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Reproduced with permission of 17 Journal of Law & Commerce (1998) 219-244

The U.N. Sales Convention in the Americas: Recent Developments

Alejandro M. Garro [*]


Introduction

Mexico Case Law
- Morales y/o Son Export, S.A. Dec. v. Nez Marketing, 7 April 1993
- La Costeña S.A. v. Lanin San Luis S.A., Agroindustrial Santa Adela, S.A., 29 April 1996

Argentina Case Law
- Quilmes Combustibles A.A. v. Vigan S.A., 15 March 1991
- Inta S.A. v. MCS Officina Meccanica S.p.A., 14 October 1993
- Bedial, Sociedad Anónima v. Paul Müggenburg and Co., GmbH, 31 October 1995

Conclusion


INTRODUCTION

The most recent list of ratifying countries to the Vienna Sales Convention ("CISG" or "Convention") includes five jurisdictions from Latin America.[1] Only two of those five (Argentina and Mexico) have some experience with the application of CISG. To this date, no cases, published or unpublished, have been reported from Cuba, Chile or Ecuador. None of the decisions rendered in Mexico and Argentina were handed down by courts of last resort, though at least in theory the supreme courts of those countries are trusted with the final word on the interpretation of international treaties, under the federal law that both jurisdictions regard as the supreme law of the land.[2]

The two Mexican decisions applying CISG were rendered by a government agency -- the Mexican Commission for the Protection of Foreign Commerce ("Compromex"). This agency was set up in 1956 with the function of supervising ethical standards in the practice of foreign commerce,[3] and in 1976 it became a subdivision of the Mexican Institute for Foreign Trade (IMCE).[4] In addition to its advisory role on matters of foreign trade, Compromex has the ability to act as a conciliator and arbitrator in foreign trade disputes.[5] Compromex has set up a committee composed of representatives of various official bodies involved in foreign commerce, to which Mexican parties and their foreign trading partners [page 219] submit commercial disputes. Claims may be submitted by either the Mexican or non-Mexican party directly to Compromex, or through Mexican trade representatives at Mexican embassies and consulates. The claim procedure is divided into two stages. First, Compromex tries to reach a settlement through a conciliation hearing, and if no settlement is reached, the parties are urged to accept arbitration administered by Compromex.[6] If these attempts fail, Compromex "may render a recommendation based on the evidence submitted by the parties."[7] This decision is rendered "without prejudice to the parties' rights to resort to any judicial authority to settle the dispute."[8]

In the two cases reported by Compromex in the Mexican official gazette, the complaints were brought by Mexican parties. In the Morales case, decided in 1993, a Mexican exporter brought a complaint against a California buyer for lack of payment of a shipment of garlic.[9] In the case of La Costeña, decided in 1996, a Mexican importer brought a complaint against Argentine and Chilean exporters arising out of the nonconformity of a shipment of canned fruit.[10] In both cases the respondents refused to agree to submit the case to conciliation or arbitration, and in both cases the recommendation (dictamen) issued by Compromex favored the Mexican complaining party. It is not altogether clear why a foreign or even a Mexican party would find it most convenient to submit a dispute to Compromex, rather than proceeding directly to file suit before a Mexican court. Be this as it may, the non-binding nature of the recommendations issued by Compromex makes it likely that these types of disputes will eventually face adjudication before a court of competent jurisdiction.

A recent development on the application of the CISG in Argentina involved a determination of the rate of interest on the purchase price which was owed by bankrupt debtors to sellers domiciled in other Contracting States (Czech Republic, Spain, and the United States). Three other cases decided by the national court of appeals, commercial division, discussed the application of the CISG to several issues arising under sales contracts concluded between Argentine importers and exporters domiciled in other Contracting States (France, Italy, and Germany). A close reading of those decisions indicates that the CISG was not applicable in any of the three cases, either because the contracts had been concluded [page 220] before the entering into force of the Convention (Inta and Bedial),[11] or because the issue at stake, i.e., the validity of a forum selection clause, was not covered, either expressly or impliedly, by the Convention (Quilmes Combustibles).[12] The summary account of these and other cases that follows focuses on some of the questions which, though raised in these decisions, invite further analysis.

MEXICO 1. Morales y/o Son Export, S.A., Dec. v. Nez Marketing, 7 April 1993, Dictamen de Ia Comisión para la Protección del Comercio Exterior de México ("COMPROMEX") [13]

A Mexican seller brought a complaint against a California company for lack of payment for twenty-four tons of purple garlic harvested in Hermosillo (Mexico) and delivered in Nogales (Arizona). The purchase price was for a total of $20,000, in payment of which the buyer sent four checks for $5,000 each. None of those checks could be cashed; three of them because of insufficient funds, and the fourth because of cancellation of the account. When confronted by the Mexican seller, who traveled to Los Angeles to collect what was due to him, the buyer made a partial payment of $4,300. Soon thereafter, the seller brought a claim for payment of $15,700, which was the remaining portion of the purchase price.

Upon the buyer's failure to answer the complaint, Compromex urged the parties to submit to conciliation in order to preserve their commercial ties and "reconcile their differences."[14] The evidence submitted by the Mexican seller consisted of a commercial invoice, dated April 22, 1992, indicating the goods sold and the price to be paid, as well as a bill of lading showing that the goods were shipped and consigned to the order of the California buyer. The seller also submitted the three canceled checks showing that they were not paid due to insufficient funds, as well as a copy of a fourth check which bounced as a result of the closing of the account. Since the Convention was in force in both Mexico and the United States as of the time the invoice was produced in April, 1992, Compromex applied paragraph 1(a) of Article 1 of the CISG.[15] [page 221]

Compromex raised on its own motion the question of whether the contract had been concluded in the proper form. On this point, Cornpromex noted that Article 11 of the CISG dispenses with the requirement of a writing and found the contractual relationship to be evidenced by the commercial invoice, the bill of lading, and other documentary evidence.[16] The failure of the California buyer to make full payment of the goods triggered the application of Article 62 of the CISG, authorizing the disappointed seller to claim performance (i.e., payment of the full price) unless he has resorted to a remedy inconsistent with this requirement.[17]

Assuming that the facts described by Compromex are complete, and that the only facts taken into account for rendering the decision are those described in the published "advisory opinion" (dictamen), everything indicates that the Mexican seller had performed in full and was claiming specific performance (payment of the purchase price that was due) from the buyer. Thus, it is not clear then why Compromex resorted to Article 81(2) of CISG in support of the seller's right to obtain payment of the remaining $15,700.[18] Article 81(2) gives a party which performed the contract in whole or in part the right to claim restitution of whatever he or she has supplied or paid to the party.[19] A more fitting frame of reference under the given facts points to the buyer's fundamental breach for lack of full payment by the California buyer. The facts do not indicate whether the Mexican seller fixed an additional period of time for the buyer to make full payment, as authorized under Article 63(1).[20] It is possible to speculate that after the Los Angeles meeting, where the buyer made a partial payment of $4,300, the buyer could have obtained an extension of time to pay the rest of the price. In any event, after the expiration of that period, the Mexican importer could have sought damages for delay in performance and the payment of interest,[21] which do not appear to have been either claimed by the Mexican seller or awarded by Compromex.[page 222]

MEXICO 2. Conservas La Costeña, S.A., v. Lanín San Luis S.A., Agroindustrial Santa Adela, S.A., 29 April 1996, Dictamen de Ia Comisión para la Protección del Comercio Exterior de México ("COMPROMEX") [22]

