Case text (English translation)
Queen Mary Case Translation Programme
Court of Appeal (Cour d'appel ) of Paris, 14 June 2001
Société Aluminium and Light Industries Company v. SARL Saint Bernard Miroiterie Vitrerie
Translation by [*] Audrey Turquois [**]
Translation edited by Camilla Baasch Andersen [***]
RG No, 1998/38724
REPUBLIC OF FRANCE
In the name of the French People
PARTIES. Appellant: Société A and L … Industries Co. of Sharjah, United Arab Emirates, [buyer]; Appellee: SARL S … B … Miroiterie Vitrerie of Paris, France [seller]. COMPOSITION OF COURT. During the arguments and the deliberation: Président: Mr. Main; conseillers: Mr Fauchere and Mrs. Briottet; greffier [Clerk of the Court] during arguments and entry of the ruling: Mrs. Laissac. Ruling rendered by Mr. Main, président, signed transcript of ruling with Mrs. Laissac, greffier.
I. FACTS AND PLEADINGS
Société A and L … Industries Co. [buyer] ordered 128 decorated glass panels from SARL S … B … Miroiterie Vitrerie [seller], which subcontracted the manufacture to company C, which itself subcontracted the assembly of the goods to company IVB CH, while the packaging was subcontracted by [seller] to SNEM.
Asserting that the goods did not conform to the contract, the [buyer] sued the [seller] in order to obtain the avoidance of the contract, restitution of the price and damages. By judgment of 10 May 2000, the French Court of First Instance rejected these claims considering that the [buyer] did not prove the origin of the defects observed.
The [buyer] seeks the reversal of that ruling.
1. [Buyer's position]
The [buyer] requests that the Appellate Court:
| - | Declare that the CISG is applicable to the contract concerned; |
| - | Declare the non-conformity of the panels with the order, the default of manufacture and the improper packaging of the goods; |
| - | Declare that the [seller] failed to perform his obligation under Article 35 CISG; |
| - | Declare, by virtue of Article 49 CISG, the avoidance of the contract; |
| - | Consequently, order the restitution of the price (f [French francs] 1,467,000), the payment of interest at a rate of 8.5% per annum, damages (f 500,000) and a sum of f 50,000 pursuant to Article 700 of the new Code of Civil Procedure. |
2. [Seller's position]
The [seller] requests that the Appellate Court:
| - | Affirm the judgment of the Court of First Instance which rejected the claim of the [buyer] and order the payment of f 5,000 by the [buyer] to the [seller] pursuant to Article 700 of the new Code of Civil Procedure; |
| - | Reverse the judgment when it declares that the CISG is applicable, ruling that the contract concerned is a contract of supply of services and reject the [buyer]'s claims; |
| - | Declare, if the Convention [CISG] is held to be applicable, that the [buyer] lost the right to sue for the avoidance of the contract by virtue of Article 49(2) CISG; |
| - | Order, as subsidiary claim, that company C, manufacturer, and/or company SNEM, which packed the goods, to pay instead of [seller] or to provide a guarantee for the sums that [seller] could be ordered to pay. |
[…]
[II. REASONING OF THE APPELLATE COURT]
[1.] Applicability of the CISG
The CISG is applicable to the contract concerned, which is not a contract of supply of services but a contract of sale of goods since the [seller] has no obligation to furnish labor or other services which, in the case of preponderance, would prevent the application of the CISG by virtue of Article 3(2) CISG. Indeed, even if the work required to manufacture the decorated glass panels ordered by the buyer were preponderant in comparison with the obligation to furnish the raw materials, it could not characterize the contract as one for supply of labor and other services as understood by Article 3(2) CISG.
[2.] Evaluation of the buyer's claims
By virtue of Article 49(2) CISG, in cases where the seller has delivered the goods, the buyer loses the right to declare the contract avoided if the buyer does not declare this (in respect of any breach other than late delivery) within a reasonable time after the buyer knew or ought to have known of the breach, or after the expiration of any additional period of time fixed by the buyer in accordance with Article 47(1) CISG, or after the expiration of any additional period of time indicated by the seller.
