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MINISTRY OF JUSTICE
HANOI LAW UNIVERSITY

Group Assignment
Course: Advanced Legal English 2

Topic: Choose a CISG case. Prepare a case analysis including those following elements.
Group: 05
Class: N01-TL2

Hanoi, 2024

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 TABLE OF CONTENT

INTRODUCTION...................................................................................................................1
CONTEXT................................................................................................................................1
1. Case Summary.....................................................................................................................1
a. Parties to the disputes and the dispute resolution body..........................................1
b. Legal actions................................................................................................................1
c. Legal issues...................................................................................................................2
d. Applicable law to the dispute.....................................................................................2
2. Case summary......................................................................................................................2
a. Plaintiff’s arguments...................................................................................................2
b. The respondent’s arguments......................................................................................3
c. The Judiciary’s arguments.........................................................................................4
3. Comment on the Judicial Body’s judgement....................................................................5
CONCLUSION........................................................................................................................6
LIST OF REFERENCES........................................................................................................8
 INTRODUCTION
In the realm of international commercial transactions, the issue of paying damages is
of paramount importance which directly affects the parties’ rights and interests. As a result,
disputes concerning damages are frequently encountered, given the natural desire of each
party to maximize their own interests. The United Nations Convention on Contracts for the
International Sale of Goods 1980 (CISG) has established a framework to recover the losses,
including the imposition of damages. This paper will delve into analysing the case
"International Flavors & Fragrances Inc. v. Ramón Sabater, SA (2014)" to illuminate the
topic of the sellers’ liability to pay for damages in the context of breaching contracts.
CONTEXT
1. Case Summary
a. Parties to the disputes and the dispute resolution body
- Claimant:
+ International Flavors & Fragrances Inc.
+ International Flavors & Fragrances (I.F.F.) Nederland B.V.
- Respondent: Ramón Sabater, SA – a Spanish company
- Dispute Resolution Body: Spanish Supreme Court
b. Legal actions
Plaintiff (hereinafter, “the Buyer”) was International Flavors & Fragrances (I.F.F.)
Nederland B.V and International Flavors & Fragrances Inc. – an American corporate
specialising in manufacturing and trading all fragrances and aromas. IFF Nederland was a
subsidiary of IFF Inc. Respondent (hereinafter, “the Seller”) was Ramón Sabater, SA
dedicated to the production and marketing of spices, medicinal and culinary.
On September 25, 2003, both parties reached an agreement to purchase a specific
quantity of Red Pepper Powder (“Red Pepper”) through a document titled “Product
Questionnaire”. This did not contain essential terms as prescribed in a contract but specified
the products’ characteristics. Specifically, the products must be Red Pepper for incorporation
into food products, 100% natural and pure, no additive (regardless of whether those additives
are permitted), and colorings which were suitable for human consumption in the EU region.
From September 2003 until late 2005, the Seller imported numerous containers from a
Uzbekistan manufacturer and subsequently delivered five containers to the Buyer. Rather
than conducting an immediate inspection upon receipt, the Buyer directly used the goods as
ingredients in its production and then distributed the Red Pepper to various agents.
After a while, upon receiving customers' complaints about the existence of colorings,
the Buyer noticed the presence of Para Red and Sudan Red. Simultaneously, the Seller
admitted the contamination in all five batches through an e-mail dated April 22, 2005.
Therefore, since those impurities were not included in the list of additives allowed by the
European health authorities, the Buyer was forced to take measures to minimize and address
the consequences, including the recall and destruction of the products1.
On February 5, 2008, the Buyer filed a lawsuit in ordinary trial before the Court of First
Instance, seeking damages from the respondent. Subsequently, both Parties filed appeals
against the judgement of September 16, 2010. Following the decision of the appellate court,
the Seller continually appealed to the Supreme Court.
c. Legal issues
(i) Did the delivery of shipments containing Para Red – a substance only later recognized
as colorings after the delivery date – qualify for exemption from liability due to
objective impediments under Article 79.1 CISG?
(ii) Did the plaintiff’s ignorance of inspection right after receipt albeit having full
condition to examine, result in the forfeiture of the right to invoke the non-conformity
of the goods under Article 39.1 CISG?
(iii) Did the claimant’s decision to recall all batches of products, when only one shipment
was identified as exceeding the permissible quantity of Para Red, recognise as not
performing reasonable measures to mitigate the losses which led to the forfeiture of
the right to invoke the breaching party under Article 77 CISG?
d. Applicable law to the dispute
(i) CISG 1980 (the United Nations Convention on Contracts for the International Sale of
Goods): Article 35, 38.1, 39, 40, 77, 79.
(ii) An agreement documenting the rules and procedures governing the dispute resolution.
2. Case summary
a. Plaintiff’s arguments
Although both parties did not directly enter into a written contract, the Seller’s quality
control department and the Buyer’s representative did sign the “Product Questionnaire”. 2 The
Buyer highlighted the clauses: (i) the quality of Red Pepper must conform to the Buyer’s
requirement and (ii) the liability for defective products and material damage. Nevertheless,
after receiving and distributing those 05 shipments, the buyer was notified that one shipment
was contaminated with Para Red3, and the remaining four containers were suspected of
containing this additive. Besides, the Buyer provided a letter from the General Director of
Health and Consumer Protection of the European Commission, highlighting that the use of
Para Red and Sudan Red was qualified as a risk to health and possibly cancer-enhancing.
Consequently, Red Pepper was prohibited from being purchased within the EU market. As a
result, distributed agents demanded compensation for damages, and simultaneously, the IFF

