The Applicability of the Vienna Convention

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On the 28th of Mai 2019 the Federal Court of Switzerland made a decision in the field of international law. Subject of the ruling was, if the United Nations Convention on Contracts for the International Sale of Goods (CISG; the Vienna Convention) was applicable to purchase contracts between a public institute domiciled in Bale (Switzerland, hereinafter “the complainant”) and a Slovenian company (hereinafter “the opponent 1”) and its Swiss subsidiary (hereinafter “the opponent 2”). The complainant ordered and received energy meters from the opponent 1 and 2, however, criticized the functionality of the goods and declared the contracts as invalid.

Controversial was the question, if the situation was an international matter (and therefore, relevant concerning the applicability of the CISG). The Federal Court of Switzerland ruled that the situation must be considered as an international matter, in order to find a universal solution. All the more, since the opponent 2 joined the contractual relationship at a later time. The Court further pointed out that the internationality of the contract is to be determined at the time of conclusion of contract.

The parties included a provision in their contracts, after which the Swiss Federal Code of Obligations (hereinafter “OR”) was applicable. The court stated that a choice of law doesn’t exclude the applicability of the CISG, unless explicitly agreed otherwise. Furthermore, the complainant cannot conduct the wish of exclusion of CISG, only because the opponent 1 and 2 argued based on the OR in front of the precious instances.

Finally, the complainant claimed that according to clause 4 litera a of CISG, CISG is not concerned with the validity of the contract and therefore, is not applicable. The court carried out that this clause concern only questions, which are not regulated by the CISG at all, namely lack of consent as a result of threat or deception. In regard to the quality of goods the CISG contains a functional equivalent provision. As a result, the CISG remained exclusively applicable with regard to the claims of the complainant resulting out of lack of quality.

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