Source: http://cisgw3.law.pace.edu/cisg/wais/db/cases2/060512s1.html
Timestamp: 2018-01-17 20:07:29
Document Index: 472761170

Matched Legal Cases: ['art. 296', 'art. 22', 'art. 17', 'art. 2', 'art. 1', 'art. 100', 'art. 8', 'art. 8', 'art. 8', 'art. 8', 'art. 8', 'art. 18', 'art. 8', 'art. 59', 'art. 62', 'art. 78', 'art. 78', 'art. 104', 'art. 58', 'art. 59', 'art. 176']

Switzerland 12 May 2006 Appellate Court Genève (Office furniture case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060512s1.html]
DATE OF DECISION: 20060512 (12 May 2006)
JUDGE(S): Louis Peila (president), Stéphane Geiger, Laura Jacquemoud-Rossari (juges)
CASE NUMBER/DOCKET NUMBER: ACJC/524/2006
CASE HISTORY: 1st instance Tribunal de première instance (C/23618/2004-8) 16 June 2005 [affirmed]
GOODS INVOLVED: Office furniture
CLOUT abstract no. 911
The judgement concerned a dispute between a German manufacturer of office furniture and a trader whose place of business was in the Canton of Geneva, the parties having had a business relationship of several years' standing. The lower court ordered the buyer to pay a total sum of approximately 25,000 euros to the seller by reason of outstanding invoices. The buyer lodged an appeal, acknowledging solely a debt of approximately 400 euros. It maintained that it had already paid the balance. The seller stated that it had used those payments to collect older debts.
In its deliberations, the court indirectly asserted that the question of the allocation of a buyer's payments in the case of multiple debts arising from different orders was determined in the light of the CISG and not of domestic law. The court held that any agreement between the parties was in the first instance applicable to resolve the issue. In that context, it considered at length the question of interpreting statements made by the parties, in accordance with article 8 CISG.
The seller had continually assigned the buyer's payments to meet the oldest debts and had sent detailed advices thereof to the buyer. The buyer had never objected to that procedure and the court thus accepted the existence of an agreement between the parties. The fact that the buyer, at the time of its payments, indicated on some of its cheques the most recent invoice numbers was hardly taken into account by the court, especially since the amounts never corresponded exactly with those entered on the invoices and also since, in the court's opinion, the buyer had to assume that the seller would suspend its deliveries in the event of non-payment of the oldest invoices.
The court ordered the buyer to pay an amount in the region of that awarded to the seller by the lower court and, like the lower court, it made that amount subject to interest on arrears calculated in accordance with national law as determined by Swiss private international law.
Key CISG provisions at issue: Articles 4 ; 8 ; 78 [Also cited: Articles 7(2) ; 53 ; 54 ; 59 ; 62 ]
Descriptors: Scope of Convention ; Statute of limitations ; Intent ; Interest
German: Swiss Review of International and European Law (SRIEL) (1-2/2008) 197 et seq.
Original language (French): CISG-online website <http://globalsaleslaw.com/content/api/cisg/urteile/1726.pdf>; [2008] SZIER 107-201
A. By notice submitted to the registrar of the Court on 18 August 2005, [Buyer] lodged an appeal against the judgment entered by the Court of First Instance [District Court of Geneva] on 16 June 2005, notified to the parties on 17 June 2005, holding the following:
2. Orders [Buyer] to pay two-third of legal costs (dépens), inclusive of an indemnity of Swiss francs [Sfr.] 4,500 - (2/3 = Sfr. 3,000) in attorneys' fees of __ .
[Buyer] sought cancellation of the judgment made on appeal and a declaration by the Court that he only owes to [Seller] the amount of € 242.26 with interest of 5% running from 19 February 2000, as well as an amount of € 112.73 with interest of 5% running from 14 April 2003.
With regard to legal costs and expenses (avec suite de dépens), [Seller] sought denial of the main appeal. By way of additional appeal, [Seller] sought cancellation of the judgment made and, on the basis of its first submissions, re-asserted its claim in payment from [Buyer] of the following sums:
a) [Seller], - a limited company with its registered office in Germany, operating in the production and distribution of office furniture - and [Buyer] - sole owner of a company registered in Puplinge, Switzerland, since 11 September 1979 under the trade name of ___ , Philippe W, notably, for the import, distribution and exhibition of design and furniture - have been in a business relationship since the early 1990s.
In a letter dated 25 September 1992, [Buyer] informed [Seller] that he would proceed to pay the invoices remaining unpaid, explaining that he had been faced with late payments from some of his major clients. There is no indication as to whether [Buyer] actually did so.
