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CISG CASE PRESENTATION

Netherlands 8 July 2009 District Court 's-Gravenhage (Fruitpartner BV v. Helfer Overseas Fruit Distributor SA) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/090708n1.html]

Primary source(s) of information for case presentation: Netherlands case law website

Case Table of Contents


Case identification

DATE OF DECISION: 20090708 (8 July 2009)

JURISDICTION: Netherlands

TRIBUNAL: Rb 's-Gravenhage [Rb = Arrondissementsrechtbank = District Court]

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 324074 / HA ZA 08-3751

CASE NAME: Fruitpartner BV v. Helfer Overseas Fruit Distributor SA

CASE HISTORY: Unavailable

SELLER'S COUNTRY: [-]

BUYER'S COUNTRY: [-]

GOODS INVOLVED: [-]


Classification of issues present

APPLICATION OF CISG: [-]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 38 ; 39

Classification of issues using UNCITRAL classification code numbers:

Unavailable

Descriptors: Unavailable

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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): Netherlands case law website <http://www.rechtspraak.nl/>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Unavailable

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Case text (English translation) [first draft]

The CISG Translation Network

The Netherlands 8 July 2009 District Court's-Gravenhage
(Fruitpartner B.V. v. Helfer Overseas Fruit Distributor S.A.)

Translation [*] by Judy C.C. Hsieh [**]

Case summary

The legal issue involved in the present case

On 30 November and 4 December of 2007 Fruitpartner B.V. [hereinafter referred to as “Seller”] sold 24 pallets of Peruvian mangoes to Helfer S.A. [hereinafter referred to as “Buyer”], the contracts stipulated that 24 pallets of Peruvian mangoes are to be delivered in Maasdijk at the premises of Cool Control B.V., a cold storage facility. Subsequent to the delivery of the goods, they were dispatched to Switzerland as instructed by Buyer. [Paragraph 2.2]. The first pallet arrived on 1 December and the second pallet was delivered on 5 December 2007. Internal rotting of the mangoes was detected on 7 or 8 December 2007. On 10 December 2007 an examination was conducted by a Swedish expert and the mangoes were disapproved by the expert [Paragraph 4.4]. The Buyer voiced his dissatisfaction over the non-conforming goods on 8 December (via telephone) and 11 December 2007 (in writing) [Paragraphs 2.3 & 4.5]. The legal issue involved in the present case, is whether the notification on 8 December and 11 December 2007 can be qualified as a notification within a reasonable time pursuant to Art. 39(1) CISG.

The ruling of the court

The District Court of The Hague held that since mangoes are to be qualified as perishable goods the Buyer is required to act especially fast in notifying the Seller about the lack of conformity [Paragraph 4.5]. The contracts did not involve carriage of the goods to Switzerland and because the goods were prone to rapid deterioration, the Buyer was not allowed to defer examinations of the mangoes until after its arrival in Switzerland. Art. 38(2) CISG is not applicable in the present case [Paragraph 4.5].

Prior to the transfer of ownership and the passing of risk, the Buyer should and more importantly could have uncovered problems with the mangoes, by examining the mangoes (pursuant to Art. 38 CISG) upon arrival in Maasdijk and the Buyer should not have waited to examine the goods approximately one week after the delivery of the mangoes, at that time the Buyer had already lost its right to object against the bad quality of the goods, pursuant to Art. 39 CISG [Paragraph 4.7]. The Buyer could have easily conducted examination of the mangoes prior to the transport to Switzerland, because the Seller [Fruitpartner B.V.] and a subsidiary of the Buyer [Helfer Sales S.A] and Cool Control B.V. are located on the same premises [Paragraph 4.3]. Consequently, the Buyer’s complaints about the lack of conformity on 8 (via telephone) and 11 December 2007 (in writing) cannot be qualified as a notice within “reasonable time” pursuant to Art. 39 CISG, because the Buyer should have relayed the lack of conformity to the Seller upon delivery of the goods in Maasdijk on 30 November and 4 December 2007 [Paragraph 4.5]. By failing to do so, the Buyer has lost his right to rely on lack of conformity [Paragraph 4.9].

