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CISG CASE PRESENTATION

Belgium 8 November 2004 Appellate Court Gent (NV Boco v. S.r.l. Lenzi Egisto) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/041108b1.html]

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

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Case identification

DATE OF DECISION: 20041108 (8 November 2004)

JURISDICTION: Belgium

TRIBUNAL: Hof van Beroep [Appellate Court] Gent

JUDGE(S): H. Debucquoy, F. Deschoolmeeester, J. Vermeir

CASE NUMBER/DOCKET NUMBER: 2001/AR/1982

CASE NAME: NV Boco v. S.r.l. Lenzi Egisto

CASE HISTORY: 1st instance Rechtbank van Koophandel Oudenaarde 10 July 2001

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Belgium (defendant)

GOODS INVOLVED: Textiles


Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 14 ; 18 ; 19 ; 23 ; 33

Classification of issues using UNCITRAL classification code numbers:

14A [Criteria for an offer (basic criteria): intention to be bound in case of acceptance];

18A [Acceptance of offer (time and manner): criteria for acceptance];

19A1 [Reply to offer purporting to accept but containing additions or modifications: in general, consitutes rejection and counter-offer];

23A [Time of conclusion of contract: contract concluded when acceptance becomes effective];

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

Descriptors: Offers ; Acceptance of offer ; Counter-offer ; Formation of contract ; Delivery

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Editorial remarks

Overview comments (CISG-Belgium database): "Application of CISG -- Convention on the Law Applicable to Contracts for the International Sale of Goods (Hague Conference, 15 June 1955) -- residence of seller -- Italy -- CISG as part of Italian law. Creation of contract -- agreement -- if not acceptance of offer -- counter-offer. Time of delivery -- determined by agreement -- not only by order of buyer."

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Citations to case abstracts, texts, and commentaries

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=1205&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1205&step=FullText>

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. Boco v. S.r.l. Lenzi Egisto

8 November 2004 [2001/AR/1982]

Translation [*] by Kristof Cox [**]

[...]

FACTS AND PROCEDURE IN FIRST INSTANCE

2. The parties had a business relationship in which Defendant-Appellant N.V. Boco [Buyer], a manufacturer of slippers, purchased fabrics from Plaintiff-Appellee S.r.l. Lenzi Egisto [Seller], a company under Italian law that manufactures fabrics.

The [Seller] provided samples of its fabrics to the [Buyer] on the basis of which the latter determined its collection of slippers and presented this collection to its customers. Depending on the orders of its customers, the [Buyer] then ordered the necessary amounts of fabrics from the [Seller]. On 28 November 1994 and 7 December 1994, the [Buyer] ordered samples from the [Seller] for the winter collection 1995-1996.

In a fax of 30 March 1995, a first order for fabrics was placed in which the [Buyer] asked [Seller] to deliver before the end of April 1995. In a fax of 5 April 1995, the [Seller] answered that this delivery date would not be met and sent a confirmation of order. In a fax of 14 April 1995, the [Seller] confirmed that the fabrics would be delivered on 10 May 1995. On 5 May 1995, the fabrics were delivered and, in invoice F.581, [Seller] asked for payment of 17,887,080 It. Lire.

In a fax of 20 April 1995, the [Buyer] placed a second order for fabrics, among which 100 meters of fabric "Kabul", with a request for urgent delivery, certainly before the end of May 1995. In a fax of 21 April 1995, the [Seller] sent the prices of the ordered fabrics and suggested an alternative for the "Kabul" fabric, namely "Lima". The [Seller] sent a confirmation of order, except for the fabric "Kabul". In a fax of 3 May 1995, the [Buyer] stated that its customers had placed their orders on the basis of the "Kabul" sample. In a fax of 12 May 1995, the [Seller] stated that the fabrics would not be delivered before 15 June 1995.

