CISG
SLOVAKIA

NS SR - 3 Obo/247/2005sk en

Supreme Court of the Slovak Republic

 

26 October 2006 [3 Obo 247/2005]

 

 

RESOLUTION

[slovenske znenie]

 

The Supreme Court of the Slovak Republic, deciding in a panel, in the case of Plaintiff S.L., S.r.o. [Seller], with its registered office in R.B., Czech Republic, represented by attorney JUDr. M.T., versus Defendant J.S.-O. [Buyer], with its registered office in C., [Slovak Republic], represented by attorney JUDr. J. U., regarding payment of 254,561.24 Slovak koruna [Sk] and appurtenances, on appeal of the [Buyer] against the judgment of the Regional Court in Zilina of 20 April 2005, rec. no. 15 Cb 10/2004 - 64

 

h a s   d e c i d e d   a s   f o l l o w s:

 

The challenged judgment of the Regional Court in Zilina of 20 April 2005, rec. 15 Cb 10/2004 - 64 is cancelled and the case is returned to the Court of First Instance for further proceedings.

 

 REASONING

 

The Court of First Instance by the challenged judgment bound the [Buyer] to pay to the [Seller] a sum of 254,261.24 Sk and interest of 14.25 % annually for the period from 18 September 2001 until payment and a reimbursement of costs of the proceedings in sum of 12,775.- Sk. The court also granted to the [Seller] the right to reimbursement of costs of the proceedings in the sum of 28,800.- Sk. The Court of First Instance reasoned its decision by stating that the [Seller] claimed its right to payment of the purchase price in the sum of 254,561.24 Sk with appurtenances. With reference to the evidence gathered, the court found that the [Buyer] placed a purchase order for textile goods by phone and subsequently personally took possession of these goods at the customs office in B. on 25 July 2001. The [Seller] then billed the [Buyer] for the purchase price for the goods by invoice no. FV 00543/01 for the sum of 199,969.- Kc. The [Buyer] did not notify [Seller] of any lack of conformity when inspecting the goods at the time of their delivery. In July 2002, the [Buyer] notified of a lack of conformity of the goods and argued that the delivery was not performed on time. The Court of First Instance referred to sec. 409 part 1 of the Slovak Commercial Code and to the obligation of a buyer to pay the purchase price for goods delivered. Since the [Buyer] did not fulfil this obligation, i.e., did not pay the invoiced purchase price, the [Seller] reasonably claimed its right to payment of the price. The court reasoned its decision about the interest by sec. 369 of the Slovak Commercial Code.

 

The [Buyer] filed an appeal against the judgment, asking the court to change it and dismiss the action. The [Buyer] argued that the parties to the proceedings, with reference to previous defective deliveries, have agreed on the right of the [Buyer] to avoid the contract in case of delivery of defective goods. The [Buyer] notified of lack of conformity of goods for the first time in August or September 2001. The [Seller] reacted by replacing the defective goods. The customers of the [Buyer] ceased to buy the goods because of their frequent lack of conformity and the [Buyer] therefore declared to the [Seller] that the contract was avoided in presence of Mr. O.S. and informed that it will restitute the goods being defective in 40 % of their amount. With reference to these facts, the [Seller] has the right to restitution of the goods.

 

The [Seller] answered the appeal by stating that it considers the challenged judgment to be correct, since it determined that the [Buyer] failed to fulfil its obligation from the contract of sale. The [Seller] once again pointed to the fact that the [Buyer] only notified of the lack of conformity one year after taking possession of the goods and thereby breached sec. 428 part 1 of the Slovak Commercial Code. The [Seller] also objected to the allegation that an agreement about the right to avoid the contract has ever been concluded.

 

The Supreme Court of the Slovak Republic as an appellate court (sec. 10 part 2 CPC) tried the appeal under sec. 214 part 1 CPC and concluded that the [Buyer]’s appeal is justified.

 

The object of the appellate proceedings is the right to payment of the sum of 254,261.24 Sk with appurtenances representing the purchase price for the goods delivered. The parties to the proceedings did not establish jurisdiction of a foreign court and therefore Slovak courts have jurisdiction to try the case (sec. 37 of act no. 97/1963 Coll. on international private and procedural law as amended). The parties to the proceedings also made no choice of law applicable to their relationship from the contract of sale. Therefore, with reference to sec. 2 of act no. 97/1963 Coll. and with reference to the fact that both the Czech Republic and the Slovak Republic are parties to the UN Convention on Contracts for the International Sale of Goods published in the Collection of Acts as no. 160/1991 Coll., the claim of the [Seller] shall be qualified under the Convention.

 

The [Buyer] argued in the proceedings that the goods delivered by the [Seller] lacked conformity. The [Buyer] specified its argument during the appellate proceedings and presented the name of the person who was present at the time when the declaration of avoidance was performed, since the delivery of defective goods constituted a substantial breach of contract.

 

The Appellate Court determined that the Court of First Instance incorrectly decided about the obligation of the [Buyer] to pay the purchase price under the Slovak Commercial Code. Since the court applied an incorrect legal instrument, the judgment cannot be upheld or changed and the Supreme Court therefore cancelled the decision of the Court of First Instance under sec. 221 part 1 CPC and returned the case for further proceedings (sec. 221 part 2 CPC).

 

In the upcoming proceedings, the Court of First Instance shall also decide about the reimbursement of costs of the appellate proceedings.

 

Instruction: An appeal against this judgment is not admissible.

 

Bratislava, 26 October 2006.

 

                                                                                                          JUDr. Beata Minicova

                                                                                                          Chairman of the Panel

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