Source: http://cisgw3.law.pace.edu/cases/991229i3.html
Timestamp: 2019-04-22 18:26:29+00:00

Document:
CASE NAME: Tessile 21 S.r.l. v. Ixela S.A.
A buyer from Greece and a seller from Italy entered into a contract for the sale of fashion fabric. At the conclusion of the contract, Greece was not a Contracting State to the CISG. The court held that under the 1955 Hague Convention, the law of the seller, Italy, was applicable. As Italy was a Contracting State at the conclusion of the contract, the Court determined that the CISG governed the relationship between the parties per CISG Art. 1(1)(b). The court then addressed the rate of interest to be applied to damages. Applying CISG Article 78 and 7, the court applied the legal interest rate in force in Italy.
An agreement for supply of fashion fabric was entered into between a company having its place of business in Italy and a company having its place of business in Greece, prior to ratification of the CISG by Greece. The Italian [seller] sued the Greek [buyer] for the payment of the price, as well as of interests and damages.
In awarding payment to the plaintiff [seller], the Court retained the applicability of the CISG pursuant to article 1(1)(b), since the Italian rules of conflict of laws led to the application of Italian law and Italy was a Contracting State at the time when the agreement was entered into. It also held that uniform substantive law prevails over the conflict of laws rules due to its speciality.
The Court held that the rate of interest is not settled by the Convention itself, since article 78 merely states that failure to pay the price or any other sum due entitles the other party �to interest on it�. Therefore, the issue has to be settled in conformity with the national law applicable by virtue of the rules of private international law.
The Court also highlighted that, under article 78, title to interests does not prejudice the right to claim damages and that it is the party claiming damages who has to prove them, according to the principle underlying article 79.
Finally, the Court recognized that foreign decisions, though not binding, should be taken into account by the judge in construing and applying the Convention; this according to article 7 (1), which expressly provides that �regard has to be taken� to the international character of the convention and the need to promote uniformity in its application.
Italian: Ferrari, Corriere Giuridico (2000) 933-939; Giustizia Civile (2000) 3203 et seq.; Corriere Giuridico (2002) 369 et seq.
By its complaint filed on 17 November 1998, Tessile 21 S.r.l [seller] [of Italy] in liquidation (formerly Hertess S.r.l.) brought suit against Ixela S.A [buyer] of Athens, seeking recovery of a claim of IT� [Italian Lira] 15,685,060 for the sale of high fashion textiles, the payment of the price of which the [buyer] had not settled in full, notwithstanding repeated requests, even by means of counsel. In particular, the [seller] maintains that goods had been supplied for a price of IT� 21,209,860, and deducting the sum already paid, the money debt is the amount indicated above [IT� 15,685,060] plus accrued interest.
[Seller] sought judgment against [buyer] asking payment of this sum, with legal interest and monetary devaluation from the due date of the invoice to settlement of the claim.
Although timely served, the [buyer] did not file an answer; consequently, a default was entered.
In the default judgment, [seller] was identified as a firm that had been declared bankrupt; the bankrupt [seller] therefore interposed its pleadings by authorization of the Bankruptcy Judge.
After the presentation of the evidence, which was wholly documentary, the case went to decision on the above claims of the [seller].
Since the contractual relationship adduced during the proceedings is an international relationship, the judge must first identify the material law applicable to the relationship. In regard to this issue, the court cannot agree with the [seller's] theory according to which one must have recourse to the Rome Convention of 19 June 1980 in order to determine the applicable law.
In any event, for recourse to international private law, one must prefer the relevant norms of uniform law created by international conventions which, by reason of their speciality, prevail over conflict rules.
In Italy, the United Nations Convention on Contracts for the International Sale of Goods was in effect, ratified by Law 11 December 1985, no. 765, entered into force on 1 January 1988. It is therefore necessary to determine whether it is applicable.
