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CISG CASE PRESENTATION

France 8 April 2009 Supreme Court (Société Bati-Seul v. Société Ceramiche Marca Corona) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/090408f1.html]

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

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Case identification

DATE OF DECISION: 20090408 (8 April 2009)

JURISDICTION: France

TRIBUNAL: Cour de cassation [Supreme Court]

JUDGE(S): M. Bargue (président)

CASE NUMBER/DOCKET NUMBER: 08-10678

CASE NAME: Société Bati-Seul v. Société Ceramiche Marca Corona

CASE HISTORY: 1st instance Tribunal d'instance de Villeneuve-sur-Lot 29 July 2005; 2d instance Cour d'appel d'Agen 5 September 2007 (reversed)

SELLER'S COUNTRY: Italy (defendant)

BUYER'S COUNTRY: France (plaintiff)

GOODS INVOLVED: Floor tiles


UNCITRAL case abstract

FRANCE: Court of Cassation, First Civil Division (Société Bati-Seul v. Société Ceramiche Marca Corona) 8 April 2009

Case law on UNCITRAL texts [A/CN.9/SER.C/ABSTRACTS/104],
CLOUT abstract no. 1026

Reproduced with permission of UNCITRAL

Abstract prepared by Claude Witz and Stephan Pache

The plaintiff, a French firm selling building materials, bought some tiles from the defendant, an Italian company, and sold them to a French client in December 1996. The latter laid them on his terrace in May 1997, since they were guaranteed to withstand frost. During the winter of 2001-2002, the tiles turned out not to be frostresistant, swelling and breaking in places. Having been sued by its client, the French company instituted warranty proceedings against its Italian supplier.

The case was heard by the Agen Appeal Court, which dealt with the obstacle of the two-year deadline by taking as the starting point the date on which the damage appeared, on the grounds that the claim that the tiles were frost-proof could not be tested until they had been subjected to frost. The Appeal Court also ruled that the time limit accorded to the seller in the event of action for indemnity for warranty proceedings should begin at the time of its own writ of summons.

The Court of Cassation overturned this ruling on the grounds that it breached article 39 of CISG. In setting out its grounds, the Court recalled that, according to CISG, the buyer lost the right to rely on a lack of conformity of the goods if he did not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer.

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Classification of issues present

APPLICATION OF CISG: Yes

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 8 ; 39 [Also cited: Articles 35 ; 38 ]

Classification of issues using UNCITRAL classification code numbers:

8C [Interpretation of party's statements or other conduct: interpretation in light of surrounding circumstances];

39B1 [Requirement to notify seller of lack of conformity: cut-off period of two years (starting point: actual handing over of goods)]

Descriptors: Intent ; Standard terms and conditions ; Lack of conformity notice, timeliness ; Latest defects

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Editorial remarks

Reproduced with permission of European Journal of Contract Law (3/2009) 154-155

EDITOR: Olivier Vibert, IFL Avocats

Cour de cassation (Floor tiles case) 8 April 2009

The 1st civil chamber of the French Civil Supreme Court strictly applied the Vienna Convention, signed on 11 April 1980 on the international sales of goods.

This case illustrates perfectly the strict application of the Vienna Sales Convention (CISG), made by the French Civil Supreme Court.

An individual bought a stone floor for his terrace in December 1996. The stone floor was installed in May 1997 in the south of France. The stone floor, bought from a French company was guaranteed not to freeze. The stone floor was laid by an Italian company.

In winter 2001/2002, bulges and cracks appeared in the stone floor. An expert found these damages were caused by freezing temperatures.

The French company that had sold the stone floor was declared liable by having sold the product. The French company then sued the Italian company to obtain compensation for the damages paid.

Th French and the Italian companies had not excluded the CISG and therefore it applied to the contract. The French company sued the Italian company for the lack of conformity of the goods.

Article 39 CISG provides that:

"(1) 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.

"(2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of Guarantee."

The Italian company challenged the French company's claims by claiming that the French company had given no notice within two years of the lack of conformity of the goods sold.

The Agen Court of Appeal (5 September 2007), in considering that it was only possible to verify if a stone floor was frost-resistant when the temperature dropped below freezing, held that the two-year delay only starts running when the damage appeared. Furthermore, the Court also held that in a recursive action, the delay starts when the initial writ of summons is about to be delivered.

The Court of Appeal therefore awarded compensation to the French company and rejected the Italian company's arguments.

