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CISG CASE PRESENTATION

Belgium 4 June 2004 District Court Kortrijk (Steinbock-Bjonustan EHF v. NV Duma) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040604b1.html]

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

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Case identification

DATE OF DECISION: 20040604 (4 June 2004)

JURISDICTION: Belgium

TRIBUNAL: Rechtbank van Koophandel [District Court] Kortrijk

JUDGE(S): L. Vandenbroucke, J. Vanbiervliet, F. Deschepper

CASE NUMBER/DOCKET NUMBER: AR 21 36/2003

CASE NAME: Steinbock-Bjonustan EHF v. N.V. Duma

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Belgium (defendant)

BUYER'S COUNTRY: Iceland (plaintiff)

GOODS INVOLVED: Fork lift truck


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 26 ; 33 ; 39 ; 49(1)(a) ; 74 ; 84 [Also cited: Articles 31 ; 64 ]

Classification of issues using UNCITRAL classification code numbers:

25B [Definition of fundamental breach : substantial deprivation of expectation, etc.];

26A [Notification of avoidance : effective declaration of avoidance];

33A [Time for delivery : on date fixed by or determinable from contract];

39A2 ; 39C [Requirement to notify seller of lack of conformity : buyer must notify seller within reasonable time ; Other issues concerning notification : waiver];

49A1 [Buyer's right to avoid contract (grounds for avoidance) : fundamental breach of contract];

74A ; 74A1 [General rules for measuring damages : loss suffered as consequence of breach ; Includes loss of profit];

84A [Seller bound to refund price must pay interest]

Descriptors: Fundamental breach ; Avoidance ; Delivery ; Lack of conformity notice, timeliness ; Waiver ; Damages ; Profits, loss of ; Interest

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Editorial remarks

Overview comments (CISG-Belgium website):

"Wrong delivery -- timely notification. Rectification -- not in time. Avoidance of contract -- clear. Damages -- price difference of trucks (buyer decided to keep wrong truck). Damages -- transport costs. Damages -- reputation of buyer (for reselling) -- not proved. Damages -- further sale by buyer lost -- ex aequo et bono -- 10%."

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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 <http://www.law.kuleuven.ac.be/ipr/eng/cases/2004-06-04.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

Rechtbank van Koophandel, Kortrijk [4 June 2004]
Steinbock-Bjonustan EHF v. N.V. Duma

Translation [*] by Vassiliki Mitrias [**]

TEXT OF THE DECISION

In case No. 2136/2003 in the "algemene rol" (register for legal actions to be brought before the Court)

Steinbock-Bjonustan [Buyer], a company established under Iceland law, with business centre/head office in Iceland but having chosen a domicile in Belgian process server, Mr. ..., in Kortrijk, Belgium

[...]

vs.

NV Duma [Seller], a company with head office at Kortrijk [Belgium].

[...]

The Court heard the parties in a public hearing of 21 May 2004 and acquainted itself with the introduced materials, application of Articles 2, 37 and 41 of the law of 15 June 1935 on the use of language in judicial cases.

By summons issued on 11 April 2003 the [Buyer] sought to have the Court:

     -      Judge that the agreement, concluded between the [Buyer] and the [Seller] on 22 February 2001 has been justly terminated [avoided] by the [Buyer] on 2 October 2001 in accordance with Articles 49 and 51(2) of the Vienna Convention (CISG);
 
     -      Direct the [Seller] to repay to the [Buyer] the amount of 9,127.61 Euros plus delay interest at the legal rate of 7 % on the amount of 6,941.02 from 5 March 2001, i.e., the date of the payment of the purchase price as provided for in Art. 84 of the CISG, and on an amount of 2,186.59 from 18 April 2001, the date of the payment of transport costs;
 
     -      Direct the [Seller] to pay to the [Buyer] a basic compensation of 1,000 Euros for the loss of a client who had already 15 years commercial relations with the [Buyer];
 
     -      Direct the [Seller] to the pay the judiciary interests and the cost of the proceeding.

I. The factual data

On 22 February 2001, the [Seller] confirmed [Buyer]'s order for the purchase of a second-hand of a Caterpillar V8OE truck, model year 1992, manufacture no. 37W6977, for the sum of 6,941.02 Euros (280,000 Belgian franks), ex works.

