Implicit Exclusion
Invitation to Debate
Comment
Two recent French Supreme Court decisions centre on the application of the Vienna Convention on Contracts for the International Sale of Goods 1980.
On June 26 2001 the First Civil Chamber of the Supreme Court stated that French judges may apply the uniform material rules governing international sales contained in the convention. The convention became enforceable in France on January 1 1988.
The case arose after a French purchaser of paper refused to pay the seller, a UK company, following a disagreement about the price and quality of the products. The purchaser appealed against an unfavourable decision on the grounds that (i) the judges failed to determine the governing law as the Vienna Convention and the Hague Convention on the International Sale of Goods, and (ii) by applying French internal pricing rules, the court violated the pricing rules in the Vienna Convention.
The court stated that, according to Articles 1(1)(b) and 3(2) of the Hague Convention, French judges may apply the uniform material rules of the Vienna Convention to international sales contracts.
However, it added that under Article 6 of the Vienna Convention, parties may implicitly exclude the application of the Vienna Convention if they do not establish their claims on the basis of the uniform material rules. As a result, the Supreme Court upheld the court of appeal decision on the ground that both parties failed to refer to the convention during the proceedings.
In the second decision the First Civil Chamber of the Supreme Court held, on October 2 2001, that when a court determines by its own motion that the Vienna Convention applies to an international sale of goods, it must invite the parties to make submissions on that issue.
The case arose out of a claim filed for epidemic contamination against an importer and distributor of meat in France. The Canadian company which had sold the meat was ordered to pay damages. The court of appeal based its decision on Article 35(1) of the Vienna Convention.
The decision was reversed by the Supreme Court because the Vienna Convention was applied without allowing debate between the parties on that issue, and this violated Article 16 of the French Code of Civil Procedure.
The decisions show that although the Vienna Convention introduces material and uniform rules for the international sale of goods in the French system, the court must consider the intent of the parties in determining whether those rules should apply. However, judges may have trouble in ascertaining intent, as the parties may either refer expressly to the Vienna Convention or implicitly exclude it in their choice of law governing their obligations. They may also exclude the Vienna Convention during the proceedings - having concluded the sales agreement without choosing the applicable law - if they do not refer to the convention as their basis for litigation.
Thus, in cases involving international sales agreements, decisions applying the Vienna Convention must refer to any debate between the parties on the matter during the proceedings. Courts will be reluctant to apply its provisions in the absence of any reference to the Vienna Convention, either in an agreement or during the proceedings.
The French Supreme Court made two new findings in the decisions. First, the behaviour of the parties in court may implicitly exclude the rules contained in the Vienna Convention, even though it is part of the French system. Second, French judges may apply those rules to international sales agreements when they comply with the convention's requirements.
For further information on this topic please contact Philippe Blaquier-Cirelli at Jeantet et Associés by telephone (+33 1 45 05 81 85) or by fax (+33 1 45 05 82 28) or by email ([email protected]).