Reproduced with permission of Camilla B. Andersen & Ulrich G. Schroeter eds., Sharing International Commercial Law across National Boundaries: Festschrift for Albert H. Kritzer on the Occasion of his Eightieth Birthday, Wildy, Simmonds & Hill Publishing (2008) 582-599
Jeffrey Waincymer [*]
The United Nations Convention on Contracts for the International Sale of Goods (CISG) has had a major role in supporting the growth in international trade. It provides a substantive law model that aims to meet the efficient commercial needs of international business. It strives to not be biased in favour of the norms and values of particular legal systems. It seeks to promote fairness and mutually beneficial commercial relations. In addition to its own direct sphere of operation, it has also inspired other similar developments including the principles of International Commercial Contracts (UNIDROIT Principles) and the Principles of European Contract Law. There is now a vast array of high level scholarship analysing the CISG's operation, not the least being Al Kritzer's seminal work. International traders now have a [page 582] highly sophisticated substantive law model applying presumptively in a high percentage of international sales of goods.
Because it promotes clarity and reasonableness, it also operates to prevent disputes arising between traders from different legal and political cultures. Nevertheless, disputes inevitably arise in international trade owing to the increased physical and legal risks accompanying cross-border trade. As a result, the value or otherwise of its substantive law rights and obligations depends to a significant degree on the fairness and efficiency of the procedural dispute resolution model underlying the relationship. This applies in both a preventative and restorative sense. Parties would wish to know whether the CISG works well with alternative dispute resolution models and how those models might lead to certain disputes being resolved, particularly when negotiated solutions are being contemplated.
In addition to promoting the development of the CISG, the United Nations Commission for International Trade Law (UNCITRAL) has also promoted international commercial arbitration as a desirable alternative procedural model for international trade. In particular, this has arisen through development of the UNCITRAL Model Law on International Commercial Arbitration (Model Law) and the UNCITRAL Arbitration Rules. This followed the development of an effective arbitration enforcement model through the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. No similar model as yet exists in the field of litigation. Because international commercial arbitration is the dominant dispute settlement mode in international trade, it is important to see how it affects the utility, development and uniformity of CISG norms.
This article looks to the essential nature and principles underlying both the CISG and international commercial arbitration to determine the extent to which they act in a complimentary manner. To the extent that there are any barriers to complimentarity, this should assist in the identification of strategies that should be employed by traders and their advisers in maximising such a complimentary relationships. [page 583]
ARE THE CONCEPTS AND UNDERLYING PRINCIPLES COMPATIBLE?
It is often a matter of judgment and disputed opinion to attempt to describe the fundamental principles underlying a particular legal regime. This is particularly so when one goes beyond the express norms and attempts to identify the underlying objects and purposes. For example, if one looks to the work of the International Institute for the Unification of Private Law as a historical guide to CISG aims, one would see it being concerned with the unification of the law relating to the international sale of goods. Over time, such aims have become more modest and functional and have been more closely aligned to principles of party autonomy and efficiency.
Another reason why a search for implied norms is often contentious is that history also shows us that many international economic law norms originally were developed between Western democratic capitalist and industrialised nations with common values, whereas now we have to consider harmonisation with both North-South and East-West elements.
With these caveats in mind, it would hopefully be reasonably non-contentious to assert that the CISG aims to provide a clear, simple model for international sale of goods transactions, written in business oriented language. Furthermore, its basic principles seek to promote efficient trade, reasonable behaviour, maximum communication between the parties and mutually beneficial obligations to deal with problems as they arise, even for the party free of fault. This makes sense in all transactions, but particularly so where international trade is concerned. Economic theory would suggest that it is never desirable to engage in zero sum game adversarial disputes as the prime means of dealing with defects in contractual performance. This is a major concern with international trade where the transaction costs of contract avoidance are much higher. Thus the CISG imposes numerous obligations on even innocent parties to try and assist in an efficient outcome. These include the duty to mitigate under Article 77 CISG and the significant rights for parties in breach to try and redress the problem such as the possibility of an offer to cure under Article 48 CISG. [page 584]
One obvious difference with any dispute settlement model is the very fact of a dispute. Contracting parties hopefully wish for mutually beneficial rights and obligations at the outset when drafting contracts, particularly in international trade where so many transactions are part of ongoing relationships. At the time of a dispute, however, parties are naturally in a zero sum game mentality, considering who is at fault and who must compensate the other. Nevertheless, similar issues of reducing transaction costs and enhancing ongoing relationships remain and it is equally important that dispute settlement models, when negotiated at the outset in commercial contracts, consider similar policy aims to the CISG. The following sections analyse some of the key policy norms in more detail to determine the degree of convergence between the two systems.
