Civil Procedure. Case 1957: CISG 7(1); 39 Italy: Corte Suprema di Cassazione, sezione seconda civile No. 1605/2021, ECLI:IT:CASS:2021:1605CIV Decopress Printing GmbH v. DEA S.p.A. in AS 26 January 2021 Original in Italian Available on the online database of the Italian Supreme Court at: http://www.italgiure.giustizia.it/xway/application/nif/clean/hc.dll?verbo=attach&db =snciv&id=./20210126/snciv@s20@a2021@[email protected]; and on CISGFrance Database: www.cisg-france.org, No. 5551 This case deals primarily with the interpretation of the “reasonable time” for giving notice of the lack of conformity of the goods under article 39 CISG. DEA S.p.A., a company with place of business in Italy, sued Decopress Printing GmbH, a company with place of business in Germany, for the payment of an outstanding balance of more than 840,000 euros for the supply of decor paper. In the Court of First Instance, the German company resisted the claim indicating that the goods had defects and asking for compensation of damages arising from the lack of conformity. The Italian company prevailed in the First Instance Court as well as in the Appellate Court. The German company appealed to the Supreme Court against the decision of the Supreme Court on several grounds. One of them related to the fact that the Court of Appeal had interpreted the notion of “reasonable time” for the timely notice of the non-conformity of the goods under article 39 CISG in light of the terms set in article 1490 of the Italian civil code. It recalled that, under precedents of the same Supreme Court, 5 the CISG should be applied under its own scope because of the prevalence of uniform contract law treaties over private international law rules. The Supreme Court noted that the Court of First Instance had indicated that the reasonable term for giving notice had expired without further qualification. It also noted that the Court of Appeal had referred on that point to the relevant provision of the Italian civil code without further explanation. Given the lack of adequate reasoning on the point, the Supreme Court remanded the case to the Court of Appeal. Case 1958: CISG 7(1); 71(2); 71(3) Norway: Høyesterett HR-2019-231-A Genfoot Inc. v. SCHENKERocean Ltd. 6 February 2019 Original in Norwegian Published in: https://www.domstol.no/enkeltdomstol/hoyesterett/avgjorelser/2019/hoyesterett-sivil/krav/ English translation provided by the Supreme Court: https://www.domstol.no/globalassets/upload/hret/decisions-in-english-translation/hr2019-231-a.pdf This case deals primarily with the carrier’s duty to carry out the seller’s instruction to exercise stoppage in transit under article 71(2) CISG when the buyer already holds the transport documents and demands delivery of the goods. It also deals with the legal effects of not giving notice of stoppage in transit under article 71(3) CISG. In June 2014, the seller – a Canadian company – bought shoes from two factories in China, which were sold FOB to a Norwegian buyer. The parties were under a long term distribution agreement, and the buyer could buy the shoes on credit. The buyer __________________ 5

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organized for the shoes to be sent in containers from Xiamen, China to Oslo, Norway. Shortly after obtaining the bills of lading from the Chinese manufacturer, the seller endorsed them in blank to the carrier’s Canadian agent and instructed them to send them directly to the buyer, who in turn passed them on to the carrier’s Norwegian agent. When the containers arrived at the port of Oslo, the seller instructed the carrier to release the containers. However, on the same day, the buyer’s bank terminated the overdraft facility with the buyer, who consequently could no longer pay the seller. The buyer notified the seller of the bank’s termination, which prompted the seller to order the carrier to retain the containers until further notice. However, the carrier’s Norwegian agent replied that ownership had already passed to the buyer since the buyer had passed the bills of lading over to them, and that the seller no longer had the power to retain the goods. Nevertheless, as the containers had not yet been delivered, the seller made repeated attempts to prevent the goods from being handed over to the buyer. In the meantime, the carrier pressed the buyer for outstanding claims for duty, VAT, port rent and warehouse rent, including for previously unpaid deliveries, threatening to sell the containers. Upon payment of an agreed sum, the carrier’s Norwegian agent delivered the containers to the buyer, who became subject to bankruptcy proceedings one week later. The seller brought an action against the carrier for not complying with the stoppage instructions. The case was eventually appealed in front of the Supreme Court (Høyesterett). The suit required determining both whether the seller could validly exercise stoppage in transit against the buyer and whether the carrier had to comply with the stoppage order. As for the former, the distribution agreement between the buyer and the seller was governed by Quebec law, and since the CISG applied both as state