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CISG CASE PRESENTATION

France 12 October 2000 Appellate Court Paris (Data processing equipment case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/001012f1.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 20001012 (12 October 2000)

JURISDICTION: France

TRIBUNAL: Cour d'appel de Paris

JUDGE(S): Pascal (président); Matet, Hascher (conseillers); Ferrie (greffier)

CASE NUMBER/DOCKET NUMBER: R.G. no. 1998/025917; 1999/11308 (attached to 1999/19558)

CASE NAME: Société Dutch M... v. S.A. Eur...

CASE HISTORY: 1st instance Tribunal de commerce de Paris 18 March 1999 [affirmed]; 3rd instance Cour de cassation 20 May 2003 [affirmed]

SELLER'S COUNTRY: France (plaintiff)

BUYER'S COUNTRY: Netherlands (defendant)

GOODS INVOLVED: Data processing equipment


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 9 ; 25 [Also cited: Articles 30 ; 53 ; 62 ]

Classification of issues using UNCITRAL classification code numbers:

9C [Practices established by the parties];

25A [Effect of a fundamental breach]

Descriptors: Usages and practices ; Fundamental breach

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (French): CISG-France website <http://witz.jura.uni-sb.de/CISG/decisions/121000v.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Court of Appeal of Paris

12 October 2000 [case no. 1998/025917]

Translation [*] by Andrea Vincze [**]

[…]

Between March and May 1997, Dutch M. ("[Buyer]"), a company subject to Dutch law placed several orders for data processing equipment with Eur. ("[Seller]"), a company subject to French law in the amount of French francs [f] 1,153,100, out of which only the first orders were fulfilled. Following correspondence on 5 December 1997, [Buyer] rejected the notice that had been sent to it by [Seller] on 20 November [1997]. Thereupon the [Seller] referred the matter to the Commercial Court of Paris based on the forum selection clause included in the invoices and requested payment of f 995,200 representing the unpaid sum.

In its judgment of 18 March 1999, the Commercial Court of Paris ruled as follows:

   -    Citing Article 48 of the New Code of Civil Procedure, the Court rejected the plea of [Buyer] regarding [lack of jurisdiction of the French judge and] ruled in favor of jurisdiction of the judge. The Court:
 
   -    Ordered [Buyer] to pay to [Seller] the sum of f 547,560.20 with legal interest due from 20 November 1997 and f 98,983 as value-added tax;
 
   -    Ordered [Seller] to pay to [Buyer] the sum of 20,225.59 Dutch florins equaling EUR 44,571.33;
 
   -    Ordered a set-off of the latter sums;
 
   -    Ordered [Buyer] to pay to [Seller] the sum of f 20,000 as damages and interest as well as f 15,000 under Article 700 of the New Code of Civil Procedure;
 
   -    Ordered execution by provisional measures, and ordered [Seller] to provide security.

[Buyer] filed an appeal against this judgment, seeking a reversal.

   -    [Buyer] alleges that the clause under which jurisdiction of the Commercial Court of Paris was established is void under Article 17 of the Brussels Convention of 17 September 1968, and that the French judge has no jurisdiction under Article 5(1) of the latter Convention.
 
   -    [Buyer] requests the Court to rule under Article 1131 of the Civil Code and Article 30 (rather than Article 20 as indicated erroneously in the plea) of the Vienna Convention of 11 April 1980 on the International Sale of Goods.
 
   -    Furthermore, with respect to the payment obligation referred to by [Seller], failing to deliver the goods which were delivered to third parties, [Buyer] asks the Court to take note of the fact that [Seller] admits its liability for a sum of 20,225.59 Dutch florins regarding which [Buyer] requests the court to order [Seller] to pay that sum.
 
   -    [Buyer] also requests the Court to order [Seller] to pay to [Buyer] f 50,000 in damages and interest for abuse of process and f 40,000 under Article 700 of the New Code of Civil Procedure, as well as the costs. In addition, [Buyer] refers to Article 1244-1 of the Civil Code and requests the court to apply it to the payment of the sums [Buyer] was ordered to pay in the judgment of the Commercial Court.