In a fax of 16 May 1995, the [Buyer] placed a third order with the [Seller]. The [Buyer] urged the [Seller] to produce 100 meters of "Kabul" fabric. The [Seller] answered that this was impossible since the order should be for at least 1,000 meters to start the production of this fabric. In a fax of 24 May 1995, the [Seller] stated that certain fabrics could only be delivered at the end of June / beginning of July 1995.

The [Seller] complained about the delivery date and in a fax of 6 June 1995 [Buyer] sent a formal notice to [Seller] to deliver the fabrics before 7 July 1995. On 9 June a number of fabrics were delivered by the [Seller] and, in invoice F.759 of 9 June 1995, [Seller] asked for payment of 8,865,235 It. Lire.

On 16 June 1995 the [Buyer] sent a formal notice to the [Seller] regarding the fabric "Kabul" and stated that its customers had ordered 1,036 pairs of slippers in "Kabul". The [Buyer] calculated that its loss of profit in case of non-delivery would be 238,280 Belgian Francs. The [Seller] replied that it already warned in December 1994 that the fabric "Kabul" was no longer part of its collection and would only be reproduced for a minimum order of 1,000 meters. The parties did not come to an agreement.

After several letters of reminder for payment of unpaid invoices, the [Buyer] confirmed on 12 September 1995 that it had paid invoice F.759, but that it had subtracted from invoice F.581 its lost profits for the non-production of the fabric "Kabul". On 12 October 1995, [Buyer] paid the sum of 5,320,006 It. Lire on invoice F.581, against which the [Seller] protested.

3. By summons, delivered on 8 January 1997, the [Seller] claimed payment from the [Buyer] of 12,567,074 It. Lire, against the value in Belgian Francs at the highest exchange rate on the date of payment, as the balance of invoice F.581 of 5 May 1995, plus 36.721 Belgian Francs late-payment interest from 5 June 1995 till day of summons, plus judicial interest and legal costs.

The [Buyer] strongly rejects the [Seller]'s claim. It filed a counterclaim against the [Seller] for 348,510 Belgian Francs as damages for breach of contract by the [Seller], plus legal interest from 20 June 1995, plus judicial interest, plus legal costs.

In an interim judgment of 22 June 1999, the Court of First Instance re-opened the debates ex officio to allow the parties to present on the applicable law and the consequences that would flow from that.

In a final judgment of 10 July 2001 the Court of First Instance ruled:

   -    The [Seller]'s main claim is admissible and founded and ordered the [Buyer] to pay to the [Seller] 12,567,074 It. Lire, at the value in Belgian Francs at the highest exchange rate on the date of payment, as the balance of invoice F.581 of 5 May 1995, plus legal default interest from 5 June 1995 until the summons, plus judicial interest, plus legal costs;
 
   -    The [Buyer]'s counterclaim is admissible, but unfounded.

PROCEDURE ON APPEAL

4. The appeal was filed by the [Buyer]. The parties are no longer in dispute about the competence of the Court of First Instance, nor the applicable law according to the Hague Convention of 15 June 1995, namely Italian law. The CISG has been part of Italian substantive law since 1 January 1988 and thus is applicable to the disputed sales agreements between the parties of March, April and May 1995.

The [Buyer] contends that the [Seller] has breached the contract by (1) late deliveries and (2) non-delivery of the fabric "Kabul". Alternatively, the [Seller]'s claim for interest is contested. The [Buyer] upholds its original counterclaim.

The [Seller] asks the confirmation of the first judgment.

EVALUATION

5. The alleged late deliveries

Art. 33 CISG provides that, if the sale agreement or a later agreement between the parties determines the delivery date, either explicitly, or by reference to a certain event, that date is binding on the seller. This concerns the date that was agreed on by the parties, and not the delivery date that was demanded by the buyer on the order.

      5.1 As to order no. 21463 of 30 March 1995, the [Buyer] had asked in a fax of 5 April 1995 to deliver at the latest in April 1995 (...). The [Seller] had answered immediately that it would be nearly impossible to deliver before the end of April 1995 (...).

