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):

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: