Case number: 94
Article number: sales convention / 1(1)(b); 7(2); 16(2)(b); 29; 74; 78
Thessaurs issue:
Country of decision: Austria
Year of decision: 1994
Type of decision: Judicial decision

Case 94: CISG 1(1)(b); 7(2); 16(2)(b); 29; 74; 78
Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien; SCH-4318 15 June 1994
Original in German
Unpublished
Reported on in English: [1995] UNILEX, D.94-11

An Austrian seller and a German buyer concluded a contract for the sale of rolled metal sheets. The goods were to be
delivered in installments "FOB Rostock", specially packaged for export. Immediately after receiving the first two deliveries, the
buyer sold the goods to a Belgian company which shipped them to a Portuguese manufacturer. The manufacturer found that
the goods were defective and refused to accept the rest of them. The German buyer sent to the Austrian seller notice of
non-conformity of the goods with contract specifications, but the seller refused to pay damages, alleging that the notice was not
timely. The buyer commenced arbitral proceedings pursuant to an arbitration clause contained in its contract with the seller.

The sole arbitrator held that, since the parties had chosen Austrian law, the contract was governed by CISG as the
international sales law of Austria, a contracting State (Art.1(1)(b) CISG).

It was found that the buyer had not complied with the particular requirements as to the examination of the goods and notice of
non-conformity, which were contractually stipulated by the parties in derogation from articles 38 and 39 CISG. The buyer had
sent to the seller written notice of the defects, together with an expert statement by an internationally recognized company, only
six months after delivery, while, according to the contract, it should have done so immediately after delivery of the goods (or at
the latest within two months after delivery).

With regard to the argument of the buyer that the seller had waived its right to raise the defense that notice of non-conformity
was not timely given, the arbitrator held that the intention of a party to waive this right must be clearly established, which was
not the case here. However, it was held that the seller was estopped from raising that defence, since the seller had behaved in
such a way that the buyer was led to believe that the seller would not raise the defense (e.g., after receiving the notice the seller
had continued to ask the buyer to provide information on the status of the complaints and had pursued negotiations with a view
to reach a settlement. The arbitrator held that, while estoppel was not expressly settled by CISG, it formed a general principle
underlying CISG ("venire contra factum proprium"; articles 7(2)), 16(2)(b) and 29(2) CISG).

The arbitrator awarded damages to the buyer for lack of conformity of the goods. With regard to interest, the arbitrator
awarded interest at the average prime rate in the buyer's country (Germany) with respect to the currency of payment (US
Dollars), giving the same reasons mentioned in case 93.