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Reproduced with permission from 14 Journal of Law and Commerce 209-215 (1995)

INTERPRETIVE DECISIONS APPLYING CISG

JOURNAL OF LAW & COMMERCE CASE II: COURT OF

APPEALS OF GRENOBLE, CHAMBRE DES URGENCES,[1] 16

JUNE 1993, 92/4223

TRANSLATED TEXT[2]

Between:

YTONG, a limited liability company [hereinafter YTONG LLC] whose registered office is at 14 avenue du 23 Novembre at 67305 Schiltigheim.

APPEALING from an ordonnance de référé[3] given by the President of the Court of First Instance[4] of Bourgoin-Jallieu on 15 July 1992 following the notice of appeal of 2 November 1992. The Plaintiff is represented by Solicitors PERRET and POUGNAND, Assisted by Benoît HORN, Esquire, attorney at the Strasbourg Bar.

And:

Mr. Angel LASAOSA, residing at Escalona 42 Entlo 22600, SABINIANIGO (Huesca), Spain

APPELLEE

Represented by solicitors CALAS-BALAYN

Assisted by Jean-Pierre CASADEBRAIG, Esquire, Attorney at the Pau Bar.

Composition of the Court:

At the proceedings and deliberation of judges:

Mrs. PALISSE . . . Appellate judge presiding as President,

Mr. BALMAIN . . . Appellate judge,

Mrs. COMTE . . . Appellate judge.

Assisted in the proceedings by Mrs. Combe, clerk of the court.

Proceedings:

At the open court hearing of May 19, 1993,

The solicitors were heard in their statements and the barristers were heard in their oral arguments.

Following which, the decision was rendered at the hearing of Tuesday, 15 June 1993 after the court's deliberations.

YTONG, an Alsacian company that has a factory in Saint Savin (Isère), sold various merchandise to Angel LASAOSA for a total of 741, 191.01 Francs, according to different bills whose dates are spread over a period from 4 February to 14 June 1991.

Despite several formal notices, among which is that of July 11, 1991, it was unable to obtain payment for the merchandise.

Consequently, it commenced this proceeding against Angel LASAOSA by a writ of 3 June 1992 before the President[5] of the Court of First Instance of Bourgoin-Jallieu, seeking a verdict obliging him to pay the aforesaid sum, in addition to interest at the legal rate, to be calculated from 11 July 1991; and 35,000 Francs pursuant to Article 700 of the NCPC.

Angel LASAOSA, having raised [(1)] the lack of territorial jurisdiction of the judge of these proceedings; and [(2)] the existence of a serious dispute, the President of the Court of First Instance of Bourgoin-Jaillieu, by an order dated July 15, 1992, declared himself to lack territorial jurisdiction and said that a serious difficulty existed.

On November 2, 1992, YTONG LLC duly gave notice of appealing that decision.

In support of its appeal, it affirms that Angel LASAOSA took delivery of the goods at the Saint-Savin factory, that, being a sale of goods, it was performed in France and more specifically within the territorial jurisdiction of the Court of First Instance of Bourgoin-Jallieu; that article 46, paragraph 2 of the NCPC; article 10, section 5 of chapter 5 of the Spanish Civil Code; and article 5 of the Brussells Convention recognize, under these circumstances, Borjallian territorial jurisdiction; moreover, pursuant to article 24 of the Brussells Convention, a party may assert a claim to the judicial authorities of a contracting state for the provisional measures provided for by the law of that state, even if, by virtue of the convention, another contracting state has subject-matter jurisdiction; that, in this particular case, the relief requested in the form of an allocation by the court of a sum of money in a procedure[6] in a matter of special urgency [before final judgment] clearly constitutes a provisional measure; that, thus, the Court of First Instance of Bourgoin-Jallieu certainly had jurisdiction.

[YTONG LLC] specifies that it never contested the problems which affected the buildings constructed with the materials furnished to Angel LASAOSA but never acknowledged that the problems were caused by a defect in those materials; that fact has, moreover, neither been proven nor even alleged by the defendant; that, in addition, almost two years after the deliveries, which took place over the period from January to June of 1991, [YTONG LLC] was not summoned to any court or requested to give any testimony, that, finally, the action which may be commenced against [YTONG LLC] by Angel LASAOSA would long since have been extinguished pursuant to article 1648 of the Civil Code.

[YTONG LLC] therefore requests the reversal of the decision[7] a finding of liability on the part of Angel LASAOSA for the payment of 641,711 Francs with interest at the legal rate, to be counted from 11 July 1991; and the allocation of 40,000 Francs pursuant to article 700 of the NCPC.

