Queen Mary Case Translation Programme
District Court (Tribunal Commercial) of Nivelles
S.A. Gantry v. Research Consulting Marketing
19 September 1995
Translation [*] by Julien Soupizet [**]
Translation edited by Thalia Kruger [***]
I. Object of the claim
The [buyer] seeks:
Main claim: Reduction of the purchase price of a line of continuous vulcanization machinery to an amount to be determined after expertise by the court and, provisionally, to the amount of the accounts already paid, i.e., the equivalent in Belgian francs of Sf 342,000 [Swiss francs], representing two-thirds of the sale price.
Alternative claim: If the expert considers that the machinery will never function, the [buyer] seeks avoidance of the contract of sale and restitution from the [seller] for the accounts paid (Sf 342,000), as well as compensation and judicial costs.
In both cases: to order that the [seller] should pay the [buyer] damages in the amount of ...
Ancillary, and before finding on the merit of the claims: Appointment of an expert to examine the machinery.
II. Facts of the case
The [buyer] manufactures streamlined rubber toughened by a sheet of steel, designed for ball bearings.
In June 1990, [buyer] approached the [seller] in order to find a process of continuous vulcanization.
The [seller] first suggested using a die-casting machine and a microwave oven. [Seller] only delivered the microwave oven since the [buyer] chose to keep the die-casting machine it already had.
The negotiations took place through numerous offers from the [seller] (5 October 1990, 12 March 1991, 14 June 1991, 1 July 1991 and 31 July 1991).
The last offer (31 July 1991) was accepted by the [buyer] (order of 9 September 1991).
The vulcanization machinery was sent on 9 April 1992 and was tested on 24 April 1992.
The [buyer] paid two-thirds of the price (upon ordering and on delivery).
Even after a number of tests, repairs and adaptations made with the cooperation of both parties, the performance of the machine was unsatisfactory. The parties disagreed on the causes of this: according to the [buyer] this was due to the defaults of the machine; according to the [seller] it was the inadequate choice of the rubber that was used.
III. Jurisdiction of the Belgian courts
[Seller's arguments]
The [seller] contested the jurisdiction of the Belgian courts, making the following arguments:
1. The contract is governed by the General Conditions of the "Association Suisse des Industriels en Machines" [standard terms of the "Swiss Association of Machinery Manufacturers"] which enable the jurisdiction of the courts of the seat of the seller and the application of Swiss law.
The [buyer] wrongly challenged the applicability of those standard terms on the basis of principles of Belgian law while [buyer] expressly admits that Swiss law, which recognizes the applicability of standard terms if they are expressly referred to, ruled the contractual relations of the parties.
2. The litigation cannot be brought before Belgian courts in application of the Berne Convention of 29 April 1959 (in the absence of a forum selection clause in favor of Belgian courts, the head office of the [seller] being situated in Switzerland).
3. The breached obligation which founds the claim (article 635 3° Code of Civil Procedure) is an obligation for payment and not an obligation for delivery of the machine. The place of payment of the price is determined by the law governing the contract, i.e., Swiss law.
Therefore, either based on the standard terms of the contract of sale or under the CISG, which is part of Swiss law, the place of payment is the seat of the seller, in this case Zürich, Switzerland.
[Buyer's arguments]
The [buyer] argues that Belgian courts have jurisdiction for the following reasons:
1. The contract was concluded according to the detailed order of [buyer] (which contained no reference to the standard terms), not the successive offers of the [seller]. Moreover, if those offers did make reference to the General Conditions of the "Association Suisse des Industriels en Machines" [V.S.M.General Conditions], they were not attached to the [seller's] offer and were not accepted by [buyer].
2. The Berne Convention is only concerned with recognition and execution of judicial decisions, not jurisdictional issues.
3. The obligation is an obligation to deliver and the [buyer's] claims relate to the designation of an expert and also request remedies for non-conformity of the delivered machine.
4. Swiss law governs the litigation, in accordance with article 3 of the 1955 Hague Convention on the Law Applicable to International Sale of Goods. However, Belgian law governs the issues related to the form and time-limits concerning the examination of the machine, which is in Belgium (art. 4 of the Hague Convention).
IV. The law
The parties agree on the fact that the contract is governed by Swiss law and the CISG has been ratified by Switzerland.
Concerning the jurisdiction of Belgian courts and without commenting on the merits, it appears that:
1. The [buyer] wrongly challenged the applicability of the standard terms on the basis of the principles of Belgian law. This is so because Swiss law [i.e., the CISG law of Switzerland] applies to the contract.
All the offers made by the [seller] made reference in bold letters to the V.S.M. General Conditions, including the last offer which was accepted by the [buyer] without any substantial modifications.
Therefore, on the basis of article 19(2) CISG, the contract has been formed following the conditions of the offer (which made reference to the standard terms) including all the modifications in the acceptance (which did not relate to the application of the standard terms).
Furthermore, on the basis of paragraphs (1) and (3) of article 8 CISG, the court considers that during the negotiations the [buyer] was aware or should have been aware of the V.S.M. General Conditions, to which all the offers from the [seller] made reference.
2. Even supposing that the V.S.M. General Conditions could not be called upon against the [buyer], the [buyer's] claim is, primarily, for the reduction of the price and, subordinately, for the avoidance of the contract of sale - not for the delivery of conforming goods - and further subordinately, for the nomination of an expert.
The obligation on which the claim is based is an obligation of payment, not an obligation of delivering conforming goods; thus, the court that has jurisdiction is the court of the place where the obligation has been performed, i.e., the main office of the seller, which is established in Zürich, Switzerland.
3. The [buyer] argues that the jurisdiction of the Belgian courts is based on article 4 of the Hague Convention of 1955, which states:
"In the absence of an express clause to the contrary, the domestic law of the country in which inspection of goods delivered pursuant to a sale is to take place shall apply in respect of the form in which and the periods within which the inspection must take place, the notifications concerning the inspection and the measures to be taken in case of refusal of the goods."
That text determines the form and time-limits within which the buyer should examine the goods and notify its reserves and it does not determine the law applicable to the eventual/possible appointment of an expert. It could not be applied in this case, even under the subsidiary claim of the [buyer] for the designation of an expert.
4. Finally, the [buyer] considers that Belgian courts would in any case have jurisdiction to rule on the expertise ruling based on article 10 of the Berne Convention of 29 April 1959, though it elsewhere rightly contests that this convention can be used to examine the jurisdiction of the Tribunal. This text states that, in the case of an emergency, provisional or conservatory measures could be requested from Belgian or Swiss authorities without prejudice to the court ruling on the merits.
However, the legal action is not aimed at the nomination of an expert in a summary procedure and emergency is not argued. It is an action on the merits in principal order looking for a price reduction and therefore article 10 of the Berne Convention does not apply.
It appears that the [seller] properly raised the absence of jurisdiction of the Belgian courts.
V. Ruling of the District Court
For these reasons, the District Court … declares that it does not have jurisdiction over the case; consequently the dispute should be heard before the Swiss courts in Zürich, Switzerland.
FOOTNOTES
* All translations should be verified by cross-checking against the original text. For purposes of this translation, the Plaintiff of Belgium is referred to as [buyer]; the Defendant of Switzerland is referred to as [seller]. Monetary amounts in Swiss francs are indicated by [Sf].
** Julien Soupizet, DEA international private law in Paris-II (Pathéon-Assas), actually in the Paris Bar School (until January 2004), was a member of Paris-II (Pathéon-Assas) during the 8th Moot. The second-iteration redaction of this translation was by Dr. John Felemegas of Australia. Go to Case Table of Contents
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