Go to Database Directory || Go to Bibliography

Reproduced from Kaarina Buure-Hägglund ed., The Finnish National Reports to the Twelfth Congress of the International Academy of Comparative Law (Sydney and Melbourne 18-26 August 1986), Studia Iuridica Helsingiensia, Edidit Institutum Iurisprudentiae Comparativae Universitatis Helsingiensis, Helsinki (1986) 11-26. Reproduced with permission of the author.

Method of Unification of Law for the International Sale of Goods

Leif Sevón
Director of Legislation
Ministry of Justice, Helsinki

  1. Introductory Remarks
  2. Interpretation of the Convention to Promote Uniformity in Application
    2.1   Regard for interpretations in other countries
    2.2   Use of legislative history
  3. Problems Not Expressly Decided by a Specific Provision of the Convention
    3.1   Resort to "general principles on which the Convention is based
    3.2   Interpretation to promote good faith
  4. In General

1. INTRODUCTORY REMARKS

Any effort to describe, with some accuracy, the principles adhered to in Finnish law in the interpretation an application of international Conventions encounters a number of difficulties. One may point to four reasons for this.

First, there are comparatively few cases in Finland involving international Conventions. This is the case although Finland, together with the other Scandinavian countries, is among those countries which frequently ratify international Conventions in the field of private law. The limited number of cases makes it difficult to deduct any general principles followed by the courts.

On the other hand, this difficulty is to some extent diminished by the fact that the use of foreign legal materials in legal reasoning in Finland is quite common both in the Supreme Court and in the legal doctrine. This is the case within the framework of the Nordic legal cooperation, which in the field of private law has resulted in a number of important Acts being identical, or almost identical, in the Nordic countries. This is the case with the Contracts Act, the Scandinavian Sale of Goods Act, a number of acts in the field of intellectual and industrial property, the Maritime Codes and other legislation on transportation, to mention some examples. Even if the uniform legislation in most cases has not been achieved through Conventions between the Nordic countries, both the possibilities of using materials from [page 11] the other Nordic countries and the need to do so has made Nordic lawyers well aware of some of the problems related to such use. Although no legal obligation to introduce identical legislation exists, and thus neither any obligation relating to the identical interpretation of the uniform legislation, the reasons underlying the uniform legislation does in many cases call for efforts to avoid differences in the interpretation. The achievements in this field as well as the means for reaching these results would therefore seem to have some bearing on the question how one may promote uniform interpretation of international Conventions.

The second difficulty in deducting general principles of interpretation of international Conventions arises from the fact that the courts in Finland until the last few years have been rather short when stating the reasons for their decisions. Even today only the Supreme Court tends to be more elaborate in this respect. It is unusual that a court would state explicitly the reasons for choosing one of two or several plausible interpretations of a legal text. Thus one would not likely be as lucky as to find statements by Finnish Courts where they would expressly deal with the weight attributed to court decisions of, or opinions expressed in law books, of other countries.

One is thus forced to deduce the principles from the decision themselves. Here one faces the third difficulty. The mere fact that the result reached by a Finnish Court coincides with results reached in other Contracting States, does not necessarily evidence the fact that the Court has been influenced by interpretations accepted in other countries. The uniformity may be accidental. The Court may have reached the result without knowledge of the interpretations accepted in other countries, probably believing that the text does not allow but one result. In order to find out whether this is the case or whether the decision is based on a thorough scrutiny of foreign Court decisions and legal writings, one would have to analyze the cases more closely. One would have [page 12] to identify the cases where the court has had access to information about the interpretations and principles adopted elsewhere and try to ascertain what influence this information has had on the decision. As the courts do not state in their decisions whether the court has had access to such materials, either by way of its own knowledge or because the parties in the presentation of their case have provided the court with that information, one would have to analyze the files of the Courts. Even then one may not be certain of the weight attributed to such information.

In Finnish procedural law the principle jura novit curia is observed. The courts are expected to know the contents of Finnish law. If they are aware of the contents of foreign law that is applicable, they would make use of that knowledge and apply that law ex officio. If not, the general rule is that the court has to request the parties to provide information on the contents of the law to be applied. In some cases, as in the field of family law, the court is required to seek the necessary information itself, or through official channels.

These are the general principles. As far as international Conventions are concerned, the question is not merely, and in some cases not at all, one relating to enquiries into foreign law. In the interpretation of an international Convention, the court is basically faced with the interpretation of an Act of the Finnish Parliament. Here one encounters the fourth difficulty in ascertaining the principles of interpretation of Conventions in Finnish law.