Autonomy and consent
While the CISG will operate as of right if the criteria in Articles 1-3 are satisfied, this is subject to Article 6 CISG which affords the parties an overriding power to vary all or any part of it. This has led CISG commentators to see party autonomy as the 'overriding principle' and the 'dominant theme of the Convention'.
Just as Article 6 CISG stipulates party autonomy as a foundational principle of substantive law, so too is this a foundational issue in international commercial arbitration. The Model Law requires there to be, an 'agreement' to arbitrate for it to apply, although it expressly stipulates that this does not need to be a contract. Not only is consent fundamental to the very establishment of international commercial arbitration, but it is equally applicable to [page 585] its processes. For example, Article 19 of the Model Law provides the parties with the right to control the procedure to be applied. The same is true with the choice of applicable substantive law as identified in Article 28 of the Model Law. That degree of choice over both procedural and substantive law makes party autonomy far more important in arbitration than litigation.
While party autonomy and consent are fundamental to both regimes, it is also necessary to integrate these notions with the methods of proof by which such consent might be determined from time to time. This is particular so where dispute settlement is concerned, as at that stage, the parties are often in disagreement as to the nature and effect of their contract. In arbitration, the argument often begins at the most extreme level, denying an effective agreement to arbitrate and denying arbitral jurisdiction.
In this context we find the first potentially significant difference between the CISG and arbitration. The CISG aims to promote reasonable behaviour and reasonable methods of interpretation. Thus, in the vast majority of cases where interpretation of a contract is required, actual knowledge and consent, made paramount under Article 8(1) CISG, simply cannot be identified on the facts. In these circumstances the CISG reverts under Article 8(2) to an objectively based presumed reasonable intent. Article 8(2) CISG invites the adjudicator to concentrate on the person who received the communication, take note of their particular features and consider how a reasonable person of the same type in the same circumstances would have viewed the ambiguous communication. On this approach, a party who truly did not intend a communication in a particular way could still be held liable for based on such a reasonable and objective standard.
Where arbitral consent is concerned, the presumption is instead that parties should only be held to have waived their entitlement to have their rights protected in domestic courts through sufficient evidence of actual consent. It is for this reason that most arbitrators would be loath to apply Article 8(2) CISG to determine whether there was an agreement to arbitrate even where the parties selected the CISG as applicable to their contract.
An arbitrator can naturally take this approach under the principle of separability, which treats an arbitration agreement as being separate to the main contract even if found in a clause within it. Separability supports the viability of arbitration, allowing an arbitrator to have valid jurisdiction even where the contract itself is void. The idea of separability also would explain one aspect of Article 81 CISG which indicates that avoidance does not affect [page 586] any provision of the contract for the settlement of disputes. In addition, the CISG being limited to contracts for the sale of goods, does not apply naturally to a separable dispute resolution agreement. An arbitration agreement, if considered discretely, would not fit naturally within the wording of Articles 1-3 CISG. Nevertheless, the CISG has been applied in this way in some instances.
One situation where there is a convergence in terms of subjective consent is in relation to Article 19(3) CISG and the issue of battle of the forms. Because an alteration to a dispute settlement provision is deemed to be material, this supports the need to find actual consent to arbitration when there are variations between offers and acceptances in relation to this issue, although the debate about the role of Article 8(2) CISG could still arise when the arbitrator tries to unravel the developing relationship after Article 19 CISG has deemed there to be a counter-offer.
How different the consent norms are in practice will depend upon the natural inclinations of different arbitrators. Some require the strongest evidence of consent to justify arbitration. Others might allow the vaguest reference to arbitration to be sufficient for that purpose. Another approach is to analyse all relevant evidence to determine what is 'objectively fair and subjectively reasonable' in the circumstances. Under the CISG this raises the question as to whether Article 8(3), allowing reference to extraneous circumstances, supports Article 8(2) or should be limited to determining the actual intent as per Article 8(1). Once again integrating issues of evidence with underlying concepts such as consent are fundamental. One scholar has even observed that consent in contract law in common law systems has shifted from the Roman law origins of consent being consent to a particular class of contracts with their historical rights and duties, to instead a notion of consent [page 587] limited to the particular words chosen. At the very least, the CISG draws back from this flaw and brings in more systemic values through Articles 7, 8(3) and 9 CISG.
Another important evidentiary distinction that needs to be considered at the drafting stage is that arbitration under the Model Law (and indeed most systems), requires an agreement to be in 'writing', although the definition of writing is of a broad nature and a working group is looking to expand this further. Article 11 of the New York Convention has a more restrictive writing requirement which must be born in mind for enforcement purposes.