Later on, from 8 December 1999 until 7 February 2000, [Seller] consistently sent to [Buyer] reminders featuring a list of the invoices remaining unpaid, the oldest invoices dating back to 23 April 1998, and the newest invoices to 31 January 2000, for a total amount of Deutsche Mark [DM] 67,749.73.
b) From 8 November 1999 to 20 October 2000, [Buyer] continued to place several orders for office furniture with [Seller], which led to the issuance of the following purchase orders, delivery receipts and invoices:
Purchase orders Delivery receipts Invoices Amounts
in DM Amounts
No 9081102 from
(pce 2a dem.) No 45295 from
(pce 2b dem.) No 207614 from
(pce 2c dem.) 1,134.31 579.97
No 9171220 from
(pce 3a dem.) No 45251 from
(pce 3b dem.) No 207613 from
(pce 3c dem.) 16,055.65 8,209.25
(pce 3b dem.) No 207903 from
(pce 3c dem.) 473.82 242.26
No 210127 from
(pce 4a dem.) No 45817 from
(pce 4b dem.) No 208742 from
(pce 4c dem.) 653.36 336.11
No 40201 from
8pce 5a dem.) No 46184 from
(pce 5b dem.) No 208747 from
(pce 5c dem.) 1,235.38 631.65
No 310301 from
(pce 6a dem.) No 47463 from
(pce 6b dem.) No 209029 from
(pce 6c dem.) 220.48 112.73
No 310320 from
(pce 7a dem.) No 47966 from
(pce 7b dem.) No 209893 from
(pce 7d dem.) 24,461.31 12,507.01
(pce 7a dem.) No 47968 from
(pce 7c dem.) No 209894 from
(pce 7e dem.) 3,110.42 1,590.36
No 310505 from
(pce 8a dem.) No 48666 from
(pce 8b dem.) No 210428 from
(pce 8c dem) 3,288.37 1,681.34
No 20502 from
(pce 9a dem.) No 48354 from
(pce 9b dem.) No 210422 from
(pce 9c dem.) 3,203.76 1,638.08
No 190601 from
(pce 10a dem.) No 1000055 from
(pce 10b dem.) No 210691 from
(pce 10c dem.) 408.02 208.62
No 120701 from
(pce 11a dem.) No 1000397 from
(pce 11b dem.) No 210964 from
(pce 11c dem.) 2,318.66 1,185.51
No 290901 from
(pce 12a dem.) No 1500202 from
(pce 12b dem.) No 212624 from
(pce 12c dem.) 904.87 462.55
No 41001 from
(pce 13a dem.) No 1500203 from
(pce 13b dem.) No 212625 from
(pce 13c dem.) 287.11 146.80
No 201001 from
(pce 14a dem.) No 150211 from
(pce 14b dem.) No 212623 from
(pce 14c dem.) 948.87 485.15
(pce 14c dem.) No 212626 from
(pce 14e dem.) 1,551.57 793.31
60,255.96 30,810.80
c) In the meantime, by letter of 14 January 2000 with reference (Zeichen) FI/Ro*901, [Seller] requested that [Buyer] send [Seller] a check of 25,000 DM "bezogen auf" AB 44414 DM 1,034.43, AB 45251 DM 16,529.47 (16,055.65 + 473.82), AB 45295 DM 1,134.31 and AB 45057 DM 5,013.43, stating that "Sollte dies nicht der Fall sein, kénnen wir die AB 45251, AB 45296 und AB 45057 nicht ausliefern" (unofficial translation: [...] were it not the case, we would not be able to deliver the AB 45251, AB 45296 and AB 45057).
[Seller] being incapable of collecting the check for DM 25,000 issued in its favor on 19 January 2000, [Buyer] sent to [Seller] another check for Sfr. 20,750, dated 24 January 2000, stating under the heading "reason for payment" that it concerned the "replacement post-check of 19 January 2000 no 13088. The Check, please, back!" ("remplacement postchèque du 19 Janvier 2000 no 13088. Dem Scheck, bitte, retour!")
By letter of 3 February 2000, [Seller] advised [Buyer] that it had collected the check of Sfr. 20,750, the exchange value of DM 25,146.20, and had allocated the total amount to payment of the invoices remaining unpaid; [Seller] included in this letter a document featuring the detailed account of the twenty-seven invoices, the oldest of which dated back to 23 April 1998 and the newest of which to 10 May 1999, with their numbers and the amounts taken into account.
[Seller] specified that the outstanding amount of DM 148.06 in the latest invoice dated 10 May 1999, no 203271, had to be taken into account at the next occasion; it prayed for [Buyer] to use the same accounting method as [Seller], in order to avoid any misunderstanding ("Damit keinerlei Unstimmigkeiten entstehen, bitten wir Sie gleichlautende Buchung").
d) On 14 March 2000, [Buyer] issued a second check of DM 2,100, stating "AB 45817" and "AB 46184" - that is, delivery numbers, according to the table shown above - under the heading "reason for payment".
By letter of 28 March 2003, [Seller] advised [Buyer] that it had collected this check of DM 2,100 which it had allocated to payment of the invoices no 203271 and 203273 of 10 May 1999, no 204013 of 17 June 1999, nos 204575, 204577 and 204569 of 23 July 1999, the outstanding amount of the latter, that is, DM 23,351.50, to be discharged in the next payment.
