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Reproduced with permission of The American Review of International Arbitration (1999) 101-122

Application of the U.N. Sales Convention in Chinese
International Commercial Arbitration: Implications
for International Uniformity

Frank N. Fisanich [*]

I. Introduction

The United Nations Convention on Contracts for the International Sale of Goods ("CISG") [1] is about to enter its second decade. As a vehicle for bringing uniformity to the international sale of goods, the drafters hoped that it would lead to predictability and smooth out some of the inherent bumps in international trade by serving as a bridge over the idiosyncracies of the individual legal systems of its signatory states.[2] It was hoped that developing nations would use the CISG as a guide in developing their domestic contract laws, and that developed nations would use the CISG in their dealings with the rest of the world, thereby creating a "snowball" effect by which a growing body of uniform law would encourage other nations to become signatories. These goals have met with some success. However, the CISG depends on the adjudicatory organs of each of its signatory states to ensure that the body of law growing around the CISG is indeed uniform.

With this dependence in mind, this Comment will attempt to offer a critique of the adherence to uniformity in the application of the CISG by one of its major signatories, the People's Republic of China. The Comment argues that Chinese arbitrators and lawyers are applying the CISG in an idiosyncratic way, out of step with the plain meaning of the CISG's provisions, and thus pose a threat to a uniform international practice. With this argument in mind, Part II serves as a primer on the [page 101] history and purposes of the CISG. Part III introduces the unfamiliar reader to the law of the People's Republic of China as it pertains to foreign parties engaged in trade or business. Part IV serves as an explanation of the choice-of-law rules and conflict of laws rules of the CISG and China's domestic law in preparation for a discussion of how these rules play out in China's international trade. Part V explains the differences between the CISG and China's domestic contract law in order to show the reader why it is important that the CISG be applied in accordance with uniform international practice. Part VI consists of the analysis of two arbitration decisions in an attempt to illustrate the problems with China's application of the CISG. Finally, Part VII concludes with the implications for international uniformity of China's idiosyncratic application of the CISG, and attempts to recommend some avenues for rectifying the problems illustrated in Part VI.

II. CISG: History and Purposes

The United Nations Convention on Contracts for the International Sale of Goods was approved unanimously by 62 states on April 11, 1980.[3] It entered into force for the United States in 1988.[4] It has now been ratified by 51 nations from every part of the globe.[5] Prepared by the United Nations Commission on International Trade Law ("UNCITRAL"), the CISG was the product of UNCITRAL's mandate to promote "the progressive harmonization and unification of the law of international trade."[6]

Recognizing that "the existence of different national legal systems impedes the development of international economic relations with complicated problems arising from the conflict of laws,"[7] the CISG was written to be a uniform international trade law, alleviating legal conflicts with rules that recognize "the specific character of international economic relations"[8] and that consist of compromises between the myriad contract provisions of legal systems the world over.[9] "In order to promote uniformity, it had to detach itself from the idiosyncrasies of any one legal system; however, it is a product of the civil, socialist, and [page 102] common-law systems of contract."[10]

The desire for uniformity led the CISG drafters to include in Article 7 the provision that, when the CISG is interpreted, "regard is to be had to its international character and to the need to promote uniformity in its application. . . ."[11] This was an attempt to head off the situation in which the CISG would be applied differently by each jurisdiction, and thereby defeat the purpose of a unified, international contract law.[12]

In order to attain uniformity in application, judicial organs, whether they be courts or arbitration tribunals, are expected to interpret the CISG without reference to the jurisdiction's own contract law, and to avoid relying on the jurisdiction's definitions of common terms and construction of legal doctrine.[13] Presumably, this method of interpretation applies to the CISG's provisions on its applicability as well.

III. The Many Layers of Law Applicable to Foreign Parties in China

Depending on the type of transaction or business relationship, China has a myriad of contract laws which the foreign party may find applicable.

A. Economic Contract Law

The Economic Contract Law of the People's Republic of China [14] ("ECL"), which became effective on July 1, 1982, is the principle domestic contract law of China, akin to the Uniform Commercial Code in the United States. Article 2 of the ECL provides:

"This Law shall apply to contracts concluded between legal persons [15] of equal civil standing, other economic organisations, individual industrial and commercial households and rural contracting households in order to define mutual rights and duties and conclude contracts so as to achieve certain economic goals."[16]

The ECL does not, by default, apply to contracts between Chinese domestic entities and foreign entities due to ECL Article 46, which provides that "[t]he Foreign Economic Contract Law of the People's Republic of China and the Technology Contract Law of the People's [page 103] Republic of China shall separately apply to foreign economic contracts and technology contracts."[17] However, the ECL remains relevant to foreign business interests because it is applicable to Chinese-foreign joint ventures when they engage in business with other domestic Chinese entities.

B. Foreign Economic Contract Law

The Foreign Economic Contract Law of the People's Republic of China ("FECL"), which became effective on July 1, 1985, is the principle law governing business contracts between Chinese and foreign parties. It was based, in part, on the CISG [18] and applies to "economic contracts . . . concluded between enterprises or other economic organizations [19] of the People's Republic of China and foreign enterprises, other foreign economic organizations or individuals, but with the exception of the international transport contracts."[20] The FECL applies to the vast majority of Chinese-foreign business contracts in one way or another, and, as such, applies to most international sale of goods contracts.[21]

C. Regulations on Administration of Technology Import Contracts

On May 24, 1985, China put into effect regulations "with a view to further expanding foreign economic and technical cooperation, upgrading the scientific and technical level of the country and promoting the [page 104] national economic growth."[22] The Technology Import Regulations ("TIR") apply to every importation of technology into China, whether by trade, cooperation, assignment, provision of know-how, or provision of technical services.[23] The TIR was promulgated to ensure that China was receiving access to advanced technology through trade and business contracts with foreign parties.[24] Such contracts must meet one of an enumerated list of requirements, be in writing, and be submitted to an official government entity for approval.[25] The TIR is to be applied in addition to any other applicable law, including the FECL.[26]

D. Special Economic Zones

Since 1979, China has created a number of Special Economic Zones ("SEZ"), mostly along the east coast and particularly in the southeast coastal provinces of Fujian and Guangdong. A foreign businessperson should be aware that doing business in an SEZ, or with entities that have their place of business in an SEZ, implicates yet another layer of Chinese law. In Guangdong province, the city of Shenzhen, just across the border from Hong Kong, was just a sleepy fishing village until the Chinese Government declared it an SEZ in 1979.[27] It is now a teeming city, perhaps the most vivid indicator of China's explosive growth in the last twenty years. As such, I will use its laws and regulations here as an example, though the reader should keep in mind that the Shenzhen SEZ is one of, if not the, largest and most successful of the SEZs, and, therefore, has a more complicated legal framework than most of the smaller SEZs scattered around China's east coast.

