|A Romanian seller and a Dutch buyer concluded a contract for the sale of chemicals. Three weeks after delivery the buyer had the goods inspected by a local authority. The goods turned out to be defective, and the seller was given notice therof some 23 days after delivery. The buyer paid only a part of the agreed price. The seller filed and arbitration suit claiming full payment.
The sole arbitrator held that the contract was governed by CISG, since both parties had their place of business in contracting States (Art. 1 (1)(a) CISG).
As to the merits of the dispute, the sole arbitrator stated that, as a general rule, when the goods delivered are not in conformity with the contract, the buyer is entitled to reduce the price and claim damages (Arts. 45, 50 and 74 CISG). However, it further held that, in the case at hand, the buyer had lost its right to rely on the lack of quality (Art. 39 CISG) as a justification for its reduction of the price since it had failed to have the goods examined when the lack of quality should have been discovered, i.e. "(a)t the moment of the arrival of the goods at destination" (Art. 38 CISG). In fact, the buyer had the goods examined only three weeks after their arrival at destination. The buyer was therefore ordered to pay the remaining part of the price.