Belgium 22 January 2007 Appellate Court Antwerp (B.V.B.A. I.T.M. v. S.A. Montanier) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/070122b2.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: A.R. 2006/AR/384
CASE HISTORY: Unavailable
SELLER'S COUNTRY: France (plaintiff)
BUYER'S COUNTRY: Belgium (defendant)
GOODS INVOLVED: Road sweeping vehicles
Reproduced from CISG-Belgium database
"The Incoterm 'ex usine Saumur' does not necessarily mean that the place where the seller's obligation has to be performed is in France. The court has to examine where the duty to deliver a good in conformity with the contract (in the sense of art. 35 CISG) needs to be performed."Go to Case Table of Contents
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
35A [Conformity of goods to contract: quality, quantity and description required by contract]; 36A ; 36B2 [Time for assessing conformity of goods: conformity determined as of time when risk passes to buyer; Lack of conformity occurring after passage of risk: guarantee of continued conformity]
35A [Conformity of goods to contract: quality, quantity and description required by contract];
36A ; 36B2 [Time for assessing conformity of goods: conformity determined as of time when risk passes to buyer; Lack of conformity occurring after passage of risk: guarantee of continued conformity]
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/2007-01-22%20Antwerpen(2).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
22 January 2007 [2006/AR/384]
Translation [*] by Kristof Cox [**]
The facts may be summarized as follows:
On 18 October 1995, [Seller] sent a price offer to [Buyer] for the delivery of three brushing carts type City VAC 2000. In the offer, [Seller] provided the following guarantee:
|-||on the Kubota undercarriage twelve months, parts and labor by Kubota Belgium;|
|-||on the hydraulic and suction part twelve months guarantee on parts, with the exception of the parts that are affected by deterioration (tubes, filters, oil, etc.)|
On 20 March 1997, [Seller] made an updated offer which contained the payment facilities.
On 20 March 1997, [Buyer] ordered three machines by fax, deliverable ex factory Saumur.
The three brushing carts were delivered on 20 June 1997. The carts were put at the disposition of [Buyer] in the production hall of [Seller] in Saumur. A report of acceptance was made.
It is not disputed that [Buyer] paid the total price of 740,915.80 French francs [Ff].
In the course of 1998 defects, in the machines occurred. More precisely, the front and rear-axles of the carts broke because of the overweight of the undercarriage and the lack of technical provisions to absorb the vibrations when used on the public road.
[Buyer] holds [Seller] fully responsible for these defects and faults in the construction and for the damage that resulted from it. [Buyer] alleges that it contacted [Seller] about this from February 1998 on.
After the formal notice of 14 February 1998 by fax regarding the defective functioning of the machines, [Seller] replied with the request to send the defective parts. [Buyer], however, refused to send the parts and apparently did the repairs itself.
[Buyer] sent an invoice for the costs of the repairs to [Seller] on 16 September 1998. [Seller] objected to this invoice by registered mail of 24 September 1998.
[Buyer] sold the City VAC 2000 machines to a third company, Road Sweeper Renting.
[Buyer] sent an ultimate formal notice to [Seller] on 12 August 1998.
[Buyer] filed suit against [Seller] on 5 October 1998 relying on Articles 1641-1644 and 1645 of the Belgian Civil Code, and on the obligation of guarantee for two years which [Seller] had undertaken.
III. In its judgment of 21 March 2005, the Court of First Instance declared the application of international jurisdiction acceptable and grounded and ordered [Buyer] to pay the costs of the proceedings.
In its reasoning, the Court of First Instance came to the following conclusions:
2.6 [...] The place of delivery should be determined according to French law. The CISG entered into force in France on 1 January 1988. The place of delivery should therefore be determined according to the CISG.
2.7 The parties have supplemented the CISG by incorporating Incoterms. By mentioning on the order "livraisor: ex usine Saumur" (free translation: "delivery: ex factory Saumur") the goods had to be delivered there.
[Seller] did not appear at the hearing of 9 January 2007, nor was [Seller] represented at that hearing. [Buyer] demanded application of Article 747 §2 of the Code of Civil Procedure. This was granted.
* * *
1. The Court of First Instance decided correctly that the international jurisdiction for the underlying case with international character should be decided on the basis of the EEX Convention of 27 September 1968 on the Jurisdiction and the Enforcement of Decisions in Civil and Commercial matters which was still applicable at the time the suit was filed on 5 October 1998 since EEX Regulation no. 44/2001 only entered into force on 1 March 2002.
It should be examined whether the Belgian judge has international jurisdiction in the underlying case.
In the opinion of the Court, the jurisdiction is determined on the basis of the object of the claim as it appears from the writ of summons, disregarding the ground of the case. The judge does not have to perform a prejudicial examination of the ground of the case to decide on his international jurisdiction.
2. [Buyer] bases its claim in the writ of summons on hidden defects (faulty construction). [Buyer] bases its claim on both Articles 1641-1644 Civil Code and Article 1645 Civil Code (liability of the seller for hidden defects under Belgian law) and the contractual obligation of guarantee as mentioned in the offer of 18 October 1995.
Unlike what was mentioned in the writ of summons, the parties agree that French law is applicable. Thus, they have made a choice of law for French law.
Therefore, the Court does not have to decide on the question whether the applicable law should be determined on the basis of Article 3 of the Hague Convention of 15 June 1955 on the Law Applicable to the International Sale of Goods (point of view of [Seller]) or on the basis of Articles 4.1 and 4.2 of the Rome Convention of 1980 (point of view of [Buyer], followed by the Court of First Instance).
