Search for cases
CISG-online number
2920
Case name
Mees van den Brink Haaksbergen B.V. v. SAS (Shanghai) Industrial & Trading Co. Ltd.
Jurisdiction
Netherlands
Court
Gerechtshof Arnhem-Leeuwarden (Court of Appeal Arnhem-Leeuwarden)
Judges
A.W. Steeg (Presiding Judge), B.J. Engberts (Judge), R.A. Dozy (Judge)
Date of decision
03 October 2017
Case nr./docket nr.
200.187.131
Claimant 1
Respondent 1
Case History
Seller 1
Buyer 1
Category of goods
74: General industrial machinery and equipment, not elsewhere specified, and machine parts, not elsewhere specified
Goods as per contract
Brass valves
Price
15'296.17 EUR (Euro)
CISG applicable
yes, agreement of the parties
CISG applied
yes
(Domestic) law applied in addition
Dutch law
Key CISG provisions applied
Art. 8(2); Art. 8(3); Art. 57(1)(a)
Relevant CISG provisions not cited
Art. 4 (e-mail fraud)
Decision published in 2
European Case Law Identifier (ECLI)
ECLI:NL:GHARL:2017:8585
Full text of decision 1
by Ulrich G. Schroeter
The present appellate decision was rendered in a dispute arising out of an international sales contract for brass valves concluded between a Dutch buyer (Mees van den Brink Haaksbergen B.V., the Claimant-Appellant) and a Chinese seller (SAS (Shanghai) Industrial & Trading Co. Ltd., the Respondent-Appellee). The parties had had a continuing business relationship over the past four years. During this time, payment for any goods had always been made by the buyer by bank transfer to the seller's bank account at Bank of China, Shanghai Pudong branch.
After the buyer had on 7 August 2014 sent an e-mail to the seller's usual e-mail address placing an order for brass valves, an unknown third party on 25 September 2014 contacted the buyer's staff member in charge via e-mail regarding payment. (The third party apparently had obtained information about the parties' business relationship by hacking the seller's computer, internet and e-mail system.) The e-mail address from which the third-party message was sent contained the name of the seller's staff member and the seller's company name, but not the seller's domain name ("sasvalve.com"), using a different domain ("126.com") instead. After an exchange of e-mails, the third party in a case of e-mail fraud asked the buyer to transfer the contract price for the brass valves not to the seller's usual bank account, but to a different bank account with Citi Bank in New York (U.S.A.), allegedly because the seller's "account department is presently undergoing financial reconciliation accounts analysis/updates and tax clearance with our local chamber of commerce for the last quarter of the year so we connot receive your payment at this time through our Normal Ningbo commerce Bank". The Dutch buyer transferred the price to the bank account at Citi Bank New York (which did not belong to the Chinese seller).
Upon appeal, the Court of Appeal Arnhem-Leeuwarden had to decide whether the buyer's payment to the third party fraudster's U.S. bank account had fulfilled the seller's claim for the contract price, or not. In affirming the District Court Overijssel's decision that the payment made had not done so, the Court of Appeal first pointed to the provision on the place of payment in Art. 57(1)(a) CISG, according to which the buyer must pay the contract price to the seller at the seller's place of business, unless he is "bound to pay the price at any other particular place" (para. 22 of the decision).
In assessing whether a different place of payment had presently been designated and who bore the risk that the respective e-mails had not been sent by the seller, but by a third-party fraudster, the Court of Appeal (in paras. 24–29 of the decision) looked to the principles of Art. 8 CISG, applying the understanding of a reasonable person (Art. 8(2) CISG) taking into account all circumstances of the case (Art. 8(3) CISG). It concluded that a reasonable person could not have understood the fraudster's messages as having been made by the Chinese seller, pointing to a number of apparent inconsistencies that should have been noted by the Dutch buyer had it behaved with reasonable care (as, among others, the differences between the seller's and the fraudster's e-mail addresses; the fraudster using a different, nondescript e-mail subject ("Re:RE:Delivery all") instead of "Purchase order 62262" used by the seller); the fraudster's reference to "our Normal Ningbo commerce Bank" although the seller banked with Bank of China in Shanghai; and the unbelievable reason given for the alleged change in bank account (why would a pending finance and tax control require payments to be made to a different bank located in a foreign country?)).
The Court of Appeal therefore concluded that the Chinese seller still had a claim for payment of the contract price against the Dutch buyer.