- Republic of Korea
- Seoul Central District Court
FIXING OF AN ADDITIONAL TIME FOR PERFORMANCE BY BUYER (ART. 47(1) CISG) – BUYER ENTITLED TO AVOID (TERMINATE) THE CONTRACT AFTER SUCH TIME HAS ELAPSED (ART. 49(1)A) CISG)
PARTIAL DELIVERY - REMEDY OF AVOIDANCE APPLICABLE TO MISSING PART (ART. 51(1) CISG)
EFFECTS OF AVOIDANCE - RIGHT OF BUYER TO REFUND OF PRICE PAID IN EXCESS (ART. 81(2) CISG)
[CLOUT Case NO. 1564; abstract prepared by Haemin Lee, National Correspondent].
The plaintiff buyer is a Russian corporation, and the defendant seller is a Korean
corporation exporting automobiles. The plaintiff reached an agreement with the
defendant, under which this latter would supply nineteen model A vehicles and
six model B vehicles, and the plaintiff paid the full purchase price. The defendant
supplied model A vehicles, but failed to supply model B vehicles within the supply
period. The plaintiff thus claimed a refund of the purchase price from the defendant,
because the contract was avoided due to non-performance of the obligation.
The defendant argued that there was no cause attributable to itself for its default on
its duty to supply vehicles, claiming an exemption under Article 79(1) CISG, on the ground that: (a) although model A vehicles were originally manufactured for the
purpose of exporting to Africa, they were shipped to the Russian Federation at the
plaintiff’s assurance that it would resolve any issues in importing them to the
Russian Federation; and (b) problems arose during the customs clearance,
prompting the manufacturer to stop manufacturing model B vehicles.
Under Articles 49(1)(b), 47(1), and 51(1) CISG, the Court held that the relevant part
of the contract was avoided by the plaintiff’s expression of its intent of avoidance in
this lawsuit because firstly the defendant defaulted on its obligation to deliver the
above six vehicles by the end of the supply period; and secondly, the defendant
failed to perform despite the plaintiff’s fixing of an additional period of time of
reasonable length for the defendant’s performance.
In addition, under Articles 81(2) and 84(1) CISG, the Court indicated that the defendant should be liable for restitution by paying the price of the above
six vehicles, plus delinquency charges at an annual rate of 20 per cent under other
relevant Korean legislation.
The Court rejected the defendant’s claim on the grounds that: the duty to secure and
supply the above vehicles to the plaintiff rested within the defendant’s control,
regardless of the plaintiff; and even if the defendant eventually defaulted on its duty
to supply model B vehicles due to problems arising from the export of model A
vehicles with the cooperation of the plaintiff, it did not mean that the defendant’s
failure to perform was due to impediments beyond its control.
Original in Korean:
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Case law on UNCITRAL texts (http://www.uncitral.org/uncitral/en/case_law.html) A/CN.9/SER.C/ABSTRACTS/168}}