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Netherlands 19 July 2006 District Court Arnhem (Skoda Kovarny v. B. van Dijk Jr. Staalhandelmaatschappij B.V.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/060719n1.html]

Primary source(s) of information for case presentation: Website of the Dutch courts

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Case identification

DATE OF DECISION: 20060719 (19 July 2006)


TRIBUNAL: Rb Arnhem [Rb = Rechtbank = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: Zaaknummer / rolnummer: 125903 / HA ZA 05-682

CASE NAME: Skoda Kovarny v. B. van Dijk Jr. Staalhandelmaatschappij B.V.

CASE HISTORY: 1st instance Rb Arnhem 1 March 2006

SELLER'S COUNTRY: Czech Republic (plaintiff)

BUYER'S COUNTRY: Netherlands (defendant)

GOODS INVOLVED: Steel products

Classification of issues present



Key CISG provisions at issue: Articles 74 ; 75

Classification of issues using UNCITRAL classification code numbers:

74A ; 74A1 [General rules for measuring damages: loss suffered in consequence of breach; Includes loss of profit];

75A [Substitute transaction after avoidance]

Descriptors: Damages ; Profits, loss of ; Proff of damages ; Cover transactions

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Editorial remarks

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Citations to case abstracts, texts, and commentaries


(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1436&step=Abstract>


Original language (Dutch): Website of the Dutch courts: <http://www.rechtspraak.nl/>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1436&step=FullText>

Translation (English): Text presented below



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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

District Court (Rechtbank) Arnhem

19 July 2006 [125903; HA ZA 05-682]

Translation [*] by Thorsten Tepasse [**]

Judgment in the dispute between

SKODA KOVARNY, a company under Czech law, seated in Pilzen, Czech Republic, hereinafter [Seller], Claimant in main claim, Respondent in (conditional) counterclaim, proxy Mr. H. van Ravenhorst, attorney Mr. W.A.J. Hagen, from Arnhem, The Netherlands,


B. VAN DIJK JR. STAALHANDELMAATSCHAPPIJ B.V. [*], a limited liability company under Dutch law, acting under the name Van Dijk Staal, seated in Arnhem, The Netherlands, with office in Heteren, municipality Overbetuwe, hereinafter [Buyer], Respondent in main claim, Claimant in (conditional) counterclaim, proxy Mr. J.C.N.B. Kaal, attorney Mr. H.C.M. van Haastert, from Arnhem, The Netherlands.

The proceeding

The process of the case is as follows:

-  The interim judgment of 1 March 2006;
-  [Seller]'s memorandum with one exhibit;
-  [Buyer]'s memorandum with exhibits;
-  Another memorandum from [Seller],

A decision will be handed down.


1. The Court holds to the finding of its decision of 1 March 2006. In that judgment, [Buyer] was given the possibility to file further documents related to the compensation requested for loss suffered (ibid. loss item sub II) and loss of prospective profit (ibid. loss item sub III).


The compensation concerns damages [Buyer]'s customers have suffered since they were forced to conduct cover purchases as a result of [Seller]'s non-delivery.

2. As [Seller] terminated the orders already confirmed, the [Buyer]'s customers had to order steel elsewhere (than from [Buyer]) for a higher price, for which they now request to be compensated. [Buyer] asserted that it was facing claims in the amount of 226,599.97 EURO and filed the documents named in the decision of 1 March 2006 under paras. 19(a) to (g) to support its position.

Upon [Seller]'s request (see para. 21 of last interim judgment), [Buyer] was ordered to forward the files the letters in paras. 19 (a) to (c) and (e) to (g) were based on, i.e., the orders of the customers to the suppliers and the respective order confirmations.

3. [Buyer] failed to do so. The reason [Buyer] gave is that its customers were all only "stockpiling" traders, who do not buy steel for specific projects, which means that these customers would continuously supervise their stock and as stock is reduced, they would refill it (weekly) in response to continuing sales. Since many months passed between placement of their orders to the [Buyer] (which then placed an order to the [Seller]) and the avoidance of the contract by the [Seller], the specification and amount of steel bought in replacement for the avoided orders cannot be (completely) determined due to permanent sale out of stock. However, [Buyer] asserted that the fact that the customers conducted their business regularly, demonstrated that they were "definitely" forced to buy the amount of steel missing elsewhere due to termination by the [Seller] -- facing a market price -- at a far higher price.