[Seller] requests confirmation of the judgment of the Commercial Court of Paris. It requests the Court to dismiss the plea of [Buyer] regarding lack of jurisdiction of the judge under Article 75 of the New Code of Civil Procedure and to reject it under a valid jurisdiction clause or to rule that the French judge is competent under Article 5(1) of the Brussels Convention of 27 September 1968 and Articles 14 and 15 of the Civil Code.

In its counter-appeal, [Seller] requested the Court to order [Buyer] to pay the sum of f 541,000 plus VAT in addition to the compensation awarded by the Court of First Instance, as well as interest at the statutory rate on all sums due based on the unpaid invoices, including the f 541,000, and f 4,000 of damages and interest. Finally, [Seller] requested the Court to order [Buyer] to pay to [Seller] f 3,500 under Article 700 of the New Code of Civil Procedure, and the costs.

The order of closure [regarding the pre-trial phase] of 15 June 2000 was changed on the day of the hearing in order to allow [Seller] to rectify two errors in its argument, as a result of which [Seller] requested f 40,000 of damages and interest and f 35,000 under Article 700 of the New Code of Civil Procedure. [Buyer], which had agreed to modification of the order of closure, requests the Court to act immediately in the light of these corrections.

DECISION OF THE COURT:

Regarding the jurisdiction of the French judge

[Seller] argues that the plea brought by [Buyer] regarding lack of jurisdiction is inadmissible based on the provisions in Article 75 of the New Code of Civil Procedure according to which the party who raises the plea has to provide reasons thereof and to indicate, in all cases, the court before which the matter should be brought.

[Buyer], asserting jurisdiction of the Dutch courts based on the special jurisdictional rule in contractual matters included in Article 5(1) of the Brussels Convention, performed its obligation to designate the competent jurisdiction under Article 75 of the New Code of Civil Procedure, where an express designation was not essential when the French judge can only refer the parties to seek adjudication of the dispute before the court having jurisdiction, without designating the competent foreign jurisdiction that applies under Article 96(1) of the Code.

[Buyer] argues that no clause was concluded regarding jurisdiction of the Commercial Court of Paris, and that [Seller] is unable to justify that such a writing exists regarding the making or confirmation of such an agreement.

If the Brussels Convention does not govern pleas regarding lack of jurisdiction which shall be governed by the law of the forum, [that Convention] includes the conditions for validity of forum selection agreements, without prejudice to domestic laws of the Contracting States, which means that in the case of France, Article 48 of the New Code of Civil Procedure applies.

Article 17(1) of the Brussels Convention provides that an agreement regarding jurisdiction shall be concluded:

"a) in writing or orally and evidenced in writing, or

b) in a form which accords with the usages the parties established between themselves, or

c) in international commerce, in a form which accords with usages of which the parties are or ought to have been aware and which are widely known and regularly observes in the trade of the parties in contracts of the same type in the respective branch of commerce."

The invoices issued by [Seller] to [Buyer] contain conspicuously and in capital letter the phrases "PLACE OF JURISDICTION", "COMMERCIAL COURT OF PARIS", "GENERAL CONDITIONS OF SALE ON THE BACK OF THE INVOICE" and this was not contested by [Buyer]. Although a copy of the general conditions is not on file, a forum selection clause establishing jurisdiction of the Commercial Court of Paris is included in Article 14 of the general conditions.

[Buyer] received several invoices (nos. 96005583 and 96005588) on a regular basis containing the forum selection clause prior to the invoices in dispute and never reacted to or disputed such a clause.

The parties are bound by the usages established between themselves, the forum selection clause establishing jurisdiction of the Commercial Court of Paris was actually subject to an agreement between [Seller] and [Buyer], which is manifested clearly and precisely through the lack of any opposition to or questioning by [Buyer] of the forum selection clause stipulated in the invoices issued by [Seller], therefore, there is no evidence of an objection.

Article 17 of the Brussels Convention of 27 September 1968 includes a mandatory provision in favor of the jurisdiction chosen by the parties unless there is mandatory exclusive jurisdiction under Article 16 of the Convention or special jurisdiction under Articles 12 and 15, however, it is neither alleged nor supported that one of the latter hypotheses actually occurred. Therefore, the plea raised by [Buyer] regarding lack of jurisdiction is rejected and the related part of the previous judgment is confirmed.

