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CISG CASE PRESENTATION

Spain 29 March 2005 Court of First Instance of Tudela (Bricks case) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050329s4.html]

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

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Case identification

DATE OF DECISION: 20050329 (29 March 2005)

JURISDICTION: Spain

TRIBUNAL: Juzgado de primera instancia [Court of First Instance] instrucción no. 3 de Tudela

JUDGE(S): Luisa Isabel Ollero Vallés

CASE NUMBER/DOCKET NUMBER: Unavailable

CASE NAME: Unavailable

CASE HISTORY: SAP Navarra, 27 December 2007 [CISG-online 1798]; Tribunal Supremo 20 July 2011; Juzgado de Primera Instancia no. 3 de Tudela (Navarra) 25 July 2014

SELLER'S COUNTRY: Germany (defendant)

BUYER'S COUNTRY: Spain (plaintiff)

GOODS INVOLVED: Machine for rectification of bricks


UNCITRAL case abstract

SPAIN: Tudela Court of First Instance and Investigation No. 3 (Bricks case) 29 March 2005

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/105],
CLOUT abstract no. 1041

Reproduced with permission of UNCITRAL

Abstract prepared by María del Pilar Perales Viscasillas

The business of the Spanish buyer was the manufacture and marketing of tiles and bricks. In 1999, it had considered the possibility of introducing brick-grinding technology into its manufacturing process, for which purpose it had contacted the German seller's exclusive representative in Spain. Prior to the conclusion of the sale contract in July 2000, the seller sent the buyer publicity material on its machines, with particular reference to their productive performance. The buyer, meanwhile, visited the seller's installations and supplied it with a number of samples of the bricks that it manufactured.

Following the co-instruction and delivery of the machine by the seller, the buyer had complained about the machine's poor performance. The seller had denied that there were defects and ascribed the buyer's problems to excess cracking in the bricks that it used. It had also demanded payment of the price of the contract.

The seller's understanding was that, under article 46 of CISG, the contract could not be unilaterally avoided, because the parties had established new deadlines (CISG, art. 47.1). The Court rejected this argument, on the grounds that both the complaint about the defects of the machine and the claim for payment had been submitted within the periods of time set out in CISG (arts. 39 and 49).

With regard to the goods' lack of conformity, the Court applied the provisions of the Civil Code and Spanish case law regarding the principle aliud pro alio; that is, it held that there had occurred a fundamental breach of the sales contract, in view of the unfitness of the machine in question for the purpose for which it was sold and the buyer's consequent dissatisfaction, which gave it the right to avoid the contract. In that connection, the Court considered that the possible avoidance of the contract was provided for in similar terms in article 49.1 (a) of CISG. Lastly, the Court considered the seriousness of the defects in the light of the expert report that had shown that bricks passing through the machine exhibited a breakage level of between 75 per cent and 84 per cent, depending on the speed applied.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 25 ; 35 ; 47 ; 49 ; 84 [Also cited: Articles 30 ; 39 ; 46(1) ; 53 ]

Classification of issues using UNCITRAL classification code numbers:

25B [Fundamental breach (definition of): substantial deprivation of expectation, etc.];

35A ; 35B [Conformity of goods: quality, quantity and description required by contract; Requirements implied by law];

47A [Notice fixing additional final period for performance: buyer's right to fix additional period for performance];

49A [Buyer's right to avoid contract: grounds for avoidance];

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

Descriptors: Conformity of goods ; Lack of conformity notice, timeliness ; Fundamental breach ; Nachfrist ; Avoidance ; Interest

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1381&step=Abstract>

Spanish: CISG-Spanish website <http://www.cisgspanish.com/seccion/jurisprudencia/espana/?anio=2005>

CITATIONS TO TEXT OF DECISION

Original language (Spanish): CISG-Spanish website <http://www.cisgspanish.com/jurisprudencia/espana/juzgado-de-primera-instancia-e-instruccion-no3-de-tudela-29-marzo-2005/>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1381&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Peter Schlechtriem and Pilar Perales Viscasillas, Case commentary (June 2005)

