Source: http://cisgw3.law.pace.edu/cases/001024f1.html
Timestamp: 2019-04-19 22:47:00+00:00

Document:
In February 1990, the company Pelliculest, established in France, gave Mr. Molinier, a representative, domiciled in France, of the company Morton International GmbH established in Germany, an order for 2,000 kilograms of glue for the manufacture of fancy packages for the company Socratem. In April 1990, the latter company discovered defects in the packages characterized by the partial unsticking of the cellulose acetate film, and retained a sum of 367,640.08 francs from the invoices due to Pelliculest.
On 8 June 1990, the insurer of Pelliculest informed the insurer of Morton International GmbH of the occurrence of the damage and invited the Pelliculest insurer to the private appraisal operations conducted to determine the causes of the �grave defects whose origin appears to lie in the quality of the glue delivered�. Many meetings and discussions between the various parties ensued, mainly with the aim of arriving at a settlement. Meanwhile, the company Rhin et Moselle compensated Socratem with a payment of 1.7 million francs on 27 June 1991.
By an order issued on 8 December 1992, the interim relief judge of the Strasbourg Court of Major Jurisdiction, to which the case had been referred by Rhin et Moselle, appointed a judicial expert. The latter submitted a final report on 15 November 1993. On 13 January 1994, Rhin et Moselle, having entered into the rights of Socratem by subrogation, sued Morton International GmbH and its insurer in the Strasbourg Court of Major Jurisdiction for damages amounting to 1.7 million francs. On 9 June 1995, Pelliculest, meanwhile under liquidation, joined in the procedure and claimed the sum of 367,648.08 francs.
By a judgement on 28 March 1996, the Strasbourg Court of Major Jurisdiction found that French law was applicable and decided that the action was inadmissible because it had not been brought within the brief period allowed under article 1648 of the Civil Code.
Both the plaintiffs appealed the judgement. The defendants lodged a cross-appeal. The Court of Appeal allowed the claim of Rhin et Moselle and ordered Morton International GmbH and its insurer to pay Rhin et Moselle the sum of 1.7 million francs in reparation of the damage caused by the seller, with interest at the (French) statutory rate as from 13 January 1994. On the other hand, the Court of Appeal dismissed Pelliculest�s claim.
The Court of Appeal declared the Vienna Convention applicable to the claim and referred in this regard to article 1(1)(b) and article 10 CISG. The Court stressed that, even assuming that the representative of Morton International GmbH based in France had the responsibility of managing one of the seller�s establishments, the establishment having the closest relationship in the meaning of article 10 CISG was that situated in Bremen, Germany, since the order of confirmations emanating from the seller, the invoices and the deliveries of goods came from the head office of the company in Germany. As the contract had been concluded in February 1990, before the date of entry into force of the Vienna Convention in Germany, the Court made use of article 1(1)(b) and applied the Hague Convention of 15 June 1955 on the Law Applicable to International Sales of Goods. It ignored article 12 of the general conditions of sale referring to the applicability of German law, on the grounds that the requirement for legibility of the general conditions was not satisfied. As the order had been received in the country of the buyer, French law was applicable (Hague Convention, art. 3(2)) and, in consequence, the Vienna Convention (art. 1(1)(b)).
The Court of Appeal noted that the unsticking became apparent in April 1990 and that the letter from the insurer of the buyer informing the seller�s insurer of the damage dated from 8 June 1990, and concluded that it was therefore �indisputable that the insurer of the buyer informed the seller of the damage within a reasonable time as provided for in article 39 of the applicable Convention�.
The Court then considered whether the legal action brought against the seller on 13 January 1994 had been brought in time. The Court also applied the Vienna Convention on this point and found that �the time that elapsed between the reporting of the damage and the initiation of court action by Rhin et Moselle seems reasonable�, taking into account, in particular, the efforts made in the direction of an out-of-court settlement. On the other hand, the action brought by Pelliculest, which had been initiated only on 15 June 1995, was found inadmissible in view of the absence of any reminder letter or communication in any form during the intervening period. The Court concluded that the period that had elapsed since the reporting of the damage could not be considered of reasonable duration.
