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CISG CASE PRESENTATION

Mexico 4 May 1993 Compromex Arbitration proceeding M/66/92 (Jose Luis Morales v. Nez Marketing) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/930504m1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19930504 (4 May 1993)

JURISDICTION: Arbitration ; Mexico

TRIBUNAL: Compromex [Comisión para la Protección del Comercio Exterior de México = Mexican Commission for the Protection of Foreign Trade] [arbitration decree in this case a "dictamen" (non-binding opinion)]

JUDGE(S): Arturo Guajardo Estrada, Secretario ejecutivo

CASE NUMBER/DOCKET NUMBER: M/66/92

CASE NAME: Jose Luis Morales y/o Son Export, S.A. de C.V., de Hermosillo Sonora, México v. Nez Marketing de Los Angeles, California

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Mexico (plaintiff)

BUYER'S COUNTRY: U.S.A. (defendant)

GOODS INVOLVED: Garlic

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Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 11 ; 53 ; 62 [Also cited: Article 81(2) ]

Classification of issues using UNCITRAL classification code numbers:

11A [Formal requirements: no need for writing or other formality for conclusion of contract];

53A [Buyer's obligation to pay price of goods];

62A [Seller's right to compel performance: seller may compel performance of any of buyer's obligations]

Descriptors: Formal requirements ; Price ; Specific performance

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Editorial remarks

EDITOR: Albert H. Kritzer

The sales contract between a Mexican seller and a U.S. buyer was concluded at a time when the CISG was in effect in both countries. The CISG was held applicable pursuant to Article 1(1)(a). CISG issues ruled upon:

Price, buyer's obligation to pay. Buyer presented four checks in payment for the goods. One check was not honored due to insufficient funds; the remaining were not honored pursuant to instructions given to his bank by the buyer. The commission declared buyer in breach of his obligation to pay the price of the goods.

Performance, seller's right to compel. The commission ruled that seller was entitled to full payment of the purchase price under Article 62 and recommended that the buyer comply with his obligations.

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Citations to case abstracts, texts, and commentaries

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=374&step=Abstract>

Italian: Diritto del Commercio Internazionale (1994) 855-856 No. 38

Spanish: CISG-Spain and Latin America database at http://www.uc3m.es/cisg/smexi1.htm

CITATIONS TO TEXT OF DECISION

Original language (Spanish): CISG-Spain and Latin America database at http://www.uc3m.es/cisg/rmexi1.htm; Diario Oficial (México) 27 May 1993, 17-19; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=374&step=FullText>

Translation: (English): Gonzalez & Cohen, 17 Journal of Law & Commerce (1997) 363-367 [text presented below]

CITATIONS TO COMMENTS ON DECISION

English: DiMatteo, Yale Journal of International Law (1997) 111 [167]; Garro, 17 Journal of Law & Commerce (1998) 219-244 [the analysis of Morales v. Nez Marketing is presented at pages 221-222 of this commentary]; Gillette/Walt, Sales Law Domestic and International (Foundation Press 1999) 342 n.71 [price action under Art. 62]; Petrochilos, Arbitration Conflict of Laws Rules and the CISG (1999) n.75; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.120, 122; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 11 para. 13

French: Witz, Les premières applications jurisprudentielles du droit uniforme de la vente internationale (L.G.D.J., Paris: 1995), 70-71; Zuppi, in: Sebastien Bettschart ed., Les ventes internationales (CDICAC 1998) Vol. 36, 23 [34-36]

Spanish: Osuna González, La Compromex y su Aplicación de La Convención de las Naciones Unidas sobre La Compraventa Internacional de Mercaderías (September 2000)

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Case text (English translation)

Reproduced with permission from 16 Journal of Law and Commerce (1997) 363-367

DICTAMEN DE LA COMISIÓN PARA LA PROTECCIÓN DEL COMERCIO EXTERIOR DE MÉXICO:[*] MORALES Y/O SON EXPORT, S.A. DEC. V. NEZ MARKETING [**]

Advisory opinion [***] concerning the claim stemming from a transaction of foreign commerce between the private parties Jose Luis Morales and/or Son Export, S.A. de C.V., from Hermosillo Sonora, Mexico and Nez Marketing from Los Angeles, California, U.S.A.

