Source: http://cisgw3.law.pace.edu/cases/991214i3.html
Timestamp: 2019-04-22 18:08:35+00:00

Document:
CASE NAME: Imperial Bathroom Company v. Sanitari Possi S.p.A.
A buyer from the U.K. and a seller from Italy entered into a contract for the sale and distribution of goods. Applying the 1968 Brussels Jurisdiction and Enforcement Convention and the Rome Convention the court addressed whether the obligations arising under the contract had a closer connection to seller's country, or buyer's country for purposes of determining whether the Italian court had proper jurisdiction over the dispute. In assessing where the characteristic performance took place, the Court also considered CISG Art. 57, requiring buyer to pay seller at seller's place of business, if not otherwise indicated. Taking into consideration all the various factors, the Italian court determined it had proper jurisdiction over the dispute.
A company having its place of business in Italy and a company having its place of business in Great Britain entered into an agreement providing for the sale and the distribution of goods. The Italian company sued the British company claiming termination of the agreement due to the latter�s failure to fulfill its obligations thereunder (i.e., to buy and distribute the goods on the British market and to pay the price), as well as damages.
The Supreme Court retained jurisdiction of the Italian Courts pursuant to article 5(1) of the Brussels Convention and to article 4 of the Rome Convention: the first states that jurisdiction belongs to the country where the obligation was or has to be fulfilled, the second leads to the application of Italian law, Italy being the place in which the characteristic obligations of the agreement had to be fulfilled.
However, the Supreme Court also supported its view by way of mentioning article 57(1)(a) of the CISG, according to which the price must be paid at the seller�s place of business and highlighted that this article sets forth a general rule the application of which can only be avoided on the basis of a provision, either legal or contractual, providing for a place of payment other than the seller�s place of business. Accordingly, the decision relied on the assumption that the CISG is applicable not only to sales, but also to distribution agreements, provided that these can be construed as accessory clauses to a sale agreement.
Imperial Bathroom Company v. Sanitari Pozzi S.p.A.
1. According to the Brussels Convention of 27 September 1968 which was ratified by the Act of 21 June 1971 no. 804, art. 5, prf. 1, persons having domicile in the territory of a Contracting State may be summoned "before a judge of a place where the obligation is, or must be, accomplished." (The same rule was defined by the Lugano Convention of 16 September 1988, ratified on 10 February 1992 by Act no. 198, art. 5, prf. 1, which states that a defendant domiciled on the territory of a Contracting State may be summoned before a judge of a place where the obligation in demand is, or must be, fulfilled").
Referring to international contracts of sale, in order to establish the grounds of an Italian judge's jurisdiction regarding the claim of the Italian seller for fulfillment of a foreign buyer's obligation, we need to take into consideration art. 57 of Law no. 218, dated 31 May 1995, which states that the Rome Convention of 19 June 1980, enforced in Italy by Law no. 975 of 18 December 1984, regulates contracting obligations "without prejudice of other international conventions also applicable."
Art. 4 of the Rome Convention states that, in the absence of choice of law by the parties, rights and obligations deriving from a contract are governed by the law of the country with which the contract has the closest connection. It is presumed that the contract has the closest connection with the country in which the party who is to effect the characteristic performance has its habitual residence or its central administration at the time the contract is concluded. If the contract is signed by a company for its business, the country with which the contract has the closest connection is the country in which the main business office is located.
To determine the "forum destinate solutionis", art. 57 of the Vienna Convention (CISG) of 14 April 1980 (ratified in Italy 11 December 1985 by Law no. 765) is also important. It establishes that the buyer must tender payment at the seller's place of business ("If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller at the seller's place of business"). This article provides a general rule, which does not approve the payment in any place other than seller's place of business, unless defined otherwise by the parties, law or convention regulation (Cass. Sez. Un. 7 August 1998, no. 7759).
2. In trial has been deduced the non-accomplishment of the obligations agreed in the contract of sale and distribution, due to the fact that the buyer has purchased a quantity of products less than the scheduled minimum, has distributed only one of the three agreed lines of products, has tendered payments in delay in respect of the prescribed deadline (the payments should have been made not later than sixty day from the date on the invoice, directly on the Pozzi Company's [seller's] bank account opened at Banca Commerciale Italiana agenzia Navigli-Milano).
The contract, defined by the parties as an atypical agreement, actually assumes a form of a sale agreement accompanied by a distribution pact. In truth, the essential object of the agreement, as can be deduced from the letter dated 5 July 1884, is the sale of products and its subsequent distribution in the U.K. In fact, the buyer committed itself to purchase and distribute a certain type of sanitary products and to tender payment on time in Italy, which is the country most closely connected with the contract that has to be carried out.
3. From the above mentioned statements and according to art. 57 of Law no. 218 of 31 May 1995, the contractual obligations are regulated by the Rome Convention and according to art. 57 of the CISG, the jurisdiction must be asserted to Italian courts.
In fact, Italy is the place where, according to the rules of Italian Private International Law, the demanded obligation must be fulfilled - this rule corresponds with the applied law (regarding the payment of the sold merchandise); Italy is also the place of seller's central administration and the buyer is not bound by any other expressed specific regulation regarding the place of payment.
Taking in consideration the nature of the contract entered into by parties and the place where the obligation should have been performed; taking in consideration the applicable law coming from the private international law, the applied law - that means the demand of paying the price and accomplishing the contractual obligation - that should have taken place in Italy; and evaluating all of these matters, we conclude that the dispute will be settled under the jurisdiction of Italian courts.
The Court deciding the present case, declares the jurisdiction of the Italian Judge.
* Eva Kucich is a graduate of the Faculty of Law, University of Rijeka (2000), enrolled in postgraduate study "Law of European Integrations", employed as a Research Assistant at the Faculty of Law (2001).

References: v. 
 Art. 57
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 art. 5
 art. 5
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Art. 4
 art. 57
 art. 57
 art. 57