Amicus Curiae Brief — Zapata Hermanos Sucesores, S. A. v. Hearthside Baking Co., Inc., Dba Maurice Lenell Cooky Co

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- MOTION FILED

MAY { 2 2063 No. 02-1318

Jn the

Supreme Court of the Anited States

ZAPATA HERMANOS SUCESORES, S.A.,

Petitioner,

HEARTHSIDE BAKING CO. d/b/a

MAURICE LENELL COOKY CoO.,

Respondent.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Seventh Circuit

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE AND BRIEF AMICUS CURIAE

OF THE INTERNATIONAL ASSOCIATION OF

CONTRACT AND COMMERCIAL MANAGERS

AND THE INSTITUTE OF INTERNATIONAL

COMMERCIAL LAW OF THE PACE UNIVERSITY

SCHOOL OF LAW IN SUPPORT OF PETITIONER

ALBERT H. KRITZER

Counsel of Record

PACE UNIVERSITY SCHOOL OF LAW

78 North Broadway

White Plains, New York 10603

(914) 422-4159

JARNO VANTO

STEWART F. HANCOCK, JR.

RICHARD L. OTTINGER

Counsel for the Amici Curiae

Midwest Law Printing Company/Photex — Chicago — (312) 321-0220

eee — — assem 2 NN OR ET nck + Aa ails POY NE

MOTION FOR LEAVE TO FILE

BRIEF AMICUS CURIAE

The International Association of Contract and Contract and

Commercial Managers (“IACCM”) and the Institute of

International Commercial Law of the Pace University School

of Law respectfully move, pursuant to Rule 37.2 of the Rules

of this Court, for leave to file a brief amicus curiae in support

of petitioner. The consent of counsel for petitioner has been

granted; the consent of counsel for respondent has been sought

but not obtained.

Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Co.

d/b/a Maurice Lenell Cooky Co. is a proceeding that centers

around a uniform law on international trade. The Zapata rul-

ings of the District Court and Circuit Court of Appeals have

elicited diverse views by persons from many parts of the world.

IACCM, a not-for-profit corporation, is an association of

professional businesspersons engaged in international trade

who represent more than 400 corporations in over 80 countries.

The Pace Institute is a university learning center devoted to

international trade and the uniform international sales law

that is the subject of the Zapata proceeding. Educators, prac-

ticing attorneys and jurists associated with the Institute have

written over 400 books, monographs and law journal articles

on this law.

JACCM and the Institute believe that an opportunity to

consider their views can be of help to the Court in its determi-

nation whether or not to grant certiorari.

Respectfully submitted,

Abert. Kutecr

ALBERT H. KRITZER

Counsel of Record

PACE UNIVERSITY SCHOOL OF LAW

78 North Broadway

White Plains, New York 10603

(914) 422-4159

JARNO VANTO

STEWART F. HANCOCK, JR.

RICHARD L. OTTINGER

Counsel for the Amici Curiae

REASONS WHY THE COURT SHOULD

RULE ON THE ZAPATA CASE

I. The Zapata case calls for interpretation of the world’s

most important uniform international sales law. It is the

uniform law of countries that account for over two-thirds of all

world trade.

II. The uniform international sales law of the United States

and sixty-one sister signatories (most of the U.S.’s major

trading partners) requires autonomous interpretation, within its

four corners: (1) text of the law, drawing as appropriate from

its (2) travaux préparatoires (legislative history), (3) doctrine

(scholarly writings), and (4) jurisprudence (case law).

The Seventh Circuit Court of Appeals has resorted to

domestic law to interpret uniform international sales law.

Similar error that the Supreme Court can correct is present in

decisions of other U.S. Circuit Courts of Appeal and District

Courts.

III. Uniform law requires regard for foreign and domestic

precedents as uniform law precedenis. U.S. courts operate

within the framework of a domestic jurisconsultorium for the

Uniform Commercial Code; so too are courts of sister signato-

ries expected to operate within the framework of a global

jurisconsultorium for uniform international sales law.

The Seventh Circuit has failed to do so. Similar error that the ©

Supreme Court can correct is present in decisions of other U.S.

Circuit Courts of Appeal and District Courts.

IV. Supreme Courts of sister signatories have been heavily

involved in reviews of uniform international sales law proceed-

ings. They have handed down eighty-five rulings on this law.

A United States Supreme Court ruling on the Zapata case

wili benefit the U.S. and world trade community. It can serve

as a template for rulings on all uniform international sales law

proceedings by all courts.

TABLE OF CONTENTS

PAGE

REASONS WHY THE SUPREME COURT

SHOULD RULE ON THE ZAPATA CASE ............ i

py. FR Oo Pigs 8 545 .. Sener iil ;

INTEREST OF THE AMICI CURIAE ................ ]

EXECUTIVE SUMMARY ........... Pee Te ee l

PRESENTATION

a: WR Ge cag be SOO ee eae eke eh iatan 3 )

Ti BE i pdb ksas bos chee ee eee a eae esa 5

A. Uniform law and the U.S. Constitution ...... 5 :

B. Inierpretive mandate of the uniforin law ..... 5 |

C. The four corners of the uniform law ......... 6 |

(1) Text

(2) Legislative history i

(3) Scholarly writings

(4) Jurisprudence

D. Case law and doctrine ..............ceee.- 7

ie PSCC SET Ce ee er eee Te eee 9

ill

IV. Assessment of issues ....................-. 18

es PS Pee ee Te eee ye 19

TABLE OF AUTHORITIES )

Case law PAGES(S)

“Uniform law requires ... a new common law”

in which “[fJoreign precedents would not be

precedents of a foreign law but of uniform law.”

Antonio Boggiano

A arte NS Ett clr an

AUSTRIA

14 January 2002, Oberster Gerichthof

[Supreme Court], available at ‘

<http://cisw3.law.pace.edu/cases/020114a3.html> .... 17 ;

6 February 1996 Oberster Gerichthof

{Supreme Court], available at

<http://cisgw3.law.pace.edu/cases/960206a3.html> . 17-18

BELGIUM

’

ere ae ee en

4 April 2001, Rechtbank van Koophandel

[District Court] Kortrijk, available at

<http://cisgw3.law.pace.edu/cases/010404b1.html> ... 17

GERMANY

11 April 2002, Amtsgericht [Lower Court]

Viechtach, available at

<http://cisgw3.law.pace.edu/cases/020411gl.html> ... 17

26 November 1999, Oberlandesgericht

[Appellate Court] Hamburg, available at

<http://cisgw3.law.pace.edu/cases/991126g1.html> ... 17

—

3 April 1996, Bundesgerichtshof

[Federal Supreme Court], available at

<http://cisgw3.law.pace.edu/cases/960403g1.html> . .

20 July 1995, Landgericht

[District Court] Aachen, available at

<http://cisgw3.law.pace.edu/cases/950720g1.html> .

14 January 1994, Oberlandesgericht

[Appellate Court] Diisseldorf, available at

<http://cisgw3.law.pace.edu/cases/940114g1.huml> ..

