Case 10(7) Nuova Fucinati

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CISG CASE PRESENTATION

Italy 14 January 1993 District Court Monza (Nuova Fucinati v. Fondmetall International)[translation available][Cite as: http://cisgw3.law.pace.edu/cases/930114i3.html]

Primary source(s) for case presentation: Case text

Case Table of Contents

Case identification UNCITRAL abstract Classification of issues present Editorial remarks Citations to case abstracts, texts, and commentaries Case text (English translation)

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Case identification

DATE OF DECISION:19930114 (14 January 1993)

JURISDICTION:Italy

TRIBUNAL: Tribunale Civile [District Court] di Monza

JUDGE(S): Lapertosa Estensore, Nuova

CASE NUMBER/DOCKET NUMBER:R.G. 4267/88

CASE NAME:Nuova Fucinati S.p.A. v. Fondmetall International A.B.

CASE HISTORY:Unavailable

SELLER'S COUNTRY:Italy (plaintiff)

BUYER'S COUNTRY:Sweden (defendant)

GOODS INVOLVED: Ferrochrome

Case abstract

ITALY: Tribunale Civile di Monza 14 January 1993

Page 1 of 8Italy 14 January 1993 District Court Monza (Nuova Fucinati v. Fondmetall Internatio...

11/30/2013http://cisgw3.law.pace.edu/cases/930114i3.html


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Case law on UNCITRAL texts (CLOUT) abstract no. 54

Reproduced with permission from UNCITRAL

The plaintiff, an Italian seller who failed to deliver the goods to the defendant, a Swedish buyer,claimed avoidance of the sales contract on the ground of hardship ("eccessica onerositasopravvenuta") since the price of the goods had increased after conclusion of the contractand before delivery by almost 30%.

The court held that CISG was not applicable since at the time of the conclusion of the contractCISG was in force in Italy but not in Sweden (Article 1(1)(a) CISG). The court also excluded theapplication of the Convention on the ground that the parties had chosen Italian law as the lawgoverning their contract holding that Article 1(1)(b) CISG operates only in the absence of a choiceof law by the parties. In the court's opinion, even if CISG applied, the seller could not rely onhardship as a ground for avoidance, since CISG did not contemplate such a remedy in Artice 79 orelsewhere. A domestic court could not integrate into CISG provisions of domestic law recognizinga right of avoidance of the contract in case of hardship since hardship is not a matter expresslyexcluded in Article 4 CISG from the scope of the Convention.Go to Case Table of Contents

Classification of issues present

APPLICATION OF CISG:No [however, the court's ruling contains interpretations of variousprovisions of the CISG]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue:Articles 1(1)(a); 1(1)(b); 4; A HREF="/cisg/text/e-text-

79.html">79(1) [Also cited: Article 61] [Also relevant: Article 6]

Classification of issues using UNCITRAL classification code numbers:

1B1 ; 1B2 [Basic rules of applicability: parties in different Contracting States; International lawpoints to Contracting State];

4A ; 4B [Scope of the Convention: issues covered; Issues excluded];

79B [Impediments excusing party from damages]

Descriptors:Applicability ; Choice of law ; Scope of Convention ; Exemptions or impediments ;Hardship

Go to Case Table of Contents

Editorial remarks

Unavailable


Citations to other abstracts, case text and commentaries




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CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database ; see also

German: Schweizerische Zeitschrift fr Internationales und Europisches Recht (SZIER) / Revuesuisse de droit international et de droit europen, 1995, 275

Italian: Diritto del Commercio Internazionale 1993, 657 No. 20

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowachmiedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 246-247

CITATIONS TO TEXT OF DECISION

Original language(Italian): Unilex database ; see also ; IContratti (1993) 580-583; Il Foro italiano (1994 I) 916-923; Giurisprudenza italiana (1994 I) 146-

154 [cited as 14 January 1993]; Rivista di Diritto Internazionale Privato e Processuale 30 (1994)367-372

Translation(English): 15 Journal of Law & Commerce (1995) 153-158 [text presented below]

