Belgium 19 June 2009 Court of Cassation [Supreme Court] (Scaform International BV v. Lorraine Tubes S.A.S.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/090619b1.html]
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: C.07.0289.N
CASE NAME:
CASE HISTORY: 1st instance Rechtbank van Koophandel Tongeren 25 January 2005; 2d instance Hof van Beroep Antwerp 29 June 2006 and 15 February 2007 [affirmed]
SELLER'S COUNTRY: France (defendant)
BUYER'S COUNTRY: Netherlands (plaintiff)
GOODS INVOLVED: Steel tubes
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
7A1 ; 7C22 [Principles of interpretation: international character of Convention; Gap-filling (problems governed by Convention but not expressly settled): recourse to general principles on which Convention is based]; 79B [Impediments excusing party from liability for damages: hardship]
Descriptors:
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1457&step=Abstract>
CITATIONS TO TEXT OF DECISION
Original language (Dutch): <http://BelgianCourdeCassationCISGArt79.19June2009.pdf>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=1457&step=FullText>
Translation (English): Text presented below
CITATIONS TO COMMENTS ON DECISION
Unavailable
Go to Case Table of ContentsCase text (English translation) [second draft]
Queen Mary Case Translation Programme
19 June 2009 [C.07.0289.N]
[...]
The provision in cassation is directed against the judgments rendered by the Court of Appeal of Antwerp of 29 June 2006 and 15 February 2007.
[These appeals were directed against the judgment of the Commercial Court of Tongeren 25 January 2005 <http://cisgw3.law.pace.edu/cases/050125b1.html>.]
[...]
II. FACTS
From the contested judgments it appears that:
| - | Scafom International [of Netherlands] (hereinafter referred to as "[Buyer]") concluded with SA Exma [of France], the predecessor of Lorraine Tubes S.A.S (hereinafter referred to as "[Seller]"), a number of contracts of sale for the delivery of steel tubes. |
| - | After the contracts had been concluded, the price of steel unforeseeably increased by 70%. |
| - | There was no clause in the contracts for price adaptation. |
III. PLEA IN CASSATION
[Buyer] submits a plea in its application.
Statutory provisions under breach: Articles 4, 7(1) and (2), 23, 29(1), 53 to 60 (incl.), 71 and 79 of [the CISG].
Contested decisions
[...]
Grounds
[...]
Conclusion
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IV. DECISION OF THE COURT
Evaluation
1. Under Article 79(1) [CISG], a party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences.
Changed circumstances that were not reasonably foreseeable at the time of the conclusion of the contract and that are unequivocally of a nature to increase the burden of performance of the contract in a disproportionate manner, can, under circumstances, form an impediment in the sense of this provision of the treaty.
2. Article 7(1) states that in the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade.
Article 7(2) states that questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law.
Thus, to fill the gaps in a uniform manner adhesion should be sought with the general principles which govern the law of international trade.
Under these principles, as incorporated inter alia in the Unidroit Principles of International Commercial Contracts, the party who invokes changed circumstances that fundamentally disturb the contractual balance, as mentioned in paragraph 1, is also entitled to claim the renegotiation of the contract.
3. The judgment finds that:
| - | [Buyer] concluded with SA Exma, the predecessor of [Seller], a number of contracts of
sale for the delivery of steel tubes. |
| - | After the contracts had been concluded, the price of steel unforeseeably increased with 70%. |
| - | There was no clause in the contracts for price adaptation. |
The judges on appeal found that these unforeseen increases in the price gave rise to a serious imbalance which rendered the further performance of the contracts under unchanged conditions exceptionally detrimental for [Seller].
4. The judgment could on the basis of these findings, without violation of the statutory provisions indicated in the plea, decide that [Buyer] must renegotiate the contractual conditions.
The plea cannot be accepted.
The Court rejects the provision in Cassation.
[...]
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Scafom International of the Netherlands is referred to as [Buyer] and Lorraine Tubes S.A.S. is referred to as [Seller].
** Kristof Cox is a Senior Legal Consultant at Deloitte and Affiliated Senior Researcher at the Institute for International Trade Law of the Catholic University of Leuven (KU Leuven, Belgium). His consultancy work focuses on aspects of trade law and M&A-transactions. His research is devoted to International Commercial Arbitration and the CISG. Kristof has been appointed as an arbitrator and is a member of the Steering Committee of CEPINA-40, the Belgian association of young arbitration practitioners.
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