France 15 October 2007 Appellate Court Bordeaux (Anthon GmbH v. SA Tonnellerie Ludonnais) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/071015f1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: 03/02869
CASE HISTORY: 1st instance Tribunal de commerce de Bordeaux (R.G. 2002F159) 28 April 2003; 2d instance Cour d'appel de Bordeaux 28 June 2004; 4th instance Cour de cassation 3 November 2009
SELLER'S COUNTRY: Germany
BUYER'S COUNTRY: France
GOODS INVOLVED: Stave manufacturing machines
APPLICATION OF CISG: No. The court stated: "Even though [Seller] referred to provisions of the [CISG], the [Seller] does not request application [of the CISG] in the present case. Therefore, the parties to this dispute acknowledge that the provisions of the French Civil Code are applicable to this case." Upon appeal, this conclusion was reversed by the Cour de cassation which held that the CISG applied.
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (French): CISG-France database <http://www.cisg-france.org/decisions/151007v.htm>
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
15 October 2007
Translation [*] by Andrea Vincze [**]
SA Tonnellerie Ludonnais (hereinafter "[Buyer]", appealing a judgment (R.G. 2002F159) rendered on 28 April 2003 by the Commercial Court of Bordeaux, following a declaration of appeal on 26 May 2003,
Anton GmbH (hereinafter "[Seller]"), a company subject to German law, [and] SA L.B. acting on behalf of SA L.M.
Judgment was rendered following an oral hearing on 3 September 2007,
In the dispute between [Buyer] and [Seller] as well as SA L.B., in a judgment of 28 June 2004, the court reversed the appealed judgment, rejected the plea of invalidity of the statement of appeal, rejected the objection regarding the lack of legal standing of [Buyer], dismissed the claim under Art. 233(6) of the Labor Code, admitted the recourse claim based on the guarantee for hidden defects under Article 1641 et seq. of the Civil Code, and on the merits, ordered an expert examination by Mr. B.
The expert presented his report on 12 September 2006. The court took into consideration the pleas of [Buyer] dated 7 August 2007. The court also took into consideration the pleas of SA L.B. acting on behalf of SA L.M. dated 4 June 2007.
On 27 August 2007, the pre-trial judge noted the absence of any serious circumstances and refused postponement of the order of closure requested by [Seller].
THE COURT HANDED DOWN THE FOLLOWING JUDGMENT
Concerning the statute of limitations claim by [Seller] regarding violation of the documentary rules, [Buyer] did not contest violation of the safety regulations of the machines in due time because it only found it out during the expert examination, and it was only at this date that the limitation period started to run. This argument is, therefore, rejected.
Concerning the expert examination ordered on 28 June 2004, the court is not the proper forum [to adjudicate] appeals regarding its own judgments and, in addition, in ordering an expert examination, it only used the powers granted to it by Article 143 of the New Code of Civil Procedure. This argument is, therefore, rejected.
Even though [Seller] referred to provisions of the Vienna Convention of 11 April 1980, i.e., the United Nations Convention on Contracts for the International Sale of Goods signed in Vienna on 11 April 1980, ratified by Germany on 21 December 1989 and by France on 6 August 1982, the [Seller] does not request application [of the CISG] in the present case. Therefore, the parties to this dispute acknowledge that the provisions of the French Civil Code are applicable to this case.
Regarding the existence of a latent defect, the expert examined the respective machines at the University of Bordeaux I under two different sets of measurement, and the second set of measurement was performed in response to the objection raised by [Seller] regarding the time period between collection of the samples and their measurement.
|-||The expert only used the second set of measurement. The expert determined based on the staves
manufactured by another user of an identical machine of the A. brand, that there is a problem with the
compass level of the machinery, that is a specific problem with the machine subject to the dispute but
also an unpredictable problem that is caused by uncontrolled mechanical processes. This problem
causes a material deviation from the angularity of staves manufactured with high gradient, thereby
causing contact defects between the staves and thus the joints opening to the outside.
|-||The expert specified that the defect concerning maintenance of the depressor does not affect the
defect discovered concerning the angle of the jointing.
|-||The expert added that the latter defect existed when the machine was commissioned on 2 May 2000
but it might have worsened during the five-year use of the machine.
|-||The expert also discovered that the CE marking was not displayed on the equipment, as well as a
design defect of the machine that generated the risk of crushing and feeding problems on the feeding
station, and that there was no protection on the output unit.
|-||The expert responded to various statements of the parties, in particular, regarding the referenced:
each cooper considers himself as holder of a trade secret regarding manufacturing, the coopers agreed
to submit samples of the goods manufactured only under the condition that their secrecy is guaranteed,
and before the problem raised by [Seller]., the expert made new measurements with a cooper who
agreed to be named and who admitted that he carved the staves in a contradictory way.
|-||The expert submitted a report after the expert opinion was requested by the court, he answered all
questions raised and there is no evidence that he committed any mistake during the performance of his
assignment, hence, the parties are bound by this report.