The Court then took into account the damage assessment report, from which it emerged that the glue was unsuitable for the use for which it was intended: the products at issue were designed specifically for the lamination of cardboard and were unsuitable for photogravure-printed substrates. The Court noted that Morton International GmbH had been fully informed of the use for which the glue delivered was intended and had even undertaken prior tests. The technical instructions made no mention of the particular incompatibility in question. The seller, as a professional, and considering that the technique of stamping on fancy packages made of film-coated board is relatively common, should have been aware of this incompatibility, and should have informed the customer of the need for caution in the utilization of the glue; this was not done. In this part of the judgement, the Court does not refer to any provision of the Vienna Convention.
SARL Pelliculest [buyer] / SA Rhin et Moselle v.
Morton International GmbH [seller] / Société Zurich Assurances S.A.
Mr. GUEUDET, Président de Chambre, Mrs. MAILLARD, Conseiller, Mrs. VIEILLEDENT, Conseiller. Greffier [Court Clerk] present during the arguments: Mr. F. DOLLE; Greffier present during the ruling: Mrs. LAEMLE.
ARGUMENTS at the public hearing on 11 September 2000. REVERSAL of 24 October 2000 entered publicly by the President.
APPELLANT and voluntarily joined party: 1) [buyer], having its principal offices at 6a. Avenue de la Gare à 67230 Benfeld [France], in reorganization redressement judiciaire, represented by Maître BUEB, attorney before the Court.
APPELLANTS: 2) Maître Paul PATRY, auditor for the [receivership] plan of [buyer] residing at 5. rue des Frères Lumière à 67200 Eckbolsheim, represented by Maitre BUEB, attorney before the Court; 3) LA S.A. RHIN ET MOSELLE ASSURANCES, having its principal office at 1. Rue des Arquebusiers à 67000 Strasbourg, through its legal representative, represented by Maîtres PERRAD ET ASSOCIES, Attorneys before the Court.
APPELLEE and defendant: 3) Maître WEIL Claude, procedural representative, residing at 28, Rue De Lattre de Tassigny at 67300 Schiltigheim, represented by Maître BUEB, attorney before the Court.
The [buyer], whose principal place of business is in Benfeld [France], is involved in the lamination of packaging in boxes with films of cellulose acetate.
On 19 February 1990, [buyer] confirmed with [seller] an order for 2,000 kgs of Pentaphan glue-additive, deliverable on 22 February 1990. The glue-additive was used for the execution of orders for luxury lamination passed on to [buyer] by the Socatrem company.
In the beginning of April 1990, Socratem noticed during the stamping, the appearance of defects on the packaging, characterized by the partial ungluing of the cellulose acetate film in the places of the stamping.
Some technical investigations were conducted at once at the initiative of the Rhin et Moselle insurance company, [buyer]'s insurer, and Socatrem whose damages amounted to more than one million francs, held back a sum of 367,640.08 francs on invoices owed to [buyer].
The Rhin et Moselle insurance company indemnified Socatrem (1,700,000 francs paid on 27 June 1991) and appointed Mr. Rabate to proceed to the first operations of expert evaluation in the search for the causes of the disaster. The CERIPEC company, TEXA bureau and INGEXAS bureau were equally called into action on this point. By interim order of 8 December 1992, a judicial expert evaluation was finally entrusted to Mr. Riess, who set down a pre-report dated 21 July 1993 and a definitive report of 15 November 1993.
On 13 January 1994, the Rhin et Moselle insurance company served [seller] and the Zurich Assurances company to appear before the Commercial Chamber of the [Court of First Instance] of Strasbourg [France] to obtain a joint and several judgment for the payment of the sum of 1,700,000 francs with interest at the legal rate from 28 June 1991 and of 170,000 francs as damages and interest, for compensation of commercial damage, plus 100,000 francs for indemnity of court costs.
[Seller] and Zurich Assurances opposed this demand. They raised the lack of jurisdiction of French courts in favor of the jurisdiction of courts of the city of Bremen in Germany. The [seller and Zurich Assurances] also maintained that there was occasion to make application of German law, and consequently to deny the [buyer and Rhin et Moselle] on the merits.
