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Petar Sarcevic & Paul Volken eds., International Sale of Goods: Dubrovnik Lectures, Oceana (1986), Ch. 12, 385-399. Reproduced with permission of Oceana Publications.

Uniform Substantive and Conflicts Rules
on the International Sale of Goods and Their Interaction

Giorgio Conetti
Professor of Law, Trieste

Practically speaking, a high degree of certainty regarding the applicable law in international trade transactions, especially in respect of international sales of goods, can be attained by uniform substantive law through the adoption of international conventions. Thus, a large number of States may agree to incorporate the uniform rules into their internal legal orders. This practice is deemed to offer a better solution than the alternative of the conventional unification of conflict-of-laws rules, as it seems capable of solving the problems arising from the conflicts of laws themselves.

This attitude is widely accepted notwithstanding the well-known fact that deriving an international uniform law from an international conventional source leads to serious problems regarding the determination of its scope in relation to the internal rules of general application as well as its classification and interpretation. The adoption of the two Hague 1964 Conventions (Convention relating to a Uniform Law on the International [page 386] Sale of Goods [ULIS] and Convention relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods [ULF]), the 1974 UN convention on Prescription in International Sales of Goods, the 1980 UN (Vienna) Convention on Contracts for the International Sale of Goods [CISG], and the 1983 UNIDROIT (Geneva) Convention of Agency in the International Sale of Goods marks the solidarity of the present preference which appears to be even too ample in attainments.

However, a quick glance at the uniform substantive provisions of these conventions suffices to see that they cannot entirely avoid dealing with private international law rules and problems (e.g., see Art. [1(1)(b)] of the 1980 Vienna Convention or Art. IV of the 1964 Hague Conventions) concerning the internal conflict-of-laws rules of the Contracting States which, at times, have been introduced as the result of international conventions on uniform choice-of-law rules. The relationship between the uniform substantive law of a convention and the internal substantive and conflicts rules is one of ambivalence. Within the internal legal order of a State it raises the problem of interaction between the conventions' rules on the sphere of application of the uniform substantive law and the lex fori conflict-of-laws rules; or within public international law it leads to the problem of coordinating subsequent uniform law conventions containing substantive or conflict-of-laws rules. We shall see that the latter problem is easier to solve than the former.

Sometimes the uniform substantive law itself deals with the problem of its position within the internal legal order as well as with the application of its rules with regard to other internal legal orders. However, there is much uncertainty, [page 387] and the various texts contain a number of solutions, at times, several within one text itself.

Generally speaking, the problem can be presented by referring to the following models:

a) Uniform substantive law of conventional origin could be considered as a system of mandatory internal provisions whose sphere of application is determined autonomously and which therefore refrains from interfering with the conflict-of-laws rules, at least with those not derived from another international convention; in that case the question of interaction is shifted to the level of the interrelated international agreements.

b) Uniform substantive law could be held to be a special internal law since it prevails over the other general provisions of substantive law; however, just as this substantive law, it is also subject to the choice-of-law rules, both the general ones and those incorporated into internal law in compliance with other international conventions.

c) Furthermore, one may regard the substantive law introduced by a convention as special substantive private international law that is separate from the general substantive and conflicts laws of the forum, and, in accordance with the given convention's scope, is to be applied to some well-defined issues which link only the Contracting States of the convention on a reciprocal basis, as indicated by the convention's special rules on its sphere of application.

d) On the other hand, the uniform substantive law could be applied only when referred to by the autonomy of the parties or when it functions as a connecting factor referring to the application of a legal order containing the uniform law; or

e) When the contracting parties select the uniform provisions as a special part of the internal law that can be [page 388] applied only when requested by the parties themselves as an expression of their contractual autonomy within the limitations set by the internal public order of the law applicable to the contract, as established in accordance with the lex fori conflict-of-laws rules.

Odd as it may sound, this last approach to the relationship of uniform substantive law of conventions and internal substantive and conflicts rules is taken by some conventions on the international sale of goods. At present, it has also turned out to be the favored approach of the Italian courts in regard to the sphere of application or the 1956 Convention on the Contract for International Transport of Goods by Road (CMR).