CITATIONS TO COMMENTS ON DECISION

English: Ferrari, International Legal Forum (4/1998) 138-225 [216 n.707 (criticism of implicitexclusion of CISG)]; Bonell/ Liguori, Uniform Law Review (1996-1) 147 [156 n. 52, n. 53];Klotz, International Sales Agreements (Canada 1997) 6 n.10, 9 n.26, 15 n.55, 202 n.24; Klotz,International Sales Agreements - International (1998) 5 n.10, 8-9 n.27, 22 n.77, 258 n.24; Ferrari,

15 Journal of Law & Commerce (1995) 159-174[commentary limited to a discussion ofapplicability issues present]; Rimke, Pace Review of the Convention on Contracts for theInternational Sale of Goods, Kluwer (1999-2000), Section IV.D.8; Weitzmann, 16 Journal of Law& Commerce (1997) 286-289[commentary on Article 4 and Article 79 issues]; Murray, 17Journal of Law and Commerce (1998) 365[371]; Petrochilos, Arbitration Conflict of Laws Rulesand the CISG (1999) n.58; Krger, Financial force majeure ... remarks on the impact of CISG Art79 (1999) nn.65-67 [cited as 29 March 1993]; Slater, Inapplicability of the UNIDROIT Principles'Hardship Provisions to CISG, 12 Florida Journal of International Law (1998) 231-262;Southerington, Impossibility of performance and other excuses in international trade (2001) n.131;Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) : 6-19 n.234[cited as 14 January 1993]; Larry A. DiMatteo et al., 34Northwestern Journal of International

Law & Business(Winter 2004) 299-440at nn.796; [2004] S.A. Kruisinga, (Non-)conformity inthe 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?,Intersentia at 198; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention onInternational Sale of Goods, 2d (English) ed., Oxford University Press, Art. 79 paras. 30, 31; CarlaSpivack, 27 Pennsylvania Journal of International Economic Law(Fall 2006) n.158[commentaryon Art. 79 issues]

Dutch: Erauw in: van Houtte/Erauw, het Weens Koopverdrag [HWK] (1997) No. 1.55 [46 n.69],1.60 [48 n.77]; Claeys, HWK (1997) no. 7, 121 [271 n.190]

French: Witz, Les premires applications jurisprudentielles du droit uniforme de la vente

internationale (L.G.D.J., Paris: 1995), 25-26, 40-41, 109-110; Witz, Dalloz Sirey (1995) 143 [145n. 21]




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German: Ferrari, Zeitschrift fr Europisches Privatrecht (1998) 162-172; Herber in vonCaemmerer/Schlechtriem, Kommentar zum Einheitlichen UN-Kaufrecht (2d ed. 1995) 53-54 n. 55[Art. 1], 86 n.30 [Art. 6]; Piltz, Neue Juristische Wochenschrift (Mnchen) 1996, 2768 [2769 n.19]; Schlechtriem, Internationales UN-Kaufrecht (1996) 10 n.10, 164 n.260; Will, UN-Kaufrechtund internationale Schiedsgerichtsbarkeit (1999) n.6

Greek: Witz/Kapnopoulou, Ellenike epitheorese europaikou dicaiou (1995) 561 [567 n.28]

Italian: Bonell, Giurisprudenza italiana (1994-I) 145-150; De Nova, i Contratti 1 (1993) 584-585;Ferrari, Rivista di Diritto Civile (Padova) (1995) 669-685; Di Paola, Diritto Marittimo (1995)1059 et seq.; Liguori, Foro italiano (1996-IV) 145 [159 n. 73, n. 74]; Maglio, Contratto e impresa/Europa (1996) 29-34; Lopez de Gonzalo, Foro Padano 2 (1997/I) 2 et seq.

Spanish: Castellanos, Autonomia de la voluntad y derecho uniforme en la compraventainternacional, thesis, Carlos III de Madrid (1998) 93-98, 116, 150-152, 169-170


Case text (English translation)

Reproduced with permission from 15Journal of Law and Commerce153-158 (1995)

Tribunale di Monza, Sentenza 14 Gennaio 1993 [*]

Laudisio Presidente, Lapertosa Estensore, Nuova

Fucinati S.p.A. (Avv. Bassi, Santamaria) v Fondmetall International A.B. (Avv.