In Finland Conventions are not self-executing. The ratification of a Convention presupposes that the Finnish legislation corresponds to the Convention. In a few cases this may be true without any changes in national law. In most cases the provisions of an international Convention in the field of private law must be enacted through an Act of Parliament. This may be done by means of different techniques. [page 13] The method used may affect the interpretation and the bearing of the methods for interpretation.

In some cases the provisions of an international Convention are made applicable as such. The Convention concerned is made part of Finnish law usually by means of an Act by Parliament stating that the provisions of the Convention will apply. In many cases, however, the provisions of a Convention are transformed into Finnish law by rewriting the provisions in the manner in which Finnish legislation is normally drafted. This method is in many cases combined with another policy, whereby provisions identical to those of the Convention or closely related to them are simultaneously enacted for national transactions of the same kind as those international transactions covered by the Convention. Thus the provisions of the Geneva Conventions of 1930 on promissory notes and bills of exchange and checks respectively have been rewritten into the Finnish acts on promissory notes and bill of exchange on one hand, and on checks on the other. These Acts are equally applicable to national bills of exchange and checks. The Maritime Code contains provisions; corresponding to a number of international Conventions such as the Hague-Visby Rules, the London Convention of 1976 on limitation of maritime liability, and many others. The provisions of the Maritime Code are in most cases applicable both to national and to international operations.

The technique chosen for the implementation of an international Convention has a considerable effect on the interpretation of the Convention. If the Convention is incorporated as such, the Convention is applicable in the original languages, in practice in their English and French versions, which are those reproduced in the official gazette. The Finnish and Swedish texts are then only translations of the "binding" text. If the technique of transformation is used, the provisions take the form of a normal piece of legislation. When applying such a piece of legislation to a purely domestic case the court may even be unconscious of the fact that it [page 14] is applying an international piece of legislation. This makes it even more difficult to ascertain the principles of interpretation of international Conventions.

In the case of the UN-Convention on Sales three different techniques have been considered and the matter is not definively settled in all the Nordic countries. Under the first technique, the Parliament would pass an Act stating that the provisions of the Convention are applicable as such, with the exceptions that may follow from reservations made, such as the reservation in respect of Chapter II or that in respect of sales within the Nordic countries. The second technique would consist in an Act containing a translation word by word of the provisions of the Convention to the extent the Convention is ratified, that is with a reservation in respect of Chapter II and with the modifications that would follow from any reservation admitted under the Convention which are to be made. Such an Act would thus contain a provision on the scope of applicability of the Convention restricting it to international sales in which one of the parties has his relevant place of business outside the Nordic countries. The third technique would be to draft the provisions of the Scandinavian Acts on Sale of Goods in such a manner that in most cases identical provisions would be applicable both to international sales falling under the Convention and to domestic and Nordic sales. In addition, such an Act would have to contain special provisions in cases where different provisions are desired for domestic and Nordic sales than those included in the Convention.

It is uncertain how far a court would go in ascertaining the contents of an international Convention ratified by Finland by means of enquiries into foreign court decisions and legal doctrine. It seems likely that the extent to which this would be done depends, among other things, on the technique chosen for the implementation of the Convention. In addition, it depends on the way in which the parties to a case argue [page 15] their points. If a Convention is implemented by making it directly applicable, the parties may become aware of the international character of the case and may thus introduce materials from other counties relevant to the case. If, on the other hand, identical provisions are applicable both to domestic and to international sales, the parties may well argue their case concerning a domestic sale of goods on a purely national basis and the court may decide it, and even feel forced to decide it, without looking into the international background.

The following must be read against the background of what has been said above with all the reservations as to the certainty of the views that are advanced.

2. INTERPRETATION OF THE CONVENTION TO PROMOTE UNIFORMITY IN APPLICATION

2.1. Regard for interpretations in other countries

The first problem that is raised in the outline set out for this report deals with the situation where in State A, i.e. Finland, the question arises whether a provision of the Convention should be interpreted to mean "X" or "Y", and where tribunals and legal scholars in States B and C have reached interpretation "X". The question is: what weight, if any, should tribunals in State A give to the interpretation current in States B and C?

As formulated, the question may aim at two different targets which both seem to be relevant. On one hand it may be directed to an estimation of how a Finnish court presumably would deal with this problem if faced with it today. Secondly, the question may also be directed to the problem where such a state of affairs is considered to be acceptable and desireable.

