Source: http://cisgw3.law.pace.edu/cases/010123i3.html
Timestamp: 2019-04-25 08:47:50+00:00

Document:
The Tribunale of Milan declared PDP S.r.l [Seller]'s bankruptcy on 12 December 1991. The Plaintiff Bankruptcy Official Receiver of PDP S.r.l. [Seller] sued before the Tribunale of Milan (Circuit Court of First Instance). Defendant [n.1] is Credito Italiano S.p.A.; Defendant [n.2] is Nelostuote KY [Buyer], which has its headquarters in Noormarkuu (Finland). The summons and compliant were served on 25 February - 1 March 1994, explaining as follows.
In May 1991, [Seller] shipped to [Buyer] a complete line for the output of stiff covered boxes, which had been delivered at the beginning of the following month. [Buyer] was obligated to pay the outstanding purchase price of approximately Finnish Mark [FM] 170,000. However, when the [Official Receiver] was about to ask for the balance due, [Buyer] opposed with a document, signed by the parties on 30 August 1991, which contained a commitment for the payment subordinated to the prior proof of the impossibility of the [bank] Credito Italiano, as assignee of the [Seller]'s credit [cessionario of cessione del credito], to get its connected claims.
The [Official Receiver] alleged that the assignment, by [Seller]'s letter of 7 June 1991, had been notified to the obligor, i.e., it had been transferred or had been accepted by the obligor, prior to the declaratory judgment of [Seller]'s bankruptcy. As a result, the [Official Receiver] moved to deny the admissibility of the procedure provided by Art. 2914(2) of the Civil Code (Cc); subordinately, the [Official Receiver] sought revocability [of the assignment] pursuant to Art. 67(1) n. 2 of the R. D. 16 March 1942 n. 267 (L. Fall.).
[Seller] asked for a declaration of the inadmissibility [of the procedure provided by Art. 2914(2) C.c.]; subordinately, [Seller] sought a declaration of the inefficacy of the assignment; [Seller] claimed for the payment due by [Buyer] for the outstanding price of FM 170,000 along with interest.
Declaring Credito Italiano S.p.A contumacious, [Buyer], considering the place of its domicile, appeared before the Tribunal to object to lack of jurisdiction of the Italian court by declaring the jurisdiction of the Pori court [Finnish court] in accordance with the Lugano Convention of 16 September 1988 on Jurisdiction and Enforecement of Awards on Civil and Commercial Matters.
On the merits, [Buyer] alleged [Seller]'s failure to perform its contractual duties on the basis of either the verified malfunction of the goods as well as various supply defects, or the insufficient staff training; subordinately, [Buyer] sought to dismiss [Seller]'s claim for payment.
According to Art. 6 of the Lugano Convention, on 15 June 1998 the Tribunal rendered its decision recognizing its jurisdiction over [Buyer] because of its authority to deal with the "strictly connected" claim proposed [by Seller] with respect to the Italian bank; on the merits, considering the assignment as settable against [the bankruptcy], [the Tribunal] declared the admissibility of the request of revocability; and the Tribunal, declared the inefficacy of the assignment. Moreover, after recognizing that with the signature of August 1991 [Buyer] undertook to pay the outstanding price, the Tribunal declared [Buyer]'s allegations groundless, and ordered [Buyer] to pay the required price.
[Buyer] filed notice of appeal, served on 13 October 1998, seeking to review the judgment for two reasons. Credito Italiano S.p.A did not appear, while, [Seller] appeared and raised defenses along with the incidental appeal. After the parties had concluded their statements, as reminded later, the G.I. [instructing judge] handing the case over the Collegio [Panel] for the final decision.
As a preliminary issue, the court declared the non-appearance of Credito Italiano S.p.A.