Here there is an obvious distinction with Article 11 CISG which indicates that contracts do not need to be concluded or evidenced in writing. Scholars have argued persuasively that the CISG norms should apply in arbitration to temper the strict writing requirement and align arbitration with modern business practices where there is otherwise sufficient evidence of consent. Nevertheless Article 90 CISG does give precedence to other international agreements, in this case the New York Convention. Until such time as the Model Law is amended, parties need to be vigilant in ensuring appropriate writing requirements are satisfied.
There are some other important differences in the way the two systems deal with consent. When finally accepted, the CISG was very much about issues of sovereignty and a determination by a range of countries as to the compromises they would be prepared to have overriding their domestic laws [page 588] where international sale of goods was concerned. International commercial arbitration on the other hand, being aimed at private dispute resolution, defers to a model primarily about the choice of the parties and the arbitrator's discretion in the absence of such choice. Furthermore, while its exact status is constantly debated, it entails some significant degree of removal from parochial national control.
Another difference between notions of consent and autonomy is that the CISG adopts an opt-out model whereby parties that otherwise come within its terms can utilise Article 6 CISG if they can so agree. International commercial arbitration is an opt-in model, requiring an agreement in advance before parties can be said to have transferred their litigation rights to the field of arbitration.
Good faith and reasonableness
Another element of the CISG, although one hotly debated as to its essential nature and extent, relates to duties of good faith. This article does not seek to resolve the scholarly debate about the place of good faith within the CISG. At the very least, the CISG's limited reference to the phrase in Article 7 supports the view of many commentators that it is merely an interpretative tool, not a direct contractual obligation, although scholars have also observed that Article 7 CISG reflects an uneasy compromise reached in the negotiations. As has been suggested by Ole Lando, part of the historical problem under CISG negotiations was a concern not to allow domestic interpretations of good faith to encroach on the Convention as a whole. This is a separate issue as to whether it ought to be an express norm of behaviour between international business persons, however it might be defined.
Most arbitral models make even less reference to the concept although it is still seen as relevant. Professor Hanotiau asserted that it is a 'basic principle [page 589] of international commercial arbitration that the parties have a duty to cooperate in good faith in the performance of their agreement as well as in the arbitral proceedings [...]'. In the Hong Kong High Court decision of China Nanhai Oil Joint Service Corporation, Shenzhen Branch v. Gee Tai Holdings Co. Ltd, Mr Justice Kaplan (as he then was), granting leave to enforce an award, held that a defendant was estopped from preventing enforcement of an award simply on the grounds that the tribunal had been constituted in Beijing rather than Shenzhen as required under the agreement. He considered that estoppel was a principle emanating from general obligations to arbitrate in good faith emanating from provisions of the New York Convention. In the circumstances it was not appropriate to wait two years after losing the arbitration before raising this procedural challenge.
Arbitrators have also applied abuse of rights style provisions as principles of good faith. For example, ICC Case 1939/1971 denied a claim by a State that it was not bound by the arbitration clause where a State organ which freely entered into the clause sought to invoke the nullity of its own promise when a dispute arose.
Lack of good faith in arbitral procedure will commonly be challenged at the enforcement stage where a deliberate procedural inadequacy may be a ground for blocking enforcement on public policy grounds. For example, the English Commercial Court in Profilati Italia SRL v Paine Webber Inc & Anr, noted that if an important document was deliberately withheld from discovery resulting in the party at fault obtaining an award in their favour, 'the court may well consider that he has procured that award in a manner contrary to public policy.' In this sense the duty to communicate under the CISG has a less certain equivalent in arbitral procedure, where the norms have not been able to articulate a mid position between fundamentally different [page 590] legal adjudicatory systems, particularly in relation to discovery rights and whether one party must thereby assist the other in preparation of its case.
Much of the debate as to the role of good faith will vary in importance depending on the circumstances. Because the CISG and arbitration are permeated with notions of reasonableness, in most instances a party that does not act in good faith would fall foul of a particular expressed norm in any event. Craig, Park and Paulsson make the observation that a common lawyer's rejection of a good faith obligation under contract law, may lead to the same result under the guise of implied terms.
Notions of good faith in arbitration are also bound up in general questions of applicable law and the extent to which lex mercatoria may apply primarily or residually. In the latter event there is then the question of whether good faith is an accepted principle within the lex mercatoria?
This raises an overriding policy issue in determination of the optimal principles and processes in both regimes. They each aim to promote both fairness and efficiency, yet these two concepts will often pull in opposite directions. From a fairness perspective, it may be desirable that parties act in good faith. From a certainty perspective, it may not be desirable to have their relationships subject to vague concepts about which there can be much disagreement.
