- High Commercial Court
- Industria Conciaria S.p.A. v. Šimecki d.o.o.
BUYER'S OBLIGATIONS - PAYMENT OF PRICE
INTEREST RATE ON SUMS IN ARREARS - MATTER EXCLUDED FROM THE SCOPE OF CISG (ART. 7(2) CISG) - DETERMINED BY DOMESTIC LAW APPLICABLE IN THE ABSENCE OF CISG
[CLOUT Case no. Abstract prepared by Davor Babic]
The Italian seller delivered goods to the Croatian buyer as part of an ongoing business relationship. The buyer failed to pay the price for the last delivery claiming that it had never entered into a contractual relationship with the seller but with another Croatian company which acted as an intermediary. The seller sued the buyer in the Commercial Court of Zagreb for the payment of the price. The court found for the seller and ordered the buyer to pay the price plus interest accrued under Croatian law.
On appeal, the High Commercial Court affirmed in part and rejected in part the decision. The Court noted that the first instance court should have applied the CISG and not the Croatian Obligations Act. The CISG was applicable pursuant to article 1 (1)(a) CISG because the parties’ places of business were in different contracting states. The Court held that, because there was an ongoing business relationship between the seller and the buyer, the contract of sale was formed under articles 23 and 24 CISG when the buyer’s order reached the seller. The court affirmed the lower court’s decision that the buyer must pay the price, even though the proper legal basis for such ruling was article 53 CISG and not the corresponding provision of the Croatian Obligations Act.
The High Commercial Court also upheld the Commercial court’s decision that the seller’s claim was not barred by the statute of limitation. The Court noted however that the commercial court should have applied the four year limitation period provided by the UN Convention on the Limitation Period in the International Sale of Goods of 1974 and not the five year period provided by the Italian Civil Code.
The Court rejected the lower court’s decision on interest because this latter should have applied the interest rates defined by the Italian not the Croatian law. The Court noted that article 78 CISG regulates the payment of interest, but provides no criteria for determining the interest rate. Relying on article 7 (2) CISG, the High Commercial Court applied Croatian private international law (Article 20 (1) Croatian Private International Law Act) and found that the interest rate was governed by the Italian law as the law of the seller.
Original in Croatian.
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