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CISG CASE PRESENTATION

ICC Arbitration Case No. 8247 of June 1996 (Chemical compound case) [English text]
[Cite as: http://cisgw3.law.pace.edu/cases/968247i1.html]

Primary source(s) of information for case presentation: Case text

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Case identification

DATE OF DECISION: 19960600 (June 1996)

JURISDICTION: Arbitration ; ICC

TRIBUNAL: Court of Arbitration of the International Chamber of Commerce

JUDGE(S): Unavailable

CASE NUMBER/DOCKET NUMBER: 8247 of June 1996

CASE NAME: Unavailable

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Romania [?] (claimant)

BUYER'S COUNTRY: Netherlands [?] (respondent)

GOODS INVOLVED: Chemical compound


Classification of issues present

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

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 35 ; 38 ; 39(1) ; 53 [Also cited: Article 45 ; 50 ]

Classification of issues using UNCITRAL classification code numbers:

35A ; 35B [Quality required by contract; Requirements implied by law]

38A ; 38B [Buyer's obligation to examine goods; When contract involves carriage of goods, postponement until after arrival at destination];

39A [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

53A [Summary of buyer's obligations: obligation to pay price + obligations recited in other provisions of Convention obligate buyer to pay penalty as called for in contract]

Descriptors: Conformity of goods ; Examination of goods ; Notice of lack of conformity, timeliness ; Penalty clauses

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Editorial remarks

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

(a) UNCITRAL abstract: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=458&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (English): ICC International Court of Arbitration Bulletin [ICAB], Vol. 11/No. 2 (Fall 2000) 53-55; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=458&step=FullText>

Translation: Unavailable

CITATIONS TO COMMENTS ON DECISION

English: van Houtte ICAB (Fall 2000) 29 n.59 [inspection and notification]; Witz ICAB (Fall 2000) 21 n. 49 [inspection and notification]; CISG-AC advisory opinion on Examination of the Goods and Notice of Non-Conformity [7 June 2004] (this case and related cases cited in addendum to opinion); [2004] S.A. Kruisinga, (Non-)conformity in the 1980 UN Convention on Contracts for the International Sale of Goods: a uniform concept?, Intersentia at 84; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 156

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Case digest

ICC Arbitration Case No. 8247 of June 1996
[Digest of presentation at ICAB, Vol. 11/No. 2 (Fall 2000) 53-55]

Digest by Albert H. Kritzer

Facts. A sale of chemical compound with full payment to be made within ten days of transmission of the shipping documents, after which the contract called for payment of a penalty. Only a partial payment was made. Buyer alleged that he was not required to pay the remaining balance due to the poor quality of the goods.

Examination of goods/Notice of lack of conformity, timeliness. The 6 m. ton shipment of chemical compound arrived at its destination on 19 April. On 11 May, experts inspected about 12 m. tons of the shipment. Seller was notified of defects, perhaps by telephone on 11 May, definitely by fax on 19 May. The arbitrator stated:

"[T]he purchaser loses his right to avail himself of the fault of non-conformity of the goods 'if he does not denounce it to the seller . . . within a reasonable time from the moment when he has discovered it or should have discovered it' [sic] (Article 39). Such a moment is identified by Article 38, which in its para. 1 provides that the purchaser must examine the goods, or cause them to be examined, within the shortest possible time, and specifies in its para. 2 that 'if the contract implies the transportation of the goods, the examination can be deferred until the moment of the arrival of the goods at their destination.'

" . . . [I]n order to comply with the obligation so imposed by the Convention, [buyer] should have inspected the goods no later than the 19th April . . . when -- as shown by the . . . fax dated the 19th May . . . the goods arrived in Rotterdam. The defects, if any, would have been detected on that occasion and should therefore have been denounced promptly thereafter, while [seller] appears to have been notified by [the Expertise Bureau] on the 19th May with said fax or, at the most, on the 11th May during the course of the telephone conversation mentioned in [the fax].

"The number of weeks elapsed between the date when the alleged defects should have been discovered with ordinary diligence and the date of notice to [seller] appear to be beyond the 'reasonable time' provided by the Convention."

Conformity of goods. In any event, the arbitrator did not find an actionable lack of conformity of the goods, stating:

"[The experts] report that part of the goods . . . inspected was 'stonehard however the product could in our opinion . . . be transformed to crystals again' and that 'the packing of these bags was contaminated/defiled to various extent'. They also inform that 'reportedly, during discharge of the containers no irregularities . . . were found except for the above mentioned defiled bags and hard product' and that, according to what they were told, the defiled bags were stowed in the containers among the others.

"Furthermore, the experts indicate that the remaining 'approximately 28 m. tons with sound packing was transforwarded to various inland receivers' and that according to information received by them also the goods so delivered would have been hard/solid.

"The Quality Certificates filed by [seller] indicate the appearance of the goods to be 'microcrystals'; however it should be noted that the originals of said certificates are dated 7th April . . . while according to the Bill of Lading the goods had been shipped on board on the 29th March . . . On the other hand, the other documents filed with the Arbitral Tribunal do not appear to constitute conclusive evidence of the existence of a defect of the goods . . . and even more so, of a defect of such a gravity, as to allow one to consider [seller] to be in default according to Article 50 of the Convention, for having supplied goods not in conformity with the contract.

"As a matter of fact, there is no mention in the contract that the [chemical compound] being sold . . . should necessarily be in crystals and in any event the very report by the experts . . . appears to indicate that the part of the goods reported to be 'stonehard' could easily be retransformed into crystals. Besides that, even the amount of damages allegedly incurred by [buyer] . . . seems to point to a problem of limited size, thereby confirming the conclusion outlined above about the lack of default by [seller]."

Penalty clauses. Citing Article 53 CISG (confirming the obligation by the buyer "to pay the price for the goods . . . under the conditions provided by the Contract") and in other relevant articles, the arbitrator held that seller is entitled to recover the penalty set forth in the contract.

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Pace Law School Institute of International Commercial Law - Last updated February 15, 2007
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