legislation in Quebec and as national legislation in Canada, the Court concluded that the conditions for exercising stoppage in transit would be governed by article 71(2) CISG. The carrier made several objections against the seller’s alleged right of stoppage. The first objection was that the seller was already aware of the buyer’s financial difficulties before the goods were shipped from China, which prevented effecting stoppage in transit under article 71(1)(a) and (2) CISG. However, the Supreme Court found that the buyer’s inability to pay became apparent to the seller only when it received news of the bank’s termination. Secondly, the carrier claimed that the goods had already been delivered to the buyer before the seller made its stoppage order because the carrier’s Norw egian agent had acted as a forwarding agent representing the buyer from the moment when the buyer presented them with the bills of lading. While the Supreme Court agreed that an agent for the carrier at some point could become a representative of the buyer, it added that it was important that this point in time could be clearly determined since it affected the seller’s right of stoppage. In this case, there was no documentation suggesting that such a representation had been agreed, and the carrier’s Norwegi an agent had also exercised its right of retention against the buyer. Consequently, the Court concluded that there had been no delivery to the buyer before the stoppage order. Thirdly, the carrier suggested that the right of stoppage had been lost because no stoppage notice had been given to the buyer under article 71(3) CISG. On this issue, the Supreme Court observed that article 71(3) CISG did not specify the effects of not giving notice and that the words “immediately give notice” suggested that a seller was not required to provide notice earlier than immediately after stoppage had already been completed. Moreover, the fact that the notice requirement was placed separately in the third paragraph suggested that giving notice was not a requirement for exercising stoppage in transit under article 71(2) CISG. With reference to the need for uniform interpretation under article 7(1) CISG, the Court further observed that the foreign judgments presented before it were not conclusive on whether the right of stoppage was lost if the buyer was not notified, noting that these judgments were in any case judgments from lower courts rather than from supreme courts. In addition, the Court noted that the legal literature had expressed different views on this issue. V.22-00259

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The Court explained that the purpose of the duty to give notice was to give the buyer a chance to adjust to the stoppage order and mitigate any loss as a result. The Court concluded that article 71(3) CISG did not make notice to the buyer a requirement for exercising the right of stoppage in transit under article 71(2) CISG but failure to do so could lead to a claim in damages from the buyer. Having concluded that the seller had validly exercised its right of stoppage, the Court turned to the question whether the carrier was obliged to comply with the seller’s stoppage order. It indicated that this was not a matter governed by the CISG as the Convention did not regulate this relationship between the seller and the carrier due to the last sentence of article 71(2) CISG, and that it was an issue of duty of care and tort governed by Norwegian tort law since the loss had been sustained in Norway. Case 1959: CISG 8(2); [58(1)]; 74 Switzerland: Kreisgericht Rheintal (Court of First Instance Rheintal) No. OV.2011.4-RH3ZK-REU 6 November 2012 Original in German Published in: CISG-online database (www.cisg-online.org) No. 4859. Abstract prepared by Ulrich G. Schroeter, National Correspondent After lengthy negotiations, a Swiss chicory farmer (buyer) concluded a contract f or the purchase of a self-propelled chicory harvesting machine for the price of EUR 300,000 with the harvesting machine’s manufacturer, a French company (seller). The payment terms of the contract provided for the price to be paid by the buyer in instalments (40 per cent upon contract conclusion, 40 per cent upon delivery of the machine, 20 per cent upon the machine’s acceptance and its functioning free from defects). The contract furthermore called for a bank guarantee, in the French words – the rest of the contract was written in German – “(1) 40% pour l’acompte, 2) 10% d’une garantie”. After the contract’s conclusion, both parties initially remained passive – neither did the buyer make the down payment of 40 per cent, nor did the seller provide a bank guarantee. After a further two months, the seller declared the contract avoided because the buyer had not made the down payment, citing article 64 CISG. The buyer thereupon sued the seller for damages. Both parties were in agreement that the CISG applied to their contract. The Court of First Instance Rheintal first discussed which of the parties had breached the contract by remaining passive. As the contract’s wording did not specify when the price payment and the provision of the bank