In 1996, a Norwegian company (Claimant) entered into a contract for the sale and supply of cement products to a Belgian company (Respondent). The contract, which was governed by Dutch law and subject to the application of the 1980 United Nations Convention on Contracts for the International Sale of Goods, provided for delivery FOB but gave the parties the option to change the delivery terms to DES/DDU, which they did by way of an addendum at the start of the contract's third year. Although self-discharging vessels were used for the transport of the products, dockers' costs were incurred in the Belgian port of arrival. The purchasing company invoiced the seller for these costs and set off the amount invoiced against sums owed to the seller. The seller objected that it was not liable for the dockers' costs.

'Applicable rules of law

5.1 Dutch law has been chosen to apply to the Contract and the Addendum. The CISG has entered into force in the Netherlands on January 1, 1992 and is (pursuant to art. 1 CISG) applicable to international sale agreements such as the Contract and the Addendum. As regards the terms of delivery of goods and the allocation of costs of such delivery art. 6 and 31 CISG allow parties to deviate by agreement from the default rules contained in the CISG. In this case [Claimant] and [Respondent] have made such further agreement.

5.2 The parties disagree as to the correct interpretation of the Contract. Art. 8 CISG sets forth the rules according to which international sale agreements, such as the Contract, are to be interpreted. These rules provide, in short, that contracts are to be interpreted according to the common intent of the parties and, failing such common intent, according to the understanding that a reasonable person would have had. All relevant circumstances are to be taken into consideration when interpreting an agreement.

Nature of dock workers' costs

5.3 Before the question can be addressed which party has to bear the costs of the dock workers, the nature of these costs must be assessed. [Claimant] has argued that the dock workers' costs constitute a government levy, tax, duty and/or official charge (or the equivalent thereof), which under DDU are not for its account. This argument is incorrect. To qualify as a government levy, tax, duty and/or official charge (or the equivalent thereof) the costs involved should be charges imposed by a governmental authority. It is clear that [X], the entity that has invoiced the dock workers' costs, is not a governmental authority. The fact that Belgian law requires dock workers to be used, does not mean that the costs of such dock workers thereby become a levy, tax, duty or an official charge (or the equivalent thereof). There are many laws which impose compliance costs, which cannot be qualified as levies, taxes or duties.

5.4 The view that the dock workers did not render any (meaningful) service also cannot change the nature of the dock workers' costs into a government levy, tax, duty, charge or the equivalent thereof.

5.5 In light of the above the dock workers' costs are costs necessarily incurred in the discharge of the vessels.

5.6 The principal question to decide is which party is obligated to bear the dock workers' costs. In this respect it is irrelevant which party has in fact (initially) paid the dock workers' costs or which person ([Respondent], [Claimant] or the masters of the vessels) have instructed the dock workers.

Interpretation of Contract and Addendum

5.7 There is no dispute between the parties that the delivery terms of the Contract, as amended by the Addendum, are "DDU [Respondent] Terminal [Ghent] (Incoterms 1990)".

5.8 [Claimant] has argued that DDU Incoterms 2000 should be considered in interpreting the agreement reached between the parties. This argument is incorrect. The parties have explicitly referred to DDU Incoterms 1990. Incoterms and the interpretation thereof may change from one revision of the Incoterms to the next. Indeed, in this arbitration the relevant provisions of DDU Incoterms 2000 differ from those of DDU Incoterms 1990. Therefore, the ICC suggests when using Incoterms to stipulate which version of the Incoterms applies. [Claimant] and [Respondent] have done so. Similarly, the parties did not agree on "DES Incoterms 1990" or, for that matter, any other Incoterm. The meaning of such other Incoterms is therefore irrelevant for the dispute at arbitration. Furthermore, the Incoterms 2000 were not published until after the Contract and the Addendum were entered into. As such it is a poor aid in understanding what the common intent of the parties was regarding the terms of the Contract or what understanding a reasonable person would have had of said terms at the time the Contract and the Addendum were entered into.

5.9 DDU Incoterms 1990 provides, to the extent relevant:

A. The seller must

(…)

A3 Contract of carriage and insurance

a) Contract of carriage

contract on usual terms at his own expense for the carriage of the goods by a usual route and in the customary manner to the agreed point at the named place of destination. (…)

A4 Delivery

Place the goods at the disposal of the buyer in accordance with A.3. on the date or within the period stipulated.

(…)

A6 Division of costs

Subject to the provisions of B.6.

• in addition to costs resulting from A.3.a), pay all costs relating to the goods until such time as they have been delivered in accordance with A.4.;

• pay the costs of customs formalities necessary for exportation as well as all duties, taxes and other official charges payable upon exportation and, where necessary, for their transit through another country prior to delivery in accordance with A.4.

(…)

B. The buyer must

(…)

B2 Licenses, authorisations and formalities

Obtain at his own risk and expense any import licence or other official authorisation to carry out all customs formalities necessary for the importation of the goods.

B3 Contract of carriage

No obligation

B4 Taking delivery

Take delivery of the goods as soon as they have been placed at his disposal in accordance with A.4.

(…)

B6 Division of costs

Pay all costs relating to the goods from the time they have been placed at his disposal at the named point of destination in accordance with A.4.

