Data
- Date:
- 29-04-2024
- Country:
- Spain
- Number:
- 292/2024
- Court:
- Audiencia Provincial de Barcelona
- Parties:
- FERN RIDGE LTD vs. MAFRIGES S.A.
Keywords
INTERNATIONAL SALES CONTRACT GOVERNED BY DOMESTIC LAW - REFERENCE TO CISG AND UNIDROIT PRINCIPLES IN ORDER TO INTERPRET AND SUPPLEMENT APPLICABLE DOMESTIC LAW
MITIGATION OF LOSSES – REFERENCE TO ART. 77 CISG AND 7.4.8 UNIDROIT PRINCIPLES
Abstract
The case concerns a dispute between a New Zealand buyer and a Spanish seller arising out of several international sales contracts for the supply of pork. The meat, intended for direct human consumption in New Zealand, was required under local regulations to be packaged in pieces not exceeding three kilograms. The seller was aware of this requirement and expressly confirmed compliance in the accompanying health documentation.
Upon arrival, New Zealand biosecurity authorities found that part of the goods did not comply with the weight limit. The shipments were therefore rejected and could not be marketed. The buyer, who had prepaid the price, incurred storage costs and other losses and brought an action seeking avoidance of the contracts and damages.
The court of first instance found that the seller had breached the contract but reduced the amount of damages on the ground that the buyer had failed to mitigate its loss. The buyer appealed.
The Court reversed the decision and upheld the full claim for damages. In so doing, although not directly applying the CISG or the Unidroit Principles, it expressly cites the case law of the Spanish Supreme Court (Supreme Court ruling of March 4, 2015 - already in Unilex), which incorporates these texts as a manifestation of the principle of good faith (Article 7 of the Civil Code) and the reasonableness required of the injured party in limiting damages.
Article 77 of the CISG establishes that the injured party must take reasonable measures to reduce the loss arising from the breach of contract, otherwise it will be unable to recover the part that could have been avoided. The same rule is reflected in Article 7.4.8 of the Unidroit Principles. The Court used these precepts as an interpretive guideline for the general principle, emphasizing that the injured party cannot be imposed the burden of accepting disproportionate or economically harmful solutions to remedy harm caused by the other party.
In this specific case, in the Court's view, the buyer demonstrated that it acted in good faith, notifying the seller of the situation from the outset and exploring alternative avenues to minimize losses, including selling at a reduced price. However, it legitimately conditioned this option on the seller's acceptance of the discount. Given the seller's lack of response or cooperation, the Court concluded that the buyer could not be required to bear additional damages resulting from the seller's breach. In the words of the Court, allowing this would amount to "shifting the consequences of the third party's breach to the victim."
Fulltext
Original in Spanish:
- available at https://www.cisgspanish.com/}}
Source
Original in Spanish:
- available at https://www.cisgspanish.com/}}