In December 1992, a Mexican importer (La Costeña S.A.) placed a purchase order for 8,490 boxes of canned fruit with an Argentine seller (Lanín S.A.).[23] Before the conclusion of the contract, La Costeña had approved the can and label samples furnished by Lanín. La Costeña furnished samples of the carton packages in which he wanted the cans to be contained and shipped. Payment of the purchase price was effected by a letter of credit opened by the Mexican importer. According to the facts reported in the decision, Lanín decided to subcontract the packaging and delivery of the goods with a Chilean company (Agroindustrial Santa Adela, S.A., hereinafter "Santa Adela").[24] The parties disagreed as to whether La Costeña was duly informed of this delegation of performance,[25] but it was not disputed that the Chilean company Santa Adela, rather than the Argentine company Lanín, was the party which proceeded to package and ship the goods to the Mexican buyer. The recommendation or "advisory opinion" rendered by Compromex followed the style of judicial decisions traditionally followed in Mexico and much of Latin America. The opinion begins with a procedural history of the case, or a summary account of the position of the parties (resultandos), followed by a statement of reasons (considerandos) supporting the recommendation issued by Compromex.

a. Position of the Parties

La Costeña claimed that the goods arrived in Mexico in a damaged condition and that the lack of conformity of the goods was the responsibility of the respondent sellers. As relief, La Costeña sought the return of the purchase price and damages.[26] The Mexican importer made several allegations: that 63% of the cans were corroded due to humidity in the packages; that the colors of the cartons and labels were different than [page 223] those agreed upon by the parties; that the mixture of fruits and the size of some of those goods were not in accordance with the specifications; and that there was a shortage in the number of boxes.[27] In order to establish the lack of conformity of the goods, La Costeña submitted a document in which a Mexican Notary Public certified that the cartons and cans were in a damaged condition, and to which twenty-eight photographs were attached, showing the damaged boxes labeled "La Costeña." Attached to the notarial act, the Mexican buyer submitted a report by two technicians concluding that the cartons used by the seller were useful for wrapping but not for packaging the goods. A third document provided by La Costeña's production manager of packaging (Gerente de Producción de envases) reported that the cause of the damage was the seller's use of improper material for packaging.[28]

It appears from the decision that the proceedings conducted by Compromex were pursued exclusively in writing. After La Costeña filed the statement of claim seeking the return of the purchase price and damages, Compromex notified the respondents through the Mexican trade offices located in Santiago and Buenos Aires. The Mexican Trade Office (Consejería Comercial de México) in Santiago was informed that the Chilean company Santa Adela had been declared bankrupt. Moreover, the trustee in bankruptcy informed Compromex that Santa Adela had been "totally liquidated."[29] The Mexican Trade Office in Buenos Aires received an answer from Lanín, in which Lanín disclaimed any responsibility for the alleged damages, on the ground that the canning, packaging and delivery of the goods was the responsibility of the Chilean company. Lanín also alleged that in a meeting held in November, 1992, at Lanín's office in Buenos Aires, representatives of La Costeña were told that Lanín was unable to supply the goods and that La Costeña agreed that the goods were to be shipped from Chile by Santa Adela.[30] According to Lanín, it was also agreed at that meeting that the payment by letter of credit was to be made to the order of Lanín, which in turn would transfer the funds to Santa Adela.[31] In support of this allegation, Lanín submitted a copy of the bill of lading issued by the carrier, a certificate of origin the goods and a phitosanitary certificate issued by Chilean agencies. In all of those documents Santa Adela appeared as the shipper and exporter [page 224] of the goods. The package list issued by Santa Adela, addressed to La Costeña, was also attached to the response filed by Lanín with Compromex.[32]

In addition to displacing any eventual liability upon the Chilean company, Lanín argued that the term FOB transferred the risk of loss or damage to La Costeña at the time the goods were shipped. Lanín argued in the alternative that, even if this were not the case, the buyer failed to establish that the alleged nonconformity, resulting from the improper packaging of the cans, was the seller's fault. Lanín also disputed the evidentiary value of the proof submitted by La Costeña to substantiate the lack of conformity. Thus, Lanín argued that it had not been given the opportunity to intervene in the inspection of the goods allegedly carried out by La Costeña, and that the notarial act produced by the buyer was merely a unilateral declaration, embodied in notarial form, which lacked any evidentiary effect for determining whether the goods were defective at the time the risk of loss shifted to the buyer.[33] Lanín also argued that the CISG was not applicable because Argentina had entered a reservation under Article 96.[34] Essentially, Lanín sought to impress upon Compromex that even if the CISG would apply, the alleged contract was null and void because it was not embodied in writing.

b. The Decision of Compromex

Lanín also challenged the jurisdiction of Compromex to settle the dispute by arbitration and to issue a recommendation, although the decision fails to indicate the legal bases of the challenge.[35] Nevertheless, Compromex called for a conciliation hearing (junta de aveniencia) attended by a representative of La Costeña. The Argentine exporter did not attend the hearing but filed a memorandum of law,[36] and Compromex affirmed its competence to issue a recommendation.[37]

Compromex decided that the contract of sale was governed by the CISG, and found that the existence of such a contract was established through Lanín's own admissions in response to the buyer's complaint, and by virtue of other documents exchanged between the parties. The opening of the letter of credit in Lanín's favor, its acknowledgment of a [page 225] course of dealing with La Costeña regarding this transaction, and other written communications exchanged between the parties sufficed to establish "the essential elements of the contractual relationship."[38] The decision appears to concede that Argentina's reservation under Article 96 of the CISG imposes the requirement of a writing according to Articles 11 and 12. However, according to Compromex, the documents exchanged by the parties sufficed to meet the writing requirement. Compromex stated in its recommendation that the writing requirement does not mandate a formal or solemn contract (contrato formal), for that "would be in conflict with the general principles of the CISG."[39]

In the absence of specifications as to the quality, quantity, and type of goods to be sold and the manner in which they were to be packaged, Compromex decided to apply Articles 34 through 36 of the CISG. Thus Compromex had little trouble finding both Lanín and Santa Adela liable to La Costeña, on the ground that the Argentine seller was bound to monitor the performance of the Chilean shipper with whom it had subcontracted the packaging and shipping of the goods.[40] Compromex also found that both companies were liable under Article 34 for failing to provide the Mexican buyer every invoice (factura) specifying the quantity and price of the shipped goods.[41] It appears that La Costeña was at least provided with a bill of lading pursuant to the letter of credit contract. Therefore, the importer was enabled to obtain the goods from the carrier when they arrived in Mexico and to bring them through customs. However, it is not clear from the decision which documents (other than the commercial invoices) the seller failed to hand over to the buyer, nor is clear in the decision when those documents should have been handed over. It is further unclear which form such documentation should have taken, either pursuant to agreement by the parties, or applicable usage or under the seller's implicit obligation of good faith under Article 7(1) of the CISG.[42]

Compromex accepted the documentary evidence offered by La Costeña that the damage suffered by the goods was due to the fact that packaging, boxes, and cans containing the fruit were unsuitable to withstand maritime transportation.[43] Whether the term of the sale was "FOB/ buyer's plant,"[page 226] as alleged by the buyer,[44] or "FOB/any Chilean port," as alleged by the seller,[45] was irrelevant to determine who should bear the risk of damage. Compromex found that the sale was agreed to "FOB/any Chilean port," so that La Costeña was to bear the risk of loss as of the moment the goods passed the ship's rail at the Chilean port of shipment. Yet the seller remained liable for defective goods even though the lack of conformity became apparent only after the passing of the risk.[46] Since the cause of nonconformity was found in the unsuitability of the packaging, Compromex found the seller liable even though the lack of conformity became apparent only at the time the goods arrived in Mexico.[47] Because the Chilean company Santa Adela had been declared bankrupt, Cornpromex focused its recommendation on the obligation of the Argentine seller (Lanín), to pay $612,236 Mexican pesos to the buyer (La Costeña).[48] This amount appears to represent restitution of the price paid by La Costeña, which payment was requested in the complaint. Although La Costeña had also asked for damages, Compromex refused to rule on this issue on the ground that there were insufficient elements in the record to rule on this point.[49]

c. The Writing Requirement

Both Argentina and Chile have entered the reservation allowed under Article 96 of the CISG.[50] Accordingly, the principles of informality embodied in Articles 11 and 29 do not apply to a contract in which "any party has his place of business in a Contracting State that entered such declaration."[51] This means that the contract of sale between Lanín and La Costeña had to be concluded in written form to be valid.[52] The decision in La Costeña did not elaborate on what it takes to determine whether a contract has been concluded "in writing" in those cases where one of the parties to the contract has his place of business in a Contracting State which made a reservation under Article 96. Arguably, compliance with the writing requirement may be determined by the domestic [page 227] law that is applicable according to the relevant conflict-of-laws rules. However, rather than searching for that applicable law, Compromex decided to apply its own "autonomous" conception of a writing, finding that the documents exchanged by the parties identified the essential elements of a sale, so that the contract could be properly said to have been concluded "in writing."

