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CISG CASE PRESENTATION

Belgium 28 January 2004 Appellate Court Gent (J.B. and G.B. v. BV H.V.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040128b1.html]

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

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Case identification

DATE OF DECISION: 20040128 (28 January 2004)

JURISDICTION: Belgium

TRIBUNAL: Hof van Beroep [Appellate Court] Gent

JUDGE(S): D. Floren

CASE NUMBER/DOCKET NUMBER: 2003/AR/902

CASE NAME: J.B. and G.B. v. BV H.V.

CASE HISTORY: 1st instance Rb van Koophandel Veurne 15 January 2003

SELLER'S COUNTRY: Netherlands (plaintiff)

BUYER'S COUNTRY: Belgium (defendant)

GOODS INVOLVED: Breeding sows and cages


Case outline

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

Non-conformity notice -- not proved that within reasonable time -- faxed copy of medicine -- not sufficient as notice. Presumption relating to latent defects -- does not exist under CISG. Case postponed -- debates re-opened on matter of amount already paid.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 38 ; 39 ; 40

Classification of issues using UNCITRAL classification code numbers:

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

39A ; 39A11 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; specification of non-conformity: degree of specificity required];

40A [Seller's knowledge of non-conformity]

Descriptors: Examination of goods ; Lack of conformity notice, timeliness ; Lack of conformity notice, specificity ; Lack of conformity known to seller

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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 (Dutch): CISG-Belgium database of Katholieke Universiteit Leuven <http://www.law.kuleuven.ac.be/ipr/eng/cases/2004-01-28.html>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 35 para. 49 Art. 39 para. 11

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Case text (English translation)

Queen Mary Case Translation Programme

Hof van Beroep [Appellate Court] Gent

28 January 2004

Translation [*] by Yurishan G. Wilsoe [**]

Translation edited by Thalia Kruger [***]

PARTIAL AWARD

In the case of:

1. J.B., farm help, residing at 8600 Diksmuide (Vladslo) ...,
2.G.B., farm help, residing at 8600 Diksmuide (Vladslo) ...,

Appellants [Buyers], having as counsel Mr. Rik Demeyer, advocate, 8000 Brugge ...

vs.

B.V. H.V., a company under Dutch law, with registered office in 5473 KT Dinthen, municipality of Bernheze (The Netherlands) ... and registered in the commercial register of the Chamber of Commerce Oost-Brabant at Eindhoven ...,

Respondent [Seller], having as counsel Mr. Wilfried Van Looveren, advocate, 2018 Antwerp ...,

The Appellate Court issues the following award:

-   The Appellate Court has heard the arguments and conclusions of parties during an open court session, and has considered the documents.
 
- The appeal against the award of 15 January 2003 rendered by the Commercial Court of Veurne was initiated with a summons, deposited with the registrar of the Appellate Court on 14 April 2003. It is timely deposited and is of the required form. No copy of the deposit is available.

I. BACKGROUND

      1. In a summons dated 28 June 2002, the [Seller] claims payment from the [Buyers] of 34,376.73, made up of 22,448.94 Euro based on the invoice balance, Euro 8,827.79 conventional interest and Euro 3,100.00 fixed damages.

The disputed invoices pertain to the sale of breeding sows and cage-installations, which the [Seller] had delivered to the [Buyers] in June and August 2000.

[Buyers] refused to pay the invoices because the delivered breeding sows were diseased, and a great number of the sows died as a result. Based on this, the [Buyers] put forth a counterclaim of Euro 30,000 in damages and a demand for the appointment of an expert.

      2. The Court of first instance declared [Seller]'s claim justified up to the main sum of Euro 22,448.94 plus interest at 10.50% per year from 5 September 2000.

[Buyers'] counterclaim was rejected because [Buyers] had not informed [Seller] of their complaints in a timely manner.

      3. [Buyers] cannot reconcile themselves with this decision. They maintain that, contrary to the finding of the Court of first instance, [Seller] had been timely informed of the fact that the delivered animals were diseased. In addition, they point out that the assessment of damages did not take into account a down payment made by [Buyers] in the amount of 33,000 guilders or Euro 14,974.75.

[Buyers] ask the Court to deny [Seller]'s claim and to reconsider their counterclaim, which consist of a payment order of Euro 30,000 in damages and the appointment of an expert.

      4. [Seller] asks the Court to dismiss the appeal and claims the full confirmation of the disputed decision. In addition, [Seller] claims damages in the amount of Euro 2,500.00 for a provocative and reckless appeal.

II. CONSIDERATONS

      1. The dispute between the parties consists, on the one hand, of [Buyers]' claim based on the non-conformity and defects of the animals which they had bought from [Seller] and the damage which they encountered as a result and, on the other hand, the consideration of a payment of Euro 33,000.

     2. The parties do not dispute that, as the Court of first instance quite rightly held, the contract for the sale of goods concluded between them falls under the auspices of the Vienna Convention on Contracts for the International Sale of Goods (CISG).

According to the provisions of this treaty, specifically articles 38 and 39, the buyer must examine the goods within as short a period as possible and he 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. Furthermore, 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.

It is up to buyer, who received the goods without any reservation, to provide evidence of the alleged non-conformity, as well of the fact that this non-conformity existed before the risk passed to buyer.

The non-conformity or the defects, which [Buyers] argue, concern diseases with which the breeding sows that were delivered by [Seller] in June and August 2000 were infected, according to [Buyers]. More precisely, [Buyers] claim that the animals were infected with "blauwziekte" [blue disease] (blood analyses, dated 17 October 2000) and with the "EMC-virus" or "encyphalomyocarditis", with bloody diarrhea (autopsy report, dated 2 February 2001).

