Source: http://cisgw3.law.pace.edu/cases/000915s2.html
Timestamp: 2017-03-24 02:13:27
Document Index: 665167058

Matched Legal Cases: ['Art. 33', 'Art. 47', 'Art. 49', 'art. 63', 'art. 64', 'art. 55', 'Art. 1', 'art. 1', 'art. 2', 'art. 43', 'art. 33', 'art. 33', 'art. 81', 'art. 25', 'art. 25', 'art. 25', 'art. 25', 'art. 25', 'art. 25', 'art.\n49', 'Art. 47', 'Art. 26', 'art. 11', 'in fine', 'art. 26', 'art. 79', 'art. 4', 'art. 75', 'art. 75', 'art. 156']

Switzerland 15 September 2000 Supreme Court [4C.105/2000] (FCF S.A. v. Adriafil Commerciale S.r.l.) [translation available] Go to Database Directory || Go to CISG Table of Contents
Switzerland 15 September 2000 Supreme Court [4C.105/2000] (FCF S.A. v. Adriafil Commerciale S.r.l.) [translation available] [Cite as: http://cisgw3.law.pace.edu/cases/000915s2.html] Primary source(s) of information for case presentation: Case text Case Table of Contents
DATE OF DECISION: 20000915 (15 September 2000) JURISDICTION: Switzerland TRIBUNAL: BGer [= Bundesgericht = Supreme Court] JUDGE(S): MM. Walter (pr�sident), Corboz (juge), Pagan (juge suppl�ant), M. Ramelet (greffier) CASE NUMBER/DOCKET NUMBER: 4C.105/2000
CASE NAME: FCF S.A. v. Adriafil Commerciale S.r.l. CASE HISTORY: 1st instance Tribunal de premi�re instance de Gen�ve 20 May 1999; 2d instance Cour de justice du canton de Gen�ve 18 February 2000; see companion case BGer 15 September 2000 [4P.75/2000]
SELLER'S COUNTRY: Switzerland (defendant) BUYER'S COUNTRY: Italy (plaintiff)
GOODS INVOLVED: Egyptian cotton Classification of issues present
APPLICABLE CISG PROVISIONS AND ISSUES Key CISG provisions at issue: Articles 4 ; 7 ; 8 ; 11 ; 25 ; 26 ; 33 ; 47 ; 49 ; 74 ; 75 ; 77 [Also cited: Articles 76 ; 79 ] Classification of issues using UNCITRAL classification code
Descriptors: Scope of Convention ; Formal requirements ; Delivery ; Avoidance ; Intent ; Nachfrist ; Fundamental breach ; Damages ; Foreseeability of damages ; Burden of proof ; Cover transactions ; Mitigation of loss ; Exemptions or impediments Go to Case Table of Contents Editorial remarks
"In this case, a Swiss court used language that to
the common law lawyer appears to reflect a homeward trend in its mode of interpretation. The court
was faced with contract for cotton to be delivered between certain dates, with payment to be made
by letter of credit due 60 days after the date of customs clearance. The buyer and seller contracted
for a series of cotton deliveries that, to condense the facts, did not materialize according to the times
specified in the contract. The buyer sued for the costs of cover, and the seller complained that the
buyer had unilaterally cancelled the contracts with no justification. One of the issues for the court was
the significance of avoidance under Article 49(1). Citing commentary on the CISG, the court
characterized avoidance under the CISG in this manner: "It is not an avoidance in the juridical way
of the words with effects ex tunc, but a resolution which releases both parties from their contractual
obligations yet to be executed and which executes itself ex nunc." The court in explaining its
decision in a manner sensible to Swiss lawyers is doing so at the expense of hindering the
development of uniform concepts."