The purchase price was paid by the [Buyer] before the delivery on 5 March 2001. The truck was shipped and on 18 April 2001 the [Buyer] took delivery in the port of Reykjavik. On 18 April, the [Buyer] paid the transport costs, 2,186.59 Euros.

The [Buyer] contends that it protested immediately by phone after examination of the truck.

On 6 June 2001, the [Buyer] made several phone calls but which led to no further consequences. The [Buyer] therefore indicated the defaults of the delivered truck:

"The wrong truck was delivered and with the number 37W3539, which was four years older than the foreseen one, it had no two fore wheel, no side closing and had only one window on the front side instead of a whole (bedekking)."

The [Buyer] sought the repayment of all its costs and offered its help send the wrong truck back to Belgium.

On 6 June 2001, the [Buyer] confirmed by fax that it had found the origin of the problem. The truck intended for the [Buyer] was delivered to a French client and vice versa. [Buyer] stated that, by mischance, the truck was loaded on the wrong transport truck. [Buyer] accepted to deliver the right truck and to take back the wrong truck at its own expense. The [Buyer] asked in this regard the [Seller]'s consent.

On 9 July 2001, the [Buyer] asked if the truck was being transported and if the [Seller] was willing to sell to [Buyer] the wrongly delivered truck for the amount of 4,957.87 Euros (200,000 Belgian franks).

On 19 July 2001, the [Seller] confirmed that it accepted the offer of 4,957.87 Euros and that the other truck would be shipped the following week.

On 2 October 2001, the [Buyer] let the [Seller] know that it was fed up. It wished to have the wrong truck taken back and advised that that its patience was over. [Buyer] asked for repayment of the purchase price, the transport costs and interest on these amounts.

On 6 November 2001, the [Seller] made another offer to the [Buyer]: either to deliver a second-hand cabin or to pay a compensation of 80,000 Belgian franks, a proposal which was rejected by the [Buyer].

In rejecting the offer, the [Buyer] also advised the [Seller] of a defective hydraulic pump and a meter which did not work.

Further exchange of letters stayed without any consequence so that the dispute was brought to the Court.

II. The judgment

      1. By their counsel, the parties indicated in the pleadings that no challenge exists on the applicable law; that in accordance with the applicable rules of Private International Law, Belgian law is applicable; and that therefore the aforementioned contract of sale is governed by the CISG, which came into force in Belgium on 1 November 1997, so that the Court has to examine the following discussion on that subject.

      2. Pursuant to Article 39(1) of the CISG, a buyer loses its right to invoke that the goods do not conform to the agreement if it does not give notice to the seller within a reasonable time after that buyer has discovered or ought to have discovered the lack of conformity, specifying the nature of the lack of conformity.

The Court states that the [Buyer] should have discovered the lack of conformity described in its letters of 6 June 2001 and of later dates, within a very short time after the delivery, the best immediately after the delivery; after that the notice of lack of conformity has to be presented within a reasonable time.

On 18 April 2001, the [Buyer] could already establish the lack of conformity with the taking of the truck in the port of Reykjavik.

It is accepted that as a general rule (deler/criterium) the time for the challenge is one month after the passage time for the examination. (De Groot S., "Non-conformiteit volgens het Weens Koopverdrag", T.P.R., 1999, blz. 671-679, no, 4.2.1.).

The complaints have thus to be submitted at least on 18 May 2001. In this case, there is no evidence that the [Buyer], on whom the burden of proof lies (De Groot S., "Non-conformiteit volgens het Weens Koopverdrag", T.P.R., 1999, blz. 687, nr, 4.4), has communicated by phone his complaints to the [Seller] at a time before 18 May 2001. It is therefore obvious that the [Buyer] has primarily lost the right to avail himself of the fact that the goods delivered do not conform to the contract.

On the other hand, the [Buyer] states completely justly that the [Seller] can refuse to avail himself of the fact that the [Buyer] did not or did not on time or not correctly contest after the acceptance of the goods delivered. In this case, the [Seller] has confirmed that on 6 June 2001 the [Buyer] was 100 % right in stating that the wrong truck had been delivered, that it was sorry about that and that it by mischance has placed the truck on the wrong "delivery truck", that [Buyer] would send the right truck within two weeks if the [Seller] agrees and that [Buyer] will bear all costs.

