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CISG CASE PRESENTATION

Netherlands 9 March 2010 Gerechtshof [Appellate Court] Arnhem (_____ v. Pastificio Della Mamma S.A.) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/100309n1.html]

Primary source(s) of information for case presentation: Website of the Dutch courts

Case Table of Contents


Case identification

DATE OF DECISION: 20100309 (9 March 2010)

JURISDICTION: Netherlands

TRIBUNAL: Hof Arnhem [Hof = Gerechtshof = Appellate Court)

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: LJN: BL 7399 zaaknummer 104.002.936

CASE NAME: _____ v. Pastificio Della Mamma S.A.

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Netherlands

BUYER'S COUNTRY: Belgium

GOODS INVOLVED: Pasta


Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 3 ; 6 ; 7 ; 8 ; 35 ; 36 ; 38 ; 39 ; 40 ; 44 ; 67 ; 69

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): Website of the Dutch courts <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

Netherlands 9 March 2010 Gerechtshof [Appellate Court] Arnhem
(_____ v. Pastificio Della Mamma S.A.)

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

Case summary

The legal issue involved in the present case

Since 17 February 2003, Pastificio Della Mamma S.A. [hereinafter referred to as “Seller”] has been a supplier of consumable materials to Buyer [hereinafter referred to as “Buyer”]. The consumable materials are meant to be processed for the production of ready-to-eat-pasta meals and they have been packaged and delivered to Buyer [Paragraph 3.1]. Buyer received an initial complaint about the consumable materials from a purchaser on 28 April 2003, but waited till 4 July 2003 to notify the Seller about the lack of conformity. According to the Buyer the notification was submitted in a timely manner because the expert examination was concluded on 1 July 2003 (and prior to the notification the Buyer had already communicated the problems about the quality of the supplied goods to the Seller) [Paragraph 4.9]. So the legal issue involves whether Buyer’s notification was relayed to the Seller within the boundaries of timeliness pursuant to Art. 39(1) CISG?

The ruling of the Court

If perishable goods are involved, the examination in order to determine whether the goods are conforming to the contract, is required to take place at the time when the risk passes to the Buyer (Art. 36(1) CISG), and the examination must be conducted without any delay [Paragraph 4.10]. The Buyer has a shorter period of time to notify the Seller about the lack of conformity, which is deemed reasonable according to Art. 39(1) CISG [Paragraph 4.10]. The present case involves perishable items [Paragraph 3.1] and furthermore the consumable materials supplied by the Seller were meant to be processed along with other ingredients to produce ready- to-eat pasta meals. Thus, a prompt examination is especially of significance because an examination of the consumable materials subsequent to its processing is a rather impossible task to complete [Paragraph 4.10].

The Appellate Court mentions a judgment rendered by the Dutch Supreme Court on 29 June 2007 [NJ 2008, 60], wherein under Art. 7:23(1) Dutch Civil Code the Buyer may await the result of an expert inspection, prior to notifying the Seller about the lack of conformity [Paragraph 3.3.3 and 3.4.4 of the judicial decision by the Dutch Supreme Court]. However, the Appellate Court concludes that the ruling of the Dutch Supreme Court is not analogously applicable because the subject matter of the Dutch case concerns an (non-conforming) immovable property, which is precluded from the CISG’s sphere of application. In addition, the Buyer in the Dutch case is to be qualified as a non-expert buyer, whereas in the present case the Buyer is to be qualified as an expert-consumer (/expert-buyer) [Paragraph 4.11].

Conclusion

In this interlocutory judgment the Appellate Court of Arnhem tends to lean towards Seller’s view that a notification was not given within a reasonable time, because perishable items require a prompt examination (Art. 38(1) CISG) and subsequently a swift notice pursuant to Art. 39(1) CISG.