30 September 1992, Landgericht

{District Court] Berlin, available at

<http://cisgw3.law.pace.edu/cases/920930g1.html> .

16 September 1991, Landgericht

{District Court] Frankfurt, available at

<http://cisgw3.law.pace.edu/cases/910916g1.html> . .

3 June 1983, Landgericht

[District Court] Konstanz, available at

<http://cisgw3.law.pace.edu/cases/830603g1.html> ...

10 June 1980, Landgericht

{District Court] Essen, available at

<http://cisgw3.law.pace.edu/cases/8006 10g 1.html>

INTERNATIONAL CHAMBER OF COMMERCE

ICC Arbitration Case No. 8716

of February 1997, available at

<http://cisgw3.law.pace.edu/cases/978716il.html> .

14,

ICC Arbitration Case No. 7585

of 1992, available at

<http://cisgw3.law.pace.edu/cases/92758Sil.html> ... 18

ITALY

26 November 2002, Tribunale [District Court]

Rimini, available at

<http://cisgw3.law.pace.edu/cases/021126i3.html> ... 15

aah tain tt LO A OO BES ON Bb A RS OE i a il) Aah hl

12 July 2000, Tribunale [District Court]

Vigevano, available at

<http://cisgw3.law.pace.edu/cases/000712i3.html> ... 15

NETHERLANDS

2 October 1997, Gerechtshof [Appellate Court] s’

Hertogenbosch, available at

<http://cisgw3.law.pace.edu/cases/971002n1.html> ... 17

POETS Asal. Ba eee

SWITZERLAND

19 December 1997, Handelsgericht

{Commercial Court], Aargau, available at :

<http://cisgw3.law.pace.edu/cases/971219si/html> . 9, 17 |

7 May 1993, Richteramt

[District Court] Laufen, Canton Berne, available at

<http://cisgw3.law.pace.edu/cases/930507s1.html> .... 9

UNITED STATES :

Air France v. Saks,

Rte Me ae 8. Brrr ee 8

Vii

Asante Technologies, Inc. v. PMC-Sierra, Inc.,

164 F.Supp.2d 1142 (N.D. Cal. 2001) ................ 4

Calzaturificio Claudia v. Olivieri Footwear,

1998 U.S. Dist. Lexis 4586 (S.D.NY) ............. 4,8

Delchi v. Rotorex,

71 F.3d 1024 (2nd Cir. 1995) ................ 4,8,17

Helen Kaminski v. Marketing Australian Products,

1997 U.S. Dist. Lexis 10603 (S.D. NY) ............ 4,8

MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova,

144 F.3d 1384 (11th Cir. 1998) ..................... 4

Mitchell Aircraft Spares v. European Aircraft Service,

25 F.Supp.2d 915 (N.D. Ill) ................000 ee 4,8

Schmitz-Werke GmbH v. Rockland Industries,

2002 WL 1357095 (4th Cir. 2002) ............... 4,8

Supermicro Computer v. Digitechnic,

2001 U.S. Dist. Lexis 7620 (N.D. Cal.) ............... 4

Zapata Hermanos v. Hearthside Baking,

2001 WL 1000927 (N.D. Ill.) ...............005. 7,9

Statutes and U.S. legislative history documents

United States Constitution,

United States Senate, 98th Congress, Ist Session,

WEEE © es POE POE ov on oc occavevacedenes 3,4

vill

United States Senate TREATY DOC. NO. 98-9,

April 4, 1984, S. Hrg. 98-837 ........ 00. cee eee

Commentaries

Bernard Audit, The Vienna Sales Convention

and the Lex Mecatoria, in Thomas E. Carbonneau

ed., LEX MERCATORIA AND ARBITRATION,

Juris Publishing, rev. ed. (1998) .................

Bernard Audit, LA VENTE INTERNATIONALE

DE MARCHANDISES, Librarie Générale de Droit

OF Ge Detopetence (IFSG) ..... 6. ccc seen eens

Antonio Boggiano, The Experience of Latin

American States, in INTERNATIONAL

UNIFORM LAW IN PRACTICE /LE DROIT

UNIFORM INTERNATIONAL DANS LA

PRATIQUE [Acts and Proceedings or the 3rd

Congress on Private Law held by the International

Institute for the Unification of Private Law

(Rome 7-10 September 1997) 47 (1988) ...........

William S. Dodge, Teaching the CISG in Contracts,

0 J. Legal Educ. 72-94 (2000) ........cccccceees

Fritz Enderlein & Dietrich Maskow,

INTERNATIONAL SALES LAW, Oceana (1992) ...

John Felemegas, An Interpretation of Article 74

CISG by the U.S. Circuit Court of Appeals.

(December 2002), available at

<http://cisgw3.law.pace.edu/cisg/biblio/

EY odie ody eden een caenbaneeuaks

John Felemegas, The Award of Counsel Fees

Under Article 74 CISG in Zapata Hermanos

Sucesores v. Hearthside Baking Co.,

6 Vindobona J. Int’] Com. L. & Arb. 30-39 (2002) .... 10

Harry M. Flechtner, Recovering Attorneys’ Fees

as Damages under the U.N. Sales Convention:

A Case Study on the New International Commercial

Practice and the Role of Case Law in CISG

Jurisprudence, with Comments on Zapata Hermanos

Sucesores, S.A. v. Hearthside Baking Co.,

22 Nw. J. Int’] L. & Bus. 121-159 (2002) ............ 10

Harry M. Flechtner, Several Texts of the CISG

in a Decentralized System: Observations on

Translations, Reservations and Other Challenges

to the Uniformity Principle in Article 7(1),

i? 5. £.. & Com, 187-217 (1998) .. 0. ce cee 19-20

Harry M. Flechtner & Joseph Lookofsky,

Viva Zapata! American Procedure and CISG

Substance in a U.S. Circuit Court of Appeal,

7 Vindobona J. Int’] L. & Arb. 93-104 (2003) ........ 10

Philip T. Hackney, /s the United Nations Convention

on the International Sale of Goods Achieving

Uniformity ?, 61 Louisiana L. Rev. 473-486 (2001) ....20

Rolf Herber & Beate Czerwenka, INTERNATIONALES

KAUFRECHT, KOMMENTAR ZU DEM

UBEREINKOMMEN DER VEREINTEN

NATIONEN VOM 11. APRIL 1980

UBER DEN INTERNATIONALEN

WARENKALUF, Beck (1991) .................... 14

John O. Honnold, UNIFORM LAW FOR

INTERNATIONAL SALES, Kluwer,

CONE 5 55s So ce oe ee ee eh eda

Rafael Illescas-Ortiz & Pilar Perales Viscasillas,

DERECHO MERCANTIL INTERNACIONAL

EL DERECHO UNIFORME, Madnid (2003) .....

Martin Karollus, UN-KAUFRECHT.