As far as the first alternative is concerned, the lack of express statements on the question causes uncertainty. [page 16] However, in cases where courts are known to have had access to broad information on the interpretation adopted abroad, and this information has pointed to a uniform and broadly accepted interpretation, the result of the Finnish court seems to have coincided with that interpretation. This would seem to indicate that a Finnish court would, at least in some cases, give considerable weight to interpretations given in other Contracting States. This view is confirmed by information available on the interpretation by the Supreme Court of uniform Nordic legislation, where there seems to be a tendency to adopt a similar interpretation as that adopted in other Nordic countries unless differences -- intended or unintended -- in the formulation of the of the relevant provision force another solution. As the Supreme Court has access to the decisions of the Supreme Courts of the other Nordic countries, there is no problem in following the interpretations adopted by those other courts. At other levels the courts may use legal literature -- primarily Finnish literature -- which normally contains references to court decisions at least from Sweden.

The fact that weight obviously is attributed to decisions of courts in other Contracting States does not answer the question whether this would also be the case where no general tendency might be deduced from the foreign court decisions, either because they are two few or because they are conflicting. If such a general interpretation exists, a party to the Vienna Convention on the Law of Treaties is under Article 31(3)(b) of that Convention under an obligation to take account of such a common practice in the interpretation of the Convention. It is uncertain to what extent the courts are aware of the existence of that rule. Nor does the statement answer the question whether and to what extent the decisions are considered authoritative or whether they are followed because of the merits of the decisions. A Finnish court may find the reasoning by the foreign court to be convincing on its merits, not because it is the reasoning by another court. [page 17]

Turning to the question whether a Finnish court should give weight to the interpretations concerned, the answer depends on what is meant by the expression "give weight to". The mere fact that a certain interpretation has been adopted in one Contracting State cannot mean that the courts of other Contracting States could be or even should feel bound to follow the same solution. One cannot establish such a rule on time priority. On the other hand, the existence of an interpretation is relevant under the Vienna Convention on the Law of Treaties. It may serve as a guide for the interpretation: a court faced with a problem should avoid choosing another interpretation if it agrees that the interpretation established is equally plausible as any other solution contemplated by the court or even if the court agrees that the interpretation established is reasonable.

The next question raised is what authority, if any, is given to judicial decisions in Finland.

As in most legal systems, there are mechanisms in Finland to ensure the uniformity of court decisions. This involves measures to avoid that an accidental majority of the members of the Supreme Court departs from principles having been established earlier. The Supreme Court thus gives weight to its earlier decisions which are followed unless the Court decides otherwise in plenary. Parties to a case may thus assume that the court will follow its previous decisions and that the decisions thus lay down the legal rule to be applied.

Within the limits provided by the reference to the Vienna Convention on the Law of Treaties, a Finnish court is not required to follow judicial decisions in other Contracting States. This does not mean that the existence of such decisions might not have an influence on the decision by the Finnish court. They may serve as an indication of a possible course to be followed by a Finnish court in the future. However, this is probably the case only if a clean trend could be seen in the decision. [page 18]

Court decisions preceding the legislation necessary for Finland's ratification of a Convention may in some cases be reflected in the statement on the correct interpretation of the Convention in the bill introducing the legislation. They may thus have an influence in predicting future court decisions in Finland.

Next it is asked whether a different approach by the courts would or should result from the provision in Article 7 of the UN-Convention.

The provision would certainly draw the attention of the courts to the problems of uniform interpretation and might thus affect the readiness of the court to look into the matter. It may also draw the attention of the parties to the possibilities of arguing on the basis of court decisions of other countries. It may do so much more efficiently than the provisions of the Vienna Conventions on the Law of Treaties on the interpretation of Conventions. The provision may thus serve as a means of providing the courts with broader information on judicial decisions from other States. On the other hand it seems difficult to influence the courts in matters dealing with the methods of interpretation by provision in the legislation.

The next question deals with the weight given to the legal doctrine. On this point one may detect an influence from the German tradition in Finland. The views expressed in the doctrine play an important role both for the parties when presenting the legal side of their case, and to the judges in considering and formulating their decisions.

In the interpretation of the uniform Nordic legislation it is quite normal in the legal doctrine that legal writers from the other Nordic countries are referred to. This is also done in the context of legislation based on international Conventions. In most cases a writer would cover court decisions of countries he considers to be important in deciding the future interpretation of the Convention. [page 19]

In deciding a case, the Supreme Court would look into the practice of the Supreme Courts of the other Nordic countries. This is the case in the interpretation of uniform Nordic legislation as well as in the interpretation of international Conventions. The Supreme Court would also take a look at the literature in the other Nordic countries. In this respect, one may find that the influence of the legal writing across the borders on the courts has at times been considerable.