Angel LASAOSA responds that his relation with the YTONG company comes within the scope of a contrat de concession, he personally being in charge of selling products manufactured by YTONG LLC in the northern part of Spain; that, thus, the applicable law is that of the contract's place of performance; that the Spanish courts thus have jurisdiction; that the same result would obtain if the parties were bound by an international contract for a commercial representative, since, if the law chosen by the parties is not established, the applicable law is that of the country in which the commercial agent's residence is located; that, finally, even if it were a question of a simple contract for international distribution, only the Spanish courts would have jurisdiction because the materials were used in Spain.

He is of the opinion that, in view of the importance of this litigation, the instant action is not amenable to a provisional or protective measure.

He adds that the materials delivered have shown themselves to be unfit for their intended use since their implementation revealed numerous problems and defects; that a meeting took place on 9 July 1991, in the course of which YTONG LLC made an inventory of the various claims existing in Catalonia; that it was agreed upon at that occasion that YTONG LLC undertook personal responsibility for dealing with those actions; that a new legal relationship thus came into effect between the parties, with YTONG LLC benefiting from a transfer of credits by him.

He therefore requests that the lower court's order be affirmed and that he be granted 25,000 Francs both as damages and interest for abuse of proceedings as well as on the basis of article 700 of the NCPC.

Grounds for the Decision

Firstly, with respect to territorial jurisdiction:

Service of the writ of summons for the emergency procedure[8] was served on 3 June, 1992.

Under these circumstances, and pursuant to articles 29 and 32 of the Saint Sebastien Convention of 26 May 1989, the latter applies to the present action since it was required by France on 11 October 1990 and by Spain on 22 November 1990.

The Brussells Convention of 27 September 1968, as modified by the above-cited convention, consequently controls the rules of jurisdiction to the present proceedings.

The contract, which is the basis of the claim which YTONG LLC has submitted to the judge of emergency proceedings,[9] is construed as an international contract, since no aspect of it establishes the existence of such a contract between YTONG LLC and Angel LASAOSA, even if in fact an agreement of that type may have been signed by LASAOSA and YTONG Spain. Nor is the contract a contract for a commercial representative, since no aspect of it establishes the existence of a mandate given by YTONG LLC to Angel LASAOSA.

It is, thus, this contract for the sale of goods which must be examined to determine the court with jurisdiction to adjudicate the claim; i.e., the court of the location where the duty which forms the basis of the claim was, or should be, performed.

In the present case, the duty which forms the basis of the claim is the duty of Angel LASAOSA to pay for the goods which were delivered to him.

It is thus appropriate to ascertain where that obligation is to be performed.

.That location is to be determined in conformity with the law which governs the duty at issue according to the rules pertaining to conflicts concerning the forum.

Thus, since the parties have not expressly designated the law to be applied in case of litigation, no written contract having been established at the time of the sales, and only delivery confirmation and bills having been produced, as well as correspondence between the parties, it has happened from the circumstances of the suit that the parties wished to locate the contractual obligation in France, to the extent that the delivery vouchers and bills are drafted in French, that the price of the merchandise was assessed in French currency and was anticipated to be made at the departure from the factory.

Under these circumstances, pursuant to articles I l.b and 57.a of the Vienna Convention,[10] dated 11 April 1980, applicable to France since January 1988, which provides that "if the buyer is not bound to pay the price at any other particular place, he must pay it to the seller at the seller's place of business["], the place of performance of the agreement is France.

France has the jurisdiction to adjudicate the claim of YTONG LLC; which leads to the reversal of the order given for the reasons stated above.

Secondly, on the existence of a serious dispute:

To justify his refusal to pay, Angel LASAOSA argues that the delivered goods were unfit for their intended purpose and that YTONG LLC profited from an assignment of claims, because it declared that it was making its personal business the settling of those damages, including the recovery of the unpaid sums after retaking the defective goods, [all of] which casts serious doubt as to his obligation.

Yet, the documents proffered during the proceedings reveal that, even if, in fact, malfunctioning affected a building complex called "the Estel" (cf. report of de ROCAFIGUERA, Esquire, dated 31 October 1991) and even if cracks appeared on the walls which were constructed with partitions of concrete [béton cellulaire] of the YTONG brand, yet nothing indicates that these defects originate in inherent defects of those materials rather than, for example, from their defective implementation.

Moreover, YTONG, LLC neither benefited from an assignment of debts by Angel LASAOSA, contrary to the appellee's attorneys' arguments, nor recognized its responsibility.