[Seller] prayed, once again, for [Buyer] to use the same accounting method, in order to avoid any misunderstanding.
e) [Buyer] issued a third check in the amount of Sfr. 24,090, on 2 May 2000, stating "according to letter FI/RO 901" ("selon lettre FI/RO 901") and "DM. 30,000", referring to a letter dated 28 April 2000, with reference "FI/Ro*901", in which [Seller] requested him to send to [Seller] a check for DM 30,000, in the following wording:
"(...) vielen Dank für Ihre Bestellung i. H. von ca DM 27,000.- Das es sich um Artikel mit Multiplex-Kanten handelt, die selten bei uns nachgeFragt werden und wir diese Artikel kommissionweise nur für diesen Auftrag fertigen, dürfen wir Sie bitten uns bis Produktionsbeginn in der KW einen Scheck i. H. von DM 30,000.- zukommen zu lassen. Wir werden den Scheck aber erst nach erfolgter Anlieferung einreichen. (...)" . (unofficial translation: � (...) merci pour votre commande pour un montant d'environ 27,000 DM. Comme il s'agit d'un article avec des bords Multiplex qui nous est rarement demandé et que nous fabriquons à la commission uniquement pour cette commande, nous devons vous demander avant le début de la production de nous faire parvenir un chèque de 30,000 DM. Nous n'encaisserons le chèque qu'après la livraison (...) � "(...) thank you for your purchase order for the amount of approximately DM 27,000. Since it pertains to a piece with Multiplex edges which is rarely ordered and which we would manufacture solely on commission for this purchase order, we must request that you send us a check for DM 30,000 prior to start of production (...)."
By letter of 18 May 2000, [Seller] advised [Buyer] that it had collected this check, on 11 May 2000, and ascribed the total collected amount, that is, DM 30,214.15, to payment of the invoices 204569 of 23 July 1999, 205173 of 13 September 1999, 205351 of 16 September 1999, 206342 and 206346 of 12 November 1999, the outstanding amount of the latter to be discharged in the next payment, [Seller] reminding that [Buyer] should use the same accounting method, in order to avoid any misunderstanding.
f) On 20 June 2000, [Buyer] issued a fourth check of Sfr. 10,000, stating under the heading "reason for payment":
By letter of 5 July 2000, [Seller] advised [Buyer] that the amount collected, that is, DM 12,518.92 (the exchange value of Sfr. 10,000), had been ascribed to payment of the invoices 206346 and 206349 of 12 November 1999, 206986 of 14 December 1999 and 207611 of 31 January 2000, the outstanding amount of the latter, that is, DM 2,780.89, to be discharged in the next payment; [Seller] reminded [Buyer] to use the same accounting method.
g) As to the fifth check in an amount of DM 1,000 issued on 17 July 2000, [Buyer] stated "last two purchase orders" ("deux dernières commandes") as reason for payment.
As to the sixth check in the amount of DM 2,000 issued on 19 July 2000, [Buyer] stated "your letter of 11 July 2000 with respect to the delivery of end of July DM 2,000.-. It goes with check 96315376 of 17 July 2000 DM 1,000.-" ("votre lettre du 11.7.2000 pour livraison fin juillet DM. 2,000.-. Va avec chèque 96315376 of 17.7.2000 DM 1,000.-").
By letter of 27 July 2000, [Seller] advised [Buyer] that it had collected the two above-mentioned checks, the total amount of which of DM 3,000 had been ascribed to payment of the invoices 207611 and 207613 of 31 January 2000, the outstanding amount of the latter, that is, DM 15,836.54, to be discharged in the next payment; [Seller] requested [Buyer] to use the same accounting method.
h) On 14 November 2000, [Buyer] issued a seventh check of DM 4,100 in favor of [Seller] stating "1001956, 1001955, 1001756 and 1001650" under the heading "reason for payment".
[Buyer] submitted this document, not to the District Court, but to this Appellate Court, in support of his claim, having found it again only recently.
According to the submitted documents, the reference 1001650 corresponds to the invoice no 212624 of DM 904.87, the reference 1001756 to the invoice no 212625 of DM 287.11, the reference 1001955 to the invoice no 212626 of DM 1,551.57 and the reference 1001956 to the invoice no 212623 of DM 948.87, as listed above in the table featuring purchase orders, delivery receipts and issued invoices.
i) [Buyer] lodged opposition to the two summons to pay, suits 01 148804 Z and 03 180061 L, which [Seller] - represented by Intrum Justitia SA - had notified on 20 November 2001 and 18 July 2003, in respect of an outstanding debt of Sfr. 47,326 based on an invoice dated 17 December 1999 plus various interest and late fees.
In a letter to Intrum Justitia SA, dated 22 February 2001, [Buyer] explained that he consistently made his payments to [Seller] and that he had never received the invoice dated 17 December 1999, as mentioned in the summons to pay.
j) By notice submitted to the Registrar of the Court of First Instance [District Court of Geneva] on 25 October 2004, [Seller] brought against [Buyer] a claim for payment of a total amount of € 28,693.15, with interest, in respect of the purchase orders which the latter had placed from 8 November 1999 until 20 October 2000. [Seller] asserted that only a down payment of € 2,208.33 had been made in respect of the invoice no 207613 of 31 January 2000 and that the other invoices in respect of these purchase orders remained unpaid.