The Italian company appealed and the Supreme Court held that according to Artidle 39 CISG, the two-year delay starts when the goods are delivered and not when the damage appears.

The Supreme Court applied the CISG strictly, avoiding extension of the delay. The efforts by the Supreme Court to make sure international conventions are correctly applied must be praised. International conventions cannot be subject to interpretation. If everyone were to interpret conventions in their own way, there would be no point in having common rules for international sales. The Supreme Court must ensure that judges avoid the temptation to accept small exceptions to an international rule.

If parties need longer delays, they are free to specify it in the sales contract. When preparing a sale for certain kind of goods it would be sensible to exclude short delays and define longer delays. If parties do not specify special delays, they must know they have to respect the given delays whatever the circumstances.

International conventions are too often ignored by companies involved in international markets, but the French company in this case will surely now double-check their sales contracts before signing.

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

Unavailable

CITATIONS TO TEXT OF DECISION

Original language (French): CISG-France database <http://www.cisg-france.org/decisions/180409v.htm>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

French: Claude Witz, "Un double éclairage sur le délai butoir de deux ans consacré par la Convention de Vienne", Recuel Dalloz (10 December 2009) 2907-2910

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

French Supreme Court, Civil Section

Société Bati-Seul v. Société Ceramiche Marca Corona

8 April 2009

Translation [*] by Leandro Tripodi [**]

[THE FACTS]

The facts are:

   -    On 9 December 1996, Mr. X purchased from [Buyer] a batch of frost-resistant floor tiles of the [Seller]'s brand, which he installed to his backyard in May 1997.
 
   -    During the winter of 2001/2002, flakes and blisters appeared all over the backyard. According to the expert witness, that defect was due to the quality of the tiles which did not withstand frosting.

[THE PROCEEDINGS BEFORE THE COURT OF
FIRST INSTANCE AND THE COUR D'APPEL]

   -    Mr. X filed a claim with the Tribunal d'instance of Villeneuve-sur-Lot for defects in the products sold to him by [Buyer], who impleaded the [Seller]. The Tribunal ordered [Buyer] to indemnify Mr. X [and directed [Seller] to reimburse [Buyer] for this amount]. The Tribunal dismissed a motion for lack of competence that [Seller] had filed.
 
   -    [Seller] filed an appeal to the Cour d'appel d'Agen.

[THE FURTHER APPEAL TO THE SUPREME COURT]

[Seller's allegations]

On the first Appeal, the [Seller] alleged that the Court improperly denied [Seller]'s motion for lack of competence

The Supreme Court dismissed this allegation in every one of its parts, holding that the Court of Appeals has justifiably found that:

   -    the [Seller] did not prove that any forum selection clause nominating the Courts of Modena (Italy) existed in whatever contractual document was signed, and hence accepted, by the [Buyer]; and
 
   -    the [Seller] did not demonstrate the existence of any international usage which would attribute exclusive competence on Italian Courts.

On those grounds, the Court dismissed the [Seller]'s motion for lack of competence, as well as the [Seller]'s efforts to adduce complete evidence of the invoices at the appellate stage, since only their reverse sides were formerly brought in and they were found to be, as such, inoperative

A second basis for the [Seller]'s appeal was the allegation that the Court improperly interpreted and applied Article 39 of the Vienna Convention of 11 April 1980 [hereinafter, the CISG]

The [Seller] pointed out that, according to Article 39, the buyer loses the right to rely on a lack of conformity unless he notifies the seller at the latest within a period of two years after he was actually handed over the goods;

The [Seller] alleged that the Court of Appeals improperly interpreted Article 39 by:

   -    Ruling that, since the frost-proof feature of the tiles could only be tested when they were set under freeze, this defers the starting point of the period up to when the defects were noticed; and
 
   -    Ruling that the time periods assigned to the seller in the case of impleading start to run from the day when the seller was summoned;

The Supreme Court agreed with the [Seller] that the Court of Appeals was wrong on both of these counts.

IN LIGHT OF THAT:

[The Supreme Court] sets aside the decision of 5 September 2007 of the Court of Appeals of Agen, to the extent that that it orders the [Seller] to guarantee the [Buyer] regarding the latter's condemnation to pay Mr. X;

Each party should bear its own expenses, but for Mr. X, whose expenses should be borne by [Seller];

[The Supreme Court] rejects the claims brought under Article 700 of the New Code of Civil Procedure;

[...]

This is the decision of the Supreme Court, First Civil Section, pronounced by its Chairman at the public hearing of 8 April 2009.

