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CISG CASE PRESENTATION

France 29 March 1995 Appellate Court Grenoble (Cámara Agraria v. André Margaron) [translation available]
[Cite as: http://cisgw3.law.pace.edu/cases/950329f1.html]

Primary source(s) for case presentation: Case text


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Case identification

DATE OF DECISION: 19950329 (29 March 1995)

JURISDICTION: France

TRIBUNAL: CA Grenoble [CA = Cour d'appel = Appeal Court]

JUDGE(S): Beraudo (président); Baumet, Fallet (conseillers); Combe (greffier)

CASE NUMBER/DOCKET NUMBER: 93/2821

CASE NAME: Société Cámara Agraria Provincial de Guipuzcoa v. André Margaron

CASE HISTORY: 1st instance Tribunal de Grande Instance de Grenoble 11 March 1993 [reversed in part] [CISG overlooked]

SELLER'S COUNTRY: France (plaintiff)

BUYER'S COUNTRY: Spain (defendant)

GOODS INVOLVED: Corn


Case abstract

FRANCE: Court of Appeal of Grenoble 29 March 1995

Case law on UNCITRAL texts (CLOUT) abstract no. 153

Reproduced with permission from UNCITRAL

A French seller and a Spanish buyer concluded a number of contracts for the sale of maize. All the deliveries were made, but the buyer did not pay the full price. The seller brought an action against the buyer before a French court, demanding payment of the full price and interest accruing.

In the first instance, the Regional Court of Grenoble, without invoking CISG, ordered the buyer to pay the full price, but found that the seller was not entitled to claim interest.

The buyer lodged an appeal, objecting that the French court did not have jurisdiction and demanding a price reduction on the basis of an agreement emerging from a meeting of the parties after conclusion of the contract.

The Court of Appeal found that CISG was applicable since the contract in question was a contract for the international sale of goods concluded between two parties established in different States Parties to CISG.

In order to determine where the price was payable, the Court of Appeal cited article 57(1) and article 31(a) and (c) in their entirety, and accordingly found that the obligation to pay the price should be performed within the jurisdiction of the Regional Court of Grenoble, whether or not the payment had been made subject to delivery of the goods.

Regarding the price reduction requested by the buyer, the court found that, on the basis of article 29 CISG, a contract could be modified purely by agreement of the parties. However, it also found that the modification of the purchase price could not, as in the case in point, result from the general mood of a meeting.

The seller's entitlement to payment of the price and interest on arrears was recognized. The Court of Appeal made reference for this purpose to article 78 CISG and noted that, unlike under French law, the serving of notice was not necessary. Finally, the court ordered the capitalization of the interest requested by the buyer.

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Classification of issues present

APPLICATION OF CISG: Yes [Article 1(1)(a)]

APPLICABLE CISG PROVISIONS AND ISSUES

Key CISG provisions at issue: Articles 29 ; 31(a) and 31(c) ; 57(1) ; 78

Classification of issues using UNCITRAL classification code numbers:

29A [Parties by agreement may modify or terminate the contract];

31A1 ; 31C1 [Place for delivery: contracts involving carriage of goods (obligation to hand goods to first carrier); Other cases (goods at buyer's disposal at seller's place of business];

57A ; 57B [Place for payment; in absence of agreement, payment at seller's place of business; Agreement for payment in exchange for goods or documents];

78A [Interest on delay in receiving price or any other sum in arrears]

Descriptors: Modification of contract ; Payment, place of ; Delivery ; Jurisdiction ; Interest

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Editorial remarks

Excerpt from Larry A. DiMatteo et al., 34 Northwestern Journal of International Law & Business (Winter 2004) 299-440 at 332-333

"[The] French court considered affidavits from the buyers' witnesses who were present at a meeting to determine whether the parties had concluded a valid price modification. Because the affidavits did not mention the seller's agreement to the price, however, the court held that 'the modification of a sale price cannot result from the general environment of a meeting'."