Interlocutory judgment

APPELLATE COURT OF ARNHEM

Civil Section

Case number/ Docket number: 104.002.936/ LJN: BL 7399

in the case of

[Buyer],

domiciled in [place of residence]

Buyer,

counsel: mr. A.C.Huisman,

Against:

the legal entity under foreign law

Pastificio Della Mamma S.A.

Established in Herstal, Belgium,

Respondent,

Counsel: mr. B.J. Schadd.

1. Proceeding at the court of first instance

The Appellate Court refers to the content of judgments rendered by the Court of First Instance on 25 May 2005 and 28 June 2006 [hereinafter referred to as “final judgment”], rendered by the District Court of Almelo between Buyer [hereinafter referred to as: “ Buyer”] as respondent in the principal action and claimant in the cross-action proceeding, and respondent (Pastificio Della Mamma S.A.) [hereinafter referred to as “Seller”] as claimant in the principal action and respondent in the cross-action proceeding. The final judgment is attached as a copy to this judgment.

2. Proceeding at the Appellate Court

2.1 (Buyer) sent a writ of summons dated 27 September 2006, and served the document on Seller on 19 October 2006 and notified Seller that (Buyer) is lodging an appeal against the final judgment rendered by the Court of First Instance.

2.2 In the statement of grounds of appeal (Buyer) objected to the final judgment and submitted five grounds to support his objection to the ruling by the Court of First Instance. As mentioned in the summons, (Buyer) claims that the final judgment should be quashed, and that the provisional enforcement should be overturned on appeal. Subsequently, Seller’s claims should be dismissed and damages amounting to € 164.147,98 (VAT excluded) should be awarded to (Buyer); plus interest to be calculated as of 4 July 2003 or from the day the summons was served. Or, according to (Buyer) any amount in damages that the Appellate Court deems reasonable plus interest should be awarded to (Buyer). (Buyer) also request the Appellate Court to award his ancillary claim, meaning that Seller must compensate the damages arising out of the breach of contract. Furthermore, Pastifico should bear the costs for the initial and cross-action proceedings.

2.3 In Seller’s statement of answer in appeal, Seller rebuts the grounds of appeal and presented proof to support its rebuttals. Seller has requested the Appellate Court to uphold the final judgment rendered by the Court of First Instance and thereby ordering (Buyer) to compensate the costs of the appellate proceeding.

2.4 Parties have submitted documents in order to enable this Court to reach a judgment, and the Court has decided as follows.

3. Facts of the case

As put forward by parties or not sufficiently disputed, the facts in the appellate proceeding are as follows:

3.1 Since 17 February 2003, Seller has been a supplier of consumable materials to (Buyer) (as appears from overruling ground I hereafter). The consumable materials, i.e. pastas and sauces are meant to be processed for the production of ready-to-eat pasta meals, and have been packaged (separately) and delivered to (Buyer) for that purpose. The storage life of the pastas is fourteen days, provided that they are kept or stored at 4 C. (Buyer) processed the consumable materials along with other ingredients in order to produce ready- to- eat pasta meals. (Buyer) subsequently packaged them and delivered them to its purchasers.

3.2 Concerning the deliveries mentioned in Paragraph 3.1, Seller sent several invoices to [trade name]. Initially, payments were being fulfilled. However, payment over the period commencing from 1 April 2003 to 20 June 2003 with a total amount of € 31.159,57 remained outstanding.

3.3 On 4 July 2003 Seller was informed by (Buyer) via letter that (Buyer) holds Seller liable for damages amounting to € 50.647,68 (VAT excluded). (Buyer) asserts that the amount of damages corresponds with a claim filed by a (not yet disclosed) purchaser of the products. That claim is based on rejected products and a lost profit margin due to cambering of the products’ wrapping, because the amount of non-lactic acid bacteria exceeded the permitted percentage.