EIN E SYSTEMATISCHE DARSTELLUNG

FUR STUDIUM UND PRAXIS,

CRIES os ose oo cee

Warren L.H. Khoo, Sphere of Application—

General Provisions, in C.M. Bianca &

M.J. Bonell eds... COMMENTARY ON THE

INTERNATIONAL LAW, Giuffré, 48-50 (1987) ....

Viktor Knapp, Damages in general, in C.M.

Bianca & M.J Bonell eds.. COMMENTARY

ON THE INTERNATIONAL LAW,

CGEIND, SIO-SOG CIPS) 5 occ ccs eee ewes es

Joseph Lookofsky, Zapata Hermanos v.

Hearthside Baking,

6 Vindobona J. Int’ Com. L. & Arb. 27 (2002) ...

F.A. Mann, Uniform Statutes in English Law,

99 L. Q. Rev. 376-406 (1983) .................

Karl H. Neumayer & Catherine Ming,

COMMENTAIRE DE VIENNE SUR LES

CONTRATS DE VENTE INTERNATIONALE

DE MARCHANDISES, CEDIDAC (1993) ......

Secaner RET me pen sey spencers

C. Giovannucci Orlandi, Procedural Law Issues

and Uniform Law Conventions, Uniform Law

Review 23-41 (2000-2001) ...................... 19

Burghard Piltz, INTERNATIONALES KAUFRECHT.

_ DAS UN-KAUFRECHT, Beck (1993) .......-..... 13

Fernando Pantaleén Prieto, in Luis Diez-Picazo

y Ponce de Leon ed., LA COMPRAVENTA

INTERNACIONAL DE MERCADERIAS (1998) .... 13

Djakhongir Saidov, Methods of Limiting

Damages under the Vienna Convention on

Contracts for the International Sale of

Goods, (2003), available at<http://

cisgw3.law.pace.edu/cisg/biblio/saidov.html> ....... 13

Peter Schlechtriem, Attorneys’ Fees as Part of

Recoverable Damages, 14 Pace Int’! L. Rev.

203 (2002) and Praxis des Internationalen Privat-

und Verfahrensrechts (May 2002) ................. 10

Herbert Schénle in Heinrich Honsell ed.,

KOMMENTAR ZUM UN-KAUFRECHT,

Meer Geeee ............................... 13

Secretariat Commentary on the draft Convention

on Contracts for the International Sale of Goods,

General rule for calculation of damages,

UN A/CONF/97/5, Doc. C(3) at 58-60 .............. 12

Xil

Erika Sondahl, Understanding the Remedy of ,

Price Reduction: A Means to Fostering a More

Uniform Application of the United Nations

Convention on Contracts for the International

Sale of Goods, (2003), available at <http://

cisgw3.law.pace.edu/cisg/biblio/sondahl.html> ....... 6

Hans Stoll, in Peter Schlechtriem ed.,

KOMMENTAR ZUM EINHEITLICHEN

UN-KAUFECHT, Beck, 3rd ed. (2000) ............ 12

Hans Stoll, in Peter Schlechtriem ed.,

COMMENTARY ON THE UN CONVENTION

ON THE INTERNATIONAL SALE OF

GOODS (CISG), Clarendon: Oxford (1998) ......... 12

Jarno Vanto, Attorneys’ Fees as Damages,

(2003) available at

<http://cisgw3.law.pace.edu/cisg/biblio/vantol.html> . 10

Bruno Zeller, The Development of Uniform

Laws—A Historical Perspective,

14 Pace Int’! L. Rev. 163-177 (2002) ..........c0000- 6

Bruno Zeller, Four Corners—The Methodology

for Interpretation and Application of the

UN Convention on Contracts for the

International Sale of Goods, available at <http://

cisgw3.law.pace.edu/cisg/biblio/4corners.html> ...... 6

INTERESTS OF THE AMICI CURIAE!

The International Association of Contract and Contract and

Commercial Managers represents practicing professionals from

more than 400 international corporations in over 80 coun-

tries—through its electronic library, its global web-based

training programs, its international professional certification,

its global conferences and provision of news and information

to more than 8,000 professional negotiators, contract managers

and in-house counsel. The Officers and Members of the Board

of the Association (listed at <http://www.iaccm.com>) repre-

sent firms that are impacted on a daily basis by the uncertain-

ties and risks of international law. The Association petitions

because it is of clear advantage that business should have an

internationally available standard as an alternative to the

current national codes and that this standard has been recog-

nized and adjudicated at the highest levels; to this end, there is

today no court of greater significance than the United States

Supreme Court. The Institute of International Commercial

Law of the Pace University School of Law shares knowledge

on uniform international sales law <http:// cisgw3. law. pace.

edu>. Officers, Fellows and Members of the Board of the

Institute have written 477 books, monographs and law jour-

nal commentaries on the uniform international sales law. The

Institute petitions the Supreme Court in support of added

certainty in uniform international commercial law.

EXECUTIVE SUMMARY

The United Nations Convention on Contracts for the Interna-

tional Sale of Goods (CISG) is a treaty. The United States

Constitution provides for the supremacy of treaties. The States

' This brief was not written in whole or in part by any party and no one

other than the amici made a monetary contribution to its preparation.

Counsel for the Petitioner has provided written consent, a copy of which

has been filed with the clerk. Counsel for Respondent has withheld consent.

Party to this Convention have covenanted with one another that

“‘[i]n the interpretation of this Convention, regard is to be had

to its international character and to the need to promote

uniformity in its application and the observance of good faith

in international trade.” Article 7(1) CISG. In disregard of this,

the Seventh Circuit has preempted the CISG (and the suprem-

acy clause of the U.S. Constitution) in favor of domestic

“procedural” law, and turned to the UCC to interpret the CISG.

In so doing, that court has followed a pattern laid down by

other U.S. courts that have ignored relevant non-U.S. case law

and erroneously looked to U.S. domestic UCC case law to

interpret the uniform international sales law. The Seventh

Circuit and other U.S. courts that have so ruled turn the

precepts of Article 7(1) CISG upside down. They are in

conflict with courts of sister signatories to the uniform law.

The Zapata case offers the Supreme Court a unique opportu-

nity to correct U.S. judicial errors and rule on a proceeding of

national and international significance in a manner that puts the

U.S. judiciary in the forefront of guidance to the bar and bench

and the business community:

¢ On the proper interpretation of uniform international

sales law: autonomously, within its four corners; and

¢ On attention to relevant case law: comity to foreign

decisions much the same as U.S. courts give comity to

interpretations of the UCC in sister states. Drawing on

the positive experience of the U.S. judiciary with

uniform-law case law under the UCC, the U.S. Supreme

Court is well postured to lead the _ global

jurisconsultorium on the CISG.

2 een tine am

. 3

PRESENTATION

I. INTRODUCTION

A. The world has a uniform international sales law (CISG)

that holds much promise.

A ket SRC BEANE HS WRUNG

VE e NA

“Questions often arise as to whether our law or foreign law

governs the transaction, and our traders and their counsel find

it difficult to evaluate and answer claims based on one or

another of the many unfamiliar foreign legal systems. The

Convention’s uniform rules offer effective -answers to these

problems.