In a letter of 18 January 2005 sent to the District Court, [Buyer] contended that, in the course of 2000, he had paid Sfr. 54,840 (Fr. 24,090 + Sfr. 10,000 + Fr. 20,750) and DM 5,100 at the request of [Seller], which held an accounting that was common to the parties ("comptabilité commune") and that he rigorously paid what he was requested to pay ("rigoureusement payé ce qu'elle lui demandait"). [Buyer] submitted copies of the above-mentioned checks as well as of the summons to pay.
k) In the hearing with personal appearance before the District Court on 5 April 2005, Walter WA, head of [Seller]'s firm explained that the checks issued by [Buyer] had been ascribed to payment of unpaid invoices that were older than the invoices that are the object of the present dispute; upon receipt of each check issued in its favor, [Seller] had advised [Buyer] of the allocation of the collected amount, by stating which invoices had been paid. Since 2000, [Seller] had terminated its business relationships with [Buyer] on account of these invoices remaining unpaid.
[Buyer] declared before the District Court that he had paid the invoices in respect of his purchase orders in 2000. He was of the opinion that the amounts claimed were time-barred.
l) In its supplementary brief of 9 May 2005, [Seller] asserted that in 1992, the invoices remaining unpaid by [Buyer] already amounted to approximately €60,000. From 8 October 1999 until 20 October 2000, [Buyer] had placed purchase orders for furniture for a total amount of € 30,810.80. [Seller] had agreed to make new deliveries conditional upon receiving payment of each ongoing purchase order, plus 10% in order to amortize the sums in arrears; thus, by agreement between the parties ("d'entente entre les parties"), the amounts paid by [Buyer] were to be ascribed to payment of the oldest debts. Upon collection of each check issued in its favor, [Seller] had advised [Buyer] of the way in which the collected amount had been ascribed in respect of the invoices remaining unpaid in his books. At no time had [Buyer] made reservations as to this way of proceeding.
Upon receipt of the [Seller]'s brief dated 9 May 2005, [Buyer] requested the District Court, by letter of 13 May 2005, to adjourn the hearing on the pleadings hearing scheduled for 19 May 2005, as well as to allow a supplementary delay for his reply thereto, to enable [Buyer] to search for documents capable of proving his previous payments and to assign a counsel for his defense.
C. By judgment of 16 June 2005, the District Court found that there was no grounds for the adjournment of the hearing, the [Buyer] having had the chance to discuss the [Seller]'s submissions, submit exhibits, as well as to assign a counsel for his defense.
Having considered that the Vienna Convention on Contracts for the International Sale of Goods of 11 April 1980 (hereinafter: CISG) - which is applicable to the successive sales contracts entered into by the parties - does not settle the question of limitation of actions, the District Court applied German law, pursuant to Article 3 of the Hague Convention on the Law Applicable to the International Sale of Goods of 15 June 1955, applicable erga omnes pursuant to Article 118 LDIP, it being specified that the rules on limitation of actions had been modified by the law for the revision of the German Civil Code, entered into force on 1 January 2002. The District Court thus held that the disputed debts were not time-barred for the mere fact that they had arisen in 2000, under the previous law, and that they were governed by the general time period of 30 years, which was still running and remained applicable under the new law. This time period had indeed been suspended as a result of the claim in payment lodged by [Seller], but not as a result of the notification of the summons to pay in respect of an invoice of 17 December 1999, which was not the object of the claim.
By application of Articles 59 and 62 CISG and of Article 366 BGB, the District Court held that [Seller] was entitled to allocate the amounts that were paid by checks dated 24 January and 2 May 2000, that is, Sfr. 20,750 and Sfr. 24,090, to payment of the oldest debts (article 366 al. 2 BGB); concerning the invoice no 207613 of 31 January 2000 of an amount of Sfr. 16,055.65, that is, € 8,209.25, it was appropriate to rectify the outstanding amount due from € 6,092 to € 6,000.92, [Seller] having indicated that [Buyer] had paid this invoice up to an amount of € 2,208.33.
With respect to the additional claim (pour le surplus), the District Court dismissed [Seller]'s claim for payment, having considered that, pursuant to Article 366 al. 1 BGB:
- on the check dated 14 March 2000 in the amount of DM 2,100, [Buyer] had indicated that this payment had to be ascribed to the deliveries nos 45817 and 46184, which had been billed on 30 March 2000 at DM 653.36 5 (€ 336.11) and at DM 1,235.38 (€ 631.65);
- on the check dated 20 June 2000 in the amount of DM 12,518.92 (the exchange value of Sfr. 10,000), [Buyer] had indicated that this payment concerned the deliveries nos 48666 and 48354 and the purchase order of 19 June 2000, invoiced on 30 June and 20 July at DM 3,288.37 (€ 1,681.34), DM 3,203.76 (€ 1,638.08) and DM 408.02 (€ 208.62);
- on the checks dated 17 and 19 July 2000 in the respective amounts of DM 1,000 and DM 2,100, [Buyer] had indicated that these payments were ascribed to the last two purchase orders and to a delivery scheduled for end of July 2000, the invoice of which was to be issued on 31 July 2000 in the amount of DM 2,318.66 5 (€ 1,185.51).
The interest for late payment accrued from the date when payments were due, the interest rate of the debtor's place of business being applicable, in conformity with CISG's aim.