Regarding payment for the goods

[Buyer] argues that its payment obligation under Article 1131 of the Civil Code is unfounded to the extent that [Seller] did not perform its duty to deliver under Article 30 of the Vienna Convention of 11 April 1980 on the International Sale of Goods, because the computer hardware was delivered by a third party.

The sales contract concluded between a Dutch company and a French company is governed by the Vienna Convention of 11 April 1980, of which the Netherlands and France are Contracting States. Article 1(1)(a) of the Convention makes [the CISG] applicable to sales of goods between parties having their places of business in different Contracting States.

Pursuant to Article 30 et seq. of the Convention, the seller has the obligation to deliver the goods and hand over the relating documents, while pursuant to Article 53 et seq., the buyer shall pay the price and take delivery of the goods.

[Seller] submitted the following evidence in support of its claim:

   -    Invoices no. 96005920 indicating a sum of f 230,000 and no. 96005927 indicating a sum of f 193,500 corresponding to order no. 9714.1289 sent by [Buyer] on 4 April 1997;
 
   -    Invoices no. 96006282 indicating a sum of f 123,000 and no. 96006305 indicating a sum of f 85,100 corresponding to orders no. 9718.1645 and no. 9718.1653, sent by [Buyer] on 28 and 29 April 1997 for pickup in the morning of 30 April;
 
   -    Invoices no. 97000060 indicating a sum of f 336,000 and no. 97000061 indicating a sum of f 205,000, representing a total of f 541,000 and corresponding to order no. 9719.1715 placed by [Buyer] on 6 May 1997 for pickup on 7 May;
 
   -    Pickup slip no. 97098179 by carrier "TTA L" regarding twenty-two packages on 9 April 1997, referring to invoice no. 960005927;
 
   -    Two slips from the carrier "MT R" showing that in the afternoon on 30 April 1997 the carrier picked up from the place of business of [Seller] in B. two time 50 packages of 60 kgs and transported them to Company C. Micro in P., and that invoices no. 96006282 and 96006305 bear the signature of the carrier's driver;
 
   -    A delivery slip from Company MT T dated 7 May 1997 showing a transportation that took place on the same day between [Seller] and Company C. Micro in P. [the bad quality of the photocopy submitted probably refers to twelve packages; the rest in illegible];
 
   -    Correspondence exchanged on 20 and 23 October 1997 with the carrier "TTA L" in which the latter company told [Seller]: "we hereby confirm that we have never been mandated by the Dutch company [Buyer] to deliver in The Netherlands…it was merely one single transportation by truck from B. in P. to Company C.";
 
   -    Correspondence on 27 October 1997 with Company TSG on having taken delivery of the goods subject to invoices no. 96005583 and 96005588 that had been paid to [Seller], according to the bank statement of Company G dated 22 to 30 April 1997, by Company Mega M., in which correspondence the carrier declares the following: "We wish to inform you that it is not your client, "Dutch company M." [Buyer], that assigned us with the transportation, as we do not know it in any way. The delivery request was given to us by TLCI P. We had no knowledge that the goods were to be delivered to The Netherlands, and in any case, we do not know of such a transport.";
 
   -    A protocol prepared on 4 July 1997 by the representatives of [Seller] and Company TLCI to stop the installment payment regarding the debt of Company TLCI and [Buyer] amounting to f 2,077,559.67 subject to two accounts called "documentary evidence of the balance" presented stapled to the protocol on which the numbers of the invoices in dispute were indicated;
 
   -    A security given to [Seller] on 21 April 1997 by M.N., who is identified in the above-mentioned protocol as a representative of Company TLCI, regarding the payment by [Buyer] in the amount of f 1,500,000;

[Seller] speculates, without submitting any evidence, that the goods were delivered to the French subsequent purchasers following resale by [Buyer], but did not prove that it had received the instructions from the latter for delivering the goods to Company C. in P. in cooperation with carriers TTA L or MT T. [Seller] failed to prove the effect of the relationship between Company TLCI and [Buyer] regarding the delivery to a third party of goods that had been ordered by [Buyer], and [Seller] is generally unable to explain the intervention of Company C and others whose role remains obscure regarding [Seller]'s contractual relations and habitual practices with its contractual partners.