4. Reasoning of the Appellate Court

4.1 Seller brought an action in the First Instance against (Buyer) and submitted in its statement of claim that it is entitled to € 33.425,49 plus the added interest and additional expenses. (Buyer), subsequent to modification of the initial claim, submitted in cross-action that Seller should be held liable for damages amounting to € 164.147,68 (VAT excluded), or an amount that the District Court deems reasonable, with inclusion of interest. (Buyer) submitted an ancillary claim. (Buyer) asserted in his ancillary claim that the breach of contract should be imputed to Seller, and as a consequence (Buyer) is entitled to claim damages. Subsequently, Seller should bear the costs for the legal proceedings.

4.2 The Court of First Instance awarded a great deal of Seller’s claim and rejected (Buyer’s) counterclaim. (Buyer) has to compensate the costs for the legal proceedings. The appellate proceeding is based on this judgment rendered by the Court of First Instance.

Applicable law

4.3 The Court of First Instance held in its final judgment that, according to Seller (in its reply) the Dutch law is applicable and (Buyer) did not contest its applicability and had only made references to certain provisions enshrined in the United Nations Convention on Contracts for the International Sale of Goods [hereinafter referred to as: “CISG”] of 11 April 1980 (Trb. 1981, 184 and 1986, 61), where (Buyer) appeals to particular provisions under Dutch law during the first proceeding, this will cause the Dutch law to be applicable. No objection has been raised towards this judgment. Consequently, the Appellate Court shall assume the applicability of the Dutch law regarding the legal aspects of the contract conclusion between parties.

4.4 The applicable law shall be determined ex officio by the Appellate Court, because the ruling of the Court of First Instance did not sufficiently address the issue of whether Dutch private law or the CISG should govern the issues at hand. Seller and (Buyer) have their place of business in different States and these States (respectively the Netherlands and Belgium) are Contracting States to the Convention. At time of the contract conclusion between parties the CISG has already entered into force. The contract dealt with delivery of consumable materials, which may be specified as movable things and consequently is covered by the CISG. In accordance with Art. 1(1)(a) CISG this Convention is applicable to the present dispute. There is no indication that parties excluded the Convention’s sphere of application, or made significant deviations from its provisions (Art. 6 CISG). Should questions arise during the appellate proceeding, and does neither the provisions nor the general principles of the Convention offer resolve in answering them, then these matters shall be settled by invoking Art. 7(2) CISG. As a result the matters will fall within the scope of private international law. Pursuant to Art. 3(1) of the 1980 Rome Convention on the law applicable to contractual obligations [i.e. the Treaty of Rome (/ EVO, Trb. 1980, 156)], a contract shall be governed by the law chosen by parties; that choice must be explicitly expressed by terms of the contract or the circumstances of the case. Parties have agreed on the application of Dutch law - albeit not at the outset -, which does govern the contractual obligations, as may be inferred from parties’ behavior as stated in Paragraph 4.3. Consequently, the Appellate Court finds that Dutch law shall be applicable in the event that the CISG offers no resolve in answering the questions raised in the instant proceeding.

Was [Buyer] party to the contract conclusion with Seller?

4.5 In his statement of grounds for appeal (Buyer) asserted that De Industrie Catering Groep B.V., a private limited company under Dutch law, was factually the party to the contract conclusion with Seller. The answer to this issue is governed by Art. 8 CISG. Pursuant to this provision, statements and other conduct made by a party are to be interpreted according to the intent, where the other party knew or could not have been unaware of what the intent was (Art. 8(1) CISG). In the event that the intention of a party is not sufficiently ascertainable, then pursuant to Paragraph 2 of Art. 8 CISG the statements or/ and conduct are to be interpreted according to what a reasonable person could or would have inferred from the circumstances. Furthermore, in interpreting statements [/or in determining the intent of a party], due consideration must be given to all relevant circumstances of the case including negotiations, and practices which the parties have established between themselves, usages and any subsequent conduct of the parties (Art. 8(3) CISG).