D. a) In support of his appeal, [Buyer] contends, with no other precision whatsoever, that the amount of Sfr. 20,750 of the check issued on 24 January 2000 had to be ascribed to payment of the first two disputed invoices, of DM 1,134.31 (€ 579.97), and of DM 16,055.65 (€ 8,209.25). According to [Buyer], the outstanding amount of €6,000.92 taken into consideration by the District Court in respect of the second invoice was based on a reasoning of his own ("raisonnement qui lui était propre").
With respect to the check of Sfr. 24,090, [Buyer] explains that he issued it subsequent to [Seller]'s letter of 28 April 2000 requesting a down payment on the purchase order of DM 30,000 in connection with purchase orders of some DM 27,000 ("pour des commandes de quelque DM 27,000.-"), as a precondition to the deliveries. It appears from the chronological order of the documents that the amount of Sfr. 24,090 was to be ascribed to payment of the two invoices of 31 May 2000 of DM 24,461.31 (€ 12,507.01) and of DM 3,110.42 (€ 1,590.36), in respect of the purchase orders of 12 April 2000. [Buyer] is of the opinion that it is not relevant to determine to which invoices the rest may be ascribed ("n'est pas intéressant de determiner à quelle(s) facture(s) peut être affectée le reste").
With respect to the check of DM 4,100 which [Buyer] issued on 14 November 2000 - and which was recently found again - [Buyer] notes that he had stated four references under the heading "reason for payment" ("motif de paiement"), that is, 1001956, 1001955, 1001756 and 1001650, which corresponded to the invoices of DM 904.87 (€ 462.65), DM 287.11 (€ 146.80), DM 948.87 (€ 485.15), and DM 1,551.57 (€ 793.31), which the first judge ordered [Buyer] to pay.
Hence, [Buyer] admits owing merely the amounts mentioned at n� 3 and n� 4 of the judgment made on appeal (invoices of € 242.26 and € 112.73), being incapable to prove payment of said amounts.
b) As for [Seller], it asserts that [Buyer] remains liable for the payment of € 28,602.47, having merely paid the amount of € 2,208.33 with respect to the disputed invoices. Since the [Buyer] was liable for more than DM 66,000 at the end of 1999, the parties had orally agreed that he would pay an additional 10% on the price of ongoing purchase orders prior to delivery, the paid amount to be ascribed to payment of the oldest debts. The first judge erred in noting that the indications under the heading "reason for payment" ("motif de paiement") meant the way in which [Buyer] intended to pay [Seller]'s invoices. These indications corresponded, rather, to the numbers of upcoming deliveries, payment considered. Indeed, each time, the amount of the issued checks was set at an amount against 110% of the ongoing purchase order, as agreed. [Buyer] should have advised [Seller] that he did not agree with the accounting figures and accounting method used.
In its letter of 14 January 2000, [Seller] requested [Buyer] to issue a check for DM 25,000, that is, for approximately 110% of the ongoing purchase order, which amounted to DM 23,771.64; the delivery AB 44414 (DM 1,034.43) having already been made, only the deliveries AB 45251 (DM 16,529.47), 45295 (DM 1,134.31) and 45057 (DM 5,013.43), of which the 110% amounted to DM 24,944.93, which corresponded to the amount of DM 25,000, remained to be paid. This check had been replaced with another check of the same amount in Swiss francs, that is, Sfr. 20,750.
Similarly, the statements on the check of 14 March 2000, that is, AB 45817 and AB 46184, do not mean, contrary to the first judge's interpretation, that the check was issued for the purposes of payment of the goods ordered on 21 January and 4 February 2000, and invoiced on 30 March 2000 at an amount of DM 1,888.74. Again, the amount of the check corresponded to 110% of the ongoing purchase orders (DM 2,077.61, rounded to DM 2,100).
Contrary to [Buyer]'s contention, [Seller], by letter of 28 April 2000, requested payment by way of a check of DM 30,000, to be ascribed to payment of the sums in arrears, as a precondition to any new delivery. This amount corresponded to 110% of the ongoing purchase order of 31 March 2000, which led to two deliveries, on 18 May 2000, and two invoices of 31 May 2000 of a total amount of DM 25,571.73 (p. 7d et 7e [Seller]). [Buyer] thus issued a check of Sfr. 24,090 and did not contest the accounting thereof. Besides, [Buyer] continued to place orders while knowing that they would be subjected to the same accounting method in the next payment.
Similarly, the check of Sfr. 10,000, the exchange value of DM 12,518.92, issued by [Buyer] on 20 June 2000, with references 48666 and 48354, corresponded to 110% of DM 11,183.33, which accounted for the total price of the purchase orders of 31 March, 2 May and 19 June 2000, which were delivered on 30 June and 6 July 2000 (p. 8b, 9b and 10b [Seller]).
This is also the case with respect to the checks of DM 1,000 of 17 July 2000 and DM 2,000 of 19 July 2000, which correspond to at least 110% of the ongoing purchase order (of 12 July 2000/ p. 11a [Seller]), which was delivered on 21 July 2000 and invoiced on 31 July 2000 at an amount of DM 2,318.66.