French: Claude Witz, Recueil Dalloz (22 February 2007) 535, 539

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Case text (English translation)

Queen Mary Case Translation Programme

Court of First Instance

Juzgado de Primera Instancia e Instrucción No. 3 de Tudela
Cerámica Tudelana, S.A. v. Wassmer Gruppe Spezial Machinen GmbH

29 March 2005

Translation [*] by Mercedes Romero Iglesias [**]

Translation edited by Mª Pilar Perales Viscasillas [***]

[..]

FACTS

First.- On 29 October 2002 a statement of claimconcerning contractual liability was submitted to this Court, presented by the Plaintiff "Ceramica Tudelana, S.A." [Buyer] against Defendant "Wassmer Gruppe Spezial Machinen GmbH" [Seller]. The claim pertains to a contract entered into between [Seller] and [Buyer] on 21 June 2000 for the sale of machinery that incorporated a new technique for the rectification of bricks.

[Buyer] seeks to have the contract declared avoided and to have [Seller] condemned to pay the [Buyer] 467,450 Euros, plus interest as well as costs, and to have [Seller] remove the machinery installed, at the [Seller]'s expense.

The basis of [Buyer]'s claim is:

  1. [Buyer] manufactures and markets tiles and bricks. In 1999, [Buyer] considered the possibility of introducing a "rectification of bricks" technique in its manufacturing process and to obtain information, contacted Schattner & Asoc. S.L., [Seller]'s exclusively representative for Spain and Portugal. The conversations lasted for approximately one year, whereby the [Buyer] received publications of the [Seller], and information on its machines and their productive process.

  2. On 28 and 29 February 2000, [Buyer]'s manager, Juan José Simón, went to Germany to visit [Seller]'s installations. Previously, at [Seller]'s request, [Buyer] had sent samples of bricks manufactured by it, in order to introduce [Buyer]'s product to the [Seller], and to enable the [Seller] to analyze the bricks manufactured by [Buyer], to design the machinery for their rectification and to do all the relevant tests, without any claim having been raised by the [Seller] regarding the poor/bad quality of the bricks.

  3. Having examined the information offered by [Seller], [Buyer] decided to buy the machinery, concluding the contract of sale on 21 July 2000.

  4. [Seller] has breached its contractual obligations, as the construction and delivery of the machinery was delayed several months and because of the deficient performance of the machinery, from the very beginning.

Second.- By writ dated 20 December 2002 andafter having required the [Buyer] to translate some of the documents attached to its statement of claim, [Buyer]'s statement of claim was admitted and was sent to the [Seller] for [Seller] to reply in twenty days. On 6 March and 8 March 2003, respectively, the [Seller] filed written statements calling for the annulment of proceedings, and gave notice of a plea alleging that the German courts were competent to hear the proceedings. Both written statements were rejected by writs dated 23 April and 14 July 2003, respectively.

In due legal time, [Seller] replied to [Buyer]'s statement of claim objecting to it and requesting its rejection, alleging that [Seller] had complied with all its contractual obligations, and that all the problems envisaged in the "rectification of bricks" were due to excessive cracks in the bricks used by the [Buyer]. Also, and as a result of [Buyer]'s non-compliance with the partial payment of the price requirement of the contract, [Seller] filed a counterclaim, containing an action for payment against [Buyer], whereby, [Seller] alleged that [Buyer] should be ordered to pay 151,212.17 Euros and the legal interest since the interposition of the [Seller]'s counterclaim.

Third.- By writ dated 10 September 2003, the [Seller]'s counterclaim was admitted and sent to the [Buyer] for [Buyer] to reply in twenty days. The [Buyer] replied in due time, asking for the total rejection of the counterclaim.

Fourth.- By court order dated 4 October 2003, and admitting the answer to the counterclaim, the parties were called for a pre-trial conference on 3 March 2004. The parties having appeared in legal form, the process was declared opened.

