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| An Austrian Seller applied for an injunction before the Tribunal of Padova, Este section, against an Italian Buyer for the payment of Lit. 40.690.916, expenses and interest, for agricultural produce.
The Court granted the injunction. The Italian Buyer filed an objection on two grounds: first that the Austrian company had failed to formally request it to pay before applying for the injunction; second, that it had, on its part, a claim for payment of Lit. 245.605.200 against the Austrian Seller which it intended to set off. The Court first of all held that in view of their international character, the transactions involved were governed by CISG which was applicable directly because both parties had their places of business in two different contracting States, and had not excluded the application of the Convention. Indeed, the mere fact that in their pleadings the parties referred only to the domestic laws of the two countries involved is not sufficient to establish a clear intention of the parties to exclude the application of the Convention and have instead one or the other domestic law applied. As to the merits the Court rejected the argument that the Austrian Seller should have first formally requested payment of the price from the Italian Buyer before applying for an injunction. According to Art. 58 CISG "if the buyer is not bound to pay the price at any other specific time, the buyer must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and this Convention". In addition Art. 59 states that “the buyer must pay the price on the date fixed by or determinable from the contract and this Convention without the need for any request or compliance with any formality on the part of the seller”. It follows that in the absence of any provision to the contrary in the contract, the buyer was therefore under a duty to pay the price at the time the goods were delivered without the seller having to make a formal request to this effect. It could be argued that to file a request for an injunction immediately after payment becomes due is contrary to the principle of good faith which, according to the Court, constitutes a general principle underlying the Convention. However, in the case at hand the Austrian Seller had filed such a request only months after the time when the Italian Buyer should have paid the price, i.e. at the time of delivery of the goods. With respect to the request for set-off, the Court pointed out that the matter was not covered by CISG and had therefore to be determined in accordance with the otherwise applicable domestic law which in the case at hand was Austrian law. According to Austrian law one of the condition for set-off is that the two claims involve the same persons. In the case at hand this condition was not met since the claim which the Italian Buyer intended to set off against the Austrian Seller's claim was in fact a claim against another company though closely linked with the Austrian Seller. The Court therefore rejected the request for set-off and confirmed the injunction granted to the Austrian Seller. In applying the individual provisiosn of the Convention the Court stressed the need for their uniform interpretation and application in accordance with Art. 7(1) CISG. According to the Court to this effect reference should be made whenever possible to foreign decisions which, though not representing binding precedents, have persuasive value. In the case at hand the Court repeatedly referred to foreign case law in support of its conclusions. |