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Citations to other abstracts, case texts and commentaries

CITATIONS TO OTHER ABSTRACTS OF DECISION

English: Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=82&step=Abstract>

Italian: Diritto del Commercio Internazionale 1995, 464-465 No. 87

Polish: Hermanowski/Jastrzebski, Konwencja Narodow Zjednoczonych o umowach miedzynarodowej sprzedazy towarow (Konwencja wiedenska) - Komentarz (1997) 288-289

CITATIONS TO TEXT OF DECISION

Original language (French): CISG - France website ("http://Witz.jura.uni-sb.de/CISG/decisions/290395v.htm"); CISG online website ("http://www.jura.uni-freiburg.de/ipr1/cisg/urteile/text/156.htm"); Journal du Droit International 1995, 964-969; Unilex database <http://www.unilex.info/case.cfm?pid=1&do=case&id=82&step=FullText>

Translation (English): Text presented below

CITATIONS TO COMMENTS ON DECISION

English: Honnold, Uniform Law for International Sales (1999) 241 [Art. 31]; Behr, 17 Journal of Law and Commerce (1998) 266-288 [abstracts and comments on 29 interest rulings from 10 countries (this case presented at 283)]; Koneru, 6 Minnesota Journal of Global Trade (1997) 105 [145 n. 178]; Bernstein & Lookofsky, Understanding the CISG in Europe, 2d ed., Kluwer (2003) §: 1-4 n.41; Liu Chengwei, Recovery of interest (November 2003) n.93; Article 78 and rate of interest: Mazzotta, Endless disagreement among commentators, much less among courts (2004) [citing this case and 275 other court and arbitral rulings]; [2005] Schlechtriem & Schwenzer ed., Commentary on UN Convention on International Sale of Goods, 2d (English) ed., Oxford University Press, Art. 29 para. 2 Art. 57 para. 11a

French: Ph. Kahn, Journal du Droit International (1995) 969-971; Witz, Emptio-Venditio Internationales, Neumayer ed. (Basel 1997) 442, 446

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Case text (English translation) [second draft]

Queen Mary Case Translation Programme

Court of Appeals of Grenoble 29 March 1995
Camara Agraria Provincial de Guipuzcoa v. M. André Margaron

Translation [*] by Charles Sant 'Elia [**]

R.G. no. 93/2821

REPUBLIC OF FRANCE
In the name of the French People

Court decision of Wednesday, 29 March 1995

PARTIES AND COUNSEL. Camara Agraria Provincial de Guipuzcoa, whose principal office is Calle Catalina de Erausso no. 18, San Sebastian (Spain) 20010, [buyer], Appelant against a judgment rendered by the County Court [Court of First Instance] of Grenoble 11 March 1993, following notice of appeal of 11 June 1993. Represented by SCP Calas et Balayn, Solicitors, through Marion-Fondaneche Danièle, Barrister, and Mr. Margaron André, born 13 November 1933, at Montrigaud, residing at "Les Pins" à Roybon (38940) v. Appellee, [seller], represented by SCP Perret et Pougnand, Solicitors, through Dunner, Barrister.

COMPOSITION OF COURT. During argument and deliberation: Mr. Beraudo, Président; Mr. Baumet, Conseiller; Mr. Fallet, Conseiller. Assisted during the argument by Mrs. Combe, Court Clerk. ARGUMENTS. At the public hearing on 1 March 1995, the Solicitors were heard on their briefs, and the Barristers on their pleas. Then the ruling was entered at the hearing of Wednesday 29 March 1995.

1. FACTS AND PLEADINGS

      1.1 [Facts of the case and decision of the Court of First Instance]

Whereas [buyer] concluded in August, September and October 1991 with [seller], Mr. André Margaron, farmer in Roybon (38940) [France], some sales contracts for 10,000 tons of corn intended for livestock feed;

That it is an established fact that the ordered goods were delivered to [buyer];

That [seller] sued [buyer] for payment of the sum of f [French francs] 111,094.29, corresponding to the total sum of four invoices, increased by f 9,268.79, as late fees;

Whereas the Court of First Instance declared itself competent to hear the suit based on the application of Article 5(1) of the Brussels Convention [EC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (Brussels 1968)], the obligation to pay was performed at Grenoble (France), on an open credit at the S.A. Lyonnaise de Banque;

That [buyer] was ordered to pay f 101,825.50, the sum of the principal amount of [seller]'s invoice; That the Court of First Instance rejected the [seller]'s demand for payment of interest and awarded f 10,000 under Article 700 of the New Code of Civil Procedure;

      1.2 [Buyer's position]

Whereas, before the Appellate Court, [buyer] argues that [the Appellate Court]:

-   Grant [buyer]'s appeal;
Declare [buyer]'s appeal well founded;
-   Hold that the Court of First Instance should have declined its jurisdiction competence in favor of the court of Guipuzcoa (Spain); and additionally
Reverse the appealed decision;
-   Order [seller] to pay the sum of f 10,000 pursuant to the application of Article 700 of the New Code of Civil Procedure;
Order [seller] to pay the entire costs of [buyer's solicitors].

