A Canadian buyer and a French seller concluded several contracts for the delivery of wine corks by the latter. Initially, the contracts were concluded orally over the telephone between the Canadian buyer and a US Company based in California, which was a wholly owned subsidiary of the seller. Subsequently, the buyer concluded the contracts directly with the French seller. While the former contracts did not address the issue of the competent forum, on the occasion of the subsequent contracts the French seller included in each delivery of the goods an invoice containing a forum selection clause in favour of French courts. After taking delivery, paying the price, and using the corks, the buyer noticed that the wine was tainted by the corks. The buyer first filed an action against the French and the US sellers in a California Federal District Court where the proceeding was dismissed (see UNILEX: Chateau des Charmes Wines Ltd. v. Sabate USA Inc., Sabate S.A., U.S. Circuit Court of Appeal (9th Circuit), 5 May 2003).
During the course of the U.S. proceedings, the sellers agreed to comply with a future judgment of a Canadian or French Court. The buyer subsequently filed an action against the sellers in the Ontario Superior Court of Justice and sought compensation. The sellers launched a motion before the Court to stay the Ontario proceeding.
The issue before the Court was to determine whether Ontario was the appropriate forum for the above action. The Court held that the CISG was the applicable law (Art. 1(1)(a)) and that there was no objection from either party on this point. It further concluded that the oral agreements between the buyer and the sellers were sufficient to create complete and binding contracts, since a contract of sale under CISG need not be concluded or evidenced by writing nor is subject to any other formal requirement (Arts. 11, 18), and the parties had agreed on the kind of goods, their quantity and their price (Art. 14 (1)). As to the forum selection clause in favour of the French courts, the Court found that it definitely did not form part of the earlier contracts. Even assuming that it may have become binding on the parties on the occasion of the subsequent contracts on account of the fact that the buyer did not object to it when included in the invoices sent by the seller, the Court nevertheless concluded that Ontario was the appropriate forum for the dispute and declined to stay the action. In its opinion, since buyer's claims for damages related indifferently to all the contracts concluded with the sellers, it would not be expeditious to litigate in more than one jurisdiction since damages could not be easily allocated between the different contracts.
|