Another question raised by the requirement of a writing relates to the possibility of its waiver. To what extent should the seller Lanín be allowed to argue the absence of a writing where both parties had performed the contract, especially in light of the overriding principle of good faith embodied in Article 7(1) of the CISG? Assuming that the finding of a duty is too much to expect from a tangential reference to the need to interpret the Convention in good faith, it could still be argued that Lanín's performance (e.g., by accepting payment of the purchase price and delivering the goods) might have induced La Costeña to rely on the existence of the contract. Under those circumstances, it may be unfair to insist on the requirement of a writing and Lanín may be estopped from so doing under Article 29(2) of the CISG.[53] Compromex chose instead to uphold the validity of the contract by relying on the exchange of documents and Lanín's own admissions as to the existence of a contract of sale.

Article 96 of the CISG permits this reservation only to Contracting States "whose legislation requires contracts of sale to be concluded in or evidenced by writing."[54] Neither the legislation of Argentina or Chile prescribes a mandatory written form for all sales contracts. Quite to the contrary, the Chilean Commercial Code openly permits oral testimony to prove a contract of sale.[55] Its Argentine counterpart, while requiring a writing for contracts exceeding a relatively trifling amount, makes an exception whenever the party affirming the sale can show a "commencement of written proof" (comienzo de prueba por escrito).[56] This term is [page 228] generally understood as any writing pointing to the existence of the contract emanating from the person against whom the action is brought. It is at least questionable, therefore, whether Argentina and Chile could have availed themselves of the reservation permitted by Article 96, which can only be entered by jurisdictions whose laws require a mandatory written form for contracts of sale to be in writing.[57] Even if the principle of consensuality and informality embodied in the Convention were to be held inapplicable due to the reservation filed under Article 96, Compromex should have determined the applicable law to this issue of form before deciding whether to validate the contract. If the relevant conflict of law rule were to point to the application of Argentine or Chilean law, a commercial invoice, bill of lading, or any other document issued by Lanín would have sufficed to uphold the validity of the contract.

d. Non-conformity

(1) Timeliness of the buyer's examination of the goods and of giving notice of lack of conformity

According to the Convention, the Mexican buyer, La Costeña, was bound to examine the goods (Article 38) [58] and give prompt notice of the alleged lack of conformity (Article 39).[59] Yet, it does not appear from a reading of the facts supplied by the decision that La Costeña sent notice to Lanín or Santa Adela within a reasonable time, specifying the nature of the nonconformity as required under Article 39(1) of the Convention.[60] Neither is there an indication that Lanín relied on the absence of notice of nonconformity to contest La Costeiña's claim for the return of the price and damages. It is at least surprising that neither the seller nor Compromex addressed the timeliness of the buyer's examination of the boxes of canned fruit and whether such buyer provided a seasonable and specific notice as to the lack of conformity. This is especially so in light of the strict interpretation taken by some courts on the buyer's duty to examine the goods "within as short a period as practicable" [61] and to provide [page 229] notice of nonconformity "within a reasonable time."[62] Arguably, the unsuitability of the packaging to protect the goods in transit may be deemed one of those defects of which the seller "could not have been unaware" before the transfer of risk to the buyer (i.e., before the shipping of the goods), in which case the timeliness of the examination and of the notice of lack of conformity would be irrelevant.[63] Still, it is the buyer (in this case the Mexican importer La Costeña) who has the burden of establishing that the seller knew about the defective packaging or could not have been unaware of this failure. The reported decision fails to indicate whether the buyer raised this issue before Compromex.[64] [page 230]

(2) Establishing lack of conformity

The breach alleged by the buyer points to the seller's failure to deliver goods conforming to the quantity, quality, and description required by the contract.[65] Lanín did not dispute the allegations of La Costeña that the parties had agreed beforehand on the type of cans and boxes to be used in the packaging of the fruit, and the findings of Compromex against Lanín appear, at first blush, to be based on Lanín's failure to comply with the packaging standards called for by the contract.[66] Clearly, if the buyer provides the seller with a sample or model of the packages to be used in transporting the goods, this would have been a concrete way of determining the kind and quality of packaging to which La Costeña was entitled.[67] Thus, in order to determine the breach of the seller's obligation to do what is ordinarily required to allow the buyer to receive the goods in a satisfactory condition, Compromex sought to ascertain the proper content of the seller's obligation regarding packaging according to what they have agreed. In the absence of an express provision on the form of packaging, Compromex was required to ascertain the parties' intentions as to how the canned fruit was to be protected.[68]

In another part of the decision, however, Compromex intimates that the inadequacy of the packaging was due to the failure to meet certain standards which made the boxes unsuitable for maritime transportation.[69] In this case, the seller's liability under the Convention arises out of Article 35(2)(d), which provides that, unless the parties have agreed otherwise, the goods do not conform to the contract unless they are "contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods."[70] In determining the manner in which the goods are to be packaged, Compromex could have resorted to the practices regularly observed in the trade. There are no indications in the reported decision that Compromex actually relied on any such standard.[page 231]

The documents submitted by Lanín include a certificate of origin of the goods and a phitosanitary certificate, but no certificate of inspection was issued at the place of dispatch. In the absence of a controlling certificate, it is desirable for both parties to be present at the inspection in order for such an inspection to be binding on them. However, inspection of the goods and their packaging was conducted only by the buyer, La Costeña, at the place of destination. The means of proof to establish the inadequacy of the packaging is not regulated by the Convention. The issue is governed by the lex fori, as is the evidentiary weight to be given to the notarial act and expert reports produced by La Costeña. It is obvious that the seller is not bound by the results of that inspection, yet it appears that Lanín did not take the opportunity to contest the allegations of deficient packaging made by the Mexican importer.

e. Remedies for Lack of Conformity

Lanín's alleged breach of contract did not involve a failure to perform (as would be the case if it would have failed to deliver the goods to the buyer), but rather a defective performance consisting of lack of conformity of the goods to the express or implied specifications called for by the contract. Did the seller's failure to package the goods in such a way that would have allowed the buyer to receive the goods in satisfactory condition amount to a fundamental breach warranting the avoidance of the contract? Was the breach serious enough as to "substantially deprive" La Costeña of what it was entitled to expect under the contract? [71] This determination required, inter alia, an assessment of whether La Costeña would have been able to make a reasonable use of the goods despite the alleged nonconformity, or whether the partial performance could have been remedied by partial avoidance of the contract, a reduction of the price, or damages.[72] Thus, Compromex could have properly inquired whether the canned fruit could have been resold in the condition in which it was received.[73] If the saleability of the fruit was not in jeopardy,[page 232] La Costeña could not have avoided the contract in its entirety.[74] Otherwise, La Costeña could have fixed an additional and reasonable period of time for Lanín to comply with its obligations,[75] or it could have required Lanín to deliver substitute goods.[76] In the alternative, La Costeña could have declared the contract avoided [77] and sought damages.[78]