The Shenzhen SEZ's explosive growth in foreign trade and investment led the provincial government of Guangdong to promulgate its own law concerning business dealings with foreign parties. The result was the Regulations of Shenzhen Special Economic Zone on Economic Contracts Involving Foreigners ("SECR").[28] SECR Article 2 provides that it shall [page 105] be applicable to agreements between Chinese entities in the SEZ and foreign entities, and to economic agreements concluded for implementation in the SEZ between any mix of Chinese, foreign, and Chinese-foreign entities.[29] As such, it seems to be a sort of hybrid of China's ECL and FECL in that it covers both foreign and some domestic contracts.[30] It seems that, in substance, the SECR attempts to bring some order to the SEZ's experiment in market economics by treating most of the entities that do business there (including foreign entities) equally.

In addition to the SECR, the Shenzhen SEZ has a great number of rules and regulations covering every facet of business, including land use rights, labor, partnership, technology transfers, insurance, bankruptcy, immigration, taxation, and banking.[31]

IV. Choice of Law and Conflicts of Laws

A. Choice of Law Under the CISG: Applicability to International Sales

Before beginning the discussion of the applicability of the CISG to international sale of goods contracts in China, it would perhaps be of help to review the choice-of-law rules under the CISG and under Chinese law.

Article 1 of the CISG provides the basic rules of applicability.[32] Under Article 1, the CISG should apply to an international sale of goods contract when the parties have their places of business in different states and: (a) each party's respective state is a signatory to the CISG, or (b) the conflicts rules of private international law would lead to the application of the law of a state that is a signatory to the CISG.[33] [page 106]

Article 95 allows signatory states to the Convention to make the reservation that they will not be bound by part (b) above, and, therefore, will not apply the CISG to an international sale of goods contract unless both parties are from signatory states.[34] Both the United States and the People's Republic of China have made the Article 95 reservation.[35]

The CISG upholds the norm of freedom of contract through the provision of Article 6 that "[t]he parties may . . . derogate from or vary the effect of any of the provisions of this Convention."[36] Article 6 allows the parties to choose the law that is to apply to their contract, and Article 1 is therefore only relevant when the parties have not done so. For the purposes of this discussion, only Article 1(1)(a) of the CISG, providing that the CISG applies to an international sale of goods contract between parties of different Contracting States, is relevant. Assuming that the provisions of Article 1 that require the contract to be one for the international sale of goods are met, we are left with the relatively simple language of subparagraph (a) that only requires that the parties to the contract be from Contracting States. When this occurs, and the parties have not chosen otherwise, the CISG should apply.

B. China's Choice-of-Law Rules

Article 5 of the Foreign Economic Contract Law [hereinafter FECL] of the People's Republic of China [37] states:

"The parties to a contract may choose the law to be applied to the settlement of the disputes arising from the contract. In the absence of such a choice by the parties, the law of the country which has the closest connection with the contract applies.

"Contracts for Chinese-foreign equity joint ventures, Chinese-foreign co-operative enterprises and for Chinese-foreign co-operative exploitation and development of natural resources to be performed within the territory of the People's Republic of China shall be governed by the law of the People's Republic of China.

"The international practice may apply in case no relevant provision is stipulated in the law of the People's Republic of China."[38]

The Supreme People's Court has explained that when the parties to a dispute cannot agree on the applicable law, the "closest connection with the contract" test requires that:

"[i]n the case of an international commodity trade contract, the law of the region where the seller has its operational base at the time of the signing of the contract shall apply. If a contract is negotiated and signed at the operational base of the buyer, or if the main terms and conditions of a contract are determined by the buyer and the contract is concluded after the buyer has called for tenders, or if a contract [page 107] clearly states that the seller shall fulfil its delivery obligations at the operational base of the buyer, the law of the region where the buyer has its operational base at the time of the signing of the contract shall prevail."[39]

What implications does this test hold for the applicability of the CISG in a case where both parties are from Contracting States? From our discussion above, it would seem that whether the seller's law or the buyer's law is implicated, the CISG should apply.[40] However, in China, things are a bit more complicated.

The Supreme People's Court has explained that though the parties to a contract may "choose the law applicable to the settlement of disputes arising from the contract at the time of the signing of the contract or after a dispute arises . . ."[41] in no event will any law other than the law of the PRC apply to contracts for Sino-foreign joint equity enterprises, Sino-foreign co-operative enterprise projects, and for Sino-foreign cooperative exploration and exploitation of natural resources to be implemented within Chinese territory (hereinafter referred to collectively as "Chinese-foreign joint ventures)").[42] This seems clear and reasonable given that Chinese-foreign ventures of the types mentioned above are treated as domestic entities under Chinese law.[43]

In actual practice, however, many Chinese-foreign joint ventures call for the foreign party to find foreign buyers for the products of the venture. The contracts resulting from this activity fall squarely within the definition of an international sale of goods, being between a domestic Chinese entity and a foreign buyer. Such contracts should allow the parties to choose the applicable law.[44] Yet the sales contracts themselves are often attached to the contract that created the Chinese-foreign joint venture as "appendices." As one commentator has stated:

"It has become common for joint venture contracts to include ancillary agreements to be entered into at a later date between the joint venture and third parties as appendices to the joint venture contract. For example, joint venture contracts will commonly provide that after the joint venture has obtained its business license the company shall enter into an equipment sales contract with foreign company X. The form of the contract to be entered into is then attached to the joint venture contract as an appendix. This practice serves a variety of purposes, among which is to ensure that fundamental elements of the deal agreed to at the time of entering into the joint venture contract are in fact carried out later."[45] [page 108]

"In such a situation, the Chinese authorities have interpreted the sales contract to be "an integral part" of the joint venture contract,[46] and hence required to be governed by China's domestic law.[47] Because Chinese-foreign joint ventures are domestic entities under Chinese law, contracts between Chinese-foreign joint ventures and foreign parties fall under the FECL.[48] Such a rule can potentially affect a tremendous amount of China's foreign trade.[49] When coupled with the Chinese proclivity for form contracts that do not provide for a choice of law applicable to disputes,[50] this practice could lead a great number of unsuspecting foreign parties to assume the CISG will apply to their contracts with Chinese-foreign joint ventures, only to find out once a dispute arises that the Chinese authorities will insist on applying Chinese domestic law.