1
Until 2004, before accidents related to users' health resulted from Para Red, the global food industry was completely unaware of the
existence of this substance, and there were no documents regulating its use or prohibition.
2
In this document, the Seller clearly committed to the good quality of Red Pepper by (i) putting a cross in the box “no artificial
colors”, (ii) by attributing to the Red Pepper Powder the status of “Halal” i.e. acceptable food according to Islamic legislation, and (iii)
by agreeing that it should come from a natural vegetable source.
3
This additive is not on the EU list of approved food additives. Many EU member states have claimed the illegality of using this
additive and have announced a ban on all food containing Para Red.
Nederland was compelled to withdraw the products, prioritizing human health and aiming to
mitigate potential incurred expenses. The Buyer affirmed that the Seller breached its
obligation to ensure the agreed-upon quality of goods, thus preventing the Buyer from
fulfilling the initial objectives to distribute Red Pepper within the EU market. This breach
engendered severe losses in finance and reputation so the Buyer initiated legal action against
the Seller.
b. The respondent’s arguments
Firstly, the Seller acknowledged that those shipments delivered to the Buyer did
contain the Para Red. However, Para Red was a coloring unknown in the food sector at the
relevant time and only became aware five months after the sale of the relevant batch (which
was exactly analyzed by November 2004), and the Seller immediately notified the Buyer.
Consequently, the Seller should not assume any responsibility as the EU legislation
contained a list of colorings that had been allowed instead of a list of those that have been
banned. They maintained that the failure of their goods to meet the EU’s import quality
standards, as previously agreed, was due to a completely objective and uncontrollable
circumstance. Thus, they were exempted from the liability under Article 79.1 CISG on
grounds of force majeure.
Secondly, the Seller argued that the agreement between both parties stipulated the term
obliging the Buyer’s liability to examine the goods upon being officially received.
Nevertheless, the Buyer waived their right to inspect the goods by immediately accepting and
using those items in production, and distributing them into the market. Therefore, under
Article 39.1 CISG4, the Seller asserted that the Buyer should have identified any non-
conformity in the goods' quality, and both parties could have minimized losses if the
inspection had been fulfilled as prescribed in the agreement. Based on these grounds, the
Seller affirmed that the Buyer implicitly accepted the goods unconditionally, thus forfeiting
the right to invoke claims of non-conformity and consequently being unable to seek damages.
Thirdly, the Seller argued that even if they were found to breach the contract, the Buyer
failed to take necessary steps to mitigate damages reasonably, and even took excessive
actions that resulted in additional losses for both parties. Upon receiving customer feedback
suspecting those batches might be contaminated with Para Red, the Buyer immediately
withdrew the product from the market and accepted returns of the Batches. Notably, only
one-fifth of the shipment was found to contain Para Red. Furthermore, at that time, warnings
regarding the dangers of Para Red were at the advisory level. Therefore, the Seller confirmed
that the Buyer did not take reasonable measures to limit the consequences and requested a
reduction in damages commensurate with the actual losses and expenses related solely to the
contaminated batch, should the Seller be found to have breached contractual obligations.
c. The Judiciary’s arguments
4
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.
 Regarding whether the seller could be exempted from liability albeit breaching their
obligation to ensure product quality: All judicial levels acknowledged that the “Product
Questionnaire” was a legally binding agreement defining the conditions and standards of Red
Pepper. Yet, the delivered batch contained colorings only recently identified by scientists.
The Adjudicating body rejected the Seller’s argument that the recent discovery constituted a
force majeure event beyond their control and they could not have reasonably foreseen it at
the time of contract execution. When signing the contract in 2003, there were initial warnings
from National Health Organization and World Health Organization (“WHO”) regarding the
emergence of this new substance. Although it was only formally documented in 2004, the
Adjudicating body obligated the Seller to investigate and stay informed of warnings
regarding this substance, anticipating its potential formal recognition soon.
About whether the Buyer forfeits the right to claim for the defects in the goods due to
not examining them upon receipt: The Court concurred that the Buyer did neither process to
inspect the goods nor notice in reasonable time about the non-conformity to the Seller; thus,
under Article 39.1 CISG, the Buyer lost the right to invoke such fault. Nonetheless, the Court
invoked Article 405 to hold the Seller accountable for non-compliance in quality of the five
shipments. Yet, the Court observed that the Seller did not directly manufacture Red Pepper
but sourced it from a producer in Uzbekistan 6, subsequently reselling it to the Buyer with an
assurance of quality. Acquiring goods from this particular market should reasonably have led
the seller to approach the goods’ quality with skepticism. Moreover, credible international
organizations had previously issued warnings concerning the emergence of a new additive.
Concurrently, this appearance in food industry was not abnormal, particularly for a long-
established company such as the Seller. These points highlighted the Seller’s negligence and
lack of due diligence in failing to implement necessary verification measures to ensure the
products’ purity, despite numerous indications necessitating such actions.
As for whether the Buyer had undertaken adequate measures to mitigate losses, the
Court noted that, upon receiving the Seller’s notification concerning potential contamination
of Para Red in those shipments, the Buyer immediately withdrew all distributed products,
conducted tests to analyze the containers, and compensated for agents. The Court found these
actions were entirely appropriate, aligning perfectly with the customary obligations of a
“Manufacturer” in safeguarding client rights. Under Article 77 CISG, it would be
unreasonable to require a party to bear liability for failing to minimize damages when they
neither knew nor ought to have known of the issues, especially given that the Seller itself was
negligent in causing the harm. Therefore, the Seller’s contention that the Buyer violated
Article 77 CISG and thus should have its claim for damages reduced is unreasonable.
3. Comment on the Judicial Body’s judgement