Being a "vente à l'usine", the delivery occurred on 7 January 1997, when the goods were taken in Montreuil under the responsibility of and with the risk passed to [buyer], before their carriage by sea to Dubai.
According to [buyer]'s own declarations, the [buyer] noticed, as soon as the goods arrived in Dubai, that some panels had apparent defects making them, along with the rest of the goods, unusable. On 26 February 1997, the [buyer] informed the [seller] of these defects and of [buyer]'s opinion that "we noticed that the goods do not comply with the required norms". Nevertheless, [buyer] did not sue the [seller] for avoidance of the contract before 6 May 1998.
According to the [buyer], the avoidance of the contract could not be sought before the results of the amicably agreed expert examination since, until then, the liability of the [seller] could not be established with certainty.
Nevertheless, the observation of the non-conformity of the goods with the order, obliged the [buyer] to sue for the avoidance of the contract without waiting for the results of the amicably agreed expert's report; the [seller] admitting only the reality of the defaults but denying his liability - only a contradictory judicial expert examination would have established with certainty the cause of the defects and the subsequent liability.
Even if the last report of the amicably agreed expert was considered as the starting point of the reasonable time period in which to sue, provided by Article 49(2) CISG, the claim for the avoidance of the contract, arising eight months later, does not comply with this provision.
Therefore, the claim for the avoidance of the contract and the subsequent claims of restitution of the price and payment of damages by the [buyer], who lost his right to declare the contract avoided, are not recoverable.
Considerant a titre surabondant [In addition to the fact that the present claim is unsuccessful for the above reasons, the Court adds that] the claim would have failed, since no contradictory judicial expert examination was carried out or can be carried out because of [1] the long period of time since the delivery [of the goods] and [2] the parties' lack of knowledge concerning the conditions of storage of the panels. The reports presented by the [buyer] on the basis of unilateral examinations and analysis cannot establish with certainty that the defect is due to the manufacture or the packaging by the [seller], which would characterise a fundamental breach of the contract. Indeed, according to report M, criticized by the [buyer], the cause of the defect is in the transportation; according to report L, which the [buyer] argues comes from an independent expert, the source of the default is "probably" due to the cleaning of the triple layer of glass using a solvent of hydrocarbon with chlorine; but the report of the "Centre experimental de recherches et d'études du batiment et des travaux publics", whose independence is not criticized by either party, gives no opinion about the origin of the defects. The report merely states that they are signs of too much humidity in the PVB, which can result from a manufacturing atmosphere with a humidity ratio of at least 25%, but that the conditions of carriage by sea can reveal the same phenomenon of bubbles and peeling without being the reason for it; the storage of the products at various temperatures can also be the cause of the superficial condensation.
Thus, considering this divergent technical information, it is not possible to determine with certainty the cause or the causes of the defects which appeared on the goods as soon as they arrived in Dubai, and thus to assert that they are accountable to the [seller], since they were not noticed at the moment of the delivery and transfer of the risks to the [buyer], and could be totally or partially due to the condition of transportation or of storage, which were under the responsibility and at the risk of the [buyer].
[…]
The Appellate Court:
[…]
Reverses the judgment of the Court of First Instance, except when it applied the CISG, [and the opinion] stated regarding the expenses and Article 700 of the new Code of Civil Procedure;
Declares that the claim of the [buyer] for the avoidance of the contract with the [seller] and the subsequent claims (restitution of the price and damages) are unfounded;
Holds that the [buyer] will bear the expenses of the appeal (f 12,000) and will guarantee the [seller] against his condemnation pronounced by the Court of First instance and by this Court towards the guarantees in accordance with Article 700 of the new Code of Civil Procedure;
[…]
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff/Appellant Société T…diffusion of the United
Arab Emirates is referred to as [buyer]; the Defendant/Appellee Société M…SL of France is
referred to as [seller]. Monetary amounts in the currency of France [French francs] are
indicated by [f].
** Audrey Turquois, has a DJCE Masters Degree in Commercial & Tax Law from University of
Poitiers in France, and is currently taking her LL.M. degree at Queen Mary, University of
London. The second-iteration redaction of this translation was by Dr. John Felemegas of
Australia.
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