[Seller] then said straightforward, without any qualifications, that he will therefore replace the wrong truck number 37W3595 with the truck with the right number 37W6977. The [Seller] thus expressed completely its liability for the justified claim of the [Buyer] on the non-conformity of the truck.

What the [Seller], in his letter of 6 June 2001 undoubtedly admits that the actual circumstances implies that it must be accepted that the [Seller] has renounced to his right to avail himself of the late contestation (De Groot S., "Non-confirmiteit volgens het Weens Koopverdrag", T.P.R., 1999, blz. 683, nr. 4.3).

In this case, there are no circumstances which could lead to an "amiable solution".

The [Seller] declared itself liable for what happened and offered to deliver the right truck instead of the wrong truck.

      3. It derives from a letter of 6 June 2001 of the [Buyer] ("Have you sent the truck", or "Is de vorkheftruck op transport gezet" [the same question in Dutch]) that the [Buyer] requested the further execution of the sales contract. [Buyer] sought the delivery of the initial truck.

On 19 July 2001, the [Seller] thought that the truck at issue would be shipped the following week ("next week").

On 2 October 2001, the delivery, expected for the following week, had not occurred.

Pursuant to Article 33(a) of the CISG, the [Seller] has the duty to deliver at a fixed date if a date has been fixed.

When an agreement was reached on 19 July 2001 relating the information that the truck is to be delivered "the following week", then it can be concluded that the date of the delivery must be the following week to be diminished by the time of the shipping (transport by ship), what implies that the delivery of the right truck was promised by the [Seller] by the beginning of August.

It must be accepted that the right truck was nonetheless not sent the following week. Since this did not happen and in the two following months the truck was still not sent, it must be admitted that the [Seller] had committed a fundamental breach of contract pursuant to Art. 49(1)(a) CISG (Van Houtte H., Erauw J., Wautelet P., (eds) "Het Weens Koopverdrag" blz. 197, no. 6.7., example 3).

Given the factual circumstances, that is to say, the purchase in February 2001, the shipping of the wrong truck in April 2001 and the false promise in July 2001 to deliver the following week

Pursuant to Article 64(1)(a) of the CISG, the [Buyer], on 2 October 2001, in the absence of the promised delivery, declared the contract of sale relating to the truck with the number 37W66977 avoided.

[Translator's note: Article 64 of the CISG is a remedy in case of breach of contract by the buyer; here the [Buyer] has not breached the contract but the [Seller]. The Court thus undoubtedly intended to refer to Article 49 of the CISG, which pertains to buyer's right to avoid the contract.]

It cannot be challenged that the content of the [Buyer]'s letter of 2 October 2001 implied such avoidance. When in this letter it is stated that ["the glass is full" / "enough is enough"], the repayment of the purchase price and the transport costs was asked and restitution of the wrong truck delivered was required; this can only indicate that the avoidance of the initial contract by the sender of such a letter has been confirmed.

The Court states also that the [Buyer] has unilaterally decided to rescind/avoid the contract. And, because of the fundamental breach of contract committed by the [Seller], the Court upholds the legality of this unilateral declaration of avoidance.

      4. Moreover, a contract between the parties was nonetheless concluded on the purchase of the truck with number 37W3539.

To the question of the [Seller] in his fax of 6 June 2001 if the wrongly delivered truck could be exchanged, the [Buyer] proposed in his letter of 9 July 2001 to buy the truck present in Iceland for 4,957.87 Euros (200,000 Belgian franks).

On 19 July 2001, the [Seller] declared agreement with this purchase price.

Therefore, the [Seller]'s acceptance of the [Buyer]'s offer who expressed his willingness among other things to be bound by this second wrongly-delivered truck for 4,957.87 Euros.

And the fact that the second letter of 9 July 2001 indeed involved a matter of a second sale appears from the text of the letter itself where finally it is written that a contract for the two trucks can be concluded.

Any other consideration of the [Buyer] after the contract was concluded for this additional truck does not matter. The [Buyer] is bound by the second additional sales contract.

