- Arbitral Award
- Netherlands Arbitration Institute
SALES CONTRACT - BETWEEN DUTCH SELLER AND ITALIAN BUYER - GOVERNED BY CISG – REFERENCE TO UNIDROIT PRINCIPLES DEFINED AS "PRINCIPLES IN THE SENSE OF ARTICLE 7(2) CISG" AND TO PRINCIPLES OF EUROPEAN CONTRACT LAW
APPLICABILITY OF SELLER’S STANDARD TERMS – QUESTION AS TO WHETHER BEFORE OR AT TIME OF CONCLUSION OF CONTRACT BUYER MUST BE GIVEN OPPORTUNITY TO KNOW CONTENT OF SELLER'S STANDARD TERMS NOT EXPRESSLY REGULATED IN CISG - QUESTION LEFT OPEN IN UNIDROIT PRINCIPLES (CF. ARTICLE 2.19 [ART. 2.1.19 OF THE 2004 EDITION] AND COMMENTS AND TO ARTICLE 2.20 [ART. 2.1.20 OF THE 2004 EDITION] – AFFIRMATIVE SOLUTION ADOPTED BY PRINCIPLES OF EUROPEAN CONTRACT LAW (ARTICLE 2:104)
A Dutch Seller and an Italian Buyer entered into several contracts for the sale of certain goods. The confirmation of the orders which Seller in all cases sent to Buyer both by fax and regular mail contained on the front a reference to Seller’s general conditions which were printed on the back. The general conditions provided for the application of Dutch law and arbitration in Rotterdam in accordance with the rules of the Netherlands Arbitration Institute. A dispute arose between the parties when Buyer refused to pay under the last three contracts alleging defects in the goods. When Seller commenced arbitration proceedings Buyer objected that it had not approved either orally or in writing the arbitration clause contained in Seller’s general conditions and that therefore the Arbitral Tribunal lacked jurisdiction.
The Arbitral Tribunal rejected Buyer’s objection and confirmed its jurisdiction. In its decision the Arbitral Tribunal referred first of all to Articles 14, 15, 8 and 9(1) of the CISG which governed the sales contracts and concluded that, since Buyer could not have been unaware of Seller’s intention to apply its general conditions, the fact that Buyer did not object to their application amounted to implied acceptance of them. As to the question whether Buyer had to be in a position to known the content of Seller’s general conditions before or at the time of the conclusion of the contracts, in order to be bound by them, the Arbitral Tribunal, in the absence of a specific provision of the CISG dealing with this question, referred first of all to the UNIDROIT Principles defining them as “principles in the sense of Article 7(2) CISG”. However, since Articles 2.19 and 2.20 of the UNIDROIT Principles “only answer the question whether explicit acceptance of a certain clause is necessary and not whether the accepting party had a reasonable possibility to know the contents of the general conditions and whether good faith entails that the user of the general conditions takes the initiative to offer such a possibility to the accepting party”, the Arbitral Tribunal held that “in order to answer this question support may be found in the Principles of European Contract Law (PECL) prepared by the Commission on European Contract Law of the European Union which Commission included lawyers from The Netherlands and Italy”. The Arbitral Tribunal then referred in particular to Article 2:104 (1) and (2) PECL which provides that contract terms which have not been individually negotiated may be invoked against a party who did not know of them only if the party invoking them took reasonable steps to bring them to the other party’s attention before or when the contract was concluded and that terms are not brought appropriately to a party’s attention by a mere reference to them in a contract document even if that party signs the document. According to the Arbitral Tribunal, by sending the confirmation of the orders not only by fax but also by regular mail thereby permitting Buyer to read also the text of the general conditions printed on the back, Seller had complied with the requirements set forth in Article 2:104 PECL and Buyer was therefore bound by the arbitration clause.
Yearbook Commercial Arbitration, Vo. XXXII-2007, pp. 95-106.}}