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CISG CASE PRESENTATION

Belgium 27 January 2004 Appellate Court Liège (Reinfenrath Geflugel GmbH v. SA Herelixha) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040127b1.html]

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

Case Table of Contents


Case identification

DATE OF DECISION: 20040127 (27 January 2004)

JURISDICTION: Belgium

TRIBUNAL: Cour d'appel [Appellate Court] Liège

JUDGE(S): R. de Francquen, M. Ligot, A. Jacquemin

CASE NUMBER/DOCKET NUMBER: 2001/RG/1579

CASE NAME: Reinfenrath Geflugel GmbH v. SA Herelixha

CASE HISTORY: 1st instance Tribunal de commerce Liège 14 September 2001 [affirmed]

SELLER'S COUNTRY: Belgium (plaintiff)

BUYER'S COUNTRY: Germany (defendant)

GOODS INVOLVED: Poultry


Case outline

Reproduced with permission of CISG-Belgium database of Katholieke Universitiet Leuven

"Jurisdiction - forum clause in general conditions - practice between the parties (Brussels Convention). Notice of non-conformituy (dioxin in poultry) - too late."

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 9 ; 38 ; 39

Classification of issues using UNCITRAL classification code numbers:

9C [Practices established by the parties];

38A [Buyer's obligation to examine goods];

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

Descriptors: Usages and practices ; Standard terms and conditions ; Examination of goods ; Lack of conformity notice, timeliness

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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

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=983&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (French): CISG-Belgium database of Katholieke Universiteit Leuven <http://www.law.kuleuven.ac.be/ipr/eng/cases/2004-01-27.html>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=983&step=FullText>

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

Cour d'appel [Appellate Court] Liège
Reinfenrath Geflugel GmbH [Buyer] v. SA Herelixha [Seller]

27 January 2004 [2001/RG/1579]

Translation [*] by Linus Meyer [**]

[...]

PARTICULARS OF THE PROCEEDING

The appellant, Reifgenrath Geflugel GmbH [*] [Buyer], which has its seat in Betzdorf, 57520 Steinbach, (Germany), is represented by Maître Marichal Yves, Advocate in Liège. The appellee [Seller], SA [*] Herelixha, recorded in the companies' register in Liège, which has its seat in 4684 Haccourt, is represented by Maître Low Sandro, advocate in Liège.

The court refers to the protocol of the oral proceedings of 3 January 2002, 16 December 2003, 20 and 27 January 2004.

On 13 December 2001, Buyer has appealed the first instance decision in this dispute by the Commercial Court of Liège of 14 September 2001.

With respect to this appeal, on 9 May 2003 the [Seller] has raised a demand for damages for frivolous litigation.

FIRST INSTANCE DECISION

The judges in the first instance proceedings have produced a complete record of the dispute and the underlying facts to which this court refers.

In the first instance proceeding, the Commercial Court decided mainly in favor of the [Seller] and ordered the [Buyer] to pay the balance billed by the [Seller], 36,589 [DM], plus interest at the contractual rate of 12 %, plus a contractual penalty of 3,659 [DM]. The Commercial Court rejected the [Seller]'s claim for payment of 112,250 [F] for non-returned boxes and pallets.

The appeal is only directed at the first decision.

Except for one argument with respect the last point, the judgment has to be confirmed for the arguments by which it adequately and convincingly deals with the [Buyer]'s allegations, which the [Buyer] only repeated in the appellate proceeding.

[BUYER]'S APPEAL

The [Buyer] upholds its contention that only German courts were internationally competent under art. 2 and art. 17 of the Brussels Convention, the reason being the place of delivery of the goods and the place of fulfilment.

The parties were in an ongoing business relationship, the claimed balance results from 25 invoices dating from 2 December 1998 until 26 May 1999, with a total sum of 188,423 [DM]. Each of these invoices referred to the [Seller]'s general terms and conditions printed on the back of the invoice, the reference was printed on the front. Art. 9 of the general conditions stipulated the exclusive competence of Belgian courts and the application of Belgian law. The [Buyer] has never contested that the business relationship was governed by those general conditions in the first instance proceeding before the [Seller] had requested a decision under art. 751 of the Code Judiciare.

