A Belgian seller sold candy to a Norwegian buyer. When the seller asked for payment, the buyer stated that its subsidiary had (accidentally) paid to the seller's sister company and refused to pay again. The seller sued the buyer for payment in the Rechtbank van Koophandel (Commercial Court of first instance) of Dendermonde. The Court upheld the seller's claim. The buyer appealed.
As to the question of jurisdiction, the Court applied Art. 5(1) of the 1968 Brussels Convention, which states that a person domiciled in a contracting State may be sued in the Court of the place of performance for the contractual obligation in dispute (i.e. place of payment). In order to determine the place of payment the Court applied Art. 57(1)(a) CISG and found that it was the seller’s place of business in Belgium. Therefore the Belgian courts had jurisdiction.
As to the merits, the Court observed that CISG does not contain any provision on the way in which payment should be made. Therefore, the otherwise applicable domestic law (i.e. Belgian law) should govern that issue. Under Belgian law the Court found that payment to the subsidiary had to be considered as a good payment and upheld the buyer's claim. |