Judgment

DISTRICT COURT OF THE HAGUE Civil branch

Docket number: 324074/ HA ZA 08-3751
Judgment date: 8 July 2009

In the case of

The private limited liability company FRUITPARTNER B.V., established in Venlo
Counsel: mr. A.D.A. Quaedvlieg; Trial Attorney: mr. E. Grabrandt,

Against

The legal entity under Swiss law HELFER OVERSEAS FRUIT DISTRIBUTOR S.A., established in Gland, Switzerland
Counsel: mr. F. th. P. van Voorst

The District Court shall hereinafter refer to the parties as Fruitpartner B.V. [Seller] and Helfer S.A. [Buyer]

  1. Proceeding at the District Court

1.1 Progress of the proceeding based on the following items:

- the summons dated 6 November 2008, supplemented by 4 exhibits;

- defence dated 7 January 2009, supplemented by 13 exhibits;

- record of the personal appearance of parties dated 27 May 2009, with the inclusion of additional material documents and exhibits

1.2 Parties failed to agree upon a settlement and as a result the following judgment is rendered.

  1. Facts of the case

2.1 On 30 November and 4 December 2007 Seller sold and delivered 24 pallets of Peruvian mangoes. The contracts stipulated that 24 pallets of Peruvian mangoes are to be delivered to Maasdijk at the Cool Control B.V. premises. Cool Control B.V.’s business areas comprise of: providing cold storage facility, inspections on incoming fruits and providing logistics services for fruit traders e.g. Seller and Buyer and Helfer Sales S.A. are located on the same premises as Cool Control B.V. Helfer Sales B.V. is a subsidiary and serves as a Dutch trading agency owned by the Swiss parent company, Buyer

2.2 Subsequent to the delivery of 24 pallets of Peruvian mangoes in Maasdijk, the mangoes were dispatched to Switzerland under instruction from Buyer. The first pallet arrived on 1 December and the second pallet arrived on 5 December 2007. Upon arrival the pallets were stored in a cold storage facility with the purpose of reselling them to Helfer SA clients, i.e. Swiss purchasers (supermarkets).

2.3 On 11 December 2007 Buyer lodged a complaint with Seller via e-mail about the hidden defects of the mangoes, mainly internal fruit rot. Seller rejected the complaint via e-mail, stating that Buyer did not notify Seller about the alleged non-conforming mangoes within a reasonable time. As a consequence Seller was unable to recall its products and (possibly) resell them.

2.4 Buyer has two outstanding invoices remaining in the amount of € 26.284,61 (VAT excluded) for 24 pallets of Peruvian mangoes. Further correspondence between parties has not proven to be fruitful; the dispute between parties could not be settled through negotiations.

  1. The legal issues involved in this case

3.1 Seller demands payment of the outstanding invoices in the amount of € 26.284,61, plus interest and collection costs. Furthermore, Buyer should bear the costs for this proceeding.

3.2 Buyer rejects Seller´s claims. Buyer asserts that it did notify Seller about the non−conforming mangoes, and the notification reached Seller within a reasonable time. Buyer is entitled to rescind both contracts, or to be released from any overdue payment, because upon arrival in Switzerland the mangoes appeared to be affected by internal rotting. Consequently, the supplied mangoes did not attain the quality standards as reasonably may be expected from the goods.

  1. The ruling of the Court

4.1 International aspects are involved in the instant case and pursuant to Art. 5 EVEX Convention the Court considers it competent to decide on the issues at hand; and shall do so by applying Dutch law and the CISG.

4.2 Seller based its claim on Arts. 38, 39 CISG. Pursuant to Art. 39(1) CISG 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 or ought to have discovered it. Art. 39 is entwined with Art. 38 CISG. Art. 38(1) CISG calls for an examination of the goods by buyer, within as short a period as is practicable in the circumstances. The Court finds Seller´s claim consistent with Arts 38, 39 CISG.

4.3 What can be ascertained is that Buyer neither examined the goods upon delivery, nor did it examine the goods subsequent to the delivery. A quality check by Buyer – as a professional fruit trader - should not have been a complicated task to complete, since its subsidiary and trading agency Helfer Sales B.V. (party to the contract negotiations with Seller) are located on the same premises as Seller and the cold storage facility Cool Control B.V.

4.4 Upon delivery in Maasdijk on 30 November and 4 December 2007 the ownership of the mangoes transferred to Buyer The risk of damage to the mangoes has passed to Buyer as well (Arts. 66, 67 CISG). The dispatchment of mangoes to Switzerland under instruction from Helfer SA, was carried out at Buyer´s own risk and account. As appears from the exhibits and the information brought forward during the personal appearance of parties, internal rotting of the mangoes was detected on 7 or 8 December 2007. Subsequent to the reporting of a “stress induced accelerated ripening process” of 2 pallets of mangoes. On 10 December 2007 an examination was conducted by a Swedish expert and the mangoes were disapproved by the expert.

4.5 Taking into account the nature of the Peruvian mangoes, being perishable goods, the buyer is required to act especially fast in notifying the seller about the lack of conformity (Art. 39 CISG). Buyer’s complaints about the lack of conformity on 8 (via telephone) and 11 December 2007 (in writing) cannot be qualified as a notice within “reasonable time” pursuant to Art. 39 CISG. In the present case, the “reasonable time” within which the lack of conformity should have been relayed to Seller had already passed upon delivery of the goods in Maasdijk on 30 November and 4 December 2007. The contracts did not involve carriage of the mangoes to Switzerland. Consequently, the Court finds that pursuant to Art. 38(2) CISG, Buyer was not allowed to defer examinations of the mangoes until after its arrival in Switzerland.