[In the margin there is a seal with the National Shield, which says: Mexican United States -- Secretary of Commerce and Industrial Promotion.]

In Mexico City, Federal District, on April 7, 1993, the Mexican Commission for the Protection of Foreign Commerce (Compromex), based on Article 2, section IV and Article 14 of its Organic Law,[1] analyzed the file M/66192. This file was comprised as a consequence of the complaint presented by Mr. Jose Luis Morales and/or Son Export, S.A. de C.V., from Hermosillo Sonora, Mexico (hereinafter the [seller]) against the Nez Marketing from Los Angeles, California, U.S.A. (hereinafter the [buyer]) in order to deliver the following opinion.

Conclusions

I. In a writing of August 12, 1992, the State Directors of Bancomext in Hermosillo Sonora, sent to this commission an initial written claim signed by [seller], who pleaded the intervention of this organization in order to aid in the recovery of US $15,700.00, which was originally US $20,000.00, from the sale of purple garlic made to [buyer].

II. The claimant based its claim on the following facts:

     a) On May 8, 1992, the [buyer], through the mediation of Mr. Francisco Enriquez, agreed to the purchase of twenty-four tons of purple garlic harvested in 1992. The garlic was tendered in the city of Nogales, Arizona on May 6, 1992.

     b) It was agreed that the payment would be in four checks for US $5,000.00 each, which would be cashed by the claimant on May 8, 14, 21, and 28, 1992. However, none of these checks could be cashed, the first because of insufficient funds and the rest because of cancellation of the account. For this reason the [seller] traveled to Los Angeles, California, U.S.A. to interview the [buyer] and demand payment. At that time the [buyer] gave him a partial payment of US $4,300.00.

     c) The [buyer] also informed the [seller] that a partial payment of US $3,700 had already been made in the respondent's name through Mr. Francisco Enriquez. However, the [seller] never received said sum nor authorized said person to receive the money in his name.

III. On August 17, 1992, the Executive Secretary of the Mexican Commission for the Protection of Foreign Commerce (Compromex), after the receipt of the claim in question, proceeded to notify the North American [buyer] about the claim through the Commercial Council of Mexico in Los Angeles, California, U.S.A., and gave him a fifteen working day period to argue his rights. The period, however, passed without any response to the Commission.

IV. At this stage of the proceeding, and in accordance with Article 12 of the Organic Law of Compromex, the parties were summoned to appear on October 6, 1992 to reconcile their differences. Only [seller] appeared by sending a written notice; the [buyer] did not appear through an agent or by sending a written notice. In the notice, the [seller] confirmed his initial written claim and requested the payment of the debt plus the expenses incurred due to lack of payment.

V. In relation to the statements made by the [seller] in the aforementioned meeting, this Commission decided to notify the respondent company that it had a seventeen day period beginning on October 6 to argue its right and interest.

This period expired on October 30, 1992, without a response from the [buyer].

VI. When the [mediation] procedure to reconcile the interests of the parties was completed without achieving the objective, and in accordance with Article 14 of the Organic Law of Compromex and the [seller's] petition, the commission must continue with the analysis of the file as follows:

Legal Reasons

1. In conformity with Articles 2, section IV and 14 of the Organic Law of Compromex, this organization is competent to submit a recommendation in this case, given the impossibility of reconciling the interests of the parties; the fact that the respondent did not submit to this Commission's arbitration; and the [seller's] plea as described above, as it states in the proceedings on page 51 of the record pertaining to this case filed at the Mexican Commission for the Protection of Foreign Commerce (Compromex).

2. The substance of the controversy is the lack of payment of US $15,700.00 owed by the [buyer] that bought twenty-four tons of purple garlic harvested in 1992 from the Mexican [seller]. This situation has been proven by the invoice 007 dated on April 22, 1992 in the proceedings on page 57 of the record pertaining to this case filed at Compromex.

3. Although there is not a specific written contract for this sales transaction, this situation should be understood in reference to Article 11 of the United Nations Convention on Contracts for International Sale of Goods (hereinafter United Nations Convention), adopted in Vienna, Austria, on April 11, 1980, and published in the Official Publication of the Federation on March 17, 1988, ratified by the United States of America on December 11, 1986. Said article of the Convention states: "A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. . . ." Therefore, it can be assumed that the contractual relation between the claimant and the respondent in accordance with the terms stated in subparts II b and c of the conclusion section of this opinion as proven by the following documents: invoice 007 dated April 22, 1992 where the price of US $1,030.00 per ton is indicated for a total of US $24,915.70; goods that were received by the driver in charge of its transfer; the bill of lading indicating that the final destination of the goods would be [buyer]; photocopied documentary evidence shown on pages, 57, 58 and 59 of the record pertinent to this case filed at the Mexican Commission for the Protection of Foreign Commerce (Compromex).