C. China's Conflict of Laws Rules

The above discussion is especially pointed given China's conflict of law rules. Article 6 of the FECL requires that when an international treaty to which the PRC is a signatory differs from China's domestic law, the treaty provisions shall be applied.[51] One would think, therefore, that in the context of the applicability of the CISG, a contract between a domestic Chinese entity (i.e., a Chinese-foreign joint venture) and a party from a state that has acceded to the CISG would call for the application of Article 6 of the FECL, and thus require that the CISG trump China's [page 109] domestic contract law. A party attempting to make this argument should be wary, however. China has made the reservation that:

"Contracts that violate the law or public interests of society of the People's Republic of China are invalid.

"In a case where any clauses in a contract violate the law or the public interests of society of the People's Republic of China, the validity of the contract is not derogated if such clauses are cancelled [sic] or revised by the parties through consultations."[52]

Given that China has made it clear that Chinese-foreign ventures are to be governed by Chinese domestic law for public policy reasons,[53] a foreign party to a contract such as the one described above may find itself in the awkward position of agreeing to have Chinese domestic law apply to its contract in order to avoid having the entire contract held invalid.

D. Form Contracts in China: Not Choosing an Applicable Law

Form contracts have been in widespread, if not ubiquitous, use in China since the 1970's.[54] These forms have blanks for the names of the parties, quantities of goods, price, and shipping terms.[55] The reverse usually contains, inter alia, a standard arbitration clause calling for arbitration in China.[56] The collections of Chinese form contracts available [page 110] to this commentator [57] has not revealed a single instance where the arbitration clause, or any other clause, contained a choice of law applicable to the contract, though this has been possible since 1985 when the new FECL allowed the parties to a contract to choose the law applicable to disputes.[58] This also has been standard practice in China's international trade since the 1970's.[59] According to some commentators, Chinese negotiators are reluctant to deviate from the government approved forms, and therefore will likely insist that the standard form be used.[60] Other commentators have surmised that this reluctance to use a foreign locale for the arbitration, or foreign law, is based on a Chinese belief that the law and adjudicatory institutions in a non-socialist country serve the ruling class, and, therefore, it is not possible to get a fair hearing.[61]

In any case, it is plain that the practice common in China's international trade of choosing China as the locus of arbitration and of not choosing the law applicable to disputes leads to the necessity of applying China's choice-of-law and conflicts rules. As discussed above, where the parties to a dispute cannot agree on the applicable law, it seems clear that the CISG should apply whenever the foreign party is from a signatory state.[62] However, a lawyer unfamiliar with Chinese practice should not be encouraged by this prospect to assume that using a form contract will guarantee that the CISG will apply. As strong as the argument seems to be that the CISG should apply to a great number of agreements concluded using the Chinese form contracts, the difference between what should happen and what actually happens is great indeed.[63]

V. Relevance: Differences between the FECL and CISG

We have seen in the discussion above that China's Foreign Economic Contract Law (FECL) is the law most likely to be found applicable to an international sales contract. This section will attempt to explain why a foreign party expecting the CISG should be concerned to find the FECL applied to its contract instead.

As the CISG drafters had hoped developing countries would do,[64] China used the CISG as a model when drafting the FECL.[65] Even so, [page 111] significant differences remain. The following examples are just a few of the most glaring.

A. Contract Formation

The most important difference between the CISG and the FECL in the area of contract formation is the fact that the FECL has no provisions for offer and acceptance. Unlike CISG Articles 14-24, which cover the formation issues known to lawyers familiar with UCC 2-204 through 2-207, [66] Article 7 of the FECL states:

"A contract is formed when the clauses of contract [sic] are agreed in written form and signed by the parties. In case one party requests to sign a confirmation letter when the agreement is reached by the means of letter, telegram, or telex, the contract is only formed upon the confirmation letter being signed.

"Contracts, which are under the provisions of the law and administrative regulations of the People's Republic of China, shall be approved by the competent authorities of the state. They are only formed when the approval is granted."[67]

China has made the declaration required by CISG Article 96 to preserve its requirement that a contract be in writing to be valid.[68] However, FECL Article 7 goes further than just requiring written evidence of an agreement and provides, in essence, that there is only one valid way to form a contract; one must reduce all agreements to writing and sign. This strict rule has the unarguable benefit of simplicity and may serve Chinese state policies concerning control of foreign business contacts, but a foreign party that is expecting the CISG to apply to their dealings with a Chinese party could be surprised to find that an exchange of purchase order and confirmation forms followed by performance will not suffice to form a contract under the FECL. This is possible either because the forms do not agree, because neither form contains both parties' signatures, or because the contract was of the type that required approval by the competent state authority of the People's Republic.

Unlike the CISG, which envisions and provides for the often complex circumstances of international business transactions in its elaborate formation framework, the FECL envisions that the parties will abide by Chinese customary business methods in which the parties to an agreement spend time developing their relationship, negotiate extensively, and agree to every detail of the contract before performance.[69] An informed foreign businessperson will keep in mind that success in China often depends on personal relationships and, to be safe, will follow the Chinese method of contract formation regardless of which law should be [page 112] applicable to their contract. Having said this, however, the situation described above does a disservice to the CISG's goal of uniformity in international trade because it defeats the drafter's attempts to "detach [international trade] from the idiosyncrasies of any one legal system."[70]

B. Performance, Breach and Remedies

Article 16 of the FECL provides that "[t]he parties should fulfill their obligations stipulated in the contract."[71] This clause has caused some consternation among commentators because the word "should," and the FECL's provision for damages, have led some to read the FECL as doing away with specific performance as a remedy.[72] However, given China's civil-law tradition and its domestic practice, the argument that the English translation of "should" in Article 16 should be read as "shall," and, therefore, that specific performance is the preferred remedy, is convincing and the more reasonable.[73] That such uncertainty can exist is reason enough to recommend the CISG and its clear provision for either specific performance or damages.

Another difference concerns the duty of a non-breaching party to avoid as much economic damage as possible when the other party breaches. CISG Article 77 provides that the non-breaching party "must take such measures as are reasonable in the circumstances to mitigate the loss . . . resulting from the breach."[74] A party that fails to mitigate its losses will see its damages reduced by the amount that could have been avoided.[75] The FECL, on the other hand, provides that "[a] party who suffers losses arising from a breach of contract by the other party should take appropriate measures in time to prevent the loss from aggravating."[76] A party that fails to do so "shall have no right to claim damages for the aggravated part of the loss."[77]

The mitigation principle of CISG Article 77 is well-understood as a duty of the non-breaching party to take positive steps to prevent a loss from growing larger.[78] For example, in case of non-delivery, the buyer must make a reasonable effort to purchase substitute goods. However, FECL Article 22 provides that the non-breaching party has a duty to "prevent the loss from aggravating."[79] It is unclear from these words [page 113] whether the FECL requires the non-breaching party to take positive steps to prevent further losses, or whether it merely requires the non-breaching party to take no steps that would cause further losses.[80] It seems to this commentator that FECL Article 22 could as easily be read to create a duty to preserve non-conforming goods (similar to CISG Articles 85-88)[81] as to create a duty to mitigate a loss. In any case, the uniformity and universality of the CISG is frustrated when such issues arise where, by its own terms, the CISG should be the only law applicable.

