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CISG online 5309

Jurisdiction Netherlands

Tribunal District Court of The Hague

Date of the decision 27-05-2015

Case no./docket no. C/09/475774 / HA ZA 14-1201

Case name Kalpesh Enterprise LLC vs Fintex Chemie SRO

COURT OF THE HAGUE

Team trading

case number / docket number: C/09/475774 / HA ZA 14-1201

Judgment of May 27, 2015

in the case of

the legal entity under foreign law,

KALPESH ENTERPRISE LLC,
established in Virginia, United States of America, plaintiff in claim,
defendant in counterclaim,
lawyer Mr. FDP Nobel in Rotterdam,

in return for

the legal entity under foreign lawFINTEX CHEMIE SRO,

established in Prague, Czech Republic, defendant in the claim,

plaintiff in counterclaim,
lawyer Mr. B. Vanatova in Amsterdam.

The parties will hereinafter be referred to as Kalpesh and Fintex.

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1 The procedure

1.1. The course of the procedure is evident from:

- the summons of August 15, 2014, with 12 exhibits,

- the statement of defense in the claim, also the claim in the counterclaim, with 31 exhibits,
- the deed of deposit dated 1 December 2014, deposit A1 to J,
- the interim judgment of December 17, 2014, in which a appearance of the parties was ordered; -
the statement of defense in counterclaim,
- the official report of the appearance of the parties held on February 3, 2015,
- the letter dated February 17, 2015 from Mr. Vanatova (Zintex Fintex), with comments
in response to the official report, which are considered to be part of it.
1.2. Finally, a date for the delivery of judgment has been set.

2 The facts

2.1. Kalpesh is an American legal entity involved in the trading of chemical raw
materials.
2.2. Fintex is a Czech legal entity engaged in supplying high-quality chemical raw
materials (erbium oxide, neodymium oxide and gadolinium) for the glass industry
to various companies.
2.3. In the period from the beginning of 2011 to 2013, Fintex purchased various consignments
of the aforementioned raw materials from Kalpesh. Mr. [X] acted as Kalpesh's contact person.
Mrs. [Y] acted as contact person at Fintex. These persons are hereinafter referred to as [X] and
[Y].

2.4. By email of June 19, 2013, [Y] ( [email protected] ) messaged [X]: “Okay.
We agree, so we confirm 2500kg EXW Rotterdam at 45.40 usd/kg.

I would like to inform you about news in our company. Our company will cooperate with
another company from 1.7.2013, which will ensure purchasing of our goods (for us). So I
would like to ask you if you accept our purchase throught this company. Our process,
communication will be the same, but invoice and order and payment will be from this
company: Burmit Trading Unlimited (...) Gibraltar (...).”

We would like make this order for 2.5 MT maybe 3MT throught Burmit already, because we
begin from 1.7.2013 we can pay 50% from this date. Please could you accept this? We want to
collect the goods as soon as you will receive our payment.”

2.5. By email dated June 19, [X] ( [email protected] ) messaged [Y] ( [email protected] ):

“I have no problem at all because I know you and I am quite happy to work with you. As I said, I
never give any credit to any company except you. I give credit to big customers such as Rhodia and
Elkem.”

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2.6. With reference to the aforementioned email, Kalpesh has drawn up a pro forma invoice
dated June 20, 2013, addressed to Burmit, which includes the above order for an amount of USD
113,500 (invoice number KE/223/06/13). The following is included under “Terms”:

“50% of the Invoice value to be Wire Transferred to our account with BB&T. Swift:
BRBTUS33. Account: 5234911947.”

2.7. On July 15, 2013, Kalpesh received an amount of USD 56,750 (50% down payment)
in accordance with this invoice into the account number she specified at an American
bank. Kalpesh then released the ordered goods to Fintex in Rotterdam.

2.8. Kalpesh furthermore, with reference to an email dated July 15, 2013, drew up a pro
forma invoice dated July 16, 2013, addressed to Burmit, regarding an order for 2,500 kg of
erbium oxide for a total amount of USD 109,000 (invoice number KE/243/07/13 ). The same
text as above under 2.6 is included under “Terms”. displayed.

2.9. Kalpesh received the down payment (50%) of USD 54,500 into the bank account
in the US on July 24, 2013. Kalpesh then released the ordered goods to Fintex in
Rotterdam.
2.10. On July 30, 2013 at 1:40 AM, [X] ( [email protected] ) messaged [Y]
( [email protected] ): “Dear [Y],

I want you to kindly send the payment tomorrow to these banking details below:

Name: Bank ASYA

Address: (...)
Account Name: Yildirim Call Center Paz. Org. Than. Ltd Sti (...)

