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2008 UNCITRAL Digest of case law on the United Nations Convention on the International Sale of Goods

Digest of Article 6 case law [reproduced with permission of UNCITRAL] [*]

[Text of article
Introduction
Derogation
Express exclusion
Implicit exclusion
Opting-in]

Article 6

The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions.

INTRODUCTION

1. According to article 6 of the Convention, the parties may exclude the Convention's application (totally or partially) or derogate from its provisions. Thus even if the Convention would otherwise be applicable, in order to decide whether it applies in a particular case, one must determine whether the parties have excluded the Convention or derogated from its provisions.[1] According to several courts, opting-out requires a clear expression of intent by the parties.[2]

2. By allowing the parties to exclude the Convention or derogate from its provisions, the drafters affirmed the principle that the primary source of rules for international sales contracts is party autonomy.[3] Thus the drafters clearly acknowledged the Convention's non-mandatory nature [4] and the central role that party autonomy plays in international commerce -- specifically, in international sales.[5]

Derogation

3. Article 6 distinguishes between excluding application of the Convention entirely and derogating from some of its provisions. The former is not subject to any express limitations in the Convention, but the latter is. Where one party to a contract governed by the Convention has its place of business in a State that has made a reservation under article 96,[6] the parties may not derogate from or vary the effect of article 12. In such cases, therefore, any provision "that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply" (article 12). Otherwise, the Convention does not expressly limit the parties' right to derogate from any provision of the Convention.[7]

4. Although the Convention does not expressly so state, the parties cannot derogate from the public international law provisions of the Convention (i.e. articles 89-101) because those provisions address issues relevant to Contracting States rather than private parties. This issue, however, has not yet been addressed by case law.

Express exclusion

5. The parties can expressly exclude application of the Convention. Express exclusions come in two varieties: exclusion with and exclusion without indication by the parties of the law applicable to their contract. Where the parties expressly exclude the Convention and specify the applicable law, which in some countries can occur in the course of legal proceedings,[8] the law applicable will be that designated by the rules of private international law of the forum,[9] resulting (in most countries) in application of the law chosen by the parties.[10] Where the parties expressly exclude the Convention but do not designate the applicable law, the governing law is to be identified by means of the private international law rules of the forum.

Implicit exclusion

6. A number of decisions have considered whether application of the Convention can be excluded implicitly. Many courts admit the possibility of an implicit exclusion.[11] Although there is no express support for this view in the language of the Convention, a majority of delegations were opposed to a proposal advanced during the diplomatic conference which would have permitted total or partial exclusion of the Convention only if done "expressly".[12] An express reference to the possibility of an implicit exclusion was eliminated from the text of the Convention merely "lest the special reference to implied exclusion might encourage courts to conclude, on insufficient grounds, that the Convention had been wholly excluded." [13] According to some court decisions [14] and an arbitral award,[15] however, the Convention cannot be excluded implicitly, based on the fact that the Convention does not expressly provide for that possibility.

7. A variety of ways in which the parties can implicitly exclude the Convention -- for example, by choosing the law [16] of a non-Contracting State as the law applicable to their contract [17] -- have been recognized.

8. More difficult problems are posed if the parties choose the law of a Contracting State to govern their contract. An arbitral award [18] and several court decisions [19] suggest that such a choice amounts to an implicit exclusion of the Convention, because otherwise the choice would have no practical meaning. Most court decisions [20] and arbitral awards,[21] however, take a different view. They reason that the Convention is the law for international sales in the Contracting State whose law the parties chose; and that the parties' choice remains meaningful because it identifies the national law to be used for filling gaps in the Convention.[22] According to this line of decisions, the choice of the law of a Contracting State, if made without particular reference to the domestic law of that State, does not exclude the Conventions applicability. Of course, if the parties clearly chose the domestic law of a Contracting State, the Convention must be deemed excluded.[23]

9. The choice of a forum may also lead to the implicit exclusion of the Conventions applicability. Where there was evidence that the parties wanted to apply the law of the chosen forum and that forum was located in a Contracting State, however, two arbitral tribunals have applied the Convention.[24]

Opting-in

10. The question has arisen whether the Conventions application is excluded if the parties litigate a dispute solely on the basis of domestic law, despite the fact that all requirements for applying the Convention are satisfied. In those jurisdictions where a judge must apply the correct law even if the parties have relied on law that does not apply in the case (jura novit curia), the mere fact that the parties based their arguments on domestic law has not by itself lead to the exclusion of the Convention.[25] Another court has found that, if the parties are not aware of the Convention's applicability and argue on the basis of a domestic law merely because they wrongly believe that law applies, judges should apply the Convention.[26] In one country which does not recognize the principle of jura novit curia, a court has applied domestic sales law where the parties argued their case under that law.[27] This approach has also been adopted by a court [28] and an arbitral tribunal [29] sitting in countries that acknowledge the principle jura novit curia.