Again it would seem that Article 7 would probably not affect the importance given to such writings but may draw the attention of the courts and the parties to the possibility of using such materials and thus indirectly increase the influence of such writings.

Next, I turn to the question of the channels that exist or may be developed for gathering and communication of interpretations of international rules.

As far as court decisions are concerned, the Ministry of Justice has the possibility, and has from time to time made use of it, to request the courts to transmit decisions dealing with specified problems to the Ministry. This has in some cases been done in order to evaluate the effects of new legislation, and in other cases for purposes similar to those now in question. This method has proved to be efficient when used for a limited period of time. It may be used in general or restricted to certain courts such as the Supreme Court and the Courts of Appeal.

In this way materials are gathered for two publications. One of them contains decisions by the Supreme Courts of all the Nordic countries covering uniform Nordic legislation. This periodical is financed by the Ministries of Justice and edited by reporters from the different Supreme Courts. Finnish decisions are reported in Swedish which means that they in most cases have to be translated. [page 20]

Secondly, there is a publication containing decisions on maritime and certain other transport law matters. This publication contains decisions from all courts as well as arbitral awards.

From this one may judge that channels can be found for gathering decisions on international Conventions such as those elaborated by UNCITRAL. The choice of the channels would have to be made depending on the commercial or non-commercial nature of the publication.

I believe that the collection and presentation of judicial decisions in cases on international Conventions is an important measure in order to promote the uniform interpretation of the Conventions. It is too burdensome for the courts to carry out investigations on such matters themselves due, inter alia, to the limited access to the relevant decisions and the limited access to qualified personnel to carry out such investigations in foreign languages. In areas where collections of courts decisions exist, as on the 1930 Geneva Conventions on Bills of Exchange and Promissory Notes, such publications are known to be used by the Supreme Court. Secondly, one may assume that the confidence the courts may have in materials collected by, or under the auspices of , an international organization must be much greater than the confidence they may have in the reprentativity of materials presented by one of the parties to the case.

2.2. Use of legislative history

Next, it is asked whether legislative history may be used in construing domestic legislation.

This may be done. In legal doctrine this is considered to be a necessary part of the reasoning. At times one may find that the parties to a case present the legislative history of the relevant provisions in support of their case. One may also find references in court decisions to statements in the [page 21] travaux préparatoires. Although these statements are not binding on the courts, the legislative history of more recent Acts is considered to be of considerable importance in construing their provisions. The government bills for new legislation are available in most courts.

In Finland the government bills contain explanations of the reasons for the proposed legislation as well as of the intended interpretation of the provisions,. These explanations have until recent years been quite short compared to, e.g. the corresponding Swedish explanations. For that reason it has not been infrequent to see references to statements in the travaux préparatoires of the other Scandinavian countries advanced to elucidate the construction of Finnish legislation in areas of uniform legislation. During the last years the explanatory comments in the Finnish bills have grown and it remains to be seen whether and to what extent this may influence the use of the corresponding Scandinavian travaux préparatoires.

In the legal litterature on international Conventions one may normally find references to the travaux préparatoires of the Convention. It is generally appreciated that one must be cautious in using the legal history of Conventions. The reasons for introducing or supporting a provision given by one or a few delegates are not necessarily considered to reveal the background of that provision. On the other hand, in accordance with the Vienna Convention on the Law of Treaties, it is normally felt that the results of votes at the Diplomatic Conference may be of considerable importance in the interpretation of the contents of the Convention.

When the legislation enabling Finland to ratify a Convention is presented to the Parliament, the bill usually contains an explanatory memorandum on the Convention. This may vary considerable both in length and in quality. In such memorands one may touch upon the interpretation of provisions of the Convention and even recommend or exclude a certain type of [page 22] interpretation. The legislation may also contain provisions on matters which have been left to national law in the Convention.

When the technique of transformation is used, the legislator may go even further. In cases where the texts of the Convention in different languages contain differences, the legislator may choose one of the possible interpretations and reflect that in the transformed legislation, thus excusing other interpretations. The reason for this is usually that the legislation is prepared by persons who have participated in the preparation of the Convention, who therefore may have a more adequate picture of the intentions behind the Convention than a judge occasionally faced with the interpretation of a Convention without being well acquainted with international legislation at all.