[Buyer] has also transferred sums on 3 and 11 May 1999, which the [Seller] had requested as interest for the unpaid bills, calculated at the rate of 12 % per annum which was stipulated in its general terms and conditions without the slightest sign of protest.

[Buyer] has argued that the [Seller]'s general terms and conditions were in contradiction with its own general terms and conditions; it has, however, neither presented these conditions in the first instance proceedings nor on appeal. [Buyer] does not at all explain how its conditions could have become part of the contract despite the absence of any presented or only alleged order form or confirmation of order. The only contractual documents that governed the legal relationship between [Seller] and [Buyer] were the invoices by [Seller] on which the general terms and conditions were printed.

OPINION OF THE COURT

[JURISDICTION]

Art. 17 of the Brussels Convention, on which the [Buyer] bases its appeal, provides that the agreement, by which the parties designate a tribunal of a member state as exclusively competent for the disputes arising out of or in connection with a legal relationship need only be concluded in writing or orally with a written confirmation, but also, in international commerce, and particularly in ongoing business relationships between the parties, in a form which accords with a usage of which the parties are or ought to have been aware.

"In these especially flexible methods of reaching an agreement, which are adapted to particular situations (ongoing business relationships, international commerce), in which the risk of a secret and disloyal introduction of a clause into the relationship is smaller at the outset, the requirements for the validity of an agreement can be reduced to its substance (the agreement itself) -- this confirms that art. 17, which seems to govern this topic with, or to be more precise, through its possible formal aspect - can, on the other hand, be proven indirectly according to the concept of a 'presumption of knowledge understood in the sense of a possibility to know in good faith.' It seems that these ways of concluding the agreement do not set less strict requirements as to the conclusion of the agreement, but only establish a greater flexibility as to its proof, however, with the exception that the systematic condition of good faith seems to indicate the possibility -- at least in its specific field of application -- to sanction the disloyal behavior of a party which has not opposed a clause at the due moment but later refuses its application, by a real presumption. In this case, and only in this case, the presumed agreement effectively replaces the party's actual acceptance; this will, however, not be a real surprise for the party, as it had to know that it was culpably creating and upholding the appearance of an effective agreement." (BORN, FALLON, VAN BOXSTAEL, Droit judiciaire international, Chronique de jurisprudence, 1991-1998, Les dossiers du J.T., p.299, 301 and 302)

The [Buyer] cannot deny without infringing the principle of good faith, to have effectively accepted the agreement, or at least to have culpably created and later upheld the appearance of an agreement to the effect that the general terms and conditions of the [Seller] governed their ongoing business relationship, as the [Buyer] has never contested them in due time, even though they were repeated at every dealing.

The first instance court was therefore right in assuming its competence under art. 17 of the Brussels Convention and on the basis that the parties had agreed upon Liège as the forum through art. 9 of the [Seller]'s general terms and conditions.

[APPLICATION OF THE CISG]

It is also correct that, on the basis of the same clause, the application to this dispute of Belgian law, and through it, the CISG, was assumed.

Regarding all circumstances of the case, in the absence of even a contrary stipulation in general terms and conditions, the dispute fell within the CISG's scope of application. It was a contract for the sale of goods between parties that had their place of business in different States that were both Contracting States of the CISG. For this situation, the CISG contains a direct rule of application which takes precedence over national law (FALLON/PHILIPPE, La Convention de Vienne sur les contrats de vente internationale de marchandise, JT 1998, p. 19, no. 13)

According to Arts. 38 and 39 CISG, the buyer has the obligation to examine the goods within as short a period as is practicable in the circumstances, beginning at the goods' arrival at the destination if the goods have been transported. 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.

