A German buyer and a US (Indiana) seller concluded a contract for the sale of a machine subsequently to become a part of a machine in Russia. As a result of a defect in the machine component an accident occurred during its operation. The buyer commenced action against the seller claiming the costs it had sustained in repairing the machine component. At first instance the court held that it had jurisdiction to hear the case. The seller appealed arguing that the court did not have jurisdiction.
The appellate court held that it would have jurisdiction if the place of performance of the obligation in question (payment of damages) was in Germany. To determine the place of performance the court applied CISG, as the German private international law rules led to the application of the law of US (Indiana), a contracting State (Art. 1(1)(b) CISG). As CISG does not expressly settle the place of payment of damages, the court applied Art. 7(2) CISG and held that Art. 57(1)(a) CISG (place of payment of the price) is an expression of the general principle that obligations to pay are to be performed at the place of business of the creditor, in this case the German buyer ('Bringschuld', 'obligation portable'). The court affirmed therefore its jurisdiction. |