Spanish Supreme Court interprets Arts. 39(1) and (2) CISG

On 6 July 2020, the Spanish Supreme Court (Tribunal Supremo) rendered its decision in the matter Intraval S.L. v. Econ Industries GmbH. The decision's full text, originally written in Spanish, has been translated into English by Juan Pablo Gómez-Moreno, a lawyer and philosopher of the Universidad de los Andes (Colombia). We are very grateful for his translation that can now be accessed via the case presentation about CISG-online no. 5370 (below).

The dispute underlying the decision arose from a CISG contract for the sale of a thermal desorption unit (TDU) concluded between a Spanish buyer (Intraval S.L.) and a German seller (Econ Industries GmbH). The TDU was purchased for installation in a waste treatment plant in Dinnington (United Kingdom). After the TDU had failed to operate as expected, the buyer eventually initiated legal proceedings against the seller.

In its decision, the Spanish Supreme Court addresses in detail both the applicability of the CISG and the principles of interpretation to be applied to the Convention. It then goes on to interpret Art. 39(1) CISG, concluding that the buyer had not given notice of non-conformity "within reasonable time" when he first informed the seller of the TDU's defects one year and seven months after its installation.

The Supreme Court furthermore clarifies that the two-year cut-off period of Art. 39(2) CISG is not a limitation period, and that the applicable limitation period is instead governed by domestic law (in the present case, by German law). In addition, Art. 39(2) CISG only becomes relevant in cases in which Art. 39(1) CISG does not apply because the seller neither discovered nor could not have discovered the non-conformity – however, in the present case the seller did discover the issue with the TDU (but notified too late).