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| A German buyer and a Danish seller concluded a contract concerning the lease of a steam plant. In the contract it was agreed that the buyer would buy the steam plant after three months of leasing, with a reduction of the original purchase price. The parties also made agreements for the sale of other goods, parts of which were to be used in connection with and on the steam plant and goods used for other purposes. The place of delivery was not mentioned in the contract while the invoices stated that goods had to be delivered in Denmark. The invoices also stated that the place of payment was at the seller's bank in Hamburg, Germany. At one point during the leasing period the buyer sent a cheque to the seller's place of business, as partial payment of the amount due. When the cheque was cashed, however, it was referred to drawer.
As the buyer subsequently disputed the obligation to pay the price according to the documents constituting the agreement, the seller sued the buyer for the full amount. The case was decided only on the jurisdiction matter with an interim judgment, on appeal from the Lower Court (Roskilde Ret, April 4, 2000). In order to assess the jurisdiction of the Danish courts, both the Lower Court and the High Court applied Art. 5(1) of the EC Convention on Jurisdiction and the Enforcement of Decisions in Civil and Commercial Matters [1968 Brussels Convention], according to which a person domiciled in a contracting State may be sued in the Court of the place of performance of the obligation in question. In the case at hand the obligation in question was payment of the purchase price. The question arose whether the place of payment was in Denmark or in Germany. The Lower Court addressed the problem as to whether the contract was to be considered one contract which included both the lease of the steam plant and the different sales of goods, or whether the various transactions were the result of independent contracts. The Court held that the transactions between the parties derived from several independent contracts, taking into consideration that some of the performances to be made by the seller did not relate to the steam plant. As to the transactions which derived from the sale of goods, the Court found that CISG was applicable, since both Denmark and Germany were contracting States (Art. 1 (1)(a) CISG). Without further reasoning it also stated that the goods were not those mentioned in Art. 3 CISG. According to Art. 57(1) CISG the buyer was obliged to pay the purchase price at the seller's place of business, since no other agreement on this matter had been made. As to the agreement on the lease of the steam plant, the Court applied the Convention on the Law applicable to Contractual Obligations [1980 Rome Convention], as CISG was not applicable (Art. 3 CISG). It then held that Danish law was applicable and that the Danish Court had jurisdiction in the matter concerning the payment of the lease. The High Court upheld the Lower Court's decision and without entering into the question of the applicability of CISG, it found that the Danish Courts had jurisdiction over the case according to Art. 5(1) of the 1968 Brussels Convention in conjunction with Danish domestic law. |