The parties having manifested the existence of the proceedings, the [Seller] alleged a lack substance to the [Buyer]'s claim, alleging the impossibility of unilateral avoidance of the contract, and submitting the decision of such action of exception to judgment. The parties stated the controversial facts, with the [Buyer] challenging the content of every document handed in by the opposite party.

Regarding the evidence, the [Buyer] proposed as means of proof: the documents handed in, witness evidence, expert evidence, and juridical expert evidence and the [Seller]'s interrogation of [Buyer]'s legal representative, witness and juridical expert evidence. Once all the evidence proposed by the parties was admitted, 15 September 2004 was the date indicated for the commencement of the proceedings.

Fifth.- During the proceedings, with the parties having appeared in court in legal form, the evidence presented and the parties having orally formulated their conclusions on the controversial facts, and according to the legal arguments which support their statements. The [Seller] required the testimony of a witness situated in Germany, and the proceedings were declared closed and subject to judgment.

Sixth.- By writ dated 15 September 2004, the testimony of the witness in Germany required by the [Seller] was submitted, suspending the date to dictate until judgment.

The Ministry of Justice informed about the impossibility of permitting this due to a formal defect. By Court order dated 18 January 2005, it was agreed to leave the actions pending till final judgment, with the [Seller] having submitted an appeal which was rejected.

Seventh.- During the present process, the legal prescriptions have been observed.

LEGAL REASONING

First.- Previously, and before entering into the substance of the case, the representation of the [Seller], supported by Article 46 of the United Nations Convention on Contracts for the International Sale of Goods, 11 April 1980, alleged the exception of lack of action of the [Buyer], as the unilateral avoidance of the contract is not allowed by the Convention, as the parties established different compliance deadlines as those regarded at Article 47(1) of the cited Convention.

Replying to this exception, the [Buyer] alleged that the Vienna Convention does not exclude the application of Spanish rules, Article 39, as it is possible, according to the legislation contemplated at our Civil Code, the unilateral action of avoidance of the contract if lack of compliance of the other party.

In this respect, it must be noted that, we are under an international sales contract, whereby the United Nations Convention on Contract for the International Sale of Goods, 11 April 1980, made in Vienna, which Spain acceded to on 17 July 1990, is applicable.

Article 39 of the Convention states:

"(1) 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.

"(2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee."

Art 46(1) of the Convention states:

"The buyer may require performance by the seller of his obligations unless the buyer has resorted to a remedy which is inconsistent with this requirement."

Finally, Article 49 envisages the possibility of avoidance by the buyer, as follows:

"(1) The buyer may declare the contract avoided:
(a) if the failure by the seller to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract; or
(b) in case of non-delivery, if the seller does not deliver the goods within the additional period of time fixed by the buyer in accordance with paragraph (1) of article 47 or declares that he will not deliver within the period so fixed.

"(2) However, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided unless he does so:
(a) in respect of late delivery, within a reasonable time after he has become aware that delivery has been made;
(b) in respect of any breach other than late delivery, within a reasonable time [...]"

In the present case, taking into account the documents handed in, the statement of claim had not only been timely submitted, but also, the communications and claims made by the [Buyer] regarding the multiple problems that occurred with the operation of the machinery acquired, had also been made within a reasonable time, as the contract was signed on 21 July 2000, but the delivery and installation of the machinery at the [Buyer]'s facilities were not made until the month of June 2001.

Since that date, the communications and claims made by the [Buyer] to the [Seller] were multiple (Docs. 15 to 46 Statement of claim). The last of these communications took place on 25 October 2002 (Doc. 45), whereby the [Buyer], making reference to a previous communication of 18 October 2002 (Doc. 43), and due to the months that had gone by without [Seller] having offered any reasonable solutions to the problems regarding the breakage of the bricks, stated that, if after a deadline of one week, the [Seller] offered no solution to the problems, [Buyer] would go to court.

