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CISG CASE PRESENTATION

France 16 July 1998 Supreme Court (Les Verreries de Saint Gobain v. Martinswerk) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/980716f1.html]

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

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Case identification

DATE OF DECISIONS: 19980716 (16 July 1998)

JURISDICTION: France

TRIBUNAL: Cour de Cassation [Supreme Court]

JUDGES(S): Lemontey, président; Ancel, conseiller rapporteur; Renard-Payen, Chartier, Durieux, Bénas, Guérin, Sempère, Bargue, conseillers; Savatier, Bignon, conseillers référendaires; Petit, avocat général; Aydalot, greffier de chambre

CASE NUMBER/DOCKET NUMBER: J 96-11.984

CASE NAME: Société Les Verreries de Saint Gobain, SA v. Martinswerk GmbH

CASE HISTORY: 1st instance [-]; 2d instance Cour d'appel d'Orléans 3 January 1996

SELLER'S COUNTRY: Germany [defendant]

BUYER'S COUNTRY: France [plaintiff]

GOODS INVOLVED: Aluminium hydrate


Case abstract

FRANCE: Cour de Cassation 16 July 1998

Case law on UNCITRAL texts (CLOUT) abstract no. 242

Reproduced with permission from UNCITRAL

The buyer, a French company, placed successive orders with the seller, a German company, for products to be used in glass manufacturing, which were to be transported from the seller's premises to the buyer's premises by tanker lorry chartered by the buyer. The latter claimed that the goods were defective and sued the seller before the Commercial Court of Orleans.

The Court of Appeal of Orleans held that the lower French court had no jurisdiction, basing its ruling on the provisions of the Brussels Convention of 27 September 1968 (articles 17 and 5(1)) and on those of the CISG. The Court of Appeal considered that the jurisdiction clause appearing on the buyer's order forms in favour of the Commercial Court of Orleans should not apply since the order confirmations sent by the seller contained a jurisdiction clause in favour of the courts at that company's principal place of business.

The Court of Cassation did not make any reference to the Brussels Convention (article 17). It cited only articles 18 and 19 CISG and stated that a reply to an offer which purported to be an acceptance but which contained different terms that materially altered the terms of the offer, such as a different stipulation regarding the settlement of disputes, as provided for in article 19(3), did not amount to acceptance. The jurisdiction clause invoked by the buyer was therefore inapplicable. The Court of Cassation also concurred with the Court of Appeal's ruling in regard to the application of article 5(1) of the Brussels Convention, namely that the obligation to deliver the sold goods, as defined in article 31 CISG, had been performed by the handing over of the goods to the first carrier and that the obligation forming the basis of the claim had thus been performed in Germany.

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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 18 ; 19 ; 31

Classification of issues using UNCITRAL classification code numbers:

18A [Criteria for acceptance];

19A1 ; 19C1 [Reply purporting to accept but containing additions or modifications: in general, constitutes rejection and counter-offer; Modifications considered material: stipulation regarding settlement of disputes];

31A1 [Place for delivery (contracts involving carriage of goods): obligation to hand goods to first carrier]

Descriptors: Acceptance of the offer ; Battle of the forms ; Delivery ; Jurisdiction

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Editorial remarks

Excerpt from Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 353

"The Cour de Cassation ... applied the knock out rule regarding conflicting jurisdiction clauses. Recognizing that jurisdiction provisions are material terms according to Article 19(3), the court, instead of invalidating the contract, applied traditional conflict of law rules to determine jurisdiction."

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: [1998] 3 Forum des Internationalen Recht / The International Legal Forum (English language edition) 86; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=281&step=Abstract>

German: [1998] 3 Forum des Internationalen Recht / The International Legal Forum 87

CITATIONS TO TEXT OF DECISION

Original language (French): CISG France website (http://www.cisg-france.org/decisions/160798v.htm"); [1998] Bulletin des arrêts de la Cour de Cassation, I, No. 252 [176-177]; Juris-Classeur Périodique - La Semaine Juridique, IV.3086 [1829]; [1999] Revue critique de droit international privé 122-123; [1998] 3 Forum des Internationalen Recht / The International Legal Forum 87-88 = [1998] 3 Forum des Internationalen Recht / The International Legal Forum (English language edition) 86-87; [1998] Recueil Dalloz, IR, 22; [1999]; Recueil Dalloz (1999) 8ème Cahier, Jurisprudence 117; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=281&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Perales, Battle of the Forms and Burden of Proof, 6:2 Vindobona Journal (2002) 217-228, n.10; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) §: 1-4 n.40; §: 3-8 n.82 & n.93; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 18 para. 8 Art. 19 paras. 8, 9, 20 Art. 31 paras. 91, 92

