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| An Austrian seller and an Italian buyer concluded a contract for the sale of cellulose. An Italian company assumed a guarantee for the buyer's obligation of payment. When the buyer went bankrupt, the seller sued the guarantor before an Austrian Court.
The Court of First Instance ordered the guarantor to pay the price. The guarantor appealed, alleging lack of jurisdiction of the Austrian Courts. The Court of Appeal held that the jurisdiction to hear the case was not vested in Austrian Courts and rejected the seller's claim. The seller appealed, alleging that the place of performance of the guarantor's obligation was the seller's place of business and that therefore the Court of First Instance had jurisdiction. In order to determine whether the Austrian Courts had jurisdiction, the Supreme Court applied Art. 5(1) of the Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters (Lugano 1988), pursuant to which a person domiciled in a Contracting State may be sued before the Court of the place of performance of the disputed obligation. As to the applicable law, the Court held that it would apply CISG, since both parties had their places of business in Contracting States (Art. 1(1)(a) CISG). However, since guarantees are excluded from the scope of CISG, the Court concluded that the place of performance had to be determined according to Austrian domestic law (Art. 7(2) CISG). Since, according to Austrian law, the guarantor's obligation had to be performed at the guarantor's place of business, the Supreme Court confirmed that the Austrian Courts had no jurisdiction to hear the case and rejected the seller's appeal. |