France 4 June 2004 Appellate Court Paris (Pressure cookers case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040604f1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 2002/18702
CASE HISTORY: 1st instance Tribunal de Commerce de Bobigny (RG no. 2002/00070) 19 September 2002
SELLER'S COUNTRY: Portugal (defendant)
BUYER'S COUNTRY: France (plaintiff)
GOODS INVOLVED: Pressure cookers
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
25B [Fundamental breach (definition): substantial deprivation of expectation, etc.]; 35A [Conformity of goods: quality, quantity and description required by contract]; 49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract]
25B [Fundamental breach (definition): substantial deprivation of expectation, etc.];
35A [Conformity of goods: quality, quantity and description required by contract];
49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract]
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=984&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (French): CISG-France website <http://witz.jura.uni-sb.de/CISG/decisions/040604v.htm>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=984&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISIONEnglish: Spaic, Analysis of Fundamental Breach under the CISG (December 2006) n.290 Go to Case Table of Contents
Queen Mary Case Translation Programme
S.A.R.L. NE... v. SAS AMI... and S.A. Les Comptoirs M...
Translation [*] by Julia Hoffmann [**]
PARTICULARS. Judgment appealed to the Court: Judgment delivered on 19 September 2002 by the Bobigny Commercial Court -. RG no. 2002/00070. APPELLANT: S.A.R.L. NE..., appearing by way of its legal representatives, having its registered office at [...] Portugal, represtented by SCP F-C-B, Court attorney assisted by Maître M... RESPONDENTS: Société C.S.F. holder of the rights of the Operating Company AMI... et C..., hereto referred to as AMI..., its registered office located at [...] Mondeville ; and S.A. Les Comptoirs M... holder of the rights of SNC I... Cm, appearing by way of its legal representatives, having its registered office at [...] Le Mans, represented by SCP G-K-G, Court attorney assisted by Maître W...
COMPOSITION OF THE COURT: The matter was heard on 18 March 2004, in an open court, before the Court composed of Monsieur Betch, presiding judge; Madame Jaubert, judge; and Madame Bernard, judge. who heard the matter. Court Clerk during the hearing: Madame Gouge. JUDGMENT: Contradictoire. Delivered publicly by the President Monsieur Betch, signed by President Monsieur Betch and by Madame Gouge, Court Clerk present at delivery of judgment.
S.A.R.L. NE... [Seller] lodged an appeal from a judgment delivered on 19 September 2002 by the Bobigny Commercial Court. The Court pronounced the resolution of a contract of sale of pressure cookers, and ordered the removal, at [Seller]'s own expense, of the pressure cookers still in the possession of the Ch... group. [Seller] was ordered to reimburse S.A. Les Comptoirs M... [Respondent Buyer] for the cost of the pressure cookers in its possession, i.e., 416,153.356, to pay [Respondent] AMI... 53,006.38 in damages, and pay 7,622.45, in application of the provisions of article 700 of N.C.P.C.
The facts of the case are as follows:
[Respondent] AMI... (whose rights are now held by the Company C.S.F) operates the supermarket chain Ch... in France. Company I... whose rights are now held by [Respondent Buyer] acquired 15,000 pressure cookers from [Seller], intended to build loyalty amongst Ch...supermarket customers. The pressure cookers were alleged to have a defect which made them dangerous to use, and [Respondent Buyer] requested the resolution of the sale, while [Respondent] AMI... made a claim for reimbursement of the costs of storage as well as compensatory damages for the commercial loss suffered.
[Seller] submits in support of its appeal, by way of its final submissions, to which the Court makes reference for its extensive outline of the facts, that contrary to the trial judges' findings, the resolution of the sale or the successively agreed sales for the delivery of the 15,000 pressure cookers cannot be declared, as the defects can only be found in some of the models of pressure cooker, and those that are defective remain identifiable as they are marked with different identification from those that are in conformity with their intended use.
The [Seller] adds that according to the evidence submitted during the hearing, only a percentage of the appliances supplied are relevant to the dispute, and that there is no reason for the non-marketing of the conforming appliances. A selective recall of the non-conforming appliances can be carried out as their identification markings are different. The [Seller] rejects all suggestions made by [Respondent Buyer] of a loss of consumer confidence, and denounces its lack of good faith, in seeking the recall the entirety of the pressure cookers.