4.6 (Buyer) acceded in the clarification to his statement of grounds for appeal, that the trade name utilized by De Industrie Catering Group B.V. is similar to that of (Buyer’s), under which (Buyer) as a sole proprietorship utilized prior to 2001 for commercial trading purposes. This is apparent from the vendor rating, where the trade name of (Buyer’s) sole proprietorship was utilized (exhibit 4 as attachment to statement of defence). In addition, the orders and fax messages that have been included as exhibit 1 along with Seller’s reply also indicate the use of a trade name that (Buyer) had been utilizing for his sole proprietorship. However, (Buyer) asserts that Seller made use of pre-printed letters with the trade name of the private limited company De Industrie Catering Groep on its heading and the Chamber of Commerce’s registration number of De Industrie Catering Groep B.V. was placed at the bottom. The Appellate Court views that (Buyer) utilized two similar trade names, both of them consisting of four words with the only ascertainable difference being that one of the trade name has the two words “Catering Groep” placed in front, while the other trade name has the words “Catering Groep” placed at the end [De Industrie Catering Groep B.V.]. A substantial risk of confusion among these trade names is very probable, because the trade names are nearly identical; the inclusion of the Chamber of Commerce’s registration number is not sufficient to avoid the substantial risk of confusion. It should be noted that is it is ascertainable that (Buyer) did not notify Pastifico about the invoices being incorrectly addressed to the sole proprietorship instead of the private limited company. Payment of invoices by the limited company instead of the sole proprietorship does not detract from the fact that the trade names are nearly identical. The Appellate Court also notes that under Dutch law (art. 6:30(1) Dutch Civil Code) a person other than the obligor may perform contractual obligations, without the obligee being in default. Furthermore, it is ascertained by the Court that Buyer’s counselor utilized two different trade names, being “Catering Groep de Industrie B.V.” and “the private limited company Catering Groep De Industrie”, in the documents (i.e. statement of defence and rejoinder in the principal action) submitted to the Court. Hence, two similar trade names have caused confusion to materialize. (Buyer’s) letter dated 4 July 2003 to Seller, is an indication that (Buyer) too was clearly confused because the letter was written on behalf of “Catering Groep B.V.” A previous proceeding initiated by Seller against (Buyer’s) private limited company before the District Court of Luik illustrates once more the underlying confusion of utilizing two similar trade names. The Appellate Court concludes that (Buyer) did not succeed in rebutting Seller’s negation, i.e. that Seller was or should have been aware of (Buyer’s) intention (Art. 8(1) CISG) to allow the private limited company to be party to the contract negotiation(s) with Seller.

Timely notification of any shortcomings

4.7 Due to the devolutive effect of the appeal, the Appellate Court must, if one or more than one complaint is well-founded, specify a reason for rejecting Seller’s defences during the initial stages of the proceeding at the Court of First Instance. In the proceeding before the Court of First Instance, Seller asserted that (Buyer) did not provide a timely notification to Seller concerning shortcomings of its supplied products. Should the Appellate Court conclude that Seller’s assertion is well-founded, it may award Seller’s initial claim of € 31.159,57 plus interest; leading to a rejection of (Buyer’s) cross-action and dismissal of the appeal. The Appellate Court shall therefore, examine whether (Buyer) failed to provide a timely notification to Seller, as a precondition to the question whether Seller products that conformed to the contract.

4.8 It should be noted that in the first place, the seller must deliver goods which are conforming to the contract (Art. 35 CISG). The seller is liable for any lack of conformity which exists at the time when the risk passes to the buyer (Arts. 36, 67, 69 CISG). Under Art. 39(1) CISG, the buyer loses the right to rely on 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. This provision needs to be read in conjunction with Art. 38(1) CISG. According to Art. 38(1) CISG, the buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances. The obligation to examine the goods is also meant to determine the point in time when the buyer should have been aware of the lack of conformity (pursuant to Art. 39(1) CISG). This implicates that a time will be set for examination of the goods by the buyer and subsequently the commencement of a reasonable time within which the buyer must relay a notice of lack of conformity to the seller (CISG Advisory Council Opinion No. 2, Paragraph 4.1).

