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CISG CASE PRESENTATION

Belgium 16 April 2007 Appellate Court Ghent (Dat-Schaub International a/s v. Kipco Damaco N.V.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/070416b1.html]

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

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Case identification

DATE OF DECISION: 20070516 (16 May 2007)

JURISDICTION: Belgium

TRIBUNAL: Hof van Beroep [Appellate Court] Ghent

JUDGE(S): Vanherpe

CASE NUMBER/DOCKET NUMBER: 2006/AR/477

CASE NAME: Dat-Schaub International a/s v. Kipco-Damaco N.V.

CASE HISTORY: 1st instance Rechtbank van Koophandel Kortrijk 17 October 2005

SELLER'S COUNTRY: Belgium (defendant)

BUYER'S COUNTRY: Denmark (plaintiff)

GOODS INVOLVED: Meat


English summary

Reproduced from CISG Belgium database:

"The period for the examination of the goods and the notice of lack of conformity cannot be dependent on a procedure which was unilaterally determined by the buyer. The court considers that an examination and notice period of two weeks is too long for frozen meat."

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 8 ; 38 ; 39 ; 40

Classification of issues using UNCITRAL classification code numbers:

8A ; 8B ; 8C [Interpretation of party's statements or other conduct: intent of party making statement or engaging in conduct; Interpretation based on objective standards; Interpretation in light of surrounding circumstances];

38A [Buyer's obligation to examine goods: time for examining goods];

39A2 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

40A [Seller's knowledge of non-conformity: seller fails to disclose known non-conformity]

Descriptors: Intent ; Examination of goods ; Lack of conformity notice, timeliness ; Lack of conformity known to seller

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Editorial remarks

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (Dutch): CISG-Belgium database <http://www.law.kuleuven.ac.be/ipr/eng/cases/2007-04-16%20Gent.html>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

French: Claude Witz, Recueil Dalloz (23 October 2008) 2628-2629

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Hof van Beroep [Court of Appeals] Ghent
DAT-Schaub International A/S [Buyer] v Kipco-Damaco N.V. [Seller]

16 April 2007 [2006/AR/477]

Translation [*] by Kristof Cox [**]

I.   [...]

      B. [Buyer] claims damages for alleged breach of contract by [Seller]. [Buyer] states that [Seller] delivered frozen mechanically altered turkey-meat, in which feathers were found. Therefore the meat was not in conformity with the agreement.

II.   [...]

III. A. [Buyer] seeks to have the judgment under appeal quashed and to have its original claim granted. [Buyer] claims capitalization of interest on several dates. [Buyer] also claims a fixed sum of 12,500 for the costs of its Danish and Belgian attorneys, made with an eye to obtaining contractual damages from [Seller].

      B. [Seller] states that the [Buyer]'s appeal is unacceptable, at least unfounded. Further, [Seller] files an incidental appeal, increasing its original counterclaim for damages based on vexatious proceedings and for reimbursement of attorneys' fees. [Seller] claims payment of 12,500 in sum. In the reasoning of its memoranda, [Seller] also formulates an incidental appeal to quash the writ of 3 September 2004 for breach of the legislation on the use of languages (see point II).

DISCUSSION

Preliminary

I. [Seller] provides neither legal grounds, nor factual elements why the appeal should be dismissed as unacceptable, nor could the Court sua sponte find grounds to rule that the appeal would be unacceptable. The appeal is correct and timely. It is seriously reasoned. There are no elements to reasonably support that [Seller] did not know what it was about. The main appeal as such is acceptable.

II. The Court of First Instance mistakenly failed to quash the writ of 3 September 2004 for breach of the legislation on use of languages. The Court of First Instance states correctly, and this Court repeats:

"Article 2 of the Act of 15 June 1935 on the use of languages in court proceedings determines: 'Before the civil and commercial courts, of first instance and the labor courts which have their seat in the provinces (...) West-Flanders (...), the entire proceedings in disputes are conducted in Dutch."

This implies that the writ of summons, which files a claim before the Commercial Court of Kortrijk, province West-Flanders, must be completely in Dutch. Article 40 of the Act of 15 June 1935 states that breach of the rules on the use of languages is sanctioned by nullity. If Article 2 is not respected, the Court has to nullify the writ sua sponte.

For a correct application of these rules, a distinction should be made between essential and non-essential parts of the writ (Lindemans L., Taalgebruik in Gerechtszaken, A.P.R., nr. 76). The uni-lingual character of the act is not affected by words or sentences in other languages that can be considered as superfluous (Lindemans L., Artikelsgewijze commentaar met overzicht van rechtspraak en rechtsleer, Taalgebruik in gerechtszaken, Art. 1, p. 4, nr. 4).

Where [Buyer] mentions "frozen mechanically de-boned turkey meat" (hereinafter MDM-meat) in the first paragraph of its writ, [Buyer] touches upon a particularly important aspect, namely, that the object of the sale was deep-frozen de-boned turkey meat. Nowhere in the initial writ can it be read that this was the object of the sale. The reference to MDM-meat does not suffice to understand that this is deep-frozen mechanically de-boned turkey meat. Nowhere can it be found that MDM-meat is generally known as such in the Dutch-speaking area, neither as an abbreviation, nor written in full. Thus, an essential element of the writ is written in another language than Dutch, but remained un-translated in the writ.

The writ is void.

The incidental appeal formulated in the reasons of the memorandum is not only acceptable, but also founded (see inter alia, the memorandum for [Seller], deposited on 16 October 2006, p. 7 in fine and p. 8). Certain aspects, however, do not interfere with the further decision of the case on the merits, considering the report of voluntary appearance of 30 December 2004.