In its decision, Compromex found that the use of a packaging different from the one required by the contract was a determinant cause of the lack of conformity.[79] However, the decision fails to provide any reason as to why such nonconformity amounted to a fundamental breach of the contract. La Costeña requested the payment of damages,[80] but without furnishing any guidelines as to the criteria for determining the recovery of damages. It is not difficult to understand why Compromex refused to grant damages to La Costeña, which failed to provide any evidence of its losses. However, La Costeña's right to interest should not hinge upon the buyer's indication as to how the interest is to be calculated.[81]

ARGENTINA 1. Quilmes CombustiblesS.A. v. Vigan S.A., 15 March 1991, National Court of Appeals on Commercial Matters, Division C [82]

According to the facts supplied by the published portion of the opinion, an Argentine buyer of industrial machinery (Quilmes Combustibles) entered into a contract of sale with a seller located in France or Belgium [page 233] (Vigan SA.). Quilmes Combustibles claimed damages for breach of contract due to Vigan's delay in delivering the machine, as well as for its failure to function properly. The only issue before the Argentine court was whether the case should be heard in Argentina or France.[83] A standard form sent by the French seller included a choice-of-forum clause pointing to the exclusive jurisdiction of the French courts. The Argentine buyer sought to nullify that choice-of-forum clause on the ground that it was written in a foreign language (French) and inserted, in a standard form, on the back of an invoice sent by the seller. The trial court was not persuaded by this argument, dismissing the case and referring the parties to the courts of France.

Having lost in the first instance, the Argentine buyer brought up an appeal in which he argued for the first time that the CISG applied to this transaction. According to the allegations made by the Argentine buyer, as reproduced in the opinion of the Procurator, (whose function is to advise the court on jurisdictional issues) before the Court of Appeals, the receipt of the commercial invoice by Quilmes Combustibles without objecting to its terms did not amount to a tacit acceptance of the French forum. According to Quilmes Combustibles, the reservation entered by Argentina under Article 96 "requires that every manifestation of intention be in writing . . . "[84] According to the Argentine buyer, such reservation calls "for an express [written] acceptance of the choice-of-forum clause."[85] The advisory opinion of the Procurator did not enter into a discussion on the application of the CISG ratione materiae. It simply dismissed the argument by recalling that the writing documenting the transaction (i.e., the commercial invoice) was dated June 14, 1970, that is, well before the CISG had entered into force.[86]

After pointing out that jurisdictional issues are procedural matters subject to the lex fori, the Procurator found that Argentine courts could have entertained this suit on at least two predicates of jurisdiction. First, Argentina was one of the places where at least one of the contractual performances was due and, second, Argentina was the place where the obligation to be enforced (i.e., the verification that the machine was in proper working condition at the time of its arrival at the port of Buenos Aires) had to be performed.[87] However, added the Procurator, these rules [page 234] pointing to the jurisdiction of the Argentine courts were displaced by the choice-of-forum clause.[88] According to settled Argentine precedents, clauses selecting a forum for the settlement of disputes are valid and enforceable despite being embodied in a standard form (cláusulas 'formulario,' 'tipo,' 'predispuestas,' or 'cláusulas generales de contratación'), unless a court finds "an unreasonable disparity in the bargaining power that would nullify the consent given by the parties."[89] The Court of Appeals affirmed the dismissal on jurisdictional grounds as advised by the Procurator.[90] A different panel of the same court of appeals faced a similar question two years later, and the opinion of the court was once again based on the advise given by the Procurator.

ARGENTINA 2. Inta S.A. v. MCS Officina Meccanica S.p.A., 14 Oct.1993, National Court of Appeals on Commercial Matters, Division E [91]

This case confronted an Argentine buyer of industrial machinery (Inta) and an Italian seller (Officina). The Argentine buyer filed suit in Argentina alleging that Officina had breached the contract by delivering a piece of machinery that failed to conform to contract specifications. The contract was concluded through an exchange of standard forms. The form sent by the Officina incorporated a choice-of-forum clause in favor of the courts of Bergamo, Italy. The issue before the court was whether the choice-of-forum clause was binding on the Argentine buyer. As in the Quilmes Combustibles case, both the trial and appellate courts upheld the forum selection clause and dismissed the case in favor of the foreign [page 235] court.[92] Once again, the issue of whether the CISG should control the existence or validity of the choice-of-forum clause was brought up in an advisory opinion of the Procurator before the court of appeals.

The court of first instance based its dismissal on the provisions of the Civil Code governing international jurisdiction.[93] As noted in connection with the Quilmes Combustibles case, the predicates of jurisdiction recognized by Argentine law in matters of contract point to the defendant's domicile or to the place of performance of the contract.[94] Since both connecting points lead to Italy, the case was dismissed for lack of jurisdiction and the parties were referred to the jurisdiction of the courts of Bergamo. On appeal, the appellant buyer raised for the first time the applicability of the CISG, alleging that the choice-of-forum clause was invalid because it had not been signed by him. A three-judge panel of the Commercial Court of Appeals affirmed the dismissal, resting its decision, once again, on the opinion of the same Procurator who had given an opinion in the Quilmes Combustibles case.

This time, however, the Procurator did not pause to inquire whether the CISG was in force in Italy and Argentina at the time the contract had been concluded. Rather, he started the analysis by pointing out that Article 4(a) of the CISG expressly excludes from its scope of application matters related to the validity of the any of the clauses of the contract.[95] He then examined the enforceability of choice-of-forum clauses under the lex fori, which was based on a bilateral treaty concluded between Italy and Argentina, Argentine case law, and scholarly doctrine. While the dismissal of the case was grounded on the choice-of-forum clause pointing to the jurisdiction of the Italian courts, in a subsequent passage of his opinion the Procurator refers to the potential application of the CISG, as a sort of reinforcement of the conclusion that the choice-of-forum clause was valid and enforceable.

The Procurator accepted the argument raised by the Argentine buyer to the effect that mere receipt of the invoice incorporating a choice-of-forum clause does not amount to an acceptance of that term. "Silence or inaction does not in itself amount to an acceptance," reasoned the Procurator, relying on the first sentence of Article 18(1) of the CISG.[96] However, immediately thereafter he noted that the Argentine buyer had [page 236] counter-signed the invoice containing the choice-of-forum clause, submitting such invoice to a financial institution for the purpose of applying for a loan to finance the purchase price. This part of the opinion intimates that if the CISG were to apply to this case, the buyer's counter-signature of the commercial invoice would amount to a type of "conduct revealing assent to the offer" which incorporated the choice-of-forum clause, as per the second sentence of Article 18(1).[97] As noted before, the dismissal of the case on jurisdictional grounds was affirmed by the Court of Appeals without much analysis, simply relying on the opinion of the Procurator. Although the validity of the choice-of-forum clause finds support in Argentine law, the ambiguity of the Procurator's opinion regarding the applicability of the CISG invites further examination.