Bianchi, Ginelli, Rossi)[Synopsis by the Court:] The Vienna Convention on Contracts for the International Sale of Goodsdoes not apply pursuant to Article 1(1)(b) when the choice of the law governing the contract isdetermined by the agreement of the parties instead of by the objective "criteria of connection" (forexample, the place where the contract is concluded).

Article 79 of the Vienna Convention provides for release from an obligation made impossible by a

supervening impediment not attributable to a party according to a rule similar to article 1463 et

seq. of the Civil Code, but it does not seem to contemplate the remedy of dissolution forsupervening excessive onerousness of a performance as provided for in article 1467 of the Civil

Code for contracts involving performance over time or deferred performance.

On July 20th, 1988, upon petition of [buyer], whose place of business is in Kyrgogatan 44-S-41115 Goteberg (Sweden), the President of the Tribunal of Monza ordered [seller], whose place of

business is in Monza, to deliver to the [buyer] 1000 tons of ironchrome "Lumpy" as ordered in thecontract of February 3, 1988 (at the price of Lira 545 per kilo).

[Seller] objected to this injunctive order, notice of which was given on July 25, 1988, and sued the[buyer] in this Tribunal with notice of summons given on September 29, 1988.

The [seller] pled that it was impossible to deliver the goods within the agreed delivery dates

(between March 20, 1988 and April 10, 1988) because [buyer] was late in taking delivery ofanother load of goods (700 cubic meters of ironchrome "Fine") ordered at the same time. [Seller]demanded the repeal of the injunctive order and, as a further claim, argued for the dissolution ofthe February 3, 1988 contract because of supervening excessive onerousness with respect to the




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executory portion of the performance. In fact, [seller alleged], between the time the contract wasentered into and the date for delivering the ironchrome "Lumpy," the price on the internationalmarket rose remarkably and unforeseeably to the point that it upset the balance between thecorresponding performances and justified, at least, a price correction that the [buyer] refused toconsider.

[Buyer] denied the factual foundation of [seller's] arguments [seller] to the injunction. [Buyer] alsoopposed dissolving the contract for supervening excessive onerousness by arguing that thisremedy was unavailable under Article 79 of the April 11, 1980 Vienna Convention on Contractsfor the International Sale of Goods, adopted in Italy by Law No. 765 of December 11, 1985. Forthese reasons, [buyer] demanded that [seller's] objections and claims be rejected, and urged that itsopposition be ordered to pay damages for non-performance of the contract.

After the parties exchanged memoranda and submitted documents, the court held a hearing onMarch 1, 1990 at which counsel gave their statement of conclusions.

To investigate the possibility that the contract was governed by the April 11, 1980 ViennaConvention on Contracts for the International Sale of Goods, the Court issued an order on March6, 1990 holding that it was necessary to ascertain if and when Sweden had ratified the Convention.It therefore reopened the judicial inquiry to acquire proper information. [The court thereafteracquired the necessary information and, after several delays, a final hearing was held on January14, 1993.]

Reasoning: At the final hearing the [seller] relied primarily on the argument that its obligation todeliver 1000 metric tons of ironchrome "Lumpy," confirmed by order no. 002/88 of February 3,1988, had become excessively onerous, thus justifying [seller's] non-performance. The argumentupon which it had originally relied, based on [buyer's] failure to take delivery of 700 tons ofironchrome "Fine" ordered on the same date but under a different confirmation number (003/88),

was relegated to subordinate importance.The [buyer], in turn, availed itself of the ius variandiprovided for by Article 1453(2)[1]of theCivil Code and demanded dissolution of the contract as well as the damages already claimed inconnection with its original petition for performance.

We must first determine whether Article 1467 of the Civil Code [excusing performance of acontract where one party's obligations have become "excessively onerous"] applies to the contract

between these parties.