Merits

I. For the factual background, the Court refers to the broad and exhaustive report as provided by the Court of First Instance in the judgment under appeal "Facts", p. 2 to 6, initio).

II. On the basis of the correct grounds which the Court here explicitly considers to be repeated, except in as far as they would be in conflict with what is considered in this judgment, the Court of First Instance has declined the claim of [Buyer] as unfounded under point "III. Merits", sections "A. On the alleged acceptance of the goods." And "B. On the timeliness of the protest."

The Court does not repeat point "C. For the sake of completeness: damage" of the judgment under appeal.

III. A.  a. [Buyer] cannot be followed in its rather "exegetic" analysis of the mail of [Seller] to [Buyer] of 3 December 2003, in which [Seller] confirms that the pieces (of meat) that could contain feathers were not used for production, so that the risk factors were avoided (free translation of: "The parts which could contain featherhuls have not been used for your production so that all risks factors have been avoided" [original language] (see exhibit no. II, 2, file of [Buyer]).

From this, it cannot be concluded that there would be a lack of good faith and consistency in the defense of [Seller] and/or that "[Seller] is aware of faults in the production process, namely, of the possibility that feathers may end up in the MDM-meat" (see memoranda deposited by [Buyer] on 15 September 2006, p. 14, medio).

To the contrary, from the mail it appears that [Seller] knows its own production process of the deep-frozen turkey meat well and states that it has done everything that is necessary to avoid every risk factor. Moreover, the core of the matter in this case is whether or not the protest as expressed by [Buyer] was timely (see further on).

            b. The Court accept the analysis of [Seller], where it refers to the mail of [Buyer] of 26 November 2003 to allege that the goods should be considered to be accepted. This mail, inter alia contains the following sentence: Your MDM has been well accepted in the Philippines. They liked the product and in beginning of December. (free translation by the Court: [...]) (see exhibit no. 11, 1, file of [Buyer]). The wording of that mail is very vague and do not allow the acceptance of no matter what, let alone in the legal meaning of the concept 'acceptance' as [Seller] alleges.

            c. Writings that are written by persons who do not have the language they use as their mother tongue, must be considered very reluctantly as to their legal interpretation.

      B. Article 40 CISG is not applicable. This Article 40 reads:

"The seller is not entitled to rely on the provisions of articles 38 and 39 if the lack of conformity relates to facts of which he knew or could not have been unaware and which he did not disclose to the buyer."

Article 40 aims at either the bad faith of the seller, or severe negligence on his part. Neither the one, nor the other is assumed. The burden of proof is on the buyer. From the facts of the case, it does not appear that there was bad faith or severe negligence on the part of the [Seller]. The alleged presence of feathers in the meat is "as such" insufficient to conclude that the seller was aware of this, or was severely negligent.

      C. Even if it were to be assumed that the first (two) containers that arrived at Pure Foods (the end-user of the goods) on 19 November 2003 were only really at their disposition on the next day, even then a protest on 3 December 2003 is to be considered as untimely.

It should not be forgotten that this was foodstuff, where an extensive diligence of all involved - in the international context too - is necessary. [Buyer] provides a detailed schedule of the terms which in its opinion are/were necessary to check the goods. It is significant that [Buyer] makes a sharp chronological distinction between a micro-biologic and chemical tests (which would take 4 to 5 days), only after which other aspects of the test would start. The 'second step' in the checking of the goods could apparently only be started after completion of the first step (micro-biologic and chemical tests). Only in that "second step" could it be determined whether alien substances were present in the meat.

We do not agree with [Buyer]: the tests cannot take place in steps and, in any event, the tests cannot be made dependent on a procedure which the buyer has unilaterally created for itself. Of course, nothing prevents the parties from agreeing on a procedure beforehand, in which such a procedure is determined. However, such an agreement is not present.

It is impossible to make the procedure that was unilaterally created by the buyer binding on the seller. This would make the time of Article 38(1) CISG which should be "as short as possible" solely dependent on what the buyer wants or does not want.

A time to check and give notice of two weeks is too long for this type of product (frozen meat). The checking at the destination in the Philippines should have taken place faster and more diligently.

      D. We do not agree with [Buyer] where it states alternatively that in any event the notice was timely for the containers other than the first one.

As the Court of First Instance has determined from the exhibits, the first protest of 3 December 2003 was directed against the first container (see exhibit II, 2, [Buyer]'s file, being a mail from [Buyer] of 3 December 2003 in which [Buyer] mentions one container which has already been rejected [...]). In that same mail, it is mentioned that the other containers are "taken on hold until there has been made a deeper investigation." [...] The [Buyer]'s duty to check and give notice under Articles 38 and 39 CISG remained untouched with regard to the other containers.

It is impossible to put the duty to check and give notice on hold for the largest part of the delivery, because the first part has to be examined more deeply first. Many things can happen in the meantime. In the international context, diligence is the first duty of all involved.

The analysis of the Court of First Instance (see judgment under appeal p. 12, first four paragraphs) makes clear that there was only a protest for the other containers on 12 December 2003.

All this leads to the conclusion that the notice was sent two to three weeks after the containers arrived. This is late for all containers.

      E. The claims of [Buyer] are unfounded.

[...]


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Plaintiff-Appellant of Denmark is referred to as [Buyer] and Defendant-Appellee of Belgium is referred to as [Seller].

** 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.cox@law.kuleuven.be>.

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Pace Law School Institute of International Commercial Law - Last updated November 7, 2008
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