4.6 Seller asserts that subsequent to the delivery in Maasdijk anything could have happened, which affected the mangoes´ condition; causing internal rotting to set in. The exposure to incorrect temperature control during the conditioned transport, incorrect temperature control at the cold storage facility in Switzerland, and employing an incorrect method to “accelerate the ripening process induced by stress”. Consequently, the occurrence of internal rotting cannot be attributed to Seller Arts. 38, 39 CISG are meant to protect the seller against unfounded claims about non-conforming products, which ensues subsequent to the delivery.

4.7 Buyer asserts that the cause of the internal rotting must have been apparent during the mango harvesting in Peru, prior to the delivery in Maasdijk. This assertion was not substantiated with any verifiable pieces of evidence. The report composed by the Swiss expert on 10 December 2007 had not been translated, and the handwritten pages from the report (insofar as it is readable by the Court) only contain general remarks. The inspection reports composed by Cool Control B.V. and submitted by Seller, does not indicate any hidden defects of the mangoes prior to delivery in Maasdijk. In the event that Buyer’s assertion can be substantiated with evidential proof, this defence should be dismissed due to the applicability of Arts. 38, 39 CISG. Prior to the transfer of ownership and the passing of risk, Buyer should and more importantly could have uncovered problems with the mangoes, by examining the mangoes (pursuant to Art. 38 CISG) upon arrival in Maasdijk and should not have waited to examine the goods approximately one week after the delivery of the mangoes, at that time Buyer had already lost its right to object against the bad quality of the goods, pursuant to Art. 39 CISG.

4.8 Exceptional circumstances that could exempt Buyer from the required timely notification period, would imply that the defects could not have been detected and as a consequence Buyer could not have notified Seller any sooner than after the delivery was made in Maasdijk. Such circumstances were not brought forward or adequately substantiated by Buyer Nevertheless, occurrence of exceptional circumstances still implies that Buyer as an expert-buyer (professional buyer) and trading agency should bear the risk of defects subsequent to the delivery, as Buyer is (just as Seller) involved in international trade in perishable goods; and should be aware of risks that is inherent in the nature of perishable goods (particularly Peruvian mangoes). In addition, as inferred from the e-mail correspondence on 14 January 2008 (included as an exhibit), Buyer delayed inspection of the goods due to lack of time and pressure of activities. Consequently, the Court finds it obvious that Buyer should bear the risk of the fruit defects.

4.9 Given the circumstances in the present case, the Court concludes that due to Buyer’s failure to conduct a timely quality check, it has lost its right to rely on lack of conformity regarding the mangoes sold and supplied by Seller. The aforementioned is sufficient to conclude that Buyer must settle the outstanding invoices with Seller for the mangoes that have been sold and supplied by Seller

4.10 The principal sum and its interest claimed by Seller have not been contested, and the content of the documents submitted to the Court indicate that the estimated amount of the principal sum is correct. The Court awards Seller the principal sum. Subsequently, the Court shall include in the dictum that the amount will be split into two portions, because both invoices have different starting dates regarding accrual of the interest. The collection costs have been contested, and the exhibits submitted by Seller are insufficient to substantiate the total amount of the collection costs; the Court shall dismiss that part of the claim. Furthermore, the Court orders Buyer to pay for the expenses made during this proceeding, consisting of: € 71,80 summons + € 655 Court registry fee + € 1.158 allowance of attorney’s fees, total amount €1.884,80.

  1. Decision

The Court hereby:

- orders Helfer Overseas Fruit Distributors S.A. to pay € 8.547,84 (VAT included) to Seller, plus interest pursuant to Art. 6:119a Dutch Civil Code effective on 2 January 2008;

- orders Helfer Overseas Fruit Distributors S.A. to pay € 17.736,84 (VAT included), plus interest pursuant to Art. 6:119a Dutch Civil Code effective on 5 January 2008;

- orders Helfer Overseas Fruit Distributor S.A. to pay € 1.884,80 proceeding costs, according to the estimation in Paragraph 4.10;

- declares this judgment provisionally enforceable;

- dismisses alternative claims or claims concerning a different amount than estimated.

This judgment was rendered by mr. H. Wien and pronounced in public on 8 July 2009


FOOTNOTES

* All translations should be verified by cross-checking against the original text.

** Judy C.C. Hsieh, LLM. Leiden University, majoring in Company Law. She received her LLB and (first) LLM from the Vrije Universiteit in Amsterdam. She partook in the 17th (2009-2010) Willem C. Vis International Commercial Arbitration Moot.

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