At times this is seen as a difference in overall emphasis between legal regimes, yet comparative law research often shows that systems with differing philosophical starting points often do not have consistent norms internally. For example the common law of contract's preference for certainty and predictability as opposed to civilians' notions of fairness and justice sits uneasily with the French historical tradition requiring an agreement to arbitrate to arise after the dispute for it to be valid. Agreements in advance, when parties could not anticipate the nature of the dispute were seen as too vague to be enforced.
Thus in addition to the overriding question as to the applicability of good faith norms, there are also a whole host of sub-issues as to whether good faith [page 591] would be a positive obligation imposing specific duties or merely negatively, precluding some forms of behaviour. Is it merely a synonym for reasonableness, does it provide an obligation to exchange information, does it incorporate civilian law concepts such as abuse of rights? Finally, to the extent that the CISG leaves good faith as a principle of interpretation, this inevitably reverts back to the adjudicator's own understanding of how interpretation is affected in that way.
Where reasonableness is concerned, much again depends upon the evidentiary basis for any such determination. For example, Professor Honnold suggests that what is reasonable can be determined by ascertaining what is normal and acceptable in the relevant trade, seeing the approach as analogous to and supported by Article 9 CISG. Professor Bonell cautions against judges automatically referring to the standards of business people in domestic affairs. In his view the answer is to be found either in the Convention itself or at least on the basis of standards currently adopted in other legal systems.
Equality of Rights and Obligations
Here there is a strong convergence between CISG and arbitral norms. Article 18 of the UNCITRAL Model Law provides that 'the parties shall be treated with equality and each party should be given a full opportunity of presenting his case.' The preamble to the CISG speaks of 'the development of [page 592] international trade on the basis of equality and mutual benefit [...]’. Kastely suggests that due consideration for the particular circumstances of the other party, as indirectly demanded by Article 8(2) CISG, is a manifestation of an equal treatment norm. Nevertheless, in some circumstances, it is debateable how an equal treatment norm would apply for parties coming from fundamentally different legal systems. Once again, it is difficult to see how discovery rights could be equated between parties from fundamentally different legal cultures.
Communication and Co-operation
The CISG is permeated with duties to communicate, whether articulated directly or merely implied through other obligations such as the interpretive methodology in Article 8 CISG. Reasonableness and communication also leads to the CISG being said to recognise a principle of co-operation.
Communication and co-operation would generally apply to arbitration, although as indicated above, the issue becomes more complex when issues such as discovery arise and the question of whether one is to assist one's opponents in establishing an evidentiary record. Here the historical differences between common law and civil law jurisdictions have tended to gravitate over time to a greater entitlement to documentary discovery through arbitral processes. The general right would be tempered by notions of relevance and reasonableness. [page 593]
PRINCIPLES OF INTERPRETATION
Principles of interpretation bring the two systems into the same sphere of analysis as it is natural to think of contract interpretation arising predominantly in the face of a dispute and being conducted, if necessary, by some independent adjudicator.
Where interpretation and uniformity is concerned, while there is no doctrine of precedent either in relation to the CISG or international commercial arbitration, the desire for uniformity means that the more transparency and scholarly analysis, the more likely uniformity will arise. Here again the excellent projects that Al Kritzer has been involved with are exemplars of this in the CISG field. Because international commercial arbitration is dominated by notions of confidentiality, there will never be the same degree of primary material available, although there is at least a strong tradition of arbitral scholarship to the same end.
There is always the question of whether judges will bring in their own domestic notions under the guise of interpretation. Where arbitration is concerned, this is complicated by the fact that parties choose the arbitrators. Where a dispute is of a significant size, each party will select their own arbitrator, with the two selected picking a neutral chair. Not only is there the possibility of picking those with parochial views, but one can actively seek an arbitrator who has already committed him or herself to a particular view on an issue of law.
Issues of interpretation also raise fundamental policy questions. Should the aim be to make the instrument ongoing and dynamic, able to meet changing circumstances or should it provide for consistency, certainty and predictability? Once again there is a need to reconcile conflicting meritorious values. An example would be the tempering of the strict writing requirement for arbitration, alluded to above, or seeking to interpret the CISG to best meet the needs of e-commerce.
There is also aquestion of the appropriate aids to interpretation. Article 7 CISG contains its own interpretation device unlike intergovernmental treaties which call on principles under the Vienna Convention on the Law of Treaties. Whatever approach is taken to the exact meaning of Article 7(1) CISG, what intent can be gleaned from the history of the CISG and indeed its predecessor instruments, scholarly texts and working and expert groups? The same issue arises with arbitration. [page 594]
One commentator has noted additional interpretation challenges through the mismatch between common law drafting norms which dominate much of international business and the CISG's more hybrid position. Other problems arise when inappropriate selections are made such as the wrong INCOTERM for a particular mode of transport where the allocation of risk under the INCOTERM does not match up with the practicalities of efficient insurance. It is always important to remember that the CISG is only part o the substantive rights and obligations in any international sales contract and these integration issues must be carefully considered at the drafting stage.
