A Dutch buyer entered into a contract with a Swedish seller for the sale of a certain amount of compensators. The buyer, then, resold two of these compensators to a third person (the successor). The successor suffered damages due to the fact that the goods were defective and therefore brought an action against the buyer before the Dutch Courts. Challenging the claim, the buyer demanded warranty compensation from seller. The seller contested the competence of the Court on the basis of an arbitration clause contained in its general terms, alleging that the arbitration clause is a usage which is widely known in international trade and regularly observed by parties to contract of the type involved in that particular trade. Furthermore, the seller held that the buyer was aware of the general terms and conditions whose applicability was at dispute.
The Court held that the question of the validity of the arbitration clause had to be answered on the basis of the substantive law governing the contract pursuant to the private international law rules of the forum. Since both parties had their place of business in contracting States, the Court applied CISG (art. 1(1)(a) CISG).
As to merits, in order to determine whether the parties had agreed to include seller’s general terms in their contract, the Court referred to the general principles on which the CISG is based. Therefore, the Court took into account Arts. 8, 11 and 14-24 CISG. Consequently, the Court found that, even if there was no need for formal requirement to agree upon general terms (Art. 11 CISG), it cannot be assumed that the buyer tacitly accepted the arbitration clause because silence in itself cannot be considered as an acceptance pursuant to Art. 18(1) CISG. Then, the Court held that only if a practice has been established between the parties according to Art. 18(3) CISG, a party could tacitly accept the general terms. However, in the case at hand, there was no established practice nor steady business relationship between the parties. Hence, the Court found that it cannot be assumed that the buyer accepted the seller’s general terms and conditions, no matter if the buyer received the general terms and conditions or if the use of them is typical in the field of business in which the parties operate. As such, the Court held the arbitration clause not applicable and it also affirmed its competence to decide on the question concerning warranty.
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