4.9 In its summons Seller stated that (Buyer) failed to examine the goods promptly, i.e. immediately subsequent to receiving the goods. A complaint about the quality of the goods was made known to Seller only subsequent to the default in payment by (Buyer); as a consequence Seller declined to deliver additional supplies to (Buyer). (Buyer) asserts (statement of defence in principal action, Paragraph 6) that the first complaint was received from his purchaser Hema on 28 April 2003 (the complaint concerned the cambering of the packaging, containing pasta meals processed with consumable materials from Seller, prior to the expiration date). Another complaint was filed by Hema about another batch on 2 May 2003, with the same content as the previous one. These complaints led to an inspection being conducted on both batches, on behalf of (Buyer) by Silliker, a research firm. The result obtained from the inspection regarding the pasta meals, was that the colony count exceeded the legal guide level. According to (Buyer) Seller, in particular A., was notified on 6 June 2003 via telephone communication about the result of the inspection that had been conducted by the research firm. In addition, on 7 May, 27 May and 24 June 2003 (Buyer) asserts that he had discussed the problems with Seller regarding the quality of their products. Consequently, (Buyer) contends that he has fulfilled his obligation prescribed under Art. 39 CISG (statement of claim in cross-action, Paragraphs 28-30) because (Buyer) subsequent to receiving the first complaint from Hema on 28 May (Appellate Court interjects: April) 2003 (Buyer) notified Seller on 6 July (Appellate Court interjects: June) 2003, which is six weeks after (Buyer) had received the first complaint lodged by Hema. According to (Buyer) the notification was given within a reasonable time, because (Buyer) had to appoint a research expert to conduct the necessary inspection. Seller contested (Buyer’s) assertion in its statement of defence in cross-action. According to Seller the first complaint from (Buyer) was received on 4 July 2003, whilst (Buyer) had already received Hema’s first complaint well over two months, i.e. on 28 April 2003. In addition, Seller contested that the alleged meetings took place on 27 May and 24 June 2003. Seller contends in its reply (p. 4.) that (Buyer) should have examined the supplied goods upon receiving them and (Buyer) did not complain about the quality of the goods upon receiving the goods. In the aforementioned reply a reference is made to the HACCP and ISO food safety regulatory standards, pursuant to the regulatory standards Seller asserts that (Buyer) has a duty to examine the conformity and temperature of the goods prior to accepting the goods. (Buyer) (reply in cross-action) contends that he has fulfilled his duty in examining the goods by hiring the research firm Silliker, on the same day Hema’s complaint was received by (Buyer) on 28 April 2003. Silliker completed the inspection on 1 July 2003 and subsequently a complaint was filed (by letter) against Seller by (Buyer) on 4 July 2003. Furthermore, (Buyer) offers to place the burden of proof on him, as to proof that prior to 4 July 2003 correspondence with Seller about the complaints did factually occur.

4.10 In light of the parties’ statements set out in Paragraph 4.9, and in conjunction with Paragraph 4.8, the Appellate Court has come to the following reasoning.

In the event that perishable goods are involved (an established fact is that the storage life of pastas is fourteen days, if it is kept or stored at 4 C) the examination in order to determine whether the goods are conforming to the contract, must take place at the time when the risk passes to the buyer (Art. 36(1) CISG) and the examination must be conducted without any delay. The reasonable time within which the seller must be given notice of the lack of conformity depends on the circumstances of the case and the type of goods involved needs to be taken into account as well. In case of goods that are prone to rapid deterioration, the buyer must notify the seller about the lack of conformity within a (very) short period of time, which is in accordance with “reasonable time” mentioned in Art. 39(1) CISG. The aforementioned enables the seller to examine complaints and gather evidence regarding alleged lack of conformity, as well as taking necessary measures to prevent the delivery of non-conforming goods in the future (in the present case it concerns perishable goods, consequently the buyer is required to act quickly in notifying the lack of conformity to seller). In addition the consumable materials supplied by Seller were meant to be processed along with other ingredients to produce ready- to-eat pasta meals, thus an examination of the consumable materials subsequent to its processing is impossible. The burden of proof regarding a timely notice, relayed to the seller within a reasonable time is placed on the buyer.