4. Likewise, Article 62 of the United Nations Convention, states: "The seller may require the buyer to pay the price, take delivery or perform his other obligations, unless the seller has resorted to a remedy which is inconsistent with this requirement." Based on this provision, the Mexican [seller] has the right to demand that the [buyer] firm pay the price of the merchandise, a situation that has been proven with the checks issued by Bank of America. The check numbered 3645 was not paid because of insufficient funds, and the checks 1149, 1150, and 1151 were canceled by order of the [buyer]. [See the] photocopied documentary evidence found on pages 5, 6, and 7 of the record filed at the Mexican Commission for the Protection of Foreign Commerce (Compromex).

5. Article 81(2) of the United Nations Convention states: "A party who has performed the contract either wholly or in part may claim restitution from the other party of whatever the first party has supplied or paid under the contract. . . ." Based on this provision, the Mexican [seller] also has the right to claim payment from the North American [buyer] for the sale of purple garlic, which is the object of the controversy, as has been demonstrated through the invoice 007 dated April 22, 1992 and through the photocopy of the bill of lading which is within the proceedings on pages 58 and 59 of the record pertinent to this case filed at the Mexican Commission for the Protection of Foreign Commerce(Compromex).

For the legal reasons expressed above and in conformity with Article 2, Section IV and Article 14 of the Organic Law of the Mexican Commission for the Protection of Foreign Commerce, the Commission finds as follows:

Recommendation:

FIRST. The present claim stems from a foreign commercial transaction between private parties involving the sale of twenty-four tons of purple garlic concluded between [a seller], from Hemmosillo Sonora, Mexico, and [a buyer] from Los Angeles, California, U.S.A.

SECOND. Based on the findings and legal reasons in this recommendation, we conclude that the instant case could not be resolved through conciliation, nor through arbitration, because the [buyer] did not submit to these proceedings. For this reason this Commission, because of the petition of the Mexican [seller] and the terms of its own Organic Law, is entitled to make a recommendation in this controversy.

THIRD. In conformity with the provisions of law discussed in paragraphs 3, 4, and 5 of the legal reason portion of this opinion and based on the documentary evidence cited in those sections, we conclude that the [seller] proved his allegations, but the [buyer] did not prove its defenses.

FOURTH. This Commission recommends to [buyer] that in order to preserve its commercial ties it considers the importance of completing its obligation to pay the sum of US $15,700.00 to [seller].

FIFTH. The rights of the [seller] and [buyer] will be left intact to allow their exercise before an authority in the form most convenient to the parties' interests.

SIXTH. Notice to the parties-

In the city of Mexico, Federal District, on the 4th day of the month of May 1993, this recommendation was approved by the members of the Honorable [acting in plenary session] Mexican Commission for the Protection of Foreign Commerce.

The Secretary hereby certifies that the foregoing is entitled to its proper legal effect

Mexican Commission for the Protection of Foreign Commerce.- Executive Secretary.- [officially signed by] Arturo Guajardo Estrada, Executive Secretary.


FOOTNOTES

* Diario Oficial 27 May 1993, 17-9.

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

** Translated by Maria F. Gonzalez, Lawyer, Colegio Mayor de Nuestra Señora del Rosario, Bogota, Colombia; LLM, University of Pittsburgh School of Law, 1996-1997; Stacey Cohen, J.D. Candidate University of Pittsburgh School of Law, 1998; MA candidate University of Pittsburgh Graduate School of Public & International Affairs. With thanks to Professor Eduardo Bozzo and Professor Harry Flechtner.

*** This Tribunal is advisory in nature and therefore is not binding on the parties-Trans.

1. The Organic Law was created to determine the principles and precepts of the Mexican Commission for the Protection of Foreign Commerce (Compromex)-Trans.

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Pace Law School Institute of International Commercial Law - Last updated August 15, 2005
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