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| Abstract | ||||||||||||||||||
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| In February 1990 a French buyer confirmed an order to a German seller for the purchase of a determined amount of glue. The glue was used to package films, which the buyer then sold to its own customer. In April 1990 the films turned out to be defective. Some two months later, on June 8, 1990, the insurance company of the buyer gave notice to the seller that the films were defective and invited the latter to attend a private expertise aimed at assessing the cause of the defects. After having compensated the customer, the insurance company entered into negotiations with the seller for a settlement of the claims. In October 1992, in view of the failure of attempts to amicably settle the dispute, the insurance company applied to a French Court to obtain a judicial expertise to assess the cause of the defects. In January 1994, two months after having been reported the final expertise, the insurance company sued the German seller to recover the sum paid in compensation plus interests, alleging that the defects were due to the chemicals contained in the glue. The seller objected to the jurisdiction of the French Court, arguing that the jurisdiction should be vested in German Courts, and requested the application of German law.
The Court of first instance (Tribunal de Grande Instance de Strasbourg) affirmed its jurisdiction and rejected the action of the insurance company because it had not been brought in due time. In its opinion, it was true that the defects had been discovered in April 1990, but the application to the Court for the judicial expertise had been made only in October 1992. The insurance company appealed. With respect to the matter of jurisdiction, the Court of Appeal found that the standard terms of the seller contained a jurisdiction clause in favour of a German Court. Nevertheless, the Court, in application of French law, denied effect to such clause. In reaching this conclusion, it pointed out that the requirements of validity of standard terms laid down in French law had not been fulfilled, because the jurisdiction clause had been printed in small characters on the back of the delivery orders and had been drafted in German, while the front of the delivery orders, as well as all the other contractual documents, had been drafted in French. The Court then affirmed its jurisdiction according to Art. 5(1) of the 1968 Brussels Convention, since the obligation in question, that is the delivery of conforming goods, had to be performed in France under a "franco domicile" clause in the contract. As to the law applicable to the merits of the dispute, the Court decided to apply the CISG, since the rules of private international law led to the application of French law (Art. 1(1)(b) CISG), and the CISG had already come into force in France at the time of the conclusion of the contract. As to the international character of the contract, the Court noticed that, even if the orders had been received by a French agent of the seller, the confirmations of the delivery orders, the issuance of the invoices and the delivery of the goods had been made from the German place of business of the seller, which had the closest relation to the contract (Art. 10 CISG). With respect to the merits, the Court reversed the decision of the Court of first instance and held that the insurance company of the buyer had given notice of the defects to the seller within a reasonable time, approximately two months after their discovery (Art. 39 CISG). Therefore, the Court of Appeal ordered the seller to refund the insurance company of the buyer the expenses it had to suffer to compensate the buyer's customers plus interests. |