ANCILLARY MOTIONS TO THE APPEAL

Requests brought by the SCP [Law firm] Delaporte, Briard et Trichet as counsel for the [Seller]:

ON THE [SELLER]'S FIRST MOTION FOR ANNULMENT

[Seller] appeals the rejection of its motion for lack of competence. This is an appeal against the findings by the Cour d'appel d'Agen that

   -    "The Court accepts the order by the first instance judge that the [Buyer] pay the damages suffered by Mr. X; and
 
   -    The Court rejects the motion for lack of competence brought by the [Seller] and finds that [Seller] should guarantee the payments that should be made by [Buyer]" [reference to appellate decision]

[Seller], an Italian company headquartered in Italy, also appeals against the warranty claim by [Buyer], a French company, that [Seller] has manufactured and sold defective tiles.

[Seller] challenges the position taken by the Cour d'appel d'agen::

   -    That Article 17 of the Brussels and Lugano Conventions as well as Article 23 of the EC Regulation 44/2001 of December 2000 [hereinafter, the Brussels I Regulation] provide that where the parties (one of which at least has its domicile in a Contracting State) agree that the court or courts of a Contracting State are to settle any dispute that has arisen or may arise between them regarding a particular legal relationship;
 
   -    That those court or courts are competent; that this is an exclusive competence, unless the parties have agreed otherwise; that the same articles provide that the forum selection agreement could be concluded either in writing or orally with a written confirmation, in a form which is consistent with the usages that the parties have established between themselves or are supposed to know and is largely accepted and practiced in contracts of the same branch of trade considered; that those competence rules are interpretative rules; that it follows that a forum selection clause is invalid and ineffective unless the party which relies on it provides proof that it was made know to, and accepted by, the co-contracting party;
 
   -    That it is established (in Italian) in article 12 of the conditions of sale adopted by [Seller] a copy of which was served on [Buyer] that the Court of Modena was competent to adjudicate any dispute relating to the contract of sale, either by a claim of the seller or that of the buyer, save the seller's right to seize another judicial authority; that the [Seller] contends that such conditions of sale can be found on the reverse of every confirmation of order and were once more made known to [Buyer] when it was informed of [Seller]'s price list; that it is, however, convenient to notice that the price list was not annexed to the files and that only the front of several invoices were brought to the proceedings, hence it is impossible to distinguish on the reverse of which documents the conditions of sale referred by the [Seller] can be found; that the evidence brought in does not suffice to establish whether the forum selection clause in the benefit of the Court of Modena was put on a contractual document, and thereby signed and accepted by the buyer; that furthermore, the [Seller] did not prove the existence of any international usage which would attribute exclusive competence on Italian courts in what concerns disputes relating to sales by Italian tile manufacturers to their foreign clients;
 
   -    That [Seller] failed to provide any evidence but the fronts of several invoices addressed to [Buyer] which have no trace of a forum clause; that is not established, therefore, that [Buyer] had knowledge of the forum clause invoked by the [Seller] and consented to it, so that such clause has no effect in relation to [Buyer]; that [Buyer], in the absence of a jurisdiction clause, is allowed to seize a French court and to appeal the [Seller] in warranty before the same territory, which was the place of delivery of the defective tiles according to Article 46 of the New Code of Civil Procedure.

These were the bases on which the Cour d'appel d'Agem rejected the [Seller]'s motion for lack of competence [reference to the appellate decision];

However, it is [Seller]'s position that:

Whereas, Article 23, Paragraph 1, of the Brussels I Regulation admits the validity of jurisdiction clauses concluded either in writing or orally with a written confirmation, or according to the usages established between the parties or those of international trade, which the parties are, or should be, aware of; and that the Appellate Court, while rejecting the jurisdiction clause attributing competence to the Court of Modena, did not inquire whether that clause was in accordance with the usages established by the parties, and therefore left its decision without a legal basis under the aforementioned Regulation;

Whereas, on the other hand, while retaining that it was not established that the forum clause could be found on the reverse of the invoices, because only their fronts had been introduced, and given that both sides of the invoices were produced at the appeal level, the Court disregarded the evidence and decided in violation of Article 1.134 of the French Civil Code;

Whereas, finally, that by virtue of Article 6 of the European Convention on Human Rights [right to a fair trial], a motivation by incorporation of grounds is not in accordance with the Convention unless the essential issues have been effectively examined and the jurisdiction has not contented itself with simply reaffirming its previous arguments; that, in the case at hand, in taking advantage of the arguments of the first instance judges without expressly examining the essential issues and notably the evidence produced in the appeal, which differs from that produced in the first instance, the Court of Appeals violated Article 6, Paragraph 1 as cited above.