The theory that the contract should be dissolved for supervening factors that upset the originaleconomic balance between corresponding performances has been contested by the [buyer] both asa matter of law [i.e., because of the preemption by Article 79 of the Sales Convention] (as recalledin the synopsis) and for factual reasons related to the requirements of Article 1467 of the CivilCode.

Since the case involves an international sale of goods between an Italian corporation (seller) and aSwedish corporation (buyer), the first question to resolve is whether the contract is subject to theVienna Convention of April 11, 1980, adopted in Italy by Law No. 765 of December 11, 1985 andeffective as of January 1, 1988. This question is anything but insignificant since that Convention,which applies only to international sales of goods, does not seem to contemplate the remedy ofdissolution of contract for supervening excessive onerousness. Article 1467 of the Civil Code, in

contrast, provides for this remedy with respect to contracts involving continuous or periodic ordeferred performance - criteria that fit the contract under discussion (formed on February 3, 1988)because it permitted the buyer to choose a delivery date between March 20 and April 10, 1988.




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The Convention, ratified by both Italy and Sweden, provides in Article 79 that a party who fails toperform any of his obligations is not liable "if he proves that the failure was due to an impedimentbeyond his control and that he could not reasonably be expected to have taken the impediment intoaccount at the time of the conclusion of the contract [or to have avoided or overcome it or itsconsequences]."

This provision, however, governs a different case - release from a duty made impossible by asupervening impediment not ascribable to a party, according to a rule similar to Article 1463 ofthe Civil Code. Article 61, et seq., of the Convention governs the seller's remedies for breach ofcontract by the buyer, providing in particular for the remedy of avoidance ("dissolution" in theterminology of our Civil Code) for breach of contract. These rules parallel those in Article 45 etseq.[of the Convention] governing [a buyer's remedies for] breach of contract by the seller.

Under the Convention the remedy of dissolution is associated with breach, whereas the excessiveonerousness doctrine does not fit within the structure of the Convention when invoked either as adefense or as a reason to avoid (rectius: dissolve) the contract.

It is clear that, if the Convention applied to the contract in this case, one could not as a matter oflaw defend on the basis of the supervening excessive onerousness of the seller's obligation todeliver, whether or not the factual requirements of that doctrine were met. Article 4 of the ViennaConvention states that "[t]his Convention governs only the formation of the contract of sale andthe rights and obligations of the seller and the buyer arising from such a contract," and it specifiesthat "except as otherwise expressly provided in this Convention, it is not concerned with (a) thevalidity of the contract" or "(b) the effect which the contract may have on the property in thegoods sold."

Dissolution of the contract for supervening excessive onerousness affects neither the validity ofthe contract nor the property in the goods (except indirectly, by removing the obligation to deliver

and thus affecting the transfer of title by preventing the identification of particular goods to thecontract). [I.e., dissolution for excessive onerousness is a matter within the scope of theConvention]. Because the Convention is "special" law [i.e., one that applies to specific types oftransactions] we must conclude that, if it were applicable to the case, it would preempt the generallaw of Article 1467 et seq.of the Civil Code.

The Vienna Convention came into force in Italy on January 1, 1988 - prior to the conclusion of thecontract on February 3, 1988 (the date of the order confirmation that functioned as an acceptancesent by the [seller, an] Italian corporation to the [buyer, a Swedish] corporation) and prior to theMarch 7, 1989 [sic - March 7, 1988] telex declaring March 20 as the [first] date for delivering thegoods. The Convention nevertheless cannot apply in this case because in Sweden it came into

force (with a few reservations not relevant in our case) on January 1, 1989 [i.e., after theconfirmation and telex mentioned above], as appears from the documentation procured in therecent judicial inquiry.

Now it is true that the law applicable to the contract is Italian law, by virtue of the explicitprovision inserted in the order confirmation ("law: Italian law to apply"); and it is also true that,because the Vienna Convention at this time was in force in the national system, it must beconsidered a law like any other law of this State.

Nevertheless, because of the conditions that this "law" [i.e., the Convention] fixes for itsapplication, we must consider the fact that the Convention came into force in Sweden after the

conclusion of the contract as an obstacle to its application.

