The Rotterdam District Court issued an interesting judgment on March 9, 2022. The case was about the following issue:
Medical agreed with E2C that E2C would provide the transportation of Covid masks to Italy. The masks did not arrive in Italy. This is a shortcoming on the side of E2C which causes Medical to suffer damage. E2C should therefore – according to Medical – repay the already paid purchase price of the masks of € 90,000 to Medical. The dispute therefore concerns a purchase agreement of movable goods between parties who are established in different states. Both the Netherlands and Italy are Contracting States within the meaning of Article 1 (1) of the United Nations Convention on Contracts for the International Sale of Goods (hereinafter: Vienna Sales Convention). The parties have not contractually excluded the application of the Vienna Sales Convention. The Vienna Sales Convention therefore applies.
Does the purchase contract also cover transport? In view of article 30 Vienna Sales Convention, E2C had the obligation to deliver the masks. Article 31 Vienna Sales Convention specifies what the obligation to deliver means in different situations. In order to determine which situation applies, the question must first be answered whether the purchase agreement also includes the transport of the goods. The court answers this question in the affirmative.
E2C argues that on the basis of the purchase agreement it was not obliged to arrange for the transport of the masks and that it did not pay for this either. Therefore, according to E2C, the transportation would not be a sub-purchase part of the contract. The court held that it was irrelevant whether E2C was obliged under the purchase agreement to arrange for the transportation of the masks to Italy. It is undisputed that on March 30, 2020, E2C engaged an independent third party to arrange transportation to Italy. Thus, E2C eventually actually arranged the transport and thus the transport became part of the purchase agreement.
Article 67 (1) Vienna Sales Convention provides that the risk passes to the buyer when the goods are delivered to the first carrier for shipment to the buyer in accordance with the contract. In view of paragraph 2 of the aforementioned article, the goods must be clearly intended for performance of the contract by marks, by shipping documents, by notice to the buyer or otherwise.
The court notes that on March 30, 2020, the masks were delivered to a carrier and a bill of lading was issued. In addition, on March 30, 2020, E2C provided Medical with a notice of shipment. The court finds that with the surrender of the items to the carrier, the risk passed to Medical. E2C can no longer be held liable for loss or damage occurring after the moment of handing over to the carrier or auxiliary person, unless the loss or damage is due to an act or omission on the part of E2C, according to article 66 Vienna Convention on the International Sale of Goods. The latter has not been stated nor shown. Medical’s claims are rejected.
Therefore, as a buyer, please note that if you do exclude the Vienna Sales Convention, after handing over the shipment to a carrier by the seller- you can no longer hold the seller liable, even if the transport is not paid for by you.
