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| Abstract | ||||||||||||||||||
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| A Slovenian seller entered into a contract with an Italian buyer for the supply on a regular basis of rabbits with certain genetic qualities, raised by the seller using reproduction rabbits supplied by a third party. The contract contained inter alia a clause stating that the contract was to be governed by the “laws and regulations of the International Chamber of Commerce of Paris, France”. Finding problems with the delivered animals, the buyer asked the seller to acquire the reproduction rabbits from a different company which however refused to supply the new type of rabbits to the seller on the ground that the hygienic conditions on the seller’s farm were inadequate. Consequently, the seller stopped deliveries to the buyer, which declared the contract terminated. The seller brought an action asking for damages for breach of contract by the buyer.
The Tribunal found that the contract was governed by CISG and in order to interpret its provisions, it referred to international case-law applying the Convention, which has to be taken into account according to its Art. 7(1), thereby ensuring an autonomous interpretation and uniform application of the said Convention. Though the contract at hand would be qualified under Italian domestic law as a contract for deliveries in instalments at the buyer’s requirement (so called “contratto di somministrazione”), it was to be included in the broad concept of “sale” under CISG. Moreover, CISG would be applicable according to its Art. 1(1)(a), having both parties their place of business in two different contracting States at the time of conclusion of the agreement. The Tribunal held that reference to the “laws and regulations of the International Chamber of Commerce” cannot amount to an implied exclusion of CISG. According to the applicable conflict of law rules, parties are free to choose the governing law of their contract, but in so doing they must opt for a particular domestic law. A reference by the parties to non-State rules of supranational or transnational character such as the lex mercatoria, the UNIDROIT Principles of International Commercial Contracts as well as the CISG when the Convention is not per se applicable cannot be considered a veritable choice-of-law clause by the parties, but only amounts to an incorporation of such rules into the contract, with the consequence that they will bind the parties only to the extent that they do not conflict with the mandatory rules of the applicable domestic law. In the case at hand, however, even such incorporation into the contract must be excluded since the reference to the “laws and regulations of the International Chamber of Commerce of Paris, France” was clearly too vague as to permit a precise identification of any specific rule. As to the merits of the case, the Court held that the termination of the contract by the buyer was justified. Indeed the seller's failure to continue to supply rabbits amounted to a fundamental breach which entitled the buyer to terminate the contract in accordance with Arts. 25 and 49(1)(b). It is true that according to Art. 49(1)(b) CISG the right to terminate presupposes that the non-performing party fails to deliver the goods within the additional period of time fixed by the aggrieved party or else declares that it will not deliver within that period, and that the buyer had not fixed such an additional period of time. However, the Court held that in the case at hand there was no need to fix such an additional period of time since all parties involved had known from the outset that the seller in the circumstances would not have been in a position to deliver the rabbits for several months. |