5
The seller is not entitled to rely on the provisions of articles 38 and 39 if the lack of conformity relates to facts of which he knew or
could not have been unaware and which he did not disclose to the buyer
6
Uzbekistan is considered a less reputable that has been accused of using different colorings.
 First of all, regarding the Court’s reasoning that the Seller was not exempt from
liability due to force majeure, we agree with only the extent that the Seller should indeed be
expected to know of the aforementioned advisories. As seasoned manufacturers in this
industry, they bore the responsibility to conduct continuous research and updated on new
chemical substances. However, the advisories from the organizations only constituted
recommendations for manufacturers about the emergence of a new substance, without any
binding legal force. In this context, the EU mandated a list of allowed additives for specific
food products, and any substance outside this list was strictly prohibited. At the time of
contract formation, the Seller’s products did not contain additives outside the list, thereby
fully complying with EU import requirements. Only after the Seller had fulfilled its delivery
obligations and the goods had been made available on the market, Para Red was officially
classified. Thus, we argue that the official recognition of Para Red occurred after the Seller
had fulfilled its obligations. This event was beyond the Seller’s control, and it was
unreasonable to expect them to foresee that Para Red would later be recognized, as they
lacked the knowledge and means to detect it. Consequently, there was sufficient basis to
establish that the Seller’s breach of contract was due to force majeure under Article 79 CISG,
justifying an exemption from liability.
Secondly, in the context of the Seller’s breaching contract, we do not concur with the
Court’s judgement based on Article 40 CISG which the Seller lost their right to invoke
Article 38 CISG when the Buyer did not inspect the goods upon delivery and the Seller
neither knew nor ought to have known of the issues. The Court relied on initial warnings
issued by WHO about the discovery of the Para Red to establish the Seller’s obligation to be
aware of and rigorously inspect the goods. We assume that the WHO’s warnings do not
imply that the Seller could reasonably anticipate or detect the presence of the specified
substance. Moreover, the tribunal’s argument that the Seller failed to exercise due diligence
in testing Para Red. While Uzbekistan might be considered a less reputable market, the Seller
was required to conscientiously examine the goods. However, the reports indicated that the
Seller had consistently adhered to testing the goods in accurate order, procedure, and the
authority’s requirement. Thus, imposing an expectation on the Seller to detect a previously
unknown substance for which no specific detection measures existed was unreasonable.
Furthermore, the Buyer retained the right to inspect the goods prior to acceptance. By
foregoing this right and proceeding to integrate the product into the production process and
subsequently release it into the market, the Buyer effectively accepted the risk of non-
conformity associated with the goods delivered, consistent with Article 39.1 CISG.
Finally, we agree with the Court in recognizing that the Buyer had fulfilled its
obligations to mitigate the loss, the Seller could not definitively identify which specific
shipment was contaminated with the colorings so instead expressed only a suspicion.
Furthermore, as the goods had already been distributed to the market, it was impracticable to
conduct proper examination on each shipment. Consequently, the Buyer was compelled to
act on presumption that all five containers came from Uzbekistan and were imported in a
single batch so that it was pivotal to recall all distributed products. Therefore, the Seller was
not entitled to invoke Article 77 CISG to request a reduction in the compensation.
CONCLUSION
The CISG 1980 has harmonized many conflicts by establishing a specific and unified
legal framework, pivotal in addressing disputes involving contractual breaches requiring
damages compensation. The precedent "International Flavors & Fragrances Inc. v. Ramón
Sabater, SA (2014)" exemplifies a typical dispute in international goods transactions,
serving as a valuable precedent for subsequent cases. This underscores the importance of a
thorough understanding of CISG provisions in international commerce, particularly
concerning damages for breach of contract by the seller.
 7