Indeed, during the meeting of 9 July 1991, it was contemplated only that YTONG LLC Spain receive directly the payments of amounts owing to Angel LASAOSA.

The claim of YTONG LLC against Angel LASAOSA is thus not genuinely in doubt.

Consequently, he will have to be found liable for payment to the appellant company of the amount of 600,000 Francs, to be added to the totality of his debt.

Thirdly, with respect to the accessory claims

Angel LASAOSA will be non-suited with respect to his claim for damages and interest as well as with respect to his claim for indemnification of those of his expenses not included in the court costs, since he loses.

Moreover, he will have to pay to YTONG LLC the sum of 10,000 Francs pursuant to Article 700 of the New Code of Civil Procedure.

Based on these grounds,

The court:

Ruling publicly and after hearing full argument on both sides,

After having deliberated in accordance with the law,

Receives the appeal,

Reverses the decision of the lower court in all of its provisions,

And ordering anew,

[This Court] holds that the French judiciary has jurisdiction to rule on the instant case.

[This Court] finds Angel LASAOSA provisionally liable to pay to YTONG LLC the sum of six hundred thousand francs (600,000 F.),

In addition,

[This Court] denies Angel LASAOSA's claims of damages and interest and indemnification of expenses not included in court costs,

[This Court] finds him liable for the payment to YTONG LLC of ten thousand francs (10,000 F.) pursuant to Article 700 of the New Code of Civil Procedure,

[This Court] finds him liable for the totality of costs, both for the litigation in the Court of First Instance as well as for the appellate litigation, with an award to the benefit of Solicitor PERRET-POUGNAND.

So Declared publicly by Madame the Judge COMTE and signed by Judge PALISSE[11] functioning as President and by Mme Combe, Clerk of the Court.

[Footnotes:]

1. The Courts of Appeal hear both criminal and civil cases. For civil cases, the courts are divided into several civil sections or chambres civiles. See. e.g., CHRISTIAN DADOMO & SUSAN FARRAN, THE FRENCH LEGAL SYSTEM 51-68 (1993). All footnotes in the following material were supplied by the translator and did not appear in the original material.

2. This Journal of Law & Commerce case translation was prepared by Vivian Curran, Legal Writing Instructor, University of Pittsburgh School of Law (B.A. University of Pennsylvania; Ph.D., J.D., Columbia University). Any reader who intends to rely on this case must consult the original text, a copy of which can be obtained from the Journal of Law & Commerce. The Journal of Law & Commerce is extremely grateful to Peter Winship, James Cleo Thompson, Sr. Trustee Professor of Law, Southern Methodist University School of Law, who generously provided the original French text of this case.

3. Pursuant to Articles 808-811 of the New Code of Civil Procedure [Nouveau Code de Procédure Civile] [hereinafter "NCPC"], an ordonnance de référé is a procedure of the court of first instance (le tribunal de grande instance) whereby the President of the court, in cases of urgency, issues an order to the plaintiff which cannot be disturbed by an appeal. The procedure resembles a request for a preliminary injunction, except that the relief requested can be monetary damages. It should be noted that although French law does not distinguish between law and equity, specific performance injunctions may be granted pursuant to articles 1425-1 and -5 of the NCPC. They are called injonctions de faire. The ordonnance de référé is in contradistinction to the ordonnance sur requête, in which the defendant is not informed of the proceeding or of the relief requested by the plaintiff. See NCPC, arts. 493-498; 812-813.

4. Reference is to the tribunal de grande instance; the other French court of first instance is the tribunal d'instance. The tribunal de grande instance was created in 1958, replacing the tribunal de première instance.

5. The court of first instance is comprised of no fewer than three judges, one of whom functions as President. In certain areas (i.e., divorce; traffic; and juvenile cases) a single judge is permitted to adjudicate. See arts. 311 and 312 of the Code de l'organisation judiciaire.

6. That procedure is the référé described supra, note 3.

7. I.e., of the Court of First Instance.

8. The référé described supra, note 3.

9. I.e., of the référés.

10. Reference here is to the United Nations Convention on Contracts for the International Sale of Goods, U.N. Doc. A/Conf. 97/18 (1980) [hereinafter "CISG"], reprinted in S. Treaty Doc. No. 98-9, 98th Cong., 1st Sess. and 17 INT'L LEGAL MAT. 668 (1980).

11. These judges are called conseillers. "Conseiller" means to advise. The term originated at the time of the French monarchy, when the King was advised as to how to render justice by his conseillers de longue robe, advisors attired in long robes. See DADOMO & FARRAN, supra note 1, at 80 n.57.

Pace Law School Institute of International Commercial Law - January 1997
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