On 9 June 1995, the [buyer], in receivership represented by Paul Patry, Esq., receiver, intervened voluntarily in the suit to obtain joint and several condemnation of the [seller and Zurich Assurances] to pay it the sum of 367,640.08 francs with interest at the legal rate from the date of the voluntary intervention, in addition to the sum of 35,000 francs by application of the provisions of Article 700 of the new Code of Civil Procedure.
- Ordered the Rhin et Moselle insurance company and the [buyer] in receivership to pay the court expenses.
The [Court of First Instance] considered, first of all, that [seller] could not rely on the general conditions of sale which were not entered in the scope of the contract so that the forum selection clause, no more than the reference to German law stipulated in these general conditions, was not to be construed against [buyer] and the Rhin et Moselle insurance company. The Court considered that the rules of the common law of international trade had to apply, which led back instead to the place of delivery of the goods and to the place of residence of the [seller].
- The defects that rendered the item unfit for its use constituted defects inevitably harkening back to the scheme of Art. 1641 et seq. of the Civil Code.
Even though the defects were noticed in April 1990 and a judicial proceeding was not instituted until October 1992 -- the order appointing the expert having been made on 8 December 1992. The Court deduced from this that the condition for admissibility of the action was not satisfied.
On 26 June 1996, the Rhin et Moselle insurance company lodged an appeal of this decision. On 9 September 1996, [buyer], in its turn, also filed an appeal against this judgment. On 27 May, [seller] and Zurich Assurances brought a cross appeal.
Both suits were joined by order of 23 September 1997. By ruling entered on 10 November 1998, the Court ordered the reopening of argument to allow [buyer], having been the object of a transfer plan, to settle the proceedings.
- To, moreover, hold [seller] and Zurich Assurances liable for the entire expenses and costs including those of the interim order and proceeding (com. 92 1276) and for the payment of a sum of 10,000 francs by application of the provisions of Article 700 of the new Code of Civil Procedure.
- The forum selection clause appearing on the back of the invoices sent by [seller] to [buyer] cannot serve as an objection since it is not established that this clause had been accepted.
As to the applicable law, the Rhin et Moselle insurance company invokes Article 1 of the [CISG], and reminds that this Convention came into effect in France on 1 January 1988 and in Germany on 1 January 1991, and that neither of these countries set forth the reservation of Article 95 allowing them to not be bound by subparagraph (1)(b) of Article 1. The disputed contract having been formed in February 1990, the Convention can be given application by means of the rules of private international law.
In this respect, there is occasion to apply the solutions of the Hague Convention of 15 June 1955 on the Law Applicable to the International Sale of Movable Goods.
In the case at bar, the order having been received in the country where the buyer has its establishment, it is French law (Article 3 of the Hague Convention) -- the law of one of the Contracting States -- which is applicable. It is thus by virtue of Article 1(1)(b) of the [CISG] that the Convention on Contracts for the International Sale of Goods must receive application.
For the Rhin et Moselle insurance company, Article 12 of the general conditions of sale appearing on the back of the invoices sent by [seller] to [buyer] does not meet with the requirements of Article 2 of the Hague Convention of 15 June 1955, which sets forth that the will of the parties, as to the applicable law, must result indubitably from the provisions of the contract.
As for the period of time for commencing the action and by application of Articles 35 and 36 of the [CISG], there is no longer room to distinguish between [seller]'s obligation of delivery and the warranty against latent defects; the Convention groups together these two actions by imposing upon the [seller] the obligation to deliver conforming goods; notice of the non-conformity must be given first, within a "reasonable" period of time (not "soon" as in French law), for the action to commence.
- Only the report of the expert, Mr. Riess, pronounces clearly on the cause of the unsticking of the cellulose acetate film.
Moreover, and at the same time, a settlement solution was sought by the parties and it was only on 15 July 1992 that the Zurich Assurances company definitively rejected this proposition.
As a result, the action had indeed been commenced within the reasonable period of time aimed at by the [CISG].
Furthermore, and even on the basis of Article 1648 of the Civil Code, the [Court of First Instance] could not properly reject the Rhin et Moselle insurance company's demand in its measure or the sure knowledge of the defect marking the point of departure of the brief period of time; this can be set as the day of the announcement of the judicial survey report (cass. civ. 11 January 1989).