French: Ancel/Muir Watt, Revue critique de droit international privé (1999) 123-132; Witz, Dalloz Sirey (1999) 117-120

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Case text (English translation)

Queen Mary Case Translation Programme

Cour de Cassation 16 July 1998
Les Verreries de Saint Gobain, SA v. Martinswerk GmbH

Translation [*] by Annabel Teiling [**]

Translation edited by Dr Loukas Mistelis [***]

[This is a battle-of-the-forms controversy. By tradition, the decisions of the French Supreme Court are normally quite laconic. This translation of the Court's decision is accompanied by excerpts from an annex that contains additional detail on the controversy.]

Civ. 1

Cour de Cassation
------------------------
Public hearing of July 16, 1998
Rejection
Mr. Lemontey, president
Ruling no. 1309P
Appeal no. j96-11.984

FRENCH REPUBLIC
In the Name of the People of France

The Cour de Cassation, First Civil Chamber, rendered the following ruling:

Regarding the appeal filed by [buyer], whose headquarters are at 7, rue du Petit Bois, 45380 La Chapelle Saint-Mesmin,

[Buyer] seeks the reversal of a ruling rendered 3 January 1996, by the Court of Appeals of Orleans (Civil Chamber, first section), for the benefit of [seller], headquartered at Koelner Straße 110, Post Box 1209, 50102 Bergheim (Germany),

To uphold its appeal, [buyer] invokes two reasons for the reversal of the ruling by the Court of Appeals. [Buyer's] reasons for reversal are annexed to the present ruling;

The Court, in a public ruling on 9 June 1998, for which were in attendance: Mr. Lemontey, President, Mr. Ancel, counsel reporter, Mr. Renard-Payen, Chartier, Durieux, Mrs. Bénas, Mr. Guérin, Sempère, Barque, counsels, Mr. Savatier, Mrs. Bignon, public auditor, Mrs. Petit, general counsel, Mrs. Aydalot, clerk;

For the account of Mr. Ancel, counsel, the observations of the SCP Célice, Blancpain and Soltner, counsel for [buyer], of the SCP Vincent and Ohl, counsel for [seller], the conclusions of Mrs. Petit, general counsel and after deliberation in conformity with the law;

On [buyer's] first argument

The appeal is of a ruling that set aside the competence of the Commercial Tribunal of Orléans as stipulated in the order form the French [buyer] addressed to its German supplier through [seller's] intermediary, the French company Lonza. The Court of Appeals ruled that the French tribunal is not competent to rule on the argument relative to the delivered goods. [Buyer] alleges that the Court's ruling against [buyer's] jurisdiction clause did not take into consideration the role of [seller's] subsidiary company, Lonza France; and that the Court erred by relying on a contradictory jurisdiction clause stipulated by the [seller].

However, considering that [seller's] terms and conditions contained a clause, conferring jurisdiction upon the courts at [seller's] principal place of business [in Germany], the Court of Appeals came to the justified conclusion that the different jurisdiction clause stipulated in [buyer's] forms could not be found applicable. Indeed, considering articles 18 and 19 of the Vienna Convention of 11 April 1980 on International Sales Contracts, an answer which leans towards the acceptance of an offer, but contains different elements substantially altering the terms of the offer, such that, according to article 19(3), there is a different stipulation on the settlement of disputes, does not lead to the application of the clause contained in [buyer's] form.

The ruling of the Court of Appeals is, on this point, legally justified.

On [buyer's] second argument

To determine international jurisdiction, the Court of Appeals researched the exact place of performance of the contractual obligation, serving as a base to the offer of the [buyer], according to article 5(1) of the Brussels Convention of 27 September 1968. The Court properly held that the obligation of delivery of the goods, as defined by article 31 of the Vienna Convention was realized by the delivery of the goods to the first carrier involved in the delivery of the goods to the buyer. The obligation was performed in this case in Germany.

