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CISG CASE PRESENTATION

Spain 12 September 2001 Appellate Court Barcelona (Frozen cuttlefish and octopus case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/010912s4.html]

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

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Case identification

DATE OF DECISION: 20010912 (12 September 2001)

JURISDICTION: Spain

TRIBUNAL: Audiencia Provincial de Barcelona [Appellate Court], sección 4ª

JUDGE(S): Mercedes Hernándes Ruiz-Olalde

CASE NUMBER/DOCKET NUMBER: 566/2000

CASE NAME: Pescados J. Gutiérrez, S.I. v. Port Said Export Fish

CASE HISTORY: 1st instance Juzgado Primera Instancia No. 12 de Barcelona 9 April 2000

SELLER'S COUNTRY: Egypt (defendant)

BUYER'S COUNTRY: Spain (plaintiff)

GOODS INVOLVED: Frozen cuttlefish and octopus


Case abstract

SPAIN: Audiencia Provincial de Barcelona 12 September 2001

Case law on UNCITRAL texts (CLOUT) abstract no. 487

Reproduced with permission of UNCITRAL

Abstract prepared by Maria del Pilar Perales Viscasillas, National Correspondent

The buyer, a Spanish company, purchased from an Egyptian seller 139,050 kg of frozen cuttlefish and octopus on 5 May 1997. The goods were to be transported from Egypt to Spain. On their arrival, the buyer noted missing boxes and differences in the weight and size of the fish. The seller maintained that the action was timebarred. The Court referred to paragraphs (1) and (2) of article 39 CISG and noted that the claim had been submitted within the time-limit of two years, as required by article 39(2). It also pointed out that notice pursuant to article 39 had been given within a reasonable time. Specifically, loading took place in Egypt on 4 and 5 May 1997, the goods arrived in Barcelona on 17 May, at which time they were deposited in cold-storage premises of a third company. The reports on the condition of the goods were issued on 18 and 19 June and the claim was submitted on 30 June 1997. The Court of Appeals also found that compensation was due by reason of the lack of conformity of the goods, citing article 50 of the Convention.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Article 39 [Also cited: Article 50 ]

Classification of issues using UNCITRAL classification code numbers:

39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]

Descriptors: Lack of conformity, timeliness

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

Spanish: CISG-Spain and Latin America website <http://www.uc3m.es/cisg/respan22.htm>

CITATIONS TO TEXT OF DECISION

Original language (Spanish): CISG-Spain and Latin America website <http://www.uc3m.es/cisg/sespan22.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (this case and related cases cited in addendum to opinion)

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Audiencia Provincial de Barcelona, 12 September 2001

Translation [*] by Alejandro Osuna [**]

[...]

Visros, en grado de apelación, ante la Sección Cuarta de esta Audiencia Provincial, los presentes autos de Juicio declarativo de menor cuantía no. 510/1997, seguidos por el Juzgado de Primera Instancia no. 12 de Barcelona, a instancia de Pescados J. Gutiérrez, S.L. representado por el Procurador D. Alfredo M. S. y dirigido por el Letrado D. L. B. C., contra Port Said Factory for Export Fish, representado por la Procuradora D. Elena S. de V., y dirigido por el Letrado D. José M. H. L.; los cuales penden ante esta Superioridad en virtud del recurso de apelación interpuesto por ambas partes contra la Sentencia dictada en los mismos el día 9 de abril de 2000, por el Sr/a. Juez del expresado Juzgado.

PROCEDURAL BACKGROUND

FIRST. -- The part of the judgment that is appealed is as follows: "ORDER: The claim filed on behalf of Pescados J. Gutiérrez, S.L. [Buyer], against Port Said Factory Export Fish [Seller] is DISMISSED, along with the [Seller]'s counterclaim, and I absolve all of the parties from the claims made against the other parties, without making any special award regarding the procedural expenses incurred."

SECOND. -- Appeals were filed against this judgment by both parties and were admitted in both effects; the case was brought before this Superior Court; prior notice was given to the parties, who appeared within the legal period, and a public hearing was held on 18 June 2001, the results of which are mentioned in this file.

THIRD. -- All legal requirements in this suit where met and complied with, except for the period to issue this judgment.

Magistrate Doña Mercedes Hernández Ruiz-Olalde wrote the opinion.

