Data

Date:
07-10-2010
Country:
Argentina
Number:
--
Court:
Cámara Nacional de Apelaciones en lo Comercial de Buenos Aires
Parties:
Ecotune (India) Private Ltd. c/ Cencosud SA, s/ Ordinario

Keywords

APPLICATION OF CISG – RULES OF PRIVATE INTERNATIONAL LAW REFERRING TO LAW OF A CONTRACTING STATE (ART. 1(1)(B) CISG)

BUYER’S FAILURE TO PAY THE PRICE (ART. 53 AND 54 CISG) – SELLER’S RIGHT TO CLAIM DAMAGES (ART. 74 CISG)

ADMISSIBILITY OF COMPENSATORY INTEREST UNDER CISG (ART. 74 CISG) - EXCLUDED - DISSENTING OPINION BY ONE OF THE JUDGES

RIGHT TO INTEREST IN CASE OF LATE PAYMENT OF PRICE (ART. 78 CISG)

Abstract

An Indian company (seller) and an Argentine company (buyer) entered into a sales contract according to which payment was to be made by letter of credit. The seller delivered the goods, but the buyer failed to pay the price. The seller then sued the buyer claiming payment of the price plus damages (i.e. compensatory interest at a rate of 18% per year from the date on which the payment was due until the day of actual payment) and interest on late payment. The buyer argued that it had issued a letter of credit in favor of the seller, but the confirming bank had failed to comply with its obligation to pay the seller.

By applying Spanish law, the Court of first instance sentenced the buyer to pay the price plus interest on late payment at a rate of 7% per year. However, the Court refused to award compensatory interests in the absence of any agreement between the parties in this respect. The seller appealed.

The Court of Appeal held that the contract was governed by CISG even though India is not a Contracting State. Indeed, the Argentine rules of private international law led to the application of the law of Argentina (i.e. law of the place where delivery had to take place), which is a Contracting State (Art. 1(1)(b) CISG).

With respect to the merits, the Court confirmed the first instance decision. It found the buyer responsible for violation of Arts. 53 and 54 CISG and awarded the seller payment of the price plus interest on late performance (Arts. 74 and 78 CISG). As to compensatory interest, the Court rejected the seller’s claim because compensatory interest had not been provided for in the contract.

One of the judges, however, presented her dissenting opinion, contending that also compensatory interest was due according to Art. 74 CISG. As to the applicable interest rate, lacking any indication by the parties or in CISG, the judge referred to the interest rate in force in the seller’s country.

Fulltext

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Source

Original in Spanish:
- available at the CISG-Spain and Latin America website, http://www.uc3m.es}}