Finally, the check of DM 4,100 of 14 November 2000 had been ascribed to partial payment of the disputed invoice no 207613 of 31 January 2000.
c) In his reply dated 12 December 2005, [Buyer] denies, in essence, having agreed to pay an additional 10% on the price fixed for the ongoing purchase orders, to be ascribed to payment due in arrears. [Buyer] contends that, by all accounts, as a debtor he was free to allocate the amounts collected by [Seller]. [Buyer] refers, with respect to additional claims (pour le surplus), to his notice of appeal.
1. The appeal and the additional appeal (appel incident) are declared admissible having been submitted in the time and form prescribed by law (art. 296 al. 1, 298 al. 1 and 300 LPC).
The judgment having been entered in the first instance, the Court re-considers the cause of action with a full scope of review (art. 22 LOJ and 291 LPC).
2. 2.1 The Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 16 September 1988 (RS 0.275.11; hereinafter: Convention or LC) is applicable since both parties have their places of business in a Contracting State.
In the absence of a clause conferring jurisdiction agreed upon by the parties that makes the court of a Contracting State the legal forum to hear any contractual differences (cf. art. 17), the Court is competent ratione loci to decide the present dispute, the defendant being domiciled in the Geneva Canton (art. 2 LC).
2.2 Article 1 al. 2 LDIP reserves the application of international treaties. Germany and Switzerland acceded to the United Nations Convention on Contracts for the International Sale of Goods adopted in Vienna on 11 April 1980 (RS 0.221.211.1; hereinafter: CISG), which entered into force in these two States, respectively, on 1 January and 1 March 1991.
The purchase orders and deliveries of office furniture, of which payment of the invoices is disputed having taken place between November 1999 and October 2000, the Vienna Convention is applicable to the sale of furniture which occurred after its entry into force, it being noted that the parties have their place of business in different Contracting States (art. 1(1)(a) and art. 100(2) CISG; BUCHER/BONOMI, Droit international privé, Basel 2001, n. 991 and 992, p. 263). The question of the application of German law (BGB) shall not be considered.
2.3 There is no reason to re-consider the question of limitation of actions, which was reviewed by the first judge and which [Buyer] no longer invokes before the Court.
3. 3.1 It is undisputed that, from 8 November 1999 to 20 October 2000, the parties were bound by successive contracts for the sale of office furniture, and that the ordered goods were delivered, accepted, then invoiced in accordance with procedures.
[Buyer] alleges that only two invoices of € 242.26 and € 112.73 relating to these deliveries remained unpaid; he contests [Seller]'s right to allocate to older invoices the paid amounts in respect of the disputed invoices.
[Seller] maintains that it was orally agreed with [Buyer] that [Seller] would continue to deliver the goods which [Buyer] ordered, conditional upon [Buyer] paying 110% of the amount of ongoing invoices - of which [Buyer] knew the exact price - pertaining to payment of older unpaid invoices, the total amount of which was more than DM 66,000 at the end of 1999.
3.2 The application of the CISG is exhaustive in that it governs the contract as a whole, in other words, its formation, the rights and obligations of the parties as well as the remedies for non-enforcement of the contract. As a general rule, the subsidiary application of the national law is precluded (ATF n. p. 4C.307/2003 of 19 February 2004, recit. 2.2.2; 4C.105/2000 of 15 September 2000 recit. 2a, in SJ 2001 I p. 304 ff; STOFFEL, Le droit applicable aux contrats de vente internationale de marchandises in : Publication Cedidac no 20, Les contrats de vente internationale de marchandises, p. 36).
3.2.1 In accordance with the wording of Article 8(1) CISG, statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what that intent was. In determining the intent of the party, due consideration is to be given to all relevant circumstances (art. 8(3) CISG; RSDIE 2000 115; RSDIE 1998 84). Where the intent cannot be discerned, statements made by and other conduct of a party are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances (art. 8(2) CISG).
The first step in the interpretation of statements made by the parties is the subjective intent of the declaring party, as outwardly manifested in a discernable way to the addressee. The CISG is indeed governed by the principle of reliance that is common to numerous legislations: it is applied to expressed declarations and to communications, but also to the persuasive conduct exhibited before or after the conclusion of a contract (NEUMAYER/MING, Convention de Vienne sur les contrats de vente internationale de marchandises, Commentaire n. 1 ad art. 8(1) CISG, p. 111-112).
Where the actual intent of the declaring party cannot be discerned by the addressee, it may be irrelevant how the latter actually understood the intent since the standard of interpretation is the "understanding that a reasonable person of the same kind as the other party would have had in the same circumstances". While it is true that the intent must be determined from what an objective addressee might have understood, regard must also be had to the circumstances in which the declaring party expressed its intent, as well as his conduct as a whole (NEUMAYER/MING, op. cit., n. 2 ad art. 8(2) CISG).
It is up to the addressee to investigate the meaning of an expressed declaration only where the content of the latter leads to confusion. One party who could not have been unaware, at the time of making a declaration, of the existence of circumstances likely to lead the addressee to have a different understanding than his/her own, will be held to the meaning attached according to the surrounding circumstances at the addressee's place (NEUMAYER/MING, op. cit., n. 4 ad art. 8(3) CISG, p. 114).
