- High Commercial Court
- EURAMIK s.r.l. v. STUDIO GRADNJA — TRGOVINA D.O.O.
BUYER'S OBLIGATION TO PAY THE PRICE (ART. 53 CISG)
RIGHT TO INTEREST (ART. 78 CISG) - RATE OF INTEREST - MATTER EXCLUDED FROM CISG - DOMESTIC LAW APPLICABLE
[CLOUT Case no. 1675]
The Italian seller commenced an action against the Croatian buyer in the Commercial Court of Zagreb for the payment of delivered goods. The Commercial Court found in favour of the seller and ordered the buyer to pay the due amounts, upon which the buyer appealed the decision to the High Commercial Court of Croatia.
On appeal, the High Commercial Court noted that the lower court had erred in its application of substantive law; it had applied the Croatian Obligations Act rather than the CISG, but the Court reasoned that such an error did not affect the validity of the decision. The case dealt with a dispute of international nature and since the disputing parties had not made an explicit choice of applicable law, according to the Conflict of Laws Act of Croatia, the CISG was applicable. It was ensured that Italy’s substantive law ought to be applied only to matters that were outside the scope of the Convention or that could not be settled in conformity with the general principles on which the Convention was based (Article 7(2) CISG). The Court subsequently noted that the prerequisites for the application of Article 1(1) CISG were met, as the parties had their place of business in two different contracting States to the Convention, and that the CISG would be the applicable law likewise by virtue of the rules of private international law, which pointed to the application of Italian law (a contracting State of the Convention).
Examining the long lasting business relationship between the parties, the Court observed that, in accordance with Article 7(2) CISG, the buyer was familiar with the prices and samples of the goods at the time of the order and that it had made the order for goods in writing. Hence, the Court decided that the parties had concluded a valid contract (pursuant to Article 23 CISG), had agreed upon the price of the goods, and given that the seller had delivered the goods to the buyer, the buyer was required to fulfil its obligations to pay the price in accordance with Article 53 CISG.
Furthermore, the Court upheld the decision of the lower Court to grant the seller’s right to interest on all sums in arrears owed by the buyer (Article 78 CISG). In this respect, the Court emphasized that the party that is entitled to interest also retains any claim for damages under Article 74 CISG. Since the Convention did not specify the interest rate to be applied, the Court stated that Italian law was the applicable law on this matter as per Article 7(2) CISG.
Original in Croatian:
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Abstract: CLOUT Case no. 1675, in A/CN.9/SER.C/ABSTRACTS/181}}