Finally, the FECL and the CISG differ in their respective provisions concerning excuse for non-performance when a force majeure event occurs. CISG Article 79 allows for excuse when a party proves that his failure to perform was due to "an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences."[82] The FECL provision on force majeure is in Article 24 which reads:

"A party should be exempted from his obligations in whole or in part in case he fails to perform all or part of his obligations as a result of a force majeure event.

"In case a party cannot perform his obligations within the time limit set in the contract due to a force majeure event, he should be relieved from the liability for delayed performance during the period of continued influence of the effects of the event. An event of force majeure means the event that the parties could not foresee at the time of conclusion of the contract and its occurrence and consequences cannot be avoided and cannot be overcome.

"The scope of force majeure events may be specified in the contract."[83]

There is a superficial similarity in the force majeure provisions of the CISG and the FECL. However, whereas there is little dispute that government acts may result in an "impediment" under the CISG,[84] China has generally not allowed acts of government to be regarded as force majeure events for the purpose of excusing performance.[85] Rather, China has been quite strict in allowing excuse due to a force majeure event only in cases of natural disasters.[86] Rereading FECL Article 24 with this definition of force majeure in mind, the timing provisions of the second [page 114] paragraph reflect the Chinese view that natural disasters are only temporary impediments and that a party's excuse only lasts as long as the disaster impedes performance. There is almost no recognition in FECL Article 24 of a permanent impediment to performance. Though there is some evidence that Chinese policy has been relaxing a bit on this matter,[87] it is still advisable, and encouraged by the FECL, to attempt to spell out the definition of a force majeure event in a force majeure clause in any contract with a Chinese party.[88] This is especially advisable to protect against detrimental acts of government, given that a change in Chinese government policy regarding foreign trade may make a legal contract suddenly illegal.[89]

In any case, a foreign party expecting the CISG's more liberal force majeure provisions to apply to their contract with a Chinese party may be rudely awakened to find that an act of government does not excuse its non-performance under the FECL. Such differences between the CISG and the FECL belie the similarities between the two laws and weaken any argument that having the FECL apply to an international sale of goods contract will not have a substantial effect on the outcome of a contractual dispute.

VI. Case Analysis

The following case histories will serve to illustrate the problems outlined above. Case 1 is an arbitration award from China's international commercial arbitration organ, China International Economic and Trade Arbitration Commission (CIETAC), dated October 31, 1991, translated from an official collection of CIETAC awards published by CIETAC itself.[90] Case 2 concerns an arbitration under China's forerunner to CIETAC and consists of an arbitration award dated March 2, 1988, the seller's statement of defense, a supplementary submission by the buyer in answer to seller's statement of defense, and commentary by an officer of the China Legal Affairs Center.[91] [page 115]

A. Case 1

Case 1 involves a dispute arising from contracts for the sale of aluminum materials to be used in the manufacture of aluminum cans. The first contract was partially performed in that a portion of the goods were shipped and they arrived in China, but were at that time found to be non-conforming. Buyer then requested that seller take back that portion of the goods. Subsequently, the seller failed to deliver a second portion of the goods, and, after a failed attempt at resolution through friendly negotiations, seller attempted to cancel the contract applicable to the undelivered goods. The buyer then brought the case before CIETAC in accordance with an arbitration clause in both contracts.

Case 1 was chosen for translation because, although the identities of the parties and their nationalities have been concealed, the goods relating to the contract in dispute are certain aluminum materials manufactured in the United States, shipped from a United States port to a Chinese port for use in the manufacture of aluminum cans by a Chinese manufacturer. This, combined with the arbitration tribunal's application of the CISG, leads to the inference that the buyer was a Chinese company and the seller a U.S. company, both from nations that are Contracting States under the CISG. This reasoning is admittedly circular in that any conclusion that the CISG should apply to the contract in dispute must be based on the fact that the parties are from Contracting States under the CISG, and that such a conclusion in this case is based on an inference partially informed by the fact that the CIETAC arbitrators applied the CISG. Nevertheless, the inference is a strong one because in this case the arbitration tribunal applied the CISG according to Article 6 of the FECL, which only requires the application of an international treaty which China has participated in if such international treaty "relates" to the contract in dispute.[92] Therefore, it seems to be safe to infer that the parties are from Contracting States because there would otherwise be no legitimate reason for the arbitrators to conclude that the CISG relates to their contract.

It may likewise be inferred from the arbitration award that the parties did not choose the law applicable to disputes arising from their contract. As discussed above, this is common practice in China.[93] This inference is based on the fact that the arbitral tribunal applies the "closest connection" test contained in FECL Article 5 to determine the law applicable to the contract in dispute. According to FECL Article 5, the "closest connection" test should only be applied when the parties have not chosen the law to be applied to the settlement of disputes arising from the contract.[940] Therefore, it seems safe to infer that the parties did [page 116] not specify the applicable law in their contract. As discussed above, a dispute arising from a contract for the international sale of goods between parties from different Contracting States should be governed by the CISG.

In Case 1, however, the CIETAC arbitral tribunal concludes that because the contracts in dispute were all signed in Beijing, PRC, and that because the "material problems related to the disputes are connected with China," China has the "closest connection" to the contracts, and, hence, they should be governed by Chinese law. Because the contracts involved a foreign entity, the tribunal concludes that the applicable Chinese law is the FECL. Thereafter, applying FECL Article 6, as discussed above, the tribunal concludes that the CISG is also applicable, a conclusion which is totally untenable according to the terms of CISG Article 1. Nowhere in CISG Article 1 is there a provision for the combined use of the CISG and any nation's domestic law. Only CISG Article 7, which covers matters not expressly settled by the CISG, would give an arbitral tribunal the authority to apply the domestic law of the place in which it sits, and this only if the matter is not covered by the CISG, it cannot be settled in conformity with the CISG's general principles, and the rules of private international law point to the domestic law of the place where the tribunal sits.[95] In contrast, the CIETAC tribunal in Case 1 is applying the CISG to a dispute between parties from Contracting States, but only to the extent that the CISG's provisions "differ from the law of the People's Republic of China."[96] The tribunal goes on to apply the CISG to determine that the seller had no right to cancel the second contract, and then applies the FECL to determine that damages claimed by the buyer for rent paid to lease a machine to be used for manufacturing cans were not recoverable because they were not foreseeable at the time the contract was concluded.