Should he fail to fulfil his obligations in accordance with B.2., or take delivery of the goods when they have been placed at his disposal in accordance with B.7., bear all additional costs incurred thereby provided, however, that the goods have been duly appropriated to the contract, that is to say, clearly set aside or otherwise identified as the contract goods.

Pay all duties, taxes and other official charges as well as the costs of carrying out customs formalities payable upon importation of the goods.

B7 Notice to the seller

Whenever he is entitled to determine the time within a stipulated period and/or the place of taking delivery, give the seller sufficient notice thereof.

5.10 It is noted that the term "DDU Incoterms 1990" by itself does not specify how the costs for loading and discharging are distributed between the seller and the buyer. Clause A4 of DDU Incoterms 1990 only stipulates that the goods should be placed at the disposal of the buyer. Under DDU Incoterms 1990 it was explicitly up to the parties to agree on an allocation of (discharging) costs. [Claimant] refers to Question 41 contained in a publication of the ICC (Incoterms 1990 Questions and Answers, 1998) in support of its argument that under DDU Incoterms 1990 the discharging costs are for the buyer's account. This reference does not support [Claimant]'s case since [Claimant] ignores the fact that Question 41 relates to situations where the contract is silent relating to the costs of offloading, discharging, etc. In this case, however, the Contract and the Addendum were not silent as to the allocation of costs.

5.11 In the Addendum it was stipulated that the destination was "[Respondent] Terminal [Ghent]". In accordance with clause A4 of DDU Incoterms 1990 [Claimant] was therefore required to deliver the goods at the disposal of [Respondent] at the [Respondent] terminal. Pursuant to DDU Incoterms 1990 all costs up to the [Respondent's] terminal are thus for [Claimant]'s account.

5.12 As asserted by [Respondent], and according to the map submitted by [Respondent] with its statement of reply, which has remained undisputed, the [Respondent] terminal is located approximately 18 meters from the quay. Therefore, in order to place the goods at the disposal of [Respondent] at the [Respondent's] terminal, [Claimant] was obligated to bring the goods over such distance. This cannot be done without discharging the vessel. In that respect it is irrelevant whether, as [Claimant] has argued, [Claimant] was obligated to deliver the goods "up to", and not "into" the [Respondent's] terminal, as both phrases would require discharging the vessel and bringing the goods over the distance separating the quay from the [Respondent] terminal. Under the circumstances described above the costs thereof cannot be considered as costs relating to taking delivery of the goods. In accordance with the stipulated delivery term "DDU [Respondent] Terminal [Ghent]" the costs of discharging the vessels, including those of dock workers, are therefore to be borne by [Claimant].

5.13 This conclusion is also supported by the text of the option contained in the Contract to change delivery terms to DDU or DES (Incoterms 1990). There it was stipulated that if such option were exercised by [Claimant] the shipping cost ("all costs up to delivered into silo") should not exceed what [Respondent] could document to have offered. This indicates that it was the intention of the parties that the shipping costs would include all transportation costs until the goods were delivered into [Respondent]'s silo. These shipping costs were to be borne by [Claimant].

5.14 [Claimant] has argued that the terms of the Addendum take precedence over the aforementioned option in the Contract in case of any inconsistencies between the Addendum and the Contract. This is correct. However, in relation to the point of delivery and the distribution of costs, the wording of the Addendum is not inconsistent with the wording of the option contained in the Contract. Moreover, it is clear that the Addendum was the result of the exercise of said option, albeit in the form of an amendment. Relevant in this respect is that [Claimant] at all material times was aware, which [Claimant] has conceded in its statement of claims (and otherwise should have been aware), of the (publicly available and in Europe not unusual) Belgian Labor Regulations and the need to use official dock workers for discharging vessels in the port of Ghent. Accordingly, [Claimant] was or at least should have been aware that dock workers' costs would be incurred even if self-discharging vessels were used. On the basis of the wording of the option in the Contract and the stated delivery point "[Respondent's] Terminal Ghent" in the Addendum, [Claimant] was or should have been aware that absent wording to the contrary in the Addendum the dock workers' costs would be for its account. No such wording was included in the Addendum.

5.15 In this regard [Claimant] has argued that during the negotiations it had rejected the idea that dock workers' costs would be for its account and that it was the agreement between the parties that [Respondent] would bear the dock workers' costs. On the other hand [Respondent] has argued that an explicit agreement was reached between the parties that [Claimant] was to pay the dock workers' costs. The preceding paragraph shows that [Claimant]'s assertion that an agreement allocating the dock workers' costs to [Respondent] was reached, is not apparent from, but instead is inconsistent with, the Contract and the Addendum. The burden to prove that an agreement to allocate the dock workers' costs with [Respondent] was reached, rests with [Claimant]. The arguments advanced and (witness) statements provided by [Claimant], which are contradicted by [Respondent]'s argument that an oral agreement to the contrary was reached, are insufficiently motivated and do not evidence an agreement to allocate the dock workers' costs to [Respondent]. [Claimant] has furthermore not made a (sufficiently specific) offer of additional proof in this respect. [Claimant]'s argument therefore fails.'