guarantee had to be made, the Court resorted to an interpretation of the contract in accordance with article 8 CISG. It concluded that the purpose of a bank guarantee – namely to secure the buyer against the seller keeping the down payment without making delivery – made clear that the seller would have had to act first and had accordingly breached the contract by not doing so, while the buyer only needed to pay once the guarantee had been provided. The buyer was therefore, in principle, entitled to claim damages according to article 45(1)(b) in conjunction with articles 74–77 CISG. However, the Court held that the question on how and when the loss incurred by an innocent party had to be substantiated in a court proceeding was a procedural question and therefore governed by the lex fori, and not by articles 74 et seq. CISG. In the present proceedings, the buyer’s attorney had in her first and her second briefs only claimed delivery of the harvesting machine and (broadly) damages for the loss incurred, without specifying this loss in any way. Only subsequently did she detail and offer evidence for an overall loss amounting to CHF 514,000, mostly consisting of the buyer’s expenses for a replacement machine acquired for the chicory harvests in 2010 and 2011. Applying Swiss procedural law (notably article 229 of the Swiss Code of Civil Procedure), the Court ruled that the buyer’s loss thereby had been substantiated too late, given that his attorney – whom the buyer, at this stage, had replaced by a new attorney – had been aware of and therefore should have presented 8/12

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this information already in her second brief. The buyer’s claim for damages was therefore dismissed in its entirety. (The buyer subsequently sued his first attorney for professional malpractice.) Case 1960: CISG 8; 9; [53; 54] Switzerland: Tribunale d’appello Ticino (Court of Appeal of the Canton Ticino) No. 12.2018.110 3 February 2020 Original in Italian Published in: CISG-online database (www.cisg-online.org) No. 5493. Abstract prepared by Ulrich G. Schroeter, National Correspondent The present appellate decision touches upon the borderland between the CISG and tax law, namely the question of which of the parties to a cross-border CISG contract has to pay VAT, if the parties have not addressed this point in their sales contract. The sales transaction underlying the decision was a CISG sale of steel coils by an Italian steel producer to a Swiss trading company. The parties had fixed the price in their contract but had not specifically mentioned therein whether Value Added Tax (VAT) would be added to the price. The Swiss buyer had initially sold the steel coils on to a Turkish (sub-)buyer, but subsequently asked the seller to instead deliver the coils to a sub-buyer in Spain. The Italian seller’s invoice to the Swiss buyer stipulated the agreed price, together with the clause “VAT exempt”. When the Italian tax authorities later charged VAT to the Italian seller because the delivery had been made to the Spanish sub-buyer, the Italian seller (after failed negotiations) sued the Swiss buyer for payment of the VAT amount, arguing that the VAT should be borne by the buyer. The Court of Appeal first affirmed the Court of First Instance’s holding that principles of tax law determined whether the buyer had to bear the VAT costs in relation to the seller and also agreed with the Court of First Instance’s conclusion that in the present case, the answer was in the negative. As an alternative line of argument, the Court of Appeal applied the CISG’s rules on contract interpretation (arts. 8 and 9 CISG), and concluded that also under these rules the result was that the seller could not expect that the buyer would bear the VAT. Given that the VAT is a tax imposed by the law of the seller’s country, the seller could be expected to know the tax regulations of its own country and to calculate the contract price taking into account this tax as one of his costs. The Court of Appeal accordingly affirmed the dismissal of the case. Case 1961: CISG 39; 50 Switzerland: Bundesgericht/Tribunal fédéral (Federal Supreme Court) No. 4A 493/2020 4 January 2021 Original in German Published in: Internationales Handelsrecht (2021), 95–98; Swiss Federal Supreme Court database (www.bger.ch); CISG-online database (www.cisg-online.org) No. 5508. Abstract prepared by Ulrich G. Schroeter, National Correspondent The Swiss Respondent (buyer) is operating a mountain lodge in Switzerland, which it renovated in 2014. For this purpose, the buyer purchased façade panels from two German manufacturers (sellers). After a dispute about both the delay of the delivery and the quality of the panels had arisen, the buyer refused to pay part of the contract price. The sellers in turn assigned their payment claim to a German factoring company (Claimant), which eventually sued the buyer for payment in a Swiss court. After the Claimant had prevailed in both the Court of First Instance and the Court of Appeal, the Respondent appealed to the Federal Supreme Court. Two of the points of law raised upon appeal concerned the CISG.