(Buyer) did not rely on Art. 40 CISG, under this provision Seller would lose its right to rely on Arts. 38, 39 CISG if (Buyer) succeeds in demonstrating that the lack of conformity was related to facts which Seller knew or ought to have been aware of, but did not disclose this information to (Buyer). Neither did (Buyer) contend that he had a reasonable excuse for his failure to give the required notice, if (Buyer) had relied on Art. 44 CISG it would have enabled him to claim price reduction pursuant to Art. 50 CISG or damages, except for loss of profit. Furthermore, (Buyer) did not assert that if the notification had reached Seller in time, it would not have mattered because Seller would not have taken measures allowing additional supplies to be conforming to the contract. It has not been asserted by parties, nor does it appear from the facts that parties have deviated from Arts. 38, 39 CISG.

4.11 Under Art. 22 Dutch Code of Civil Procedure, the Court may resort to the order of personal appearance in the event that more or additional information is required in order to determine the outcome of the proceeding. A personal appearance by parties is necessary to settle the question of whether (Buyer) sent out a notification about the lack of conformity within a reasonable time, and subsequently the following issues may be addressed as well:

(a) the dates whereupon additional supplies were delivered but payment remained outstanding;

(b) the storability of the supplied sauces;

(c) whom, on behalf of (Buyer) notified Pastifcio and in turn who was in charge with communicating with (Buyer), and what methods of communication were employed for correspondence; and to which supplied batch of consumable materials were the complaints directed at. What was the nature of the breach of contract and subsequently what were the consequences subsequent to the complaints and how will parties proof their assertions;

(d) at what time subsequent to the delivery did (Buyer) process the consumable materials acquired from Seller;

(e) does the contract between parties involve carriage of the goods, necessary question to ascertain the moment in time when the risk passes to the buyer and the reasonable time period within which (Buyer) should have examined the goods, pursuant to Arts. 36, 38, 67, 69 CISG

(f) whether it may be inferred from the HACCP and ISO food safety regulatory standards the following: a reasonable time frame within which (Buyer) should have examined the goods and subsequently should have sent out the notification of lack of conformity of the goods to Seller.

In addition, the Court wishes to familiarize itself with the view of parties concerning the applicability of a judicial decision rendered by the Dutch Supreme Court on 29 June 2007 [NJ 2008, 60], notwithstanding the applicability of the CISG in the case at hand. The aforementioned judicial decision enables the buyer to conduct an inspection regarding the lack of conformity, within as short a period as is practicable under the circumstances prior to filing a complaint against the seller. The Court views in advance that the decision by the Dutch Supreme Court cannot be applied in the present case because the dispute in that case was not governed by the CISG. The Dutch judicial decision did not concern perishable food items but it concerned house defects in a residence and the buyer was a non-expert consumer, whereas in the present case the buyer is an expert-consumer. Consequently, (Buyer) should not have waited until the release of the inspection result to file a complaint with Seller. A buyer could supplement his complaint accordingly, depending on the availability of the latest information and/ or the progress of the inspection; if the buyer substantiates his complaints accordingly, the seller would have the opportunity to take suitable measures in order to prevent non-conforming products in the future.

4.12 The possibility cannot be excluded that the Appellate Court will, subsequent to receiving the requested information under Paragraph 4.11 conclude that either the examination of the goods by Buyer was not conducted within a reasonable time, or that evidence needs to be furnished concerning the dates whereupon (Buyer) submitted the complaint(s) to Seller.

