Belgium 17 May 2004 Appellate Court Ghent (Noma B.V.B.A. v. Misa Sud Refrigerazione S.p.A.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040517b1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 2001/AR/1679
CASE HISTORY: 1st instance Rechtbank van Koophandel Ieper 29 January 2001
SELLER'S COUNTRY: Italy (plaintiff)
BUYER'S COUNTRY: Belgium (defendant)
GOODS INVOLVED: Cooling installation and accessories
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
4B [Scope of Convention (issues excluded): statute of limitations]; 18A [Criteria for acceptance of offer]; 39B [Requirement to notify seller of lack of conformity: cut-off period of two years]; 78B [Rate of interest]
4B [Scope of Convention (issues excluded): statute of limitations];
18A [Criteria for acceptance of offer];
39B [Requirement to notify seller of lack of conformity: cut-off period of two years];
78B [Rate of interest]
Overview comments (CISG-Belgium database): "Application of CISG -- regarding main claim -- both Italy and Belgium Contracting States. Application of CISG -- regarding counterclaim -- CISG not yet applicable in Belgium -Convention on the Law Applicable to Contracts for the International Sale of Goods (Hague Conference 15 June 1955) -- law of residence of seller -- Italy -- CISG as part of Italian law. General conditions -- not proved that accepted by buyer. Interest -- according to applicable Italian law. Notice of non-conformity (counterclaim) -- according to art. 39 CISG. Prescription (counterclaim) -- according to applicable Italian law."Go to Case Table of Contents
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Dutch): CISG-Belgium database <http://www.law.kuleuven.ac.be/ipr/eng/cases/2004-05-17.html>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents
Case text (English translation) [second draft]
Queen Mary Case Translation Programme
17 May 2004 [2001/AR/1679]
Translation [*] by Kristof Cox [**]
FACTS AND PROCEDURE IN FIRST INSTANCE
2. By writ summoned on 31 May 1999 [Seller] claimed from [Buyer] payment of 92,224,000 Italian lira [Lit] in main sum for delivery of cooling installations and accessories, for the following invoices:
[Buyer] did not dispute these invoices (main claim) as such; however, it stated, on the one hand, that it had paid the sum of 45,020,827 Lit. (= 936,433 Belgian francs [BEF]) on 17 February 2000 and, on the other hand, that it was entitled to damages for a prior transaction in 1993, namely for a crack in the polyester tub of the freezing installation, which it claimed by means of a counterclaim for the sum of 47,203,173 Lit. (= 981,826 BEF), so that after judicial compensation, it is discharged.
The judgment under appeal of 29 January 2001:
|(1)||With regard to the main claim: The court ordered [Buyer] to pay to [Seller] 47,203,173 Lit. (= 24.378.40 €), plus interest at 7 % on 92,224,000 Lit. from 10 August 1986 till 17 February 2000 and on 47,203,173 Lit. from 17 February 2000 till payment;|
|(2)||Rejected the [Buyer]'s counterclaim because the period of limitation had expired; and|
|(3)||Ordered [Buyer] to pay the costs.|
PROCEDURE ON APPEAL
3. The appeal was filed by [Buyer].
[Buyer] states that the period of limitation for its original counterclaim has not expired, because Article 39(2) CISG takes precedence over the national Italian law (Article 1495 § 3 Codice civile [C.c.]). [Buyer] claims 981,826 Belgian francs [BEF], plus judicial interest from 17 February 2000, plus costs. Further, [Buyer] disputes the interest awarded with regard to the [Seller]'s main claim.
[Seller] files an incidental appeal to claim conventional interest according to Article 5 of its general conditions of sale. For the rest, [Seller] seeks to have the judgment under appeal be confirmed.
4. In its original main claim, [Seller] sought payment of the price for an international sale of goods, namely, cooling installations and accessories. The CISG is applicable.
Since the sales at hand originate from 1998 and both parties have their place of business in Contracting States, bound by the CISG (Italy since 1 January 1988 and Belgium since 1 November 1997), the rules of the Convention should be applied without passing by the conflict of law rules (Article 1(1)(a) and Article 100(2) CISG).
The legal situation is different with regard to the counterclaim. It concerns an international sale of 1993, when the CISG had not yet entered into force in Belgium. Since the parties did not agree explicitly on the choice of law, the rules of Article 3 of the Private International Law Convention of the Hague of 15 June 1955 on the international sale of goods must be applied.
The sale of 1993 is governed by the internal law of the country of the seller, in this case Italy. Since 1 January 1988, however, the CISG has been applicable in Italy, so that the CISG is also primarily applicable to the counterclaim (Article 1(1)(b) and Article 100(2) CISG), supplemented by the lex contractus for the principles not determined by the CISG.