[Buyer] alleged the nullity of the award for violation of subject matter jurisdiction. [Seller] sought revocability as per Art. 67(2) L. fall. Pursuant to Art. 1(2) of the Lugano Convention of 18 September 1988, which states that [the Convention] does not apply to bankruptcy procedures, [Buyer] challenged the applicability of the provision stated in Art. 6(1) [of the above convention]. Moreover, [Buyer] claimed the absence of a strict connection between the request of revocability proposed [by Seller] against Credit Italiano S.p.A and [the request] advanced against [Buyer] in regard to the balance of the purchase price. [Buyer] also alleged that, since [this dispute] refers to a situation ended while the precedent regulation was still in force, the precedent regulation applies. See Art. 25 of the disposizioni sulla legge in generale (disp. gen. C.c.), as repealed by Art. 73 of the L. 1995 n. 218 which reformed the Italian private international law system. Arguing that the contract for the supply of goods has been signed as well as executed [in Finland] -- through the delivery of the [industrial] plant, the payment of the first instalment of the price and, finally, through the commitment of paying the due balance -- [Buyer] alleged that the [dispute] falls within the jurisdiction of the State of Finland.
After this preliminary remark, contrary to the opinion rendered by the Tribunal, with respect to the claim proposed by [Seller] against [Buyer], [the court] asserts that the jurisdiction of the Italian judge recovers its prescriptive referent under the criteria of special jurisdiction stated in Art. 5 of the aforementioned convention on contract matters. The court points out that this claim [against Buyer] does not contain any characteristic of bankruptcy as instead that brought against Credito Italiano S.p.A. does. [This reasoning] is based on the fact that the [Official Receiver] only replaced [Seller] in claiming for the performance of [Buyer]'s duty, which pre-existed to the declaration of [Seller]'s bankruptcy and which remained unmodified.
According to this argument, [Buyer], which has its domicile in the territory of a Contracting State, can be summoned in another Contracting State before the court of the place where the obligation in dispute has been or has to be performed. Moreover, according to the domestic private international law, the judge who is handling the case has to determine the law applicable to the legal relationship at issue, and, according to such law, has to identify the place of performance of the contractual duty as well as the place of payment.
Interpreting the Brussels Convention of 27 September 1968, the European Court of Justice, with decisions of 6 October 1976 - case Tessili v. Dunlop and of 15 January 1987 - case of Shenavai v. Kreischer, establishes the same principles as stated above. [These judgments] are binding with respect to intra-community relationships and some Contracting States have implicitly recognized [these judgments] as grounds in the context of the following and analogous [Lugano] Convention.
This is effectively what is obtained from the Preamble of the attached protocol n. 2 of 16 September 1988 relative to the uniform interpretation of the same means: "The High Contracting Parties, [...] considering the substantial connection that exists between the [Lugano] Convention and the Brussels Convention [...] having full knowledge of the decisions rendered by the European Court of Justice [...] until the moment of the signature of this Convention; considering that the negotiations [...] have been based on the Brussels Convention in the light of such decisions," and, as per Art. 65 (giving note, in the Preamble, of the occurred implementation of the "substance" of the Brussels Convention of 1968), [the Brussels Convention] is going to make integral part of the [Lugano Convention]. In this way, the carrying of the mentioned decisions is of absolute importance [for the issue in dispute].
As immediate consequence, it remains to be said that the law appointed to govern the relationship, according to the selective criteria considered above, can be the one that directly derived from a rule (in theory also substantial) of a conventional nature, which results to be incorporated and operating in a single domestic legal order as regards of the peculiar contractual event in dispute.
With respect to the actual identification of the regulating law, it has to be excluded the relevance of the reminded Art. 25 disp. gen Cc, which dealt with contractual obligations in general, since the relationship is likely to be, more specifically, qualified on the basis of Art. 1(1)(a) and Art. 3(1) of the Vienna Convention of 11 April 1980 on Contracts for the International Sale of Goods (CISG). Therefore, [this relationship] has to be considered governed by the relative uniform subject matter rules, even if, in the case at hand, with exclusions of the [rules contained in the] second part on formation of contract, since the State of Finland, where the treaty entered into force on 10 January 1989, declared to not accept Part II of the CISG.
With regard to the formation of the contract for the sale of goods that is in dispute (and to which only [Buyer] referred in its statements of defense), a real question cannot even be proposed in this proceeding since this dispute arose from a conclusive, very specific development of that set forth by the agreement between [Buyer] and [Seller], concluded in Pori on 30 August 1991. According to [this agreement], [Buyer] undertook to make available to [Seller] the remaining sum of FM 170,000. This should have been produced within 7 days from when the documentation, suitable to confirm that Credito Italiano had not and would not have had any questions or claims to present against [Buyer].
