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CISG CASE PRESENTATION

Belgium 6 October 1997 District Court Kortrijk (Wonderfil v. Depraetere Industries) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/971006b1.html]

Primary source(s) of information for case presentation: CISG-Belgium database of Katholieke Universiteit Leuven; Case text

Case Table of Contents


Case identification

DATE OF DECISIONS: 19971006 (6 October 1997)

JURISDICTION: Belgium

TRIBUNAL: Rechtbank [District Court] van koophandel Kortrijk

JUDGE(S): P. Vanherpe, Rechter; F. D'Huyvetter and J. Devoldere, Rechters in handelszaken; B. Lefebvre, griffier

CASE NUMBER/DOCKET NUMBER: A.R. 4143/96

CASE NAME: Wonderfil S.r.l. v. N.V. Depraetere Industries

CASE HISTORY: Unavailable

SELLER'S COUNTRY: Italy (plaintiff)

BUYER'S COUNTRY: Belgium (defendant)

GOODS INVOLVED: Crude yarn


Classification of issues present

APPLICATION OF CISG: Yes [Agreement of parties at trial; see also Article 1(1)(b)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 6 ; 8 ; 35 ; 38 ; 39 ; 78

Classification of issues using UNCITRAL classification code numbers:

6A [Modification of Convention by contract/conduct of parties (waiver of 10-day notice clause)];

8B [Intent of parties: interpretation based on objective standards];

35A [Conformity of goods to contract: quality, quantity and description required by contract];

38A1 [Buyer's obligation to examine goods as soon as practicable in the circumstances];

39A2 ; 39A11 [Requirement to notify seller of lack of conformity: buyer must notify seller within reasonable time];

78B [Rate of interest: domestic statutory rate; accrual of interest: from date of seller's formal request for payment, even though formal request not required]

Descriptors: Applicability ; Choice of law ; Intent ; Conformity of goods ; Lack of conformity notice, timeliness ; Lack of conformity notice, specificity ; Telephone notice ; Autonomy of parties ; Waiver ; Interest

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Editorial remarks

Headnotes by Patrick Wautelet, Katholieke Universiteit Leuven

Choice of law for "Code civil" in general conditions and terms of seller, printed on back of a pre-printed acknowledgment of order form - Acknowledgement of order form signed by buyer - Choice of law disregarded by court because too vague, no indication which civil code was chosen

Application of the CISG: Rules of Private International Law of the forum referring to law of Contracting State (Article 1(1)(b)) - Convention on the Law Applicable to Contracts for the International Sale of Goods (Hague PIL Conference, June 15, 1955, Article 3)

Notice of lack of conformity/Waiver: Buyer's obligation to give seller notice of conformity of goods - Time of notice - Contractual agreement for time of notice (10 days) - Contractual agreement not applicable because waived by seller - Buyer's notice within reasonable time - Circumstance that buyer paid for part of the delivered goods - Not relevant - Expert appointed to examine conformity of the goods

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Citations to case abstracts, texts, and commentaries

CITATIONS TO ABSTRACTS OF DECISION

(a) UNCITRAL abstracts: Unavailable

(b) Other abstracts

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=339&step=Abstract>

CITATIONS TO TEXT OF DECISION

Original language (Dutch): CISG-Belgium database of Katholieke Universiteit Leuven <http://www.law.kuleuven.ac.be/ipr/eng/cases/1997-10-06.html>; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=339&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

Dutch: Erauw, [1998] Tijdschrift voor Privaatrecht (TvP 35) 1369 [1513 No. 255, 1517 No. 260]

English: 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 68, 176; Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]; Henschel, The Conformity of Goods in International Sales, Forlaget Thomson (2005) 157

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Rechtbank van Koophandel Kortrijk 6 October 1997

Translation by Yvonne P. Salmon [1]

The Commercial Court of the judicial district of Kortrijk, in the Province of West Flanders Fourth Chamber, ruling in case number 4143/96 of the General Register -

W. Limited, [the seller] a company established under Italian law with its registered office in Italy, 50047 Prato, the plaintiff in the principal claim and the defendant in the counterclaim,

v.

D. Limited, [the buyer] with its registered office in 8570 Anzegem-Ingooigem [], the defendant in the principal claim and the plaintiff in the counterclaim []

The parties have, with the consent of the Court, submitted their respective files. The Court has examined the documents and submissions.