Processing of the consumable materials

4.13 In ground III of the grounds for appeal (Buyer) rebuts what is stated in (particular) Paragraph 9 concerning the Court of First Instance’s final judgment. The Court of First Instance mentioned that as inferred from a letter dated 18 June 2003 by (Buyer’s) purchaser Chilled Food Company, the consumable materials have been subjected to high temperatures during the processing process (statement of claim in principal action); leading to the growth rate of microorganism being enhanced. The Court of First Instance dismissed (Buyer’s) claim, because (Buyer) submitted the letter himself in order to substantiate his assertions. The letter mentions that the problems surrounding the meals were caused by an extreme pressure of activities at Chilled Food Company, and that – without reservation – the company did not possess the required expertise. As a consequence an enormous amount of products remained in the food processing plant longer than was necessary. This led to the rise of temperature subsequent to processing of the consumable materials and the rapid cooling of the products was carried out at a later stage, causing bacteria to grow. Furthermore, it was mentioned in the letter – without reservation – that the cambering of the meals’ packaging did not occur with black wrappings, but only with translucent wrappings.

The question of whether the consumable materials meet the requirements and the claim in cross-action

4.14 The Appellate Court shall hold over its judgment concerning the grounds IV and V of the grounds for appeal (with regard to the ruling of the Court of First Instance that the supplies of consumable materials did meet the required requirements and the dismissal of Buyer’s cross-action and the costs for the legal proceeding. The Court notes that based on Pasticifio’s substantiated rebuttal to the reports submitted by (Buyer) an affirmative judgment however, cannot be reached wherein the Court concludes that the consumable materials did not, at the time when risk passed to the (Buyer), complied to the contract.

Conclusion

The Appellate Court shall order personal appearance of parties to provide information regarding the issues set out in Paragraph 4.11, and to ascertain whether an appropriate settlement may be reached between parties. Parties will be ordered to address the issues mentioned in Paragraph 4.11. Pastifcio is required to submit a copy of the HACCP and ISO food safety regulatory standard, in particular the provisions that concern the issue set out in Paragraph 4.11(f). The documents need to be submitted four days prior to the court session. In the event that parties wish to take procedural actions before Court or present additional documents intended for the court session, a copy needs to be submitted accordingly to the Court and the opposite party four days prior to the holding of the court session.

The Decision

The Appellate Court in the appellate proceeding:

shall order personal appearance of (Buyer) and Seller by proxy. The person whom is authorized to act on behalf of Seller should have sufficient knowledge regarding the issues in the proceedings; and is authorized to reach a lawsuit settlement. Parties along with their counsels shall appear before court, where mr. H.L. van der Beek shall serve as the presiding justice. The court session will be held at Paleis van Justitie aan de Walburgstraat 2-4 in Arnhem. The date shall be announced to parties subsequent to its determination by Court; so that information can be provided and to ascertain whether parties may reach an agreement about the issues set out in Paragraph 4.11;

parties and their counsels have to submit dates on the docket date 23 March 2010, whereupon they are unable to appear before court from April till June 2010. The date and time of appearance shall be determined by the presiding justice mr. H.L. van der Beek;

(Buyer) and Seller shall be orderedto address the issues mentioned in Paragraph 4.11 and submit a copy of their statements to the Court and opposite party four days prior to the court session;

Pastifcio is required to submit a copy of the HACCP and ISO food safety regulatory standard, in particular the provisions that concern the issue set out in Paragraph 4.11(f);

in the event that parties wish to take procedural actions before Court or present additional documents intended for the Court session, a copy needs to be submitted accordingly to the court and the opposite party four days prior to the holding of the court session;

holds over any further decision.

This judgment was rendered by mrs. H.L. van der Beek, L.F. Wiggers-Rust and S.O.H. Bakkerus and is pronounced in public on 9 March 2010 in presence of the bailiff.


FOOTNOTE

* 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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