- II CK 114/04
- Supreme Court of Poland
PLACE OF DELIVERY OF GOODS (ART. 31 CISG) - ACCORDING TO DDU (DELIVERED DUTY UNPAID) [INCOTERMS 1990] CLAUSE IN THE CONTRACT
[CLOUT Case n. 1597; abstract prepared by Malgorzata Pohl and Maciej Zachariasiewicz, National Correspondent]
The Polish seller and the Ukrainian buyer concluded a contract for the sale of clothing. The carriage of goods was entrusted to a third party company. Customs inspection was to be conducted at the city of departure as well as the city of final destination of the goods. The contract included provisions regarding the conditions of unloading the goods at the final destination (after the recipient would present confirmation of the bank transfer in the amount of 80 per cent of the total value of the goods represented in the invoice). The Polish seller (plaintiff) also entered into a
carrier liability insurance for international transport with the Insurance Company (i.e. defendant). The goods were checked by the customs office at the city of departure in Poland and dispatched to their final destination in Ukraine. After crossing the Polish-Ukrainian border, alleged representatives of the buyer escorted the truck to the city of destination. As soon as the truck reached the city, the representatives requested the driver to leave the truck and took the goods in their custody. Therefore, the goods were not delivered at their final address. The buyer,
after informing the seller that the goods had reached the city, never contacted the seller again and never paid for the goods. The truck driver reported of being robbed of the truck and the goods several days later at the Polish Consulate in Ukraine.
The issue in the case at hand was whether the Insurance Company was responsible to cover the cost of the goods. Under the insurance contract, the defendant was responsible for the goods en route from the place of departure to the place of final destination. The question arose whether the goods had been effectively delivered to the buyer and when exactly the insurance coverage ended.
The Court of First Instance deemed that the goods did not reach their final destination. The carrier did not deliver the goods to the address indicated in the contract and did not receive the confirmation on the delivery protocol. The Court thus held that the truckload was stolen while the delivery was still covered by the insurance and since the defendant did not prove that it was exempted from liability, it bears the responsibility for the costs of the goods.
The Court of Appeals, after further examination of the evidence and of new facts, disagreed and reversed the decision. The Court pointed out that the insurance contract contained a duty to deliver the goods to the city of final destination and the goods were in fact delivered to that city, which was sufficient to fulfil the requirements of Articles 31 and 67 CISG. Since the plaintiff did not prove that the goods had not been taken by the actual buyer, it must be assumed that they were delivered to their final destination and to the actual buyer. The carriage contract was completed and consequently the insurance coverage ended.
The plaintiff appealed to the Supreme Court, which found that although the goods were delivered to the city of final destination, they were not delivered to the exact address indicated in the contract of carriage. The insurance contract cannot be considered independently of the carriage contract, rather it is meant to cover the exact period set in this latter. The Court explained that under Articles 31 and 67 CISG, the term “particular place” means a place clearly specified and not just the area of the city. The Court noted, however, that Articles 31 and 67 CISG do not apply in the present case, as the DDU (Delivered Duty Unpaid) [Incoterms 1990] contract of carriage explicitly specified the place of the destination and of unloading, i.e. the buyer’s place of business. Therefore, the Insurance Company knew and ought to have known the content of the carriage contract when it insured the goods. According to the Court, the Court of Appeals erroneously found that the insurance contract ended when the goods reached the city of final destination, regardless of whether the carriage contract was still in force and had been fulfilled. On the
contrary, the insurance terms stated that the insurance contract would end at the same time the carriage contract terminates — as this is the economic purpose of the insurance contract in an international carriage of goods. Therefore, it was not relevant that the goods reached the city of final destination, but it was relevant that they did not reach the exact destination indicated in the carriage and sale contracts
(i.e. the buyer’s place of business).
The Supreme Court thus reversed the decision of the Court of Appeals and remanded the case for further consideration.
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Case law on UNCITRAL texts (http://www.uncitral.org/uncitral/en/case_law.htmlA/CN.9/SER.C/ABSTRACTS/172)}}