- Czech Republic
- No. 23 Cdo 427/2017
- Supreme Court of the Czech Republic
- VÚB a.s. v. LITOZ, s.r.o.
ASSIGNMENT - MATTER IMPLICITLY EXCLUDED FROM THE SCOPE OF CISG (Art. 7(2) CISG) - RECOURSE TO OTHERWISE APPLICABLE LAW
SET-OFF - MATTER IMPLICITLY EXCLUDED FROM THE SCOPE OF CISG (Art. 7(2) CISG) - RECOURSE TO OTHERWISE APPLICABLE LAW
INTEREST RATE (ART. 78) - TO BE CALCULATED IN ACCORDANCE WITH OTHERWISE APPLICABLE LAW (art. 7(2) CISG)
[Clout Case no. 1881; abstract prepared by Petr Bříza and Natálie Tůmová]
This case deals primarily with the (non-)applicability of the CISG to the matters of cross-border assignment (including factoring), set-off and late payment interest rate.
The claimant, VÚB a.s., was a Slovak company providing factoring services to the Slovak company Interplastics s.r.o.. Interplastics (the “seller”) had entered into a contract with a Czech company called LITOZ, s.r.o. (the “buyer”). Pursuant to the contract, the seller supplied the buyer with the components for manufacturing. However, the buyer failed to pay the invoices. The seller assigned these claims to the claimant, its factor, and the claimant filed a lawsuit against the buyer. The first instance court dismissed the claim for the claimant’s failure to prove that there had been a valid assignment of the claims. The appellate court reversed the first instance judgment and ordered the buyer to pay the full amount including late payment interest and dismissed the buyer’s attempt to set off its alleged counterclaim. The appellate court determined Slovak law to be applicable to the sales contract, the assignment and the set-off. The buyer filed an extraordinary appeal to the Nejvyšší soud České republiky (the Supreme Court of the Czech Republic) (the “Court”) claiming that the appellate court erred in applying Slovak law instead of the CISG to the underlying contract.
The Court noted that the sales contract between buyer and seller was governed by the CISG as the parties had not excluded its application.
With regard to the assignment, the Court – referring to relevant Czech writings – held that the assignment fell outside of the scope of the CISG, and that the Rome I Regulation should be applied to determine the applicable law.
Regarding the law applicable to a cross-border set-off, the Court identified three instances when set-off may occur in relation to the CISG: (a) the claims arise from different contracts governed by different laws; (b) the claims arise from different contracts governed by the CISG; and (c) the claims arise from the same contract, which is governed by the CISG. Referring to the CISG Digest, the Court concluded that in all three situations the set-off fell outside the CISG and that the Rome I Regulation should apply.
Lastly, the Court examined the issue of the rate of the late payment under art. 78 CISG. The Court, acknowledging the diverging views on the issue, made reference to the CISG Digest and ruled that the matter of interest rate fell outside the scope of the CISG. Subsequently, the Court held that the applicable law is to be determined based on the Rome I Regulation.
In conclusion, the Court referred the case back to the appellate court.
Original in Czech:
- available at the Supreme Court of the Czech Republic website, www.nsoud.cz}}
Case law on UNCITRAL texts (http://www.uncitral.org/uncitral/en/case_law.html) A/CN.9/SER.C/ABSTRACTS/205}}