Source: http://cisgw3.law.pace.edu/cisg/wais/db/cases2/110706sb.html
Timestamp: 2018-01-18 19:45:06
Document Index: 676748232

Matched Legal Cases: ['Art. 78', 'Art. 81', 'Art. 81', 'Art. 84', 'Art. 84', 'Art. 3']

Serbia 6 July 2011 Appellate Commercial Court (Automatic machine for production of fax, adding and thermo rolls case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/110706sb.html]
DATE OF DECISION: 20110706 (6 July 2011)
CASE NUMBER/DOCKET NUMBER: Pž. 10784/2010
SELLER'S COUNTRY: Serbia (defendant)
BUYER'S COUNTRY: Bosnia and Herzegovina (plaintiff)
GOODS INVOLVED: Automatic machine for production of fax, adding and thermo rolls
Key CISG provisions at issue: Articles 53 ; 81 ; 84 [Also cited: Articles 54 ; 78 ]
Descriptors: Price ; Restitution ; Interest
If the contract for international sale of goods is avoided and the seller is bound to return the price, he must also pay interest on it from the date on which the price was paid.
According to the facts determined in the first instance proceedings the parties have done business together on the basis of the sales contract with an international element, given that the [Buyer] is a company from Bosnia and Herzegovina. The [Seller] has committed to deliver to the [Buyer] the automatic machine for production of fax, adding and thermo rolls model "1+1" within the period of 30 days, which started to run on 27 June 2008, at the price of EUR 7.000. On that basis the [Buyer] paid to the [Seller] the total amount of EUR 7.000 in two installments, thus fulfilling its obligations entirely on 19 August 2008. The [Buyer] has required from the [Seller] on 8 October 2008 to deliver the goods as soon as possible or, in the alternative, to return the price to it, since the seller was more than three months late with the delivery of the machine. The [Seller] failed to comply with such a request and until the date of the submission of the claim it neither delivered the machine to the [Buyer] nor submitted to the court evidence that it returned the price to the [Buyer]. The [Buyer] in its claim requests to be reimbursed for the amount paid as the price for the machine which it was supposed to receive under the contract, as well as the statutory interest rate prescribed by the Law on Statutory Interest Rate on the amount due starting from 8 October 2009, as the date when it invited the [Seller] to either deliver the machine or return the price.
On the basis of the facts gathered by the court, and taking into account that the parties failed to choose the applicable law in their contract, the first instance court was correct in finding that the applicable law in this case is the UN Convention on Contracts for the International sale of Goods - Vienna Convention, and that the [Buyer]'s claim for return of the price is grounded on the basis of Arts. 53 and 54 of the Convention, as a consequence of the avoidance of contract.
However, the court erred in finding that the [Buyer] is entitled to interest, under Art. 78 of the Convention, on the amount equal to the price paid starting from the 25 March 2010, as the date when the [Seller] received the statement of claim, which the [Buyer] submitted on 24 February 2010, and which contains the [Buyer]'s unambiguous intent to avoid the contract.
This is because Art. 81(1) of the Convention stipulated that the avoidance of contract releases both parties from their obligations subject to any damages which may be due. Avoidance does not affect any provision of the contract for the settlement of the disputes or any other provision of the contract governing the rights and obligations of the parties consequent upon avoidance of the contract. Art. 81(2) of the Convention stipulates that a party who has performed the contract either wholly or in part may claim restitution from the other party of whatever the first party has supplied or paid under the contract. If both parties are bound to make restitution, they must do so concurrently. Art. 84(1) of the Convention prescribes that if the seller is bound to refund the price, he must also pay interest on it, from the date on which the price was paid.
In the case at hand, the [Seller] is obliged to return the price in the full amount. Hence, according to Art. 84(1) of the Convention he is also obliged to pay interest on the price starting from the day the price was paid. However, since the [Buyer] requested interest from 8 October 2010 the Appellate Commercial Court was bound by such a claim, as prescribed by Art. 3(1) of the Law on Civil Proceedings. Hence, it reversed the first instance decision in part and granted the [Buyer]'s claim for interest at the rate prescribed by the Law on Statutory Interest Rate starting from 8 October 2010 until 24 March 2010.
** Milena Djordjevic, LL.M. (U. of Pittsburgh) is a Lecturer in International Commercial Law at the University of Belgrade Faculty of Law.