Article 1 of the Convention limits its sphere of application to contracts for the sale of goodsbetween parties whose places of business are in different States (in this case, Italy on one side and




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Sweden on the other) when one of the following alternative possibilities exists: a) both States areContracting States; or b) the rules of private international law lead to the application of the law ofa Contracting State.

The second possibility does not fit the case at hand. This is not because under Article 25 of thePreliminary Provisions to the Civil Code the rules of private international law would lead to theapplication of the laws of Sweden (where, at the time the contract was concluded (Article 1326(1)of the Civil Code), the Convention had not yet come into force). Rather, the rules of privateinternational law cannot apply when the parties negotiate the law applicable to an internationalcontract, in which case only the public order principles in Article 31 of the Preliminary Provisionsto the Civil Code limit private autonomy.

Thus this case is governed by the first of the two alternatives provided for by Article 1, underwhich the Convention applies if the sale occurs between parties whose places of business are indifferent Contracting States.

A Contracting State is one that has not only agreed to the Convention, but one in which theConvention has come into force (as specified in Article 100(2), under which the Conventionapplies to contracts concluded after the Convention has entered into force in the Contracting Statesreferred to in Article 1(1)(a)[2]). We therefore conclude that the Vienna Convention does notapply to the contract under consideration, which was concluded before the Convention enteredinto force in the country where one of the contracting corporations had its place of business.

Thus, because the special law [i.e., the Convention] does not apply, the parties' choice of Italianlaw leads to the application of the general law, Article 1467 et seq.of the Civil Code. As a result,the remedy of dissolution for supervening excessive onerousness is available, both as a defenseand a claim. See Corte di Cassazione, December 13, 1980, No. 6470; for the view that dissolutionfor excessive onerousness cannot be asserted as a defense [i.e., it can only be asserted as an

affirmative claim], see Corte di Cassazione, June 8, 1984, No. 3450 and Corte di Cassazione,April 28, 1986, No. 2926. This conflict in views is irrelevant to the case at bar because the [seller]requested dissolution as a claim.

The [seller] based its claim on the ground that, between February 3, 1988 (the date on which thecontract was formed) and April (the delivery date, according to [seller's] argument) theinternational market price of ironchrome advanced 43.71%, rising from Lire 1,496 per Kg/chrome(equal to US$ 0.545 per lb./chrome as estimated in the contract) to Lire 2,150. These facts, eventhough documented, do not justify the legal conclusions that the alleging party seeks to establish.

[The court rejected Plaintiff-seller's arguments based on supervening excessive onerousness and

alleged breach by the Defendant-buyer.]As a result this Tribunal renders a non-definitive decision lifting the contested injunction,declaring the contract dissolved for non-performance by the [seller], and rejecting every defenseand contrary request of the latter. We submit the suit to the examining judge for further judicialinquiry into the [buyer's] request for compensatory damages.

P.Q.M. [per tutti questi motivi(for all these reasons)]

The Tribunal, not definitively pronouncing on the suit brought by [seller] by notice of summonsserved September 29, 1988 on [buyer] decrees as follows:

1) It lifts the injunction of July 20, 1988 ordered by the President of the Tribunal of Monza infavor of [buyer] against [seller];




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2) it declares the dissolution of the contract for sale due to non-performance by the [seller];

3) it rejects the request of [seller] for dissolution based on supervening excessive onerousness andnon-performance.

FOOTNOTES

* All translations should be verified by cross-checking against the original text.

Translated by Alessandra Michelini, Dottorato in Legge (cum laude) 1994, University of Milan,Milan, Italy; LL.M. candidate at the University of Pittsburgh School of Law, 1995-96.

1. [Article 1453(2) of the Italian Civil Code provides that "[d]issolution can be demanded evenwhen an action has been brought to demand performance ...." A.M.]

2. [Following ratification by the first ten countries, the Convention enters into force one year after

the first of the month following ratification. Article 99(2) of the Convention. Ed.]


Pace Law School Institute of International Commercial Law - Last updated February 20,2007

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