[Seller] answered this communication and stated that it is impossible to have a machine with 0% of deficiencies and that the installation supplied is suitable for the rectification of the blocks of clay, so "if you persist in demanding of 0% of deficiencies according to point 1, any action made by us would be useless and the case would have to be clarified in court." (Doc. 46).

For all these reasons and taking into account that the deadlines envisaged by the Convention have been complied with, the exception brought up by the [Seller], should be rejected.

Second.- Once having made these previous considerations, and now moving on to the substantive part of the case, the [Buyer] shielded by Articles 1101 and 1124 of the Spanish Civil Code, brings an action of avoidance of the contract of sale, alleging a breach of seller's contractual obligations, as [Seller] has delivered a defective product that is different that the one contracted for and, thus, useless for the purpose for which it was made. In particular, the [Buyer] alleges that the machine for the "rectification of bricks" acquired by it and installed by [Seller] is unsatisfactory because, as soon as the machinery gains some speed, the bricks suffer multiple breakages.

[Seller] responds to [Buyer]s submission stating that, it has complied with all its obligations contained in the contract, and that all the problems that occurred in the "rectification of the bricks" are due to excessive cracks in the bricks used by the [Buyer]. [Seller], at the same time, filed an action for payment against the [Buyer], claiming the part of the price that was unpaid.

Once having raised the issue, it is necessary to begin from the existence of a contract of sale concluded between the parties, whereby the [Seller] was obliged to deliver and install an equipment of rectification, in accordance with certain performance specifications, in particular a speed of 12m/min and a precision of rectification of +/- 2/10mm, and the [Buyer] was obligated to pay the price; a legal relationship which has been recognized by the parties.

A contract of sale is a bilateral legal transaction, as it produces reciprocal obligations for both contracting parties in such way that each of the parties commits itself to a performance with the purpose of obtaining the compliance with the commitment of the other party. In this sense, one of the commitments of a seller (articles 1461 and subsequent Spanish Civil Code, Article 329 and consistent provisions of the Spanish Commercial Code and Article 30 of the United Nations Convention on Contracts for the International Sale of Goods, 11 April 1980) is the delivery of the goods with the buyer having the duty to pay the price for the goods (Article 1500 of the Civil Code, Article 53 and subsequent provisions of the cited Convention).

In this way, as can be deduced from Articles 1124 and 1100, last paragraph, of the Spanish Civil Code, if one of the parties expects to demand of the other party the compliance with any of its obligations, it must first comply with its own obligations.

As shown by the Supreme Court in its cases of 14 June 1984 and 15 May 1985, amongst others, by Articles 1466, 1500.2, 1505, 1100 and 1124 of the Spanish Civil Code, as well as Articles 1154, 1157 and 1100, last section, of the same Code, actions based on breach of contract obligations or "aliud pro alio" can be filed against a contracting party that has not complied with its obligations or that has complied partially or in a defective way, unless in this latter case, the incorrect exercise and omission in the partial or defective performance lacks sufficient magnitude and implies a mere imperfection in the compliance with obligations, cases where the irregularities should be sanctioned, not with the most severe consequences, but with damages regarded at article 1101 Spanish Civil Code which refers to the reduction of price in the same proportion as the value of the price that should be paid.

The reciprocity that should govern the functional development of bilateral commitments, and the equity that should inspire the application of rules, has led to the adoption of disciplinary solutions directed to the re-establishment of the balance of the performances, which in general terms, puts up with the proportional reduction of the performance executed in equivalent measure or proportional to the part of the performance that the other party still has to comply with, or to the economical importance of the deficiencies contemplated in them.

In this sense, a breach of contract does not "per se" exonerate the duty to pay the agreed price, and it is the party who alleges such breach of contract, in this case, [Buyer], that has the duty to demonstrate and specify the lack of compliance, according to the Supreme Court case law, amongst others, the case of 28 December 1999, and as it infers from the general rules about distribution of burden of proof at Article 217 of the Code of Civil Procedure, as it brings up, in the procedural debate, facts related to the regular and exact compliance with the obligations owed by the [Seller].