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The first point concerned the Respondent’s allegation that the sellers had tacitly waived any right to rely on the buyer’s late notice of non -conformity (article 39(1) CISG) by investigating the source of the alleged quality defic iency and negotiating with the buyer. The Federal Supreme Court pointed out that article 39(1) CISG is a non-mandatory provision, so that a seller can waive his right to rely on it. A waiver can occur even tacitly, if clear indications (“eindeutige Anhaltspunkte”) for such a step exist. Such a tacit waiver may occur if a seller unconditionally (“ vorbehaltslos”) acknowledges the non-conformity, if it unconditionally takes the goods back, if it declares his willingness to repair the goods or to deliver substitute goods, or if it unconditionally promises to investigate the alleged defects. By contrast, no waiver can be seen in the mere commencement of negotiations about the alleged defects, in a promise of repair that is combined with a request of full payment of the contract price, or in the fact that the lateness of a notice of non-conformity is for the first time raised during court proceedings. In light of this standard, the Supreme Court affirmed the lower courts’ ruling that the sellers in the present case had not tacitly waived their right to rely on article 39(1) CISG, because they had never unconditionally acknowledged the defects. The second point concerned the buyer’s earlier refusal to pay a part of the outstanding contract price, and whether this refusal had constituted a reduction of the contract price (article 50 CISG) or merely a temporary retention of the payment. The Supreme Court affirmed the Court of Appeal’s position that the buyer’s right to reduce the price under article 50 CISG has to be exercised through an express declaration (although free of form), and that a mere notice of non-conformity combined with a partial payment of the price is insufficient. Although the remedy of price reduction (article 50 CISG) is not subject to a specific time frame, it presupposes that a notice of non-conformity has been timely given (article 39(1) CISG). In the present case, the buyer had refused to pay in order to compensate for the late delivery, and no defect had been timely notified in accordance with article 39(1) CISG. Accordingly, no reduction of the price had occurred. Case 1962: CISG 45(1)(b); 74 United States of America: U.S. [Federal] District Court for the Middle District of Pennsylvania No. 1:20-cv-01764 Minh Dung Aluminum Co., Ltd. v. Aluminum Alloys Mfg. LLC 2 August 2021 Original in English Published in: 2021 U.S. Dist. LEXIS 143459; 2021 WL 3290686 Available at: https://cisg-online.org/search-for-cases?caseId=13547 Abstract prepared by Sam Walker The case deals with the determination of damages under the CISG. Minh Dung Aluminum Co., Ltd., a Vietnamese company (the buyer), entered into a contract with Aluminum Alloys Mfg. LLC, an American company (the seller), for the sale and delivery of aluminium ingots. The seller agreed to ship the aluminium ingots for $118,978.20 and subsequently shipped four containers to the buyer in Viet Nam. Only two of the four containers arrived in Viet Nam and the rest were rerouted back to the United States of America. The two containers that arrived were filled with hazardous waste rather than ingots. The buyer informed the seller of the hazardous waste and the seller acknowledged that they shipped non-conforming goods and promised to issue a refund and arrange for the return of waste to the United States. The buyer brought proceedings for breach of contract in the federal district court of Pennsylvania to which the seller failed to respond, and the buyer resorted to default judgment in the amount of $245,097.20. The district court applied articles 45 and 74 CISG in determining whether the sel ler had breached the contract and, if so, how much the buyer was entitled to. The court

