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| An Austrian seller and an Italian buyer entered into a contract for the sale of winter potatoes. As the buyer did not pay the purchase price, the seller obtained from the Tribunale di Padova an injunction for payment plus expenses and interest, which the buyer challenged before the same court. The buyer also requested set-off against the seller's claim.
In its judgement the Court relied for each issue on a number of decisions on CISG that had already been rendered by foreign courts and arbitral tribunals, in order to promote uniformity in the interpretation and application of CISG (Art. 7(1) CISG). The Court first of all stated that the direct application of uniform law prevails over recourse to private international law: therefore it held that the contract was governed by CISG as the two parties were situated in different Contracting States, and Art. 1(2) CISG was not applicable. The Court further held that even if CISG does not contain an explicit definition of “sale”, the concept should be determined in an autonomous way, without referring to national law. Therefore, making reference to Arts. 30 and 53 CISG, the Court considered that also the substantive requirements for the application of the Convention were met, i.e. that the contract was a sales contract of an international character. Moreover the parties had not excluded the application of the Convention: according to the Court, while the parties are free to exclude the application of CISG either expressly or impliedly, the mere reference to domestic law in the parties' pleadings is not in itself sufficient to exclude CISG. To this effect parties must first of all be aware that CISG would be applicable and moreover intend to exclude it. As to the merits, the Court rejected the buyer’s opposition holding that since the parties had concluded the contract orally, as permitted by Art. 11 CISG, and had not fixed a specific time for payment, Art. 58 CISG applied. Therefore the buyer should have paid the price when the seller placed the goods at its disposal. Furthermore, according to Art. 59 CISG, the buyer should have paid the price without the seller having to make any request or comply with any formality. The Court held that the seller could fix an additional period of time as set out in Art. 63 CISG, but it also considered that this is only a possibility for the performing party, not an obligation: the seller is entitled to choose between fixing such an additional period of time (and until the expiration of this period it can neither terminate the contract nor resort to any remedy for breach of contract) or commencing a legal action for payment. In the case at hand, though the seller had waited six months after delivery before asking for the injunction of payment, the Court held that it had not violated the principle of good faith and fair dealing, considered a general principle and a precious means of interpreting the Convention (Art. 7(1)CISG). As far as the set-off claim is concerned, the Court held that this matter is not covered by CISG. By virtue of the private international law rules set forth in the Hague Convention of 1955, the Court applied Austrian law, under which the set-off claim was denied. |