At first glance, it seems obvious that the first of the various solutions described above seems preferable and most suitable for establishing uniform substantive law by means of international conventions, i.e., to have identical substantive legal provisions on the same matters and with the same sphere of application adopted by the largest possible number of internal legal orders. This is the main solution offered by the 1964 Hague Conventions; however, at the same time, they have accepted a system of reservations which allows the Contracting States to follow other models. According to Art. III, it is possible to limit the uniform law's sphere of application to contracts whose parties have their places of business or their habitual residences only in the territory of different Contracting States (model c). Otherwise, Art. IV provides that a State which has previously accepted a convention on conflict of laws on the same subject as that of the 1964 Hague Conventions (reference to the 1955 Convention on the Law Applicable to the [page 389] International Sale of Goods) can apply the uniform law only when the conflict-of-laws provisions of the latter convention require the application of a legal order containing the uniform law (model b). There is a further reservation in Art. V of the first 1964 Hague Convention providing that the uniform law of the Convention shall apply to a sales contract only if the parties thereto have selected it as the law governing the contract (model d). Furthermore, Art. 3 of the uniform law permits the contracting parties to exclude the application of the uniform law either entirely or partially (model e, as negated).

The solutions adopted by the 1980 Vienna Convention are not as elective. Although the Convention qualifies the international character of the sale by requiring that the contracting parties have their seats or places of business in different States, it does not autonomously define its sphere of application, as the two Hague Conventions do. Its application depends on the international character of the cases so that the Convention is only applied when the States concerned are Contracting States (model e), or when the lex fori conflict-of-laws rules of a Contracting State lead to the application of the law of another Contracting State containing the uniform law which, after all, could be the lex fori itself (model b). However, Art. 95 provides that the reservation is not limited to the latter solution. Thus, the general substantive applicable law would apply instead of the uniform one, if, according to the lex fori conflicts rules, the contracting parties' seats of business are not in two different Contracting States. Furthermore, according to Art. 6, the contracting parties may exclude the application of the Convention, or derogate from it, or vary the effect [page 390] of its provisions (model e).

It is commonly known that the main solution adopted by the 1964 Hague Conventions has, for the most part, not been followed and that most of the Contracting States, with the exception of Israel, have availed themselves of the optional solutions offered by the reservation clauses of the Conventions. In accordance with Art. IV, Italy has made a reservation, limiting application of the uniform substantive law to cases where it is applicable by virtue of the 1955 uniform connecting factors. This reservation applies only to the first of the two 1964 Conventions, as it has been deemed, a bit superficially, that the 1955 Convention should not overlap with the 1964 Convention on the formation of sales contracts.

The 1983 Geneva Convention on Agency in the International Sale of Goods follows a pattern similar to the model of the Vienna Convention. Declaring itself to be a complementary text of the latter, the Geneva Convention has aligned its sphere of application to that of the Vienna Convention. Hence, after having defined its application ratione materiae in Art. 1 and restricted its sphere of application in Art. 3, the Geneva Convention states the requirements for recognizing the international character of agency relationships which can be submitted to the uniform law (i.e., at last two of the three parties, the principa1 and the third party, must have their places of business in different States, thus corresponding to the application requirements of the Vienna Convention). Then, in accordance with the Vienna system, it provides that in order for the Convention to apply, the agent must have his place of business in a Contracting State (model c) or that the private international law of the [page 391] lex fori lead to the application of the law of a Contracting State containing the uniform law (model b). Moreover, under Art. 28, the Contracting States may declare that they will not be bound by the second rule stated above, thus confirming that the nature of substantive private international law of the residual model c applies only to some of the relationships involving some of the Contracting States. Art. 5 permits the principal or the agent, acting in accordance with the principal's instructions, to agree with the third party that the application of the Convention be excluded or derogated from.

The lack of success of the attempt at autonomous delimitation of uniform substantive law is reflected in the application rules adopted by this last Convention. This is also the result of widespread criticism of the main solution of the 1964 Convention which scholars have considered to be an immoderate claim of competence on the part of the lex fori.[1]

In this statement I detect some misunderstanding of the real issues at stake. One must distinguish between the sphere of application of the uniform substantive law and the necessity of not extending application of the substantive lex fori provisions beyond some fair limits in cases with which they are not meaningfully connected. Although the uniform substantive law is incorporated in the internal legal order, its origin and scope are different. Being set forth in an international agreement, it has the special aim of governing cases that can be subjected to a uniform law, which at the same time constitutes an international obligation.

The essential quality of the uniform substantive law is its applicability to those cases specified by the restrictions it sets on its own [page 392] sphere of application, thus fulfilling its intrinsic international task of providing certainty in contractual relations. The fact that this task could be carried out by incorporating the uniform law into the internal legal order should not be misleading as far as its real nature and special aim are concerned.

The general lex fori conflicts rules which define the fair limits within which the substantive lex fori provisions are to be applied cannot be assimilated to the special rules by which an international convention defines the sphere of application of its uniform law. Since these special rules comply with the international interest to provide uniform legislation in a given field, they may be regarded, vis-à-vis the general lex fori conflicts and substantive rules, as a way of conferring the character of mandatory law upon the uniform substantive law.[2] In this way they are guaranteed to satisfy the interest vested in the particular convention.