Finally, on the merits, the Rhin et Moselle insurance company refers to the conclusions of Mr. Riess' report, to the receipt established by the Socatrem company, and to the agreement of the parties regarding the evaluation of the damage.
- To hold [seller] and Zurich Assurances liable for the entire court expenses of this instance -- including the interim proceeding estimates -- as well as for the payment in the amount of 15,000 francs in conformity with Article 700 of the new Code of Civil Procedure.
- To hold them liable for the cost of the cross appeal.
As to the objection of lack of jurisdiction, the [buyer] relies on the notion that if Article 17 of the Brussels Convention is applicable, the conditions of application of this text are not all present. On the other hand, the [French Court of First Instance] was competent by virtue of the provisions of Article 5-1 of the Brussels Convention, being at the place where the obligation had been performed.
Article 48 of the new Code of Civil Procedure is not applicable, and in any hypothesis, [seller]'s general conditions of sale did not enter the contractual realm, since it is not established that they were accepted by the buyer.
Finally, the lack of jurisdiction objection should have been raised in limine litis (Article 74 of the new Code of Civil Procedure), which was not the case in the present suit, since [seller] appeared in the interim proceeding before the French jurisdiction without raising this objection.
On the applicable law, [buyer] resumes the same argumentation as the Rhin et Moselle insurance company.
On the merits, [buyer] considers that the [Court of First Instance] wrongly cast aside its showing on the basis of the lack of obligation of delivery.
One finds in Mr. Riess' report that the origin of the defect lies partially in a problem of compatibility between the glue and the acrylic varnish, and that it would have been up to [seller] to warn its customer that the delivered glue was not adapted to photogravure plates, which [seller] did not do -- even after the appearance of the first incidents, it being shown that [seller] knew perfectly the destination of the glue and the technical specificities which it had to satisfy.
According to [buyer], the expert has further noted the indistinctness and the barely explicit character of [seller]'s specification sheets and the fact that these specification sheets do not contain any restriction as for the medium on which the glue can be used. As a result, the [seller] failed in its obligation to advise [buyer]; and that this failure is related to the cause of the disorder.
It emerges from these explanations that the short-period-of-time rule [of the statute of limitations or prescription period provided for under French law] does not have to apply in the instant case.
Moreover, by the terms of Articles 35 and 36 of the [CISG] there is no room to distinguish between an action based on the breach of the obligation of delivery and an action sounding in warranty against latent defects. [Under applicable French law], an action based on a breach of the obligation of conforming delivery need only be instituted within a reasonable period of time. Such is indeed the case in the present suit since negotiations were in progress, which failed in 1992, and because [buyer] had only late knowledge of the nature and origin of the imperfections affecting the delivered goods.
Additionally, and in reference to French law, it is permitted by jurisprudence that the existence of amicable negotiations can postpone the starting point of the "short period of time" aimed at in Article 1648 of the Civil Code.
Beyond the contractual liability of [seller] being committed, there is no place for this discussion. The expert could lean on the tangible elements on the basis of a stock of sheets kept by the Socratem company.
Turning to the silicone, the presence of which would explain, at least partially, the phenomenon of the unglueing, the expert has also expressed himself and his conclusions allow one to exclude the lamination site as a possible cause of the pollution by silicone.
Finally, the circumstance that 3,200 kgs of glue are concerned by the defect while 14,442 kgs had been delivered by [seller] indeed confirms the fact that the product was unsuitable for the usage to which it was put, the rest of the glue having been used in different conditions.
- To hold that the [seller and Zurich Assurances] revindicated the competence of the jurisdictions of the city of Bremen in Germany.
- To hold that German law is the only law applicable in the case at bar.
- To hold the Rhin et Moselle insurance company and [buyer] liable for the cost of both proceedings as well as for the payment in the amount of 10,000 francs for each of the two proceedings, in application of the provisions of Article 700 of the new Code of Civil Procedure.
The [seller and Zurich Assurances] rely, first of all, on the fact that [seller] and [buyer] were in business relations, that [seller]'s general conditions of sale contained on the back a forum selection clause in favor of the courts of the city of Bremen, that moreover all the invoices proffered by [seller] came from that city where the head office of the German [seller] is located. The Rhin et Moselle insurance company subrogated to the rights of [buyer] is bound by these conditions. The drafting of the disputed clauses in the German language constitutes an irrelevant circumstance, since the order was taken down in Germany with a German company, within the framework of well established business relations.
