Data
- Date:
- 06-12-2018
- Country:
- Japan
- Number:
- 2008 (wa) No. 23209
- Court:
- Tokyo Chiho Saibansho [District Court]
- Parties:
- FILTROX AG v. FST
Keywords
RIGHT TO INTEREST (ART. 78 CISG) - INTEREST RATE - MATTER NOT EXPRESSLY SETTLED BY CISG - DETERMINED BY DOMESTIC LAW GOVERNING THE CONTRACT IN THE ABSENCE OF CISG
Abstract
[Abstract prepared by prof. Yasutoshi Ishida, Himeji-Dokkyo University]
A Swiss company specializing in the sale of filters for precision filtration machinery and a Japanese company engaged in the manufacturing, selling, and importing of filtration and separation machinery concluded four sales contracts between March 2016 and January 2017. The total quantity of goods sold was 3,110 units, with a total purchase price of 16,696 Swiss francs (including freight).
The buyer failed to pay the purchase price for all the four contracts within the due dates. Despite the seller’s repeated demands for payment and several attempts to negotiate, the buyer never made the payment. Consequently, the seller sued the buyer to recover the purchase price and default interest. The Tokyo High Court found that "there were no disputes regarding the facts underlying the claims" and ordered the defendant to pay both the purchase price and the default interest.
The Court ruled that the applicable law for default interest rate should be determined under the Japanese rules of private international law. Indeed, even though Art. 78 CISG recognizes a party’s right to recover interest on the sums in arrears, within the Convention there is no explicit provision governing the interest rate, nor is there a general principle on the matter (Art. 7(2) CISG). Therefore, the Court decided to address this issue in accordance with 'The Act on General Rules for Application of Laws', which provides the rules of Japanese private international law.
The Act stipulates that, in the absence of an agreement between the parties on choice of law, the applicable law is that of the place most closely connected with the contract (Article 8(1)). If only one party is to provide a characteristic performance, the law of the place of business of that party is presumed to be the law most closely connected with the contract (Article 8(2)).
The seller's obligation to provide goods to the buyer is considered the characteristic performance. The Court held, “Since there is no agreement between the plaintiff and defendant regarding the applicable law for the transaction, the law governing the four sales contracts is that of the place most closely connected with these contracts, namely, the law of the place of business of the seller, who provided the characteristic performance”. According to the rule of private international law, the applicable law for the default interest rate is that of Switzerland, where the seller’s principal place of business is located.”
Consequently, the Court decided that the default applicable interest rate was 5% per year, pursuant to Article 104, §1 of the Swiss Code of Obligations.
Fulltext
Original in Japanese:
- available at www.cisg-online.org}}
Source
}}