A Spanish, an Argentine and a U.S. company concluded a contract with a British company for the sale of computer products to be distributed throughout Latin America. When, a few months later, a new company was established as a result of the merger of the British company and a Canadian one, the buyers were notified that the contract would be terminated in ninety days. Alleging breach of the original agreement, the buyers filed a suit against the sellers.
The Court denied that CISG was applicable, basing its reasoning on several arguments. First of all, the Court stated that the contract had been concluded between parties not all of whom were situated in Contracting States (Art. 1(1)(a) CISG). Secondly, the Court considered it irrelevant that the original British seller was subsequently based in Canada, as this fact had at any time before or at the conclusion of contract been known to the buyers (Art. 1(2) CISG). Nor could the Court find support for the application of CISG in the history of negotiation or the practical interpretation of the Convention, since the 'universalist' approach adopted by the 1964 Hague Conventions had been expressly rejected in the formulation of its Art. 1(1)(a). Furthermore, the Court recalled that the United Stated had ratified CISG with the declaration that it would not be bound by its Art. 1(1)(b) (Art. 95 CISG); consequently, the Convention is applicable solely when all the parties to the contract are from Contracting States. Finally, the Court could not find any precedent allowing the application of CISG when a subsequent party to the contract is situated in a Contracting State.
|