By supplementary right, it is the same for the application of German law, expressly addressed in these same general conditions of sale by Article 12.
Additionally and on the merits, [seller] and Zurich Assurances maintain that [buyer] took more than two and a half years to prosecute the suit. The grounds drawn by the application of Article 1648 of the Civil Code are all the more justified as there were no more original copies of the packaging laminated by means of a glue of [seller] during the expert evaluation.
The Court requires that, [as provided by French law on statute of limitations or prescription periods], an action must be promptly instituted, the summons in interlocutory proceedings not being interruptive. The brief period of time begins to run from the manifestation of the defect and not from the knowledge of the causes of the defect.
The [seller] also disputes that real negotiations were engaged in with it and maintains that the proof of these negotiations is borne out neither by [buyer] nor by the Rhin et Moselle insurance company.
The [seller and Zurich Assurances] finally remind that the Court considered that the relied upon defects constituted defects lying inevitably within the regime of articles 1641 et seq. of the Civil Code, since the glue indeed met well with the order and its specifications.
By more supplementary right still, [seller] and Zurich Assurances maintain that the demand by [buyer and Rhin et Moselle] is unacceptable and, in any event, ill founded, as it is predicated upon the uncontradicted reports of the CERIPEC bureau, which [seller] has never accepted. And, considering the elapsed time, the judicial expert, who was not any more capable of proceeding to analyses on the disputed products themselves, was forced to refer to the CERIPEC report.
Mr. Riess' report is in any hypothesis disputed since, without the slightest demonstration, this expert believed he could exclude that the pollutant, whose presence had been noticed on laminated sheets, resulted from machines or from the dilution of solvent used by [buyer].
In fact, the glue manufactured by [seller] does not contain silicone.
Furthermore, as to the delivered 14,443 kgs of glue, only 3.2 kgs posed a problem. Finally, the CERIPEC bureau did not analyze the thinner used by [buyer] for the use of the glue and the realization of laminated cardboard samples.
As for the damages, the [seller] and Zurich Assurances dispute them. Not having been called to the deal concluded by the Rhin et Moselle insurance company, and in the absence of contradictory definition of the damage.
[Seller] and Zurich Assurances rely on a forum selection clause included in [seller]'s general conditions of sale.
This objection is acceptable having been raised in limine litis in the proceeding on the merits (see briefs filed on 3 April 1995 before the [Court of First Instance]), mattering little that [seller], for motives which are appropriate for it, did not raise this objection within the framework of the interlocutory proceeding for an expert evaluation, which establishes a different authority (cass. corn. 28 May 1991).
The Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, is applicable in the present dispute setting French companies against German companies.
In the case at bar, the forum selection clause which [seller] asserts is printed on the back of the delivery orders and invoices would have been accepted by [buyer] within the framework of the business relations established between the parties before the disputed order.
Produced in this respect are some order confirmations emanating from [buyer] on 31 January 1990 and 2 February 1990 bearing the following notations: "usual prices and conditions", "agreed prices and conditions", keeping in mind that the confirmation of the disputed order goes back to 19 February 1990.
In this respect, and by reference to the above-mentioned Brussels Convention, it is advisable to admit the practice of printing general conditions of sale, reciting a forum selection clause, on the back of the commercial documents, constitutes a current practice in the area of the sale of goods.
In the case at bar, however, [seller] -- which does not produce any specimen of invoices or original delivery orders, but only a photocopy of the first side of these documents and, apart from the one with the general conditions -- the extract of these general conditions, does not demonstrate that the disputed clause was reproduced on the back of the documents of which [buyer] had knowledge.
On the other hand, and even if we allow that the extract of the general conditions produced corresponds to the one which the delivery order refers to (see the mention appearing at the foot of the first side of this check "see extract of the general conditions on reverse"), it is an established fact that this list of conditions does not meet the conditions of legibility imposed by jurisprudence. It is indeed about the compact statement of an important number of conditions (39 articles) drafted in small print hardly distinct, where the forum selection clause is buried. This text is besides drafted in German, which establishes certainly the usual language of one of the parties but which does not appear as the language of the contract, since the other documents, and particularly the first side of the delivery order on which these conditions would be printed, are drafted in French, and since the order was sent to a correspondent of [seller] in France.