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stated that the elements of a breach under the CISG are generally recognized to be: (1) formation; (2) performance; (3) breach; and (4) damages. The court found that the buyer’s claim established that: (1) the buyer and the seller entered into a contract; (2) the buyer paid the seller $118,978.20 for the ingots; (3) the seller failed to deliver those ingots; and (4) the buyer suffered loss due to the non-performance under the contract. Under article 45(1)(b) CISG, an aggrieved buyer is entitled to damages as provided in article 74 CISG. The district court then looked at article 74 CISG for the appropriate damages. The buyer sought damages in the amount of $245,097.20. T his included the $118,978.20 originally paid to the seller, $58,394 for hazardous waste storage at the port, $67,000 in lost profits, and $725 in court costs and fees. The district court found that the original amount paid, the storage costs, and the lost profits were either direct or foreseeable losses stemming from the seller’s breaches of the sale agreements and therefore recoverable under the CISG. The court costs and fees, however, were found not to be a direct or foreseeable loss stemming from the seller’s breaches. As such, the court granted part of the buyer’s claim regarding damages. Specifically, it found the recoverable damages to be $244,372.20 ($245,097.20 less the $725 in costs and fees). Cases relating to the United Nations Convention on Contracts for the International Sale of Goods (CISG) and to the Convention on the Limitation Period in the International Sale of Goods (1980, amended text) (Limitation Convention) Case 1963: CISG 7(2); Limitation Convention (3) Russian Federation: Judicial Chamber on Economic Disputes of the Supreme Court of the Russian Federation 308-ЭС20-18927 11 March 2021 Original in Russian Available on the Supreme Court’s judgments online database: https://vsrf.ru/lk/practice/acts (Russian language text) This case deals with the determination of the law applicable to the limitation period in international sale contracts. Derways, a company with its place of business in the Russian Federation, concluded several contracts with companies belonging to the GEELY Group and having their place of business in China. The contracts contained a clause indicating that they should be “interpreted and regulated under the CISG; [and that] in all matters of contracts not governed by the CISG, the parties shall apply Swedish national law.” Derways did not comply with its obligation to pay the price of the goods. The claims against Derways were subsequently assigned to GEELY Motors, a company with its place of business in the Russian Federation. GEELY Motors started proceedings against Derways to recover the outstanding sums. The Commercial Court of first instance found, among others, that the limitation period had passed and dismissed the claim on that ground. Upon appeal, the Court of Appeal and the Supreme Court upheld the decision. These courts stated that t he limitation period had expired pursuant to Russian law, Swedish law, Chinese law, and the Limitation Convention, which they applied to the contracts as an integral part of the CISG. Upon a second recourse, the Supreme Court recognized that the parties had agreed on the application to the contracts of the CISG and, for matters outside the scope of the CISG, of Swedish law. The Supreme Court indicated that, since the CISG did not deal with matters relating to the limitation period, Swedish law should apply to t his issue. The Supreme Court also noted that the Limitation Convention was a stand -alone treaty and not a part of the CISG and that for that reason the choice of the parties to apply the CISG did not entail the application of the Limitation Convention. Fin ally, the V.22-00259

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Supreme Court held that since neither Sweden, the State whose law had been chosen by the parties as the applicable law, nor China and the Russian Federation, the States in which the parties had their place of business, were parties to the Limitation Convention, the Limitation Convention did not apply to the dispute.

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