The [Seller] opposes the demands made by [Respondent] AMI... in submitting that the latter has not demonstrated the existence of losses attributable to the [Seller], and requests that the judgment on appeal be overturned, and that [Seller] be allowed to put into effect its offer to recall the non-conforming appliances from the stock supplied to the Respondents, with the possible assistance of the National Testing Laboratory.
The [Seller] claims 75,000 in damages for the economic loss and the discredit suffered as a result of the unjustified actions of the Respondents, from whom it demands 30,000 for abuse of process and 8,000 in application of the provisions of article 700 du N.C.P.C.
The Respondents object by way of final submissions, to which it is appropriate to make reference, on the basis that following the distribution of the pressure cookers, a significant number of these cookers were returned due to a leak from the lid. A number of these appliances were submitted to testing by the National Testing Laboratory and were declared to be non-conforming to the standards imposed by the NF certification.
The Respondents add that a new series of test confirmed the risks of burns. They concluded, that the judgment on appeal should be upheld, on the basis that, in accordance with the provisions of the Hague Convention of 15 June 1955, French law is applicable to the contract of sale.
In relation to the international sale of goods, the provisions of article 49 of the Vienna Convention, which is incorporated into French law, must have application, and the fundamental breach of contract is established by the nature itself of the defects affecting the goods, which renders the goods potentially dangerous by their own nature.
The Respondents reject the suggestion of a partial avoidance of the contract limited to the defective appliances, particularly as it is not possible to reliably identify those that are defective. They add that on this point it is not a problem of traceability, but an issue of the actual identification of the products of which there is nothing to indicate that they could, once again, obtain the NF standard that they are presently lacking.
The Respondents detail the contents of the correspondence between the parties and the totals of the losses suffered in seeking confirmation of the judgment on appeal, but with attribution to [Respondent] AMI... of a sum, calculated to 18 March 2004, to the amount of 93,997. Finally, they claim the sums of 30,000 for abuse of process and 20,000 for unrecoverable costs.
THE COURT FINDS
In consideration of the following:
The sale of the pressure cookers gave rise to a single sale, even if the deliveries were staggered, as evidenced by the invoices emitted by [Seller] following its deliveries.
As to the applicable law, as submitted by the [Respondents], in relation to the international sale of goods, the combined effects of the provisions of article 3 of the Hague Convention and article 49 of the Vienna Convention of 11 April 1980 as applied by French law, permit the purchaser to declare the avoidance of the contract if, in the execution of the contract, the seller's failure to perform any one of the obligations applicable to seller under the contract or the Convention constitutes a fundamental breach of the contract ...
[Seller] asserts that the breaches claimed would not constitute a fundamental breach of the contract. However, it must be noted that under the obligation to supply pressure-cookers that were entirely safe, it has nevertheless delivered, according to the report delivered by the National Testing Laboratory on 3 July 2001, appliances that despite an identical outward appearance, were of a substantially different design, some of which became a danger to their user.
[Seller] alleges that the appliances do not have the same identification, and that the different identification markings permits them to be individually identified. It is, however, appropriate to note that the different invoices submitted in these proceedings provide only one identification number: No 3.37.0001.00...
By its submissions at first instance, the [Seller] acknowledged that the defective appliances constituted "a little less than a third of the appliances delivered", a number which is therefore particularly significant given the nature of the products sold and the safety that they must provide.
It is therefore established that there has been a breach of the obligation of conformity imposed by the provisions of article 35 of the Vienna Convention on the delivery of "goods which are of the quantity, quality and description required by the contract " and therefore of a consistent quality.
On that point, the supply, under a single identification number, of appliances of a different design, which did not provide the same safety guarantees for use, constitutes a fundamental breach of the obligation of the seller, as already discussed.
According to the results of a new series of testing requested, the National Testing Laboratory confirmed that the appliances submitted were not in compliance with the requirements of the reference documents, i.e., the standards to be followed to obtain the NF Cuisson certification.