The tribunal does not elaborate on the reasoning behind its decision to apply the CISG and the FECL in tandem, but the questions raised by such a decision are numerous. For instance, just how does a tribunal decide when the CISG's provisions differ from China's domestic laws? After our discussion concerning the need for uniformity in application of the CISG, it seems impracticable that a tribunal would or could do the research necessary to discover how the CISG is being applied around the globe, compare it to China's domestic law, and then use the CISG's provisions only when they would lead to a different outcome than would occur under China's domestic law. Should the tribunal rely on the lawyers appearing before it to point out the differences? Is it possible for a lawyer to predict which provisions of the CISG a tribunal will find different? How is the tribunal to decide between differing interpretations of the CISG? Should it interpret the CISG without regard to international [page 117] practice, interpreting it anew with each case? Or should it follow a strictly Chinese interpretation, giving a unique interpretation to the official Mandarin version of the CISG? If Chinese arbitrators follow a strictly Chinese construction of the official Mandarin version of the CISG (after all, who else is going to interpret it?), how will it affect international uniformity? These questions are important if China's arbitration tribunals continue to apply the CISG in this way.

A speculative explanation for this conundrum may be found in the commentary of the Supreme People's Court on the FECL. Therein, the Court states that the law determined to apply to a dispute arising from a contract in accordance with the "closest connection" test "shall be actual law currently in effect and shall not include conflicts of law or procedural law."[97] As shown above, FECL Article 6, which provides that an international treaty will apply only to the extent that its provisions differ from Chinese domestic law, directly conflicts with CISG Article 1(1)(a), which provides that the CISG alone applies to international sale of goods contracts between Contracting States. Since an arbitral tribunal cannot exclusively apply the CISG and, at the same time, only apply it when it differs from the FECL, it is faced with a conflicts question. If the question before the arbitrators is which law to follow, the Supreme People's Court commentary that the law determined to apply shall not include conflict of laws principles requires that the arbitrators ignore CISG Article 1(a) because, in this context, it is essentially a conflict-of-laws provision. Therefore, a Chinese arbitration tribunal would follow the FECL and apply the two laws in tandem, applying the CISG only when its provisions are outcome determinative. Such a conclusion may be logical, but it is not the conclusion that UNCITRAL had in mind when it set out to create a uniform international contract law divorced from the "idiosyncrasies of any one legal system."[98]

B. Case 2

Case 2 concerns a dispute over letters of credit opened in accordance with contracts for the sale of "jute bags" between a seller from the People's Republic of China and a buyer from the Middle East. The contracts consisted of two sales confirmations, signed by the parties, calling for the opening of confirmed letters of credit before shipment, on C & F terms, of jute bags from China to Jedda or Dammam in Saudi Arabia.

For our discussion, the pertinent aspect of this case concerns the application, or lack thereof, of the CISG. It is quite clear that the seller in Case 2 was from the People's Republic of China.[99] However, we are [page 118] left without a clue, other than the final shipping destination of Saudi Arabia, as to the nationality of the buyer. Saudi Arabia is not a Contracting State under the CISG.[100] If the buyer was indeed a Saudi national, then there would be no reason to apply the CISG. If the buyer was not a Saudi national, and was in fact from a Contracting State, then only the CISG should have been applied. Unfortunately, the arbitration award itself does not cite to either the FECL or the CISG.[101] To determine the law on which the tribunal relied, we must look to the statement of defense of the seller and the reply made by the buyer.

In both the statement of defense and the reply to it, the parties to the arbitration base their arguments on the FECL and the CISG.[102] No arguments are made concerning the choice of law applicable to this dispute; the parties simply cite to the provisions of each law that they feel best support their positions.[103] Further, in the commentary following the case, the commentator discusses the dispute over whether one of the contracts was ever actually formed in terms of both the FECL and the CISG,[104] without discussing why both laws are being applied. This aspect of the case is worth deeper inspection.

According to the facts, it seems that the seller had sent a signed sales confirmation to the buyer. The buyer also signed the sales confirmation, but only after adding a term calling for the jute bags to be shipped in pallets, a term which would have increased costs for the seller. The seller maintained that it never accepted this term, and, therefore, a contract was not formed on the basis of the sales confirmation.[105]

The commentator, in this case a Mr. Ma Xiaohu of the China Legal Affairs Center in Beijing,[106] analyzes this issue by first citing FECL Article 7 for the proposition that, for agreements reached by telex, if one party requires the signing of a confirmation, a contract is not formed until the confirmation is signed.[107] Mr. Ma thus concludes that the signed confirmation sent by the seller in this case was an offer.[108] He next cites to CISG Article 19 for the proposition that a reply to an offer which purports to be an acceptance, but which contains a material modification of the offer is not an acceptance but a counter-offer.[109] Mr. Ma then concludes that because the term added by the buyer in this case changed the costs for the seller, it was a material modification of the offer and, [page 119] therefore, a counter-offer which the seller never accepted.[110] On this basis, Mr. Ma concludes that no contract was formed on the basis of the sales confirmation.[111]

What is interesting about this analysis is that Mr. Ma seems to be comfortable with the idea that the FECL governs the requirements for contract formation by telex, while at the same time, the CISG should be applied to determine if those requirements were met.

It is open to speculation whether this application of the CISG is based on China's CISG Article 96 declaration that preserved its requirement that a contract be in writing to be valid.[112] If so, what would be the outcome if the seller in Case 2 went ahead with performance? Would a contract have been formed under the CISG? Under FECL Article 7, even if the parties performed their obligations, the seller could argue that it never agreed in a signed writing to the modifications of the buyer. And what if the modification of the buyer in Case 2 had not been material? If not material, under CISG Article 19(2) a contract would have been formed unless the seller objected without undue delay,[113] but under FECL Article 7, a contract is only formed when the parties have agreed to the various clauses in written form and signed. Is it valid for Chinese arbitrators to apply CISG Article 19 to determine that contracts were not formed, but invalid for them to apply CISG Article 19 to determine that contracts were formed?

One can gather from the fact that the lawyers involved in Case 2 argued, without question, for the simultaneous application of the FECL and the CISG that such practice is normal and accepted in Chinese arbitrations. Such a practice based on the idiosyncratic application of the CISG under Chinese arbitration raises concerns about uniform application of the CISG in international trade.