Articles 2, 37 and 41 of the Law of 15 June 1935 on the use of languages in judicial proceedings were applied.

By a writ dated 10 October 1996, [the seller] claimed payment from [the buyer] of 1,082,044 BEF, plus interest and legal costs. The principal claim is constituted as follows:

-   invoice number 148 dated 29 March 1996     1,016,004 BEF
- "compensatory" interest (Art. 3 of Invoice Terms: 13%)      66,040 BEF
1,082,044 BEF

In the submissions of [the buyer] on 14 November 1996, a counterclaim was made for payment by the [the seller] of 7,795,620 BEF. This counterclaim is based on the submission by [the buyer] that she still has a large quantity of wool yarn, a part of which has already been dyed and that "may be ridden with hidden defects, and which cannot be used and woven in any case because the risk is too great that, as was found to be the case in the past, this yarn will have the same defect as that which was found in yarn which had been supplied earlier" (conclusions submitted to the Court on 14 November 1996, page 7, first paragraph). In figures, the counterclaim is constituted as follows:

-   16,436 kg wool yarn x 300 BEF =     4,930,800 BEF
-   7,539 kg dyed wool yarn x 380 BEF =     2,864,820 BEF
     7,795,620 BEF

JUDGMENT

I.    During a time period extending from 1994 until 21 March 1995, a number of orders were placed by [the buyer] with [the seller] for a total of 71,000 kg of wool yarn. All invoices from [the seller], dating from 25 February 1995 until 23 February 1996, were paid by [the buyer]. One invoice, i.e., invoice number FE/148 dated 29 March 1996, for an amount of 1,016,004 BEF remains unpaid; payment of this invoice forms the principal claim in the case at hand.

II.   Applicable legal rules

      a. The orders placed by [the buyer] were confirmed by [the seller] on his forms which, for the most part, had been signed on the front by [the buyer]. [The buyer] does not contest that the orders were delivered. On the bottom right hand side of the front page of the order acknowledgement forms, reference is made, in Italian and English, to the General Conditions on the back. The General Conditions are printed on the back of the order acknowledgements in Italian, English, French and German.

The acceptance by [the buyer] of the order acknowledgement forms and their signature by [the buyer] result, in principle, in the applicability of the General Conditions mentioned on the back of the forms. As the correspondence sent by [the buyer] to [the seller] was always made in the French language, the French version of the General Conditions of [the seller] should be used.

      b. It is not clear from the General Conditions upon which applicable law the parties had agreed. In paragraph 8 of the General Conditions, "jurisdiction italienne (Code civil)" is mentioned under the heading "competent court" (tribunal compétent)". When the word "jurisdiction" is mentioned under the heading "competent court", juridiction [2] is probably meant and refers not to the applicable law, but rather to the competent authority or, as the case may be, the judicial district. "Code civil" can refer both to the Belgian and to the French Code, and probably also the Italian Civil Code.

There is too much ambiguity to conclude that the parties had agreed to apply the rules of the Italian Civil Code to their contractual relationship.

The establishment of the applicable law has to be made expressly or has to result unambiguously from the provisions of the agreement (J. Erauw, "Overzicht van Rechtspraak Internationaal Privaatrecht en Nationaliteitsrecht" [3] T.P.R., [4] 1993, page 601, Number 155, and the caselaw and legal theory cited therein).

      c.   1. Where there is a dispute with regard to the international sale of moveable, tangible goods before a Belgian court, as is the case here, the lex contractus is to be established in accordance with the provisions of the Hague Convention of 15 June 1955 (approved by the Law of 21 September 1962 B.S.,[5] 29 September 1964 -- G. Van Hecker and K. Lenaerts, Internationaal Privaatrecht,[6] (2nd edition), A.P.R.,[7] page 332, Number 12, J. Erauw "Overzicht van Rechtspraak Internationaal Privaatrecht en Nationaliteitsrecht" [8] T.P.R.,[9] 1993, page 601, Number 154).

The qualification of the disputes submitted to the judgment of the Court is made using the law of the forum (see L. Barnich, note under Brussels, 9 February 1989, T.B.H.,[10] 1990, in particular page 175).