(b) Other abstracts English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=907&step=Abstract>
CITATIONS TO TEXT OF DECISION Original language (French): Click here to jump to a re-publication of the original text of this case as presented on the Internet website of the Schweizerisches Bundesgericht <http://www.bger.ch>; see also Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=907&step=FullText>
CITATIONS TO COMMENTS ON DECISION English: Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.699, 716, 738, 791; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 33 paras. 9, 13 Art. 47 para. 6 Art. 49 paras. 24, 27; Schwenzer & Fountoulakis ed., International Sales Law, Routledge-Cavendish (2007) at p. 76
Supreme Court of Switzerland (Bundesgericht) 1st Civil Court Division
COURT COMPOSITION: M.M. Walter, President; Corboz, Judge; Pagan, Substitute Judge. Clerk of the
Court: Ramelet. PARTIES and COUNSEL: FCF S.A., of Geneva, Switzerland, Defendant and Appellant,
[seller], represented by Me Michel Amaudruz, Lawyer in Geneva, v. Adriafil Commercial S.r.l., of
Rimini, Italy, Claimant and Appellee, [buyer], represented by Me Le Houelleur, Lawyer in Geneva.
A. [Background facts] a) Intervening for the [buyer], an Italian company with its registered office in Rimini,
Italy, a company under Italian law, Vieffe S.r.l. (hereinafter: Vieffe), located at Milan,
Italy, sent, on 15 February 1994, to [seller], a Swiss company for which Vieffe was an
agent, a proposal of Order No. 28 concerning the purchase by [buyer] of four times five
tonnes of cotton, goods to which the quality and place of delivery had been specified. The
goods were to be delivered between 25 May and 5 June 1994, payment to be made by
letter of credit due sixty days after the date of customs clearance.
On 2 March 1994, [seller] and [buyer] signed Contract No. 94-36/CY-EG concerning the
The contract stipulated that the loading of the goods must take place in a harbor in Egypt
during the month of May 1994. On 14 April 1994, Vieffe sent to [seller] a new proposal, Order No. 69, concerning the
purchase by [buyer] of twenty tons of cotton thread with delivery at the end of August,
payment due sixty days after customs clearance.
The same day, [seller] and [buyer] signed Contract No. 94-52/ CY-EG concerning the sale
The total goods included in the order were according to these two contracts, "cotton
GIZA 75 on cone with Q.D.R. 5,57 non parafiné, raw".
b) On 27 April 1994, [seller] sent an acknowledgement by fax to [buyer] advising that
the Egyptian authorities had imposed on the weaving mill of the country an increase in the
price of cotton between 8.5% and 9% and that [buyer] was obliged to pay an increase of
8% in the price of sale. On 2 May, [seller] sent to [buyer] a second message asking
[buyer] to accept and confirm the increase of prices decided by the contract of 2 March by
6%, which represented �IT 5,790 / kg for the cotton Ne 8/1, 12/1 and 16/1 and �IT 5,840
/ kg for the cotton Ne 30/1. [Buyer] accepted the increase of 6%.
c) On 3 June 1994, [buyer] was surprised to be informed that, after the delay taken by
the [seller], both the agreement of 2 March and that of 14 April 1994 would not be
respected. After having explained that this had the consequence of limiting [buyer's]
ability to fulfil its own contractual obligations, [buyer] invited [seller] to perform the
contract as soon as possible. [Buyer] also asked to be informed exactly which goods
would be delivered and reserved the possibility of legal action in case of non-performance.
Receiving no answer to this letter, [buyer] informed [seller] on 27 June 1994 that,
concerning the goods of the contract of 2 March 1994, [buyer] was forced to purchase
substitute goods from other suppliers at a more expensive price. Insistent especially upon
the damage caused to its reputation, [buyer] valued its damages at �IT 100,000,000 and
asked for compensation by [seller]. [Buyer's] written document of 27 June 1994 was not a
letter of cancellation from the [buyer], but an incentive for the [seller] to execute its
On 30 June 1994, Vieffe informed [buyer] that the "thread" contained in the contract of 2
March 1994 could be delivered during the month of July 1994 against payment by letter of
credit due in sixty days. On 8 July 1994, [buyer] wrote to [seller] that it had taken note that [seller] was ready to
deliver during the month of July, the total quantity of the goods contained in the two
contracts, and that [buyer] was happy with this result as far as the contract of 14 April
1994 was concerned. However, [buyer] stated that it could not accept the delivery of
cotton contained in the contract of 2 March 1994 for the reasons explained in [buyer's]
letter of 27 June 1994. [Buyer] noted that if it had waited for an answer from [seller]
before purchasing substitute goods from other suppliers, the damages for which it would
be asking reparation would have been more significant.