However, in view of the fact that there are a number of legislative texts of conventional origin containing uniform substantive or conflicts rules for the international sale of goods (we must now add the 1980 Rome Convention on the Law Applicable to Contractual Obligations which, at present, is in the process of receiving its first ratifications), we must point out the problems which arise as a result of the interaction of their respective rules relating to their own sphere of application. This is very difficult since, as we have seen, some conventions offer different alternatives.

The conflicts problems arising as the result of overlapping uniform law conventions could be settled by recourse to different techniques depending on our point of departure. Regarding them [page 393] as sources of uniform law, i.e., of international conventions that have taken place, we can deal with them by the means provided for by international rules of law, notably Art. 30 of the Vienna Convention on the Law of Treaties. On the other hand, we can choose the point of view of the internal legal order where the uniform substantive as well as conflicts rules of different conventional origins have been applied and then follow its own techniques of interpretation (e.g., the principles of speciality or those in favor of a socially valued outcome). However, here again we are confronted with the alternatives described above regarding the reciprocity of general and special conflict-of-laws and substantive ru1es.[3]

Nevertheless, as far as the uniform law conventions on the international sale of goods are concerned, we are able to make use of the "compatibility clauses" which most of them contain in regard to their respective application. This includes Art. IV of the 1964 Conventions, Articles 9 and 99 of the 1980 Vienna Convention and Articles 21, 23, 24 and 25 of the Rome Convention. As for the first interaction, i.e., between the 1955 conflict-of-laws Convention and the two 1964 uniform substantive law Conventions, doubts have been raised as to the feasibility of the reservation provided for in Art. IV that every problem arising from the concurrence of the 1955 private international law rules be accounted for.[4] First of all, the concurrence between the sphere of application of the two systems still ought to be explained since the international sales of goods, as defined in Art. 1 of the 1955 Convention, could be interpreted as not entirely covering those sales qualified as international under the 1964 Conventions. As a result, the [page 394] reservation provided for in Art. IV of the 1964 Conventions could be inadequate to guarantee that the uniform conflict-of-laws rule have priority.

By virtue of Art. 3 of the 1964 Conventions and Art. 6 of the 1980 Vienna Convention, the contracting parties have the freedom to entirely or partially exclude application of the respective convention. This does not seem to contradict the 1955 conflict-of-laws rules if it is regarded as contractual autonomy within the applicable law. However, some difficulties may arise if, on the other hand, it is regarded as the freedom to choose the connecting factor. The 1973 Convention on Prescription (Art. 37), and the 1980 Vienna Convention (Art. 90) contain an identical compatibility clause that above all may be taken into account when answering the question whether they are to prevail over the 1955 private international law Convention. With the same wording, the two U.N. Conventions acknowledge that they shall "not prevail over any international agreement which has already been or may be entered into, and which contains provisions concerning the matters" within their jurisdiction "provided that the parties have their places of business in States parties to such agreement." The 1983 Agency Convention contains a similar provision in Art. 23 which, however, refers only to other agreements containing provisions of substantive law. Accordingly, Art. 23 does not apply in respect of the 1955 Convention but only in respect of conflict-of-laws rules of the lex fori to which it refers in Art. 2(1)(b) or from which it may derogate in accordance with Art. 2(1)(a).

Therefore, when the sphere of application of the two U.N. Conventions mentioned above overlaps with that of another convention, as is the case [page 395] when the States where the contracting parties have their places of business are Contracting States of both the former and latter conventions, the latter shall prevail. This clause may result in the exclusion of the 1980 Vienna Convention when a uniform conflict-of-laws rule of conventional origin, that is common to the two States involved, refers to the law of a third State where the Vienna Convention is not in force, but where, for instance, the 1964 Conventions could be in force.

Of course, this only occurs when a third State is involved, as it is well known that Art. 99 of the 1980 Convention does not allow a Contracting State to be, at the same time, party to the 1964 Conventions. On the other hand, Art. 38 of the 1973 Prescription Convention permits a Contracting State which is party to an existing convention on the international sale of goods to declare that it shall apply the Prescription Convention "exclusively to contracts of international sale of goods as defined in such existing convention." Thus, a State that has made use of this last reservation as well as the reservations provided by Art. IV of the 1964 Conventions conceding priority to the 1955 Convention could attain a very coherent regime which links the three systems together. Obviously, it is not possible to construct a unique system linking the 1955, 1964 and 1980 conventions, since a choice must be made between the latter two, with the consequences as described above.