“Enhancing legal certainty for international sales contracts

will serve the interests of all parties engaged in commerce by

facilitating international trade. I recommend that the Senate of

the United States promptly give its advice and consent to the

ratification of this Convention.”

President Ronald Reagan in Letter to the Senate.”

‘“‘We believe that the Convention represents an important step

forward in establishing fair, predictable, and universal princi-

ples to govern international sales transactions.”

Mark R. Joelson on behalf of the ABA.’

B. The promise of the Convention has not been achieved

in the U.S.

U.S. businesses-support the Uniform Commercial Code

because it reduces costs, improves efficiency and makes their

country more of a common market. In a similar vein, busi-

nesses have recorded their support for the CISG because it

2 United States Senate, 98" Congress, 1*' Session, Treaty Doc. No. 98-1.

> United States Senate Treaty Document 98-9, April 4, 1984, S. Hrg. 98-

837 at 26.

can reduce costs, improve efficiency and make the world an

increasingly unified market.”

U.S. courts have not been as supportive. Members of the

U.S. Bar have misunderstood the CISG,’ as have a number of

U.S. courts.° Courts and traders have benefited from rulings on

the CISG by Supreme Courts of many countries.’ The world

trade community has not yet had the opportunity to benefit

from guidance on the uniform international sales law by the

* “{Mjany of the most important business associations have gone on

record” as supporting the Convention, including “corporation counsel

of some of the largest and most important corporations in the United

States.” The Convention “has the support of the National Foreign Trade

Council . . . . The American Arbitration Association has indicated that

the Convention would facilitate the settlement of disputes because of

the removal of evidentiary problems and proof of foreign law. The U.S.

Council for International Business has supported the Convention. The

International Trade Policy Committee of the National Association of

Manufacturers has supported U.S. ratification of the Convention. There

are others... .” U.S. Senate Treaty document, supra note 2 at 15.

> See William S. Dodge, Teaching the CISG in Contracts, 50 J. Legal

Educ. 72-94 (2000).

* Rulings of U.S. District courts of the Southern District of New York, the

Northern District of Illinois, the Northern District of California, and of U.S.

Courts of Appeal for the Second and Fourth Circuits contain er-

rors similar to those present in the ruling of the Seventh Circuit Court

of Appeals in the Zapata case. The District Court cases are Helen

Kaminski, Calzaturificio Claudia, Mitchell Aircraft Spares, and Supermicro

Computer, the Circuit Court cases are Delchi Carrier and Schmitz-Werke.

See infra notes 15-20. There have, however, also been well reasoned U.S.

rulings on the CISG. MCC-Marble and Asante prominent examples. MCC-

Marble Ceramic Center, Inc. v. Ceramica Nuova, 144 F3d 1384, and Asante

Technologies, Inc. v. PMC-Sierra, Inc., 164 F.Supp.2d 1142.

” Recognizing the importance of the CISG, Supreme Courts of other

countries have frequently corrected errors on the part of their lower

courts. They have ruled on the CISG more than eighty-five times. See

<http://cisgw3.law.pace.edu/cisg/texUcasecit.html>.

U.S. Supreme Court. The Zapata case presents an excellent

opportunity for such guidance.

II. THE ZAPATA CASE

The Seventh Circuit has ruled contrary to the United States

Constitution, failed to respect the interpretive mandate of

the uniform international sales law (Article 7 CISG), and

disregarded established practice U.S. Supreme Court practice

(consideration of relevant case law).

A. The United States Constitution

“This Constitution and the Laws of the United States which

shall be made in Pursuance thereof: and all Treaties made, or

which shall be made, under the Authority of the United States,

shall be the supreme Law of the Land; and the judges in every

State shall be bound thereby, any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.” Art. VI,

Ch. &

The CISG is a Treaty. Judges are bound by its provisions,

any Thing in other Laws to the Contrary notwithstanding. The

Zapata case turns on whether attorneys’ fees are damages. The

CISG sets forth its rules on damages, Article 74. Contrary to

the U.S. Constitution, the Seventh Circuit has called upon

other U.S. law to preempt these rules.

B. The interpretive mandate of the uniform law

When interpreting a law, one looks to its terms, not the

terms of some other law. When considering damages under

the CISG, the Seventh Circuit instead characterizes damages

in terms of another law, referring to “incidental” damages, a

UCC term that is not encountered in the CISG.

CISG Article 7(1) states: “Jn the interpretation of this

Convention, regard is to be had to its international character

and to the need to promote uniformity in its application and

the observance of good faith in international trade.” This

is a mandate to interpret the CISG autonomously, within its

four corners:® (1) Text of the law; (2) Travaux préparatoires:

legislative history; (3) Doctrine: scholarly writings; (4)

jurisprudence: case law.

C. The four corners of the uniform law

(1) The text of the law. Article 74 CISG contains the Conven-

tion’s general rule on damages: “Damages for breach of

contract by one party consist of a sum equal to the loss,

including loss of profit, suffered by the other party as a

consequence of the breach. Such damages may not exceed the

loss which the party in breach foresaw or ought to have

foreseen at the time of the conclusion of the contract in the

light of the facts and matters of which he then knew our ought

to have known as a possible consequence of the breach

of contract.”

The CISG aspect of the Zapata case turns on whether

this provision of the uniform law regards attorneys’ fees

as damages. For Article 74 to be so regarded, one must

determine whether retention of counsel is foreseeable as

a consequence of the breach of contract where a buyer does not

honor a payment obligation and whether attorneys’ fees are “‘a

loss suffered . . . as a consequence of the breach.” The parties

* For general comments on the four-corners mandate, see Bruno Zeller,

The Development of Uniform Laws—A Historical Perspective, 14 Pace Int’!

L. Rev. 163-167 (2002), and Four Corners—The Methodology for

Interpretation and Application of the UN Convention on Contracts for

the International Sale of Goods, <http://cigw3.law.pace.edu/cisg/biblio/

4corners.html>. For an illustrative application to another CISG remedy, see

Erika Sondahl, Understanding the Remedy of Price Reduction: A Means to

Fostering a More Uniform Application of the United Nations Convention

on Contracts for the International Sale of Goods, (2003), <http://cisgw3.

law.pace.edu/cisg/biblio/sondahl.html>.

to the Zapata case stipulated that [buyer] foresaw or should

have foreseen that if [buyer] failed to pay for the tins that

it ordered, received and accepted, [seller] would incur litiga-

tion costs including attorneys’ fees to seek payment of

the invoices for said tins.”