On 23 July 1994, quantities of 6,357 kg and 5,697 kg of cotton Ne 16/1 and also 6,745 kg
and 6,085 kg of cotton Ne 8/1 were loaded at Alexandria by [seller], and unloaded at
Genoa on 7 August 1994. These goods corresponded little to the goods described in the
contract of 14 April 1994.
d) Between 31 May 1994 and 30 August 1994, [buyer] ordered elsewhere 47,243 kg
of cotton of several categories to replace the undelivered cotton ordered from [seller].
35,197 kg of the same quality cotton ordered in the earlier contracts concluded with
[seller], were ordered on 7 July and 30 August.
In the purchase made on 7 July 1994, of 10,197 kg of cotton at an average price of �IT
6,500 / kg, which related to the contract of 2 March, there was a difference of �IT 700 per
kg in comparison with the price fixed after the increase of 6% at �IT 5,800 / kg. The
increase of the cost represented �IT 7,137,900 (10,197 kg x �IT 700).
In the purchase concluded on 30 August 1994, for 25,000 kg of cotton at an average price
of �IT 7,640 / kg, which related to the contract of 14 April 1994, there was a difference of
�IT 1,492 / kg in comparison with the increased price of this contract of �IT 6,148 / kg.
Therefore, [buyer] paid an extra �IT 29,840,000 in comparison with the purchase of 20
tons of cotton stipulated in the previous contract (20,000 kg x �IT 1,492).
[Buyer] was able to acquire 35,197 kg of replacement cotton of the same quality; thus,
4,803 kg less of what was decided in the contracts. [Buyer] resold 31,000 kg, making a
profit of �IT 17,000 / kg. The loss caused by the 4,803 kg that was missing was therefore
�IT 81,651,000 (4,803 kg x �IT 17,000).
Founded on the fact that no quantity of cotton had been delivered, [buyer] claimed from
[seller], on 21 October 1994, the payment of the sum of �IT 334,527,898. On 5 December, [buyer] notified [seller] that it would commence a lawsuit, and, on 5 April
1995, it brought an action against [seller], claiming the payment of Sf [Swiss francs]
238,000.60 (�IT 294,925,126). [Buyer] claimed against the [seller] that [seller] had
breached its contractual obligations by not delivering the cotton included in the contracts
of 2 March and 14 April 1994, conduct which, first, forced the [buyer] to purchase
replacement goods with an increase of �IT 127,983,126 in the price, and to indemnify
[buyer's] clients, for �IT 52,800,000, and second, caused [buyer] a loss of profit of �IT
104,142,000 and commercial damage of �IT 10,000,000.
The [seller] replied that the [buyer] had unilaterally cancelled the contracts and,
additionally, that the loss claimed was neither justified nor proven.