I need the money there for the shipment I sent to Turkey and once you send the payment
please send to me the payment slip as email attachment for confirmation.”

2.11. Also on July 30, 2013 at 2:21 PM [X] ( [email protected] ) messaged [Y]
( [email protected] ):

“Dear [Y] ,
Did you pay for Er Oxide into the Turkish Account i gave you?”

2.12. On August 7, 2013, [X] (sales.kalpeshferro.live.com) informed [Y]

( [email protected] ):
“Thanks, Money arrived in the account today and has been received. Can you let me know
about your order of Er and Zr Oxide?”

2.13. On August 21, 2013, [X] (sales.kalpeshferro.live.com) sent [Y] (“ [Z] ”

[email protected] ) with copy to ( [email protected] ) message:
“I am still in India but I am traveling to HongKong today to see about shipment of supplies”

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2.14. On August 22, 2013, [X] (sales.kalpeshferro.live.com) sent [Y] (“ [Z] ”

[email protected] ) with copy to ( [email protected] ) message:
“oOOHHH My supplier Eminent Eagle HK Limited has disappointed me, they have sold my lot,
they said that i delayed payment that it is not inline with our agreement and that is true they
have been waiting for his payment for the past one week and there is competition in this market
as price is going up and down. Now i have made contact with my other producer and they have
decided to release the 12 MT of Zr Oxide for me if we will be able to pay up by Monday, this
producers sometimes can be crazy, that was why it seems like i was pushing you for payment to
be made all this while. Now i am going to make another deposit with this other producer and i
will want you now to use all your efforts to make sure you send all payment to him so that i can
secure this deal. This is their banking details below:

BENEFICIARY BANK: HANG SENG BANK LIMITED

BANK ADDRESS: NO.83 DES VOEUX ROAD, CENTRAL HONG KONG
ACCOUNT NAME: RAMALINE HOLDINGS HONG KONG LIMITED
ACCOUNT NUMBER: 390 521 797 883
SWIFT CODE: HASEHKHH
BENEFICIARY ADDRESS: FLAT E09, 2/F., WEARBEST BUILDING, 60-64 TOKWAWAN ROAD
KOWLOON

Please update all information to the above bank account, i will be in HongKong until I receive
payment confirmation from you. I need to seal this deal with this supplier an will need your
cooperation i am trusting you that you will not disappoint me.

Please send all $US 143,750 to their account as i stated above i am in their office now.”

2.15. Two bank statements submitted by Fintex show that Burmit transferred an
amount of USD 56,750 to the bank account in Turkey mentioned under 2.10 on August
5, 2013 and an amount of USD 87,000 to the bank account in Hong Kong mentioned
under 2.14 on August 27, 2013. Burmit therefore transferred a total of USD 143,750.

2.16. In September 2013, a disagreement arose between the parties, because Kalpesh
stated that he had not ordered payment to the bank accounts in Turkey and Hong Kong
and still demanded payment of the two outstanding invoices. Fintex has taken the
position that payment had already been made.
2.17. In a letter dated March 11, 2014, Kalpesh's lawyer summoned Fintex to pay
Kalpesh the outstanding amounts totaling USD 111,250. Fintex's lawyer
responded negatively in a letter dated March 19, 2014.
2.18. Fintex has commissioned the Czech expert, Mr J. Berger, “specialized in
computer forensics and information systems security” to investigate Fintex's email
account. In his report of November 21, 2014 he states the following:
“As for the two email addresses, [email protected] and [email protected] ,
there is evidence that these two addresses are used by the same or at least two cooperating

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persons. Part of the evidence is directly in the messages selected in this report. More
evidence can be found in the package of all acquired messages given in previous reports
recorded under references 755/84/2014 and 773/102/214.

Such evidence has been found in section 5 email dated Tue, 30 Jul 2013 08:40:43 +0900 (TLT).
Here [email protected] sends a message and sets its Reply-To option (ie where response
to his message should be sent) to [email protected] . This fact can even lead to
conclusion that both addresses are used by only one person.”

2.19. After obtaining permission to do so, Kalpesh imposed a conservatory attachment on July 18,
2014 against the forwarder in Rotterdam: C. Steinweg-Handelsveem BV at the expense of Fintex.