(2) Legislative history. The CISG has a rich and voluminous

legislative history, including material presented .0 ten

volumes of UNCITRAL Yearbooks and in Records of the

Diplomatic Conference at which this Convention was promul-

gated, '°

(3) Doctrine and (4) jurisprudence. There is much scholarly

writing on this law. The Institute of International Commercial

Law provides an Internet bibliography that cites over 5,000

such writings on the CISG.'' Tribunals of many countries

have ruled on the CISG. There are over 1,000 such cases,"

including over 300 judicial and arbitral rulings having to do

with damages under CISG Article 74.'°

D. Case law and doctrine

The U.S. Supreme Court has stated that “the opinions of our

sister signatories [to an international convention] are to be

* Zapata Hermanos v. Hearthside Baking Co, 2001 WL 1000927 (N.D.

Il!.).

'° This material may be accessed by drawing upon the Internet site of the

Institute <http://cisgw3.law.pace.edu>.

'' See <http://cisgw3.law.pace.edu/cisg/biblio/full-biblio.htmI>.

'? See <http://cisgw3.law.pace.edu/cisg/texVanno-art-74.huml>.

'’ See <http://cisgw3.law.pace.edu/cisg/text/casecit.html>.

entitled to considerable weight.”*

This is not the approach taken by the Seventh Circuit, nor

has this approach been followed by other U.S. courts which

have instead stated in error—in [1995] [1997] [1998] [2001]

{2002]—that: “There is virtually no case law under the Conven-

tion” Delchi, a Second Circuit ruling on damages under the

CISG; “There is little to no case law on the CISG” Kaminski,

Southern District, New York; “The case law interpreting and

applying the Convention is sparse” Calzaturificio Claudia,

Southern District, New York; “There is virtually no case law

under the Convention” Mitchell Aircraft, Northern District.

Illinois; “The case law interpreting and applying the CISG is

sparse” Supermicro Computer, Northern District, California;

“Case law interpreting the CISG is rather sparse” Schmitz-

Werke, Fourth Circuit.'°

U.S. Circuit and District Courts have also stated that it is

appropriate to draw on U.S. domestic law to interpret the

CISG."® The Seventh Circuit Zapata court similarly cites no

CISG case law and draws instead on U.S. domestic UCC case

'* Air France v. Saks, 470 U.S. 392, 404 (1985)..

'S Delchi v. Rotorex, 71 F.3d 1024 (2™ Cir. 1995); Helen Kaminski v.

Marketing Australian Products, 1997 U.S. Dist. Lexis 10603 (S.D. NY);

Calzaturificio Claudia v. Olivieri Footwear, 1998 U.S. Dist. Lexis 4586

(S.D. NY); Mitchell Aircraft Spares v. European Aircraft Service, 25

F.Supp.2d 915 (N.D. Ill.); Supermicro Computer v. Digitechnic, 2001 U.S.

Dist. Lexis 7620 (N.D. Cal.); Schmitz-Werke GmbH v. Rockland Industries,

2002 WL 1357095 (4" Cir.).

'© See Delchi, supra note 15 (“Caselaw interpreting analogous provisions

of Article 2 of the Uniform Commercial Code (‘UCC’) may . . . inform a

court where the language of the relevant CISG provision tracks that of the

UCC .. .”); Calzaturificio Claudia, supra note 15 (“Caselaw interpreting

Article 2 of the Uniform Commercial Code ("UCC’) may be used to

interpret the CISG where the provisions in each statute contain similar lan-

guage . . .”); Schmitz-Werke, supra note 15 (“Case law interpreting

provisions of Article 2 of the Uniform Commercial Code that are similar to

provisions in the CISG can . . . be helpful in interpreting the Convention”).

Pe ee

law to interpret the CISG. This conflicts with rulings by courts

of sister signatories.'’

The Seventh Circuit similarly cites U.S. doctrine—the Re-

Statement of Contracts—but no CISG doctrine in support of

its interpretation of the CISG.

Ill. THE TEMPLATE

The template for the Zapata case, for every CISG case, is:

Courts should draw on interpretations of the CISG, not

domestic laws and domestic restatements; The CISG should

be interpreted autonomously, by looking to its four corners.

Attorneys’ fees is the CISG issue. Most countries follow a

“loser pays” doctrine; the U.S. generally does not. The peti-

tioner in the Zapata case sought from the losing party compen-

sation for attorneys’ fees incurred. The District Court granted

this relief in accordance with Article 74 CISG and for other

reasons.'* The Seventh Circuit Court of Appeals reversed the

District Court.

'’ Courts of sister signatories state that provisions of domestic law “are as

a matter of principle inapplicable for the interpretation of the CISG.”

Bundesgerichishof [Federal Supreme Court of Germany], 3 Apri! 1996,

available at <http://cisgw3.law.pace. edu/ cases/ 960403g1.html>. “The

CISG requires uniform interpretation on the grounds of its multilaterality,

whereby special regard is to be had to its international character (Art. 7(1)

CISG. It is therefore to be interpreted autonomously, not from the perspec-

tive of the national law of the forum.” Switzerland, Richteramt [District

Court] Laufen, Canton Berne, 7 May 1993, available at

<http://cisgw3.law.pace.edu/cases/930507s1.html>. The need to take into

account the CISG’s international character obliges one to interpret the CISG

autonomously and not in the light of any domestic law. Switzerland,

Handelsgericht {Commercial Court] Aargau, 19 December 1997, available

at <http://cisgw3.law.pace. edu/cases/971219s1.html>.

'’ Zapata, supra note 9, and Zapata Hermanos v. Hearthside Baking, 313

F.3d 385 (2002).

The Zapata case is of high interest. Commentaries have been

written on it from the United States, Denmark, Finland,

Germany and Australia.'? Others are in process.

(1) Text and issues. “Damages for breach of contract by one

party consist of a sum equal to the loss, including loss of profit,

suffered by the other party as a consequence of the breach.”

CISG Article 74, sentence one. This text must be assessed in

the light of its legislative history, doctrine and case law. The

issues are:

¢ Does “loss, including loss of profit, suffered... as a

consequence of the breach” mean “full compensation”?

If so:

¢ Does “full compensation” include recovery of foresee-

able attorneys’ fees when set at a reasonable rate? If so:

'? SUPPORTIVE OF DISTRICT COURT OPINION. Peter Schlechtriem,

Attorneys’ Fees as Part of Recoverable Damages, |4 Pace Int’! L. Rev. 203

(2002) and Praxis des Internationalen Privat- und Verfahrensrechts (May

2002); John Felemegas, The Award of Counsel Fees Under Article 74 CISG

in Zapata Hermanos Sucesores v. Hearthside Baking Co., 6 Vindobona J.