By judgment on 18 February 2000, the Appellate Court of the Canton of Geneva, ruled on
an appeal made by the [seller], partly quashing the judgment of the Court of First Instance
[District Court of Geneva] on 20 May 1999; it ordered [seller] to pay to [buyer] Sf 95,720
plus interest at the rate of 5% from 5 December 1994, and ordered the withdrawal. In substance, the cantonal Appellate Court declared applicable the United Nations
April 1980 (CVIM [*], RS 0.221.211.1). The cantonal Appellate Court recognized that the [buyer], who had never received the
goods ordered by the contract of 2 March 1994 in the period of time fixed by article 33(b)
CISG, validly avoided the contract by the letter of 8 July 1994. Concerning the contract of 14 April 1994, the cantonal Appellate Court considered that,
on 8 July 1994, [buyer] had noted without protest that the goods would be deliverable
during the month of August 1994. Many tons of cotton Ne 16/1 and 8/1 had been
unloaded in Genoa on 7 August 1994 for [seller]; nonetheless, these goods corresponded
only partly to the subject matter of the contract, which required the delivery of cotton Ne
8/1, 12/1, 16/1, 20/1 and 30/1. [Seller] did not succeed in establishing an offer to [buyer]
for the cotton that arrived at Genoa, nor did it ask the [buyer] to take delivery. The cantonal Appellate Court concluded that that the [seller] had given up fulfilling its
obligations and that it could not complain of the fact that [buyer] considered the contract
as not being performed. The Appellate Court referring to articles 45(1), 74 and 75 CISG,
noted that [buyer] had a right to claim damages for replacement purchases of
substitute goods that [buyer] had made since the month of July 1994; the damage
represented �IT 7,137,900 and �IT 29,840,000; thus, a total of �IT 36,977,900.
Concerning the loss of profit, it was �IT 81,650,000. Nonetheless, the
Appellate Court held that the [buyer] did not render proof that it had indemnified some
subcontractors, or proof of loss of any clients. The damage justified was therefore �IT
118,627,900; i.e., Sf 95,720 at the exchange rate of the day of filing the [buyer's] claim.
At the same time as raising an appeal in public law, which has been rejected by judgment of
that day due to its inadmissibility, [seller] lodged an appeal to the Federal Supreme Court.
[Seller] pleads to the Federal Supreme Court to quash the cantonal Appellate Court
judgment and, subsequently, to deny the [buyer's] claim. Additionally, the [seller] requests
an application for remand of the proceedings to the cantonal Appellate Court to decide the
matter in accordance with the solution given by the Federal Supreme Court.
The [buyer] pleads that the [seller's] demand be rejected and seeks the confirmation of the
decision challenged.
Considering a recourse to appeal, the Federal Supreme Court must exercise its reasoning
on the basis of facts contained in the judgment under appeal, except in instances where
some Federal rules concerning proof have been broken, or where there are some manifest
oversights (art. 63 al. 2 OJ [*]), or where it is necessary to supplement the facts noticed by
the cantonal Appellate Court because it did not take notice of some fundamental proven
facts (art. 64 OJ; ATF [*] 126 III 59 consid. 2a and other decisions). In the case that the
[seller] presents facts, as here in ten pages, which are quite different from the facts
contained in the decision under appeal without, nonetheless, satisfying any of the
exceptions quoted above, the Federal Supreme Court is precluded from using such facts.
[Seller] can neither present attacks against some established facts nor can he use facts or instruments of
proof that are new (art. 55(1)(c) OJ).
2. [Applicability of CISG; Formal requirements; Fixing date of delivery; Avoidance] The [seller] criticizes the cantonal Appellate Court as having misapplied articles 47 and 49
CISG by considering that the [buyer], on 8 July 1994, had validly cancelled [avoided] the
contract of 2 March 1994.
a) [Applicability of the CISG (Art. 1(1)(a) CISG)] Italy, where the [buyer] has its headquarters, adopted the CISG on 1 January 1988.
Switzerland, where the [seller] is located, has been a Contracting State to the Convention
since 1 March 1991. In this case, the two contracts for the sale of goods with a
commercial purpose were concluded between two companies having their headquarters in
Contracting States, therefore, for correct reasons, the Appellate Court declared, in
conformity with art. 1(1)(a) CISG, that this Convention was applicable to the present
dispute (cf. Neumayer/Ming, Vienna Convention on International Sale of Goods:
Commentary, n. 3 ad art. 2 CISG).
