KS NR - 26Cob/108/2005sk en

Regional Court in Nitra

3 November 2005 [26 Cob/108/2005]

RESOLUTION

[slovenske znenie] 

The Regional Court in Nitra, deciding in a panel, in the case of Plaintiff I.S. s.r.o. [Seller], with its registered office in R., S___, [Slovak Republic] represented by attorney JUDr. Z.S. versus Defendant Ing. M.K. - S. [Buyer], with its place of business in K., V.O. ___ [Slovak Republic], represented by attorney JUDr. O.T., regarding payment of 1,438,853.60 Slovak koruna [Sk] with appurtenances, ruling on the appeal of the [Buyer] against the judgment of the District Court of Komarno of 19 April 2005, rec. no. 5 Cb/15/2004-134

h a s   d e c i d e d   a s   f o l l o w s:

The judgment of the District Court of Komarno of 19 April 2005 rec. no. 5 Cb/15/2004-134 is reversed and the case is remanded to the Court of First Instance for further proceedings.

REASONING

In its judgment, challenged by the appeal, the District Court of Komarno dismissed the [Seller]’s action and bound the [Seller] to pay to the [Buyer] the reimbursement of costs of the proceedings amounting to 167,024.- Slovak koruna [Sk]. The Court of First Instance reasoned its judgment stating that the [Seller] claimed in its action the right to payment of 1,438,853.60 Sk and reimbursement of costs of the proceedings. The [Seller] justified its claim on the basis of non-payment of the residual part of the purchase price for its sale to the [Buyer]. As the [Buyer] filed within the statutory period, the protest against the order to pay from 19 March 2002, rec. no.: 20 Rob 4/02-18 and subsequently after trying the case dismissed the action. The Court reasoned its decision by referring to sections 409 part 1, 411, 417, 417, 420 part 2 and 3, 428 and 436 part 1 and 2 of the Slovak Commercial Code (hereinafter referred to as “CC”) and referring to the evidence gathered, whereby it determined that the goods delivered by the [Seller] to the [Buyer] (KEG barrels for fizzy drinks of 50 l) were not conforming to the contract. These barrels were used by merchants as official measuring instruments and have to be certified by the state authorities, where the [Seller] was responsible to arrange for such certification. The [Seller] failed to repair this defect even in the additional period until 29 January 2001, as it was fixed by the [Buyer] in its letter of 22 January 2001 and the goods were not suitable for usage as a measuring instrument. The [Buyer] therefore claimed in its letter of 28 October 2001 a discount of 30 % from the purchase price. The Court concluded that such discount exceeded the sum claimed by the [Seller] and as the [Buyer] performed a set-off of mutual obligations, the claim of the [Seller] prescribed in the action expired.

The [Seller] filed appeal against this judgment and asked the Appellate Court to cancel the judgment of the Court of First Instance and returned the case to this court for further proceedings. The [Seller] argued that the Court of First Instance did not correctly determine the factual circumstances of the case, as it was clear from the evidence gathered that the [Seller] was supplying the [Buyer] with the barrels since 1999, where such barrels were intended only for packing usage. The [Buyer] did not pay the claimed part of the purchase price only with reference to the fact that the state authorities did not permit the [Buyer] to use these barrels measuring instruments, as they did not comply with state regulations. The [Seller] also submitted to the Court the Contract for the sale of barrels that was concluded on 24 March 2000.

The [Buyer] responded to the appeal by stating that when supplying barrels, the [Seller] breached its obligation under the act no. 142/2000 Coll. on metrology. The [Buyer] therefore asked the [Seller] to additionally submit the documents which would enable the usage of barrels as measuring instrument but the [Seller] failed to fulfil this obligation. The [Buyer] alleged that it notified the [Seller] of the lack of conformity of the goods for the first time on 31 October 2000 after the state authorities prohibited their usage as measuring instruments. The [Buyer] subsequently notified of the lack of conformity in its letter of 22 January 2001.

The Regional Court in Nitra as an Appellate Court tried the appeal and concluded that the challenged judgement has to be cancelled and the case has to be returned to the Court of First Instance.

The Appellate Court determined from the investigation gathered that the parties to the proceedings concluded in oral form a contract of sale under which, in response to several purchase orders placed by the [Buyer], the [Seller] delivered KEG barrels to the [Buyer]..

…

The court investigated that on 31 October 2000 the state authority S.M.I.B. performed inspection of measuring instruments at the premises of the [Buyer] and found that the KEG barrels of 50 l used by the [Buyer] were not certified and therefore banned their usage in its Protocol no. P17/5/00 from 31 October 2000 until these defects are repaired.

[…]

Under relevant provisions of the CC, a buyer must notify the [Seller] of lack of conformity of goods precisely and on time. Section 428 part 1 prescribes the statutory period for such notice. A buyer must notice lack of conformity of goods within a reasonable time after he has discovered it or ought to have discovered it. The term within a reasonable time means 8 days with reference to interpretation of the same term used in article 39 of the Vienna Convention which prescribes that the buyer must give notice to the seller specifying the nature of the lack of conformity “within a reasonable time” after he has discovered it or ought to have discovered it, where a reasonable time is interpreted as eight days. Under the CC, if a buyer does not notify the seller of the lack of conformity in the prescribed period, its claims derived from such lack of conformity of goods cannot be enforced by a court or arbitrator, provided that seller invoked such delay in the proceedings.

Under part 3 of the abovementioned section, seller cannot invoke delay in with giving notice if the lack of conformity is connected with circumstances which were known to seller or seller ought to have known them.

The Court of First Instance did not rule on the allegation of the [Seller] that the [Buyer] did not give notice of lack of conformity within the statutory period. The [Seller] referred to the letter from the [Buyer] of 28 October 2001 headed “Statement on Unresolved Matters in Delivery of KEG Barrels” from which the [Seller] for the first time aware of the fact that the barrels lack conformity. The Court of First Instance also did not decided about the argument of the [Buyer] which pointed out that it notified of the lack of conformity of the goods for the first time in its letter of 22 January 2001 (headed “Response to Call for Payment of Debts”). The Court of First Instance should therefore primarily provide further investigation about these statements. The Court should investigate whether the [Buyer] notified the [Seller] of the lack of conformity within the statutory period under section 428 of the CC in connection with its interpretation by article 39 of the Vienna Convention, the Court will also have to determine, whether the [Buyer] asserted its claims within reasonable time (sec. 436 part 1 and 2 of the CC).

[…]

The Appellate Court cancelled the judgment of the Court of First Instance and returned the case for further investigation in the manner prescribed above.

 
In the new judgment, the Court of First Instance shall decide also about the reimbursement of costs of proceedings at the first instance and appellate proceedings (sec. 224 part 3 CPC).

Instruction: An appeal against this judgment is not permissible.

Regional Court in Nitra, 3 November 2005.

JUDr. Roman Gregus
Chairman of the Panel