|-||The expert report shows that starting from the delivery of the machine, [Buyer] complained of
problems regarding the angularity of the staves cut.
|-||The expert added that the latter defect aggravated because the machine had been used for five years
and to an extent that he was not able to quantify.
|-||The expert specified that this geometrical defect could not be detected without a special examination which a cooper is not able to perform, and had such defect been known, the [Buyer] would not have purchased the machine.|
Therefore, as a result of a latent defect discovered upon delivery, the jointing machine was not unsuitable for the purpose it was supposed to serve but it considerably decreased the use to the extent that [Buyer] would not have purchased the machine if it had known of the existence of [the latent defect]. As the owner of the machine, [Buyer] is entitled to claim retroactive termination of the contract and reimbursement of the purchase price of EUR 135,679 in exchange for the return of the machine.
The retroactive termination of the sales contract causes termination of the lease-purchase contract on the same date, i.e., today. Since the lease-purchase contract expired more than two years ago, this termination announced in October 2007 is without effect.
As [Seller] is a professional and it manufactured the machine in dispute, it could not have been unaware of the defect affecting the machine, and therefore, it must bear the consequences of this defect.
|-|| Concerning repair of the barrels, the technician chosen by [Buyer] counted 25,606 defective barrels
made by machine A., and considering 23.43 minutes of repair per barrel, the total over four years is
|-||Over the course of a year, the time spent repairing the barrels is 2,499.75 hours, considering the
annual working hours limit of 1,589 hours for an employee, there is still 910.75 hours outstanding, that
incurs the need for a second employee, which results in a yearly cost increase of € 43,000 (the annual
salary of an employee) plus € 24,645 (910.75 x 43,000/1,589) = € 67,645 per year and € 270,580
for four years.
|-|| There is no evidence that if [Buyer] manufactured 3,533 more barrels it would have found someone
to buy them; and this claim is, therefore, rejected.
|-||Concerning the overconsumption of wood, [which is] actually a repeated passing of the staves
through the machine before assembly [of the barrels because they seemed not to have the requisite
angle on the sides, the technician chosen by [Buyer] could not tell if it was 1 over 3 staves or 1 over 10
staves [affected by this condition]; and considering such discrepancy in the starting point to assess the
damage, it is impossible to grant any compensation in this matter.
|-||[Buyer] did not prove any expense relating to mitigation of the harm to its reputation, also because it regularly performs tests on each barrel before the barrel is delivered to a client [to verify] that it does not have any defects. This claim is rejected.|
The termination of the lease-purchase contract was pronounced after the contract expired, therefore, the rights of SA L.B. are not affected.
Equity mandates application of Article 700 of the New Code of Civil Procedure for the benefit of SA L.B. The irrecoverable costs and the legal costs of SA L.B. must be paid by [Buyer] that did not find it necessary as early as the year 2000 to request appointment of an expert for the purposes of an interim judgment, and such appointment would have had the effect to grant an interest in the participation of this party in the proceedings.
FOR THE ABOVE REASONS, THE COURT:
|-||Declares the appeal of [Buyer] admissible;|
|-||Consequently, it makes a decision on the substance;|
|-||Orders retroactive termination of the sales contract;|
|-||Orders termination of the lease-purchase contract as of this day;|
|-||Orders [Seller] to repay to [Buyer] the net sum of € 135,679;|
|-||Orders [Buyer] to return the machine in dispute to [Seller];|
|-||Orders [Seller] to pay to [Buyer] the sum of € 270,580 for the damage suffered;|
|-||Rejects the other claims of [Buyer];|
|-||Orders [Buyer] to pay to SA L.B. the sum of € 3,000 under Article 700 of the New Code of Civil Procedure;|
|-||[Buyer] must pay the costs of the first-instance proceedings and the costs of the appeal for this part of the dispute, pursuant to Article 699 of the New Code of Civil Procedure;|
|-||Orders [Seller] to pay to [Buyer] the sum of € 8,000 pursuant to Article 700 of the New Code of Civil Procedure.|
Regarding the part of the dispute between [Seller] and [Buyer], the court orders [Seller] to pay the costs of the first-instance proceedings and the costs of the appeal, including the costs of the expert examination, pursuant to Article 699 of the New Code of Civil Procedure.
* All translations should be cross-checked against the original text. For purposes of this translation, Anton GmbH of Germany is referred to as [Seller] and SA Tonnellerie Ludonnais of France is referred to as [Buyer]. Amounts in European currency (Euros) are indicated as [€].
** Andrea Vincze is a Fellow of the Institute of International Commercial Law of the Pace University School of Law. She received her law degree from the University of Miskolc, Hungary, and her LL.M. at Pace Law School. She is working on her Ph.D. on ICSID arbitration, and is researching international commercial law and ADR.Go to Case Table of Contents