Since 1 January, the CISG is applicable in France, therefore, this Convention should be applied. Moreover, the parties explicitly state this. However, the CISG only contains rules of supplementary law.
3. We agree with the Court of First Instance that [Seller] principally had to be summoned before the French courts on the basis of Article 2 of the EEX Convention.
On the basis of Article 5.1 of the EEX Convention, however, [Buyer] can also summon [Seller] before the court of the place where the obligation that underlies the claim was performed or must be performed.
It should be examined which obligation is the relevant obligation, which forms the object of claim. The term obligation means the contractual obligation from which the claim originates.
Unlike the Court of First Instance, this Court does not find that the obligation of conforming delivery in an international sale is the obligation from which this claim originates, but the obligation to deliver goods which are conforming with the contract in the meaning of Article 35(1) CISG. [Seller] is held to guarantee on the basis of Article 35(2) CISG, which determines that the goods should be fit for the purposes for which goods of the same description are usually used.
Unlike Belgian law, the CISG does not distinguish the obligation to deliver conforming goods from the obligation of guarantee for hidden defects. The CISG lays a general obligation on the seller to deliver goods that conform to the contract. The seller has an obligation of guarantee for the conformity of the sold goods (J. Herbots, "Verplichtingen van de verkoper", in Het Weens Koopverdrag, H. van Houtte, J. Erauw en P. Wautelet (eds.), Antwerp, Intersentia, 1997, pp. 118-121 and pp. 124-125).
4. Now that it is determined which obligation is the contractual obligation that underlies the claim, it should be determined where this obligation had to be performed.
The Court of First Instance decided that, because the offer of [Seller] of 18 October 1995 mentions the Incoterm "ex usine Saumur", this implied that the seller fulfilled its obligation of delivery by putting the goods at the disposal of the buyer in his production hall (in Saumur, France). Thus, in the opinion of the Court of First Instance, the place of delivery was France and was decisive for the jurisdiction on the basis of this Incoterm.
This opinion cannot be shared. The applicable Incoterms (in their 1990 version) only determine a limited number of aspects of the contract of sale. The other aspects are determined by the other contractual provisions and by the law applicable to the contract, in this case the CISG.
Incoterms are restricted to the determination of the transfer of costs, the transfer of risk (delivery) and the documentary formalities. They have no implications for the consequences of non-conforming delivery, nor for the obligation of guarantee for hidden defects (K. Vercauteren, ,"De herziening 1990 van de Incoterms", EJL, 1992, 22, nos. 11 and 35-36, nos. 39-42). Likewise, the Incoterms have no implications for and do not change the obligation of the seller to deliver goods in conformity with Article 35 CISG.
Therefore, the Incoterm "ex usine Saumur" cannot be accorded such an effect that it would determine the jurisdiction for the place where the obligation must be performed.
5. It should be examined where the obligation to deliver the goods conforming to the contract in the sense of Article 35 CISG should be performed.
Pursuant to Article 36(1) CISG, whether the goods are conforming should be decided on the basis of the condition of the goods at the moment the risk passes to the buyer, even if the non-conformity only becomes apparent at a later time.
The Incoterm "Ex usine Saumur" has the effect that all risks of loss of or damage to the goods pass to the buyer at the moment the goods are put at his disposal in the factory.
It should be assumed that the examination of the goods under Article 38(1) CISG should also take place at that moment.
Under the CISG, the obligation of the seller to guarantee the conformity of the goods to the contract should be performed at the place of business of the seller. The place of business of the seller is in France, so that the disputed obligation should be performed in France on the ground of Article 35 et seq. CISG.
6. Finally, [Buyer] invokes the contractual guarantee in the offer of 18 October 1995 which -- in the opinion of [Buyer] -- determines explicitly that Kubota Belgium will deliver the guarantee. Since this company has its place of business in Belgium, the disputed obligation is more closely connected to Belgium -- in the opinion of [Buyer] -- and thus, the obligation of guarantee and the obligation in replacement should be performed in Belgium.
The provisions in the CISG on the obligation of guarantee of the seller (Article 35 et seq.) are only of supplementary law. The CISG does not affect the right of the parties to agree on clauses of guarantee. The validity of clauses of guarantee should be determined on the basis of the lex contractus, in this case French law. The validity of the clause of guarantee under French law, however, is not disputed.
It should be noted that the guarantee mentioned in the offer of 18 October 1995 is divided in two partial guarantees: the first guarantee for the parts and labor by Kubota Belgium, the second part relates to the hydraulic and suction part of the brushing carts. For the second part of the guarantee, it is not mentioned that these would be provided by Kubota Belgium. On the basis of the offer of 18 October 1995, only part of the obligation of guarantee had to be performed by a Belgian company.
The technical defects to which [Buyer] refers in the writ of summons are construction errors. These are not covered by the guarantee for the parts and labor that according to the offer were guaranteed by Kubota Belgium.
Further it should be decided that the order of [Buyer] on 20 March 1996 only repeats the obligation of guarantee in part. [Buyer] only mentions that the guarantee on parts and transfers will be for one year. That this obligation of guarantee will be performed by Kubota Belgium is not repeated or confirmed in the order of [Buyer].
Thus, [Buyer] does not prove that the contractual guarantee had to be performed in Belgium.
Thus, neither the legal obligation of guarantee (on the basis of Article 35 CISG), nor the contractual guarantee had to be performed in Belgium.
Conclusion: The Belgian judge does not have international jurisdiction. The appeal is unfounded.
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff of France is referred to as [Seller] and Defendant of Belgium is referred to as [Buyer]. Amounts in the former currency of France (French francs) are indicated as [Ff].
** 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.firstname.lastname@example.org>.Go to Case Table of Contents