Cite as Evans, in Bianca-Bonell Commentary on the International Sales Law, Giuffrè: Milan (1987) 645-649. Reproduced with permission of Dott. A Giuffrè Editore, S.p.A.
1. History of the provision
2. Meaning and purpose of the provision
3. Problems concerning the provision
(1) If a Contracting State has two or more territorial units in which, according to its constitution, different systems of law are applicable in relation to the matters dealt with in this Convention, it may, at the time of signature, ratification, acceptance, approval or accession, declare that this Convention is to extend to all its territorial units or only to one or more of them, and may amend its declaration by submitting another declaration at any time.
(2) These declarations are to be notified to the depositary and are to state expressly the territorial units to which the Convention extends.
(3) If, by virtue of a declaration under this article, this Convention extends to one or more but, not all of the territorial units of a Contracting State, and if the place of business of a party is located in that State, this place of business, for the purposes of this Convention, is considered not to be in a Contracting State, unless it is in a territorial unit to which the Convention extends.
(4) If a Contracting State makes no declaration under paragraph (1) of this article, the Convention is to extend to all territorial units of that State.
1. History of the provision
1.l. - It is a well-known fact that States with federal systems of government involving a constitutionally guaranteed division of powers among the constituent units of the federation sometimes face special problems in becoming Parties to an international convention. The particularly delicate nature of the question is illustrated by the fact that in the document containing the draft final clauses submitted to the Vienna Conference the Secretary-General proposed two alternative texts of the then Article B. [page 645] The first of these, virtually identical to Article 11 of the Convention on the Recovery Abroad of Maintenance, read as follows:
In the case of a federal or non-unitary State, the following provisions shall apply:
(a) With respect to those articles of this Convention that come within the legislative jurisdiction of the federal legislative authority, the obligations of the federal government shall to this extent be the same as those of Parties which are not federal States;
(b) With respect to those articles of this Convention that come within the legislative jurisdiction of constituent States, provinces or cantons which are not, under the constitutional system of the federation, bound to take legislative action, the federal government shall bring such articles with a favourable recommendation to the notice of the appropriate authorities of States; provinces or cantons at the earliest possible moment;
(c) A federal State party to this Convention shall, at the request of any other Contracting Party transmitted through the depositary, supply a statement of the law and practice of the federation and its constituent units in regard to any particular provision of the Convention, showing the extent to which effect has been given to that provision by legislative or other action.
1.2. - The second alternative was based on Article 31 of the Limitation Convention and was worded as follows:
(1) If a Contracting State has two or more territorial units in which, according to its constitution, different systems of law are applicable in relation to the matters dealt with in this Convention, it may, at the time of signature, ratification or accession, declare that this Convention shall extend to all its territorial units or only to one or more of them, and may amend its declaration by submitting another declaration at any time.
(2) These declarations shall be notified to the depositary and shall state expressly the territorial units to which the Convention applies.
(3) If a Contracting State described in paragraph (1) of this article makes no declaration at the time of signature, ratification, acceptance, approval or accession, the Convention shall have effect within all territorial units of that State.
1.3. - The basic differences between the two texts were indicated by the Australian representative at the first meeting of the Second Committee of the Vienna Conference where he stated that Alternative I did not go any further than was necessary to meet the concern of his own State, in respect of which there was a distinct possibility that the constitutional powers of the federal [page 646] Government would be inadequate to implement all the articles of the Convention. He pointed out in particular that paragraph (b) of Alternative I «faced the realities of the situation by confining the obligation of the federal Government to bringing such articles, together with a favourable recommendation, to the notice of the appropriate authorities of those units while paragraph (c) made it possible to obtain information on the law and practice of a federal State party to the Convention so that it could be ascertained how far particular provisions were being implemented». The purpose of Alternative II on the other hand was «not to qualify the obligations of the Central Government but to enable the Convention to be applied progressively to particular units of the State concerned which was not the intention of his Government» (Official Records, II, 434-435).