In the letter from counsel for [Buyers] of 27 March 2002, there is explicit mention that the disease "abortus blauw" had immediately been determined at the time of acquisition and that some time afterwards a second disease had been determined, namely "EMC-blood diarrhea".

This writing contains the first traceable statement by [Buyers], who nevertheless hold that they had already prior to this informed [Seller] by telephone of their complaints, at which they note that the letter refers to several telephone conversations. Moreover, [Buyers] refer to a (non-dated) fax, which they apparently sent in December 2000, in which they promise payment of one and a half million francs in the course of January 2001 and in which at the bottom the following mention is made: "In addition to this fax: Medicinal instructions about the vaccine Miloxan for bloody diarrhea for your information". Conclusively, they also maintain that Paul Verhoeven, [Seller]'s appointee, was personally informed of the problems in October 2000.

Regarding this defense, first of all it has to be pointed out that there is no evidence of the alleged telephone conversations regarding the claimed non-conformity of the deliveries, and it has not been proven that Paul Verhoeven had been personally informed of [Buyers]' complaints. Now that no written confirmation is available, it is impossible to trace the precise content and impact of possible oral statements.

That in between delivery (August 2000) and March 2002 (first written reaction), no traceable statement regarding the condition of the animals was made, raises even more amazement, during which time, it should be noted, [Buyers] were repeatedly urged by [Seller] in writing to settle their back invoices regarding the deliveries.

The forwarded medicinal instructions can hardly be considered a notice of non-conformity of the goods bought, as called for by the provisions of the CISG. Indeed, the notice specified by the CISG is not bound by any specific formal requirements, nor does it have to specify the shortcomings in detail. However, it should at least be possible to conclude that the goods purchased are ridden with certain defects or for some reason or another are not in conformity with the contract, so that the seller, for whom it should be clear that the buyer has complaints regarding the delivery, is able to make a judgment about the consequence it should reserve for the complaint. The notice must enable parties to decide if certain measures (possibly regarding the furnishing of proof) arise.

It goes without saying that the mere forwarding of medicinal instructions (without any comment) does not even slightly answer to the requirements of notice set out above, according to article 39 CISG.

In the case at hand, it is evident that at present it cannot be traced back whether the animals, which were delivered throughout the year 2000, were or were not, at the time of the sale already infected with one or more diseases, in other words, whether [Seller] can be held liable for a lack of conformity which existed prior to the passing of risk.

As a result of the neglect to notify [Seller] in a timely and correct manner of their complaints (whether justified or not), [Buyers] have lost their rights against the [Seller] (the abovementioned letter of 27 March 2002 falls, for the reasons mentioned, without the slightest doubt, outside of the reasonable timeframe in which notice should be given). From this follows that, on the one hand, [Buyers] are obligated to settle the purchase price in full, and, on the other hand, that they cannot claim any damages, which means that the claim to appoint an expert is also unfounded.

As a concluding remark, it can be added that [Buyers] cannot rely on the exception provided for in article 40 CISG, as it is not proven that [Seller] was aware of the invoked shortcomings.

[Buyers] refer in vain to an assumption of liability for latent defects of a professional supplier, considering that, as the Court of first instance correctly pointed out, such an assumption does not exist within the context of the CISG.

      3. [Buyers] contend for the first time on appeal that the assessment of damages should also consider the payment of 33,000 guilders (Euro 14,974.75). To prove their assertions, they provide a photocopy of a remittance dated 23 June 2000 and apparently signed by Paul Verhoeven.

On the one hand, it is of course remarkable to conclude that [Buyers], neither in reply to repeated demands for payment from [Seller], nor before the Court of First Instance, brought up this payment.

On the other hand, however, the Appellate Court determines that [Seller] has limited itself to the comment that it had taken account of all payments in its calculation of damages, without pointing out what the litigious payment, which it does not seem to dispute, concerns.

It is clear that this aspect of the case cannot be decided. The parties should provide further explanation and their argumentation should where possible be backed by weighty evidence based on accounting documents.

     4. The appeal filed by [Buyers] has not been stripped of its earnest nature. A provocative and reckless character of the appeal has not been proven.

The incidental claim (which is unjustly called a cross-appeal) enacted based on the above is unfounded.

HOLDING

For these reasons, the Appellate Court, mentioning the application of article 24 of the Act of 15 June 1935:

-   Allows the appeal;
- Declares it unfounded as to [Buyers]' counterclaim;
- As a result, confirms the disputed decision as far as it declares [Buyers'] counterclaim unfounded; and
- Rejects the [Seller]'s partial claim based on provocative and reckless appeal as unfounded.

Before deciding further on the merits, the Court reopens ex officio the debates, in order to allow parties to act in the way stated at paragraph number 3, above. In respect of that matter, the Court sets a hearing date of Wednesday 9 June 2004 at 9.30.

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Belgian Appellants are referred to as [Buyers]; the Dutch Respondent is referred to as [Seller].

** Yurishan Wilsoe, Master of International and European Law, student at Erasmus University, The Netherlands, Willem C. Vis International Commercial Arbitration Moot participant 2003-2004.

*** Thalia Kruger, LL.B. Stellenbosch, South Africa, is Assistant of Private International Law, Katholieke Universiteit Leuven, where she is currently preparing a Doctoral thesis on International Jurisdiction.

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