The fact that the [Seller] has not provided any further follow-up on the execution of the second contract -- like sending invoices on the purchase price -- does not prevent the parties from having concluded a valid contract. Through the fact that the invoices were sent by the [Seller] it cannot in any way be concluded a hardship on the part of the [Seller]. Furthermore, hardship is not a principle of law accepted in the application of Belgian law.

      5. Justly, the [Buyer] asks damages stemming from the avoidance of the contract of sale of truck number 37W6977.

The [Buyer] first justly asks for the re-payment of the purchase price of 6,941.02 Euros (280,000 Belgian franks). This amount must nevertheless be reduced by the purchase price of the second additional truck, i.e., 4,957.87 (200,000 Belgian franks).

Therefore the [Buyer] can only claim from this 1,983.15.

The [Buyer] can also rightly claim the payment of the needlessly paid transport costs, 2,186.59, an amount which is not contested by the [Seller].

These costs were borne for the delivery of the right truck with number 37W6977. The [Buyer] promised that his costs would have been borne for this truck for the moment. This did however not occur. In any case, it follows from this information that, if the [Seller] had respected his obligation, the [Buyer] could have bought the two trucks and on the condition that the transport costs would only be paid once. Only unjustly could the [Seller] have claimed from the [Buyer] in each case transport costs for the purchase of two trucks.

The second truck stood, however, in Iceland at the conclusion of the contract. Pursuant to Article 31(b) CISG, the obligation lies on the [Seller] to deliver the second truck with the number 37W3539 in the place where this truck stood at the conclusion of the contract -- this is in Iceland. The [Seller] therefore has to put this truck at the disposal of the [Buyer] at this place. The [Buyer] therefore has no transport costs foreseen or paid.

Finally the [Buyer] justly claims damages for loss of profit.

The [Seller] does not challenge that the [Buyer] bought this truck in order to resell it. Although the [Buyer] does not give any evidence of any specific candidate for the purchase of this initial truck, we cannot nevertheless agree with the fact that profit in the trade of the trucks was foreseen as well. Such a profit that the [Buyer] had in mind through his order of 22 February 2001 can not be realized by the [Buyer] in the absence of the delivery of this truck. The [Buyer] therefore justly claims the loss of a profit for his missed/failed resale of this initial truck.

The Court frames the damages ex aequo et bono at 10% of the purchase price or 694.10 Euros.

It is not however established that [Buyer]'s reputation as a trader has suffered from the failed transaction. Moreover, the fact [Buyer] has wasted a lot of time with the research on the relevant materials for the case and that a part of its activities were paralyzed, is not better established.

Therefore, the Court fixes as damages the sum of 1,983.15 + 2,186.59 + 69410 = 4,863.84 Euros to be multiplied by the legal interest from the day of the payment of the purchase sum and the transport costs, pursuant Art. 84 of the CISG.

Because of the lack of any specific motivation which concerns the situation of the creditor, of the reasons why the debtor should be deprived of his right to "kantonnement" [procedural aspect on the methods of the payment], the request relating to the exclusion of the "kantonnement" is not granted by the Court. The contention that the [Buyer] has suffered enough damage is not a justification.

On those grounds,

The Court:

     -      Declares the [Buyer]'s action admissible and to the following extent justified in substance;
 
     -      Confirms the legitimacy of the unilateral avoidance by the [Buyer] on 2 October 2001 of the contract of sale of truck number 37W6977 concluded between the parties on 22 February 2001;
 
     -      Directs the [Seller] to pay 4.863.84 (four thousand eight hundred sixty-three euros and eighty-four cents) to be multiplied by the legal interest of 7 % on 1,983.15 from 5 March 2001 and on 2,186.59 from 18 April 2001 until the day of the "citation" and to be multiplied by the judicial interest at 7 % on 4,863.84 from the day of the "citation" until the day of the payment;
 
     -      Rejects the rest as unjustified;

[... further on Belgian procedural aspects]


FOOTNOTES

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

** Vassiliki Mitrias. LL.B. (in French) at the University of Liege, Belgium - 2002; Research Assistant at the Institute for European Legal Studies (University of Liege) - 2002/2004; Post-Graduate Degree (in Dutch) in Advanced Studies in European Law at Ghent University, Belgium - 2003/2004; LL.M. student at Queen Mary, University of London, UK- 2004/2005.

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Pace Law School Institute of International Commercial Law - Last updated February 16, 2005
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