A Swiss seller and an Italian buyer concluded a contract for the sale and installation of an antipollution device. After delivery and installation by the seller the buyer declared the contract avoided alleging lack of conformity of the delivered item. The seller commenced an action before a Swiss court claiming payment of the price. The buyer objected that the Swiss court had no jurisdiction.
The Supreme Court confirmed the lower court decision, applying Art 5(1) of the 1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, which states that a person domiciled in a contracting state (in the case at hand: the buyer) may be sued in the court for the place of performance of the obligation in question (in the case at hand: the payment of the price).
The Court applied CISG (held applicable to the contract according to Art. 1(1)(a)) to determine the place of payment of the price. In the absence of a contrary agreement between the parties, payment of the price was to be made at the seller's place of business (Art. 57(1)(a) CISG), and not at the place of delivery of the goods (Art. 57(1)(b) CISG). The latter rule applies only when payment is to be made against the handing over of the goods or documents. According to the Court this happens only when the respective obligations of the buyer and the seller have to be simultaneously fulfilled (Art. 58(1) CISG) and not when, as in the case at hand, the buyer is entitled to pay part of the price after performance by the seller (delivery and installation). On this ground the jurisdiction of the Swiss lower court was affirmed. |