[Seller], which cannot prove that it performed its obligation to deliver to the [Buyer], had also committed fundamental breach of contract in the light of Article 25 of the Vienna Convention of 11 April 1980 by causing a detriment that substantially deprived [Buyer] of what it was entitled to expect from the contract. Therefore:

   -    The judgment of the Commercial Court of Paris must be modified regarding the order that [Buyer] must pay for the goods relating to invoices no. 96005920, 96005927, 96006282 and 96006305; and
 
   -    We must confirm thr portion of the judgment which rejected the request of [Seller] regarding payment of invoices nos. 97000060 and 97000061; and
 
   -    [Seller] may not demand payment of the price from the [Buyer] pursuant to Article 62 of the Vienna Convention of 11 April 1980.

Regarding the payment of VAT and compensatory and moratory damages and interest

No VAT is due from [Buyer] on the invoiced sums specified above, for which [Buyer] is not liable. In addition, [Seller] failed to prove that it had performed its duty to pay VAT on the sums it had received.

Due to rejection of its principal claim, [Seller] may not claim damages and interest.

The judgment of the Commercial Court of Paris must be modified regarding the latter points and all other claims must be rejected.

Regarding the sums payable by [Seller] to [Buyer]

[Seller] acknowledges that it has to pay to [Buyer the sum of 20,225.59 Dutch florins pursuant to invoices no. 9719.1736 and 9725.2311 dated 7 May and 23 June 1997. The judgment of the Commercial Court of Paris that ordered execution of the compensation in Euros must be confirmed in this regard.

Regarding damages and interest for abuse of process, Article 700 of the New Code of Civil Procedure and the costs

[Buyer] requests the Court to order [Seller] to pay to [Buyer] f 50,000 for abuse of process. [Buyer] did not, however, establish any special circumstances that would give rise to intentional abuse of the appeals process by [Seller]. Therefore, this claim must be rejected.

Considering the rejection of its arguments, [Seller], which is ordered to pay the costs, may not request indemnification under Article 700 of the New Code of Civil Procedure, however, it does not seem unfair to order [Buyer] to pay the expenses incurred by [Buyer] and not included in the costs.

FOR THE ABOVE REASONS

The Court withdrew the order of closure of 15 June 2000, and in accordance with the agreement of the parties, announced a new order of closure on 7 September 2000.

The Court confirms the judgment of the Commercial Court of Paris dated 18 March 1999 regarding the following issues:

   -    Rejects the plea on lack of jurisdiction raised by [Buyer];
 
   -    Orders [Seller] to pay to [Buyer] the sum of 20,225.59 Dutch florins equaling EUR 44,571.33;
 
   -    Rejects the claim of [Seller] regarding the payment of invoices nos. 97000060 and 97000061.

The Court reverses the rest of the judgment as follows:

   -    Rejects the claim of [Seller] regarding the payment of invoices 96005920, 96005927, 96006282 and 96006305, the payment of VAT, and compensatory and moratory damages and interest;
 
   -    Rejects the claim of [Buyer] for damages and interest for abuse of process.

The Court finds that no compensation is due under Article 700 of the New Code of Civil Procedure.

The Court orders [Seller] to pay the costs of the first-instance proceedings and the appeal, and grants attorney S.C.P. B-C-C the right set out in Article 699 of the New Code of Civil Procedure.


FOOTNOTES

* All translations should be cross-checked against the original text. For purposes of this translation, Plaintiff-Appellee of France is referred to as [Seller] and Defendant-Appellan of Netherlands is referred to as [Buyer]. Amounts in French currency (French francs) are indicated as [f].

** Andrea Vincze is a Fellow of the Institute of International Commercial Law of the Pace University School of Law. She received her law degree from the University of Miskolc, Hungary, and her LL.M. at Pace Law School. She is working on her Ph.D. on ICSID arbitration, and is researching international commercial law and ADR.

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