Further, the [Seller] has confirmed in a fax of 13 April 1995 that the order would be delivered on 10 May 1995 (...). The [Buyer] sent no further reaction to this, which allows one to assume that it agreed with the suggested date of delivery.

Finally, delivery took place on 5 May 1995 (...).

      5.2 As to order no. 21713 of 20 April 1995, the [Buyer] had asked for delivery as soon as possible and certainly before the end of May 1995 (...). The [Seller] answered in a fax of 12 May 1995 that it could not deliver before 15 June 1995.

In a fax of 24 May 1995, the [Seller] informed that two elements of the order could only be delivered at the end of June 1995 / beginning of July 1995 and the other goods mid-June 1995 (...). The [Buyer] answered that it demanded delivery at the latest mid-June 1995, if not, it would not accept the delivery (...).

The [Buyer] has stated in a fax of 6 June 1995 that the ordered goods had to be in its possession before 7 July 1995 (evidence item 16 of the [Buyer] / 19 of the [Seller]). This order was partially delivered on 9 June 1995 and the rest was delivered in the first week of July 1995.

      5.3 As to the order no. 22105 of 16 May 1995, the [Buyer] did not include a delivery date in its order (...). This order was delivered on 9 June 1995.

      5.4 The orders nos. 21463 and 22105 were delivered within the suggested dates and even earlier than foreseen.

In its fax of 6 June 1995, the [Buyer] expressly agreed with the delay suggested by the [Seller] as to order no. 21713 for two items of the order. A new delivery date was agreed on by the parties.

Thus, there were no late deliveries.

6. Non-delivery of the fabric "Kabul"

The following provisions of the CISG are relevant:

   -    Article 14(1) states: "A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. A proposal is sufficiently definite if it indicates the goods and expressly or implicitly fixes or makes provision for determining the quantity and the price."
 
   -    Article 18(1) states: A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance."
 
   -    Article 19(1) states: "A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer."
 
   -    Article 23 states: "A contract is concluded at the moment when an acceptance of an offer becomes effective ..."

The [Buyer] states that in December 1994 it ordered a sample of five meters of the fabric "Kabul" at an international fair, which was delivered by the [Seller] and without reservations as to the production of this fabric (evidence items 1-2-2bis of the [Seller]). The sending of samples cannot be considered as an offer. Nothing was determined at that moment, inter alia, which amount of fabric 'Kabul' the [Buyer] would order.

On the other hand, the [Buyer] made an offer (in the meaning of Article 14(1) CISG) to buy 100 meters of the fabric "Kabul" in its fax of 20 April 1995 (...).

However, on 21 April 1995 the [Seller] has suggested a modification (in the meaning of Article 19(1) CISG) to deliver the fabric "Lima" as an alternative (...). This counter-offer was not accepted by the [Buyer] (...).

In its letter of 16 May 1995, the [Seller] then states explicitly that it could not confirm the order of the fabric "Kabul". Further, it made another counter-offer to start production of the fabric "Kabul", namely, if 1,000 meters would be ordered. This counter-offer was also rejected by the [Buyer].

Unlike the contention of the [Buyer], there was no agreement between the parties as to the fabric "Kabul". Thus, there can be no contractual breach. Therefore, the [Buyer] is not entitled to compensation of 5,906.81 € as damages, this for the alleged loss because of the non-production of the "Kabul" slippers.

7. The Court of First Instance decided correctly that the balance of invoice F.581 of 5 May 1995 was still due, as was the interest from the expiry date of the invoice and at the Belgian legal interest rate.

Considering the above evaluation (no contractual breach by the [Seller]), the [Buyer]'s counterclaim is unfounded. Any causal link between the annulments of orders by EDO Shoe and Prora or the economic unemployment at the [Buyer]'s, on the one hand, and the present case, on the other hand, is not proven.

The [Buyer]'s appeal is completely unfounded.

[...]


FOOTNOTES

* 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].

** 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 casenotes 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 April 15, 2008
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