a. CISG and Selection of Forum Clauses

A few comparative remarks may be drawn between Quilmes Combustibles and Inta, because the main focus of inquiry in both cases is on the extent to which the CISG has anything to say on the existence or validity of a choice-of-forum clause included in a standard form sent by the seller. Is a selection-of-forum clause affected by, or otherwise related to, the formation of a contract of sale under the Convention? In what way is jurisdiction by consent, as a predicate of international jurisdiction, governed by the rules on formation of contracts incorporated into the CISG? In both cases the trial and appellate courts upheld the forum selection clauses, declining to exercise jurisdiction in favor of the foreign party.[98] The appellate court's opinion rested entirely on a non-binding or advisory opimon (dictamen) issued by the Procurator before the Court of Appeals (Fiscal de Cámara), whose views must be sought on matters of jurisdiction and venue. Although it may appear at first sight that the CISG was applied to these cases, a closer look shows that the enforceability of the selection-of-forum clauses rested on Argentine jurisdictional rules. Assuming, for the sake of argument, that CISG might have been applied, neither the Quilmes Combustibles nor Inta decisions endeavor to examine whether a contract was actually concluded under Article 19 of the CISG, and, if so, what were the terms of those contracts. Arguably, if the choice-of-forum clause was incorporated in the standard form sent by the seller while responding to the purchase order sent by the buyer, then such choice-of-forum clause should be regarded as a "material alteration" [page 237] of the offer. According to Article 19(3), such material alteration should have been considered a rejection of the offer sent by the Argentine buyer and a proposal or counter-offer by the seller.[99] Yet, the facts supplied in both opinions fail to provide a clear picture as to the role played by the seller's standard terms in the exchange of documents forming the negotiation process. More significanfly, in Article 4(a), the Convention expressly excludes from its scope matters related to the validity of the contract or of a contractual provision,[100] and Article 81(1) provides a clause for the settlement of disputes with a certain degree of autonomy vis-a-vis the other contractual terms. Accordingly, referral to the CISG was uncalled for to decide which was the competent court to decide the merits of the dispute.

ARGENTINA 3. Bedial, Sociedad Anónima, v. Paul Müggenburg and Co., GmbH, 31 Oct. 1995, National Court of Appeals on Commercial Matters, Division C [101]

In this case, a different panel of the Commercial Court of Appeals affirmed a judgment of a commercial court of first instance (Juzgado Nacional de Primera Instancia en lo Comercial No. 11) dismissing a claim brought by an Argentine buyer (Bedial) against a seller based in Hamburg (Müggenburg). On or about February 25, 1987, Bedial and Müggenburg concluded a contract for the sale of approximately one ton of dried mushrooms. The sale was concluded under the terms "C & F" (without insurance). The German seller, Müggenburg, had the goods shipped from the port of Hong Kong after the Argentine buyer, Bedial, obtained a letter of credit payable within 180 days from the date of shipment. Before shipping the goods, Müggenburg obtained three cerifficates from the Chinese authorities attesting as to the quality of the dried mushrooms and their fitness for human consumption.[102] However, upon their arrival in Buenos Aires,[page 238] a chemical analysis undertaken by customs authorities [103] on one of the packages of the cargo indicated that the mushrooms were not fit for human consumption pursuant to the sanitary requirements imposed by Argentine law. Bedial's reaction was to refuse payment under the letter of credit and send the mushrooms back to Hong Kong with a notice that the contract had been avoided.

Müggenburg commenced summary proceedings (juicio ejecutivo) before the Argentine courts and was able to collect the full amount due under the letter of credit. Immediately thereafter, Bedial sought to recover the money which it was compelled to pay to Müggenburg in the summary proceedings, also seeking damages for the alleged nonconformity of the goods. In essence, the court was asked to determine who should bear the risk of loss under this contract of sale. Both the trial and the appellate court found for the German seller, although the rationale followed by each court on the risk of loss was somewhat different.[104] According to the trial court, the certificates obtained by the German seller attested that the goods were in satisfactory condition at the time of shipment, so that the causes for any eventual nonconformity must have originated during the transportation of the goods from Hamburg to Buenos Aires.[105] Since the Argentine buyer had assumed the risk of loss in transit pursuant to the "C & F" term, it should follow that the buyer must bear the risk of loss. Moreover, the trial court noted that the buyer failed to object to the soundness of the inspection certificates, as well as to establish that the goods were in damaged condition before they passed the ship's rail.[106] The court of first instance also placed the blame on the Argentine buyer for returning the whole shipment back to the port of dispatch despite the objections made by the German seller, and for failing to request a second inspection allowed under Argentine customs regulations.[107] By shipping the goods back to the seller, the latter had missed the opportunity to verify whether the allegation of nonconformity was correct.[page 239]

The rationale of the trial court for allocating the risk of loss was based on the C & F clause and Article 472 of the Argentine Commercial Code.[108] As interpreted by courts and scholarly doctrine in Argentina, the risk of loss under Article 472 of the Commercial Code is shifted to the buyer upon delivery (tradición) of the goods to the carrier, the buyer being bound to pay the price unless he establishes that the goods were defective before the shipment.[109] However, since the seller alleged the application of the CISG to the contract, the trial court referred to Article 31(a) of the Convention to indicate that whenever the sale involves the carriage of the goods, the issue of nonconformity must be settled at the time the goods are handed over by the seller to the first carrier.[110] Since the risk of loss passed to the buyer at that point in time,[111] under the CISG Bedial was bound to pay the price unless he could establish that the alleged loss or damage took place before the goods were handed over to the first carrier. The appellate court affirmed on the ground that Bedial had failed to establish, as required by Article 66 of the CISG, that the alleged damage to the goods was "due to an act or omission" of the seller.[112]

a. Inapplicability of CISG ratione temporis

According to the facts supplied in the reported opinion, the contract of sale was concluded on or about February, 1987, that is, almost a year before the CISG came into force in Argentina and four years before it came into force in Germany.[113] Yet the inapplicabillty of the CISG to this case went unnoticed by the trial and appellate courts.[114] It is noteworthy that the Bedial case was decided by the same panel of the court of appeals [page 240] that four years earlier, in the Quilmes Combustibles case, held that the CISG was not applicable to a contract concluded before it came into force.[115]

Assuming, for the sake of argument, that the CISG were to apply to this case, the analysis of the transfer of risk made by the trial court appears to be correct. However, in a contract where the parties had expressly adopted trade terms such as "C & F," the rules of the CISG on transfer of risk add little, if anything, to a determination as to who should bear the risk of loss. According to a general understanding of those terms, the buyer bears "all risk of loss or damage to the goods from the time the goods have passed the ship's rail at the port of shipment."[116] Under the "C & F" clause (without insurance) it was the buyer's obligation to procure marine insurance against the risk of loss of or damage to the goods during the transportation from Hong-Kong to Buenos Aires. The judgment of the trial court reveals that Bedial had contracted insurance, noting in passing that the fact of contracting such insurance provided an indication "that the insured (Bedial) was aware that the risk of loss during the carriage was his."[117] This assumption is incorrect, because contracting insurance does not control who bears the risk of loss. Indeed, if the contract had been concluded "CIF" rather than "C & F," the fact that Müggenburg had contracted insurance would not have displaced the transfer of the risk to Bedial after the goods were shipped.

In the absence of a choice of law clause in the contract, and assuming that Argentine courts have jurisdiction to entertain this case,[118] the law applicable to this contract had to be determined according to Argentine rules of private international law. However, since the issue of transfer of risk is determined by the "C & F" clause, an Argentine court would have enforced that clause as the law chosen by the parties.[119] Regardless of the "C & F" clause, the risk of loss under Argentine law [page 241] passes to the buyer at time of the transfer of ownership, whose operative act is the manual delivery of the goods from the transferor to the transferee.[120] If the contract of sale involves carriage of the goods, Argentine commentators agree that the transfer of ownership, and the act of delivery, takes place at the time the goods are handed over to the first carrier.[121] Accordingly, the result of this case would not have changed if it would have been decided on the basis of the trade terms agreed upon by the parties or the rules on transfer of risk provided for by the CISG or Argentine law.

b. Nonconformity and Right to Inspect

The decision in Bedial proceeded on the assumption that the goods did not conform to the contract specifications, focusing instead on who should bear the loss. It should be recalled that the German seller had entrusted the determination of the quantity and quality of the goods to an agency of the Chinese government, which issued an inspection certificate that became part of the documentary sales transaction. Unless agreed otherwise, the pre-shipment inspection arranged by the seller is not binding on the buyer, who retains the right -- actually, the obligation -- to examine the goods, or to "cause them to be examined," at the point of destination.[122] Regardless of the condition of the goods at the time of loading, what is important for the buyer is to receive them in sound condition at destination, hence the buyer's insistence on inspection upon arrival. However, after the analysis of a sample of the goods undertaken by the customs authorities in Buenos Aires showed lack of conformity, the Argentine buyer proceeded to destroy that part of the cargo, rejected the goods by sending the whole shipment back to the seller, and communicated to the seller its intention to avoid the contract. A better way for the buyer to preserve his rights under the contract would have been to give prompt notice of the nonconformity revealed in the sample inspection,[123] while enabling the seller or its representative to attend a "contradictory test" of the goods. Rather than destroying the sampled goods and incurring the uneconomical cost of shipping the remaining part of the cargo back to the seller, what the buyer should have done is to provide the seller with [page 242] reasonable advance notice in order to allow him to be present at the "contradictory" inspection of the goods.