It follows from the facts recorded precisely by the judges in the first instance proceeding that the [Buyer] has not given notice of the non-conformity that it is alleging today within the reasonable amount of time required by the CISG and, a fortiori, not within the even stricter time limit required by the [Seller]'s general terms and conditions.

The [Buyer] alleges that the poultry had been seized and destroyed by German authorities due to a suspected contamination with dioxin. However, [Buyer] cannot contest that it is not able to provide any document proving that it had informed the [Seller] of this purported major problem. It has also never contested the [Seller]'s invoices; [Buyer] has never addressed this court with respect to the important partial payments it made for goods which it claims were non-conforming. In contrast, by letters of 23 February 2001 and 29 November 2001 [Buyer] has proposed a settlement with respect to the balance owed, not mentioning a word about the alleged problem but warning the [Seller] of the danger of initiating judicial proceedings would have for one or the other party's economic future, as [Buyer] states it would not hesitate to protract the proceedings by several appeals while stating that the acceptance of its settlement proposal could lead to the resuming of the business relations.

The judges therefore dealt in a particularly well-founded manner with the [Buyer]'s assertion that it had been deprived of its rights resulting from a possible non-conformity and could therefore not be requested to prove the non-conformity at this stage of the procedure.

[AUXILIARY DECISIONS]

Every invoice by the [Seller] mentioned the number of boxes and pallets delivered without billing for them, because the boxes and pallets were normally taken back at a later delivery which would then mention the return. However, [Seller] maintains that this had not been the case for the material used for the last delivery (409 boxes and 21 plastic pallets mentioned in the bill of 26 May 1999).

[Seller] has provided a copy of a fax of 20 March 2001, sent to [Buyer] in a vain effort to recover the pallets, after a previous pickup tour had already been fruitless. No document of protest against this enquiry had been provided by [Buyer] neither with respect to the ground of the request nor to its amount. Therefore, the [Seller] has to be granted an additional 3,030.47 [EUR], based on 6.19 [EUR] per box and 61.97 [EUR] per pallet.

The [Buyer]'s appeal has obviously been raised in order to delay the proceedings. The letter of 23 February 2001 already foreshadowed this even before the first judge could decide; the behavior during the appellate proceeding, calling several points of appeal certain but not giving reasons for them, confirms that result. The [Seller] once again had to resort to a procedure under art. 751 of the Code Judiciare in order to motivate the [Buyer] to give a statement of arguments, which were then identical to those brought forward in the first instance proceeding under the same conditions.

[Seller] is therefore entitled to indemnification for the damage [Buyer] has caused deliberately by its tactic indicated in letter mentioned above ("all these difficulties will yield more for courts and lawyers than for our companies"). An additional amount of 2,500 [EUR] is ordered ex aequo et bono.

JUDGMENT

Under art. 24 of the law of 15 June 1935, the court rules::

   -    The appeal is admitted,
   -    The judgement of the Commercial Court is upheld with the exception that the amount which [Buyer] was ordered to pay to [Seller] is raised by 3,030.37 [EUR] plus interest at the legal rate from 20 March 2001.

The [Buyer] is also ordered to pay a sum of 2,500 [EUR] for frivolous litigation plus the costs of the appellate proceeding, an amount of 1,048.49 according to the record of costs which was not contested.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Defendant-Appellant of Germany is referred to as [Buyer]; Plaintiff-Appellee of Belgium is referred to as [Seller]. Amounts in former German currency are indicated as [DM]; amounts in former Belgian currency are indicated as [F], amounts in European currency are indicated as [EUR]

Translator's note on other abbreviations: GmbH = Gesellschaft mit bedingter Haftung [German limited liability company], SA = Société anonyme [corporation].

** Linus Meyer has studied law in Osnabrueck, Germany and Lausanne, Switzerland. He was a participant in the 12th and a coach in the 13th Willem C. Vis Moot.

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Pace Law School Institute of International Commercial Law - Last updated May 20, 2008
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