The Court of Appeals had a legal justification for its decision on this point.

For these reasons:

The appeal is rejected;

The [buyer] is directed to pay the costs.

[...]

Thus done and judged by the Cour de Cassation, First Civil Chamber, and pronounced by the President to a public audience on July sixteenth, nineteen ninety-eight.


Reasons given by counsel for [buyer]

Reasons annexed to the ruling no. 1309/98 (Civ. 1)

[Buyer's] first reasons for reversal

[...]

{Buyer] bases its claim on the clause contained in its purchase order form specifying that the Commercial Tribunal of Orléans shall have jurisdiction in the event of dispute.

[Buyer] emphasizes that on this form it is stated that "the acceptance of our orders implies the acceptance of the general conditions of purchase stipulated in the front and the back of this form."

[...]

[Seller] cannot take advantage of the different jurisdiction clause contained in its general sales conditions which, obviously, were not accepted by the buyer.

[...]

Article 8 of [buyer's] general purchase conditions provides that the sending of an acknowledgment of receipt joined with the order "will mark" the acceptance of the provider of both the order and the general purchase conditions and its particularities. By focusing only on the fact that such an acknowledgment of receipt was not sent by [seller], the Court of Appeals erred in deducing that [seller] did not accept [buyer's] jurisdiction clause, without removing any other element that would result for this company -- without any explanation for why, once the litigation began, [seller] can take advantage of solely the jurisdictional clause. ...

Ignoring the actions of [seller] and of its subsidiary Lonza France, which received [buyer's] order as well as the general purchase conditions that were attached to it and performed the contract without discussing or asking for any modification, the Court of Appeals contented itself with the fact that [seller] has not signed any document containing the jurisdictional clause; notably, that [seller] did not send an acknowledgement of receipt from which one could deduce that it accepted [buyer's] clause. This does not pay proper attention to the principle of consensus; it violates article 1134 of the Civil Code.

[...]

In conformity with article 18 of the Vienna Convention of 11 April 1980, declared applicable in this case, the performance by [seller] of the sales contract, without discussing any clause of the offer that had been proposed to it by [buyer], constitutes acceptance of [buyer's] offer.

By supposing that the confirmations of the order sent by [seller] contained a jurisdictional clause different from that in [buyer's] general purchase conditions, such clause alters substantially the terms of the offer according to article 19 CISG, so that the terms of the contract can only be those contained in [buyer's] offer.

By excluding the acceptance of the clause contained in [buyer's] offer under the pretext that [seller's] confirmations of the order contain a different jurisdiction clause, the Court of Appeals violated articles 18 and 19 CISG.

[Buyer's] second reasons for reversal

The following is the essence of the Court of Appeals ruling that the Commercial Tribunal of Orléans does not have jurisdiction to rule on the action by [buyer] against the [seller];

The international character of the sales contract concluded between the German [seller] and the French [buyer] is not seriously contestable, the company Lonza France being in this case just a mere intermediary. As a consequence, the jurisdictional rules are fixed by the Brussels Convention of 27 September 1968. Following the terms of article 2 of this Convention, persons domiciled in the territory of a Contracting State may be sued , whatever their nationalities may be, to the jurisdiction of that State [of domicile]. Following the terms of article 5 of that Convention, a defendant domiciled in the territory of a Contracting State can be sued before a tribunal of another Contracting State -- notably because of contractual purposes -- where the obligation which holds as the basis for the demand was or has to be performed.

_____Based on article 5 of the Brussels Convention, it follows from [buyer's] complaint that the obligation which serves as a basis for the complaint is that of delivering products in conformity with the contractual specifications. The [buyer] cannot now hold that it is dealing with the warranty obligation. Based on article 31 of the Vienna Convention applicable in this case, when the seller is not required to deliver the goods to another location, the obligation of delivery consists of the handing of the goods to the first carrier for transmission to the buyer. In this case, if it is true that the evidence given during the proceedings mention as an address of delivery "La Chapelle Saint Mesmin [France]," it does not follow that the obligation to deliver the goods to this location was [seller's] responsibility. Indeed, the transportation resulted from the demand of Saint Gobain [France] effectuated from Bergheim [Germany] to the Chapelle Saint Mesmin location by truck, under [buyer's] care. The price indicated "departure [seller], product loose on the truck". Moreover, the last confirmations of the order of the months of November 1993 and January 1994 mention "FCA Bergheim Inco[terms] 1990," from which results that in the case of transportation by road, when the interchanging takes place at the establishment of the seller, the delivery is effective when the goods are loaded onto the vehicle provided by the buyer. Consequentially, the location of performance of the obligation that serves as the basis for the complaint is in Germany, not France. Thus the [buyer] cannot take support the jurisdiction of the Commercial Tribunal of Orleans relying on article 5 of the Brussels Convention. The application of this article leads to the holding that the German jurisdiction is competent.