This Convention applies to contracts for the sale of goods concluded between parties having their [relevant] places of business in different States, on the condition that these States are both Contracting States [States party to the Convention] (Art. 1(1)(a)) or in the event that norms of international private law of the forum lead to the law of a Contracting State (Art. 1(1)(b)). Even though the Convention was not applicable by virtue of Art. 1(1)(a) inasmuch as at the time of the formation of the contract Greece was not a Contracting State (in fact, Greece had ratified the Convention on 1 February 1999), its applicability is not excluded. It is in fact applicable under Italian law by virtue of Art. 1(1)(b), since the norms of Italian international private law lead to the law of the Italian seller under applicable law (art. 3(1) of the Hague Convention of 1955), that is to say, to the law of a State which at the time of contract formation was a Contracting State.
The [seller] has proved that it has sold the [buyer] the textiles for which it issued invoices numbered 768/97 and 190/98 and that it has a claim for this sale in the amount of IT� 15,685,060. In fact there was produced at trial, in addition to the invoice (document 2), an authentic excerpt from the book-keeping records regularly kept in the course of business of [seller], from which the claim is evidenced in the terms indicated by the [seller] (document 8). This document constitutes sufficient proof within the meaning of Art. 2710 Civil Code.
Lastly, there was also produced a copy of a letter and of a fax from the [seller's] attorney seeking payment, which reached the [buyer] in the summer of 1998 (documents 3 and 4). No responses by the latter to this demand followed. The fact that the [buyer] has not maintained any justification nor sought to interpose an answer confirms, according to a presumptive line of reasoning, the existence of the obligation according to the terms indicated by the [seller].
Consequently, pursuant to Articles 53 and 62 of the cited United Nations Convention, [buyer] must be ordered to pay to the [seller] the sum of IT� 15,685,060.
As far as interest on the sums not paid, it will be observed that the United Nations Convention provides only a general right to interest, without specifying which rate is to be applied. In light of the fact that the drafters of the Convention have intentionally left the problem of the applicable rate unresolved, as one evinces from the travaux préparatoires, it cannot be maintained that this is an issue dealing with one of the areas which, by virtue of Article 7(2) of the Convention, should be governed by the general principles upon which the Convention is based. Instead, it is a question not at all addressed by the Convention and which hence is to be resolved in light of the applicable law, that is to say, in light of [internal] Italian law -- such being the law of the seller, which Art. 3(1) of the Hague Convention of 1955 beckons to. This solution corresponds besides to that adopted by foreign case law (see, for example, Pretore della giurisdizione Locarno-Campagna 16 December 1991 [of Switzerland] [<http://cisgw3.law.pace.edu/cases/911216s1.html>]) which, although not binding, is however to be taken into consideration as required by Art. 7(1) of the CISG. Consequently, interest is determined according to the measure of the legal rate in force in Italy.
With respect to the life of the interest, it will be noted that being in default is not required; interest is therefore due from the due date of the invoice to settlement of the debt.
Nothing is due by right of greater damages from monetary devaluation because, in the period of time involved here, the legal annual interest rates have always been greater than the rate of inflation. On the other hand, the plaintiff [seller] which has the burden of proving damages (Art. 7(2), Art. 79 CISG ), has not proved damages incurred because of the missing payment and the Convention clearly distinguishes between interest and damages (see Art. 78).
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the plaintiff, Tessile 21 S.r.l. of Italy, is referred to as [seller]; the defendant, Ixela S.A. of Greece, is referred to as [buyer]. Also, the abbreviation IT� is used for Italian Lira.
1. Tribunale: Regional or District Court, having original jurisdiction over disputes involving amounts exceeding IT� 20,000,000. Art. 91 c.p.c.
2. G.U.: Gazzetta Ufficiale della Repubblica Italiana.
3. Attorney Griffini for Plaintiff, seller; Attorneys based in Athens for Defendant, buyer.
4. Translator's note: Although the published opinion cites Art. 79 CISG, presumably Art. 74 CISG was intended.

References: v. 
 Art. 1
 Art. 1
 Art. 1
 Art. 2710
 Art. 3
 Art. 7
 Art. 79
 Art. 78
 Art. 91
 Art. 79
 Art. 74