ARBITRAL CONFLICTS OF LAW METHODOLOGY AND THE CISG
So far this article has presumed that the CISG and an international arbitral model both apply. This section looks at how that situation comes about. It shows how there can be particular problems in ensuring the application of the CISG to arbitration.
Arbitral models promote party autonomy, so if the parties have made a selection of substantive law, an arbitrator is bound by it. In the event that the parties have not made a selection, key arbitral models provide the arbitrator with a discretion, either to pick the conflict of laws rules which are seen as appropriate or to directly pick the appropriate substantive law. A domestic judge will apply his or her own national conflicts rules in the event of litigation. For an arbitrator, what is the method for determining what is the most 'appropriate'? Historically, conflicts of laws rules were promoted from autonomous sovereign territories with the aim of allocating disputes and not optimal efficiency. There are no unified conflicts rules although there is greater convergence as a result of the Rome Convention on the Law Applicable to Contractual Obligations. [page 595]
Even if the CISG is expressly selected by the parties one question is whether Article 1 CISG must still be satisfied. Mourre suggests that parties can always make such a choice in arbitration, the difference being what the implications are. This depends on whether they otherwise satisfy the Article 1 CISG requirements. If they do so, then they are within the CISG. If not, then the better view may be that they have simply incorporated CISG terms by reference. In most cases little will turn on the distinction.
More complicated issues arise if one is considering Article 1(1)(b) CISG. If arbitrators have such broad discretions in the absence of party choice, when could it be said that 'the rules of private international law lead to the application of the law of the contracting state.' Because the arbitrator has a discretion to apply either the closest connection test, the seller's domicile, the place of characteristic performance or perhaps the conflicts rules common to the parties, various results are possible. Some might suggest that selecting conflicts rules common to the parties would be closest to their presumed intent and therefore more apt for arbitration. On the other hand the conflicts laws might be the same but the substantive law might be different.
Where the parties name a national body of law but do not address the CISG expressly, the better view is that they have indirectly selected the CISG as they have selected the entire body of national law, including that part which applies as a fallback to international sales, namely the CISG. That view is not uniform and it may be desirable to express things more clearly.
It has been suggested that it is easier for a arbitrator with a discretion to get to the CISG via a direct approach than via a conflicts approach, so it is preferable to pick a direct procedural model. One other problem in applying the CISG via a conflicts approach is whether the reference in most arbitral formulations to 'the' rules of law envisages a national body of law or allows for a hybrid. In most cases this should not be a problem as the CISG is incorporated as part of national laws. [page 596]
Another question is whether an arbitrator who has power to act as amiable compositeur should apply the CISG as lex mercatoria. It has even been the case that some arbitrators apply CISG in this manner without such imprimatur.
There are a number of other conflicts issues that need to be considered in arbitration generally and in particular in relation to the uncertain question as to the full ambit of the CISG. The first issue is whether one is considering a question of substance or of procedure. These are often problematic issues such as whether legal fees can be claimed under Article 74 CISG by way of damages or must be looked at through arbitral procedural rule alone. Many questions of evidence also fall into this complex debate. Another problem area is that of set off.
Parties should also consider what law applies to fill any gaps in the CISG and whether it should apply to arbitral validity. Where the CISG is concerned, this is in part built around the vexed question of how to interpret Articles 4 and 7 CISG. Because Article 4 CISG is not exhaustive and Article 7(2) CISG has vague concepts such as 'matters governed by this Convention which are not expressly settled in it...' there is a complex issue as to which matters are indeed within the Convention, to be interpreted based on its general principles, and which need to be resolved by some other body of law. Debates as to coverage of the CISG may encompass pre-contractual negotiations, hardship, product liability, and currency issues. At the very least, attention must be given to how an arbitrator would be expected to deal with such other issues as and when they arise. The fact that the CISG does not cover issues of property and validity means that this is a mainstream drafting concern.
Another complex issue in both regimes is when and why mandatory laws should apply over and above party choices. Each field must consider the degree to which it may or must defer to mandatory domestic legal principles and if so, which ones, given that the parties are from different States. Article 4 CISG leaves many such issues in abeyance. There may also be uncertainty where CISG provisions potentially overlap with protective measures in domestic [page 597] contract regimes, although the exclusion of consumer contracts from the ambit of the CISG reduces the potential for this type of overlap.