The application of CISG is exhaustive; it governs the entire contract, meaning the
formation of the contract and rights and obligations of parties, including the consequences
of non-performance. In principle, the additional application of national law is excluded (Stoffel, le droit applicable aux contrats de vente internationale de marchandise in:
Publication Cedidac No. 20, Les contracts de vente international de merchandises, p. 36).
CISG contains some rules directly applicable; therefore, the breach of such rules can also
make possible a recourse to appeal (art. 43(1) OJ [*]; ATF [*] 124 III 382 consid. 7b p.
It results from the fact that the offer made on 15 February 1994 by Vieffe in the name
of the [buyer] has been solidified on 2 March 1994 by the conclusion of a contract of sale.
Because this agreement did not modify the offer concerning the delivery of the goods, it
must be considered that the offer made on 15 February 1994 had been accepted. Article
11 CISG establishes freedom from requirement as to form of contracts for the international sale of
goods, with the results that parties are allowed, according to article 33(b) CISG, to fix, for
the contract of 2 March 1994, the moment of the delivery by an interval of time
determinable by two fixed dates. These dates were 25 May 1994 and 5 June 1994, a
period during which the goods should have been delivered. In others words, the date 5
June 1994 represented the last day on which goods should have been delivered
(Neumar/Ming, op. cit., n. 4 ad art. 33 CISG).
Concerning the contract signed on 14 April 1994, by reference to the offer of the same day
on the basis of which it had been concluded, it must be accepted that it was decided that
the delivery should occur by the end of August 1994 (cf. art. 33(a) CISG).
According to article 49(1) CISG, the buyer may declare the contract avoided if the
failure by the seller to perform any of its obligations amounts to a fundamental breach of
the contract (para. (a)), or when, in the case of non-delivery, the seller does not deliver the
goods within an additional period of time that has been fixed by the buyer or if the seller
declares that he will not deliver within the period so fixed (para. (b)). It is not an
avoidance in the juridical way of the words with effects ex tunc, but a résiliation which
releases both parties from their contractual obligations yet to be executed and which
executes itself ex nunc (Neumayer/Ming, op. cit., n. 1 ad art. 81 CISG).
It must be determined if, on 8 July 1994, the [buyer], without having fixed for the [seller]
the additional period to deliver goods as provided by the article 49(1)(b) CISG, was
within its rights to avoid (résolution) the contract of 2 March 1994 by reason of the lack
of delivery of goods by [seller].
In fact, because, on 8 July 1994, the time within which the cotton had to be delivered
according to the contract had already passed by more than one month, the additional delay
of reasonable time that the buyer must give to the seller according to article 47 CISG was
no longer applicable. Therefore, there was no breach of the previous article, and it is not
useful for the [seller].
The concept of fundamental breach as defined in article 25 CISG must be interpreted
in a restrictive way and, in case of doubt, it must be considered that conditions of such
breach are not fulfilled (Neumayer/Ming, op. cit., n. 2 ad art. 25 CISG). The breach must
concern the essential content of the contract, the goods, or the payment of the price
concerned, and it must lead to serious consequences to the economic goal pursued by the
parties. The importance of the breach is not determinative; only the consequences of the
breach to the damaged party are determinative. This means that a principal obligation must
have been breached in such a way that the economic goal of the contract cannot be
achieved; the damaged party being interested no longer in the performance of the contract.
Absolute loss of all objective interests of the creditor is not required. Moreover, it does
not matter whether or not the default is objectively reparable (Neumayer/Ming, op. cit., n.
3 ad art. 25 CISG).