The language of Article 7 is thus not in principle relevant to the use of the legislative history of the Convention but may certainly serve as a reminder to the courts of the usefulness of looking into that history.

The travaux préparatoires of Conventions and more specifically of the Sales Convention are not made available to all courts nor to all attorneys. A reference to the Official Records of the Vienna Conference is, however, to be included into the Bill introducing the legislation necessary for the ratification of the Convention. In addition, that Bill is going to be unusually extensive. It has been thought necessary to give a rather detailed picture of the Convention as it is to be used directly by business circles and by judges and arbitrators. [page 23]

3. PROBLEMS NOT EXPRESSLY DECIDED BY A SPECIFIC PROVISION OF THE CONVENTION

3.1. Recourse to "general principles" on which the Convention is based

The first question dealing with the effects of Article 7(2) concerns the issue whether law or practice supports the extension of statutory provisions in a manner comparable to the one authorized in this provision.

I believe that, in general terms, an approach similar to the one expressed in Article 7(2) would be adopted in corresponding cases. In interpreting an Act, one does not limit oneself to the dissemination of individual provisions of the Act, but may also draw conclusions from the general arrangement of the provisions, or apply the principles appearing from the provisions to cases falling outside the scope of the provisions or of the Act itself. Occasionally, one may also consider a provision -- although the wording of the provision is limited to certain questions only -- to express a general principle to be applied also in cases falling outside the scope of the provision as worded. It is difficult to describe with any certainty the extent to which this is done. My impression is that this is not an infrequent course of action. However, in such cases the judge operates within the framework of a legal ideology known to him. This may facilitate considerably his task of establishing the general principles underlying the legislation, especially as the judge usually would find some statements as to the objectives of new legislation in the travaux préparatoires.

I find it difficult to answer the question whether the satisfaction or criticism in Finland with respect to the use of general principles would be applicable to the Sales Convention. The risk of believing that one's own evaluations are shared by others is too great. May guess would be that little attention would be paid to this and that the solution [page 24] would rather be sought in national law, on the assumption that the issue before the court has been left open in the Convention. I fear that the provision may be used in efforts to make solutions seem legitimate where the support to be found for the solution in the Convention itself is weak or inexistent.

In the discussions of the general principles in Finland reference has been made to two general principles which are thought to be reflected in the Convention, i.e. a general obligation of loyalty towards the other party to the contract and, as a special case of that rule, the duty of a party to limit the damage caused by the breach of contract of the other party in order to diminish the compensation that may be payable by the other party.

In the interpretation of Article 7(2) there is a need to be cautious so as not to cause disparity in the interpretations of the Convention by detecting different general principles in the Convention.

3.2. Interpretation to promote good faith

There is no general express rule imposing an obligation of good faith in Finnish law. There is, however, a great number of specific provisions supporting the suggestion that such a principle exists. None of those provisions are formulated as principles of interpretation of statutory provisions. The most important of the provisions concerned seems to be the general rule on adjustment of contracts, enabling a court to adjust any provision in a contract which is considered to be unjust, or the application of which leads to an unjust result. This provision goes much further than to protect good faith, as it may apply irrespective of the knowledge of either party of the possible effects of a provision in the contract. The provision may i.e. be applied in cases where a stronger party imposes his own standard terms on a weaker party, the terms being unfair to the latter. [page 25]

This provision is, at least in principle, also applicable when Finnish law is to be applied to an international contract, although it is believed to be of a rather limited use in that context. In international contracts one may assume considerable knowledge and accuracy by the parties. It is uncertain whether the general rule on adjustment may be applied if the contract is subject to foreign law. The answer is probably in the negative. The provisions would not likely be applicable in cases to which an international Convention is applicable to the extent the issue concerned is settled by the Convention.

4. IN GENERAL

In addition to the introductory remarks made at the outset one may point to one common feature in the literature on the Sales Convention. Most authors seem to stress that the Convention closely resembles the national law on sales of the author's country. That suggestion is likely to be true. Still, one cannot avoid the impression that it reveals a tendency to find well-known features in the Convention and to see them as a confirmation of the national law on sales. There is thus a considerable risk that concepts used in the Convention will be believed to correspond to identical or even to similar concepts in national law. [page 26]


Pace Law School Institute of International Commercial Law - Last updated April 4, 2008
Go to Database Directory || Go to Bibliography
Comments/Contributions