Article 8 CISG is thus concerned with the principle of reliance that is common to Swiss law (RSDIE 1999 194, TERCIER, Les contrats spéciaux, 3ème éd., n. 1379, p. 204).
3.2.2 In Swiss law, absent any express declaration at the time of conclusion of the contract, one must interpret the declarations and conduct of the parties.
It is for the judge, first, to search for the common and actual intent of the parties, without being bound by any inexact expressions or denominations that the parties might have used (art. 18 al. 1 CO).
Where the actual intent of the parties cannot be established or is not common, the judge will have to interpret declarations and conduct in accordance with the theory of reliance; he must indeed determine how such declaration or conduct could be understood in good faith having regard to all circumstances (cf. ATF 129 III 118 recit. 2.5 and the cited cases). Under the principle of reliance, one party may be attached with the objective meaning of its conduct, notwithstanding the fact that it does not correspond to its inner intent (129 III 118 ibidem; 127 III 279 recit. 2c/ee p. 287).
It is for the party that relies on the existence of an agreement to establish the circumstances leading it to the finding of the other party's legal intent by virtue of the principle of reliance (art. 8 CC; ATF 116 II 695 recit. 2b/bb p. 698).
3.3 In the case at hand, the parties had been in a business relationship since the early 1990s. [Seller] consistently sent to [Buyer] reminders featuring the account of unpaid invoices - for a total amount of up to DM 67,000 at the end of 1999 -which [Buyer] did not contest. [Buyer] continued to place orders upon [Seller] for furniture from November 1999 to October 2000. Payment of related invoices is disputed.
The District Court did not find a common intent of the parties as to the allocation of the amounts of the checks in question to payment of the oldest invoices. Hence, one must determine whether there was an agreement on this matter, by interpreting their declarations and conduct in accordance with the principle of reliance.
3.3.1 Prior to the delivery of these new purchase orders, [Buyer] issued, upon the request of [Seller], a first check of Sfr. 20,750, the exchange value of DM 25,146.20. In its letter of 14 January 2000, [Seller] had indeed specified that, were it not the case, it could not perform the deliveries AB 45251, AB 45296 and AB 45077.
In a letter of 3 February 2000, [Seller] further clearly indicated to [Buyer] that it ascribed the total amount of this check to payment of the old invoices; [Seller] communicated to [Buyer] a detailed account in this respect, while inviting [Buyer] to use the same accounting method, in order to avoid any misunderstanding ("procéder à la même comptabilisation, afin d'éviter tout malentendu"). [Buyer] did not express any protest nor formulate the slightest comment in this respect.
Upon the issuance of the second check of DM 2,100 dated 14 March 2000, in favor of [Seller], it is correct that [Buyer] referred to the delivery numbers AB 45817 and AB 46814 under the heading "reason for payment" ("motif de paiement"). And yet, [Seller] advised [Buyer], once again, that [Seller] had ascribed the collected amount to payment of the old invoices, by communicating a detailed account and reminding [Buyer] - still without any protest from [Buyer] - to proceed with the same accounting method.
It is also the case with respect to the third (Sfr. 24,090, the exchange value of FM 30,214.15), fourth (Sfr. 10,000, the exchange value of DM 12,518.92), fifth (DM 1,000) and sixth checks (DM 2,000) issued by [Buyer] in favor of [Seller], which informed [Buyer], upon collection of each check, that [Seller] ascribed the collected amount to payment of the old invoices remaining unpaid. In addition, [Seller] communicated to [Buyer] the detailed accounts of the old invoices that are paid, by reminding [Buyer] to proceed with the same accounting method, without ever hearing any rectification or protest on the part of [Buyer].
At no time did [Buyer] invite [Seller] to clarify the meaning of the statements that [Buyer] put under the heading "reason for payment" - at times delivery numbers, at times purchase orders, without any precision - nor did [Buyer] clearly indicate to [Seller] that these checks should not have been ascribed to payment of invoices corresponding to sums in arrears. Had it been the case, [Seller], which, on account of its letter of 14 January 2000, had made the deliveries conditional upon payment by [Buyer], would have probably terminated performance of each and every delivery. [Buyer] cannot a posteriori, based on the references FI/Ro*901 (unsere Zelchen) mentioned by [Seller] in the very letter of 14 January 2000, then in another letter of 28 April 2000, in which [Seller] had requested [Buyer] to issue two checks of DM 25,000 and of DM 30,000, content himself with the assertion that the statements on the checks corresponded to his intent to pay the ongoing invoices.
The case at hand involves two professional merchants. It seems, indeed, hardly likely that [Seller] would accept, without any condition, to continue to make delivery of the purchase orders placed by [Buyer], who already owed to [Seller] an amount of approximately DM 67,000. Furthermore, it appears that the amounts of the issued checks actually corresponded to some 110% of the price of the purchase orders to be delivered. [Buyer] does not give any explanation as to the reason why the amounts of the checks that he issued in payment were higher than the invoices of the corresponding deliveries, for instance:
- On the check dated 14 March 2000 of DM 2,100 where the deliveries no 45817 and 46184, invoiced on 30 March 2000 at a total amount of DM 1,888.74 (DM 653.36 + DM 1235.38) are mentioned;
- On the check dated 20 June 2000 in the amount of Fr. 10,000, the exchange value of DM 12,518.92, where the deliveries nos 48666 and 48354 and the purchase order of 19 June 2000, invoiced on 30 June and 20 July 2000 at a total amount of DM 6,900.15 (DM 3,288.37 + DM 3,203.76 + DM 408.02) are mentioned;
- Finally, on the checks dated 17 and 19 July 2000 in the respective amounts of DM 1,000 and DM 2,000 where "last two purchase orders" ("deux dernières commandes") and "delivery (at the) end of July 2000" ("livraison (à) fin juillet 2000"), invoiced on 31 July 2000 at an amount of DM 2,318.66, are mentioned.