5. The [Seller]'s original main claim
5.1 There is no dispute with regard to the invoices as such, in as far as the performed payments are deducted, so that the main sum of 47,203,173 Lit remains unpaid.
With regard to the conditions of sale on the backside of the invoice, Article 9 CISG contains strict rules on offer, acceptance and alterations of the conditions. [Translator's note: Although the court cites Article 9 CISG, presumably Articles 18 and 19 CISG were intended.] It is determined that full agreement about these conditions is always required before the contract comes into existence and mere silence does not count as an acceptance.
The interim judgment of 14 February 2003 ordered [Seller] to provide a readable copy of its general conditions of sale, with full translation. Meanwhile [Seller] has provided this. From its new exhibits 1-2, it appears that the final paragraphs of these conditions provide twice for a signature of the buyer, this for its agreement. [Seller] cannot provide a copy of the general conditions that is signed by the [Buyer].
Thus, there is no evidence that [Buyer] had taken knowledge of the general conditions of sale of [Seller] at the moment the sales -- the object of invoices claimed by [Seller]'s main claim -- came into existence, let alone that [Buyer] would have accepted these conditions. Thus, the conditions on the invoice of [Seller] and the Articles 1341 and 1342 C.c. mentioned in these conditions are not applicable in this case.
5.2 Nevertheless, [Seller] is entitled to interest for late payment according to Article 78 CISG. This interest can be awarded from the formal notice of 10 September 1998. The CISG does not determine the interest rate. Under Belgian Private International Law it is determined by the lex contractus, in this case Italian law, more specifically Article 1284 Codice civile. After the interim judgment of 14 February 2003, [Seller] provided the interest rates under Italian law. These were determined at 5 % by the Act of 23 December 1996 and by Decree of 11 December 2001 at 3 % from 1 January 2002.
In its memorandum deposited on 3 October 2003, [Seller] voluntarily reduced the figure of the interest rate applicable to its original main claim to 3 %, so that the judgment under appeal should be reformed at this point.
6. The [Buyer]'s original counterclaim
6.1 By means of invoice of 15 February 1993 (exhibit 13 of [Buyer]), [Seller] has sold to [Buyer] a so-called "deepfreeze island" type FAGUS 5 with accessories for 452,981 BEF. In turn, [Buyer] sold the installation to a third person, the SV ANKRA which runs a UNIC-shop in Hoeselt.
The hidden defect in the cooling installation became apparent halfway into 1994 through the continued use by SV ANKRA.
[Buyer] complained by letter of 27 October 1994.
It appears from the report of expert engineer Dirk Christiaens of Kortrijk of 28 May 1996 that 3 out of 4 island elements showed cracks in the polyester tub under the cooling battery. This expertise, originally ordered on 20 October 1994 at the request of SV ANKRA on the account of [Buyer], was declared opposable to [Seller] at the request of [Buyer] by order of 9 February 1995.
[Seller] was not joined in the following procedure on the merits. By judgment of 21 April 1998 of the Commercial Court of Kortrijk [Buyer], was held liable towards SV ANKRA and ordered to pay 572,726 BEF, plus judicial interest and costs.
This judgment, however, has no collateral estoppel effect towards [Seller], who was not even called to intervene in these proceedings (Supreme Court 20 June 1996, R.W. 1997 98, 234; Supreme Court 14 May 1982, R.W. 1983-84, 186) and as such it is not a title to claim payment from [Seller].
6.2 [Buyer] has only filed a claim on the merits on this basis by means of counterclaim in its memoranda in the procedure at hand, deposited on 17 February 2000. This is a full 7 years after the delivery of the installation and 6 years after the discovery of the defect. [Seller] rightfully invokes the period of limitation.
Articles 39(1) and 39(2) CISG govern the notice by the buyer of hidden defects within a 'reasonable term' after the discovery of the defects, with a final term of two years.
However, the period of limitation of the claim is not governed by the CISG, so that the national law must be applied (Antwerp 20 December 1999, R.W. 2000-2001, 523), in this case Italian law as the lex contractus.
Article 1495.3 of the Italian C.c. determines that the period of limitation for the claim for hidden defects is one year. The Court of First Instance has determined correctly that the period of limitation had elapsed for the original counterclaim.
FOR THOSE REASONS,
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff / Appellee of Italy is referred to as [Seller] and Defendant / Appellant of Belgium is referred to as [Buyer]. Amounts in the former currency of Belgium (Belgian francs) are indicated as [BEF]; amounts in the former currency of Italy (Italian lira) are indicated as [Lit].
** 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.firstname.lastname@example.org>.Go to Case Table of Contents