Argentina 31 October 1995 Appellate Court (Bedial v. Müggenburg)
[Cite as: http://cisgw3.law.pace.edu/cases/951031a1.html]
Primary source(s) for case presentation: UNCITRAL abstract; Unilex abstract; case comment
DATE OF DECISION:
JURISDICTION:
TRIBUNAL:
JUDGE(S):
CASE NUMBER/DOCKET NUMBER: 47.448
CASE NAME:
CASE HISTORY: 1st instance Trib. Buenos Aires 18 March 1994 [affirmed]
SELLER'S COUNTRY: Germany (defendant)
BUYER'S COUNTRY: Argentina (plaintiff)
GOODS INVOLVED: Dehydrated mushrooms
ARGENTINA: Cámara Nacional de Apelaciones en lo Comercial 31 October 1995 Case law on UNCITRAL texts (CLOUT) abstract no. 191 Reproduced with permission from UNCITRAL An Argentinean buyer and a German seller concluded a contract, containing a C & F clause, for the sale of dried mushrooms to be shipped to the buyer. In the course of their transport to Buenos Aires, the goods deteriorated. The buyer sued the seller claiming lack of conformity of the goods. In accordance with article 67 CISG, the court held that the risk passed to the buyer when the goods were handed over to the first carrier for transmission to the buyer in keeping with the contract of sale. In addition, the court held that the C & F clause obliged the seller to hand over the goods to the carrier and to pay the freight. However, a C & F clause does not affect the passing of the risk. Further, it should be noted that the buyer, pursuant to the C & F clause in the contract of sale, had taken out an insurance policy for transportation risks. In accordance with article 66, the court held that the buyer, after passing of the risk, was not discharged from its obligation to pay the purchase price, even in the event of loss or damage to the goods, unless the loss or damage was due to an act or omission of the seller. In this case, the damage of the goods occurred after the passing of the risk to the buyer, who did not adduce that it was owing to an act or omission of the seller. Accordingly, the court dismissed the action.Case abstract
APPLICATION OF CISG: No [Article 100, but the court applied the CISG]
APPLICABLE CISG PROVISIONS AND ISSUES
Key CISG provisions at issue: Articles
Classification of issues using UNCITRAL classification code
numbers:
67A [Risk passes on handing goods over to first carrier]
Descriptors:
English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=226&step=Abstract>
Spanish: CISG-Spain and Latin America database at http://www.uc3m.es/uc3m/dpto/PR/dppr03/cisg/rargen9.htm
CITATIONS TO TEXT OF DECISION
Original language (Spanish): CISG-Spain and Latin America database at http://www.uc3m.es/uc3m/dpto/PR/dppr03/cisg/sargen9.htm; El Derecho (Buenos Aires) No. 9110 (21 October 1996) 1-5; 1, 4-5; Derecho y Empressa (1996) 245-246; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=226&step=FullText>
Translation: Unavailable
CITATIONS TO COMMENTS ON DECISION
English: Rosch, translation of Dalloz commentary cited below [text presented below]; Ferrari, International Legal Forum (4/1998) 138-225 [241 n.953 (reference to Art. 39(2))]; Honnold, Uniform Law for International Sales (1999) 401 [Art. 67]; Garro, 17 Journal of Law & Commerce (1998) 219-244 [the analysis of Bedial v. Paul Müggenburg is presented at pages 238-243 of this commentary]; Flambouras, Transfer of risk (1999) n.275; Spanogle/Winship, International Sales Law: A Problem Oriented Coursebook (West 2000) [seller's obligations: delivery 164-187 (case at 172-174)]; Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at nn.676, 681; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 67 para. 4
French: Rosch, Dalloz Sirey (1997) 225; Zuppi, in: Sebastien Bettschart ed., Les ventes internationales (CDICAC 1998) Vol. 36, 23 [25-28]
Spanish: Iud, El Derecho (Buenos Aires) No. 9110 (21 October
1996) 1-9; Menicocci, Derecho y Empressa (1996) 246-249 Translation of comment published in Dalloz Sirey (1997) 225
31 October 1995
Case comment by Wolfgang Rosch
Translation by Annabel V. Teiling
[…]
In 1987, Bedial SA [buyer], established in Argentina, concluded a sales contract with Paul Müggenburg and Co GmbH [seller, headquartered in Hamburg (Federal Republic of Germany). The contract involved 1100 kilos of dehydrated mushrooms and contained a clause "C&F Buenos Aires (without insurance)," Hong Kong was listed as a port of embarkation for the goods. Before the embarkation, the competent Chinese authorities verified the quality of the mushrooms and found them to be in a good state. Such was not the case when the goods were re-examined after the arrival of the vessel in Argentina. Indeed, the official analysis operated on a sample of the goods gave then a poor result, the mushrooms having been gnawed away by insects and contaminated by grubs. The goods having been declared inapt for human consumption, [buyer] refused them and took advantage of the situation to demand the annulment of the contract. The seller obtained nonetheless the money it was due because of a letter of credit accepted by the [buyer].