It seems hardly believable that [Buyer], who was in no position to pay the old invoices, would accept, without any reason, to pay amounts that are higher than the prices of the ongoing deliveries.
In accordance with the principle of reliance, it may be inferred from these elements, as well as from the absence of protest on the part of [Buyer] in regard to the detailed accounts of the collected checks set forth by [Seller], that there existed indeed an agreement between the parties for [Seller] to allocate the amounts of the issued checks to payment of the old invoices upon collection thereof.
4. 4.1 Pursuant to Article 53 CISG, the buyer undertakes to pay the price for the goods and take delivery for them as required by the contract and this Convention.
With respect to payment for the goods, the buyer must pay the price on the date fixed by or determinable from the contract, without the need for any request or compliance with any formality on the part of the seller (art. 59 CISG). The seller may require the buyer to pay the price, unless the seller has resorted to a remedy which is inconsistent with this requirement (art. 62 CISG). The seller is entitled to interest on the sum that is in arrears (art. 78 CISG), the applicable interest rate being that of the debtor's place of business (NEUMAYER/MING, op. cit., n. 2 as art. 78 CISG; TERCIER, op. cit., n. 1523, p. 222).
4.2 In the case at hand, the existence of an agreement between the parties so as to allocate in priority the amounts of the issued checks to payment of the old invoices remaining unpaid leads to consider that [Buyer] remains debtor of the invoices in respect of the purchase orders that he made to [Seller] from November 1999 to October 2000.
Besides, [Buyer] admitted, in a letter of 18 January 2005 to the first judge, that [Seller] held an accounting that was common to both parties and that he rigorously paid what [Seller] requested (of him) ("rigourousement payé ce qu'elle (lui) demandait"); the accounts set forth by [Seller] in respect of the collected amounts will be taken into consideration in order to determine the amounts owed by [Buyer] in respect of the disputed invoices.
It follows that the first check of Sfr. 20,750, the second check of Sfr. 2,100, the third check of Sfr. 24,090, and the fourth check of Sfr 10,000 were ascribed in their entirety to payment of the old invoices.
With respect to the amount of DM 30,000 as mentioned on the fifth and sixth checks, [Seller] indicated that it had ascribed an amount of € 2,208.33 to payment of the invoice no 207613 dated 31 January 2000; the outstanding amount of this invoice amounted to € 6,000.92, not € 6,092 (€ 8,209.55 [the exchange value of DM 16,055.65] - € 2,208.33).
Before the Court, [Buyer] submitted a seventh check of DM 4,100 issued on 14 November 2000 in favor of [Seller], who indicates that it had collected it in payment of the above-mentioned invoice no 207613 dated 31 January 2000. Accordingly, the latter may be deducted of an amount of € 2,096.30 (the exchange value of DM 4,100 at the rate as of 14 November 2000); the outstanding amount of this invoice is thus € 3,904.62 (€ 6,000.92 - € 2,096.30).
By reference to the table of purchase orders and issued invoices set forth at the first instance stage - which is uncontested by the parties -- [Buyer] will be ordered to pay [Seller] the following sums:
[Seller] is entitled to interest of 5% (art. 104 al. 1 CO), by application of Swiss law, [Buyer] having his place of business in Geneva. Interest accrues, in respect of any given invoice, from the date on which payment is due, here, as of the day after the date of issuance of any given invoice (NEUMAYER/MING, op. cit., n. 2 ad art. 58 CISG and n. 2 ad art. 59 CISG).
5. [Buyer], who fails in his claim almost in its entirety, will bear two-third of the costs of the appeal proceeding (art. 176 al. 1 LPC).
Declares admissible the main appeal and additional appeal submitted by [Buyer] and by [Seller] against the judgment JPTI/7961/2005 entered on 16 June 2005 by the Court of First Instance in the matter C/23618/2004-8.
Orders [Buyer] to pay two-third of the costs of the proceedings comprising an indemnity pertaining to the proceedings of Sfr. 3,000, in contribution to [Seller]'s attorneys' fees.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff-Appellee of Germany is referred to as [Seller] and the Defendant-Appellant of Switzerland is referred to as [Buyer]. Amounts in the currency of Switzerland (Swiss francs) are indicated as [Sfr]; amounts in the former currency of Germany (Deutsche Mark) are indicated as [DM].
** Claire Chabat is a candidate for a Ph.D. in Comparative Law at the University Panthéon in Paris. She was a participant in the 2007 Willem C. Vis International Commercial Arbitration Moot on the CISG.