Int’l Com. L. & Arb. 30-39 (2002). OPPOSED TO DISTRICT COURT

OPINION. Harry M. Flechtner, Recovering Attorneys’ Fees as Damages

under the U.N. Sales Convention: A Case Study on the New International

Commercial Practice and the Role of Case Law in CISG Jurisprudence,

with Comments on Zapata Hermanos Sucessores, S.A. v. Hearthside Baking

Co., 22 Nw. J. Int’] L. & Bus. 121-159 (2002); Joseph Lookofsky, Zapata

Hermanos v. Hearthside Baking, 6 Vindobona J. Int’! Com. L. & Arb. 27

(2002). CRITICAL OF DISTRICT COURT AND CIRCUIT COURT

OPINIONS. Jarno Vanto, Attorneys’ Fees as Damages, (2003), available at

<http://cisgw3.law.pace.edu/cisg/biblio/ vantol .html>. OPPOSED TO CIR-

CUIT COURT OPINION. John Felemegas, An Interpretation of Article 74

CISG by the U.S. Circuit Court of Appeals, (December 2002), available

at <http://cisgw3.law.pace.edu/cisg/biblio/ felemegas1.html>. SUPPORT-

IVE OF CIRCUIT COURT OPINION. Harry M. Flechtner & Joseph

Lookofsky, Viva Zapata! American Procedure and CISG Substance in

a U.S. Circuit Court of Appeal, 7 Vindobona J. Int'l] L. & Arb. 93-104

(2003).

* Does domestic procedural law or another theory of law

preclude or preempt such an application of the CISG to

attorneys’ fees? If so:

¢ Is the basis for preclusion or preemption the CISG or is

there another basis for such preclusion or preemption?

(2) Legislative history. The CISG template should refer to the

legislative history of the uniform law to the extent relevant to

the issues addressed. The Seventh Circuit opinion does not

refer to the CISG’s legislative history. The fount of Article 74

CISG is Article 82 ULIS, an antecedent uniform international

sales law. The CISG legislators selected this language and set

it into the CISG with no substantive change whatsoever.” It

came accompanied with ULIS jurisprudence and doctrine

holding that attorneys’ fees are encompassed by its provi-

sions;”' and a Secretariat Commentary supporting damages as

*° A roadmap to the legislative history of CISG Article 74 is provided at

<http://cisgw3.law.pace.edu/cisg/text/roadmap/intro-74.html>.

*! Audit states that “(t]he international character of the Convention should

encourage courts to refer to the Convention’s legislative history and prior

instruments (i.e., the ULIS . . . ) in order to ascertain the most likely intent

underlying the wording of a given provision.” Bernard Audit, The Vienna

Sales Convention and the Lex Mercatoria, in Thomas E. Carboneau ed.,

LEX MERCATORIA AND ARBITRATION, Juris Publishing, rev. ed.,

(1998). Citing century old precedent to the effect that where a term is used

in One statute, a subsequent statute that incorporates the same term in a

similar context must be construed so that the term is interpreted according

to the meaning that has been previously assigned to it, Mann states: “It is

simply common sense that if the Convention adopts a phrase which appears

to have been taken from [an international convention] where it is used in a

specified sense, the international legislators are likely to have had that sense

in mind and to intend it introduction into the Convention.” F.A. Mann,

Uniform Statutes in English Law, 99 L.Q. Rev. 376 at 383 (1983). ULIS

Articie 82 doctrine and jurisprudence on attorneys’ fees as damages are

(continued...)

full compensation.”

(3) Doctrine (scholarly writings). The template should also

refer to doctrine on the CISG to the extent relevant. Citing no

CISG doctrine, the Seventh Circuit states that “there are no

principles that can be drawn for determining whether ‘loss’ [as

this term is used in CISG Article 74] includes attorneys’

fees.” Commentators disagree. The leading commentary on

the CISG states: “Basic principle 1. Damages as full

compensation.”” Honnold (United States), Audit (France),

Knapp (Czechoslovakia), [llescas Ortiz & Perales Viscasillas

and Pantele6n Prieto (Spain), Karollus (Austria), Newmayer &

Ming and Schodnle (Switzerland), Saidov (Uzbekistan),

(...continued)

accordingly referred to below along with CISG doctrine and jurisprudence

on this subject. See citations to Stoll and Herber & Czerwenka, infra notes

24 and 27.

2,-UN A/CONF/97/5, Doc. C(3) at 58-80. Commissioned by the UN

General Assembly to guide the CISG’s legislators, the Secretariat Commen-

tary is the closest available counterpart to an official commentary on the

Convention.

*3 Zapata, supra note 18.

* Hans Stoll, Damages, in Peter Schlechtriem ed.. COMMENTARY ON

THE UN CONVENTION ON THE INTERNATIONAL SALE OF GOODS

(CISG), Clarendon: Oxford, 553 (1998). This guide to the CISG, along with

its German edition. KOMMENTAR ZUM EINHEITLICHEN UN-

KAUFRECHT, Beck 3” ed. (2000) is cited most frequently by courts of

sister signatories to the CISG. This commentary states: “The Convention

provides for damages for loss, including loss of profit, suffered as a

consequence of breach of contract (Article 74, first sentence), but does not

define in more detail which are the losses for which compensation can be

obtained. In order to identify the losses for which compensation may be

demanded, regard must be had to the principle of full compensation. . . .”

Id. at 558. Full compensation means that the aggrieved party is entitled

to compensation for all consequences of the breach (Stoll, op. cit.,

Kommentar at 697), albeit limited by foreseeability and mitigation

requirements. Felemegas, supra note 19.

Enderlein & Maskow and Piltz (Germany) also so state.”

*° John O. Honnold, UNIFORM LAW FOR INTERNATIONAL SALES,

Kluwer, 3” ed. (1999) 445 (“Damages consist of ‘the loss, including loss of

profit suffered . . . as a consequence of the breach’ . . . a standard that is

designed to place the aggrieved party in as good a position as if the other

party had properly performed the contract”); Bernard Audit, LA VENTE

INTERNATIONALE DE MARCHANDISES, Librarie Générale de Droit

et de Jurisprudence (1990) (“La Convention consacre le principe de la

reparation intégrale [the principle of full compensation] du dommage

prévisible”); Viktor Knapp, Damages in general, in C.M. Bianca & M.J.

Bonell eds, COMMENTARY ON THE INTERNATIONAL LAW, Giuffré

(1987) 543 (“Article 74 is based on the principle of full compensation’);

Rafael Illescas Ortiz & Pilar Perales Viscasillas, DERECHO MERCANTIL

INTERNSVCIONSL. EL DERECHO UNIFORME, Madrid (2003) 224;

Fernando Pantaleén Prieto, in Luis Diez-Picazo y Ponce de Leon, LA

COMPRAVENTA INTERNACIONAL DE MERCADERIAS (1998) 591

(“Principio de conpensacion plena [the principle of full compensation] o

resarcimiento 0 reparaci6n integral”); Martin Karollus, UN-KAUFRECHT.

EINE SYSTEMATISCHE DARSTELLUNG FUR STUDIUM UND

PRAXIS, Springer (1991) (“Grundsatz der Totalreparation Prinzip [general

principle of full compensation] des vollen Schadenasugleichs”); Karl H.