ON THE [SELLER]'S SECOND MOTION FOR ANNULMENT

The [Seller] attacks the appellate decision for ordering it to guarantee payment by the [Buyer] to Mr. X.

Onto the findings that "it was out of pertinent grounds that the Court found that the first instance judge ordered [Buyer] to compensate the damages of Mr. X, rejected the motion for lack of competence brought by the [Seller] and decided that [Seller] should guarantee the condemnations pronounced against the [Buyer]; that, regarding the purported non-conformity of the tiles, it deserves notice that the [Buyer] proved by means of documents annexed to the files that it sold first grade tiles to Mr. X; that, furthermore, the challenge of the expert's report would certainly be more useful had the [Seller] attended his examinations instead of declining the invitation to do so, presenting its arguments at the relevant time" [reference to the appellate decision];

The Court held that "the contract for the sale of tiles concluded between [Seller] and [Buyer] constitutes an international sale of goods governed by the CISG, which can be evoked due to its ratification by both France and Italy and that:

   -    Article 35(1) of the CISG states that the seller must deliver goods of the quantity, quality and description called for in the contract;
 
   -    Article 38(1) of said Convention stipulates that the buyer must examine the goods or cause them to be examined in as short a period as permitted by the circumstances;
 
   -    According to Article 39, the buyer loses the right to rely on a lack of conformity if he fails to give notice of the defect to the seller, specifying its nature, within a reasonable time after he has discovered or ought to have discovered it; that, in any case, the Convention states that the buyer is deprived of the right to rely on a lack of conformity if he does not give notice of the defect to the seller within a maximum of two years from the date on which the goods were actually delivered, unless this time-limit is inconsistent with a contractual period of guarantee.

In addition, the Court stated that:

   -    It is incontestable that the freeze-proof characteristic of a tiled floor is not noticeable until the tiles are exposed to frost and tarnish, which retards the starting point of the period of notification pending the appearance of the defect; and furthermore
 
   -    The said provisions of the CISG do not apply to the appeal in warranty commenced by the dealer against the manufacturer of a defective merchandise; that in such a case the periods assigned to the [Seller] start to run from proper summons;
 
   -    It must also be noticed that [Buyer] was summoned by act of bailiff at the request of Mr. X on 21 April 2004 and, on 16 June 2004, it filed an appeal in against the [Seller] acting therefore within a short period;
 
   -    Furthermore, in the year when the freeze-proof defect of the tiles emerged, the [Buyer] had notified the [Seller] of the flaws by fax, which refused to get involved even though being aware of the situation as well as to appear in whichever of several meetings carried out with the expert, despite having been invited.

The Cour d'appel d'Agen ruled that the [Seller] is not allowed to contend that the non-conformities were not communicated right away nor to dispute the conclusions of the expert which were unfavorable to itself; that the [Buyer] is well-founded in its request that the [Seller], which has sold falsely named non-freezing tiles, guarantees the payment that [Buyer] was ordered to make for the benefit of Mr. X." [reference to the appellate decision];

However, the Cour d'appel d'Agen was wrong on two counts:

On the one hand, Article 39 of the CISG states that:

"(1) 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.

"(2) In any event, the buyer loses the right to rely on a lack of conformity of the goods if he does not give the seller notice thereof at the latest within a period of two years from the date on which the goods were actually handed over to the buyer, unless this time-limit is inconsistent with a contractual period of guarantee."

In the case at stake, while fixing the starting date of the two-year cut-off period at the date when the defects appeared, the Court of Appeals violated Article 39(2) of the CISG;

In addition, while fixing the starting date of the two-year cut-off period, in the case of an appeal in warranty, at the date when the seller was summoned, the Court of Appeals also violated Article 39(2) of the CISG.


FOOTNOTES

* All translations should be cross-checked against the original text. For purposes of this translation, Plaintiff-Appellee of France is referred to as [Buyer] and Defendant-Appellant of Italy is referred to as [Seller]

** Leandro Tripodi is a law student at the University of São Paulo and was a member of its team in the 16th Willem C. Vis International Commercial Arbitration Moot. He is an Associate at the Brazilian Arbitration Committee (CBar) and an employee at Brazil's Ministry of Finance.

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Pace Law School Institute of International Commercial Law - Last updated March 18, 2011
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