CONCLUSION

Ten years after the Convention entered into force, the Americas continue to lag behind Europe in the quest for a uniform regime of international sales. This is consistent with the rapid pace of legal harmonization among the members of the European Union, in comparison with the more cautious path taken by the countries of the Western Hemisphere. However, it is to be expected that the increasing consolidation of subregional trade compacts in the Americas may fuel the ratification of the CISG by additional countries. NAFTA has already incorporated the CISG as uniform law, but only Argentina has ratified the Convention within the ambit of MERCOSUR; the ratification of the CISG by a major trading partner such as Brazil, is likely to encourage the other members of MERCOSUR, but there are no indications that this is likely to happen in the near future.[124]

Speculation about the slow process of ratification is not useful to explain the scarcity of judicial decisions on the CISG. None of the five Latin American countries that ratified the Convention availed themselves of the reservation under Article 95, yet in none of the reported cases have the courts resorted to paragraph (b) of Article 1(1) of the CISG in order to apply the Convention through the forum's own law or by virtue of the law of another Contracting State. As shown by the cases previously discussed, the application of the CISG in Argentina and Mexico came largely by virtue of Article 1(1)(a). In two of the Argentine cases (Quilmes Combustibles and Inta) the foreign exporter had included a choice-of-forum clause in a standard form, without any reference to the applicable law. There are reasons to speculate that a U.S. party will insist on adopting Article 2 of the UCC as the governing law to an international sales contract, but it is less likely that a contracting party in Latin America would insist on or succeed in adopting its domestic law as governing. Moreover, it is not possible to discern in any trade sector of Latin American business, a pattern to exclude the application of the Convention altogether. [page 243]

Chile and Argentina entered the reservations permitted under Articles 12 and 96, opting out from the rule of consensualism or informality governing the formation, modification, or termination of a contract.[125] Thus, whenever any of the contracting parties has its place of business in Argentina or Chile, the determination of contractual formalities will be left to the domestic law that is applicable pursuant to the forum's rules of private international law. The reservation allowed by Article 96 intends to accommodate the Convention to a Contracting State whose law requires a mandatory written form for contracts of the sale of goods. Yet, whereas Chilean law openly admits the informality principle in commercial contracts, the requirement of a written form in Argentina is not established as an element of validity (ad validitatem) but for evidentiary purposes only (ad probationem). Thus, Argentine law admits a commercial invoice or any other "commencement of written proof" as evidence of the contract.[126] It is somewhat comforting that when the Argentine seller invoked the reservation of Article 96 in the La Costeña case, the Mexican tribunal held that such a reservation does not make indispensable a formal and elaborate written contract. The same conclusion would have been reached by an Argentine court applying Argentine domestic law.


FOOTNOTES

* Adjunct Professor of Law, Columbia University, Senior Research Scholar, Parker School of Foreign and Comparative Law.

The bracket phrase page followed by a number is used to identify the page number of the original publication.

1. United Nations Convention on Contracts for the International Sale of goods, Apr. 11, 1980, art. 1(1) S. Treaty Doc. No. 98-9 (1983), 19 I.L.M. 668 (1980) [hereinafter "CISG" or "Convention"] (entered into force on Jan. 1, 1988), available in 15 U.S.C.A. app. at 49 (West Supp. 1996), 52 Fed. Reg. 6262-80 7737 (1987), U.N. Doc. A/Conf. 97/18 (1980). As of June 1997, the date of the CISG's entry into force in these five countries is as follows: Argentina (1 Jan. 1988), Chile (1 Mar. 1991), Cuba (1 Dec. 1995), Ecuador (1 Feb. 1993), and Mexico (1 Jan. 1989). See Journal of Law and Commerce CISG Contracting States and Declarations Table, 16 J.L. & Com. 371 (1997).

2. See Const. Arg., arts. 31, 75.22 (Arg.); Mex. Const., art. 133.

3. Le que crea una Comisión para la Protección del Comercio Exterior de México, D.O., 31` de diciembre de 1956 (Mex.) [hereinafter Compromex] (established the Organic Law of Compromex).

4. Diario Oficial, 31 de diciembre de 1970 (Mex.) (establishing the IMCE, and Act of 31 Dec. 1976, which integrated Compromex with the IMCE).

5. See Legal Aspects of Trade With Mexico, in 1 Doing Business in Mexico 4.02 (1996).

6. See Compromex, supra note 3, art. 12.

7. Id. arts. 2.IV, 14.

8. Id.

9. See infra notes 13-21 and accompanying text.

10. See infra notes 22-49 and accompanying text.

11. See infra notes 91-123 and accompanying text.

12. See infra notes 82-90 and accompanying text.

13. Dictamen de la Comisión para la Protección del Comercio Exterior de México: Morales y/o Son Export, S.A., Dec. v. Nez Marketing, D.O. 27 de mayo de 1993 (Mex.), translated in 16 J.L. & Com. 363 (1997) [hereinafter Morales y/o San Export].

14. Id. at 364.

15. See CISG, supra note 1, art. 1(1)(a).

16. See Morales y/o Son Export, supra note 13, at 365; see also CISG, supra note 1, art. 11.

17. See CISG, supra note 1, arts. 19, 62.

18. See Morales y/o Son Export, supra note 13, at 366.

19. See CISG, supra note 1, art. 81(2).

20. See id. art. 63(1).

21. See id. arts. 63(2), 78.

22. Conservas La Costeña, S.A. v. Lanin San Luis S.A., Agruindustrial Santa Adela, S.A., D.O., 16 de julio de 1996 (Mex.), translated in 17 J.L. & Com. 427 (1998) [hereinafter La Costeña].

23. See La Costeña, supra note 22, I(1) of the procedural history (La Costeña claimed that the canned fruit was sold "FOB/buyer's plant," yet Compromex's recommendation states that the term of the contract was "FOB/any Chilean port."). Compare id., with Compromex, supra note 3, VII of the legal reasoning (In the opinion of Compromex, however, this discrepancy was irrelevant to determine liability for nonconformity of the goods).

