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Supreme Court of the Slovak Republic
30 April 2008 [1 Obdo V 89/2007]
JUDGMENT IN THE NAME OF THE SLOVAK REPUBLIC
The Supreme Court of the Slovak Republic, deciding in a five-member panel composed of the Chairman JUDr. Jana Zemanikova and Members JUDr. Peter Dukas, JUDr. Juraj Seman, JUDr. Viera Pepelova and JUDr. Anna Markova, in the case of Plaintiff B., [Seller], [with its registered office in the Republic of Germany], represented by attorney JUDr. R., versus Defendant R., [Buyer], [with its registered office in the Slovak Republic], represented by attorney JUDr. D., regarding payment of US $29,144.50 US and appurtenances, on appeal on the points of law of the [Buyer] against the judgment of the Supreme Court of the Slovak Republic of 27 June 2007, rec. 2 Obo 244/2006-185,
h a s d e c i d e d a s f o l l o w s:
The challenged judgment of the Regional Court in Bratislava of 21 September 2006, rec. 5 Cb 13/2003-135, and the judgment of the Supreme Court of the Slovak Republic of 27 June 2007, rec. 2 Obo 244/2006-185, are cancelled and the case is returned to the Regional Court in Bratislava for further proceedings.
REASONING
The Regional Court in Bratislava in its judgment of 21 September 2005, rec. no. 5Cb 13/2003-135 decided that the [Buyer] is obliged to pay to the [Seller] the sum of US $39,144.50 and interest of:
- 19 % annually on the sum of US $20,206.- for the period from 13 July 1998 until 23 October 1999; - 12 % annually on the sum of US $20,206.- for the period from 26 October 1999 until payment; - 19 % annually on the sum of US $5,179.- for the period from 3 November 1998 until 25 October 1999; - 12 % annually on the sum of US $5,179.- for the period from 26 October 1999 until payment.
and reimbursement of costs of the proceedings in the amount of 237,875.- Slovak koruna [Sk].
The Court of First Instance had determined from the evidence gathered that the dispute concerns a contract of sale of goods concluded informally. This court determined that the deliveries were actually performed and that the purchase price was agreed in the amount prescribed in the invoices. The court dismissed the [Buyer]’s invoking the expiration of the limitation period with respect to the asserted claim, since the [Buyer] never opposed the due date of the invoices which was agreed to be 180 days after drawing of the invoices, as was evidenced by testimony of witnesses. This period was agreed as the parties to the proceedings were aware of the fact that insurance companies reimburse expenses on health care belatedly. The Court of First Instance found the [Seller]’s claim to be justified and upheld the action with reference to sec. 409 and 369 part 1 of the Slovak Commercial Code and granted reimbursement of costs of the proceedings under sec. 142 part 1 of the Slovak Civil Procedure Code (hereinafter referred to as “CPC”).
The [Buyer] filed an appeal against this judgment (rec. no. 141). The Appellate Court initially stayed the appellate proceedings by its resolution of 27 June 2006, rec. no. 5Cb 13/2003-161 and subsequently cancelled this resolution by issuing a new resolution dated 20 July 2006, rec. no. 5Cb 13/2003-166. The Supreme Court of the Slovak Republic, as an Appellate Court, ruled on the appeal in its judgment of 27 June 2007, rec. no. 2 Obo 244/2006-185 and overturned the judgment of the Court of First Instance when it dismissed the action and bound the [Seller] to reimburse costs of the proceedings to the [Buyer].
In its judgment, the Appellate Court referred to article 58(1) of the UN Convention on Contracts for the International Sale of Goods (hereinafter referred to as the “Convention”) under which if the buyer is not bound to pay the price at any other specific time, he must pay it when the seller places the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and this Convention. The seller may make such payment a condition for handing over the goods or documents. The court also referred to article 59 of the Convention under which the buyer must pay the price on the date fixed by or determinable from the contract and this Convention, without the need for any request or compliance with any formality on the part of the seller.
The court investigated from the action filed on 4 June 2002 that the [Seller] claimed its right to payment of the purchase price for the goods delivered amounting to US $39,144.50 with appurtenances under the contract of sale concluded in oral form. The court determined that the delivery was performed pursuant to purchase orders placed by the [Buyer] and that the purchase price was billed in
- Invoice no. 170089 of 16 January 1998 for the sum of US $20,206.-; - Invoice no. 170732 of 26 January 1998 for the sum of US $13,759.50; and - Invoice no. 177201 of 7 May 1998 for the sum of US $5,179.
The Appellate Court examined the due date of the invoices drawn by the [Seller]. With reference to art. 1(1) of the Convention which prescribes that the Convention is applicable to this relationship, the Appellate Court determined that the [Buyer] must pay the purchase price on the date fixed in the contract of sale, or if no such date is prescribed, when the seller places the goods at the buyer's disposal and without any further request needing to be made by the seller. The Appellate Court referred to the reasoning of the judgment of the Court of First Instance which determined that the parties to the proceedings agreed in the contract of sale that the due date shall be 180 days after drawing of a particular invoice.
