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Case 10 (7) Nuova Fucinati
Case 10 (7) Nuova Fucinati
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Case identification
UNCITRAL abstract
Classification of issues present
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Case text (English translation)
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
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Editorial remarks
Unavailable
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executory portion of the performance. In fact, [seller alleged], between the time the contract was
entered into and the date for delivering the ironchrome "Lumpy," the price on the international
market rose remarkably and unforeseeably to the point that it upset the balance between the
corresponding performances and justified, at least, a price correction that the [buyer] refused to
consider.
[Buyer] denied the factual foundation of [seller's] arguments [seller] to the injunction. [Buyer] also
opposed dissolving the contract for supervening excessive onerousness by arguing that this
remedy was unavailable under Article 79 of the April 11, 1980 Vienna Convention on Contracts
for the International Sale of Goods, adopted in Italy by Law No. 765 of December 11, 1985. For
these reasons, [buyer] demanded that [seller's] objections and claims be rejected, and urged that its
opposition be ordered to pay damages for non-performance of the contract.
After the parties exchanged memoranda and submitted documents, the court held a hearing on
March 1, 1990 at which counsel gave their statement of conclusions.
To investigate the possibility that the contract was governed by the April 11, 1980 Vienna
Convention on Contracts for the International Sale of Goods, the Court issued an order on March
6, 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 thereafter
acquired the necessary information and, after several delays, a final hearing was held on January
14, 1993.]
Reasoning: At the final hearing the [seller] relied primarily on the argument that its obligation to
deliver 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 argument
upon which it had originally relied, based on [buyer's] failure to take delivery of 700 tons of
ironchrome "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 variandi provided for by Article 1453(2)[1] of the
Civil Code and demanded dissolution of the contract as well as the damages already claimed in
connection with its original petition for performance.
We must first determine whether Article 1467 of the Civil Code [excusing performance of a
contract 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 original
economic balance between corresponding performances has been contested by the [buyer] both as
a matter of law [i.e., because of the preemption by Article 79 of the Sales Convention] (as recalled
in the synopsis) and for factual reasons related to the requirements of Article 1467 of the Civil
Code.
Since the case involves an international sale of goods between an Italian corporation (seller) and a
Swedish corporation (buyer), the first question to resolve is whether the contract is subject to the
Vienna Convention of April 11, 1980, adopted in Italy by Law No. 765 of December 11, 1985 and
effective 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 of
dissolution 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 or
deferred 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 to
perform any of his obligations is not liable "if he proves that the failure was due to an impediment
beyond his control and that he could not reasonably be expected to have taken the impediment into
account at the time of the conclusion of the contract [or to have avoided or overcome it or its
consequences]."
This provision, however, governs a different case - release from a duty made impossible by a
supervening impediment not ascribable to a party, according to a rule similar to Article 1463 of
the Civil Code. Article 61, et seq., of the Convention governs the seller's remedies for breach of
contract by the buyer, providing in particular for the remedy of avoidance ("dissolution" in the
terminology of our Civil Code) for breach of contract. These rules parallel those in Article 45 et
seq. [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 excessive
onerousness doctrine does not fit within the structure of the Convention when invoked either as a
defense 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 of
law defend on the basis of the supervening excessive onerousness of the seller's obligation to
deliver, whether or not the factual requirements of that doctrine were met. Article 4 of the Vienna
Convention states that "[t]his Convention governs only the formation of the contract of sale and
the rights and obligations of the seller and the buyer arising from such a contract," and it specifies
that "except as otherwise expressly provided in this Convention, it is not concerned with (a) the
validity of the contract" or "(b) the effect which the contract may have on the property in the
goods sold."
Dissolution of the contract for supervening excessive onerousness affects neither the validity of
the 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 the
contract). [I.e., dissolution for excessive onerousness is a matter within the scope of the
Convention]. Because the Convention is "special" law [i.e., one that applies to specific types of
transactions] we must conclude that, if it were applicable to the case, it would preempt the general
law 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 the
contract on February 3, 1988 (the date of the order confirmation that functioned as an acceptance
sent by the [seller, an] Italian corporation to the [buyer, a Swedish] corporation) and prior to the
March 7, 1989 [sic - March 7, 1988] telex declaring March 20 as the [first] date for delivering the
goods. 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 the
confirmation and telex mentioned above], as appears from the documentation procured in the
recent judicial inquiry.
Now it is true that the law applicable to the contract is Italian law, by virtue of the explicit
provision 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 be
considered a law like any other law of this State.
Nevertheless, because of the conditions that this "law" [i.e., the Convention] fixes for its
application, 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 goods
between 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 are
Contracting States; or b) the rules of private international law lead to the application of the law of
a Contracting State.
The second possibility does not fit the case at hand. This is not because under Article 25 of the
Preliminary Provisions to the Civil Code the rules of private international law would lead to the
application 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 private
international law cannot apply when the parties negotiate the law applicable to an international
contract, in which case only the public order principles in Article 31 of the Preliminary Provisions
to the Civil Code limit private autonomy.
Thus this case is governed by the first of the two alternatives provided for by Article 1, under
which the Convention applies if the sale occurs between parties whose places of business are in
different Contracting States.
A Contracting State is one that has not only agreed to the Convention, but one in which the
Convention has come into force (as specified in Article 100(2), under which the Convention
applies to contracts concluded after the Convention has entered into force in the Contracting States
referred to in Article 1(1)(a)[2]). We therefore conclude that the Vienna Convention does not
apply to the contract under consideration, which was concluded before the Convention entered
into 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 Italian
law 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 defense
and a claim. See Corte di Cassazione, December 13, 1980, No. 6470; for the view that dissolution
for 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 the
contract was formed) and April (the delivery date, according to [seller's] argument) the
international 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, even
though 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 defense
and contrary request of the latter. We submit the suit to the examining judge for further judicial
inquiry 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 summons
served 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 in
favor 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 and
non-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 even
when 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.]
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