VII. Conclusion: Implications for Uniformity in International Trade

Arbitration is an anonymous process. The parties to a dispute that is resolved through arbitration usually sustain no publicity, and the dispute sustains no notoriety. As a private means of dispute settlement this is as it should be. However, in a country like China where almost all commercial disputes are handled through arbitration,[114] the anonymity of [page 120] the process leads to a void in the legal literature.[115] This void, in turn, leads to a lack of predictability and accountability, and also makes it difficult to ascertain whether the law is being applied fairly, or even if it is being applied at all. Such is the situation in China concerning the applicability of the CISG. As an international contract law, the CISG depends on each signatory state, and the forums of dispute resolution within each signatory state, to do their part to see that the CISG is being applied uniformly across the globe. When the forum is not subject to public, international scrutiny, as in arbitration, uniformity suffers. When the end is to achieve predictability in the international sale of goods, means such as private, unpublished arbitration decisions are not the most convenient or effective method of achieving that predictability.

The problem is two-fold in China. First, arbitration under China's international commercial arbitration organ, CIETAC, as with any other arbitration organ, is private, and the few officially published decisions uniformly delete the names of the parties and their national origins.[116] Without any reliable method of determining the parties' nationalities, determining whether the CISG should have been applied, or, if it was applied, whether it was applied correctly, is problematic if not impossible. Second, the few officially published decisions are in Mandarin Chinese, requiring translation to be meaningful to the vast majority of international law commentators. This situation leads to extreme difficulty in monitoring China's international commercial dispute resolution procedures, raising questions about how, when, and if China applies the CISG. The phenomenal growth in China's international trade, growth that, if sustained, will make China's economy the largest in the world within the next 30 years, makes China's application of the CISG extremely important to the international community.

Ensuring that China applies the CISG according to the standards agreed to by UNCITRAL, standards that, if not met, will nullify the very rationale for the creation of the CISG, should be a priority among commentators and practitioners alike. For commentators, exposing inconsistencies in application of the CISG will help arbitrators and judges to learn from each other's deviations, building a uniform practice. For practitioners, predictability of application is the key consideration. Arguing from the general principle of uniformity in international trade [page 121] embodied in CISG Article 7,[117] and therefore insisting that the CISG be applied without reference to any nation's domestic contract law, should be de rigeur for lawyers practicing before international commercial arbitration organs. Predictability in application of the CISG should not rely on the eccentricities of local practice, but on demonstrable evidence of a uniform, well founded, international practice. Practitioners who rely on local practice to predict how, and if, an adjudicatory body will apply the CISG, without at least attempting to point out, and argue against, local deviations from international practice, do a disservice to the goal of uniformity in international trade. Only by a constant insistence on a uniform application of the CISG does UNCITRAL's mandate to promote "the progressive harmonization and unification of the law of international trade," as embodied in the CISG, have any hope of reaching fruition. [page 122]


FOOTNOTES

* J.D. 1999, University of Pittsburgh School of Law; associate, Reed Smith Shaw & McClay LLP, Pittsburgh, Pennsylvania.

1. United Nations Convention on Contracts for the International Sale of Goods, apr. 11, 1980, S. Treaty Doc. No. 98-9 (1983). 19 I.L.M. 668 (1980) [hereinafter CISG] (entered into force on Jan. 1, 1988), available in 15 U.S.C.A. app. At 49 (West Supp. 1996), 52 Fed. Reg. 6262-80, 7737 (1987), U.N. Doc. A./Conf. 97/18 (1980).

2. See infra notes 6-13 and accompanying text.

3. See John O. Honnold, Uniform Law for International Sales Under the 1980 United Nations Convention 47 (1991).

4. See id.

5. See CISG Contracting States and Declarations Table, 17 J.L. & Com. 449 (1998).

6. Honnold, supra note 3, at 50.

7. Fritz Enderlein & Dietrich Maskow, International Sales Law 1 (1992); see also 1 Albert H. Kritzer, International Contract Manual: Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods, Detailed Analysis - 2a (1994) (reprinting statements from commentators from Ghana, New Zealand, France, Germany, South Africa, and Norway to the effect that the risks and uncertainty of unfamiliar law restricts international business).

8. Enderlein & Maskow, supra note 7, at 1.

9. See id. at 2.

10. Larry A. Dimatteo, The CISG and the Presumption of Enforceability: Unintended Contractual Liability in International Business Dealings, 22 Yale J. Int'l L. 111, 133 (1997)

11. CISG, Art. 7(1), supra note 1.

12. See Enderlein & Maskow, supra note 7, at 56.

13. See, e.g., Kritzer, supra note 7, at Detailed Analysis - 67; Enderlein & Maskow, supra note 7, at 56.

14. Economic Contract Law of the People's Republic of China (ECL) (1981), available in 1 China Laws for Foreign Business: Business Regulation, 5-500 at 6,401 (1998) [hereinafter ECL].

15. The ECL, Art. 2 apparently makes no provision for contracts between individuals - only for "legal persons," i.e., the Chinese equivalent of corporations. Whether a party has the authority to contract in China is a labyrinthine subject beyond the scope of this paper.

16. ECL, Art. 2, supra note 14, at 6,401.

17. Id. at 6,441.

18. See Preston M. Torbert, Contract Law in the People's Republic of China, in Foreign Trade, Investment, and the Law in the People's Republic of China 324 (Michael J. Moser, ed. 1987).

19. Again, it is interesting that Art. 2 makes the FECL applicable to foreign individuals, but not to Chinese individuals who are granted no authority in China to contract.

20. Foreign Economic Contract Law of the People's Republic of China (FECL), Art. 2 (1985), available in 1 China Laws for Foreign Business: Business Regulation, 5-550 at 6,621 (1998) [hereinafter FECL].

21. See Response of the Supreme People's Court to Certain Questions Concerning the Application of the Foreign Economic Contract Law, 1, (1) (1987), available in 1 China Laws for Foreign Business: Business Regulation, 5-555 at 6,641 (1998) [hereinafter Response of the Supreme People's Court] stating:

"(1) The provisions of the Foreign Economic Contract Law shall apply to economic contracts, including commodity trade contracts, joint equity enterprise contracts, co-operative enterprise contracts, contracts for the co-operative exploration and exploitation of natural resources, credit contracts, leasing contracts, technology transfer contracts, project tender contracts, contracts to supply complete sets of equipment, processing contracts of work, labour contracts, compensation trade contracts, contracts for scientific or technical consultancy or design service, contracts of guarantee, insurance contracts, storage and custody contracts and agency contracts, which are concluded between an enterprise or other economic organization of the People's Republic of China and a foreign enterprise, other foreign economic organization or foreign individual. International Shipping contracts, international air-freight contracts, international rail-freight contracts and international double entry through-transport contracts, however, shall be excluded."