[Seller] asserts that the avoidance of the contract should only be limited to the sale of defective appliances. It should be noted that the issue is not one of traceability of the appliances, but of their actual identification. On the issue of identification, according to the General Directorate of Competition, Consumer Protection and Anti-Fraud which made an order for the suspension of entry into the market and the recall of the speed cook model « ovni », such identification can only be achieved by a verification, on a unit by unit basis, by the manufacturer, to ensure the reliable identification of those products which do not conform (letter dated 10 January 2002).
[Seller] has not provided any reliable method of identification of the pressure cookers. On this point, the [Seller]'s offer to carry out the sorting of the appliances itself, is a negation of the easy identification process which it claims can be carried out. Further, the suggestion of appointing the National Testing Laboratory to proceed with the task, is the negation itself of [Seller]'s obligation to deliver goods that comply with their intended purpose.
[Seller] re-iterates that the pressure cookers REGE OVNI benefit again from the AFNOR standard.
It is not possible to show that the pressure cookers currently in the hands of the Respondents and manufactured prior to this appeal, (of which the [Seller] admits that a large proportion are defective, but without being able to warrant in a reliable manner the traceability of the defective products), could again benefit from the NF standard. It is relevant, on that point, that [Seller] also abstained from advising the organizations responsible for the certification, of the substantial modification of the pressure cookers' locking systems, which was in disregard of the provisions of the Certifications Regulations for the « NF Cuisson » certification. Futhermore, this failure has already been raised against the [Seller] by the General Directorate of Competition, Consumer Protection and Anti-Fraud on 10 January 2002.
For these reasons and those of the trial judges that this Court adopts as its own, the entirety of the argument put forward by [Seller] becomes inoperative. It is appropriate to affirm on all grounds the judgment on appeal; as it relates to [Respondent Buyer], it being specified that the restitution of the price is no more than a consequence of the pronouncement of the avoidance of the contract;
In relation to the demand presented by [Respondent] AMI..., the Court finds that AMI has not furnished any evidence justifying the amount claimed for loss suffered and causally linked to the breach by [Seller]; nor has AMI shown evidence of having presented a claim, to this effect, to its supplier, or that it requested, in vain, removal by the latter of the deliveries in dispute. Accordingly, it is appropriate to dismiss [Respondent] AMI's claim for damages against [Seller].
As to the claims by [Seller], it has not in any way proved fraud on the part of the Respondents, nor that it has been a victim of the alleged fraud. Fraud cannot be established by simple allegations or arise solely from the search by the Respondents for a solution to the problems born out of the supply of thousands of defective pressure cookers. Accordingly, the demand for payment of damages by [Seller] must be rejected.
It has not been proved that any of the parties abused their rights to commence proceedings.
Equity requires the attribution by [Seller] to [Respondent Buyer] of a sum of only 7,622.45 for unrecoverable costs at first instance, but does not dictate the payment of an amount for those of the appeal;
In view of the nature of the dispute and the dealings that linked the parties, [Seller] must be ordered to pay the entirety of the costs at first instance and on appeal.
FOR THESE REASONS
The Court allows the appeal, confirms the judgment on appeal, in its findings as between [Seller] and [Respondent Buyer], affirms the trial judges' dismissal of the claims made by [Seller], overturns the decision at first instance as between [Seller] and [Respondent] AMI..., dismisses in their entirety the claims presented by [Seller], dismisses all claims other or contrary to these reasons, and orders [Seller] to pay all costs on first instance and appeal, including, costs of the Court attorney concerned, in application of Article 699 of the N.C.P.C.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Defendant-Appellant S.A.R.L. NE... of Portugal is referred to as [Seller], Plaintiff-Respondent S.A. Les Comptoirs M... of France is referred to as [Respondent Buyer], and Plaintiff-Respondent S.A.S. AMI... is referred to as [Respondent] AMI....
** Julia Hoffmann, BA, Dip. Lang, LLB (Hons)(Adel.). LLM (Paris I), Solicitor of the Supreme Courts of New South Wales and South Australia.Go to Case Table of Contents