Belgium 16 June 2004 Appellate Court Ghent (Mermark Fleischhandelsgesellschaft mbH v. Cvba Lokerse Vleesveiling) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/040616b1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 2003/AR/990
CASE HISTORY: 1st instance Rechtbank van Koophandel Dendermonde 6 February 2003 [affirmed]
SELLER'S COUNTRY: Belgium (plaintiff)
BUYER'S COUNTRY: Germany (defendant)
GOODS INVOLVED: Pork meat
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
38A [Buyer's obligation to examine goods: time for examination of goods]; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time]; 66A [Loss or damage after risk has passed to buyer: conformity of goods determined as of time risk passes]
38A [Buyer's obligation to examine goods: time for examination of goods];
39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];
66A [Loss or damage after risk has passed to buyer: conformity of goods determined as of time risk passes]
Overview comments (CISG-Belgium database): "Non-comformity not proved. Dioxin problem only arose after passing of risk -- buyer still obliged to pay."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/2004-06-16.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
16 June 2004 [2003/AR/990]
Translation [*] by Kristof Cox [**]
1. In its writ summoned on 8 October 2001, [Seller] states that the German company [Buyer] failed to pay the balance of 23,591.96 Deutsche Mark [DM] on invoice no. 15.590 of 19 December 2000 for delivery of goods alleging that this was to recover [Buyer]'s damage from the dioxin crisis. [Seller] disputes the existence of any damage and in any event that it would be liable for such damage. Thus, [Seller] claims payment of the main sum, plus damages of 2,359 DM and interest from the date of the invoice, calculated at 1,854 DM, or a total of 27,804.96 DM (14,216.45 €).
In its memorandum of 11 March 2002, [Buyer] states that it suffered damage amounting to 7,268.50 DM (3,716.33 €) because of the dioxin crisis, which it claims by means of counterclaim.
The judgment of 6 February 2003, rendered after proceedings before the Second Chamber of the Commercial Court of Dendermonde ordered [Buyer] to pay the main sum of 12,062.38 €, plus interest at 12 % from 19 December 2000 and to pay damages at 1,206.23 €, plus judicial interest at the legal interest rate from 9 December 2001. Further, the judgment declines the counterclaim of [Buyer] as unfounded and orders [Buyer] to pay the costs.
On 24 April 2003, [Buyer] filed a timely and formally valid appeal with this Court. [Buyer] alleges that it never received invoice no. 15.590, mentioned in the writ, (however it did receive invoice no. ME 015027 of that same date) and that the Court of First Instance wrongly decided that the risk was on its side; [Buyer] claims that "[Seller]'s original main claim ... be declared inadmissible at least unfounded". Further, [Buyer] restates its original counterclaim for compensation of the damage caused by the dioxin crisis, to which it adds attorneys' fees, so that after compensation [Buyer] claims payment of 3,407.42 €.
In its memorandum deposited on 27 February 2004, [Seller] claims payment of 12,179.95 € according to invoice no. ME 015027 € which was actually sent, plus interest at 12 % from 19 December 2000 and fixed damages of 1,218 €.
2. At the hearing of 26 May 2004, it was found that the judgment of 6 February 2003 of the Second Chamber of the Commercial Court of Dendermonde in this case, was not validly signed: the copy was not signed by Commercial Judge L. Van Nuffel.
According to Article 861 juncto 862 of the Code of Civil Procedure [CCP], the lack of signature renders the judgment invalid, even if this does not affect the interests. Since it is not shown that the invalidity would be covered according to Article 864 CCP and since there is no ground to apply Article 867 CCP, the invalidity is declared ex officio.
3. While the original writ found its cause in the delivery of goods billed in invoice no. 15.590 of 19 December 2000 for 68,849.55 DM, [Buyer] finds (for the first time on appeal) that it only received invoice no. ME 015027 of 19 December 2000 for a sum of 69,079.50 DM - and not the invoice mentioned in the writ.
[Seller] presents both invoices as exhibits no. 1a and 1b, and clarifies that no. 15.590 is a 'provisional' invoice, made for internal use; the 'final' invoice no. ME 015027 only differs in the weight: the former invoice is for 19,671.3 kg at 3.5 DM per kg, while the latter is for 19,737 kg. [Buyer] does not dispute that invoice no. ME 015027 is for the delivery mentioned on the writ; moreover, [Seller] presents the CMR-waybill, signed for receipt of 19,737 kg. Further, the correspondence between the parties shows that they always meant invoice no. ME 015027.
[Buyer] wrongly alleges that because of this material error the claim would lack an object or would be inadmissible in some other way: [Buyer] does not contest that it received the goods (nor even that it has to pay for these goods - cf. infra), while the invoice is just a form of evidence and a possible shortcoming in that evidence does not affect the underlying claim.