Neumayer & Catherine Ming, COMMENTAIRE DE VIENNE SUR LES

CONTRATS DE VENTE INTERNATIONALE DE MARCHANDISES,

CEDIDAC (1993) (“La Convention part du principe de la reparation

intégrale (the principle of full compensation]: le debiteur est tenu de

rembourser la totalité du préjudice prévisible qu’ il a causé, ce qui inclut tous

de désavantages qu’ il a occcasionnés 4 son concontractant . . . .”); Herbert

Schénle, in Heinrich Honsell ed, KOMMENTAR ZUM UN-KAUFRECHT,

Springer (1997) 943 (“Geschuldet wird grundsatzlich Totalreparation

{principle of full compensation] . . . Der Richter kann dem Geschadigten

nicht lediglich teilweisen Ersatz des verursachten Schadens zusprechen”);

Djakhongir Saidov, Methods of Limiting Damages under the Vienna

Convention on Contracts for the International Sale of Goods, (2003),

<http://cisgw3.law.pace.edu/cisg/biblio/saidov.html> (“{C]ompensation for

‘loss, including loss of profit, suffered as a consequence of the breach’ . . .

covers any situation which causes any type or form of loss . . . the principle

of full compensation . . . should be the basis for determining the loss”); Fritz

Enderlein & Dietrich Maskow, INTERNATIONAL SALES LAW, Oceana,

298-299 (1992); Burghard Piltz, INTERNATIONALES KAUFRECHT.

(continued...)

Illescas & Perales state that legal costs as well as the costs of

a specialist are within the concept of loss. Schlechtriem

concurs, as does Felemegas.”° Herber & Czerwenka state: “The

costs of legal consequences, in specific the cost of attorneys’

fees and court fees, are to be compensated [under Article 74].

The procedural costs are regularly ruled upon in the applica-

ble procedural rules. If it is the case that the procedural rules

settle the compensation issue in its entirety, these cost-shifting

procedural rules are of the essence also in determining the

issue of liability for damages. If... the procedural rules do not

determine the co:ipensation of legal costs for the prevailing

party or determine them only in part, these can be ciaimed as

damages under the CISG.” ”’

(4) Case law

The Seventh Circuit states that “it seems apparent that ‘loss’

[as the term is used in CISG Article 74] does not include

attorneys’ fees incurred in the litigation of a suit for breach of

contract, though certain pre-litigation legal expenses for

(...continued)

DAS UN-KAUFRECHT, Beck (1993) 289 “Art. 74 Satz 1 sicht daher vor,

dass der infolge der Vertragsverletzung zu ersetzen ist, und zielt auf den

vollen Ausgleich aller der anderen Vertragspartei zugefiigten Nachteile

(Grundsatz der Totalreparation) [principle of full compensation)”.

case, los gastos por utilizacién de un especialista, tanbién entran en el

concepto de dajios y perjuicios”). See also Schlechtriem, supra note 19; see

also Felemegas, supra note 19.

7 Rolf Herber & Beate Czerwenka, INTERNATIONALES KAUFRECHT,

KOMMENTAR ZU DEM UBEREINKOMMEN DER VEREINTEN

NATIONEN VOM 11. APRIL 1980 UBER DEN INTERNATIONALEN

WARENKALUF, Beck (1991). They cite the ruling on ULIS Article 82 in

Landricht [District Court] of Essen, available at

<http://cisgw3.law.pace.edu/ cases/800610g1. html>.

example, expenditures designed to mitigate the plaintiff’s

damages would probably be covered as ‘incidental’

damages.” The court does not explain how it parses CISG

Article 74 to read the UCC term “incidental” damages into the .

CISG. The court cites UCC case law as authority for this

interpretation of the CISG, but no CISG case law. This con-

flicts with approaches taken by courts of sister signatories.

Where relevant CISG case law is available, it has been cited:

where considerable CISG case law is available, courts of sister

signatories have cited considerable CISG case law.”9

There are many CISG cases are on point. Citing Honnold, the

U.S. Second Circuit Court of Appeals states that “CISG art.

74... is “designed to place the aggrieved party in as good a

position as if the other party had properly performed the

contract’.” The Appellate Court of Hamburg states that the

damages payable based on a breach of contract under Article

74 are not limited to lost profit but extend to total loss caused

by the non-performance. The Supreme Court of Austria states

that liability for damages means that the party relying on the

contract should be put in the same financial position he had

been in, had the contract been duly performed in accordance

with the principle of full compensation. An JCC Arbitration

panel states that Article 74 gives a right to the aggrieved party

to obtain compensation for any predictable damages arising out

of the fundamental non-performance of a contracting party.

The Court of Konstanz awarded the seller damages for costs

incurred by employing a collection agency. The court held that

these expenses belonged to the costs to be compensated “which

*8 Zapata, supra note 18.

* See, for example, Tribunale [District Court] Vigevano 12 July 2000

(forty relevant CISG cases cited) and Tribunale Rimini 26 November 2002

(thirty-seven relevant CISG cases cited), available at

<http://cisgw3.law.pace.edu/cases/000712i3.html> and <http://

cisgw3.law.pace.edu/cases/01 1 126i3.htmI>.

the [buyer] ought to have foreseen as a possible consequence

of the breach at the time of the conclusion of the contract.

Drawing on the literal meaning of the damages provision in

the uniform international sales law, the Court of Essen

allowed compensation for attorneys’ fees as damages, stating:

“The court does not follow the [buyer]’s opinion that the

German national principle regarding collection fees should be

applied. Under this principle, the compensable amount for

employing a collection agency is limited by the official

attorney fee for a request for payment. These judge-made

German rules cannot automatically be applied to a determina-

tion of damages under [the uniform international sales law],

both for reasons of private and international and material law.”

The Viechtach Court granted the plaintiff attorneys’ fees under

Article 74. According to this court, the term “loss” in Article

74 encompasses the cost of pursuing one’s rights. A Belgian

Court granted the plaintiff collection costs resulting from

protesting a check that did not clear. According to that court,

such costs fall under Article 74. Costs relating to collection of

outstanding payments were awarded as damages by a Swiss

Court. The court stated that the costs resulting from hiring an

attorney for collection purposes were recoverable under Article

74 insofar as breach of contract gave sufficient rise for such

expenses. A Dutch Court awarded the plaintiff collection costs,

stating that Article 74 did not exclude such costs. The Aachen

Court awarded the plaintiff collection costs, stating that

such costs have to be reimbursed under Article 74. The

Austrian Supreme Court confirmed the principle of full

compensation in Article 74, stating that due to a party’s breach

of his contractual obligation, the aggrieved party is entitled

to full compensation for its losses. The Court of Diisseldorf

did not award the plaintiff damages for attorneys’ fees even

though the court stated that Article 74 of the CISG encom-

passes compensation for the cost of a reasonable pursuit of

one’s legal rights. The court stated that it was against good

faith to claim attorneys’ fees both as damages and as a part

of the cost of proceedings which, according to the loser-pays

rule, are borne by the defendant. The Berlin Court awarded

the plaintiff attorneys’ fees as damages, stating that under

Article 74 the aggrieved party is entitled to damages for

consequential loss resulting from the contractual breach. The

court brings forth that the function of Article 74 is to remedy

the aggrieved party so as to put him in the same financial

position he would have been in if the contract had been duly

performed by the party in breach. An/CC Arbitration proceed-

ing awarded the plaintiff damages for preservation costs of

undelivered goods, attorneys’ fees and arbitration expenses

and loss of profit. The Tribunal stated that such losses are

foreseeable in the meaning of Article 74 and usual in cases of

avoidance of a contract for breach of one party. The Frankfurt

Court stated that Article 74 covers the expenses for appro-

priate legal actions taken and in particular costs of collection

proceedings if the purchase price was due at the time of request

for payment.”° -

1024 (2™ Cir. 1995); Germany, Oberlandesgericht Hamburg 26 November

1999 <http://cisgw3.law. pace.edu/cases/991 1 26g1.html>; Austria, Oberster

Gerichthof 14 January 2002, <http://cisgw3.law. pace.edu/ cases/0201 14a3.

