Data

Date:
29-03-2017
Country:
Japan
Number:
2016(Ne)No.4718
Court:
Tokyo Kōtō Saibansho [High Court]
Parties:
United Ocean Co., Ltd. vs. Marine Court Inc.

Keywords

SCOPE OF CONVENTION - PROPERTY IN GOODS SOLD NOT COVERED (ART. 4(b) CISG)

Abstract

[Abstract prepared by prof. Yasutoshi Ishida, Himeji-Dokkyo University]

In October 2012, A Japanese buyer (X), specializing in importing marine products from Russia, entered into a sales contract with Russian company (Y) for a quantity of king crab meat (boiled and frozen) produced by a Russian producer (K). The goods were delivered and stored in Tokyo.
Later on, another Japanese company (Z), also engaged in importing Russian marine products, claimed that it had a contract, effective from December 2011, under which it was entitled to purchase all the crab meat produced by the designated K’s factories during specific periods. Company Z argued that the crab meat sold to the seller was covered by its contract and sought a temporary injunction to prevent the transfer of the goods from X's warehouse, which was granted. Subsequently, the seller sued company Z in the Tokyo District Court to challenge the injunction, asserting its property rights over the crab meat.
In 2016, the Tokyo District Court ruled in favor of the buyer. Company Z appealed, but in 2017 the Tokyo High Court upheld the District Court's decision. The Tokyo High Court confirmed that the sale of crab meat between the buyer and company Y was properly executed under Russian law.
Regarding the transaction between the company Y and the seller, the Court ruled that, since CISG does not govern the issue of transfer of ownership (Article 4(b)), Russian law should apply to solve the matter. Under Articles 223(1) and 456(2) of the Russian Civil Code, property rights are transferred upon the buyer on conclusion of the contract and delivery of the goods. The contract, which specified the goods, quantity, and price, was considered duly concluded in October 2012, whether in accordance with the CISG or Article 455 of the Russian Civil Code. Also, the Court found that the contract referenced CFR Incoterms 2010, and delivery was completed when the goods were loaded at Vladivostok. Payment was made by X to Y from October 2012 to January 2013, establishing X’s property rights to the crab meat.

Regarding the transaction between company K and company Z, the Court found that
the contract fell under Art. 3(1) CISG concerning the supply of goods to be manufactured or produced. Although the contract did not explicitly state the price and quantity, it included provisions for determining these aspects (Art. 14(1) CISG).
The possibility existed that the contract was validly concluded between the parties in December 2011, potentially making company K liable for breach. Company Z made payments to company K between December 2011 and February 2012, but the nature of these payments—whether advance or credit—remained disputed.
There was no evidence that the crab meat was delivered to company Z. The contract referenced CFR Incoterms 2010 but did not specify the loading port. Even under CISG Art. 31(a), there was no proof that company K handed the goods over to the first carrier for company Z. Company Z’s claim that the crab meat was handed over to Y for Z was unclear, and the email Z received from K with specifications could not be regarded as delivery. By the time of the email, the crab meat had already been delivered to the company X.
Consequently, the alleged transfer of property rights from company K to company Z could not be proved under Russian law.

Fulltext

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Source

Courtesy of Prof. Yasutoshi Ishida, Himeji-Dokkyo University}}