Data

Date:
31-03-2022
Country:
Turkey
Number:
E. 2019/1842 K. 2022/379
Court:
Istanbul Bolge Adliye Mahkemesi (Istanbul Regional Appellate Court)
Parties:
--

Keywords

APPLICATION OF CISG - BASED ON PARTIES' CHOICE IN FAVOR OF LAW OF A CONTRACTING STATE

FUNDAMENTAL BREACH OF CONTRACT BY SELLER - BUYER ENTITLED TO TERMINATE THE CONTRACT (ART. 49 CISG)

RIGHT TO DAMAGAS (ART. 74 CISG)

Abstract

[CLOUT CASE no. 2113; abstract prepared by Gizem Alper]

The dispute concerned a sales contract for an automatic capsule filling machine executed between a Turkish buyer and an Italian seller. The parties agreed in the contract to the application of Swiss law and to the jurisdiction of Swiss courts. The seller delivered the said machine, and the buyer paid the purchase price; however, the buyer later alleged that the machine had latent defects which rendered it inoperable. So-called “acceptance tests” confirmed that the machine was not in conformity with the specifications outlined under the contract. The buyer declared the contract avoided and requested compensation of damages and the restitution of the purchase price.

The Istanbul Commercial Court of First Instance (Istanbul 9. Asliye Ticaret Mahkemesi) rendered a judgment on 16 April 2019 holding that, inter alia, Turkish courts had jurisdiction and that the CISG and the relevant provisions of Turkish Law (Code of Obligations and Commercial Code) were applicable. The court found that there were grounds for avoidance under the CISG and ordered the seller to repay the purchase price and compensate damages.

The seller appealed in front of the Istanbul Bolge Adliye Mahkemesi (Istanbul Regional Appellate Court) alleging that, as per the sales contract, Swiss courts had jurisdiction over the dispute and that the court of first instance had mistakenly applied Turkish law rather than Swiss law and the CISG. Moreover, the seller alleged that the buyer had not complied with the notification requirements under article 39 of the CISG and that notice in due course was required to mitigate risks under article 77 of the CISG, but had not been given.

The court of appeal held that the defendant had not objected to jurisdiction within the given time period, and that, consequently, any jurisdictional claims had lapsed, and Turkish courts had jurisdiction. The court of appeal further held that Swiss law was the governing law, and that the CISG was applicable as part of Swiss law. The court also found that a fundamental breach of contract according to article 49 of the CISG had occurred, and that the buyer was entitled to remedies under the CISG. The court of appeal confirmed the judgment of the court of first instance stating that the buyer had notified the seller within the required time frame set under articles 38 and 39 of the CISG, and that damages had been calculated correctly in accordance with article 74 of the CISG.

Fulltext

Original in Turkish:
- available at University of Pace Law website, https://iicl.law.pace.edu}}

Source

Case law on UNCITRAL texts -A/CN.9/SER.C/A/CN.9/ABSTRACTS/229}}