22. Regulations on Administration of Technology Import Contracts of the People's Republic of China, Art. 1 (1985), available in 1 China Laws for Foreign Business: Business Regulation, 5-570 at 6,683 (1998) [hereinafter TIR]. Additionally, there are further rules concerning the implementation of the TIR. See Detailed Rules for the Implementation of the Administrative Regulations of the People's Republic of China on the Control of Technology Import Contracts (1988), available in 1 China Laws for Foreign Business: Business Regulation, 5-573 (1998).

23. See TIR, Art. 2, supra note 22, at 6,683.

24. See TIR, Art. 3, supra note 22, at 6,683-85.

25. See TIR, Art. 3-5, supra note 22, at 6,683-85.

26. See TIR, Art. 5, supra note 22, at 6,685.

27. See Elson Pow & Michael J. Moser, Law and Investment in China's Special Investment Areas, in Foreign Trade, Investment, and the Law in the People's Republic of China 199 (Michael J. Moser, ed. 1987).

28. Regulations of Shenzhen Special Economic Zone on Economic Contracts Involving Foreigners (1984), available in 1 China Laws for Foreign Business: Special Zones and Cities 73-505 at 85,821 (1995) [hereinafter Shenzhen Economic Contract Regulations ("SECR")].

29. See SECR, Art. 2, supra note 28, at 85,821.

30. See SECR, Art. 2, 2, supra note 28, at 85,821 (stating that the SECR shall apply to economic agreements between Chinese-foreign co-operative enterprises registered in the SEZ and Chinese enterprises set up in the SEZ).

31. See 1 China Laws for Foreign Business: Special Zones and Cities 85,503 (1995) (listing the rules and regulations of the Shenzhen SEZ).

32. See Kritzer, supra note 7, at Detailed Analysis - 7.

CISG Article 1 provides:

"(1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State.
(2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.
(3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of the Convention." CISG, Art. 1, supra note 1.

33. See id.

34. See CISG, Art. 95, supra note 1 ("Any State may declare at the time of the deposit of its instrument of ratification, acceptance, approval or accession that it will not be bound by subparagraph (1)(b) of article 1 of this Convention.")

35. See Kritzer, supra note 7, at Detailed Analysis - 708.

36. CISG, Art. 6, supra note 1.

37. FECL, Art. 5, supra note 20, at 6,621.

38. See id. at 6,621-23.

39. Response of the Supreme People's Court, supra note 21, at 6,645.

40. See supra notes 32-36 and accompanying text.

41. Response of the Supreme People's Court, supra note 21, at 6,643. This explanation is in accord with current international practice. See, e.g., Howard M. Holtzmann and Joseph E. Neuhaus A Guide to the UNCITRAL Model Law on International Commercial Arbitration 766 (1989).

42. See Response of the Supreme People's Court, supra note 21, at 6,643.

43. See id. at 6,641-43.

44. See FECL, Art. 5, supra note 20, at 6,621-23.

45. Governing law for appendices to joint venture contracts, China Law and Practice, January 22, 1990, at 22.

46. FECL, Art. 8, supra note 20, at 6,623.

47. See FECL, Art. 5, supra note 20, at 6,621; see also Law of the People's Republic of China on Sino-Foreign Joint Equity Enterprises Art. 2 (1979), available in 1 China Laws for Foreign Business: Business Regulation 6-500 at 7,801 (1998) ("All activities of a joint enterprise shall be governed by the laws, decrees and relevant rules and regulations of the People's Republic of China." (emphasis added)).

48. See supra note 42 and accompanying text.

49. See Trade Information Center, Asia & Pacific Database, Summary: 1999 Commercial Guide (visited Nov. 20, 1998) http://infoserve2.ita.doc.gov/apweb . . . 51a69852566590055a914? (stating that U.S. investment in China is now $14.1 billion); Trade Information Center, Asia & Pacific Database, Trade Performance, First Three Quarters (visited Nov. 20, 1998) http://infoserve2.ita.doc.gove/apweb . . . Celec852566c0006a823d? (stating that a significant portion of U.S. foreign investment in China goes into the processing sector, and that the processing sector accounts for 55.8% of China's total exports and 70.8% of China's total exports to the U.S.).

50. See Dong Shizhong et al, Trade and Investment Opportunities in China 135 (1992) ("In China, the specialized foreign trade enterprises typically utilize form contracts to establish the terms of sale for goods exchanged through import and export."); Torbert, supra note 18, at 327 ("[T]he foreigner engaging in business activities in China will invariably meet the standard-form contracts in simple purchase and sales negotiations."); infra notes 52-61 and accompanying text.

51. See FECL, Art. 6, supra note 20, at 6,623, which states:

"When an international treaty that relates to a contract and which the People's Republic of China has concluded or participated in has provision(s) that differ from the law of the People's Republic of China, the provision(s) of the said treaty shall be applied, but with the exception of clauses to which the People's Republic of China has declared reservation."

52. FECL, Art. 9, supra note 20, at 6,623; see also Response of the Supreme People's Court, supra note 21, at 6,647 ("In a case where foreign law should apply, but application of such law would violate the fundamental principles of Chinese law and the public interest of society, it shall not be permitted to be applied and corresponding Chinese law shall apply instead").

53. See Law of the People's Republic of China on Sino-Foreign Co-operative Enterprises, Art.1 (1988), available in 1 China Laws for Foreign Business: Business Regulation 6-100 at 7,551 (1998) ("This law is formulated in order to expand economic co-operation and technological exchange with foreign parties . . . in accordance with the principles of equality and mutual benefit"); Detailed Rules for the Implementation of the Law of the People's Republic of China on Sino-Foreign Cooperative Enterprises, Art. 2 (1995), available in 1 China Laws for Foreign Business: Business Regulation, 6-105 at 7,601 (1998) ("The establishment of a Sino-foreign cooperative enterprise . . . must be in compliance with State development and industrial policies . . . ."); Regulations for the Implementation of the Law of the People's Republic of China on Joint Ventures Using Chinese and Foreign Investment, Art. 3 (1983), available in 1 China Laws for Foreign Business: Business Regulation, 6-550 at 7,911 (1998) ("Joint ventures established within China's territory should be able to promote the development of China's economy and the raising of scientific and technological levels for the benefit of socialist modernization"); Certain Regulation on the Subscription of Capital by the Parties to Sino-Foreign Joint Equity Enterprises, Art. 1 (1988), available in 1 China Laws for Foreign Business: Business Regulation, 6-556 at 7.989 (1998) ("These Regulations are formulated . . . to protect social economic order").