4. In its fax message of 4 January 2001, [Buyer] complains that there still is no decision on the dioxin scandal; therefore, it will withhold a sum of 23,131.11 DM on the payment of the invoice no. ME 015027 of 19 December 2000. After a discount of 1 % for cash payment, it paid indeed (69,079.50 - 690.80 - 23,131.11 =) 45,257.59 CEM, which [Seller] acknowledges having received on 8 January 2001.
Both in its appeal deposited on 24 April 2003 and in its memorandum deposited on 28 November 2003, [Buyer] acknowledges unequivocally that invoice no. ME 015027 of 19 December 2000 for 69,079.50 DM is due. It only compensates with the damage which it claims for the dioxin crisis, finally estimated at 24,826.37 DM and to which it later added attorneys' fees at 2,540.65 €. These sums are the object of its counterclaim.
Since [Buyer] acknowledges that the sum of 69,079.50 DM is due, but claims to be discharged of that, it has to prove that it was discharged.
5. First, [Buyer] alleges that the 'delivered meat' was non-conforming (see memorandum deposited on 26 November 2003, sub 2.1: "The non-conformity of the meat before delivery is legally established").
It may be understood that [Buyer] is referring to 3,514 kg of pork meat at a value of 14,611 DM, that was sealed up on 7 June 1999; indeed, this is the meat that [Buyer] invokes as the basis for its calculation of damages of 10 March 2000 (at 20,542.73 DM). In any event, no other complaint is being presented.
In its fax message of 27 August 1999, [Buyer] states for the first time that it paid for the "delivery on 1 / 2 June 1999 of pork halves in the period of the dioxin scandal" "without any legal admission" and that it reserves the right to "be compensated for this case (delivery of meats with dioxin) with new deliveries."
There is no trace of any (earlier) protest. Under Articles 38 and 39 CISG, however, the buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances; the buyer 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.
Apparently [Buyer] had no remarks with regard to the delivery of early June 1999, at least its 'remarks' in the fax of 27 August 1999 must be refused since they are late. This is all the more so since the delivery of 1 June 1999, according to the invoice which [Buyer] eventually paid, was of 16,458 kg, and only 3,514 kg was seized (cf. supra); apparently the other 13 tons were re-sold without any remarks.
6. However, there is more.
A letter of "DERLANDRATKREISWESEL" of 2 September 1999, sent to [Buyer] clarifies that (cited in conformity with the translation accepted by the parties and respecting the blank spaces as in the deposited copy of the original letter):
"On 3 June 1999, you received a delivery of pork halves from a Belgian company. At the moment of delivery there were no restrictions yet of the federal republic with regard to Belgian pork meat for possible contamination with dioxin.
On 4 June 1999, the EC-Commission decided to prohibit the import of meat from Belgium. This decision was published in the Bundesanzeiger on 7 June 1999. After this decision and after the Verordnung zum Schutz der Verbraucher var Gefährdung durch Dioxine of 9 June, the meat imported as such could only be traded, if it could be proven with administrative certificates, that the pigs were not kept in blocked areas before they were killed, or if a contamination with dioxin could be excluded by examinations at your expense. Up to now, you were not able to provide such evidence.
For those reasons, the rests of this delivery that are seized from you may no longer be traded."
It appears from this that the rest of the delivery of 1 June 1999 was only sealed up because of a resolution of the government that was taken a few days after [Buyer] had received these goods without protest, remarks or complaints. [Seller] correctly states that loss of, or damage to the goods, after the risk has passed to the buyer (when the buyer takes over the goods), does not discharge [Buyer] of his obligation to pay the price (see Articles 66 and 69 CISG).
[Buyer] wrongly alleges that at the moment of delivery the meat already had the characteristics that would later make its sealing up necessary: [Buyer] has not caused the goods to be examined (which was explicitly mentioned on the "Verzeichnis der zu berücksichtigenden Kostenpositionen" attached to exhibit nr 24 of [Buyer]), so that it cannot even show that the goods are contaminated. Nevertheless, [Buyer] had everything to gain from such an examination in order to make the goods fit for trade in the event there would be no dioxin (cf. supra).
7. In all this there is no proof for the allegation of [Buyer] that non-conforming goods were delivered, nor that [Seller] was in breach. Therefore, the counterclaim of [Buyer] lacks a cause.
On the other hand, [Buyer] raises no specific arguments with regard to the estimate of the claim of [Seller], nor with regard to the damages that are being claimed.
FOR THOSE REASONS,
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff / Appellee of Belgium is referred to as [Seller] and Defendant / Appellant of Germany is referred to as [Buyer]. Amounts in the former currency of the Federal Republic of Germany (Deutsche Mark) are indicated as [DM].
** 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.email@example.com>.Go to Case Table of Contents