3 The dispute

in claim and counterclaim

3.1. In summary, Kalpesh demands - order Fintex to pay USD 111,250, plus
interest from August 1, 2013 and costs.
3.2. Kalpesh primarily argues that on the basis of the invoices and after delivery of the
goods to Fintex, she still owes a remaining amount of USD 56,750 plus USD 54,500 (a
total of USD 111,250) and that Fintex has failed to pay this amount. In the alternative,
Kalpesh relies on unjust enrichment. Kalpesh disputes that she instructed Fintex or
Burmit to transfer the aforementioned amounts to a bank account in Turkey or Hong
Kong.
3.3. Fintex puts forward a reasoned defense. She primarily argues that Burmit, not she,
is a party to the purchase agreement with Kalpesh. In the alternative, Fintex relies on
the fact that Burmit paid to another place on behalf of Kalpesh and thus paid in a
liberating manner. Fintex has resulted in its defense in a counterclaim, containing, in
summary:
- a declaratory judgment that Kalpesh's seizure was unlawful;
- a declaratory judgment that Kalpesh has misused his powers; - order
Kalpesh to pay:
- USD 10,725 due to a fine imposed on Fintex;
- €171.60 for the translator's costs;
- € 1,143.76 for notary costs
- the actual legal costs, or at least the reasonable legal costs,
all this plus the statutory (commercial) interest.
3.4. The parties' statements will be discussed in more detail below, where relevant.

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4 The assessment

in claim and counterclaimJurisdiction

4.1. The parties are established on the territory of different states, which makes this case
international in nature. The Czech Republic (2004) and the Netherlands (1957) are EEX states.

4.2. Kalpesh has based the international jurisdiction of the District Court of The Hague on
Article 5(1) of EC Regulation No. 44/2001 (old) (hereinafter: EEX-Vo) or at least Article 109
DCCP, because the parties have agreed to deliver the goods in Rotterdam to deliver. Fintex
has rightly argued

that application of Article 5 paragraph 1 EEX-Vo leads to jurisdiction of the Rotterdam court. Now
that Fintex has agreed to this case being handled by the District Court of The Hague for
procedural economic reasons, it concerns a civil or commercial case and the jurisdiction is at the
discretion of the parties, the court derives its jurisdiction from Article 24 EEX-Vo.

Parties to the purchase agreement

4.3. The core of the dispute between the parties is the question whether Burmit's payments
to a different payment address have discharged Kalpesh. One of the underlying points of
dispute is that Fintex states that it has acted as a representative in the name and on behalf
of Burmit from 1 July 2013, and therefore cannot be regarded as a counterparty of Kalpesh
from that moment on and therefore cannot be held liable for payment. Kalpesh disputed
this and argued that Fintex acted in its own name and only made the payment via Burmit.
The parties, including Burmit, have requested that their legal relationships be assessed
under Dutch law in order to end the present dispute.
4.4. Under Dutch law, the answer to the question of whether Fintex or Burmit acted
when concluding the agreement with Kalpesh depends on what the parties have stated
to each other in this regard and have deduced and may have deduced from each
other's statements and conduct.
4.4. Based on the statements and conduct of the parties, the court is of the opinion that Fintex
has acted as buyer towards Kalpesh. To this end, the court takes into account that the email
correspondence, as also appears from the expert report submitted by Fintex, regarding the
purchase of various batches of raw materials was conducted from the email account used by
Fintex: [email protected] and that the goods were sent by Kalpesh have been delivered directly
to Fintex. Furthermore, it is not clear from Fintex's email message of June 19, 2013 that Burmit
fully replaces Fintex as buyer. Nor does it appear from the words “cooperation”, “ensure
purchasing of our goods (for us)” and the sentence: our process, communication will be the
same, but invoice and order and payment will be from this company” that Fintex only operates
in name van Burmit acts. The fact that Fintex ([Y]) acted under Burmit's power of attorney from
that moment on is not stated in the message. It has not been stated or proven that Fintex or
Burmit provided a power of attorney statement to Kalpesh at or around July 1, 2013. Finally, this
is evident from the response to this message from Kalpesh

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Fintex also does not know that Kalpesh has interpreted Fintex's message in the sense
intended by Fintex, as it states that Kalpesh agrees with reference to the existing
collaboration with Fintex. The court sees the fact that Kalpesh sent the proforma invoice KE/
223/06/13 to Burmit and Burmit made a down payment of 50% as a contraindication, but
considers it insufficient in the light of all other circumstances of the case. In the
circumstances mentioned here, the court therefore sees sufficient reason to follow Kalpesh
in her position that she has interpreted and was allowed to interpret Fintex's statement in
the sense that Burmit was engaged by Fintex from July 2013 for the settlement of payment
transactions. .
4.5. This means that, in the opinion of the court, Fintex can be regarded as a party
(buyer) to the agreement with Kalpesh, whereby Fintex used Burmit as an auxiliary
person in the execution of this agreement (the payment).
Liberating payment?