24. See La Costeña, supra note 22, I.

25. Compare La Costeña, supra note 22, I(2), with V(3) of the procedural history.

26. See La Costeña, supra note 22, I.

27. See id. II(6)(d).

28. See id. V of the legal reasoning.

29. See id. IV, VIII of the procedural history.

30. See id. V(3).

31. See La Costeña, supra note 22, V(4) of the procedural history.

32. See id. V(5).

33. See id. V(7), (8).

34. See id. V(10).

35. See id. V(7).

36. See La Costeña, supra note 22, VI of the procedural history.

37. See id. I of the legal reasoning.

38. Id. III.

39. Id. IX.

40. See id. VII-VIII.

41. See La Costeña, supra note 22, VI of the legal reasoning.

42. See CISG, supra note 1, art. 7(1).

43. See La Costeña, supra note 22, V-VI.

44. See id. I(1) of the procedural history.

45. See id. VI(6).

46. See CISG, supra note 1, arts. 66-70.

47. See La Costeña, supra note 22, VII of the legal reasoning. See also CISG, supra note 1, art. 36(1).

48. See generally La Costeña, supra note 22.

49. See La Costeña, supra note 22, 5 of the recommendation.

50. See CISG, supra note 1, art. 96.

51. Id. art. 12; see also id. arts. 11, 29.

52. See id. art. 11.

53. See id. art. 29(2).

54. Id. art. 96.

55. See Cód. Com., art. 128 (Chilean Commercial Code) ("Unless the law requires a notarial act (escritura pública), testimonial proof is admissible in commercial transactions regardless of the amount of the obligation sought to be proved.").

56. See Cód. Com., art. 209 (Argentinean Commercial Code).

"Unless expressly provided otherwise in this code, testimonial proof shall be admitted only in contracts whose value does not exceed two hundred strong pesos (doscientos pesos fuertes). In contracts exceeding this amount, testimonial proof shall be admitted only upon commencement of written proof. Any document, public or private, emanating from the opponent or from any party interested in contesting the existence of the contract, or who would be interested in contesting it if it were alive, shall be deemed commencement of written proof." Id. art. 209.

Compare id. art. 209, with Cód. Com., art. 168 (Ecuadorean Commercial Code) ("Unless otherwise provided by law, testimonial proof shall be admitted in commercial transactions (negocios mercantiles) regardless of the amount of the obligation sought to be proved, even in the absence of a commencement of written proof.").

57. See CISG, supra note 1, art. 96.

58. See id. art. 38.

59. See id. art. 39.

60. See id. art. 39(1).

61. Id. art. 38(1) (requiring the examination of goods to be made "within as short a period as is practicable"). Several decisions rendered by German courts indicate that the expression "as short . . .as is practicable" actually means what it says. See, e.g., Amtsgericht Riedlingen, UNILEX No. 2 C 395/93 (Oct. 21, 1996) (GE) (examination must be made within three days of delivery and notice of lack of conformity must be sent within the next three days); Landgericht Düsseldorf, UNILEX No. 31 O 231/94 (June 23, 1996) (GE) (stating that the time for examination of the goods was limited to a few working days); Landgericht Berlin, UNILEX No. 99 O 292/92 (Sept. 16, 1992), (GE) (notice of lack of conformity sent two months after delivery of the goods is deemed too late). Of course, the nature of the goods, the type of defects involved, and other circumstances of the case are relevant in assessing the timeliness of the buyer's examination of the goods and of the sending of the notice of nonconformity.

62. CISG, supra note 1, art. 39(1), provides that if the goods are not conforming, the buyer loses the right to rely on a lack of conformity unless he gives notice of it to the seller, specifying the nature of the lack of conformity, "within a reasonable time" after the buyer has discovered or ought to have discovered the lack of conformity. It has been held that the notice may be given in any form, even by telephone. See Landgericht Stuttgart, UNILEX 3 kfHO 97/89 (Aug. 31, 1989) (GE), reprinted in Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) (1990), No. 5 [317] (GE). The nature of the goods, as well as the apparent or manifest (as opposed to hidden or latent) nature of the defects have been deemed crucial for determining the dies a quo of the notice period. Thus, in a case involving the sale of frozen cheese which the buyer alleged to have contained maggots, a Dutch court held that it was reasonable to expect the buyer to give notice of nonconformity within an extremely brief period. See Arrondissementsrechtbank Roermond, UNILEX No. 900336 (Dec. 19, 1991) (Neth), reprinted in Nederlands International Privaatrecht (NIPR) (1994), No. 394 [665-667] (Neth). A Swiss court held that notice of apparent defects in pieces of furniture bought by a merchant should have been given upon examining the goods on delivery. See Pretura di Locarno-Campagna, UNILEX No. 6252 (Apr. 27, 1992) (Switz.). In contrast, while assessing the timeliness of a notice of lack of conformity in a contract for the sale of engines, a German court held that the buyer ought to be given sufficient time to install and ascertain the correct functioning of the machinery. See Landgericht Düsseldorf, UNILEX No. 31 O 231/94 (June 23, 1996) (GE).

63. See CISG, supra note 1, art. 40. See also ICC Arbitration case, UNILEX No. 5713 of 1989 reprinted in Yearbook Comm. Arb'n XV 70 (Albert Jan van den Berg ed., Kluwer 1990) (stating as dictum that according to Article 40 of CISG, the seller may not invoke the buyer's failure to comply with the terms of Articles 38 and 39, as there was proof that the seller knew that the goods did not conform to the contract specifications).

64. See also Bundesgerichtshof [BGH] [Supreme Court] VII ZR 159/94 (F.R.G.) (denying the buyer's right to avoid the contract on account of nonconformity of the packaging on the ground that the notice of nonconformity was untimely).

65. CISG, supra note 1, art. 35.

66. See La Costeña, supra note 22.

67. See CISG, supra note 1, art. 35(2)(c).

68. See id. art. 8.

69. See La Costeña, supra note 22, VI of the legal reasoning ("It is obvious that the damage to the goods was due in large measure to the fact that the containers and carton boxes were inadequate, especially if we take into account that maritime transportation was used, of which the respondents were fully aware. Therefore, the respondents were bound to ship the goods using containers and packaging suitable to protect and preserve the goods during transport.").

70. CISG, supra note 1, art. 35(2)(d).

71. Id. art. 25.

72. See id. arts. 46-51. See also ICC Arbitration case, UNILEX No. 6653 of 1993 (Paris), reprinted in Journal du Droit International (1993) 1040-1047 (recognizing the buyer's right to partial avoidance for nonconformity when one fourth of the steel bars delivered by the seller weighed more than the 5% tolerance expressly agreed by the parties); ICC Arbitration case, UNILEX No. 7660, ___ 1994 (Paris), reprinted in ICC International Court of Arbitration Bulletin (Nov. 1995) 69-71 (recognizing the buyer's right to partial avoidance when the nonconformity affected only one of three separate pieces of the purchased equipment).

73. See generally Oberlandesgericht Frankfurt am Main, UNILEX No. 5 U 15/93 (Jan. 18, 1994) (GE), reprinted in Recht der Internationalen Wirtschaft (RIW) 1994, 240-41, translated in 14 J.L. Com. 201 (1995). In this case, a German buyer complained that shoes bought from an Italian exporter were made with leather of a different quality from that agreed in the contract. See id. The court held that such lack of conformity did not constitute a fundamental breach, because the defects did not prevent the buyer from reselling the shoes. See id. In contrast, in another case the sale of clothes which shrank by 10%-205 when washed was found to constitute a lack of conformity amounting to a fundamental breach. Landgericht Landshut, UNILEX No. 54 O 644/94 (Apr. 5, 1995) (GE). See also Oberlandsgericht Düsseldorf, UNILEX No. 54 O 644/94 (Apr. 5, 1995) (GE). See also Oberlandsgericht Düsseldorf, UNILEX No. 6 U 119/93 (Feb. 10, 1994) (GE), reprinted in Neue Juristische Wochenschrift-Rechtsprechungs-Report (NJW-RR) 1994, 506-507.

74. CISG, supra note 1, arts. 50-51.

75. See id. art. 47.

76. See id. art. 46.2.

77. See id. arts. 26, 49.1.

78. See id. arts. 45(b), 74-77.

79. See La Costeña, supra note 22.

80. See La Costeña, supra note 22, I(2) of the procedural history.

81. See CISG, supra note 1, art. 84. for a discussion of the different criteria followed by national courts in calculating the interest owed on a sum that is in arrears, see Volker Behr, The Sales Convention in Europe: From Problems in Drafting to Problems in Practice, 17 J.L. & Com. 263 (1998).