11. According to one court decision, the fact that the parties incorporated an Incoterm into their agreement does not constitute an implicit exclusion of the Convention.[30]

12. Although the Convention expressly empowers the parties to exclude its application in whole or in part, it does not declare whether the parties may designate the Convention as the law governing their contract when it would not otherwise apply. This issue was expressly addressed in the 1964 Hague Convention relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, which contained a provision, article 4, that gave the parties the power to "opt in". The fact that the Convention contains no comparable provision does not necessarily mean that the parties are prohibited from opting in. A proposal by the former German Democratic Republic during the diplomatic conference [31] that the Convention should apply even where the preconditions for its application were not met, provided the parties wanted it to be applicable, was rejected; it was noted during the discussions, however, that the proposed text was unnecessary in that the principle of party autonomy was sufficient to allow the parties to "opt in" to the Convention.

NOTES

* This presentation of the UNCITRAL Digest is a slightly modified version of the original UNCITRAL text at <http://www.UNCITRAL.org/pdf/english/clout/CISG_second_edition.pdf>. The following modifications were made by the Institute of International Commercial Law of the Pace University School of Law:

   -    To enhance access to contents by computer search engines, we present in html rather than pdf;
 
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   -    To enable researchers to themselves keep the case citations provided in the Digests constantly current, we have created a series of tandem documents, UNCITRAL Digest Cases + Added Cases. The new cases and other cases that are cited in these updates are coded in accordance with UNCITRAL's Thesaurus.

In addition, this presentation introduces each section of the UNCITRAL Digest with a Google search button. This is to help you access doctrine (relevant material from the over 1,200 commentaries, monographs and books on the CISG and related subjects that we present on this database) as well as the texts of the cases that UNCITRAL cites in its Digests and that we present in our updates to UNCITRAL's Digests.

1. See [ITALY Tribunale di Vigevano 12 July 2000 (Sheets of vulcanized rubber used in manufacture of shoe soles case)]; [GERMANY Oberlandesgericht Hamm 23 June 1998 (Furniture case)]; [FRANCE Cour d'appel Paris 15 October 1997 (Mannequins case)] (see full text of the decision); [GERMANY Oberlandesgericht Karlsruhe 25 June 1997 (Surface protective film case)] (see full text of the decision); [AUSTRIA Oberster Gerichtshof 11 February 1997 (Automobile case)] (see full text of the decision); [GERMANY Oberlandesgericht Köln 8 January 1997 (Tannery machines case)] (see full text of the decision); [SWITZERLAND Tribunal Cantonal Vaud 11 March 1996 (Clay case)] (see full text of the decision); [GERMANY Landgericht Trier 12 October 1995 (Wine case)] (see full text of the decision); [AUSTRIA Oberster Gerichtshof 10 November 1994 (Chinchilla furs case)] (see full text of the decision); [SWITZERLAND Tribunal Cantonal Valais 29 June 1994 (Furniture case)] (see full text of the decision); [GERMANY Oberlandesgericht Karlsruhe 20 November 1992 (Frozen chicken case)] (see full text of the decision).

2. [UNITED STATES Federal Northern District Court of California, 27 July 2001 (Asante Technologies v. PMC-Sierra)]; [BELGIUM Tribunal de Commerce de Namur 15 January 2002 (Milling machine case)].

3. For a reference to this principle, see [GERMANY Bundesgerichtshof 4 December 1996 (Printing system and software case)] (see full text of the decision).

4. For an express reference to the Conventions non-mandatory nature, see [ITALY Corte Supreme di Cassazione 19 June 2000 (Metal processing plant case)], see [AUSTRIA Oberster Gerichtshof 21 March 2000 (Wood case)], [AUSTRIA Oberster Gerichtshof 15 October 1998 (Timber case)] (see full text of the decision); [AUSTRIA Handelsgericht Wien, 4 March 1997]; [SWITZERLAND Tribunal Cantonal Valais 29 June 1994 (Furniture case)].

5. [GERMANY Landgericht Stendal 12 October 2000 (Granite rock case)].

6. See article 96: A Contracting State whose legislation requires contracts of sale to be concluded in or evidenced by writing may at any time make a declaration in accordance with article 12 that any provision of article 11, article 29, or Part II of this Convention, that allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention to be made in any form other than in writing, does not apply where any party has his place of business in that State.

