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| An Italian seller delivered pipes and cables to a Swiss buyer. The goods were delivered to the buyer’s premises. Three days after delivery the buyer, by examining the goods, came to the conclusion that a part of the ordered goods was missing and gave notice thereof to the seller per telephone. The buyer nevertheless paid the whole price but then withhold payment relating to later deliveries by the same seller up to a sum amounting to the value of the missing goods from the first delivery.
The first instance Court granted the seller full payment, holding that the buyer had not examined the goods as soon as possible according to the circumstances, nor had it given notice to the seller within a reasonable time after it discovered or it ought to have discovered the fact that the delivery was not complete. The appellate Court reversed this decision, finding that the buyer had given notice on time, and that since the seller had not proved it had made a complete delivery the buyer was entitled to set-off. The Supreme Court first confirmed the lower Courts' decisions as concerns the application of CISG, having both parties their place of business in two different contracting States at the time of conclusion of the contracts (Art. 1 (1) (a) CISG). The Court upheld the appellate Court’s decision insofar as it had considered a partial delivery as subject to the same provisions as a non-conforming delivery. It further confirmed the appellate Court’s finding that the buyer had examined the goods as soon as possible under the circumstances (three days after delivery), taking into account the great amount of the goods delivered and the need of a speedy conclusion of the unloading operations by the transportation company (Art. 38 (1) CISG), and had given notice within a reasonable time as per Art. 39 (1) CISG. The Court, however, reversed the appellate Court’s holding that the burden of proving the completeness of the delivery fell on the seller. According to the appellate Court, the burden of proof of the non-conformity does pass on to the buyer when the latter accepts delivery without objection, but anyway never before expiry of the reasonable time for notice ex Art. 39 CISG. On the contrary, the Supreme Court observed that the question of the burden of proof is a matter governed but not expressly settled by CISG, to be decided under the general principles underlying the Convention, among them the principle that it is up to the buyer to provide evidence on the facts on which the exercise of its own rights is based. Since the buyer had first accepted the goods without objection, they had already entered its sphere of risk and therefore the buyer would have to prove the incompleteness of the delivery in order to exercise its right to reduction of price. The Court moreover held that even if the buyer succeeded in proving the partial delivery, it would not be automatically entitled to the reduction of price, since it had fully paid that delivery, withholding then a sum relating to a different contract with the same seller. Therefore, the competent appellate court would have first to establish whether the buyer were entitled to a claim under unjust enrichment deriving from the full payment of the partial delivery (matter excluded from CISG and to be solved under the applicable domestic law). Subsequently, it would have to apply the rules on set-off (again, a question not governed by CISG but by domestic law). |