Where arbitration is concerned, arbitrators seeking to exercise their rights and obligations under choice of substantive law provisions such as Article 28 of the Model Law are nevertheless faced with the question of the extent to which domestic mandatory laws m be claimed to be applicable. A common example is antitrust or competition law, where one of the parties argues that the other party's behaviour offends such norms.
Each of these uncertainties cannot easily be rectified simply as a result of careful drafting by the parties. The whole concept of mandatory laws implies that they are such that they cannot be contracted out by parties as they aim to give effect to broader societal norms. This issue has sought to be clarified in the Principles of European Contract Law.
THE CISG, ARBITRAL PROCEDURE AND EVIDENCE
It has been suggested above that determining convergence will often depend upon issues of evidence and interpretation. Both systems leave a lot to be determined by adjudicators because neither say anything expressly about relevant evidence or burden and standard of proof. These issues will all impact greatly on outcomes, therefore affecting uniformity and predictability.
Scholars have debated whether the burden and standard of proof fall within the CISG. Professor Ferrari notes that he prevailing view is that the matter is at least implicitly governed by the CISG. The party seeking to [page 598] rely on a provision or principle has the burden of proof, which means that the defendant would have the burden in relation to an exception. Standards of proof are described in different ways between common and civil law legal systems but generally look to the preponderant position.
More challenging is how conclusions on evidence are drawn, particularly in arbitration where arbitrators lack a general power of compulsion over evidence and must inevitably resort to adverse inferences. Arbitrators' lack of compulsion is particularly notable where third parties are concerned. As indicated throughout, arbitral models do not aim to provide some compromise on evidentiary issues as the CISG sought to do on substantive matters. Here it has been suggested that the tendency has been to gravitate to a hybrid of civil and common law, with the civil law written evidence being supplanted with common law oral evidence and cross-examination, together with common law discovery principles, albeit carefully scrutinised for relevance and fairness.
These issues will often be vital in predicting how arbitration would be likely to resolve CISG disputes and how best to prevent and prepare for them.
It is not surprising that the CISG and the Model Law on International Commercial Arbitration, both resulting from the work of UNCITRAL, should follow reasonably consistent policy norms. Nevertheless, some of the uncertainties and limitations in coverage of the CISG and the rudimentary nature of many procedural elements of arbitration require parties to think carefully about how best to optimise the operation of the CISG in an arbitral format. [page 599]
* Professor of International Trade Law, Monash University, Melbourne (Australia); Co-convenor International Trade and Business Committee, Law Council of Australia. The author acknowledges the invaluable research assistance of Bridie Boyle, Harshani Dharmadasa and Sarah Nicholson
1. International Institute for the Unification of Private Law (1994) Principles of International Commercial Contracts.
2. Lando, O and Beale, H (eds) (2002) Principles of European Contract Law: Parts I and II Kluwer Law International.
3. Professor Albert H. Kritzer published a five-volume text on international contracting in 1989, the International Contract Manual: Guide to Practical Applications of the United Nations Convention on Contracts for the International Sale of Goods. He is Executive Secretary of the Institute of International Commercial Law at Pace University School of Law and co-editor of the cisgw3 Electronic Library on the United Nations Convention on Contracts for the International Sale of Goods and International Contract Law.
4. United Nations General Assembly Resolution 31/98 adopted 15 December 1976.
5. Convention on the Recognition on Enforcement of Foreign Arbitration Awards of 10 June 1958.
6. Schlechtriem, P (2005) 'Basic Structures and General Concepts of the CISG as Models for a Harmonisation of the Law of Obligations' (10) Juridica International 27 at 28.
7. Secretariat Commentary, Official Records, p. 35 para. 7; available at: <http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-07.html>.
8. See also Farnsworth, E (1985) 'Rights and Obligations of the Seller' in Schweizerisches Institut für Rechtsvergleichung (ed) Lausanner Kolloquium Schulthess 84; Hyland, R (1987) 'Conformity of Goods to the Contract Under the United Nations Sales Convention and the Uniform Commercial Code' in Schlechtriem, P (ed) Einheitliches Kaufrecht und Nationales Obligationenrecht Nomos 330; Sono, K (1986) 'Formation of International Contracts Under the Vienna Convention: A Shift Above the Comparative Law' in Sarcevic, P and Volken, P (eds) International Sale of Good, Dubrovnik Lectures Oceana 14.
9. Article 7(1) UNCITRAL Model Law.
10. See for example U.S. District Court, 14 April 1992 (Filanto v. Chilewich), available at: <http://cisgw3.law.pace.edu/cases/920414u1.html>.
