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CISG CASE PRESENTATION

Spain 3 October 2002 Appellate Court Pontevedra (Frozen stockfish case)
[Cite as: http://cisgw3.law.pace.edu/cases/021003s4.html]

Primary source(s) of information for case presentation: CISG-Spain and Latin America website

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Case identification

DATE OF DECISION: 20021003 (3 October 2002)

JURISDICTION: Spain

TRIBUNAL: Audiencia Provincial de la Pontevedra [Appellate Court], sección 6ª

JUDGE(S): Magdalena Fernández Soto

CASE NUMBER/DOCKET NUMBER: 3036/2002

CASE NAME: Jabsheh Trading Est. v. Iberconsa

CASE HISTORY: 1st instance Sentencia de Primera Instancia No. 8 de Santiago de Vigo 22 January 2002

SELLER'S COUNTRY: Spain (defendant)

BUYER'S COUNTRY: Jordan (plaintiff)

GOODS INVOLVED: Frozen stockfish


Case abstract

SPAIN: Audiencia Provincial de la Pontevedra 3 October 2002

Case law on UNCITRAL texts (CLOUT) abstract no. 484

Reproduced with permission of UNCITRAL

Abstract prepared by Maria del Pilar Perales Viscasillas, National Correspondent

A Spanish seller and a Jordanian buyer entered into a contract for the CIF sale of frozen fish to be delivered to Jordan. The Jordanian authorities refused to permit the fish to be imported due to parasitic contamination, and the buyer notified the seller of the non-conformity. The seller resold the fish to a third party in Estonia, and refunded the price to the buyer, less the cost of the return shipment to Spain and the subsequent shipment to Estonia. The Court of First Instance concluded that the seller should reimburse the full freight costs it withheld from the buyer.

The Court of Appeals affirmed the decision, and reached its conclusions in law by reference both to CISG articles 26, 30, 35, 38, and 39 (as urged by the buyer), and to provisions of Spanish domestic law (as urged by the seller). In the Court's view, the buyer had examined and reported the defects in the goods within a reasonable time. The period in which the buyer carried out the examination of the goods was one month and the buyer gave notice within two months and filed a claim with the courts within two years. The Court also stated that "contrary to what happens in several domestic legal systems, avoidance is not judicial but becomes effective automatically after the obligation to give notice to the party in default is observed (article 26 of the Vienna Convention)". The Court also noted that the contract contained a cancellation clause which provided that the seller would assume full responsibility should the goods fail to pass health inspections in Jordan.

Furthermore, the Court noted that the seller acted against its own action (article 7.1 of the Spanish Civil Code) since the correspondence sent by the seller demonstrated that the seller assumed responsibility for the defects in the goods and also agreed to partial avoidance of the contract in reselling the goods and refunding part of the price to the buyer.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 26 ; 30 ; 35 ; 38 ; 39

Classification of issues using UNCITRAL classification code numbers:

26A [Effective declaration of avoidance: notice to the other party required];

30A [Seller’s obligations];

35A ; 35B [Conformity of goods: quality, quantity and description required by contract; Requirments implied by law];

38A [Buyer’s obligation to examine goods: time for examining goods];

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

Descriptors: Avoidance ; Conformity of goods ; Examination of goods ; Lack of conformity notice, timeliness

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Case Digest

Audiencia Provincial de Pontevedra 3 October 2002

Mercedes Romero Iglesias

FACTS AND DISPUTE

IBERCONSA (seller) sold frozen fish to JABSHEH Trading (buyer). The contract contained:

A CIF clause: Therefore, the risk passed to the buyer at the moment the goods were on the ship -- during the transport and unloading. The Court states that "this did not prevent the seller from delivering the goods in conformity with the contract and in regard to the agreement made by the parties, pursuant to the rules which regulate obligations under the Spanish law and also in accordance with the provisions contained in Arts. 30 and 35 CISG which regulate international sales of goods". The Court believes that the CISG (which Spain acceded to on 24 July 1990) is applicable "although the seller cites only Spanish domestic law without mentioning the CISG".