In this way, the Supreme Court case of 2 September 1998 states that "It is reiterative doctrine of the Court which declares that we are in presence of delivery of a different object "aliud pro alio" when there is a total breach of the contract of sale, because of the impossibility of the object sold to fit the purpose for which it had been sold and consequently to the dissatisfaction of the buyer, which in these cases isallowed to turn to the protection afforded by Arts. 1101 and 1124 of the Spanish Civil Code, such inability must arise from defects of the object sold which impede the object from having the utility for which it had been sold, with a purely subjective dissatisfaction of the buyer being insufficient to permit the remedy of avoidance.

Similarly, a possibility of avoidance in certain circumstances is envisaged by the United Nations Convention on Contract for the International Sale of Goods, 11 April 1980, as its states at Article 49(1)(a) that "The buyer may declare the contract avoided: if the failure by the seller to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract".

Third.- Applying to the case the doctrine referred to previously and taking into account the evidence presented in this proceeding, it should be determined, first, whether, as the [Buyer] indicates in its claim, the machinery supplied by [Seller] suffers from a vice or defect which makes it unsuitable for the purpose for which it was intended. In particular, [Buyer] maintains that performance of the machinery is "highly unsatisfactory" as the bricks suffer multiple breakages as soon as the machinery reaches some speed.

One of the principle types of evidence to evaluate the existences of defects and apart from the expert evidence enclosed to the statement of claim, is the opinion of juridical experts. The evidence presented by AIN (Navarra Industry Association) and AITEMIN Technological Centre is of special importance because of their impartiality and objectivity as they were appointed by the Court, and because of the practical and technical knowledge required in the subject.

Both reports have been ratified in trial by their authors, Natalia Ortega Zunzarren and Jorge Velasco, respectively, and submitted to the necessary principles of audience and contradiction in trial.

In first place, in the report elaborated by AIN, whose object was the inspection of the machinery installed by the [Seller] to rectify thermos-clay bricks, it is clearly stated that this rectification machinery is useless and improper for its purpose, taking into account the high level of breakage of bricks that it produces in the process of rectification.In this way, in the cited report it is stated that on 23 April 2004, the expert Sra. Ortega proceeded with the evaluation of the operation of the installation for rectification of bricks acquired by the [Buyer] and supplied by the [Seller], carrying out several tests, programming the machinery to work at two different speeds, 5m/min and 10 m/min. The result obtained is that the percentage of bricks considered useful, without any breakage, did not exceed the 25% of a total of 51 rectified bricks at a speed of 5m/min; and when the speed was raised up to 10m/min, this percentage diminished up to 16% of a total of 69 rectified bricks at that speed. Taking all this into account, the expert reached the following conclusions:

"The installation is susceptible of working electronically and mechanically at a speed offered by the manufacturer in vacuum, although it is not considered that it complies with its function of rectification of bricks of thermo-clay in the format tested 290x190x300mm at the speeds offered by the manufacturer. In the test made, it has been proved that there is a lack of compliance with the performance of production offered by the manufacturer, taking into account the high level of breakage at the two speeds of operation tested."

Likewise, the expert points out that "the possible defects of the operation appear when the teams work with the product manufactured by [Buyer]," considering that it should have been the experience and knowledge of the constructive characteristics of the machine of the manufacturer and/or designer of it, specialized in the manufacture of the rectification of bricks "adapting the size of the machine to the necessary performance" and adopting solutions in each case to fit the client's needs, as published in the commercial-technical documentation given to [Seller]'s client, the [Buyer],previous to the purchase of the machines.

The expert considers that, although any process of industrial manufacture, amongst them, the manufacture of bricks, is susceptible of generating a percentage of lack of perfection in such manufacture, a percentage of lack of perfection of 75%-84% (as in the case at hand) cannot be considered as normal in a productive process.