4. As discussed in the last interim judgment, it is very likely that the [Buyer]'s customers had to conduct cover purchases, but it is not certain. Also, since [Buyer] filed the letters named in the interim judgment under para. 19, which show that [Buyer]s customers charged [Buyer] the costs for concrete cover purchases (defined amounts of steel at defined prices), the Court asked [Buyer], upon request by [Seller], to bring forward those documents the letters are based on. It may well be true that [Buyer]'s customers are only "stockpiling" traders -- by the way, this is the first time [Buyer] brought forward this argument -- but it is incomprehensible why they are not able to file any document showing which steel was bought in which amount for which -- higher -- price in the period after termination of the orders. It is also very likely that if [Buyer] were charged for the customers' damages, [Buyer] would have demanded to see such documents to verify the claims. The fact that [Buyer] failed to file the documents related to the cover purchases is, from this point of view, unfathomable.

The very fact that the customers are "stockpiling" traders, as [Buyer] alleged and as laid down in para. 3, does not justify assuming that the customers "definitely" had to conduct cover purchases. There is still the possibility that such traders let their amount in stock "fluctuate" for various reasons (e.g., the price, the demand for steel, the financial position of the company itself, etc.) to have on one moment a larger amount of steel in stock than in another. Thus it cannot be excluded that [Buyer]'s customers did not or did not want to compensate terminated orders by cover purchases at all.

5. The conclusion is that [Buyer] failed to substantiate that its customers have performed purchases in replacement. Also, [Buyer] did not file any facts or circumstances for the other allegations, which could probably, if proven, lead to another decision. Thus, there is no room for any motion to take evidence. As a result, [Buyer]'s claim regarding this issue has to be rejected. Hence, there is also no need to discuss [Seller]'s arguments on this point.


This damage concerns [Buyer]'s prospective loss of profit on the basis that customers stopped doing business with [Buyer] as a result of [Seller]'s breach of contract and non-delivery.

6. [Buyer] fixed the damages at one year of lost profit based on figures for the years 2001 and 2002.

7. The Court held in the last interim judgment (see paras. 24 to 27) that [Buyer] substantiated with exhibits 12 and 13 that customers Stahlschmidt and Hoselmann stopped trading with [Buyer] since [Buyer] could not deliver the steel as a result of [Seller]'s termination of its contract with [Buyer]. [Seller] was ordered to compensate the resulting damages "as far as they concern customers Stahlschmidt and Hoselmann".

8. This is a definite decision on which the Court must not rule again, unless there are circumstances that indicate that it would be unacceptable for the Court to abide by that decision (HR [*] 14 December 2001 NJ [*] 2002, 57).

[Buyer] also asserted that customers other than Stahlschmidt and Hoselmann did not want to do business with it anymore, but they were not willing to send a letter for confirmation. However, [Buyer] alleged that the fact that business was stopped can also be deduced from the fact that the customers had frequently been doing business with [Buyer], but after the termination of orders by [Seller], they placed no more orders at all with the [Buyer].

This allegation is not a circumstance in the sense named above. It remains unconsidered that the customers could lay the business relation with [Buyer] idle (also) for other reasons. However, it is true, as [Buyer] alleges, that the Court did not discuss the letter of customer Wittfeld to [Buyer] of 4 February 2004 (see interim judgment para. 13) but, in contrast to [Buyer]'s assertion, this letter does not lead to the conclusion that Wittfeld did not want to deal anymore with [Buyer] because of [Seller]'s contract breach. To the contrary, in this letter, Wittfeld simply asked [Buyer] to perform orders which were placed earlier (seemingly in 2002).

