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CISG CASE PRESENTATION

Belgium 8 October 2003 Appellate Court Ghent (Textiles case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/031008b1..html]

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

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Case identification

DATE OF DECISION: 20031008 (8 October 2003)

JURISDICTION: Belgium

TRIBUNAL: Hof van Beroep [Appellate Court] Ghent

JUDGE(S): E. Teirlinck, J. Baudrez, A. Deene

CASE NUMBER/DOCKET NUMBER: 2002/AR/1184

CASE NAME: K & Cie S.A. v. P. NV

CASE HISTORY: 1st instance Rb Kortrijk 13 March 2002

SELLER'S COUNTRY: Belgium (plaintiff)

BUYER'S COUNTRY: France (defendant)

GOODS INVOLVED: Textiles


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 38 ; 39 ; 78

Classification of issues using UNCITRAL classification code numbers:

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

39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

78A [Interest on delay in receiving price or any other sum in arrears]

Descriptors: Examination of goods ; Lack of conformity notice, timeliness ; Interest

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Editorial remarks

Overview comments (CISG Belgium database): Notice of lack of conformity of goods -- only after buyer sold further to shop -- too late. Interest -- possible as of date of invoice

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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 (Dutch): CISG-Belgium database of Katholieke Universiteit Leuven <http://www.law.kuleuven.ac.be/ipr/eng/cases/2003-10-08.html>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]; 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

Hof van Beroep [Court of Appeals] Ghent
K&Cie S.A. [Buyer] v P. NV [Seller]

8 October 2003 [2002/AR/1184]

Translation [*] by Kristof Cox [**]

[...]

[Data on the case on appeal]

The judgment under appeal:

   -    Declared the main claim of [Seller] acceptable and founded; main claim for payment of 17,311.05 by [Buyer] for delivery of textile according to invoice nr. 23 of 18 January 2000, plus interest at 7% from 9 March 2000 to the day of full payment, plus the costs of the proceedings.
 
   -    Declared the counterclaim of [Buyer] acceptable but unfounded; counterclaim by which [Buyer], provisionary, claims payment by [Seller] of 1 Belgian franc provision and the appointment of a judicial expert, alleging that, on the one hand, the textile that was delivered contained miniscule fibers (so-called 'volards'), and, on the other hand, was of the wrong composition.

2.1. [Buyer] filed an appeal because it is of the opinion that the Court of First Instance mistakenly decided that it is not entitled to dispute the conformity of the goods that were delivered, although it protested in a timely manner. Moreover, it is still of the opinion that it cannot be ordered to pay for that delivery, since it cannot be disputed that the goods that were delivered were non-conforming.

For those reasons, [Buyer] seeks to have the judgment quashed, and the Court, render a new decision, declaring the original main claim by [Seller] as unfounded.

In subsidiary order [Buyer] reasserts its original counterclaim, with this difference that it now claims a 1 provisionary payment.

In its memorandum on appeal, [Seller] pleads that the judgment under appeal should be confirmed; this with the exception of the legal interest on the sum of 17,311.65 , of which [Seller] claims payment from 18 January 2000 (in the dispositive part of its memorandum mistakenly mentioned as "18 January 2002"), thus expanding its original claim.

[Discussion]

3. The Court of First Instance extensively and correctly stated the facts of the dispute on pages 1 and 2 of the judgment under appeal. The Court refers to these statements and makes them its own.

4. In the opinion of the Court, the Court of First Instance took the correct decision, except as to the interest that was awarded. The Court repeats and confirms the grounds and reasons of the Court of First Instance in the judgment under appeal. These are not rebutted by the reasons and conclusions of [Buyer] on appeal.

The Court adds the following:

   -    The applicability of the CISG is no longer disputed by the parties;
 
   -    On the basis of Articles 38 and 39 CISG the buyer must examine the goods at the moment of delivery or as soon as possible thereafter, and when he discovers a non-conformity, he must give notice to the seller within a reasonable time. The mere fact that the delivery of the ordered goods was possibly untimely does not alter this.
 
