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1980 Vienna Diplomatic Conference

Summary Records of Meetings of the First Committee

16th meeting

Thursday, 20 March 1980, at 3 p.m.

Chairman: Mr. LOEWE (Austria)

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Article 36 [became CISG article 38] (continued)
(A/CONF.97/C.1/L.154, L.155)

[Australia (A/CONF.97/C.1/L.154):

Reword paragraph (3) as follows:

"(3) If the goods are redirected in transit or redispatched, for purposes of resale or otherwise, without the buyer having a reasonable opportunity for examination, and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redirection or redispatch, examination may be deferred until after the goods have arrived at thenew destination."]

[Netherlands (A/CONF.97/C.1/L.l55):

Replace the words "If the goods" in paragraph (3) by the words "If without [an intervening] transshipment the goods".]

[Canada (A/CONF.97/C.1/L.118):

Substitute the following text:

"(c) If the goods are redispatched by the buyer without a reasonable opportunity for examination by him, or are resold by him in their existing packaging, and at the time of the conclusion of the contract the seller knew or ought to have known of the possibility of such redispatch or resale, examination may be deferred until after the goods have arrived at the new destination or the second buyer has had a reasonable opportunity to examine them."]

1. Mr. SAMSON (Canada) said that his delegation would be disposed to withdraw its amendment to paragraph 3 (A/CONF.97/C.1/L.118), which was merely of a drafting nature, unless other members of the Committee wished to see it maintained.

2. Mr. FELTHAM (United Kingdom) said that commercial circles in the United Kingdom had sought clarification as to whether "redispatch" included redirection for the purposes of sale to a third party. He had thought that the existing text sufficed but since two common law delegations had proposed amendments, he would like them to be put to the Committee.

3. Mr. HJERNER (Sweden) said that the choice of the word "redispatch" had been discussed at length by the UNCITRAL Working Group. The case it had particularly considered was that of an inland buyer who had bought goods CIF New York and had subsequently borne the cost of forward carriage to Chicago. It would not be necessary to examine the goods in New York, since their ultimate destination was clear at the time the contract was concluded. However, the paragraph did not necessarily cover the case of resales. It was important for both seller and buyer to know where they stood. The provision did not aim at dispensing the buyer from conducting an examination merely on the grounds that he proposed to resell the goods. It would not be reasonable to expect him to unpack an entire consignment of television sets packed in individual cartons, but he should perhaps unpack one such set. The Canadian amendment went too far in covering the general case of resales. The well-balanced existing text should be retained.

4. Mr. FELTHAM (United Kingdom) said he was troubled to hear the Swedish representative state that paragraph 3 was not intended to cover resales. It was recognized under common law that in the case, for instance, of the sale of a chemical packed in drums to a French buyer who resold to an ultimate consumer in Belgium, an examination of the goods was not practicable until they reached the subpurchaser. He hoped that position was covered by paragraph 3.

5. The CHAIRMAN said that from the discussion in UNCITRAL which had led up to the adoption of the present draft text, he had the impression that resale played a part in paragraph 3, but neither the important one conferred on it by the Australian and Canadian proposals nor the insignificant part attributed to it by the Swedish representative. The text should be taken literally. There were three conditions for deferring examination of goods until they reached a new destination. The first was redispatch by the buyer, the second was that, before such redispatch, there had been no reasonable opportunity for examination and the word "reasonable" was taken to include economic considerations and the third was that the original seller should know about the redispatch of the goods. Otherwise, he might think that they conformed if he was not notified within the usual period. The conditions permitting deferment of examination often occurred in resales but the resale, in itself did not suffice to authorize such a postponement.

6. Mr. MICHIDA (Japan), Rapporteur, confirmed the Chairman's explanation of paragraph 3.

7. Mr. VISCHER (Switzerland) agreed with the Chairman's explanation.

8. Mr. LOW (Canada) said that according to his delegation's interpretation of the original text, whether or not the buyer's opportunity to examine goods came within the scope of article 36 [became CISG article 38 ] depended on whether or not it was reasonable. In the case of a commission agent transmitting goods, the opportunity did not reasonably arise until they reached a party concerned and able to conduct an examination. If that interpretation was accepted by the Committee, his delegation would be content with the text as it stood and withdraw its amendment.

9. Mr. ROGNLIEN (Norway), agreeing with the conditions mentioned by the Chairman and that they covered resales, said that the wording of the Australian amendment in A/CONF.97/C.1/L.154 was more in harmony with the Chairman's explanation. He could support it if the phrase "in the existing packaging" was added after the words "redirected in transit or redispatched", and subject to further consideration of the actual drafting.