The Appellate Court did not consider it to be sufficiently proved by the testimonies that the parties to the contract agreed on the due date for payment of the purchase price and ruled that the due date prescribed in the invoice cannot per se constitute such an agreement about the due date. The Appellate Court held that if it was not sufficiently proved in the proceedings that the parties agreed in the contract about the due date, this date shall be determined by the Convention, i.e., the [Buyer] shall pay the purchase price immediately after handing over the goods and receiving calculation of the purchase price.
The court determined and the parties did not oppose the fact that:
- The goods invoiced on 16 January 1998 were delivered on 20 January 1998; - The goods invoiced on 26 January 1998 were delivered in 1997 but the documents controlling their disposition were delivered on 26 January 1998; and - The goods invoiced on 7 May 1998 were delivered on 31 March 1998.
With reference to the abovementioned, since the [Seller] filed the action on 4 June 2002, the court found that the [Seller] asserted its right before the court belatedly, i.e., after expiration of the limitation period and, since such expiration was invoked in the proceedings by the [Buyer], the court held that it could not uphold the [Seller]’s claim.
Therefore, referring to sec. 220 CPC, the Appellate Court changed the challenged judgment of the Court of First Instance and dismissed the action. The Appellate Court ruled on the reimbursement of costs of the appellate proceedings under sec. 224 part 2 and sec. 142 part 1 CPC.
The [Seller] filed against this Appellate Court judgment, in force from 31 August 2007. [Seller]’s appeal on points of law was delivered to the court on 28 September 2007. [Seller] justified its appeal under sec. 238 part 1 CPC by arguing that the challenged judgment qualified the claim under an incorrect legal instrument and that the court therefore issued an incorrect decision.
The [Seller] opposed the interpretation of the Convention by the court, alleging that the Appellate Court did not respect articles 7 and 8 of the Convention.
- Under article 7(1) on the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade;
- Under article 8(2) of the Convention, if article 8(1) is not applicable, 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.
The parties to the proceedings were in similar relationships for several years before concluding this contract and the [Seller] was gradually prolonging the period between issuance and due date of invoices, as it was prescribed in the drawn invoices and the [Buyer] never opposed such conduct. Furthermore, the [Buyer] did not provide any evidence that it ever paid the purchase price immediately after delivery of goods, i.e., contrary to the stipulated due date. Therefore it is clear that both parties to the contract interpreted the due date in the same manner and considered the due date prescribed in the invoices as binding to their relationship.
The [Seller] also argued that the Appellate Court incorrectly concluded that the parties to the proceedings did not make any agreement about the maturity of the purchase price, as it was referred to the testimony of the [Buyer]’s executive. With reference to article 8(3) of the Convention, in determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties. As it is clear from the documents submitted to the court and from the testimony of witness V., the [Seller] unequivocally expressed its intent to prescribe the maturity of the invoices 180 days after drawing of the particular invoice. This intent was expressed in the invoice itself and the [Buyer] did not behave in a way that would contest its approval of such determination of the due date. The [Seller] therefore asked the court to cancel the challenged judgment and to return the case to the Appellate Court for further proceedings.
The [Buyer] filed its own an appeal on points of law against the judgment of the Appellate Court delivered to the court on 1 October 2007 in its part dealing with the reimbursement of costs of the proceedings. The [Buyer] justified its appeal by stating that the Appellate Court incorrectly failed to grant to the [Buyer] the right to reimbursement of the court fee paid for protest amounting to 91,605.- Sk, which was duly asserted by its motion “Calculation of costs of the proceedings from 28 June 2007”, and that the Appellate Court justified this decision by stating that the [Buyer] did not pay the fee.
The [Buyer] argued that it paid the fee for the protest and was successful in the proceedings and proved this fact by the Agreement on installments no. 1050007105 concluded on 5 April 2005 under sec. 4 of act no. 65/2001 Coll. on administration and enforcement of court fees by the Regional Court in Bratislava and the [Buyer], and by five certificates of payments, each for the sum of 18,321.- Sk, and that the [Buyer] thereby proved that it paid in five installments the court fee for the protest amounting to 91,605.- Sk. The [Buyer] therefore asked the court to oblige the Appellate Court to grant to the [Buyer] the right to reimbursement of costs of the proceedings amounting to 309,530.- Sk, as raised by the sum of 91,605.- Sk corresponding to the court fee paid for the protest and to cancel the challenged judgment in its part of the decision referring to reimbursement of costs of the proceedings.