Regarding the jurisdiction of the Court of First Instance, [buyer] asserts that "even if the settlements were done through the S.A. Lyonnaise de Banque in Grenoble, the obligation which serves as basis for the payment is the delivery contract which was performed in Spain"; That the Court of First Instance should have declined its jurisdiction competence in favor of the court of Guipuzcoa, by application of Article 10(5) of the Spanish Civil Code;

On the merits of the claim, [buyer] asserts, essentially, that [seller] negotiated directly in Navarre, for the same corn, at the price of f 0.14 per kg, rather than f 0.16 and that, following a meeting with [seller], held on 26 September 1991, it was decided that [buyer] would benefit from the lesser price;

      1.3 [Seller's position]

Whereas [seller] requests that the Appellate Court:

-   Dismiss the appeal;
Uphold the appealed decision; and additionally,
-   Hold that the interest be compounded, pursuant to the application of Article 1154 of the Civil Code;
Order the [buyer] to pay f 10,000 on the basis of Article 700 of the New Code of Civil Procedure, for appellate costs.

As to jurisdiction, the [seller] asserts that the price was payable in Grenoble and that the seller performed his obligation to deliver in France;

On the merits, [seller] contests the agreement alleged by [buyer] and indicates that "the appellant has neither returned the last invoices nor explained its settlement of accounts, nor given signs of life for two years (briefs of October 1993)."

2. APPELLATE COURT'S REASONING

On this, the Appellate Court,

      2.1 [Jurisdiction competence of the French court]

Whereas it is an established fact between the parties, the Brussels Convention of 27 September 1968, such as modified on 26 May 1989 at Saint-Sebastien, entered into force on 1 February 1991, for Spain and France, is applicable to the determination of the competent jurisdiction;

Whereas, at the time of the hearing, the Appellate Court indicated to the parties that the Vienna Convention of 11 April 1980 [CISG}, on the international sale of goods, entered into force for Spain on 1 August 1991, was applicable to the merits of the suit and that its provisions on the place of payment has a bearing on the determination of jurisdiction;

That the parties were invited to make known by briefs to the Appellate Court, their assertions on the application of the CISG's provisions, before 15 March 1995; That it was made clear to them that their silence would be interpreted as waiving reliance on any grounds based on that Convention;

Whereas [buyer], in its brief of 14 March, asserted that the provisions of Article 57 CISG, on the payment at the seller's place of business or at the place of handing over the goods, lead to the jurisdiction of the court of Guipuzcoa.

      2.2 [Place of performance of buyer's obligation to make payment]

Whereas, as to jurisdiction, the determination of the place of performance of the obligation which serves as basis for the demand, provided by Article 5(1) of the Brussels Convention, in order to designate the court in which a party domiciled in another Contracting State may be sued, must be made according to the rules of the private international law of the forum;

Whereas, dealing with a contract for the international sale of goods, concluded between the contracting parties based in two different Contracting States to the CISG, it is proper to seek in that instrument where the performance of the obligation which serves as basis for the demand is effected;

Whereas the demand brought by [seller] is a demand for payment;

That Article 57(1) CISG provides as follows:

"If the buyer is not bound to pay the price at any other particular place, he must pay it to the seller: (a) at the seller's place of business; or (b) if the payment is to be made against the handing over of the goods or of documents, at the place where the handing over takes place."

That Article 31(a) and (c) CISG, applicable to the facts of the present case, provides that the seller's obligation to deliver is performed at [seller]'s place of business at the time of the conclusion of the contract, or by the handing the goods over to the first carrier for transmission to the buyer;

Whereas, consequently, [buyer]'s obligation to pay arose within the sphere of the jurisdiction of the Court of First Instance, whether or not the payment was subject to the delivery of the goods;

That in any case, in the absence of agreement between the parties that the payment or the delivery should take place in Guipuzcoa, the court of that city does not have jurisdiction;

Whereas, moreover, the provisions of Article 10(5) of the Spanish Civil Code, to which [buyer] refers, relate to legislative jurisdiction, not to judicial jurisdiction; That if there existed under Spanish law a rule of domestic jurisdiction or international jurisdiction contrary to the provisions of the Brussels Convention, these latter should prevail;

Whereas, consequently, the Court First Instance and, therefore, the Appellate Court of Grenoble have jurisdiction to hear the merits of the suit.

