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| Abstract | ||||||||||||||||||
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| An Austrian seller, acting as exclusive distributor of a company controlled by a Hungarian producer, sold clay to a Swiss buyer. The parties agreed that payment was to be made within 30 days from the date of each invoice. All the goods were delivered, but the buyer refused to pay the purchase price. The seller claimed payment of the price plus interest. The buyer counter-claimed set-off alleging credits towards another company, which the buyer considered as being part of the same group of the seller.
The court held that the contract was governed by CISG according to Art. 1(1)(a), and that the buyer had breached its obligation to pay the price (Arts. 53 and 59 CISG). The seller was therefore entitled to seek payment thereof (Art. 62 CISG). The seller was also awarded interest (Art. 78 CISG) accruing from the expiration of the period of time agreed by the parties for payment of the price. The court observed that according to Art. 78 CISG, the obligation to pay interest for the delay in payment of the price is not subject to a formal request by the seller. Since CISG does not determine the interest rate, the court held that the rate was to be determined in accordance with the domestic law of the buyer's country (Switzerland) as the obligation of the buyer was the only disputed performance in the case at hand. As to the buyer's claim for set-off, the court held that the issue was governed by Swiss law, since the CISG does not contain any rule to this regard. |