Belgium 20 September 2005 Commercial Court Hasselt (J.M. Smithuis Pre Pain v. Bakkershuis) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/050920b1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: A.R. 04/3568
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Netherlands (plaintiff)
BUYER'S COUNTRY: Belgium (defendant)
GOODS INVOLVED: Bread
Reproduced from CISG-Belgium database
"Article 33 of the CISG determines that the seller has to deliver the goods at the time specified in the agreement. This cannot be a date requested by the buyer on an order form without being accepted by the seller.
"The reasonable period of art. 39(1) of the CISG is a short period. In general, a period lasting longer than one month is considered as unreasonable. Moreover, the buyer has to specify clearly which goods were lacking at the time of delivery. A protest formulated in a general manner is not sufficient. When the conditions of art. 39(1) of the CISG are not fulfilled by the buyer, it is not necessary to examine whether the seller has performed its delivery obligations.
"The claimant is entitled to interest under art. 78 of the CISG. No formal notice is required to start the interest. Art. 78 does not determine which interest rate needs to be used. As the interest rate is considered a compensation for the late payment, the legal interest applidable in the country of residence of the creditor needs to be applied, because the damage of the creditor is the loss of that interest."Go to Case Table of Contents
APPLICATION OF CISG: Yes [Article 1(1)(a)]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
33A [Time for delivery: on date fixed or determinable by contract]; 35A [Conformity of goods to contract: quality, quantity and description required by contract]; 39A11 ; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Degree of specificity required]; 74A [General rules for measuring damages: loss suffered as consequence of breach]; 78B [Rate of interest]
33A [Time for delivery: on date fixed or determinable by contract];
35A [Conformity of goods to contract: quality, quantity and description required by contract];
39A11 ; 39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time; Degree of specificity required];
74A [General rules for measuring damages: loss suffered as consequence of breach];
78B [Rate of interest]
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=1207&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (Dutch): CISG-Belgium database <http://www.law.kuleuven.ac.be/ipr/eng/cases/2005-09-20%20Hasselt.html; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1207&step=FullText>
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
J.M. Smithuis Pre Pain v. Bakkershuis
20 September 2005 [A.R. 3568/04]
Translation [*] by Kristof Cox [**]
1. The Plaintiff [Seller] is a producer of bread [buns]. The [Seller] delivers these buns to the Defendant [Buyer], which is a wholesaler.
After some difficulties between the parties, certain agreements were reached, which the [Seller] wrote down in a letter of 21 July 2003. These agreements provided that the [Seller] would deliver the orders placed by the [Buyer] within one week and that the [Buyer] would pay the invoices within five weeks.
In a letter of 24 May 2004, that was sent by fax, the [Seller] sent formal notice to the [Buyer] to pay the balance of the invoices for a sum of 28,203.75 euro. The [Seller] demanded payment of the oldest invoices for a sum of 17,184.85 euro within ten days. [Seller] also mentioned that all deliveries were stopped.
In response to this fax, the [Buyer], in its fax of 24 May 2004, made known to the [Seller] that it had not received any order completely since the beginning of 2004, and that therefore, it had stopped its payments since 13 April 2004. The [Buyer] further stated that it would restart payment if it would receive delivery of its order of 15 May on 25 May.
In a letter of 27 May 2004, the collection agency which the [Seller] had entrusted with the collection of all unpaid invoices sent formal notice to the [Buyer] to pay the sum of 28,203,75 euro, plus interests and costs of debt collection.
In its letter of 2 June 2004, the [Buyer] made known to the [Seller] that the damage caused by the [Seller]'s defaulting deliveries amounted to 16,805.55 euro. An invoice for this amount was attached to the letter.
On 3 June 2004, the [Seller]'s collection agency sent another notice to the [Buyer] to pay the sums due, if not, it would file a claim.
In a fax of 3 June 2004, the [Buyer] made known to the collection agency that, taking into account its damage of 16,805.55 euro, it still had to pay 11,398.20 euro.