      2.3 [Merits of the case]

Whereas, on the merits of the debt owed to seller, it is an established fact that the sales contract between the parties was initially formed at a price of f 0.16 per kg of delivered goods;

That [buyer] seeks a reduction of the price to f 0.14;

That Article 29 CISG states that "a contract may be modified or terminated by the mere agreement of the parties";

That it is proper for the Court to determine whether there was an agreement between the parties on a modification of a principal term of the contract, such as the price;

That [buyer] produces the affidavits of a farmer and of a veterinary doctor who claim to have attended a meeting held with [seller] on 25 September 1991, at the premises of [buyer];

That this testimony indicates that it was decided (se acordo) [Spanish cited] that the price to be paid for the totality of the goods would be f 0.14 per kg; But no affidavit mentions in a precise manner, an agreement by [seller]; That the modification of a sale price can not result from the general environment of a meeting;

That [buyer] did not issue any letter confirming a possible future decision would have to be made as to a modification of the price;

That [buyer] does not produce any proof as to the going price in Navarre, which would have been the cause for the modification;

Just the opposite, [seller] produces some invoices stating a price of f 160 per ton from 30 September, 1 October, 2 October 1991, thus subsequent to the meeting alleged by [buyer], which were not the object of any challenge as to the manner of calculating their totals;

That furthermore, a payment of f 177,439.72 was made on 21 January 1992, by [buyer], who did not make any objection as to the manner of calculating the total;

That finally, a letter from [seller], dated 10 July 1992, complaining that the payment of the sums was late went unanswered;

Whereas, consequently, that the evidence in the file does not allow the Appellate Court to find an agreement by the parties on the modification of the price initially fixed and accepted by [buyer] up until 21 January 1992;

Whereas, as to the debt owed to [seller], the sum of f 101,825.50 sought by [seller] is not challenged in its total sum by [buyer], if the price of f 0.16 per kg is upheld; That it is thus proper to grant the claim.

      2.4 [Interest]

Whereas, as to the interest, that Article 78 CISG provides that the interest on overdue payments is owed when the debtor is in arrears; That, unlike French law, a formal request is not necessary; That it is proper to hold that the interest runs from the day after the date when [buyer] should have paid the corresponding invoice; Whereas, as to the compounding of the interest, it is proper to grant the demand, to be calculated from the date of the pleadings seeking it [interest claim] (2 May 1994), until one full year shall have run.

      2.5 [Cost associated with the appellate proceeding]

Whereas, on the demand for f 10,000 pursuant to Article 700 of the New Code of Civil Procedure, that it is proper to allow them.

3. APPELLATE COURT'S RULING

For these reasons, the Appellate Court:

Ruling publicly and against the appeal, after having deliberated pursuant to the law,

-   Decides that the Court of First Instance has jurisdiction to hear [seller]'s demand for payment, pursuant to the application of Article 5(1) of the Brussels Convention;
Partially affirms the appealed decision;
-   Orders [buyer] to pay [seller] f 101,825.50 in principal, plus interest on the overdue payments as of right, to be calculated from the day after the invoices should have been paid;
Decides that the interest will be compounded from 2 May 1994, until one full year shall have run;
-   Orders [buyer] to pay [seller] f 10,000 pursuant to Article 700 of the New Code of Civil Procedure;
Orders [buyer] to pay court costs.

DECLARED in public by Mr. Beraudo, Président, who has signed with Mrs. Combe, Court Clerk.


FOOTNOTES

* All translations should be verified by cross-checking against the original text. For purposes of this translation, Camara Agraria Provincial de Guipuzcoa, Defendant-Appellant of Spain is referred to as [buyer]; Mr. André Margaron, Plaintiff-Respondent of France is referred to as [seller]. Amounts in French currency (French francs) are indicated as [f].

** Charles Sant 'Elia has a B.A. in Political Science and Italian Literature from New York University and studied Political Science at the Universitá degli Studi di Firenze. He received his J.D. from Pace University School of Law and is admitted to the Bar of the States of New York and Connecticut. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia.

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Pace Law School Institute of International Commercial Law - Last updated August 8, 2005
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