The legal basis of the appealed judgment is accepted only to the extent that it does not contradict the following

LEGAL BASIS

FIRST. -- Having analyzed the judgment that put an end to the proceedings in the first instance, the reasoning of that court and the positions of the [Buyer] and [Seller] and the claim contained in the memorandum, the conclusions are:

     -   There was a sales agreement involving 139,050 kgs of frozen cuttlefish and octopus for U.S. $443,065.20, dated 5 May 1997, transported from Egypt to Spain on the ship "Gulf Spirit", for which buyer opened a letter of credit with Banca Catalana, in the amount of $550,950, and that in April of that year there was a withdrawal from the same;
 
     -   Upon arrival in Barcelona, when the goods were unloaded and placed in the refrigerated storage of Cefrusa in containers CKTU 7897040, LPIU 5865170, LPIU 5861364, ITLU 7211710, ITLU 7239810 y ITLU 7241946, certain deficiencies were detected, pursuant to a report prepared by Corporation SGS (doc 5), and ratified by expert Perito SR Morell Blanco, of Company Supertecna Española;
 
     -   There is nothing to show that the goods were examined in Egypt by the manager of the [Buyer] at the time of loading of the goods. And having dismissed the defense of staleness of the claim, which in reality concerns a statute of limitations, in applying the provisions of the Vienna Convention of 1980 and considering, presumptively that there was a formal claim, considering that the second shipment 35/97, (doc. 5 of the response) was sent as compensation;
 
     -   However, the damages claimed by the [Buyer] were denied, since the sale was subject to the FOB Incoterm, which implies that the risks of loss or damage to the goods are transferred to the buyer once the goods pass the rail in the port of shipment, absent evidence showing that the goods suffered a loss or damage before the shipment.
 
     -   Additionally, the Court of First Instance dismissed the [Seller]'s counterclaim, after dismissing the raised defenses, when concluding that a second sale was not made but rather the second shipment was made to make up for the deficiencies of the first shipment, and the court made no award as to fees.

Both litigants disagreed with the judgment, and while [Buyer] considered that in principle the conclusions as to the facts were correct, it disagreed with the court absolving the [Seller], since [Buyer] considered that it had been proved that the size and weight, etc., did not vary during their transportation, since the containers were sealed, and the damages could not have occurred outside of the seller's warehouse, thus restated his initial claim.

[Seller] insists that the defense it raised based on the limitation period was applicable based on articles 336 et seq. of the Commerce Code, that presumption concerning notice was erroneous as well as the conclusion that the second shipment had been made in compensation; to the contrary, that it was actually a second shipment that could be the object of an attachment, and therefore requested he be absolved and that his counterclaim be admitted.

SECOND. -- There is no doubt that the sale is of a commercial character and that the Commerce Code establishes a shorter period than the Civil Code, concerning the sales governed in that statute for purposes of claiming against the seller because of vices, defects as to quantity or quality of the goods sold and delivered. In article 336, there is a period of four days following receipt of the enfardados or packaged commodities when it concerns defects as to quantity or quality.

If the defects are more serious and profound, and fall within what are known in the Commerce Code as hidden defects, pursuant to article 342, it is inexcusable that the claim be made within thirty days following receipt of the goods and the exercise of the claim must be made within six months as provided for in article 1.490 of the Civil Code, terms that are both fixed and mandatory since they address the issue of staleness (judgments of 21 February 1957, 24 April, 6 July of 1984 and 20 November 1991, among others).

It is also true that the jurisprudential theory, concerning the adecuación of the rule to current social reality, pursuant to article 3 of the Civil Code, have made the rules of commercial law flexible, because of the complexity of the goods that are placed in the stream of commerce, moreover because of complicated internal components, in which it is difficult to ascertain determinative defects as to the adequacy or idealness, if the pertinent and sometimes difficult technical testings are not effected or can only arise when they are made to function industrially. (J. of 14 May 1992).

In the instant case, we have before us an international sale in which the United Nations Convention of 11 April 1980, made in Vienna, is applicable, to which Egypt and Spain have adhered on 6 December1982 and 24 July1990, whose article 39 provides:

"(1) The buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.

"(2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time limit is inconsistent with a contractual period of guarantee."

In this case, the claim was not only filed within that period, the notice and claim was made within a reasonable time, because even if we do without the presumptions concerning the communications or the compensation by means of the second shipment, the loading took place in Egypt on 4 and 5 May 1997, arriving in Barcelona on the 14th day, and the goods were deposited in the refrigerated storage with the Sociedad Anónima Cefrusa, the reports issued by SGS; Española de Control S.A. on 18 and 19 June 1997, and the claim was filed within a few days after, specifically on 30 June 1997, obrando burofax al folio 157, addressed to the seller, that even if it was made along with the claim, it was in the month of August, there being no evidence of a response to the contrary, it described that there had been conversations among the parties, concerning the difference between the purchased and delivered goods, and also offered the seller to chose a different expert, to which there is no evidence that a reply was made. Thus, based on the said provision, the defense of lack of timely notice made by [Seller] is hereby dismissed.