Finally, it is necessary to stress also, that during trial, Ms. Ortega manifests that she herself supervised the bricks used before the tests, noticing that these bricks were normal, that none of the bricks which had fissures had been chosen or substituted, even some of the bricks that had fissures would not break, and others which did not have fissures would break.

Secondly, and answering the allegations brought by the [Seller] regarding the unfitness of the bricks supplied by the [Buyer] because of their breakage during the process of rectification, it must be taken into account the report elaborated by AITEMIN Technological Centre, whose object was:

   -    To pass judgment on the characteristics of the bricks provided by the [Buyer];
   -    To verify whether they comply with the existing rules;
   -    To make a comparative analysis between the material sent by [Buyer] to [Seller] for the initial tests at [Seller]'s facilities, and the material used in the Notarial evidence made at the [Buyer]'s facilities;
   -    To determine if by the firing process and cuts of the bricks used at the [Buyer]'s facilities, irregularities appear that might affect in a negative way the process of rectification; and
   -    To pass judgment on whether other characteristics of the production used by [Buyer] makes their bricks suitable or unsuitable for a standard process of rectification.

In this report, the experts point out that on 23 April 2004, they made a visit to [Buyer]'s facilities in order to inspect them, to check the process of production and to pick up some samples manufactured by [Buyer]. Once having gathered the samples and made the tests, the experts concluded that all the pieces tested complied with the requirements of Rule UNE 136010:200, indicating, as well, that the results are very similar in the two series (the material which had been used in the Notarial evidence made at [Buyer]'s facilities and the material sent by [Buyer] to [Seller], for the initial tests practiced at their facilities), pointing out that the thickness of the walls, the clay density, the surface of the perforation and size control, are all of the same order; the mechanical resistance is somehow slightly higher in the pieces sent by [Seller], regarding the aspect and structure, only one fissure is detected in piece nš 5 of those sent by [Seller]. In other respects, all the pieces comply with Spanish legal requirements and only piece nš 1 sent by [Seller] presents arrows higher to 3mm in its boards.

Regarding the installation and line of production of [Buyer], the expert considers that it is a usual type of installation in Spain, and that the pile of the pieces in the oven as well as the system of cut downs are not considered to produce deformations or defects which impede the correct facing of the pieces obtained.

Taking all into account, Mr. Velasco concludes that "the pieces to not present any obvious defects which make them incapable of facing."

Other objective evidentiary elements should be taken into account with these reports. First, it is necessary to stress the testimony of the witness Jaime Olivares, Legal representative of the "Talleres Olivares S.L" company which supplied to [Buyer] a chain of transport of the material that had also been acquired by the [Buyer] as a complement to the machine of rectification, and was the company in charge of the assembly and disposition of this chain of transport, contracted by the [Seller] and according to the plans/drafts made by it, and which does not have any relation with the [Buyer] that deprives Mr. Olivares from being objective. Mr. Olivares testified in trial that he had been present in machinery tests and that "there were many breakages, and also problems with the programming of the machinery, sequence problems, and that the machine did not comply with anything it had to do."

Second, the notarial evidence of functioning made on 24 April 2002 at [Buyer]īs facilities, with the Notary Mr. Víctor González de Echávarri Díaz, as well as: Mr. Wassmer and Mr. Schattener as technician of the [Seller], Mr. Simon, representative of the [Buyer] and its technicians (DOC. 48 St. of Claim). In this evidence, at the second test of precision made at a speed of 8m/min, it is stated that "the rectified bricks commence to appear with splinters and breakages, which can been seen at a simple sight while the test is practiced" and that "out of the 45 bricks which were rectified at the speed indicated, 16 were damaged; splintered or broken". In the last test of speed, at a speed of 12m/min, the results were 81 bricks correct, 46 with gaps and 69 broken".

Taking all this into account, the existence of defects in the functioning of the machine of rectification supplied by [Seller] and acquired by [Buyer] is proved, defects which make the bricks that pass through the machine present breakages at a level much higher than 50%, specifically from 75% to 84%, depending on the speed used.