11. Berger, KP (2006) Private Dispute Resolution in International Business Kluwer Law International para. 20:61.
12. Blessing, M (1997) 'Choice of substantive law in international arbitration' (14) Journal of International Arbitration 39 at 41.
13. Rosett, A (1984) 'Critical Reflections on the United Nations Convention on Contracts for the International Sale of Goods' (45) Ohio State Law Journal 265 at 287.
14. Moss, G (2007) 'International Contracts between Common Law and Civil Law: Is Non-State Law to be Preferred? The Difficulty of Interpreting Legal Standards such as Good Faith' (7) Global Jurist, available at: <http://www.bepress.com/gj/vol7/iss1/art3/>.
15. Article 7(2) UNCITRAL Model Law.
16. Report of the Working Group II (International Arbitration and Conciliation) on the Work of its Thirty-Sixth Session, UNCITRAL (2002) 4-8 Mar. 2002, U.N.Doc. A/CN.9/508; available at: <http://www.uncitral.org/uncitral/en/commission/working_groups/2Arbitration.html>.
17. A more expansive definition of writing is also found in the UNDROIT Principles of International Commercial Contract 2004, available at: <http://www.unidroit.org/english/principles/contracts/principles2004/blackletter2004-english.pdf>.
18. See particularly Walker, J (2005-06), Agreeing to Disagree: Can We Just Have Words? CISG Article 11 and the Model Law Writing Requirement' (25) Journal of Law and Commerce 153.
19. Eörsi, G (1983), 'A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods' (31) American Journal of Comparative Law 333 at 349. CISG language is not as explicit as Article 1.7 PICC which indicates that 'each party must act in accordance with good faith and fair dealing in international trade'.
20. Lando, O (2003) 'The CISG and the UNIDROIT Principles and the Principles of European Contract Law in a Global Commercial Code', available at: <http://www.iue.it/LAW/ResearchTeaching/EuropeanPrivateLaw/Conferences/Lando_CISG.pdf>.
21. Hanotiau, B (1998) 'Complex Multi Contract -- Multi Party Arbitration' Arbitration International 369.
22. High Court of Hong Kong, 13 July 1994, available at: <http://interarb.com/clout/clout076.htm>.
23. ICC Arbitration Case No. 1939 (1973), cited by Y. Derains, 1973 Revue de l'arbitrage 145.
24. Queen's Bench Division (England), 23 January 2001, available at: <http://www.kluwerarbitration.com>.
26. Craig, WL, Park, Wand Paulsson, J (2000) International Chamber of Commerce Arbitration Oceana Publications at 644, fn 55.
27. A useful guide to potential sources of the lex mercatoria can be found in the CENTRAL transnational law database, available at <http://www.tldb.de/>.
28. On the question of good faith generally see further Sheehy, B (2005-06) 'Good Faith in the CISG: Interpretation Problems in Article 7' Review of the Convention on Contracts for the International Sale of Goods (CISG) 153, also available at: <http://works.bepress.com/benedict_sheehy/5>; Kastely, A (1988), A Rhetorical Analysis of the United Nations Sales Convention' (8) Northwestern Journal of International Law and Business 574; and Keily, T (1999) 'Good Faith and the Vienna Convention on Contracts for the International Sale of Goods' (3) Vindobona Journal of International Commercial Law and Arbitration 15.
29. Carbonneau, T and Firestone, M (1986-87) 'Transnational Law Making: Assessing the Impact on the Vienna Convention and the Viability of Arbitral Jurisdiction' (1) Emory Journal of International Dispute Resolution 51 at 75.
30. Honnold, J (1999) Uniform Law for International Sales Under the 1980 United Nations Convention (3rd ed) Kluwer Law International at 101.
31. Bonell, M in Bianca, CM and Bonell, MJ (eds) (1987) Commentary on the International Sales Law: The 1980 Vienna Sales Convention Giuffrè at 81.
32. Kastely, A Rhetorical Analysis of the United Nations Sales Convention' supra fn 28 at 592.
33. See the debate as to the entitlement to legal costs by way of damages under Article 74 of the CISG: Keily, T (2003) 'How Does the Cookie Crumble? Legal Costs under a Uniform Interpretation of the United Nations Convention on Contracts for the International Sale of Goods' (1) Nordic Journal of Commercial Law; Felemegas, J (2003), An Interpretation of Article 74 CISG by the U.S. Circuit Court of Appeals' (15) Pace International Law Review 91; Flechtner, H (2002) 'Recovering Attorneys' Fees as Damages under the U.N. Sales Convention: A Case Study on the New International Commercial Practice and the Role of Case Law in CISG Jurisprudence, with Comments on Zapata Hermanos Sucesores, S.A. v. Hearthside Baking Co' (22) Northwestern Journal of International Law & Business 121.