LIST OF REFERENCES
1. The United Nations Convention on Contracts for the International Sale of Goods 1980
(CISG 1980 https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/
19-09951_e_ebook.pdf
2. WTO, Understanding on rules and procedures governing the settlement of disputes:
https://www.wto.org/english/tratop_e/dispu_e/dsu_e.htm
3. UNCITRAL, Clout case 1496, Flavors & Fragrances Inc. and International Flavors &
Fragrances I.F.F. v. Ramón Sabater S.A.Corp,
https://cisg-online.org/files/cases/8492/translationFile/2578_12806896.pdf?
fbclid=IwY2xjawGTFnBleHRuA2FlbQIxMAABHeMWz3wg5e6IaPa6mbUDKbYQYc9KX
Jls8UWHLzGOw5M3o2l4syVL7eCbfQ_aem_4J8OmVISP6JAqO4V9qbAJA, accesed date:
29/10/2024.
4. UNCITRAL, Clout case 85, Delchi Carrier, SpA v. Rotorex
https://www.uncitral.org/clout/clout/data/usa/clout_case_85_leg-1288.html, accesed date:
29/10/2024.
5. UNICITRAL, Clout case 486,
https://www.uncitral.org/clout/clout/data/esp/clout_case_486_leg-1711.html, truy cập ngày
29/10/2024.
6. UNCITRAL, A/CN.9/SER.C/ABSTRACTS/160,
https://documents-dds-ny.un.org/doc/UNDOC/GEN/V15/063/09/PDF/V1506309.pdf?
OpenElement, accessed date: 30/10/2024.
7. Judgement’s summary,
https://cisg-online.org/files/cases/8492/abstractsFile/2578_62787264.pdf, accessed date:
31/10/2024.
8. Spanish Supreme Court, The Supreme Court’s judgement,
https://cisg-online.org/files/cases/8492/fullTextFile/2578_38746463.pdf, accessed date:
31/10/2024.
9. María Paula Herrera Duque, Translation,
https://cisg-online.org/files/cases/8492/translationFile/2578_12806896.pdf, accessed date:
31/10/2024.
10. Associate Pro., Dr. Nguyen Ba Binh, “International sales contracts under CISG:
Regulations and case law”, Justice Publication, Hanoi, 2021.