7. For example, a court has stated that article 55, relating to open-price contracts, is only applicable where the parties have not agreed to the contrary [FRANCE Cour d'appel, Grenoble 26 April 1995 (Candy case)], while another court observed that article 39, relating to the notice requirement, is not mandatory and can be derogated from [GERMANY Landgericht Giessen 5 July 1994 (Women's clothes case)]. Similarly, the Austrian Supreme Court has concluded that article 57 also can be derogated from [AUSTRIA Oberster Gerichtshof 10 November 1994 (Chinchilla furs case)].

8. This is true for instance in Germany, as pointed out in case law; see, for example, [GERMANY Oberlandesgericht Köln 26 August 1994 (Market study case)]; [GERMANY Oberlandesgericht Saarbrücken 13 January 1993 (Doors case)] (see full text of the decision); this is also true in Switzerland, see [SWITZERLAND Handelsgericht Kanton Zürich 10 February 1999 (Art books case)].

9. See [GERMANY Bundesgerichtshof 23 July 1997 (Fashion textiles case)] (see full text of the decision); [GERMANY Oberlandesgericht Frankfurt 15 March 1996 (Fashion textiles case)].

10. Where the rules of private international law of the forum are those laid down either in the 1955 Hague Convention on the Law Applicable to International Sales of Goods Convention, 510 U.N.T.S. 149, in the 1980 Rome Convention on the Law Applicable to Contractual Obligations (United Nations, Treaty Series, vol. 1605, No. 28023), or in the 1994 Inter-American Convention on the Law Applicable to Contractual Obligations (Organization of American States Fifth Inter-American Specialized Conference on Private International Law: Inter-American Convention on the Law Applicable to International Contracts, March 17, 1994, OEA/Ser.K/XXI.5, CIDIPV/doc.34/94 rev. 3 corr. 2, March 17, 1994, available on the Internet at <http://www.oas.org/juridico/english/Treaties/b-56.html>), the law chosen by the parties will govern.

11. See [AUSTRIA Oberster Gerichtshof 22 October 2001 (Gasoline and gas oil case)]; [FRANCE Cour de cassation 26 June 2001 (Auto parts case)]; [SPAIN Audiencia Provincial de Alicante 16 November 2000 (Shoes case)]; [ITALY Tribunale di Vigevano 12 July 2000 (Sheets of vulcanized rubber used in manufacture of shoe soles case)]; [GERMANY Oberlandesgericht Dresden 27 December 1999 (Chemical products case)]; [GERMANY Oberlandesgericht München 9 July 1997 (Leather goods case)] (see full text of the decision); [GERMANY Landgericht München 29 May 1995 (Computer hardware case)]; [GERMANY Oberlandesgericht Celle 24 May 1995 (Used printing press case)] (see full text of the decision).

12. Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 85-86.

13. Ibid., 17.

14. See [GERMANY Landgericht Landshut 5 April 1995 (Sport clothing case)]; [UNITED STATES Federal Court of International Trade 24 October 1989 (Orbisphere Corp. v. United States)].

15. See [RUSSIA Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Award 54/1999 of 24 January 2000].

16. Whether such a choice is to be acknowledged at all depends on the rules of private international law of the forum.

17. See [SPAIN Audiencia Provincial de Alicante 16 November 2000 (Shoes case)] (the parties implicitly excluded application of the Convention by providing that their contract should be interpreted in accordance with the law of a non-Contracting State and by submitting their petitions, statements of defence, and counterclaims in accordance with the domestic law of the forum (a Contracting State)); [GERMANY Oberlandesgericht Düsseldorf 2 July 1993 (Veneer cutting machine case)] (see full text of the decision).

18. See [ITALY Ad hoc Florence Arbitration award 19 April 1994 (Leather / textile wear case)].

19. See [FRANCE Cour d'appel Colmar 26 September 1995 (Ceramic baking dishes / cake pans, soufflé pans, etc. case)]; [SWITZERLAND Kantonsgericht des Kantons Zug 16 March 1995 (Cobalt case)]; [ITALY Tribunale Civile de Monza 14 January 1993 (Ferrochrome case)].