34. Honnold Uniform Law for International Sales supra fn 30 at 373.
35. Moss 'International Contracts between Common Law and Civil Law' supra fn 14 at 2.
36. See generally Petrochilos, C (1999), Arbitration Conflict of Laws Rules and the 1980 International Sales Convention' (52) Revue Hellenique de Droit International 191, available at: <http://cisgw3.law.pace.edu/cisg/biblio/petrochilos.html>.
37. Article 17(3) Rules of Arbitration
of the International Chamber of Commerce; Article 28 UNCITRAL Model Law; and
Article 33 UNCITRAL Arbitration Rules.
38. Carbonneau and Firestone
'Transnational Law Making' supra fn 29 at 57. 39. Convention on the Law Applicable to
Contractual Obligations 80/934/EEC). 40. Mourre, A (2006), Application of the
Vienna International Sales Convention in Arbitration' (17) ICC International
Court of Arbitration Bulletin 43 at 45-46. 41. For a case
where an arbitrator considered a selection to intend a neutral domestic law
rather than the CISG, see ICC Arbitration Case No.8482 (December 1996),
available at: <http://cisgw3.law.pace.edu/cases/968482i1.html>. 42. Carbonneau
and Firestone 'Transnational Law Making' supra fn 29 at 65. 43. Kroll, S (2005-06) 'Selected
Problems Concerning the CISG Scope of Application' (25) Journal of Law and
Commerce 39 at 50. 44. Brand, R (1988) 'Non-Convention
Issues in the Preparation of Transnational Sales Contracts' (8) Journal of
Law and Commerce 145. 45. See for example Blessing, M (1997) ‘Mandatory
Rules of Law Versus Party Autonomy in International Arbitration' (14(4)) Journal
of International Arbitration 23; Barraclough, A and Waincymer, J (2005)
'Mandatory Rules of Law in International Commercial Arbitration' (6) Melbourne
Journal of International Law 205. 46. See further
Schroeter, U (2002) 'Freedom of contract: Comparison between provisions of the
CISG (Article 6) and counterpart provisions of the Principles of European
Contract Law' (6) Vindobona Journal of International Commercial Law and
Arbitration 257; Article 1:102(1) and (2) PECL. 47. See generally Pietrowski, R (2006)
'Evidence in International Arbitration' (22) Arbitration International 373.
48. Ferrari, F (2000-01) 'Burden of
Proof under the CISG' Review of the Convention on Contracts for the
International Sale of Goods 1. 49. See U.S. District Court [Southern
District of New York], 22 April 2005 (Atmel Corp v L M Ericsson
Telefon), available at: <http://www.lexisnexis.com>.
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38. Carbonneau and Firestone 'Transnational Law Making' supra fn 29 at 57.
39. Convention on the Law Applicable to Contractual Obligations 80/934/EEC).
40. Mourre, A (2006), Application of the Vienna International Sales Convention in Arbitration' (17) ICC International Court of Arbitration Bulletin 43 at 45-46.
41. For a case where an arbitrator considered a selection to intend a neutral domestic law rather than the CISG, see ICC Arbitration Case No.8482 (December 1996), available at: <http://cisgw3.law.pace.edu/cases/968482i1.html>.
42. Carbonneau and Firestone 'Transnational Law Making' supra fn 29 at 65.
43. Kroll, S (2005-06) 'Selected Problems Concerning the CISG Scope of Application' (25) Journal of Law and Commerce 39 at 50.
44. Brand, R (1988) 'Non-Convention Issues in the Preparation of Transnational Sales Contracts' (8) Journal of Law and Commerce 145.
45. See for example Blessing, M (1997) ‘Mandatory Rules of Law Versus Party Autonomy in International Arbitration' (14(4)) Journal of International Arbitration 23; Barraclough, A and Waincymer, J (2005) 'Mandatory Rules of Law in International Commercial Arbitration' (6) Melbourne Journal of International Law 205.
46. See further Schroeter, U (2002) 'Freedom of contract: Comparison between provisions of the CISG (Article 6) and counterpart provisions of the Principles of European Contract Law' (6) Vindobona Journal of International Commercial Law and Arbitration 257; Article 1:102(1) and (2) PECL.
47. See generally Pietrowski, R (2006) 'Evidence in International Arbitration' (22) Arbitration International 373.
48. Ferrari, F (2000-01) 'Burden of Proof under the CISG' Review of the Convention on Contracts for the International Sale of Goods 1.
49. See U.S. District Court [Southern District of New York], 22 April 2005 (Atmel Corp v L M Ericsson Telefon), available at: <http://www.lexisnexis.com>.