Finally, the notations affixed on [buyer]'s order confirmations do not establish that [buyer] had knowledge, nor all the more accepted [seller]'s general conditions of sale as far as the acceptance at which it aims manifestly concerns the particular conditions of the contract (prices, delivery periods, terms of payment) and not the general conditions. It is indeed significant that while the price, delivery and payment conditions are clarified in the order confirmation, the mention "prices and usual conditions" or "agreed", does not appear there but rather the converse.
It is thus right that the [Court of First Instance] has set aside the application of the forum selection clause.
"The defendant [seller, in this case] domiciled in the territory of a Contracting State can be brought before the court of the place where the united obligation serves as basis for the demand had been or to be executed in another Contracting State in contractual matters."
In the case at bar, the obligation which serves as a basis for the demand is the obligation to deliver products corresponding to the order. The place of delivery is "delivery free Benfeld" [France], so that the [ Court of First Instance] of Strasbourg was very competent to hear the dispute.
For this Convention to be applicable, it is advisable first of all to verify the international character of the sale since [buyer]'s order was sent to Mr. Molinier, [seller]'s "representative in France", domiciled in Aulnois (88), France.
The evidence produced by the parties does not allow us to say whether this person -- of whom we ignore moreover under which form he exercises his activity -- can be considered as the defendant [seller]'s French place of business.
It is, however, established that the order confirmations emanating from the seller, the invoices, and the deliveries of the goods were made from the seat of [seller] in Germany. From then on and to suppose that Mr. Molinier was responsible for managing in France one of [seller]'s places of business, the place of business "which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract" and which must for this reason be taken "into consideration" (Art. 10 [CISG]) is indeed the establishment whose seat is in Bremen [Germany]. The international character of the disputed contract is as a consequence established.
It is advisable to remind, secondly, that on the date of the contract's formation (in February 1990) Germany had not ratified the [CISG] so that this Convention is not applicable by reference to Article 1(1)(a) CISG. However, neither Germany nor France signed on to the reservation of Art. 95 of the Convention allowing them not to be bound by Art. 1(1)(b).
Therefore, the application of the rules of private international law lead to the application of the Hague Convention of 15 June 1955 on the Law Applicable to the International Sale of Movable Goods. This Convention gives a wide primacy to the will of the parties. By the terms of Art. 2 paragraph 1, "the sale is governed by the domestic law of the country designated by the contracting parties." However, in order that this will of the parties apply, it must be clearly expressed.
Article 12 of the general conditions of sale established by [seller] -- which harkens back to the application of German law -- being reproduced on the back of the commercial documents in the same conditions as the forum selection clause, an identical solution must be held, for the reasons already expressed, the non-application of this clause in the relations between [buyer] and [seller] with regard to the disputed contract.
"the domestic law of the country where the buyer knew usual place of residence or in which he possess the establishment which placed the order if it is in this country where the order was received either by the seller or by his representative agent or travelling salesman."
In the present case, the order was received in Aulnois in France by the "representative" of [seller] in this country. From then on, by the terms of the Hague Convention, the applicable law is French law. France being a State party to the CISG at the time the contract was formed, the CISG is applicable to the relations ensuing from this contract by application of Art. 1(1)(b).
Section II of the CISG requires the seller to deliver goods "which are of the quantity, quality and description required by the contract," [Art. 35] the seller being responsible for "any lack of conformity which exists at the time when the risk passes to the buyer, even though the lack of conformity becomes apparent only after that time." [Art. 36].
"A request for repair must be made either in conjunction with notice given under Art. 39 or within a reasonable time thereafter."
"The damage of [buyer] amounts at present to the sum of 339 44.16. [sic?] The complaint of Socatrem, plater amounting to more than one million."
It is thus not contestable that the notice of the defect had been made within a reasonable period of time as envisioned by Art. 39 of the CISG.
Following this notice, carrying out the expert evaluation began at once and then a first meeting was organized by the expert in Benfeld on 25 July 1990. [Seller] as well as Zurich Assurances were invited to this meeting.