According to that view, the breach of an ancillary obligation can only constitute a
fundamental breach if it has some repercussions on the performance of the principal
obligations in a such way that the interest of the creditor in the performance of the
contract is lost, without the necessity that the latter suffers some monetary damage
(Neumayer/Ming, op. cit., n. 4 and 7 ad art. 25 CISG). The motivation of the creditor
must be identifiable by the debtor, so the debtor could have known or it would be possible
to know that the creditor considered the performance of the breached contractual clause
so essential that he would have refused the contract if he had known of such future breach
(Neumayer/Ming, op. cit., n. 5 ad art. 25 CISG). To judge that point, at the place and at
the time of the conclusion of the contract, the determining interest of each of the parties
must be identifiable by the other (Neumayer/Ming, op. cit., n. 6 ad art. 25 CISG). Finally,
the damage must be foreseeable by the breaching party or by any other reasonable person
of the same kind in the same circumstances at the time the breach of contract is
committed. The contract determines if there existed a risk of a substantial detriment to the
reasons and interests of the affected party, which had encouraged that party to conclude
the contract (Neumayer/Ming, op. cit.,n. 8 ad art. 25 CISG).
A delay in the delivery of goods constitutes a fundamental breach of contract if the parties
decided that the delivery must be made at a specific date, and that date was determinative
from the point of view of the interest of the buyer in the performance of the contract and
that the seller knew it, especially in cases concerning seasonal goods. The circumstances
determine if it must be without other and also for the delivery at a certain date of goods
for which the price in the market varies everyday. This is the case when it concerns an
agreement with a reseller and the price goes down suddenly and considerably. In the
presence of minor fluctuation in prices, the avoidance of the contract depends on the
fixing of a supplementary period of a short time in accordance with article 49(1)(b) CISG.
Against a considerable delay which constitutes a fundamental breach of the contract
according to article 25 CISG, the buyer receives the right to immediately avoid the sale
without giving a notice for a supplementary period (Neumayer/Ming, op. cit., n. 3 ad art.
49 CISG).
bb) In the present case, it must be considered that the final term decided for the
cotton delivery, 5 June 1994, constituted a fixed date that was determinative for the buyer,
who, on the day in question, should have received the material in order to be able to
transform it and send it to its clients. In that case, the period decided for the delivery was
relied on as the essential content of the contract; at the moment of the failure to deliver on
the correct date, the realization of the [buyer]'s economic goal in the contract was halted
and the [buyer] was obliged to buy the goods from other suppliers on less advantageous
conditions. This situation had the result for the [buyer] of erasing all interest it had in the
contract of 2 March 1994. Concerning the commercial sale of the untreated material, the
[seller] could not have ignored that the buyer regarded the delay in the delivery as of
prime consideration, as indicated by the precise period of time decided for the delivery.
Moreover, in its letter of 3 June 1994, the [buyer] declared that the delay in the delivery
prevented [buyer] from performing its own obligations. Finally, at the moment of the non-observation of the additional delay expiring on 5 June,
[the seller] the party in breach was able to foresee the consequences of its conduct,
especially as the [buyer] stated precisely on 27 June that, in order to discharge [buyer's]
obligations to third parties, [buyer] had to ask other suppliers to deliver substitute goods.
In these circumstances, the failure of the [seller] to deliver amounted to a fundamental
breach of the contract. It was not necessary that [buyer], on 8 July 1994, before declaring
avoidance of the contract of 2 March 1994, give an additional period to [seller] for
delivery of the ordered goods, under article 49(1)(b) CISG. The argument of the [seller] is
3. [Notice affixing additional final period for performance (Art. 47); Notice of
avoidance (Art. 26 CISG)] The [seller] also makes an argument concerning the contract of 14 April 1994. This
argument is based on the fact that [seller] had not been properly notified of the fixing of
the additional period for it to perform, in breach of articles 47 and 49 CISG. If this
argument were accepted, it would not be possible to have a valid avoidance of this
contract. In a way that links the Federal Supreme Court (article 63(2) OJ [*]), the Appellate Court
stated that the parties did not have any contact concerning the goods ordered on 14 April
1994 after 7 August 1994, the date on which the goods loaded in
Alexandria at the end of July 1994 were unloaded in Genoa. In other words, after 7
August, neither of the parties to the contract cared about those goods. It may be that this
is because of the fact that this cotton corresponded only very little, in respect to quality, to
the goods expected according to the contract of 14 April 1994. But that does not matter,
Indeed, the CISG does not provide any obligation concerning the form of the avoidance of
sale contracts (Neumayer/Ming, op. cit., n. 1 ad art. 11 CISG). Therefore, it is accepted
that a conclusive conduct constituted by a rejection of the goods that do not conform to the contract
and a refusal to pay may, depending on the circumstances, be held as an implicit
declaration of avoidance of the contract (Neumayer/Ming, op. cit. n. 1 in fine ad art. 26
According to the freedom of form granted by CISG, some juridical effect must be given to
the inaction of the parties after the 7 August 1994. This common inactivity of parties must
be analyzed as the reciprocal manifestation of a tacit will to renounce the performance of
the contract. The common adoption by parties of such conduct before the goods arrived in
Genoa leads one to think there was a will to cancel the contract of 14 April 1994.
