Polish Supreme Court interprets Art. 74, sentence 2 CISG (foreseeability) to apply to Art. 76 CISG

The Coke fuel case has not received a lot of international attention even though the case reached the Polish Supreme Court four times. The last two decisions of this case – even though they have been decided a while ago – have just been added to CISG-online and will, thereby, hopefully help to put the case closer to the spotlight.

The Polish seller and German buyer agreed on the delivery of coke fuel in 2003. After conclusion of the contract, the prices on the coke market in China increased enormously in 2004. Consequently, the seller considered himself unable to deliver the remaining coke fuel against the agreed upon price. The buyer, in turn, avoided the contract regarding the coke fuel that had not been delivered and sued for damages based on the value of the goods at the time the seller was supposed to deliver.

The Supreme Court (dispersed over four decisions) has decided that damages, even if calculated under Art. 76 CISG, have to be foreseeable as to the amount of loss under Art. 74, sentence 2 CISG. Furthermore, two experts had to be heard to determine the price of the goods at the time of delivery and the Supreme Court accepted that the experts' opinion on the foreseeability do not have to be adopted directly, as the "foreseeability" in the CISG is a normative, not mathematical term. Finally, the damages of the buyer were reduced to 20%, since merely 20% of the price increase could be considered foreseeable. The case also contains relevant statements regarding hardship under Art. 79(1) CISG in case of increasing prices and on interest under Art. 78 CISG before the damages have been fixed by the court.

Attached to this news is only the latest decision in the case, but the full case history is available and easily accessible there.