The aforementioned Convention of 15 June 1955 applies for Belgium without the need for treaty reciprocity with respect to any other country (see note by J. Erauw, "Het labyrinth van de internationale koop-verkoop",[11] R.W.,[12] 1982-83, 664 et seq, in particular page 666). According to Article 2 of the aforementioned Hague Convention, the sale is "governed by the domestic law of the country designated by the Contracting Parties". It has already been established here that the parties did not clearly designate a law applicable to the sale. In the absence of such a designated law, Article 3 of the aforementioned Convention states that the sale shall be governed by the domestic law of the country in which the vendor has his habitual residence at the time when he receives the order. In this case, that is Italian law.

  2. The Vienna Convention dated 11 April 1980 is applicable to Italian Law as of 1 January 1988 with regard to international sales agreements concerning moveable goods (see O. Van der Zee, Het nieuwe recht van de internationale koop-verkoop,[13] Antwerp, Maklu, 1993, page 81, with a list of the countries bound by the Vienna Convention - see Article 1 of the Convention in question). The Vienna Convention is thus applicable except where the parties derogated therefrom (application of Article 6 of the Convention in question).

  3. A central dispute with regard to the applicability of paragraph 5 of the General Conditions of [the seller] has arisen between the parties. In paragraph 5, it is stated that all complaints have to be made in writing and that no complaint whatsoever will be taken into account ten days after receipt of the goods, nor after a complete or partial processing of the goods. Furthermore, it states that there is a limitation on responsibility, namely a ceiling is to be placed on the possible liability of [the seller], corresponding to the value of the goods.

It appears from the acceptance without reservation by [the seller] of two claims made by [the buyer] (see below III, A. b.) that [the seller] did not consider the aforementioned paragraph 5 of its General Conditions to be applicable to possible invisible faults, or faults which only become visible upon processing. It is moreover impossible to demand that the purchaser of yarn first unravel the yarn to examine it for faults. That is a "physical" impossibility.

III. A. [The buyer] refused to pay the last invoice of [the seller] for the last delivery because she had noticed that earlier deliveries of wool yarn contained faults and therefore was afraid that, upon further processing of the still considerable amount of remaining yarn, there would again be faults, with all the damage this would bring with it. In this respect, [the buyer] refers to:

  a. A message from [the seller] (see exhibit II, 2, file of [the buyer]) dated the end of October 1995 in which [the seller] also establishes that there were faults, adding however that these were extremely minimal; and

  b. An initial claim by [the buyer] (10 November 1995 - see file of [the buyer] II, 3) which [the seller] responded to without further dispute with a credit note of 124,027 BEF (dated 7 December 1995). There was also a second claim by [the buyer] (18 March 1996 - see file II, 8 of [the buyer]) which likewise, resulted in a credit note of 47138 BEF dated 27 March 1996 from [the seller], without further dispute.

It is established that [the seller] himself expressly refers in his credit notes to the claim of [the buyer] and hence mentions the irregularities in the yarn which have resulted in unsold cloth or second choice cloth ("due to irregular pile on the chenille which cause unsold cloth or cloth second choice").[14]

      B. After the last delivery, [the buyer] complained in a facsimile message dated 4 April 1996 that the delivery was too large; however that matter is not, as such, at issue here. What is at issue is the conduct of both parties with regard to possible faults in the delivered goods.

With the aforementioned facsimile dated 4 April 1996 [the buyer] alleges "to have ongoing problems with the quality of the yarn supplied by [the seller]" and "that we shall not fail to hold you liable for all damage incurred".

With the facsimile message dated 25 April 1996 [the buyer] asks [the seller] if she may process further the yarn still present, and also if [the seller] will assume further its responsibility with regard to the bad metrages [15] of fabric. In that facsimile message, reference is made to the faults in the yarn which had already been established earlier, namely with regard to unevenness when weaving certain batches (see facsimile message dated 25 April 1996, bottom of first page). It would appear that [the seller] did not react to this facsimile message.

A third claim was subsequently delivered by [the buyer] to [the seller] in a letter dated 3 June 1996 (this time not via a representative but directly).

On 6 June 1996, the counsel to [the seller] put [the buyer] on notice for the payment of the invoice for the amount of 1,016,004 BEF.