With regard to the method of payment -- apart from what reported above about the confirming of extraneous to it of Credito Italiano -- since the content of the document at issue does not express any kind of further indications and/or specifications (quoting: "been able to produce documents that Credito Italiano has not or will not have any demands or claims against [Buyer]"), Art . 57(1) of the Vienna Convention finds an immediate application. Therefore, if [Buyer] is not bound to pay the price at any another particular place, [Buyer] has to pay [Seller] at [Seller]'s place of business.
Hence, the obligation at issue, which just concerns the agreed final payment, had and, in any case, has to be carried out in Italy; this fact gets along with the criteria of special jurisdiction stated in Art. 5(1) of the Lugano Convention, as reminded at the beginning. [This principle] is suitable and sufficient to establish that the Italian court had jurisdiction over [Buyer]; whereas, to this end, it was irrelevant that the accumulation of the claim [for payment] with the one that has been formulated against the bank, which became assignee of the credit for the performed supply. [The latter claim] is derived from the bankruptcy procedure and, at the same time, is connected [with the other claim] because of its objective preliminary function, (so that, the draws brought by the defense of the bankruptcy to the characteristic principles and parameters of the domestic procedural order are improper).
The Tribunal had no justified reason to have recourse to the criteria of special jurisdiction stated in the following Art. 6(1), which, however, in its whole and in comparison with the preceding, as well as more general, provisions of the Lugano Convention, outlines not an undifferentiated concurrent or alternative criteria for jurisdiction -- as it appears postulate in that judgment -- but rather an integrative and additional criteria.
In the latter provision there are uttered specific ancillary criteria that, just because they concern to some well precise categories of disputes, are electively aimed at permitting, from time to time, the courts of the Contracting States to operate the concentration on the same judge over more relationships denoted by a qualified link of interdependence. Rather (above all), the cumulative exercise of the jurisdiction in the case in which there would be otherwise lack of title in regard to an individual domiciled in the territory of another State.
To this end, the court has to dismiss the objection of lack of jurisdiction of the Italian court, as renewed by [Buyer] in its first grounds of appeal, and at the same time, still as a procedural matter, to point out as improper [Buyer's] subsequent request of exclusion from the proceedings relevant to the assignment between the bankruptcy proceedings and Credito Italiano, since [Buyer], as obligor, has never been part of those procedings. Coming to the analysis of the second and final allegation, it has to be reported that through this claim, it is deduced that a distortion of the facts in dispute occurred. Substantially, [the court] implies that the Tribunal had interpreted the agreement of 30 August 1991 as implicitly renounced by [Buyer] with respect to the complaints of the inexact performance of [Seller] [Omissis].
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff is the Official Receiver for PDP S.r.l.'s bankruptcy that is also referred to as [Seller]; PDP S.r.l. is referred to as the actual [Seller]; Defendant n. 1 is a Bank entitled of the assignment; Defendant n. 2 Nelostuote KY from Finland is referred to as [Buyer].
** Anoosha Boralessa LLB (London School of Economics); LLM; Member of New York Bar. She was awarded a scholarship by the Dante Alighieri Institute to study in Florence and has worked as a legal consultant in Milan. She is currently working in London and is a candidate for a diploma in International Commercial Arbitration at Queen Mary, University of London.
*** Giovanna Micheli is a member of the MAA and has received an LL.M. in Admiralty, Tulane University School of Law (2002). She also earned Certificates in International Commercial Arbitration and Domestic Law and Practice of Arbitration. She is admitted in Italy as Attorney-at-Law, she currently works in Düsseldorf, Germany.

References: Art. 2914
 Art. 67
 Art. 2914
 Art. 6
 Art. 67
 Art. 1
 Art. 6
 Art. 25
 Art. 73
 Art. 5
 v. 
 v. 
 Art. 65
 Art. 25
 Art. 1
 Art. 3
 Art. 5
 Art. 6