In a fax of 11 June 2004, the [Buyer] stated that it would pay the amount that was due according to its books within one week. Then, in a fax of 18 June 2004 (sent in reply to a letter of the collection agency of 11 June 2004, which neither party presented), the [Buyer] made known to the collection agency that it preferred to await the result of legal proceedings before paying.
On 5 August 2004 counsel for [Seller] gave notice to the [Buyer] to pay the unpaid invoices, plus 15 euro damages.
On 27 August 2004 the [Buyer] paid an amount of 11,398.20 euro.
On 9 September 2004 the [Seller] summoned the [Buyer] to pay 28,203.75 euro, plus 15% damages and interest at a rate of 12% per year.
2. The [Buyer] does not contest that the [Seller] is entitled to payment of the claimed invoices. However, the [Buyer] is of the opinion that this claim should be compensated with its own claim, being the damage that it claims was caused by the defaulting deliveries of the [Seller].
The [Seller] contends that if it had breached its obligations, the [Buyer] can no longer invoke this breach, due to its late complaints. Moreover, the [Seller] states that it is not proven that it had breached its obligations.
3. The relation between the parties is covered by the CISG, since this is a sale of goods between a seller and a buyer which, at the time the contract was concluded, were residents of different Contracting States.
4. On 24 May 2004, the [Buyer] had complained that since the beginning of 2004 the deliveries were late and partial.
According to Article 33 CISG, the seller has to deliver at the time and within the period foreseen in the contract. This has to be a date or term that was agreed on by the parties, and not a date or term that was asked by the buyer on the order (Ghent, 8 November 2004, 2001/AR/1982, unpublished). But in this case, although the [Buyer], when placing its order, asked that the deliveries take place within a certain week, this was without any consent of the [Seller]. Thus, the [Seller]'s delivery was not untimely.
5. Article 35(1) CISG states that the seller has to deliver goods of the quantity, quality and description as demanded in the contract.
However, Article 39(1) CISG states that 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.
|-||It was not until 24 May the [Buyer] complained about defaults, namely incomplete deliveries, that would have taken place at the beginning of 2004. The reasonable time of Article 39(1) is a short term. A term of one month after the discovery of the unconformity is generally considered to be unreasonable (S. De Groot, Non-conformiteit volgens het Weens Koopverdrag, TPR, 1999, 691). Thus, the [Buyer] has exceeded the reasonable time of Article 39(1).
|-||The [Buyer] must also mention the default. The contents of the notice may not be formulated in a general manner. The notice must be precise (S. De Groot, op. cit., 670), which means in this case that the [Buyer] should have mentioned precisely which goods were lacking.|
Due to the fact that the [Buyer] did not give its notice within a reasonable time and gave its notice in an imprecise manner, the [Buyer] is obliged to pay the unpaid invoices.
6. The [Seller] is entitled to interest on arrears (art. 78 CISG). A formal notice is not required for the running of the interest (Van Houtte H., Het Weens Koopverdrag in het Belgisch recht, TBH, 1998, 353). The [Seller] claim interest at a rate of 12 %.
Art. 78 does not determine the interest rate that should be applied. Since the interest must be considered as a compensation for the damage caused by late delivery, the legal interest, applicable in the country of the seller, must be applied, as the damage of the seller consists of that lost interest (Neumayer and Ming, Convention de Vienne sur les contrats de vente internationale de marchandises, 1993, p 513-514).
7. According to Art. 74 CISG, the party that is the victim of a breach by the other party is entitled to damages.
The [Seller] determines its damage ex aequo et bono at 10 % of the invoices that are still due and the invoices that were paid late, being 2,820.37 euro. It may be assumed that the [Seller] has incurred expenses for the collection of the invoices (administration and costs of the current proceedings) that are damages to the [Seller]. The damages are determined ex aequo et bono at 2,500.00 euro.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Netherlands is referred to as [Seller] and Defendant 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.firstname.lastname@example.org>.Go to Case Table of Contents