THIRD. -- In view of the evidence submitted, and in concrete, the reports made by Cefrusa attached to the escrito rector, y de SGS, y la más documental obrante al folio 545, referente al contenedor LPIU 586136-4, reiterados a los folios 608 a 615), complementados por el informe emitido por el perito de Supertecna (folio 163):

     -   This Court concurs with the Judge of the First Instance that the deficiencies concerning the loss of boxes, the discrepancies of size and weight of the fish have been proven;
 
     -   However, we disagree that there should not be an award for damages, as he states, which even contradicts the thesis that is mentioned in his judgment that the second order was a compensation for deficiencies, since that should have been seen as an acknowledgment that the seller knew and had assumed the obligation to indemnify, as provided under the Convention, whose article [50] provides that if the goods do not conform with the contract and whether or not the price has already been paid, the buyer may reduce the price in the same proportion as the value that the goods actually delivered had at the time of the delivery bears to the value that conforming goods would have had at that time, and even if it is true that the transaction was made Free on Board (FOB), the risk during transport is assumed by the buyer;
 
     -   In this case what is questioned is not the deterioration of the goods but rather the variation of the same, which makes it not only unbelievable that during the voyage all of the analyzed boxes had been changed regarding weight and caliber, but also that as the appealing party pointed out, not only is there not any evidence that the boxes had been un-taped but the contrary, which impedes their manipulation.
 
     -   And it is evidenced in folios 635 and 636 of the response given by the Port Authority of Barcelona, concerning the containers previously described, that upon their unloading the ports inspection and quality team (EQ) did not take note of any incident upon unloading, that the band that is placed on the containers upon their unloading is done by personal hired by the empresa estibadora, in this case TCB and that the Port Authority has charged with the control of quality equipment, to the Corporation SGS because of its recognized authority and independence in load inspection, as explained by the Director of Cefrusa (p. 663 and 657) in addition to certifying the albaranes issued by the company, that as an authorized customs warehouse, they control the bultos and weight of the goods that are deposited, and that they know that the containers were not manipulated during the voyage, since they break the seals directly, and it is their employees who extract the goods from inside the container, and the testimony of D. Miguel Angel Olmos, legal representative of SGS, folio 592), that the ratified documents no. 5 and 7 of the claim, that they participated in the warehouses of Cefrusa, that he witnessed the opening of the containers and if the seals are not the same from the point of origin, they are placed at the terminal, as evidence that they have not been manipulated.

The theory that the buyer approved of the shipment is also discarded, because his presence in that country cannot be deemed an inspection of the goods, the testimony of the [Buyer] was not ratified and the report that was included in support of said testimony is not credible, given the answer made by the Agent for Lloyds, (doc 5 y 6 acompañados a la contestación a la reconvención) and testimony by its Agent in Barcelona D.J.A. Domínguez Casanova (folios 544 and 588), all of which supports the reduction of the price, but concerning its quantum, and because it was estimated by the [Buyer], in exhibit 8 of his claim, and as claimed by the representative of SGS, when he states that he had not obtained an experts' appraisal of docs 8 thru 8/6. This is deferred to the judgment enforcement phase, to be based on the documents issued by Cefrusa and by SGS.

FOURTH. -- Concerning the [Seller]'s counterclaim, even if it estimated that there is not sufficient evidence nor legal presumption to consider that the supply was free of charge, there also is no evidence that there was a meeting of the minds concerning this second sale, nor is there a purchase order, nor was a letter of credit opened, contrary to what is stated in the [Seller]'s counterclaim, nor was the [Buyer] mentioned in the bill of lading, nor did he pay for the transport, in fact, the counterclaiming [Seller] attempted to ship the goods to an Italian company. Lastly, the [Buyer] did not take over the goods; therefore, in any case, [Seller] having failing to prove the sales contracts, the [Buyer] cannot be forced to pay the price, hence the judgment is to be confirmed.

FIFTH. -- Concerning the costs En cuanto a las costas dándose una estimación parcial de la demanda, y recursos, there is no express imposition, and we affirm this part of the judgment against the [Buyer] to the payment of costs derived from the [Seller]'s counterclaim.

VISTOS los artículos de pertinente aplicación.

IT IS HEREBY ORDERED:

     -   We find partially substantiated the appeals against the judgment of 9 April 2000 of the Court of First Instance of Barcelona that were filed by the [Buyer] and the [Seller];
 
     -   We revoke that judgment and sustain the claim that was filed by the [Buyer] against the [Seller];
 
     -   We order the [Seller] to indemnify for the deficient commodities supplied in its performance of its contract made by the parties in May 1997, in an amount to be estimated when the judgment is enforced, and no special award on fees is made in any of the two instances;
 
     -   We leave the rest of the findings intact concerning the [Seller]'s counterclaim, and impose on the [Seller] the costs derived from this counterclaim;
 
     -   Once this judgment becomes final, we order that the file be returned to the judge where this case originated, with a copy of the same for its compliance.

Así por esta nuestra sentencia, de la que se unirá certificación al rollo, lo pronunciamos, mandamos y firmamos.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff (and Respondent in the Counterclaim) of Spain is referred to as [Buyer], and the Defendant (and Counterclaimant) of Egypt is referred to as [Seller].

** Alejandro Osuna [enter bio info]

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Pace Law School Institute of International Commercial Law - Last updated October 20, 2004
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