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CISG CASE PRESENTATION

Belgium 24 March 2004 Appellate Court Gent (NV Segers-Van Ingelgem v. NV Axima et al.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040324b1.html]

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

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Case identification

DATE OF DECISION: 20040324 (24 March 2004)

JURISDICTION: Belgium

TRIBUNAL: Hof van Beroep [Appellate Court] Gent

JUDGE(S): D. Floren

CASE NUMBER/DOCKET NUMBER: 2000/AR/1753

CASE NAME: NV Segers-Van Ingelgem v. NV Axima Contracting, NV ECA, BVBA Gebroeders Veys and Arfa Röhrenwerke AG

CASE HISTORY: 1st instance Rechtbank van Koophandel Gent 4 August 2000 [reversed and remanded]

SELLER'S COUNTRY: Switzerland (plaintiff)

BUYER'S COUNTRY: Belgium (defendant)

GOODS INVOLVED: Sprinkler installation


Case outline

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

"Unclear whether buyer knew or should have known defects - expert investigation, as ordered by first judge, should continue. Case referred back to first judge."

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 39 ; 40

Classification of issues using UNCITRAL classification code numbers:

39B [Requirement to notify seller of lack of conformity (buyer must notify seller within reasonable time): cut-off period of two years];

40B [Seller's knowledge of non-conformity (sanction when seller fails to disclose known non-conformity): seller loses right to rely on articles 38 and 39]

Descriptors: Lack of conformity notice, timeliness ; Lack of conformity known to seller ; Burden of proof

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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/2004-03-24.html>

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

Hof van Beroep [Court of Appeals] Ghent
N.V. Segers-Van Ingelgem [Provider] v. N.V. Axima Contracting [Seller], N.V. ECA [Buyer], BVBA Gebroeders Veys [Sub-Contractor] and Arfa Röhrenwerke AG [Manufacturer] and N.V. AGF Belgium Insurance [Insurer]

24 March 2004 [2000/AR/1753]

Translation [*] by Kristof Cox [**]

[...]

I. PRELIMINARY

      1. Early 1996 [Buyer] had a sprinkler system delivered and installed in its premises by [Seller].

After it discovered defects in the tubes in 1999, [Buyer] filed a claim against [Seller] on 7 April 2000, for the appointment of an expert and payment of damages, provisionally estimated at 2,000,000 Belgian francs (= 495,787.05 ).

In turn, [Seller] filed a claim against [Provider], who had delivered the tubes, [Sub-Contractor], who had placed the installation as a sub-contractor of [First Co-Respondent], and [Manufacturer], the Swiss manufacturer of the tubes. [Seller] claims that the expert investigation claimed by [Buyer] be declared valid and that it be fully indemnified for any order against it.

Finally [Insurer] of the civil liability of [Sub-Contractor], voluntarily intervenes.

      2. The Court of First Instance found that the orders presented by [Manufacturer] (dating from 8 and 18 January and 1 February 1996) for the order of the tubes by [Provider] refer to general conditions of sale, which stipulate that Swiss law is applicable, and that for hidden defects there is a guarantee of six months.

Further, the Court considers that the CISG is applicable to the claim between [Provider] and [Manufacturer], and it points more specifically to Article 39 CISG, according to which 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.

Thus, the Court of First Instance concluded that the claim against [Manufacturer] was late, and thus not admissible, both on the basis of the contract between the parties, and on the basis of the CISG.

As to the other parties, Mr. Jacques Defrancq is appointed to investigate the sprinkler installation.

      3. The appeal of [Provider] is limited to the decision that [Manufacturer] is deleted as a party in the case.

[Provider] reproaches the Court of First Instance that it has declined the claim against [Manufacturer], even before anything was known on the cause of the leak in the tubes. [Provider] alleges that, in the given circumstances, no decision could be made on the possible application of Article 40 CISG, being the case in which the seller cannot invoke Article 38 and 39, because he knew the defects or should have known them.

On these grounds, [Provider] claims that the expert investigation would count against all parties in the case.

      4. [Manufacturer] maintains that the appeal should be declined and that the judgment under appeal should be confirmed in its entirety.

      5. [Seller], [Buyer], [Sub-Contractor] and [Insurer] allege that the appeal is not directed against them and claim that [Provider] be ordered to pay for their costs.

II. DISCUSSION

      1. The Court of First Instance decided correctly that the CISG is applicable to the claim between [Provider] and [Manufacturer].

Under Article 39(2), the buyer loses the right to rely on the non-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.

Article 40, however, states that the seller is not entitled to rely on the provisions of Article 39, if the lack of conformity relates to facts of which he knew or could not have been unaware and which he did not disclose to the buyer.

In other words, both the period of two years, and a contractual period of guarantee can in this case be set aside.

In the CISG, there is no assumption that the professional seller knew the hidden defects.

The burden of proof that the seller knew the defects or should have known them is on the buyer.

On the basis of the data known at this moment about the nature of the defects of the tubes delivered by [Manufacturer], it cannot be excluded with certainty that these are defects which it knew or ought to have known. It is precisely the expert investigation, which has to uncover the cause of the corrosion of the tubes that will have to make clear and that will show whether [Provider] can meet the burden of proof. The determination of the admissibility of the claim against [Manufacturer] was premature.

Thus, the expert investigation must be performed in the presence of [Manufacturer]. The acts of investigation that may have already taken place, may have to be redone, in as far as respect for the rights of [Manufacturer] may require this.

      2. [Seller], [Buyer], [Sub-Contractor] and [Insurer] were incorrectly involved in the procedure on appeal. [Provider] must cover their costs.

FOR THOSE REASONS,

THE COURT,

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Switzerland is referred to as [Seller] and Defendant of Belgium 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 June 6, 2008
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