CISG and the Unification of International Trade Law

Bruno Zeller

• Publisher: Routledge-Cavendish
• Year: 2008
• Print ISBN: 9780415421737
• eBook ISBN: 9781135390549
• Topic: Law
• Subtopic: Commercial Law
• Index: Law

Pushing the boundaries between domestic and unified laws, this book explores the differences between unification and harmonization. Bruno Zeller provides a critical examination of the Convention for the International Sale of Goods (CISG), the advances of international jurisprudence and the role of domestic courts, in order to consider whether unification is merely a myth or a reality.

Describing the salient features of unification and harmonization and using the CISG as a vehicle to test unification attempts, this volume touches on controversial points and fosters debates upon efforts to unify laws in discrete areas. It examines the assumption that the creation of a convention introduces a uniform law, which then contributes to the harmonization of international laws.

Provocative, this is a must read for postgraduates and researchers studying and working in the fields of comparative and international trade law.

Chapter 1
Introduction

This book starts with the premise that unification of law serves a useful purpose. This is so because internationalisation or globalisation has in effect forced the law to take a more global approach. As trade increasingly crosses borders so by necessity has the law. Transplantations, the drafting of model laws and ratification of conventions are the responses of legal systems to internationalisation and are occurring at an increased pace.

In an ideal world one law would be applicable to cover all transactions of a similar nature wherever they occur. This unfortunately is not the case, nor will it eventuate in the foreseeable future. Municipal interests and ‘sacred cows’ will always be stumbling blocks to the unification process. However international conventions in discrete areas of law are the ‘next best thing’ in the process of creating a global law. However even international conventions are not codes and hence do not cover a complete area of law. Domestic law is always needed to fill the resulting gaps. The unification process is curtailed as soon as domestic law needs to be applied. This book takes a hard look at the confluence of the spheres of influence of a convention and domestic laws.

For the purpose of showing that unification is desirable, the Convention on Contracts for the International Sale of Goods (CISG) will be analysed. One of the reasons is that, unlike earlier conventions, the CISG included a definitional section in its regime, namely article 7. This article is the most significant development as it not only assists to define the instrument itself but it also sets the borderline of influence between the CISG and the application of domestic law. This is so because – as pointed out above – the CISG is not a code and hence gaps exist, which by definition need to be filled by municipal laws.

Many authors and tribunals have examined the extent to which the CISG is applicable and which areas are excluded from its scope. The internal boundaries of the CISG have arguably been well defined. In other words, what is and what is not governed by the CISG can be easily discovered by examining jurisprudence and academic writing.

What this book attempts to achieve is to boldly ‘push the boundaries’ of unification of international sales laws at the expense of domestic laws. It is not suggested nor is it the intention of the author to find universal agreement. As the title of the book suggests, the idea is to be controversial. No doubt some of the suggestions in this book will be dismissed as either going too far, or being untenable, or even lacking credibility. If that is so and rebuttals are written, one of the aims of this book would have been achieved, namely to foster debate as to how far the boundaries of unification can be pushed.

However it was thought to be important to at least highlight areas where a possible ‘creeping unification’ can take place. After all the CISG is not a dead instrument but a living one, constantly adapting to new ideas and new challenges posed by globalisation.

Some ideas are simply a push into the unknown and hopefully others will either push further or authoritatively close the gap. Professor Fountoulakis of Basel University, who has patiently read the draft, has already made some suggestions where areas of this book contradict previous writings and in her view some ideas are indeed controversial and need to be abandoned or refined. It is hoped that it is the refining process that will prevail.

The most important idea is that the dividing line between domestic and international laws cannot be fixed. It must be constantly under attack in order to find a common solution to common problems. It is indeed hoped that this book will be looked at as being thought provoking and will provide a springboard for further debate in the process of defining the legal commitments of buyers and sellers of goods towards each other.

Chapter 2
Uniformity of laws
Mapping the territory

A. Uniformity of laws

I. The twentieth century – the century of internationalisation

The internationalisation of trade has raised the question of how such trade can be conducted in the most efficient manner. There is no debate that the beginning of the twentieth century has seen some significant law reforms in the area of international trade law. The attacks on the domestically dominated system of contract law, which did not distinguish between municipal contracts and international contracts, have been fought and won by the internationalists. It is now clear that:

. . . the nineteenth century rules the liberals have been attacking form a complex intellectual system whose vitality even in the last quarter of the twentieth century is as much or more the product of its ideological power as of the direct material dominance of particular economic or political interests.¹

As a result of the ideological shift in thinking, it has been questioned: ‘why is there international uniform commercial law rather than nothing?’² The answer depends on who is asking the question. From a legal-philosophical point of view, the response could well be that it is a vision that could be called normative, an emphasis on a principle of thought that considers uniform laws to be a virtue.³

Practically speaking, it is universally accepted that legal risks and costs are reduced if there would be one law and one judiciary dealing with international trade. There is equally no debate that the creation of a single judiciary worldwide will never eventuate. Hence, the only practical possibility is the creation of a universal trade law which is applied in all or at least in most domestic courts.