In rebuttal

_____The lack of conformity of the goods sold at their normal destination constitutes an inherent defect of the goods and the action of the buyer based on such a defect is held to the standards of an action for breach of warranty. Moreover, the Vienna Convention, that the Court declares applicable in this case, makes no distinction between an obligation to deliver and a warranty obligation. It follows from the complaint presented by the [buyer] to the Commercial Tribunal of Orleans that when the goods were placed in production, microscopic analyses were conducted, revealing that the alumina delivered by [seller] showed an atypical granulometry and that the hydrate of alumina, entering the fabrication of the glasses was of a bad quality, notably with respect to its granulometry, the alumina presented a defective character. The [buyer] sought to have the Tribunal rule that the hydrates of alumina delivered by [seller] were of poor quality and that these hydrates had generated malformations in [buyer's] productions. The Court of Appeals erred by ruling that the obligation that serves as a basis for the [buyer's] complaint is that of delivering the products in conformity to the contractual specifications and that [buyer] "cannot now sustain that it was a matter of "warranty obligation". By narrowing the action to the sole question of delivery of the goods in conformity with the contractual specifications, the Court of Appeals did not follow sound legal reasoning with regards to article 5(1) of the Brussels Convention of 27 September 1968, together with the articles 1604 and 1641 of the Civil Code, 30; nor did the Court follow the Vienna Convention of 11 April 1980.

For those same reasons, the Court of Appeals violated article 1134 of the Civil Code;

The address of delivery, "the Chapelle Saint Mesmin" [France], appears both on the orders coming from [buyer] and the confirmations of the orders addressed to Lonza France to its principal [seller] and, also, on all the documents coming from this latter company. By relying only on the forms concerning the transportation of the goods that were organized by the parties, from the German industry of the supplier, to the French industry of the buyer, to conclude that the obligation of delivery had to be executed in Germany, the Court of Appeals did not base its reasoning on sound legal basis with regards to articles 5(1) of the Brussels Convention of 17 September 1968 and 31 of the Vienna Convention of 11 April 1980;

For the same reasons, the Cour of Appeals distorted the documents aforementioned and violated article 1134 of the Civil Code;

The documents coming from the [seller] in November of 1993 and in January 1994 also emphasize that the location of delivery of the goods is in France, at the Chapelle Saint Mesmin. If the documents also mention "FCA Bergheim [Germany] Inco[terms] 1990," this mention figures under the title "Transportation-Conditions-Payments" and relates back to the material forms of transportation of the goods from the German industry of the supplier to the French industry of the buyer. By basing itself on this mention to determine the location of delivery, the Court of Appeals erroneously assimilates the location of performance of the obligation serving as a basis for the demand as being in Germany. Once again, the Court of Appeals did not base its decision on sound legal reasoning with regards to article 5 (1) of the Brussels Convention of 27 September 1968.

In any event, none of the parties can take advantage of this situation and make a profit on the modification which one party unilaterally brings to a contract in the middle of its performance. By relying on "the last confirmations of the order of the months of November 1993 and January 1994 which mention FCA Bergheim Inco[terms] 1990," the Court of Appeals refers itself to documents coming from the [seller]. By taking them into consideration as a basis for jurisdiction in Germany and not in France, the Court of Appeals violated article 1134 of the Civil Code.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of France is referred to as [buyer]; the Defendant of Germany is referred to as [seller].

** Annabel Teiling, a graduate of the Pace University School of Law, is a member of the Bar of the State of New York.

*** Loukas Mistelis is Clive M Schmithoff Senior Lecturer in International Commercial Law at the School of International Arbitration and the Chair, Graduate Studies Committee, School of Law, Queen Mary, University of London.

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