"to identify the film-forming materials deposited on the cardboard support, to assure their correspondence in the manufacture of packaging" and "to determine if a present organic pollutant in the interfacial zone 'acetate of cellulose/varnish' might provoke the observed disorders (ungluing) during the stamping of the cardboard packaging."
"You speak in your correspondence of 24 January 1991 of a settlement. Could you announce us arguments directing you this way and more particularly to pass on to us Mr. Rabate's briefs so that we can judge and forward to our principal all the elements of assessment for such an eventuality?"
"The analysis item-by-item of the different orders in question orders has led the parties to suggest to Socratrem that it assess the damages suffered by the latter in the lump sum including every category of damages in 100,000 francs."
This amount was finally accepted by Socatrem.
Afterward, the negotiations commenced again on the imputability of the damages: a technical note was drafted on 30 December 1991 by the TEXA bureau, the company appointed by [buyer], from the analyses conducted by CERIPEC on 16 March 1992. The Rhin et Moselle insurance company wrote to Zurich Assurances to relaunch the discussions. On 26 May 1992, the Ingexas company drafted in its turn a technical note on the basis of which Zurich Assurances informed Rhin et Moselle on 15 July 1992 that it refused to follow up its settlement demand.
- The Rhin et Moselle insurance company consequently served [seller] to appear before the [Court of First Instance] to obtain the name of a judicial expert.
- An order was entered on 8 December 1992, acceding to this request, and the judicial expert, Mr. Riess deposited his definitive report on 15 November 1993.
- Following the entry of this report, the action was commenced by the Rhin et Moselle insurance company against [seller] and against Zurich Assurances on 13 January 1994.
It emerges from the review of these dates that the period to commence the action is in line with the requirements or needs of the Vienna Convention [CISG]: it was indeed justifiable for the insurance company to try to handle this dispute in an amicable manner. It had been encouraged in this endeavor by [seller] and Zurich Assurances which, from the beginning, had accepted the negotiation and loyally participated in the private expert evaluations conducted at the initiative of the Rhin et Moselle insurance company.
It shall be noted, in that regard, that from July 1990 to July 1992, the exchange of letters, notes or reports had been uninterrupted, attesting to the Rhin et Moselle insurance company's seeking a prompt solution of this dispute.
CERIPEC's report ended certainly in the "likely" presence of a pollutant of a "silicone" type having provoked a loss of adhesion "in the interphase cellulose acetate varnish" but did not pronounce certainly upon the origin of this pollutant, leaving the door open to any discussions about this point. Additional analyses were thus indispensable considering the climate of the relationship in which it was made up to the research, and did not make it imperative to immediately seek legal redress.
It is thus only as from Zurich Assurances' letter of 15 July 1992 that it seemed that no settlement solution could be found and that it was advisable to pursue the matter in a contentious framework.
The period of time lapses between the notice of the defect and the commencement of the judicial action by the Rhin et Moselle insurance company, and seems "reasonable" [from the standpoint of French law on statute of limitations or prescription period].
Coming, on the other hand, to the [buyer], if it is established that until the date of the survey report its interests were defended by its insurance company (the request in interlocutory proceeding was introduced by [buyer] and the Rhin et Moselle insurance company acting by the same lawyer), nothing allows to explain -- and all the more to justify -- that [buyer] waited until 15 June 1995, which is more than one and a half years after the entry of the survey report, to intervene in the suit below. Meanwhile, there was no letter, no reminder, no manifestation of any kind whatsoever, so that, [in the context of French law on statute of limitations or prescription period], the period of time that lapsed since the notice of the defect since the time [buyer] intervened in the suit cannot be considered "reasonable" with respect to its duration. This is not explained as there was a continued proceeding of suits with the aim of compensation for the damages.
It is thus proper to affirm the judgment in that it declared [buyer]'s demand unacceptable, but to reverse it in that it declared the demand of the Rhin et Moselle insurance company likewise unacceptable.
The [seller] and the Zurich Assurances company dispute at the same moment the contradictory character of the CERIPEC report -- on which the expert partially based himself -- and the reliability of the conclusions of Mr. Riess' report which considers definitely "it is the [seller]'s glue, poorly adapted to this lamination work, that is at the origin of the damages."