One possible solution is the creation of conventions, which are open for accession by individual nations and which become part of domestic law.

This book attempts to have a fresh and contentious look at uniform laws – within the meaning of ‘unified laws’ – and specifically at the United Nations Convention on Contracts for the International Sale of Goods (CISG). The starting point in this investigation is the conclusion Marquis reached in his study of international uniform commercial law. He noted:

For some time, the contemporary world has been undergoing transition. In its simplest expression, this transition expresses a changeover from modernity to a second modernity. This changeover is currently taking place. It is real and current. It represents an interval between a starting point and a target point. Moreover, the intermediate period that we are currently undergoing is marked by a strong ambivalence.⁴

Arguably, uniform laws – and the CISG is no exception – are merely progressing towards a target point but have not reached that point yet. This book will show that the CISG is still capable of being shaped and enlarged, as it is not a document frozen in time. Uniform laws are living documents, and their implementation is merely an intermediate period.

II. Uniform legislation – just the first level towards unification of laws

I. Legislation and interpretation – first and second level

The obvious key criterion to the success of such a law is that it should be uniformly applied. The drafters of the CISG attempted to facilitate uniformity by including article 7, the interpretative article, into the regime of the convention. Article 7(1) in the relevant parts states that ‘regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith’. The importance of this article is highlighted by the fact that it has been copied into various other documents.⁵ The process of interpretation is pivotal in the attempt to achieve uniformity.

Despite a seemingly clear mandate and the inclusion of concise interpretative articles, uniformity of application is not guaranteed or automatically obtainable.

Every text, however clear on its face, requires to be scrutinized in its context and in the light of the object and purpose which it is designed to serve. The conclusion which may be reached after such a scrutiny is, in most instances, that the clear meaning which originally presented itself is the correct one, but this should not be used to disguise the fact that what is involved is a process of interpretation.⁶

The question which ultimately needs to be asked is whether the CISG facilitates international trade. In that sense, article 7 is ‘a text system that forms a subsystem of the CISG’.⁷ Even after recognising this fact, predictability and hence confidence in the CISG can only be achieved through international decisions that show at least an adequate level of uniformity.

This book also attempts to investigate how far uniformity is achievable. This – in some cases confronting – process ultimately will turn on the interpretative question of any uniform legal instrument.

2. Desirability of uniform laws

Wishing to create a new international economic order is a proposition that is either boringly old hat or is extremely original. It begs the question whether these international treaties do serve a useful purpose, namely to provide a satisfactory basis not only for international trade but also for domestic legislation.⁸ To put it differently:

If the search for uniform solutions is a good thing, then ultimately, ‘Why (Not) Seek Uniform Solutions?’ is a matter of understanding what should and should not be harmonized.⁹

This question is a complex one and depends on the will of the legal profession and sovereign states to abandon domestic laws in favour of a supranational one. A good example of an inward looking legal system is the United Kingdom, which was heavily involved in the design of the CISG. However, it never ratified the convention despite being a member of the EU. Although Lord Steyn in his maiden speech drew the government’s attention to the fact that the United Kingdom played a ‘full and constructive role’ in formulating the CISG and although the Law Commission recommended ratifying the CISG, no official announcement was made. The Government’s response simply was that ‘it continued to take an active part in the business of the convention’.¹⁰

It appears that the United Kingdom is still under the impression that ‘the law which applies to international commodities contracts conducted on standard form terms promulgated by London based trading associations [and therefore] the lawof international sale of goods . . . is but English domestic law writ large’.¹¹ This may be true in the case of the commodities market, which has a rich history, which is dominated by very few players and which arguably developed a private language that is incomprehensible to trade outsiders.¹² It could be argued that at least in the commodities market a uniform law is applicable, namely United Kingdom law. It follows that it is of no real consequence what law is applicable to the rest of the business community that is not involved in the closed trade of commodities. All involved parties within the trade understand the law and, hence, predictability and certainty is the product of a uniform law, whic...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Acknowledgements
• Table of Cases and Documents
• Chapter 1: Introduction
• Chapter 2: Uniformity of Laws: Mapping the Territory
• Chapter 3: Unification of Sales Laws: A Discussion
• Chapter 4: Article 7 CISG: The Tool to Unified Sales Laws?
• Chapter 5: Conflict of Laws: Is Uniformity Possible?
• Chapter 6: Specific Performance and Article 28 CISG
• Chapter 7: Gap Filling and Unification: Where Are the Boundaries?
• Chapter 8: Transplantation of Laws
• Chapter 9: Conclusion
• Bibliography