4.6. The judgment that Fintex must be regarded as a counterparty of Kalpesh means -
under Dutch law - that the parties' purchase agreement is governed by the United Nations
Convention on Contracts for the International Sale of Goods, Vienna, April 11, 1980, Trb.
1986, 61 (hereinafter: Vienna Sales Convention). After all, this concerns an international
purchase of movable property between professional parties from states (US and Czech
Republic) that are parties to the treaty.
4.6. Pursuant to Article 79 of the Vienna Sales Convention, Fintex is liable for Burmit's
shortcomings in that case, unless Fintex proves that Burmit has not failed. When asking
whether Burmit failed to pay the remaining amount of USD 56,750 plus USD 54,500 (a total
of USD 111,250) to a bank account in Turkey and Hong Kong, on the instructions of Fintex,
the court takes the following into account.
4.7. Article 57(1)(a) of the Vienna Sales Convention stipulates that if the buyer is not
obliged to pay the price at a certain other place, he must pay the seller at the place
of his establishment. In the present case, Fintex has twice received instructions to
pay at a specific location. On July 30, Fintex received a request to pay to a bank
account in Turkey. On August 22, 2013, Burmit and Fintex received a request to
transfer the remaining payments due to a bank account in Hong Kong. Pursuant to
these requests, Burmit transferred an amount of USD 56,750 to the said bank
account in Turkey on August 5, 2013 and an amount of USD 87,000 to the said
bank account in Hong Kong on August 27, 2013. The latter amount included the
remaining amount of USD 54,500.
4.8. Kalpesh states that the requests to make the aforementioned payments did not come from
her and that Fintex, or at least Burmit, should have understood this. When asking whether
Fintex or Burmit could reasonably have interpreted the emails they received as a statement
addressed to them by Kalpesh to make payment to another place, the court takes the following
facts and circumstances into account in application of Article 8 of the Vienna Sales Convention.
as a starting point.

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4.9. The court notes that the request to Fintex to pay to a Turkish bank account came
from the email account [email protected] . This is, as Kalpesh has confirmed,
Kalpesh's correct email address. The subsequent message (see under 2.11) in which
Fintex receives a repetition of the previous payment request also comes from this email
address. The expert report submitted by Fintex and the email messages submitted
show that both messages included a “reply to” to the email account
[email protected] . According to Kalpesh, that email address is not used by
her. However, the court agrees with Fintex's expert in his position that it can be
deduced from this reconstruction that this disputed email account was introduced from
the email account used by Kalpesh. On this basis, the court considers that the alleged
unlawful use of Kalpesh's email account lies within her sphere of risk. Furthermore, the
court takes into account that at the request of Fintex, invoices were sent from the
account [email protected] with a signature that is very similar to the invoices
not disputed by Kalpesh (exhibit 2 in the summons). Finally, the court takes into account
that in the email correspondence from the account [email protected] , many
personal and business details are provided to Fintex, which shows the user's familiarity
with the person of [X] and with the trading of raw materials . For example, an email
dated July 31, 2013 states that the sender is currently staying in Ukraine and will leave
for Hong Kong the next day and then to Fiji. At the appearance of the parties, Mr [X]
confirmed that he regularly makes this trip with his wife, who is from the Ukraine, and
that he also visits India.