9. [Seller], in its last memorandum, challenged [Buyer]'s assertion that [Buyer]'s customers, among those customers Stahlschmidt and Hoselmann, stopped placing orders after March 2003. Further, [Seller] stated again that [Buyer] could have avoided this loss by simply paying compensation for damages to the customers. Both arguments were already brought forward by [Seller] at an earlier point of time in the proceeding. The Court already held in the interim judgment (see para. 27) that this argument fails. This was also a definite decision on which the Court need not rule again, unless the circumstances named above are at hand.

The circumstances put forwarded by [Seller] that:

   -    There was no dispute between [Buyer] and its customers right after March 2003 and
   -    [Buyer] could have paid compensation to its customers since it held back the sum of 263,058.80 EURO remaining from an earlier contract with [Seller]

are insufficient to lead to a different finding by the Court. This leads to the result that [Seller]'s arguments fail. Thus there is no need to rule again on the decision (s.a. para. 6).

10. Hence, the amount of lost prospective profit due to cancellation of business contact by customers Stahlschmidt and Hoselmann, has to be determined. For this purpose, [Buyer] was asked to file a schedule of sales to those customers for the years 2001 to 2004 along with all documents relating to the sales (probably consolidated), that show which amount of steel was sold for which price and further which profit was made.

11. [Buyer] forwarded a schedule showing steel sales to its customers (among them Stahlschmidt and Hoselmann), see exhibits 19, 20. The schedule demonstrates how much steel was sold and delivered to Stahlschmidt and Hoselmann (among others) during the period January 2001 until March 2003. Further, the schedule gives notice about the sale and resale prices of the steel, costs for each transaction and the profit gained from those transactions. The documents in relation with the schedule were filed as exhibit 21.

12. [Seller] did not challenge the schedule and documents in relation with [Buyer]'s transactions with Stahlschmidt and Hoselmann regarding the amount of steel and the sale and resale prices. Thus, their correctness can be assumed. However, [Seller] noted that the schedule "states without detailed declaration the margin of the sales" and that "the costs inferred from the transactions are insufficiently traceable."

The Court does not follow [Seller]'s argument. As laid down in the interim judgment of 1 March 2006 in "loss item sub I" ([Buyer]'s loss of profit due to non-delivery of steel to customers as a result of [Seller]'s termination of orders), the costs consist of transport and general (overhead) costs. The Court has already ruled that [Buyer]'s reckonings are the basis to determine the transport costs. In [Buyer]'s exhibit 7, the costs for transportation of steel were labeled "shipping costs" amounting to 27.29 EURO per ton on the part of Stahlschmidt and 26.04 EURO per ton on the part of Hoselmann.

The documents now forwarded show the overall costs. The transport costs can thus be calculated by simply multiplying the amount of steel sold with 27.29 EURO or 26.04 EURO per ton. The remaining sum is consequently general/overhead costs. Hence, it cannot be assumed that the calculation of costs filed by [Buyer] is insufficiently traceable. Also, the margin per transaction can be estimated by deducting purchase price and costs from the resale price. Since [Buyer] forwarded specific data for each transaction, [Seller]'s sole denial of the figures concerning costs and margin is inadequate. [Seller] had to make clear which specific costs in the documents filed by [Buyer] were wrong and why. Since [Seller] did not do so, [Buyer]'s schedule is, as insufficiently disputed, to be used as the basis for calculation of damages. The schedule and documents demonstrate that [Buyer] suffered loss of prospective profit (in relation to customers Stahlschmidt and Hoselmann) in the amount of 68,051.00 EURO per year averaged in the period of January 2001 until March 2003. This sum can therefore be awarded to [Buyer].

13. [Seller]'s point that the claim has to be rejected since Czech Law does not foresee compensation for lost prospective profit determined by figures of past years, fails, since the claim has to be judged by the rules of the CISG. Art. 74 CISG provides that lost profit as a result of breach of contract also has to be compensated in the amount, which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract as a possible consequence of the breach of contract. The Court already held in the interim judgment (see para. 27) that it was, in the circumstances [Seller] sketched, foreseeable for [Seller] that [Buyer] would lose prospective profit, since its business contacts with its customers were disturbed by the [Seller]'s termination of orders.