Must the seller reimburse the buyer for the defective goods? To this question, the courts of first instance and second instance answer negatively.
1 - The decision of the court of first instance begins by reminding us of the fact that under a C&F clause, the transfer of the risks is at the transfer of the goods to the transporter, and consequently, that responsibility is passed on to the buyer to prove that the deterioration of the goods is based on an anterior events, or that it is imputable to the seller's fault. There is reason to plainly approve the decision in the sense that it correctly summarizes the importance of a C&F clause, which states that the seller is not held to the risks of the transportation, once the goods are on board -- more exactly, just when they pass the ship's rail. Based on a popular doctrine, the burden of proof lies on the buyer, who must invoke the defectiveness of the goods as subsequently noticed. This repartition of the burden of proof could indeed be inspired from the American Uniform Commercial Code from which certain authors deduce the general principle that from which the party invoking the bad execution of the contract must also bring the proof. (C. M. Bianca and M. J. Bonell, op. cit., article 36 no. 3). However, it is important to underline that the clause C&F, such as, does not expressly rule the regime of the proof applicable to the contract.
Assuredly, the decision from Argentina could have stopped there its reasoning to nonsuit the [buyer]'s demand. In the absence of the proof of a contractual violation imputable to the seller, and considering the aptitude certificate established before the embarkation, the obligation of the buyer to pay the price could not be called into question by the simple record of the deterioration of the goods at the port of destination. The judge from Argentina invoked as reinforcement the Vienna Convention, inapplicable in this case.
2 - The decision of the court of second instance examined the action of the [buyer] "in light of the norms that have been established to be applied in such case," such as articles 66 and 67 on the Vienna Convention.
Brought into force in Argentina on January 1, 1988, the Convention did not have the standing to be applied to the contract concluded in 1987. The principle of the non-retroactivity of the new uniform law is clearly enounced in article 100. Based on this clause, the moment of the formation of the contract is decisive for the application of the contract, even if the parties had the discretion of opting retroactively, even at the time of the suit, in favor of the application of the Convention to their contract. However, in this case, we cannot retrieve any revealing evidence of the communal intention of the parties to submit the contract to articles 66 et seq. of the Convention. Quite to the opposite in fact, the parties had their contract governed by the C&F clause which, even though very close to the clauses of the Convention on the transfer of risks, could not however be assimilated to this latter.
We can, however, regret that the ruling seems to insinuate the mandatory character of the Vienna Convention (see cass. 1st civ., 23 January 1996, D. 1996, Jur. p. 332, note C. Witz). The Convention has only a gap-filling character (article 6), with parties able to in principle introduce in their contracts clauses that derogate from the Convention. If the parties include Incoterms in their contract, these terms of course have an obligatory power; they prevail over the clauses of the Vienna Convention (see article 6; on this general question, see La Convention de Vienne sur la vente internationale et les incoterms, Acts of the colloquium of 1 and 2 December 1989, under the direction of Y. Derains and J. Ghestin, LGDJ, 1990).
The decision reported presents a double interest. On the one hand, it opens the opportunity to remind of the importance of Incoterms when a contract falls under the regime of the CISG. In addition, it reveals the zealousness of Judges of Argentina in favor of the application of the new uniform law, which should win a vivacious success in the jurisdictions of this country.
[…]
Classification of issues present
Editorial remarks
Citations to other abstracts, case texts and commentaries
CITATIONS TO OTHER ABSTRACTS OF DECISION
Case comment
National Chamber of Commercial Appeals of Argentina
(Cámara Nacíonal de Apelaciones enlo Comercial)
Rechtsanwalt au barreau de Sarrebruck
Pace Law School Institute of International
Commercial Law - Last updated August 5, 2005