Accordingly, the [seller] could not complain that it was not formally informed to execute
its obligations. There is no breach of articles 47 and 49 CISG.
The [seller] argues that there was an impossibility of performance according article 79(1)
and (2) CISG.
This argument is founded on a presentation of facts that are different from the facts
adopted by the cantonal Appellate Court.
The determinative facts do not reveal the existence of circumstances that may constitute
an unforeseeable or unavoidable impediment, or an obstacle that the [seller] could not
reasonably have overcome (cf. Neumayer/Ming, op. cit., n. 2 et 4 ad art. 79 CISG). The
[seller's] criticism is unfounded. 5. [Principle and amount of damages]
The [seller] invokes breaches of many rules to contest the principle and the amount of the
damages held by the cantonal Appellate Court.
The [seller] argues that, especially, the Appellate Court violated article 8 of the Civil
Code of Switzerland concerning the burden of proof by considering that the claimant
[buyer] had proven its damages concerning the replacement goods.
That legal rule is not applicable even though CISG does not contain direct rules on the
burden of proof and all procedural questions are outside its scope of application. When the
judge examines this question, he should keep in mind the content of the material law
applicable, the lex causae, which, in this case, is the CISG. The competent tribunal should
not found its solution on the domestic law. Indeed, in an indirect way, CISG contributes
to the repartition of the burden of proof, and the reason for this is the meaning of the
wording used in the provisions of the CISG. There is the establishment of a relationship
between a rule and its exception. That is why, in general, we can use the maxim "actori
incumbit probation". The result is that the party who invokes a right bears the burden of
proof to its establishment of that right and, on the other hand, the other party must prove
any facts that exclude the invoked claim (Neumayer/Ming, op. cit., n. 13 ad art. 4 CISG).
As CISG does not contain rules directing the judge how to reach its own opinion, there is
no obstacle, which does not allow the use of the jurisprudence of article 8 of the Swiss
According to that jurisprudence, article 8 of the Civil Code forbids a judge from
considering as an established fact that which is pertinent to the use by one party to found
its right, where this fact, contested by the opposite party, has no starting of proof (ATF [*]
114 II 289 consid. 2a). On the other hand, when the appreciation of proof convinces the
judge of the reality of a fact, the question of the application of article 8 of the Civil Code
does not exist anymore; only the element coming from the arbitrary appreciation of proof,
to invoke imperatively a recourse to public law, is admissible (ATF 122 III 219 consid.
3c; 119 II 114 consid. 4c p. 117; 117 II 387 consid. 2e). Indeed, article 8 of the Civil
Code does not prescribe, in the example of the CISG, how the judge must appreciate
proof and on which elements he may found his decision. In cause, the [seller] contests that the products billed by the [buyer] in relation to replacement
purchases, were of same quality as the cotton ordered. The [seller] attacks the way
in which the cantonal Appellate Court appreciated the proof rendered. The argument is
therefore not admissible. b) [Measurement of damages; replacement goods (Arts. 74, 75 and 76 CISG)]
Invoking art. 75 CISG, the [seller] argues that replacement purchases made by the
[buyer] could not have qualified as replacement purchases for the reason that a reasonable
time should have passed after the avoidance of the contract before the purchase
Article 75 CISG deals with the calculation of the damages, which must be effected in a
concrete manner in the case of avoidance of the contract. In that way, if that article
provides that the buyer purchases replacement goods within a reasonable time, it is only
for the reason that [buyer] can obtain an advantageous price and contribute to the
reduction of the loss resulting from the breach. If the substitute transaction does not
correspond to these conditions, the damage is calculated in conformity with article 74
CISG or at the market price (article 76 CISG) (cf. Neumayer/Ming, op. cit., n. 2 ad art. 75
CVIM [*]).