4.10. On the basis of the aforementioned circumstances, also considered in

conjunction, the court concludes that Fintex could reasonably have interpreted the
emails it received as statements addressed to it from Kalpesh and that in that
confidence it was allowed to instruct Burmit to pay another place. Kalpesh's
subsidiary claim is also rejected here. After all, it has been established that Burmit
paid to the payment addresses provided. There is therefore no unjustified
enrichment of Fintex: it has paid for the goods it purchased. In this case, the
damage resulting from payment to an incorrect payment address is at the expense
and risk of
Kalpesh.

furthermore in convention

4.11. Based on the foregoing, the court rejects the claim in claim. Kalpesh will act as
the unsuccessful party in the case made by Fintex in the Netherlands
legal costs are ordered. The costs on the part of Fintex are estimated at: - court
fees € 1,892.00
- lawyer's salary 2,842.00 (2.0 point × rate € 1,421.00)
Total € 4,734.00
furthermore in counterclaim

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4.12. Fintex has counterclaimed for compensation for the seizure unlawfully imposed by
Kalpesh, according to it. Her damage of USD 10,725 is the result of the fact that she was
unable to deliver a batch of oxid erbit to her customer due to the seizure of Kalpesh and
that as a result this customer charged the aforementioned fine amount to Fintex.

4.13. From what was considered above in the convention, it appears that Kalpesh wrongly had a
conservatorship seized under C. Steinweg-Handelsveem BV, so that she is therefore liable on the
basis of tort for the damage that Fintex has suffered as a result. Fintex has substantiated this
claim for damages by submitting (a) the agreement concluded with its customer on January 6,
2014, (b) the order of June 27, 2014 from this customer, (c) the letter from the same customer of
October 6, 2014 in which they claim the agreed fine in the event of default and (d) a bank
statement dated October 10, 2014, showing that Fintex has paid this amount to the customer.
Now that it has been established that Fintex paid the fine on demand from its customer, it is
established that Fintex has suffered damage as a result of the seizure. The fact that the
documents submitted do not show the term within which Fintex would deliver to its customer, as
Kalpesh argues, does not change this. The claim for damages will therefore be granted.

4.14. Fintex has also claimed reimbursement of the actual legal costs due to misuse
of powers on the part of Kalpesh.
4.15. According to established case law, it must be assumed that the existence of a
statutory lump sum settlement of legal costs only in very special cases is justified by the
party who has been unsuccessful in a procedure (in this case Kalpesh) on the basis of to
be ordered to pay compensation for the entire damage suffered by the other party (in
this case Fintex) as a result of conducting that procedure. In literature and case law,
special cases are defined as “very distressing cases”, such as apparently chicanery, or at
least unreasonable, procedural behavior. It has not been proven that this is the case.
The conclusion is therefore that there is no basis for a full award of the legal costs other
than the lump sum costs.
4.16. Finally, Fintex, upon submission of receipts, requested reimbursement of the
translation costs of the translator of € 171.60 and the costs of the notary of € 1,143.76,
therefore a total of € 1,315.36. This concerns the costs of translating procedural
documents from Czech into Dutch and the costs of the notary to demonstrate the
authenticity of the documents submitted. These costs will be awarded now that Fintex
has had to incur these costs to substantiate its defense in these proceedings. This
item will be allocated as part of the legal costs.
4.17. As the largely unsuccessful party, Kalpesh will be ordered to pay the legal
costs incurred by Fintex in the Netherlands. The costs on the part of Fintex are
estimated at:

- other costs € 1,315.36

- lawyer's salary 1,421.00 (1.0 point × rate € 1,421.00) Total € 2,736.36

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furthermore in claim and counterclaim

4.18. The amounts awarded will be increased by the statutory interest and not by the
statutory commercial interest, as these amounts are not based on the parties'
commercial agreement.

5 The decision

The court
in convention

5.1. rejects the claims,

5.2. orders Kalpesh to pay the legal costs on the part of Fintex estimated to date at €
4,734.00, plus the statutory interest as referred to in art. 6:119 BW on this amount with
effect from eight days after this judgment until the day of full payment,
5.3. declares this judgment to the extent provisionally enforceable, 5.4. rejects the more or otherwise
advanced.

in counterclaim

5.5. declares that Kalpesh's seizure was unlawful.

5.6. orders Kalpesh to pay Fintex an amount of USD 10,725.00, plus the statutory
interest referred to in art. 6:119 BW on the awarded amount with effect from eight
days after this judgment until the day of full payment,
5.7. orders Kalpesh to pay the legal costs on the part of Fintex estimated to date at €
2,736.36, plus the statutory interest as referred to in art. 6:119 BW on this amount with
effect from eight days after this judgment until the day of full payment,
5.8. declares this judgment to the extent provisionally enforceable, 5.9. rejects the more or otherwise
advanced.

This judgment was delivered by Mr. I. Brand and pronounced in public on May 27, 2015.

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