A period of over twenty days is beyond a reasonable time-limit for giving notice of non-conformity of the goods.
[Seller] submitted that he concluded a contract with [Buyer], on the basis of which he sold to [Buyer] the goods specified in the contract. Acting in conformity with contractual provisions, [Seller] delivered the goods to [Buyer] and sent him invoices that [Buyer] never paid. [Seller] requested that the Arbitration Court order the [Buyer] to pay the price for the delivered goods.
[Buyer] rejected the claim and submitted that [Seller] never delivered the goods in conformity with the contract. Additionally, [Buyer] asserted that he sent [Seller] a notice of non-conformity specifying the deficiencies regarding the quality of the goods.
[Seller] replied that the notice of non-conformity was not sent in due time.
The issue of conformity of the goods to contractual requirements is governed by the contract itself and by Articles 38 and 39 of the UN Convention on Contracts for the International Sale of Goods.
According to the contract, the delivery of the goods of agreed quality and quantity was to be taken in the warehouse of [Seller] in Yugoslavia and the authorized representatives of [Buyer] were to issue a certificate thereof, without the right to subsequent objections. Pursuant to the "Delivered at Frontier" clause, the risk passes to [Buyer] at the moment when the goods pass the Yugoslav-Hungarian border. Pursuant to Article 38 of the CISG, the buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances. Finally, pursuant to Article 39(1) of the CISG, the buyer loses the right to rely on a lack of conformity of the goods if he does not give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it.
In the case at hand, the authorized representative of [Buyer] issued a certificate of conformity of the goods on 18 October 1991. The goods were loaded on six trucks and passed the Yugoslav-Hungarian border between 4 and 8 November 1991, but the first complaint to the quality was sent by telex on 30 November 1991. The buyer must examine the goods within as short a period as practicable and give notice to the seller specifying the nature of the lack of conformity within a reasonable time after he has discovered it or ought to have discovered it. The relevant time-limit for examining the conformity of the goods is the moment of passing of the risk. [Seller] will be liable for the lack of conformity which has occurred after the abovementioned time-limit only if the cause of such non-conformity already existed before the passing of the risk. Otherwise, [Seller] will not be liable (Article 66 of the CISG). Passing of the risk concerning the last shipment took place on 8 November 1991. The Arbitral Tribunal considers that a period of over twenty days is not a reasonable time-limit for giving notice of non-conformity of the goods. The deficiencies of the goods invoked by [Buyer] were not hidden but apparent. [Buyer] ought to have given notice of such lack of conformity "without delay". The rules on short time-limits are dictated by the trade needs and established in order to eliminate uncertainty. Duty of cooperation between the seller and the buyer stems from the principle of diligence and good faith and from trade usages. Bearing in mind all the aforementioned arguments, the Arbitral Tribunal considers that, even if the goods were not conforming, [Buyer] lost his right to rely on a lack of conformity, as he failed to give notice thereof within a reasonable period of time (Article 39 of the CISG). Such opinion is further supported by the fact that [Buyer] failed to prove that he had a reasonable excuse for not giving the required notice in due time (Article 44 of the CISG).
* All translations should be verified by cross-checking against the original text. For purposes of this translation, Claimant of Yugoslavia/Serbia is referred to as [Seller] and Respondent of Germany is referred to as [Buyer].