Therefore there is no reason why the [buyer] could not have bought substitute goods without delay, except in the case in which the seller could prove that the [buyer] was able to find other goods at a more favorable price. Also, when the [seller] claims that the [buyer] refused the goods which arrived in Genoa
on 7 August 1994, [seller] moves away from the facts recognized by the cantonal
Appellate Court. The Appellate Court found that parties were not interested in what
would happen to the goods that arrived in that port.
The [seller] claims that if the Federal Supreme Court should arrive at the conclusion
that purchases made on 7 July 1994 constituted replacement purchases under article 75
CISG, damages should be determined, in accordance with article 77 CISG, by the
difference between the price concluded by parties, with an increase of 6% and 10%, and
the prices of the replacement supplier for the same goods; only this difference can be
claimed by the [buyer]. Assuming that there was loss suffered, the amount of damages is a question of fact,
removed from the examination of the Federal Supreme Court in the instance of appeal
(ATF [*] 123 III 241 consid.3a; 122 III 61 consid. 2c/bb; 122 III 219 consid. 3b). On the
other hand, it is a question of law to decide whether or not the judge missed the necessity
of juridical damage or misunderstood the sense of that notion to have founded its decision
on erroneous grounds or without criteria pertinent to the calculation of the damages (cf.
ATF 120 II 296 consid. 3b et les références). If the claim for damages is related to principles applied to determine the damages, the
claim is nonetheless unfounded. The cantonal Appellate Court has indeed taken into
account the difference of price existing between the cotton ordered from the [seller] and
the cotton actually delivered, conforming to article 75 CISG. As the [seller] does not indicate the reasonable measures that the [buyer] should have taken to limit the damage, the
Appellate Court correctly did not apply article 77 CISG.
d) The [seller] criticizes the Appellate Court as having held in "an arbitrary manner"
that the loss of profit claimed by the [buyer] was established. The [seller] alleges that the
Appellate Court founded its decision on contested elements for which facts have not been
proven. The [seller's] claim is irrelevant, because it is based on the appreciation of proof, which
depends only on the cantonal Appellate Court.
To conclude, the appeal of the [seller] must be rejected even though it is admissible, the
decision of the cantonal Appellate Court that is challenged by the [seller] is confirmed. Fees will be at the expense of the [seller] (art. 156 al. 1 et 159 al. 1 OJ).
1.	Dismisses the [seller's] appeal and affirms the challenged decision of the cantonal
3.	Declares that the [seller] will pay to the [buyer] an indemnity of Sf 6,000; 1.	Transmits the present decision in copy to order the parties and to the Civil
Chamber of the cantonal Appellate Court of Geneva.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, FCF S.A., of Geneva, Switzerland, Defendant and
Appellant is referred to as [seller]; Adriafil Commercial S.r.l., of Rimini, Italy, Plaintiff
and Respondent is referred to as [buyer]. Monetary amounts in Swiss francs are indicated
by [Sf]; amounts in Italian Lira are indicated by [�IT]. Translator's note on other abbreviations: ATF = ; CVIM = CISG [United Nations
Convention on Contracts for the International Sale of Goods]; OG = Bundesgesetz über
die Organisation der Bundesrechtspflege [Swiss Federal Code on Court Organization];
** Alban Renaud, of France, attends Kyushu University Graduate School of Law in Japan.