Such defects, if we compare them to the characteristics that the machine that was purchased (which guaranteed an optimum performance at a speed of 12m/min at a permanent functioning) should have had and with the performance that it should have offered, does not constitute a mere perfunctory vice. Rather, according to the doctrine cited, it constitutes a case of full breach of the contractual obligations because of the unsuitability of the object supplied for the purposed proposed by the [Buyer], which was the use of this machine for industrial activities for the rectification of the bricks. All the more since, taking into account that in order to adapt the machine to the circumstances and characteristics of the material used by the buyer, the buyer sent samples of such material to the seller, to which the machine was supposed to be adapted.

Taking into account that the machine and installations supplied by the [Seller] are defective and that they did not permit the correct rectification of the bricks manufactured by the [Buyer], as these suffered from an unacceptable level of breakages during the process of rectification, it must be understood that this has led to total dissatisfaction of the [Buyer], allowing him to avail himself of the sanctions provided at Arts. 1101 and 1124 of the Spanish Civil Code, regarding avoidance of the contract.

Consequently, such breakage by the [Seller] of the obligation link that the contract purports, leads, with the protection of Article 1124 of the Spanish Civil Code, to the reimbursement of each of the interested parties that in light of the contract have intervened in the object of value of the performances, extinguishing as well, with the same criteria, the other obligations which could have been agreed, being in consequence, the [Seller] is obligated to return to the [Buyer] the total price and that according to the documentation incorporated to the actions is 467,450 Euros. Likewise, the [Seller] is obliged to retire, at its own expenses, the machinery installed at [Buyer]sī facilities.

Such amount of money accrued legal interests from the date of the interposition of the statement of claim as stated at Arts. 1100, 1101, 1008 of the Spanish Civil Code, as well as the procedural interests provided at Art. 576 of the Spanish Civil Procedural Code.

Fourth.- The costs must be borne, according to Art. 394 of the Spanish Civil Procedural Code, by the [Buyer].

DECISION

Allowing in full the statement of claim made by the [Buyer] against the [Seller], and rejecting in full the counterclaim made by the [Seller] against the [Buyer], the following pronouncements must be made:

  1. I declare the full avoidance of the contact of sale of the machine for rectification of bricks, concluded on 21 July 2000 between the [Seller] and the [Buyer].

  2. To require the [Seller] to pay the [Buyer] 467,450 Euros plus the legal interest since the date of interposition of the statement of claim, in concept of default interest, with the interest provided at Art. 576 of the Spanish Civil Procedural Code.

  3. To require the [Seller] to retire, at is own expenses the machine installed at [Buyer]'s facilities.

  4. To require the [Seller] to pay the costs of the present proceedings.

Against this case, it is allowed to interpose remedy of appeal, by means of statement which is to be presented within five days of notification of the present, whereby it must be cited the case appealed and the will of appealing, with expression of the pronunciations that are to challenged, for it to be resolved by the Court of Appeal of Navarra, according to Art. 457 of the Spanish Civil Procedural Code.

By means of my decision, I pronounce, order and sign.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff and Counter-Respondent Ceramica Tudelana S.A. of Spain is referred to as [Buyer] and Defendant and Counter-Claimant Wassmer Gruppe Spezial Machinen GmbH of Germany is referred to as [Seller].

** Mercedes Romero Iglesias, Member of the Willem C. Vis Moot team of Universidad Carlos III de Madrid (2003), Degree in Law at Universidad Carlos III; postgraduate diploma in International Commercial Arbitration (2003-2004), Queen Mary, University of London; currently, Lawyer at "Ledesma y asociados, Estudio Jurídico" (Madrid Spain).

*** Mª Pilar Perales Viscasillas. Doctor in Law. Professor of Commercial Law, Universidad Carlos III de Madrid. Representative of Spain at UNCITRAL.

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