      C.  a. Article 38(1) of the Vienna Convention obliges the purchaser to examine the goods or to have them examined within as short a period as is practicable. Reference is also made to the execution of this requirement "in the circumstances". Article 39(1) states that the buyer loses the right to rely on a lack of conformity with the goods if she does not give notice thereof to the seller, within a reasonable period of time after she has discovered it or ought to have discovered it, by specifying the nature of the lack of conformity.

  b. Given what is stated under II.c.3, it follows that "in the circumstances" [the buyer] did examine the goods in a timely manner and in any case wanted to process the delivered yarn with normal diligence and that this processing resulted in the establishment of the lack of conformity (Article 38 of the Vienna Convention) and the subsequent notification of [the seller] thereof.

From what precedes under A. and B., it follows that [the buyer] has informed [the seller] in a timely and due manner of the faults and in each case pointed out the nature of the lack of conformity (Article 39(1) of the Vienna Convention).

  c. The fact that many deliveries were paid for by [the buyer] is irrelevant for the judgment of the dispute within the framework of the rules of the Vienna Convention.

      D. In these circumstances it was up to the [the seller] to prove that the complaint of [the buyer] was unfounded. An expert study should be undertaken, as there is no certainty whatsoever with regard to this.

  a. Given that it is established that the complaint with regard to all deliveries was made by [the buyer] in accordance with the applicable rules, the object of the study should, in principle, involve all deliveries. However, the arrangements which are made at any given time must be considered (see the two aforementioned credit notes from [the seller]). It appears from this that the expert study should involve the yarn, both processed and unprocessed, which forms the object of the third claim as stated by [the buyer] in her letter to [the seller] dated 3 June 1996 and also the yarn (both dyed, undyed and woven).

  b. Given that, on the one hand, [the seller] asks payment of the last invoice; and, on the other hand, [the buyer] asks [the seller] to take back the yarn and for reimbursement (and more), it is ruled that both parties have to advance half of the costs and fee of the expert.

Furthermore, it is advisable to give the expert a broad remit.

ON THESE GROUNDS,

THE COURT, rejecting all other conclusions as irrelevant and, at least for the time being, leaving them aside; RULES, both parties having been heard; APPLIES Article 962 of the Code of Procedure, before dispensing justice;

APPOINTS Mr. M. [] as expert, who may have himself assisted, as the case may be, by a specialist in the area on the condition that the expert makes the findings of the specialist his own; and that, in accordance with Articles 962 to 991 of the Code of Procedure, he complete the following tasks, within six months of his acceptance of the appointment:

1. To inform the parties by registered mail, with an interval of three clear days, of the place, the date and the hour of the execution of his task, to hear the parties, request documents, and if necessary to collect any relevant information from third parties;

2. The following shall form the object of the proceedings: the yarn which forms the object of the third claim stated by [the buyer] in her letter to [the seller] of 3 June 1996; the yarn (both undyed, dyed and woven) which is the object of the facsimile message dated 25 April 1996 from [the buyer] to the representative of [the seller]; and the yarn which is the object of invoice number FE/148 dated 29 March 1996. They shall be identified, thoroughly investigated and that it be stated upon with reasons:

      a. The expert shall determine whether these display the faults and/or inadequacies which were, or are, pointed out by [the buyer], and if so describe these including a determination of the degree thereof; and state who is accountable for them "technically" and "in fact".

[];

ORDERS the parties to each advance half of the costs and the fee of the expert; REFERS the dispute in the meantime to the Special Register; RESERVES the final decision with regards to costs; DECLARES this judgment to be provisionally enforceable, regardless of any appeal, and without guarantee.

AS RULED, pronounced in public session in the Court at Kortrijk on 6 October 1997.


FOOTNOTES

1. Associate, Institute of International Commercial Law, Pace University School of Law.

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

Translator's notes:

2. The French term juridiction can mean jurisdiction, competence or court of law.

3. "Overview of Case-Law, Private International Law and Nationality Law."

4. Tijdschrift voor privaatrecht.

5. Belgisch Staatsblad.

6. "Private International Law."

7. Algemene Practische Rechtsverzameling

8. "Overview of Case-Law, Private International Law and Nationality Law."

9. Tijdschrift voor Privaat Recht.

10. Tijdschrift voor Belgisch Handelsrecht.

11. "The Labyrinth of International Sales."

12. Rechtskundig weekblad.

13. "The New Law of International Sales."

14. English language quote in original.

15. A metrage is equivalent to approximately a yardage.

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Pace Law School Institute of International Commercial Law - Last updated December 5, 2005
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