Court of Appeal Arnhem-Leeuwarden holds that agreement on retention of title is governed by the CISG

The dispute in Top Mark B.V. v. Orchestra-Prémaman Belgium S.A., decided by the Dutch Court of Appeal Arnhem-Leeuwarden on 2 June 2020, arose out of a series of deliveries of toys by the Dutch seller Top Mark B.V. to the Belgian buyer Orchestra-Prémaman Belgium S.A. After the buyer had failed to pay the contract price and had entered into insolvency proceedings, the seller demanded restitution of the toys that were still in the buyer's possession, claiming that they had been delivered subject to a retention of title provided for in the seller's standard terms.


In determining whether the seller's standard terms had become part of the parties' contract, the Court of Appeal affirmed the District Court's application of the CISG's provision, including the fact that the District Court had followed the approach laid down in CISG-AC Opinion Nr. 13 "Inclusion of Standard Terms under the CISG" (Rapporteur: Sieg Eiselen), adopted by the CISG Advisory Council on 20 January 2013. This conforms to a general tendency in recent Dutch case law on the CISG, where courts have routinely applied the principles in CISG-AC Opinion Nr. 13 in this context.


As far as the parties' agreement on the retention of title clause contained in the seller's standard terms was concerned, the Court of Appeal acknowledged that Art. 4(b) CISG provides that the 1980 Sales Convention "is not concerned with [...] the effect which the contract may have on the property in the goods sold". However, the Court of Appeal held that despite Art. 4(b) CISG, the parties' formation of the necessary consent about the seller's retention of title has to be determined in accordance with the CISG (arguably the Convention's rules on formation of the contract in Arts. 14-24 and on the interpretation of party statements in Art. 8 CISG):

„The retention of title as such falls outside the scope of the CISG (Article 4(b) CISG). However, the CISG does apply to the question of whether a clause relating to a retention of title has been agreed upon. On the other hand, the consequences under property law of a reservation of title that has been validly entered into are governed by the law of the State in whose territory the property is located at the time of delivery, in this case by French law, pursuant to Article 10:128 of the BW [Dutch Civil Code]“ (para. 24 of the Court of Appeal‘s decision in translation).
Czech Republic
Top Mark B.V. v. Orchestra-Prémaman Belgium S.A.
Gerechtshof Arnhem-Leeuwarden (Court of Appeal Arnhem-Leeuwarden)
Netherlands, 02 June 2020 – 200.274.098/01, CISG-online 5289

Note that the CISG's applicability to the formation of retention of title agreements as now advocated by the Gerechtshof Arnhem-Leeuwarden is not a unanimous view in CISG case law. At least one court has in the past decided otherwise by applying domestic law to this issue:

Czech Republic
Motor yacht case
Oberlandesgericht Koblenz (Court of Appeal Koblenz)
Germany, 16 January 1992 – 5 U 534/91, CISG-online 47