Case number: 132
Article number: sales convention / Case 132: CISG Art.
Thessaurs issue:
Country of decision: Germany
Year of decision: 1995
Type of decision: Judicial decision

Case 132: CISG Art. 53; 74; 78
Germany: Oberlandesgericht Hamm; 11 U 206/93 8 February 1995
Published in German: Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1996, 197; commented on by Schlechtriem in IPRax 1996, 184

The German defendant ordered several times large lots of socks from an Italian manufacturer. Four contracts were concluded in the Italian language, the defendant being represented by its Italian agent. The manufacturer delivered the socks and sent four invoices in Italian to the defendant. Before payment, the manufacturer assigned its payment claims to the plaintiff, an Italian bank, and gave notice to the defendant. The assignment notice was in French and English. Despite the notice, the defendant who understood only little English and no French paid to the manufacturer, against whom bankruptcy proceedings were instituted shortly afterwards. The plaintiff claimed (second) payment from the defendant.

Noting that the parties had their places of business in different Contracting States, the appellate court found the CISG to be applicable (art. 1 (1)(a); art. 100 (2) CISG).

The court further found that the plaintiff was entitled to payment from the defendant according to article 53 CISG since it had effectively acquired the relevant claims by assignment. Noting that assignment is not regulated by the CISG, and that, therefore, its preconditions and effects must be decided according to the rules of private international law, the court, applying German private international law, found that Italian law was applicable.

As Italian law provided no specific rules on the "language risk", the court relied on the rules developed hereto under the CISG as part of the defendant's legal environment and found that the parties may either use the language agreed upon or customarily practised between them. In the court's view, if neither agreement nor practice exists at to which language is to be used, the circumstances of the case must decide. The court held that since the defendant in this case had recognized that the assignment notice could have some legal relevance, it was up to the defendant to clarify the precise contents of that notice.

The court also awarded 10% interest on the sum to be paid by the defendant (art. 78 CISG). As the CISG does not provide for a specific interest rate, the court took recourse to the governing contract law (in this case Italian law) which provides for 10 % interest (art. 1284 Codice civile). The requested interest at the rate of 14% could have been recovered under article 74 CISG only if the plaintiff had not failed to prove the higher interest damage.