1.4. - The representative of Canada on the other hand stated that the «inclusion of an appropriate federal State clause which would not require Canada to apply the rules of the Convention throughout its territory was essential if his country were to become a party to the Convention» (Official Records, II, 435).
1.5. - In these circumstances it was decided to set up a working group to attempt to accommodate the different interests involved and it was a revised version of Alternative II which that group proposed to the Second Committee for consideration and which, subject to minor changes, was ultimately adopted as Article 93 (Official Records, II, 445-447).
2. Meaning and purpose of the provision
2.1. - The text of paragraph (1) reproduces, with a small number of drafting improvements, that contained in paragraph (1) of Alternative II. It permits a Contracting State, at the time of signature, ratification, acceptance, approval or accession, to declare that the Convention is to extend to all its territorial units or only to one or more of them and to amend its declaration by submitting another declaration at any time. It should however be noted that for a State to make the declaration under Article 93 it is necessary not only for it to have two or more territorial units [page 647] but that, according to its constitution, different systems of law are applicable in those units in relation to the matters dealt with in the Convention.
2.2. - The effect of the provision is therefore on the one hand to permit federal States to apply the Convention progressively to their territorial units and on the other to permit those States which wish to do so to extend its application to all their territorial units from the very outset.
2.3. - Paragraph (2), which provides for the declarations to be notified to the depositary and to state expressly the territorial units to which the Convention extends, calls for no comment.
2.4. - Although the wording of paragraph (3) is somewhat inelegant, it seems to reflect the two major concerns of the drafters of the Convention. In the first place it makes it clear that, for the purposes of the Convention, when a party has his place of business in a territorial unit of a Contracting State to which unit that State has not extended the Convention, then that place of business is not considered to be located in a Contracting State with the consequence that the requirement of Article 1(1)(a) will not be met when such a party concludes a contract with a party in another Contracting State. The form of wording in the negative, completed by the proviso «unless it [the place of business] is in a territorial unit to which the Convention extends» was chosen so as to avoid giving the misleading impression that the Convention might apply to a contract concluded between parties with their places of business in different territorial units of the same Contracting State to which the Convention had been extended by that State.
2.5. - Paragraph (4) provides that if a Contracting State makes no declaration under paragraph (1) of the article, then the Convention will extend to all territorial units of that State. Although it was generally agreed that such a provision was necessary, a suggestion was made that its presence rendered otiose the reference in paragraph (1) to the possibility of a Contracting State making a declaration that the Convention was to extend to all its territorial units. It was however stated that some federal [page 648] States might, for internal purposes, find it desirable to make a declaration that the Convention applies to all their territorial units (Official Records, II, 446).
2.6. - It may, in this connection, also be argued in support of the maintenance of the wording of paragraph (1) that a State which makes a declaration under that paragraph extending the application of the Convention to all its territorial units may, according to that same paragraph, amend its declaration at any time in such a way as to reduce the number of territorial units to which the Convention extends, whereas such a possibility would not be open to a State which fails to make any declaration under paragraph (1).
3. Problems concerning the provision
3.1. - During the course of discussion at the Vienna Conference a suggestion was made that the language of paragraph (3) might not be fully satisfactory in that while the provision did admittedly contain the proviso that the place of business of a party to a contract should, for the purposes of the Convention, be considered not to be in Contracting State unless the place of business is in a territorial unit to which the Convention has been extended, nevertheless large companies might have places of business in more than one territorial unit of a federal State. One of those places could be in a territorial unit to which the Convention extended, thus satisfying the terms of the proviso, even though the contractual relationship had in fact been established in a territorial unit to which the Convention had not been extended. It was therefore proposed to add in fine the words «and unless it is a territorial unit from which the commercial transactions have been carried out» (Official Records, II, 445). Although the point was seen as having some force it was generally believed that it could be met by assuming that the rule laid down in Article 10(a) applies throughout the Convention. [page 649]