- The judicial expert is entitled to refer to any element which seems to him convenient, even if it constitutes a contradictory piece of evidence, on the condition that the parties are enabled to discuss it and to communicate to the expert any convenient documentary evidence.
- "the laboratory tests which we made/on a sheet of packaging representative of the disorders noticed since the disputed manufactures of the spring of 1990."
On the other hand, coming to the laboratory tests conducted by the judicial expert starting with a sheet of packaging originating from the stock which remained with the Socatrem company, this sample was "recognized as representative of the disorders by all the parties, with the exception of Mr. Chevalier of the INDEXAS bureau." For lack of more nuanced explanations, these reservations cannot be taken into account.
As a result, the grounds set out by the [seller and Zurich Assurances] are, for this reason, not founded.
Turning then to the pertinence of the conclusions of the judicial expert, [seller] disputes the assertion of the expert according to which pollutants (silicones) could not result from grease from [buyer]'s machines. [Seller] finds on its part, that of the whole disputed delivery to [buyer], only a small part posed a problem (3,200 kgs out of 14,400 kgs). [Seller] deduces from this that the pollutant which is stated in the various reports could not be in the delivered glue, but must inevitably be present on the site of the [buyer].
- "Solvents used by [buyer] are cleansed at the industrial stage by distillation, and silicones have a boiling point much too high to be involved during this operation."
- On the other hand, in a phenomenon of dissolution of the acrylic varnish by the polyurethane glue supplied by the [seller] placed in evidence by operation of the defect, which was created by the tensions in the interfaces of the various layers of the material.
According to the expert, it results that "if the glue supplied by the [seller] is not adapted to this particular case of lamination, it can perfectly be suitable for the gluing of other substrata as [buyer] was moreover able to notice."
These explanations of the expert, which are the result of the analyses to which Mr. Riess proceeded and which are not seriously contradicted, respond to the line of argument developed by Zurich Assurances and [seller] and allow one to set it aside.
There is thus room to say that the conclusions of the judicial survey report establish in a certain way the causes of the disorder.
- On the other hand, [seller] had to indicate to its customer the limitations on its use which ensued from it, which it did not do.
- [Seller] knew the Socatrem packaging because it supplied to this company a "primary before printing for the considered packaging" (see answer in the statements of [seller] drafted by the TEXA bureau on 4 November 1993, p. 5, para. 3 and 4).
Being subrogated to the rights of the Socatrem company which it indemnified, as evidenced by the letter of acceptance of the general manager of Socatrem on 26 June 1991, the Rhin et Moselle insurance company is entitled to protest to [seller] and its insurer, jointly and severally, the sum of 1,700,000 francs corresponding not only to the amount of damage contradicted by the experts of the various insurance companies (see report following the meeting of expert evaluation of 13 June 1991), but also to the sum which was paid by the Rhin et Moselle insurance company to Socatrem.
It is justified as additional damages and interest to assign to it the interest on this sum from the filing of the suit, that is, 13 January 1994.
The [seller] and its Zurich Assurances company bear the responsibility for the expenses (including those related to the interlocutory proceeding for an expert evaluation) and trial court costs. An amount of 10,000 francs has to be assigned for this reason to the Rhin et Moselle insurance company.
ORDERS the [seller] and the Zurich Assurances company to pay to the Rhin et Moselle insurance company the sum of 10,000 francs (ten thousand francs) or 1,524.49 euros (one thousand five hundred twenty four euros and forty-nine cents) by application of the provisions of Article 700 of the new Code of Civil Procedure.
The present ruling was signed by the President and by the Clerk of the Court present at the pronouncement.
* All translations should be verified by cross-checking against the original text. purposes of this translation, the Plaintiff-Appellant of Germany is referred to as [seller]; the Defendant-Appellee of France is referred to as [buyer].
*** Kirstin Statl�nder is a student of law at Humboldt University Berlin. She was a member of the team of Humboldt University at the 9th Willem C. Vis International Commercial Arbitration Moot 2001/02 and is a coach of the team at the 10th Willem C. Vis International Commercial Arbitration Moot 2002/03.

References: art. 3
 v.

 Art. 1641
 Art. 95
 Art. 1
 Art. 2
 Art. 1
 Art. 39
 Art. 39