54. See Torbert, supra note 18, at 326, n. 18 (listing bibliographic sources discussing the use of form contracts in China's international trade since the 1970's); Shizhong, et al, supra note 50, at 136; Kritzer, supra note 7, at Country Handbooks: China - 4-5; Pittman B. Potter, Foreign Business Law in China: Past Progress and Future Challenges 75 (1995).

55. See China Business Law Guide 90-210, at 92,203-801 (CCH Australia 1998).

56. See id.

57. See id.; Thomas C.W. Chiu, P.R.C. Laws for China Traders & Investors 179-90 (1988).

58. See FECL, Art. 5, supra note 20, at 6,621.

59. See Torbert, supra note 18, at 326, n. 18 (listing bibliographic sources discussing the use of form contracts in China's international trade since the 1970's); Shizhong, et al., supra note 50, at 136; Kritzer, supra note 7,m at Country Handbooks: China - 4-5; Potter, supra note 54, at 76.

60. See Torbert, supra note 18, at 328.

61. See Gene T. Hsiao, The Foreign Trade of China: Policy, Law and Practice 160 (1977).

62. See supra notes 32-40 and accompanying text.

63. See infra Part VI for a discussion of actual arbitration practice.

64. See Dimatteo, supra note 10, at 143.

65. See Torbert, supra note 18, at 324.

66. See Kritzer, supra note 7, at Appendix D at 2-3 (listing the contract formation provisions of the CISG with their corresponding sections (if any) in the UCC).

67. FECL, Art. 7, supra note 20, at 6,623.

68. See Kritzer, supra note 7, at Detailed Analysis - 708-09.

69. See Roderick W. Macneil, Contract in China: Law, Practice and Dispute Resolution, 38 Stan. L. Rev. 303, 350-51 (1986).

70. Dimatteo, supra note 10, at 133.

71. FECL, Art. 16, supra note 20, at 6,625.

72. See, e.g., Zhang Yuqing & James S. McLean, China's Foreign Economic Contract Law: Its Significance and Analysis, 8 Nw. J. Int'l & Bus. 120, 136 (1987); Torbert, supra note 18, at 323; Shizhong, et al., supra note 50, at 142.

73. See Yuqing & McLean, supra note 72, at 136.

74. CISG, Art. 77, supra note 1.

75. See id.

76. FECL, Art. 22, supra note 20, at 6,627.

77. Id.

78. See, e.g., Kritzer, supra note 7, at Detailed Analysis - 607-08.

79. FECL, Art. 22, supra note 20, at 6,627.

80. See Shizhong, et al., supra note 50, at 143.

81. See CISG, Arts. 85-88, supra note 1. CISG Articles 85-88 delineate the duties of both the seller and the buyer to preserve goods in their possession or under their control, even though the goods are non-conforming or different goods. These duties include storing the goods at the expense of the other party, or, in certain circumstances, selling the goods for the account of the other party if they are subject to rapid deterioration. See id. To my mind, this sounds very similar to FECL, Article 22's requirement that a party has a duty to "take appropriate measures in time to prevent the loss of aggravating." FECL, Art. 22, supra note 20, at 6, 627.

82. CISG, Art. 79, supra note 1.

83. FECL, Art. 24, supra note 20, at 6,631.

84. See Kritzer, supra note 7, at Detailed Analysis - 627-29.

85. See Yuqing & McLean, supra note 72, at 137-38; Torbert, supra note 16, at 333-34.

86. See Yuqing & McLean, supra note 72, at 137-38.

87. See id. at 138.

88. See FECL, Art. 24, supra note 20, at 6,631 ("The scope of force majeure events may be specified in the contract").

89. See Response of the Supreme People's Court, supra note 21, at 6,649 ("A foreign economic contract shall be confirmed as being invalid in any of the following circumstances . . . (ix) The content of a contract violates the fundamental principles of Chinese law or the public interests of Chinese society"); see also Torbert, supra note 18, at 333-35 (explaining the effect of changes in the Chinese government's state plan, and the likely effect such changes will have on contracts with foreign parties).

90. The translation was completed by Yu Weizhong, a member of the bar of the People's Republic of China, while participating in the International L.L.M. program at the University of Pittsburg School of Law during the 1998-99 academic year. See 19 J.L. & Com. (forthcoming, Spring 2000).

91. All of these documents are reprinted in English in China Law and Practice, May 1, 1989, at 32. As printed, there is no indication whether or not the materials concerning Case 2 were translated from Mandarin into English.

92. See FECL, Art. 6, supra note 20, at 6,623.

93. See supra note 58 and accompanying text.

94. See FECL, Art. 5, supra note 20, at 6,621.

95. See CISG, Art. 7(2), supra note 1.

96. FECL, Art. 6, supra note 20, at 6,623.

97. Response of the Supreme People's Court, supra note 21, at 6,643.

98. Dimatteo, supra note 10, at 133.

99. See Whuhan Jute Bag Arbitration Case, China Law and Practice, May 1, 1989, at 32, 33.

100. See CISG Contracting States and Declarations Table; 17 J.L. & Com. 371 (1998).

101. See Whuhan Jute Bag Arbitration Case, supra note 99, at 32-35.

102. See id. at 37, 40-41.

103. See id.

104. See id. at 43.

105. See id.

106. See id. at 41.

107. See id. at 43.

108. See id.

109. See id.

110. See id.

111. See id.

112. See supra note 68 and accompanying text.

113. See CISG, Art. 19(2), supra note 1.

114. See Stanley B. Lubman, Technology Transfer to China: Policies, Law, and Practice, in Foreign Trade, Investment, and the Law in the People's Republic of China 170, 188-89 (Michael J. Moser, ed. 1987); Ge Liu & Alexander Lourie, International Commercial Arbitration in China: History, New Developments and Current Practice, 28 J. Marshall L. Rev. 539, 539-40 (1995); Torbert, supra note 18, at 331.

115. See Jerome Alan Cohen, The Role of Arbitration in Economic Co-operation with China, in Foreign Trade, Investment, and the Law in the People's Republic of China, 508, 510 (Michael J. Moser, ed. 1987) (stating that there has been little public evidence of China's international commercial arbitration because China's arbitration organs dispose of many disputes brought before them without issuing an arbitration award and the awards actually made are rarely made public).

116. This conclusion is based on the author's personal visit to CIETAC's headquarters in Beijing during June of 1998. Upon a request for published arbitration awards, the CIETAC librarian generously gave me two slim volumes of CIETAC awards, both entirely in Mandarin Chinese, and, on inspection by a Chinese lawyer, both having all parties' names and nationalities removed before publication.

117. See supra notes 9-12 and accompanying text.


Pace Law School Institute of International Commercial Law - Last updated June 18, 2001
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