An Examination and notification clause: A clause which stipulated the moment when the examination had to take place and the possible effects of such examination. The clause stipulated that in case of "microbiology defects" the seller would assume full responsibility.

The goods reached port and were examined by Jordanian authorities. They determined that the fish was not suitable for human consumption as it contained parasites.

-   The buyer notified the seller that the goods were not in conformity with the contract and sent the goods back.
 
-   The seller accepted the return of the goods and resold them in Estonia.
 
-   The seller returned to the buyer the money buyer paid under their contract but deducted the CIF charges (Spain-Jordan / Spain-Estonia).

The buyer maintains that he is entitled to receive all of the money back including the CIF charges.

DECISION

The Court of Appeals ruled in favor of the buyer; the seller was directed to pay 11,489 dollars plus the legal interest.

The Court stated:

-   The seller accepted a partial avoidance of the contract and therefore the responsibilities attendant thereto. The Court states that in this case there has been a breach of a principle contained in the Spanish Civil Code (art. 7.1: "it is not lawful to operate against one's own acts when these acts modify or annul a right that becomes binding upon the causer of the acts ..." [Case law: STS 19 mayo 1998 [R] 1998, 4034]). The Court explains that not only did the seller accept his responsibility in the exchange of faxes, he went further; he resold the goods and refunded the money to the buyer deducting only the freight. In this way, the Tribunal believes that the seller accepted a partial avoidance of the contract and explains that "avoidance under the CISG, contrary to what happens in different domestic legal systems, is not juridical, it operates automatically once the notification is made to the breaching party (Art. 26 CISG)". Moreover, the Tribunal points out that the buyer conducted a timely examination of the goods and notified the seller of the lack of conformity within the reasonable time established by CISG Arts. 38 and 39. The examination took place one month after the contract had been concluded; the communication to the seller was two months after the examination.
 
-   The contract contained an avoidance clause which was agreed to by the parties. This clause stated that in the event the Jordanian authorities established the existence of defects in the microbiology of the goods, the seller would assume full responsibility. The Court decided that, in regard to the examination made by the Jordanian authorities and the experts of Lloyd´s of the agency of Amman, there is no doubt that part of the goods was refused as it did not comply with the the levels of health required by the Jordanian authorities; this certifies that the defects disqualified the goods for their purpose, to the dissatisfaction of the buyer, as the goods were not fit for the purpose for which they were provided. The Court states that it does not matter whether one applies the internal law of Spain or the CISG; under either law, the contract has been properly avoided. With respect to the internal law of Spain, the Court calls attention to the protection afforded by Arts. 1101 and 1124 of the Spanish Civil Code, as we have a case of a different object [translator's note: the Court is referring to an aliud], not a case of simple defects referred to in Art. 336 of the Spanish Commercial Code: it is what Spanish case law regards as "avoidance of the sales contract for disqualification of the goods". Therefore, it is possible to invoke the protection of the cited articles of the Spanish Civil Code, regardless of the absolute effectiveness which must been given to the avoidance clause agreed by the parties.
 
-   The contract clause which holds seller responsible in the event of microbiology defects is applicable to parasites. Seller alleged that this clause did not apply to parasites. The Court did not regard that as relevant, holding that the only relevant fact is "that the goods were not merchantable in Jordanian as they were not suitable for human consumption, regardless of the name given to the defect, as the goods were not in a good state (Art. 1281 Spanish Civil Code); this is the only interpretation which can be given to the matter, especially if we take into account that pursuant to the contract clause, the goods were expressly subject to the results of the examination of Jordanian health authorities and the fact that the health authorities found defects in them. As this occurred, the seller is responsible as seller supplied the goods without making sure of the quality required for the goods in Jordan".

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=895&step=Abstract>

Spanish: CISG-Spain and Latin America website <http://www.uc3m.es/cisg/espan24.htm>

CITATIONS TO TEXT OF DECISION

Original language (Spanish): CISG-Spain and Latin America website <http://www.uc3m.es/cisg/sespan24.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=895&step=FullText>

Translation: Unavailable

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); Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 205 et seq.

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Pace Law School Institute of International Commercial Law - Last updated December 5, 2005
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