10. Mr. BENNETT (Australia) accepted the two suggestions made by the Norwegian representative.

11. Mr. KHOO (Singapore) said he was uneasy whenever it was stated that if the delegations at the Conference reached an understanding on the interpretation of the text, it was perfectly acceptable. The Conference was not drafting a convention for its own consumption but for use by courts, tribunals and ordinary traders throughout the world. It was the Conference's task to remove phrases open to several interpretations. The Australian amendment was useful in that it helped towards achieving uniformity in interpretation and application. He also supported the suggestions made by the Norwegian representative.

12. Mr. SZÁSZ (Hungary) thought that the Australian amendment was generally acceptable but the phrase "purposes of resale or otherwise" was too wide to be a definition -- it covered everything. The question of resale could more appropriately be dealt with in the commentary on the Convention. The main element was whether the buyer had a reasonable opportunity for examination. He had no objection to the phrase "in existing packaging", but he did not feel that it made a significant addition to the text.

13. Mr. OSAH (Nigeria) considered that the Australian amendment was clearer and easier to interpret than the original paragraph 3.

14. Mr. HJERNER (Sweden) said that the question to be asked was whether the Australian amendment was compatible with the Chairman's interpretation of the text, with which he agreed. It clarified the text by adding "redirected in transit" but the phrase "for purposes of resale or otherwise" was superfluous. Furthermore, the addition of the phrase "in existing packaging" made the provision stricter against the buyer since a buyer would not be relieved from his duty of examination in the case of a bulk load split up for redispatch.

15. Mr. MICHIDA (Japan), Rapporteur, observed that the Australian amendment did not state by whom the goods were to be redirected or redispatched. Was it by a carrier or the buyer? He preferred the wording of the original text. The reference to resale also caused him concern. As the Chairman had stated, postponement of the examination of goods was subject to three strict requirements including the knowledge of the seller, which would be weakened by the amendment. He preferred the existing text of paragraph 3.

16. Mr. EYZAGUIRRE (Chile) said he agreed with the Chairman's interpretation of the original text of paragraph 3. The Australian amendment was compatible with that interpretation and was therefore acceptable.

17. The CHAIRMAN asked what the distinction was between "redirected in transit" and "redispatched". The words used in the French text seemed to be synonymous.

18. Mr. FOKKEMA (Netherlands) said that was indeed true of the choice of words in the French text but in English there was a distinction between the two terms used. "Redispatched" implied that the goods had reached their first destination and had subsequently been sent on. "Redirected in transit" implied that they had never reached their first destination.

19. Mr. LI Chih-min (China) believed that the Australian amendment much improved the text. In the Chinese text, "other purposes" gave flexibility. The purpose of article 36 [became CISG article 38 ] was to ensure that the time fixed for the examination was reasonable. Unless all elements were considered, it was difficult to make such a judgement.

20. Mr. BENNETT (Australia) requested that the vote should be taken on his original text in document A/CONF.97/C.1/L.154 and on the two groups of phrases underlined separately.

21. The phrase "redirected in transit or" was accepted by 20 votes to 19.

22. The CHAIRMAN noted that the translation of "redirected in transit" would have to be reviewed in the text of other languages.

23. He took it that the words "redirection or" in the fifth line of the amendment should be regarded as a consequential amendment.

24. It was so agreed.

25. Mr. ROGNLIEN (Norway), speaking on a point of order, inquired whether the Australian representative would retain after the word "redispatched", the words "by the buyer" which appeared in the original text and the reference to opportunity for examination by him.

26. Mr. BENNETT (Australia) said that the intention behind his proposal was not to restrict the examination to the buyer if he did not have sufficient opportunity to conduct it. He regarded the latter part of the paragraph and the reference to the seller's knowledge at the time of the conclusion of the contract as the important element in the paragraph.

27. The words "for purposes of resale or otherwise, without the buyer having a reasonable opportunity for examination", were rejected by 24 votes to 15.

28. Mr. FOKKEMA (Netherlands), introducing his delegation's amendment (A/CONF.97/C.1/L.155), explained that it was intended to cover the case where goods might be transferred from one means of transport to another, before redirection in transit or redispatch, with a consequent risk of damage. That case was not covered by article 36(3) [became CISG article 38(3) ] and as a result the balance between the interest of buyer and seller was unfairly tilted in favour of the buyer. He noted that the corresponding ULIS article included a reference to transshipment.

29. Mr. SEVÓN (Finland) said he had difficulty with the proposal, because a buyer might well receive the goods without knowledge of where or how they might have been transshipped. The proposed addition would mean that paragraph (3) lost much of its meaning.

30. Mr. FOKKEMA (Netherlands) said that in view of those objections he would withdraw his proposal.

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