The [Buyer] responded to the [Seller]’s appeal on points of law by its motion delivered to the court on 21 December 2007 which asked the court to dismiss the [Seller]’s appeal. The [Buyer] considered the Appellate Court judgment correct in its subject matter, since the court correctly referred to articles 58(1) and 59 of the Convention and noted that there was no agreement between the parties to the proceedings about maturity of the invoices and that the [Seller] did not provide evidence proving agreement on 180 days period from drawing of invoices until the due date.
The [Buyer] challenged the argument that it had accepted this period by not paying the purchase price immediately after delivery of the goods. The fact that the [Buyer] did not pay the purchase price immediately after the [Seller] handed over the goods cannot imply that the [Buyer] agreed to the maturity of purchase price prescribed by the [Seller]. Such a conclusion is incorrect and prescribing the maturity of the indebtedness by the [Seller] presents a unilateral decision of the [Seller], as it was also qualified by the Appellate Court. No agreement on maturity of the purchase price was proved by the [Seller].
The Supreme Court of the Slovak Republic (sec. 10a part 2 CPC) tried the appeal on points of law raised by the [Seller], as it was filed within the statutory period under sec. 242 CPC, contained necessary elements under sec. 241 CPC and was lawful under sec. 238 part 1 CPC. The court determined that the appeal of the [Seller] was justified.
The object of the appeal on points of law was whether the Appellate Court decided correctly when it dismissed the action because of expiration of the limitation period. It was proved that the [Seller] filed the action on 4 June 2002 and it asserted its right to payment of the purchase price by invoice no. 170089 of 16 January 1998, invoice no. 170723 of 26 January 1998 and invoice no. 177301 of 7 May 1998. It was also proved that the goods were delivered upon the oral purchase orders and therefore the contract of sale was concluded in oral form. In all of the abovementioned invoices, the due date of 180 days is prescribed as “payment 180 days net.”
Under sec. 397 of the Slovak Commercial Code, unless this act prescribes a different period for a special claim, the general limitation period is four years. This provision corresponds to the limitation period prescribed in the UN Convention on the Limitation Period in the International Sale of Goods which was ratified by the Slovak Republic. Under article 58 of the United Nations Convention on Contracts for the International Sale of Goods, if the buyer is not bound to pay the price at any other specific time, he must pay it when the seller places either the goods or documents controlling their disposition at the buyer's disposal in accordance with the contract and this convention. The seller may make such payment a condition for handing over the goods or documents. It is clear from the judgment of the Court of First Instance that this court did not uphold the invoking of the expiration of the limitation period, since it was proved by the testimony of witnesses that the [Buyer] did not oppose the due date prescribed as 180 days, as the parties to the proceedings were aware of the fact that insurance companies reimburse expenses on health care belatedly.
Such a statement nevertheless does not prove that the parties to the contract agreed under article 58 of the Convention to pay the purchase price in such a specific time. The reasoning of the judgment of the Court of First Instance does not specify which testimony proves that the parties to the proceeding have agreed on payment of the purchase price at the specific time. The fact that the invoices stated “180 days payments” does not by itself constitute a clear agreement about the date of payment of the purchase price in another specific period as prescribed in article 58 of the Convention.
Therefore, the reasoning of the Court of First Instance with respect to the invoked expiration of the limitation period is insufficient. The Appellate Court correctly found the issue of agreed date of payment of the purchase price to be resolved incorrectly. The Appellate Court correctly referred to articles 58 and 59 which regulate these issues.
The Appellate Court correctly stated that there was no written contract of sale concluded by the parties to the proceedings. It also stated with reference to the invoked expiration of the limitation period that the testimony gathered by the Court of First Instance did not prove with a sufficient degree of certainty that an agreement about the maturity of the drawn invoices had been made.
The Appellate Court made, without any further evidence gathered, the reverse decision that there was no such agreement and that therefore article 58(1) of the Convention shall apply.
- Under article 8 of the Convention, for the purposes of this Convention, 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. It is right that prescribing the 180 days maturity period by itself does not constitute an agreement about the date of payment “at other specific time” under article 58 of the Convention but it is not irrelevant that the parties to the contract respected in their previous mutual transactions the period of 180 days between drawing and payment of invoices.
- Under article 8(2) of the Convention, if the preceding paragraph is not applicable, 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.
The Court of First Instance and the Appellate Court did not take into consideration articles 8 and 7 of the Convention when deciding about the invoked expiration of the limitation period. The Supreme Court of the Slovak Republic, after examining the factual and legal circumstances, therefore concluded that both challenged judgments were made after insufficient investigation of factual circumstances and therefore the court cancelled them with reference to sec. 243b part 1, part 2 CPC and returned them to the Appellate Court for further proceedings. In these new proceedings, the court shall also decide about the reimbursement of costs of both proceedings.
Instruction: An appeal against this judgment is not admissible.
Bratislava, 30 April 2008.
JUDr. Jana Zemanikova Chairman of the Panel |
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