In addition, some coordination is attained when the application of the 1980 Convention depends on a conflict-of-laws rule of the lex fori as this could be the one introduced by the 1955 Convention.

The maximum of flexibility that can be granted [page 396] in such compatibility clauses is undoubtedly contained in Art. 21 of the 1980 Rome Convention on the Law Applicable to Contractual Obligations. In regard to the relationship between this and other conventions, it is stated that the Rome Convention shall not affect the application of any international convention to which a Contracting State is or becomes party. Such broad wording seems to cover every type of international convention on uniform conflict-of-laws rules and uniform substantive law having its own rules on its sphere of application.

Articles 23 and 24 of the Rome Convention permit the Contracting States, after the Convention has entered into force, to either adopt a new choice-of-laws rule for any particular category of contract within the scope of the Convention, or to become party to a multilateral convention to lay down rules of private international law concerning one of the subjects governed by the Rome Convention. This can only take place after having carried out a consultation procedure that may be requested by any other signatory State.

From these clauses it can be deduced that, even if interference with the Convention regime is allowed by the adoption of new single conflict-of-laws rules for special matters or particular categories of contracts, there is no freedom left to the Contracting States to create or enter into a new general system of conflict-of-laws rules for contractual obligations that, on the whole, would aim at replacing the Community Convention.[5]

One question still remains open in spite of the negative solution presented in the Convention's Explanatory Report by Giuliano and Lagarde. That is, does the consultation procedure provision [page 397] also apply to new conventions on uniform substantive law in the field of contractual obligations, where it is often possible to find some single accessory private international law rules? Furthermore, one must keep in mind that uniform substantive law conventions could, by virtue of their own rules, determine their sphere of application in a way that would interfere with the Rome Convention's system of conflicts rules.

Anyway, Art. 25 of the Rome Convention also permits the consultative procedure in the case of international agreements not covered by Art. 24 when a Contracting State maintains that the unification achieved by the Convention could be affected by their conclusion. Then, when the rules on the sphere of application in uniform substantive law conventions are intended, as special rules, to derogate from the lex fori choice-of-law rules, thus conferring the character of mandatory law upon their uniform law, coordination between the Rome Convention and the uniform substantive law convention could be achieved in accordance with the clauses on mandatory rules of the forum in Art. 7 of the Rome Convention as well as those of the law of the country with which the situation has a significant connection.


FOOTNOTES

1. See mainly L.I. de Winter, "La loi uniforme sur la vente internationale des objects mobiles corporels et le droit international privé," NTIR (1964), p. 271 et seq.; R.D. Kollewijn, "Les Conventions relatives à une loi uniforme sur la vente internationale et le droit international privé ," NTIR (1965) , p. 219 et seq.; A. von Overbeck, "Le champ de l'application des règles de conflit ou de droit materiel uniforme prévues par les traités," Annuaire (1979), p. 97 et seq.; S.M. Carbone, "L'ambito di applicazione e i criteri interpretativi della Convenzione di Vienna sulla vendita internazionale" (The sphere of application and criteria for interpretation of the Vienna Convention on International Sales), Riv.dir.int.priv.proc. (1980), p. 513 et seq.

2. On this nature of the uniform law, see A. Malintoppi, "Les rapports entre droit uniforme et droit international privé," Recueil des Cours III (1965) pp. 1-87.

3. On problems of interaction among uniform law conventions, see F. Majoros, Les conventions internationales en matière de droit privé, t. II, Le droit des conflits des conventions (Paris 1980); P. Volken, Konventionskonflikte im IPR (Zürich 1977); B. Dutoit and F. Majoros, "Le lacis des conflits de conventions en droit privé et leurs relations possibles," Rev.Crit. (1984) pp. 565-596; with special reference to the coordination of the 1964 Conventions with the upcoming UNCITRAL draft, see R. Monaco, "Relationship between the two Conventions on sale adopted at The Hague in 1964 and the future conventions resulting from the work being done by UNCITRAL," Italian Yearbook of International Law (1977) pp. 50-60.

4. On the relations between the 1964 Conventions with private international law, see K. Zweigert and U. Drobnig, "Einheitliches Kaufgesetz und internationales Privatrecht," RabelsZ (1965), p. 146 et seq.; K.H. Nadelmann, "The Uniform Law of International Sales of Goods: a Conflict of Laws Imbroglio," 74 Yale LJ (1964-65), p. 456 et seq. [399]

5. For this interpretation, see I.F. Fletcher, Conflict of Laws and European Community Law (Amsterdam/New York/Oxford 1982) p. 153.


Pace Law School Institute of International Commercial Law - Last updated September 16, 2002
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