   -    The Court is not convinced by the allegation of [Buyer] that the so-called 'volards' could only be discovered at the moment the delivered textile was being processed by E., and that it was not able to detect these fibers itself.
 
The unilateral expert report of Pierre Henri Protat, presented by [Buyer] itself, mentions that only colorless 'volards', in certain cases, can only be detected at the moment the textile is processed in which they are present. It is not proven that the textile in dispute for which the invoice of 18 January 2000 was made, contained colorless 'volards'.
 
[Buyer]'s customer, namely Company E., complained in its fax message of 14 April 2000 only about 'nombreux file étrangers de couleurs' (free translation: several colored fibers), while the Institut Textile de France, which at the request of [Seller] examined a sample of the textile, only mentioned 'fibres brûnatres' (free translation: brownish fibers) in its report of 17 July 2000.
 
Thus, the Court of First Instance decided correctly and that [Buyer] undoubtedly could have discovered the alleged 'volards' between the moment of delivery of the textile on 17 January 2000 and the moment it was sent to N.V. E., after having printed it on 31 January 2000, if it would have examined it adequately; and that the protest of [Buyer] in a letter of 5 June 2000 to [Seller] was certainly not within a reasonable time as meant in Article 39(1) CISG.
 
   -    In a letter of 16 May 2000 of [Buyer] to the credit insurer of [Seller], namely S.A. EC, [Buyer] also mentioned that there were quality problems with the goods delivered by [Seller], and that it found that the real composition of the textile that was delivered was not in conformity with the composition as mentioned on the contracts of sale with [Seller].
 
The Court fully agrees with the Court of First Instance where it considered that it is at least unclear whether this protest was for the goods for which [Seller] had filed a claim in payment against [Buyer], or for goods from other contracts of sale between the parties.
 
This is all the more so since [Buyer] with regard to the delivered goods in dispute in a later letter of 5 June 2000, directly to [Seller], without reservation still referred to the textile 'Qualité New Surf/ 75 lin - 25% ramie' (free translation: quality New Surf / 75% linen - 25% ramie), and in this letter only mentioned complaints which one of its customers had made with regard to several 'volards' in the textile because of which the goods were unfit for being sold.
 
Further, [Buyer] does not show that it had received complaints from its customers about the delivered textile with regard to a 100% ramie - composition instead of 75% linen/ 25% ramie before 16 May 2000.
In these circumstances, the contents of the letter of 16 May 2000 could not possibly refer to the said faulty composition of the textile that was delivered and for which on invoice was issued on 18 January 2000, since [Buyer] only became aware of this on 20 September 2000 after an expertise at its request by the Institut Textile de France.
 
In any event, [Buyer] only mentioned the faulty composition made known to it by the Institut Textile de France in its memorandum before the Court of First Instance on 19 February 2001. Thus, it has certainly not acted within a reasonable term mentioned in Article 39(1) CISG.
 
   -    Article 78 CISG states that, if a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it. The interest is due from the moment payment should have taken place. The Court of First Instance considered correctly that interest on the main sum of invoice no. 23 of 18 January 2000 was principally due from the same date, seen the provision on the invoice in that regard, but that it could only allow interest from the date of the formal notice of 9 March 2000, since [Seller] only claimed interest from that date on.
 
Now [Seller] claims interest from 18 January 2000 by extension of its original claim. This can be allowed, all the more since [Buyer] does not contest the calculation of interest.

FOR THOSE REASONS

THE COURT

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff-Appellee of Belgium is referred to as [Seller] and Defendant-Appellant of France is referred to as [Buyer].

** Kristof Cox is a researcher at the Institute for International Trade Law at the Catholic University of Leuven (Belgium). He is preparing a Ph.D. on the effects of an arbitration award on third parties. Further, he regularly publishes articles and case notes on the CISG and International Commercial Arbitration. Kristof Cox can be contacted at <Kristof.cox@law.kuleuven.be>.

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Pace Law School Institute of International Commercial Law - Last updated May 21, 2008
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