82. Quilmes Combustibles S.A. v. Vigan S.A., CN Com. (National Court of Appeals on Commercial Matters, Division C) (Arg. 1991); published in Revista de Derecho Bancario y de la Actividad Financiera 626-30 (1991) (excerpts) [hereinafter Revista de Derecho Bancario).

83. See Revista de Derecho Bancario, supra note 82, at 626-30.

84. See CISG, supra note 1, art. 96; Revista de Derecho Bancario, supra note 82, at 626-30.

85. Revista de Derecho Bancario, supra note 82, at 626-30.

86. See id. at 630.

87. See Articles 1215 and 1216 of the Código Civil [Cod. Civ.] (Argentinean Civil Code) which point to the place where the contract is to be performed (lex loci solutionis) as a general basis of jurisdiction, together with the defendant's domicile. Article 1215 states, "In all cases of contracts to be performed in Argentina, the defendant may be sued before Argentine courts even if not residing or domiciled there." Article 1216 states, "If the defendant were to reside or to be domiciled in Argentina and the contract were to be performed outside Argentina, the suit may be brought before the courts of the defendant's domicile, or before the courts of the place where the contract is to be performed, even though the defendant is not be found there." In the context of determining the bases for international jurisdiction of Argentine courts, Argentine courts and scholarly doctrine explain that "place of performance" is any of the places where any of the contractual obligations are to be performed. See Werner Goldschmidt, Derecho Internacional Privado 209 (5th ed. 1985); 1 Antonio Boggiano, Derecho Internacional Privado 214-15 (2d ed. 1983); Espósito e hijos v. Jocqueviel, CN Com. (National Court of Appeals in commercial matters, Division E) (Arg. 1985).

88. Revista de Derecho Bancario, supra note 82, at 629-30.

89. Id. at 628.

90. See id. at 630 ("The judgment on appeal is affirmed because the grievances of the appellant have been adequately addressed in the opinion of the Procurator, whose reasons are shared by this Court and are deemed reproduced herein.").

91. Inta S.A. v. MCS Officina Meccanica S.p.A., CN Com. (National Court of Appeals on Commercial Matters, Division E) (Arg. 1993), reprinted in El Derecho 32 (1994) No. 8483, 25 April 1994, 3-7 - 157 (1994) 129-130, 131-137 (with comment by Jorge Enrique Martorell discussing the enforceability of choice-of-forum clauses, but without addressing the applicability of the CISG).

92. See id.

93. See Argentine Civil Code, supra note 87, arts. 1215, 1216.

94. See supra notes 82-90 and accompanying text.

95. See CISG, supra note 1, art. 4(a).

96. See id. art. 18(1).

97. See id.

98. See Inta S.A. v. MCS Officina Meccanica S.p.A., CN Com. (Arg. 1993), reprinted in El Derecho 32 (1994) No. 8483, 25 Apr. 1994.

99. See CISG, supra note 1, art. 19(3).

100. See id.

101. Bedial S.A. v. Paul Muggenburg and Co. GmbH, CN Com. (National Court of Appeals on Commercial Matters, Division C) (Arg. 1995), reprinted in El Derecho (Buenos Aires) No. 9110 (___ October 1996) 1-9 (with comment by Carolina D. Iud).

102. See id. According to the facts summarized by the court of first instance, those certificates were: (1) Phitosanitary Certificate of Fitness for Consumption (Certificado Fitosanitario de Plena Atitud para el Consumo), issued by the Exporting Agency of the People's Republic of China on 30 J___ 1987; (2) Certificate of Origin issued on June 20, 1987, by the Shangai's bureau of Inspection of Products for Export and Import; and (3) Inspection Certificate issued on the same day by the same agency attesting as to the quality of the dried mushrooms and their fitness for human consumption. See id.

103. See id. The government agency which undertook this chemical analysis pertained to the Ministry of Health and Social Welfare of Argentina (Dirección Nacional de Química. Subsecretaría de Regulación y Control. Secretaría de Salud, Ministerio de Salud y Acción Social de la Nación). See id.

104. Compare Argentine Commercial Code, infra note 108, art. 472 with CISG, supra note 1, arts. 67, 68.

105. See id.

106. See id.

107. Resolution No. 2200/1982 of the National Customs Administration (Administración General de Aduanas).

108. Article 472 of the Código de Comercio [Cód. Com.] (Argentine Commercial Code) states:

"If the goods sold must be delivered in bundles or crates covered in any manner impeding their examination, the buyer may claim any loss, shortage in weight or quantity and any deficiency in quality within three days as of the date of delivery; establishing in the first case that the extremes or ends of the bundled goods have not been tampered with and, in the second case, that the deficiency in quality is not due to force majeure nor could have been fraudulently caused while the goods were under his care. In any event, the seller may compel the buyer to make a thorough inspection of the quantity and quality of the goods at the time they are handed over to the buyer, in which case no claim by the buyer shall be accepted after delivery."

109. Dalca Industria e Comercio Limitada v. Shebel S.A., CN Com. (National Court of Appeals on Commercial Matters, Division D) (Arg. 1986).

110. See CISG, supra note 1, art. 31(a).

111. See id. arts. 36(1), 67(1).

112. See id. art. 66.

113. See generally id. art. 100(2); see also CISG Contracting States and Declarations Table, 17 J.L. & Com. 449 (1998).

114. See generally CISG, supra note 1, art. 100(2); Iud, supra note 101.

115. See Bedial S.A. v. Paul Muggenburg and Co. GmbH, CN Com. (Arg. 1995), reprinted in El Derecho (Buenos Aires) No. 9110 (21 October 1996) 1-9. See also Revista de Derecho Bancario, supra note 82.

116. INCOTERMS 1990, Pub. Nr. 460, CIF, B.5.

117. Bedial S.A. v. Paul Muggenburg and Co. GmbH, CN Com. (Arg. 1995), reprinted in El Derecho (Buenos Aires) No. 9110 (21 October 1996) 1-9.

118. The jurisdiction of the Argentine courts stems from Article 6(6) of the Código de Procedimientos Civil Y Comercial [Cód. Proc. Civ.] (Argentine Code of Civil Procedure), according to which the courts of the place where the summary proceeding (juicio ejecutivo) took place are competent to conduct the ordinary proceedings (juicio ordinario) brought by the defendant.

119. Perú v. Sifar, Corte Suprena de Justica de la Nacion (Supreme Court of Argentina) (Dec. 10, 1956).

120. Códig civil [Cód Civ.] art. 577 (Argentine Civil Code) ("Before delivery (tradición) of the thing, the obligee does not acquire a right in rem over the same.").

121. 2 Carlos Zavala Rodríguez, Código de Comercio Anotado 174, at 174 (1972); 2 Raymundo L. Fernández, Código de Comercio Anotado 330-31 (1948); 2 Luis Muñoz, Contratos, in Derecho Comercial 456, at 369 (1960).

122. See CISG, supra note 1, art. 38(2).

123. See id. art. 39.

124. See Patricia Galindo da Fonseca, O Brasil perante uma nova perspectiva de direito mercantil internacional (manuscript on file with the author and incorporated into the CISG database compiled by the Institute of Commercial Law of Pace University, http://www.uff.br/cisgbrasil/.

125. See CISG, supra note 1, arts. 12, 96.

126. See, e.g., Florio y Cía, S.A. v. Valley Evaporating Co., S.A., CN Com. (National Court of Appeals on Commercial Matters, Division C) (Aug. 1988).


Pace Law School Institute of International Commercial Law - Last updated January 14, 2000
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