‘ html>; /CC Arbitration Case No. 8716 of February 1997, <http://cisgw3

.law.pace.edu/cases/9787 161 1.html>: Germany, Landgericht Konstanz 3

June 1983, <http://cisgw3.law.pace.edu/cases/830603g 1 .htmI>; Germany,

Landgericht Essen, 10 June 1980, <http://;cisgw3.law.pace.edu/ cases/

800610g1.html>; Germany, Amtsgericht Viechtach 11 April 2002,

<http://cisgw3.law.pace.edu/cases/ 020411g1.html>; Belgium, Rechtbank

van Koophandel 4 April 2001, <http://cisgw3.law.pace.edu/cases/010404b1.

html>; Switzerland, Handelsgericht Aargau 19 December 1997,

<http://cisgw3.law.pace.edu/cases/971219s1. html>; Netherlands,

Gerechtshof s’ Hertogenbosch 2 October 1997, <http://cisgtw3.law.pace.

edu/cases/971002n1. html>; Germany, Landgericht Aachen 20 July 1995,

<http://cisgw3.law.pace.edu/cases/950720g1.html>; Austria, Oberster

(continued...)

CC.

These courts are in accord with the legislative history and

doctrine on CISG Article 74. Insofar as domestic labels should

not play a role in a CISG-governed dispute, the holdings of

these courts support the conclusion that attorneys’ fees may be

claimed as damages under CISG Article 74.

IV. Assessment of issues

Considering the text of Article 74 and taking into account its

legislative history, doctrine and case law, “loss” including loss

of profit suffered as a consequence of a breach of contract

means full compensation; the plain meaning of full is “entire”,

“containing as much as possible”, “lacking restraint or limita-

tion”. If one looks to the plain meaning of full, full compen-

sation includes recovery of attorneys’ fees when, as in the

Zapata case, they are foreseeable and (in accordance with

Article 77) reasonable. One must also ask:

¢ Does domestic procedural law or another theory of law

preclude or preempt the application of Article 74 to

foreseeable attorneys’ fees. If so: Is the basis for this the

CISG?

The U.S. Constitution states that treaties are the supreme law

of the land. If full compensation under the CISG includes

attorneys’ fees and the CISG is supreme, it would seem that no

source other than the CISG can preempt or preclude its

application—other than a later-in-time source. In the absence

(...continued)

Gerichthof 6 February 1996, <http://cisgw3.law.pace.edu/cases/ 960206a3.

html>; Germany, Oberlandesgericht Diisseldorf 14 January 1994, <http://

cisgw3.law.pace.edu/cases/9401 14g1.html>; Germany, Landgericht Berlin

30 September 1992, <http://cisgw3.law.pace.edu/cases/920930g 1 .html>;

ICC Arbitration Case No. 7585 of 1992, <http://cisgw3.law.pace.edu/ cases/

927585i1.html>; and Germany, Landgericht Frankfurt 16 September 1991,

<http://cisgw3.law.pace.edu/ cases/910916g1.html>.

19 ™

of such, the basis for any preemption or preclusion of the

absence of this treaty to attorneys’ fees would therefore have

to be the CISG. If within the CISG, there is adequate autono-

mous support for such preemption or preclusion, the Court

should so hold. If not, the Court should not so hold.

* Or is there an alternative basis for such a preclusion or

preemption?

An alternative is to set aside the CISG and resolve the issue

by turning to domestic law, e.g., domestic procedural law. The

Seventh Circuit took this approach. It raises another issue

that merits Supreme Court review: labels, substantive law

vs. procedural law; whether a domestic label should control a

CISG proceeding.”

CONCLUSION ’

We urge the Court to look upon this case as an opportunity:

* To correct errors and provide guidance on autonomous

interpretation of the CISG, within its four corners; and

* Drawing on U.S. judicial experience with uniform-law

case law, to encourage all courts to consider case law of

sister signatories when ruling on uniform international

sales law.”

*' For views of leading commentators (the leading U.S. commentator and

a leading Singapore commentator) that domestic labels should not con-

trol CISG proceedings, see John O. Honnold, supra note 25 at 74-76,

and Warren L.H. Khoo, in C.M. Bianca & M.J. Bonell eds., COMMEN-

TARY ON THE INTERNATIONAL LAW, Guiffré, 48 and 50 (1987). See

also C. Giovannucci Orlando, Procedural Law Issues and Uniform

Law Conventions, Uniform Law Review 23-41 (2000-2001).

* Article 7(1) of the CISG, properly understood “requires . . . an approach

not unlike the treatment U.S. courts accord decisions of other jurisdic-

tions when applying our Uniform Commercial Code.” Harry M. Flechtner,

(continued...)

Courts of all countries can benefit from U.S. judicial

experience with uniform-law case law.

Respectfully submitted,

ALBERT H. KRITZER

Counsel of Record

PACE UNIVERSITY SCHOOL OF LAW

78 North Broadway

White Plains, New York 10603

(914) 422-4159

JARNO VANTO

STEWART F. HANCOCK, JR.

RICHARD L. OTTINGER

Counsel for the Amici Curiae

(...continued)

Several Texts of the CISG in a Decentralized System: Observations on

Translations, Reservations and Other Challenges to the Uniformity

Principle in Article 7(1), 17 J.L. & Com. 187-217 (1998). “[W]hen

interpreting the Convention, a court should look to other court’s interpreta-

tions of the Convention, including the interpretations of courts from other

countries. . . . The use in the U.S. of case law to interpret the Uniform

Commercial Code (UCC) can serve as a model for courts using case law

to interpret the Convention. No state within the U.S. is bound by an

interpretation of the UCC from another state, but the interpretations of the

UCC from other jurisdictions are extremely persuasive. While this method

does not achieve exact uniformity, the U.S. has achieved a level of

uniformity in Sales law that is useful to companies transacting business

in many states.” Philip T. Hackney, /s the United Nations Convention on

the International Sale of Goods Achieving Uniformity?, 61 Louisiana L.

Rev. 479 (2001).

re —~_-. ee ee ee. ee eee —~

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