14. As a result of the aforesaid and the interim judgment of 1 March 2006, [Buyer]'s appeal to set-off is successful to the amount of (104,800.96 EURO + 68,051.00 EURO =) 172,851.96 EURO. With reference to this point, [Seller] invoked that the prerequisites for a set-off under Czech Law were not met. However, in the interim judgment, the Court ruled in para. 6 on why set-off is possible in this case. [Seller] did not introduce any facts or circumstances which would lead to another finding.

15. Concerning the request for payment of interest, the Court rules as follows: In its last memorandum, [Seller] alleged, in contrast to its statement in summoning, that [Buyer] was in arrears with payment of invoices concerning the main claim since 18 April 2003. [Seller] did not forward any documents to prove this allegation. [Seller]'s offer to do that now has to be rejected. It can be expected from a party relying on written documents that it forwards the documents immediately and does not merely offer to do so. It contravenes the principle of a good proceeding to give [Seller] the possibility to substantiate its position at this point in the proceeding. This means that the date since which [Buyer] is in arrears cannot be determined. Thus the day of summoning is decisive to calculate the interest to be awarded.

[Buyer] did not request judicial interest for the payment of compensation.

16. The conclusion is that [Seller]'s claim is founded up to an amount of (263,058.80 EURO - 172,851.96 EURO =) 90,206.84 EURO, plus judicial interest since 8 April 2005 until payment.

17. [Seller]'s request for extrajudicial costs in the amount of 4,000.00 EURO has to be dismissed. [Buyer] challenged that those costs accumulated to collect the claim; [Buyer] received only one letter from [Seller]. It would have been [Seller]'s duty to prove which efforts caused these costs and what kind of costs accumulated that they are not compensated by a decision on the costs of the proceeding. As [Seller] did not forward anything on this issue to support its position, this part of the claim has to be rejected.

18. Hence, it follows from the aforesaid that [Buyer]'s counterclaim has to be dismissed, as far as its request can be set-off with [Seller]'s claim.

19. Since the [Seller] is basically the party that filed the unsuccessful main claim, the [Seller] bears the costs of that proceeding, besides the costs for the arrest in rem against [Buyer], as this arrest was obtained taking into account all judicial formalities and terms. However, [Seller] still has a claim against [Buyer], thus the arrest is valid. Hence, [Buyer] bears the costs for the arrest. As [Buyer] filed the unsuccessful counterclaim it bears the costs of that proceeding.


The Court holds

In the [Seller]'s main claim:

   -    [Buyer] is ordered to pay [Seller] 90,206.84 EURO plus judicial interest since 8 April 2005 until payment;
   -    [Seller] is ordered to bear the costs of the proceeding, until this decision on part of [Buyer] amounting to 6,000.00 EURO legal fees plus 4,584.00 EURO further legal costs;
   -    [Buyer] bears the costs for the arrest in rem obtained by [Seller], which is 2,000.00 EURO fees plus 324.36 EURO for expenses
   -    This judgment is enforceable upon providing security
   -    Any requests above or different are rejected

In the [Buyer]'s counterclaim:

   -    [Buyer]'s claim is rejected.
   -    [Buyer] bears the costs of this proceeding on part of [Seller] 3,000.00 EURO legal fees

Judgment handed down by Mr. R.J.B. Boonekamp in public proceeding on 19 July 2006.


* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of Czech Republic is referred to as [Seller]; Defendant of the Netherlands is referred to as [Buyer]. Amounts in European currency are indicated as [EURO].

Translator's note on other abbreviations: B.V. = Besloten Vennootschap [Limited liability company under Dutch Law]; HR = Hoge Raad der Nederlanden [Dutch Supreme Court]; NJ = Nederlandse Jurisprudentie [Database of Dutch decisions].

** Thorsten Tepasse is a law student at the University of Osnabrück, Germany and participated in the 12th Willem C. Vis Moot with the team of the University of Osnabrück.

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