Netherlands 29 July 2009 District Court Arnhem (Minibus case)
[Cite as: http://cisgw3.law.pace.edu/cases/090729n1.html]
DATE OF DECISION:
CASE NUMBER/DOCKET NUMBER: LJN BJ4645; 172927 / HA ZA 08-1230
CASE HISTORY: Unavailable
SELLER'S COUNTRY: Netherlands (defendant)
BUYER'S COUNTRY: Germany (plaintiff)
GOODS INVOLVED: Minibus case
APPLICATION OF CISG: Yes
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue:
Classification of issues using UNCITRAL classification code numbers:
7B1 ; 7C22 [Materials for interpretation of Convention: international case law and scholarly studies; Gap-filling (problems governed by Convention but not expressly settled): recourse to general principles on which Convention is based]; 25B [Definition of fundamental breach: substantial deprivation of expectation, etc.]; 49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract]; 58A1 [Payment of price (buyer obligated to pay when goods placed at buyer's disposal): however,
seller not obliged to hand over goods until buyer pays price]; 71A1 [Suspension of performance (grounds for suspension): apparent that other party will not perform
substantial part of obligations]
7B1 ; 7C22 [Materials for interpretation of Convention: international case law and scholarly studies; Gap-filling (problems governed by Convention but not expressly settled): recourse to general principles on which Convention is based];
25B [Definition of fundamental breach: substantial deprivation of expectation, etc.];
49A1 [Buyer's right to avoid contract (grounds for avoidance): fundamental breach of contract];
58A1 [Payment of price (buyer obligated to pay when goods placed at buyer's disposal): however, seller not obliged to hand over goods until buyer pays price];
71A1 [Suspension of performance (grounds for suspension): apparent that other party will not perform substantial part of obligations]
Reproduced with permission of European Journal of Contract Law (4/2009) 204
EDITOR: Sonja Kruisinga, Utrecht University
Rechtbank Arnem (Minibus case) of 29 July 2009
FACTS OF THE CASE
This case concerned a contract for the sale and purchase of a minibus. The contract was concluded in August 2007 between a Dutch seller and a German buyer. In September 2007, another contract was concluded between the same parties for the sale and purchase of another minibus. The buyer sued the seller and claimed avoidance of one of these sales contracts.
The District Court of Arnhem had to decide whether the buyer was entitled to avoid the contract, first of all, because the delivery of one of the minibuses took place two days after the agreed delivery date. The Court held that, in this case, the buyer had accepted the delivery of the minibuses and had not -- within a reasonable time after delivery -- complained about the delay in delivery. Without any reference to the question as to whether the delayed delivery as such amounted to a fundamental breach, the Court held that there was no ground for avoidance of the contract because the buyer had lost the right to avoid the contract on the basis of Article 49(2)(a) CISG.
After delivery, it appeared that some repairs to one of the buses were necessary. The seller repaired the bus, but refused to redeliver the bus to the buyer, because the buyer had not yet paid the full purchase price for the other bus, even though according to the contract it was obliged to do so at that time. In doing so, the seller relied on its right to suspend performance in Articles 58 and 71 CISG. Therefore, Dutch national law concerning the right to suspend performance cannot be applicable. Even though the CISG does not provide for a general right to suspend performance, the Court held that it follows from recent case law and literature that -- in special circumstances -- the existence of a general right to suspend performance may be derived from Articles 71, 73, 58(1) and 7(2) CISG. In this respect the Court refers to the decision by the Austrian Oberster Gerischtshof of 8 November 2005, CISG-online no. 1156.
On 10 January 2008, the buyer had not yet paid the purchase price, but was under an obligation to do so. At that time, the District Court held, the seller was entitled to suspend performance of its obligation to return the minibus after the defects were repaired. The buyer argued that the seller was not entitled to do so, as the respective obligations of buyer and seller did not arise from the same contract. The Court held that there is ample reason to interpret the provisions in Articles 73, 85 and 86 CISG extensively. The District Court concluded that, in the present circumstances, there was a sufficient connection between the respective obligations of seller and buyer to justify a suspension of the performance in this case.
In January, the buyer paid an additional part of the purchase price. The Court held that after that time, the seller was no longer entitled to suspend its performance, as only a limited part of the purchase price was still due. Therefore, the seller was -- at that time -- obliged to return the minibus after the repairs. By not doing so, it fundamentally breached its contractual obligations. The Court concluded that the buyer was, therefore entitled to avoid the sales contract concerning the minibus that needed the repairs.
The case confirms that the CISG deals with a party's right to suspend performance in an exhaustive manner. Therefore, any national law concerning the right to suspend performance will not be applicable to a contract which is governed by the CISG.
Even though in the interpretation of the CISG, courts are required to take the international character of the CISG into account on the basis of Article 7(1) CISG, it is not always the case that national courts refer to foreign decisions while applying the CISG. In this respect it is interesting to note that the District Court referred to foreign case law on the basis of the CISG in order to justify its conclusion that a general right to suspend performance may be acknowledged in the CISG.Go to Case Table of Contents
CITATIONS TO ABSTRACTS OF DECISION
(a) UNCITRAL abstract: Unavailable
(b) Other abstracts
CITATIONS TO TEXT OF DECISION
Original language (Dutch): Netherlands case law website <http://www.rechtspraak.nl/>
CITATIONS TO COMMENTS ON DECISION
UnavailableGo to Case Table of Contents