20. [AUSTRIA Oberster Gerichtshof 14 January 2002 (Cooling system case)] (see full text of the decision approving lower appeals court reasoning); [BELGIUM Hof van Beroep Gent 15 May 2002 (Design of radio phone case)]; [FRANCE Cour d'appel Paris 6 November 2001 (Cables case)]; [AUSTRALIA Supreme Court of Queensland 17 November 2000 (Scrap steel case)]; [GERMANY Oberlandesgericht Frankfurt, 30 August 2000 (Yarn case)], [ICC International Court of Arbitration, Award 9448 of July 1999 (Roller bearings case)] (see full text of the decision); [GERMANY Bundesgerichtshof 25 November 1998 (Surface protective film case)]; [GERMANY Oberlandesgericht München 21 January 1998 (Insulating materials case)] (see full text of the decision); [SWITZERLAND Kantonsgericht Nidwalden 3 December 1997 (Furniture case)]; [GERMANY Bundesgerichtshof 23 July 1997 (Benetton II fashion textiles case)]; [GERMANY Oberlandesgericht München 9 July 1997 (Fitness equipment case)]; [GERMANY Oberlandesgericht Karlsruhe 25 June 1997 (Surface protective film case)] (see full text of the decision); [SWITZERLAND Handelsgericht des Kantons Zürich 5 February 1997 (Sunflower oil case)] (see full text of the decision); [FRANCE Cour de cassation 17 December 1996 (Ceramic baking dishes / cake pans, soufflè pans, etc. casse)] (see full text of the decision); [GERMANY Landgericht Kassel 15 February 1996 (Marble slab case)], [GERMANY Oberlandesgericht Hamm 9 June 1995 (Window elements case)]; [NETHERLANDS Rechtbank s'Gravenhage 7 June 1995 (Apple trees case)]; [GERMANY Oberlandesgericht München 8 February 1995 (Plastic granules case)] (see full text of the decision); [GERMANY Oberlandesgericht Köln 22 February 1994 (Rare hard wood case)]; [GERMANY Oberlandesgericht Koblenz 17 September 1993 (Computer chip case)]; [GERMANY Oberlandesgericht Düsseldorf 8 January 1993 (Tinned cucumbers case)].

21. See [ICC International Court of Arbitration, Award 9187 of June 1999 (Coke case)]; [GERMANY Arbitration-Schiedsgericht der Handelskammer Hamburg, 21 March 1996 and 21 June 1996 (Chinese goods case)]; [HUNGARY Arbitration Court attached to the Hungarian Chamber of Commerce and Industry 17 November 1995 (Mushrooms case)]; [ICC International Court of Arbitration, Award 8324 of 1995 (Magnesium case)]; [ICC International Court of Arbitration, Award 7844 of 1994 (Radio equipment case)]; [ICC International Court of Arbitration, Award 7660 of 23 August 1994 (Battery machinery case)]; [ICC International Court of Arbitration, Award 7565 of 1994 (Coke case)]; [ICC International Court of Arbitration, Award 6653 of 1993 (Steel bars case)]; [AUSTRIA Arbitration-Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirtschaft - Wien, 15 June 1994 (SCH-4366) (Rolled metal sheets case)].

22. [UNITED STATES Circuit Court of Appeals, 5th Circuit 11 June 2003 (B.P. Petroleum International Ltd. v. Empresa Estatal Petroleos de Ecuador)].

23. [GERMANY Oberlandesgericht Frankfurt 30 August 2000 (Yarn case)]; [GERMANY Oberlandesgericht Frankfurt 15 March 1996 (Fashion textiles case)]

24. [GERMANY Schiedsgericht der Hamburger freundlichen Arbitrage 29 December 1998 (Cheese case)]; [GERMANY Arbitration-Schiedsgericht der Handelskammer Hamburg, 21 March 1996 and 21 June 1996 (Chinese goods case)] (see full text of the decisions).

25. See [ITALY Tribunale di Vigevano 12 July 2000 (Sheets of vulcanized rubber used in manufacture of shoe soles case)]; [GERMANY Oberlandesgericht Hamm 9 June 1995 (Window elements case)]; [GERMANY Landgericht Landshut 5 April 1995 (Sport clothing case)].

26. See [GERMANY Oberlandesgericht Celle 24 May 1995 (Used printing press case)] (see full text of the decision).

27. [UNITED STATES Oregon Court of Appeals 12 April 1995 (GPL Treatment Ltd. v. Louisiana-Pacific Group)].

28. [FRANCE Cour de cassation 26 June 2001 (Auto parts case)].

29. [ICC International Court of Arbitration, Award 8453 of October 1995 (Medical machine case)].

30. [AUSTRIA Oberster Gerichtshof 22 October 2001 (Gasoline and gas oil case)].

31. See Official Records of the United Nations Conference on Contracts for the International Sale of Goods, Vienna, 10 March-11 April 1980 (United Nations publication, Sales No. E.81.IV.3), 86, 252-253.


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