Zapata challenged: U.S. District Court rules that Art. 74 CISG includes award of attorney's fees

The question whether Art. 74 CISG – the Sales Convention's general provision on damages in case of a breach of contract – allows the non-breaching party to also recover attorney's fees incurred in the course of court proceedings arising out of CISG contracts was for a long time the topic of controversial discussions. The question seemingly had been settled when the U.S. Court of Appeals for the 7th Circuit in 2002 held in Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Comp. that attorney's fees do not constitute "loss" in the sense of Art. 74 CISG and therefore cannot be recovered as damages under this provision:

Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Comp.
U.S. Court of Appeals (7th Circuit)
USA, 19 November 2002 – 01-3402, 02-1867, 02-1915, CISG-online 684

Recently, the U.S. District Court for the District of Minnesota has now challenged the approach taken 21 years ago in Zapata. In Brands International Corporation v. Reach Companies, LLC, the District Court stated:

"Whether the CISG contemplates the inclusion of attorney’s fees in the measure of damages is an issue of first impression in the Eighth Circuit. Though the Seventh Circuit has held that the CISG Article 74 does not include an award of attorney’s fees, the Court finds the Seventh Circuit’s analysis unpersuasive and will not apply it here. …" [Further reasoning follows in paras. 38–44 of the decision.]

Brands International Corporation v. Reach Companies, LLC
U.S. District Court for the District of Minnesota
USA, 11 April 2023 – 0:2021cv01026, CISG-online 6279

It therefore appears as if the issue is not quite as settled as it seemed...