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8/9/2019

Legal News: Direct action of the sub-purchaser and Vienna Convention

Last month, we recalled the contribution of the judgment of 16 January 2019 (no. 17-21.477) concerning the limitation periods in civil matters. However, this is not the only contribution of this judgment.
The Court of Cassation also ruled on the admissibility of the sub-purchaser’s direct action against the manufacturer, when the relationship between the manufacturer and the purchaser of the goods is governed by the Vienna Convention.

In this case, the project owner A. had obtained a decision ordering its contractor B. to pay for damages caused by infiltrations, which were related to the work carried out by company B. Company B. was supplied by company C., which in turn was supplied by company D.

On appeal, company B. filed a claim for damages against the societies C. and D. In defence, D. argued that to the extent that the Vienna Convention on the International Sale of Goods governs the relationship between B. and C., no direct action of B. against D. was possible, as the said convention does not allow for direct action of the sub-purchaser against the seller. The Court of Appeal did not follow this argumentation and condemned society D. The Court of Appeal’s position on this point was confirmed by the Court of Cassation.

Even if the Court of Cassation reiterated the well-known principle according to which the Vienna Convention exclusively governs relationships between seller and buyer to the exclusion of the sub-purchaser, an important clarification was added:

However, as it follows from article 7 of the Convention […] that questions concerning matters governed by the convention which are not expressly settled by it are decided based on the law that applies according to the rules of private international law; that considering that the Vienna Convention exclusively governs the formation of the sales contract between seller and buyer, the Court of Appeal therefore concluded correctly that the French law, whose application has never been challenged, and which governs the sub-purchaser’s direct action against the seller, should apply.”

In other words, the Court of Cassation affirmed that even though the relationship between seller and buyer is subject to the Vienna Convention, this does not mean that a direct action of the sub-purchaser against the seller is not possible, to the extent that it is permitted by the applicable law, which is determined by the rules of private international law.

In this case, French law replaces the Vienna Convention, when no provision of the latter is applicable to the situation in question. This is especially true in the present case, the Vienna Convention does not acknowledge the direct action, but the French law, which is applicable to the dispute, acknowledges the direct action and corrects the deficiencies of the Vienna Convention. This clarification of the Court of Cassation may have surprised and given rise to many comments, yet it seems to be in line with the logic of a perfect integration of the Vienna Convention into French substantive law.

Jessika Da Ponte                                                                                          9th August 2019

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