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The Way The CISG Is Applied By The People's Courts On The Basis Of Rules And Empiricism

Posted on:2019-09-10Degree:MasterType:Thesis
Country:ChinaCandidate:H W LiFull Text:PDF
GTID:2416330596952421Subject:International law
Abstract/Summary:PDF Full Text Request
The United Nations Convention on Contracts for the International Sale of Goods(hereinafter the “CISG”)provides a set of neutral rules for contracts of sale of goods between parties whose places of business(or habitual residences)are in different States.The CISG does not apply to every kind of contracts for the international sale of goods;rather,its sphere of application is limited to contracts for the sale of goods that meet a specific internationality requirement set forth in Article 1(1).Pursuant to that provision,a contract for the sale of goods is international when the parties have their relevant places of business in different States.The internationality of a contract for the sale of goods,by itself,is not sufficient to make the CISG applicable.Article 1(1)lists two additional alternative criteria for applicability,one of which has to be met in order for the CISG to apply as part of the law of the forum.According to the criterion set forth in Article 1(1)(a),the CISG is “directly” or “autonomously” applicable,i.e.,without the need to resort to the rules of private international law,or contractingparties' mutual agreement upon its application,when the States in which the parties have their relevant places of business are Contracting States.In Contracting States the CISG can also be applicable—by virtue of article 1(1)(b)—where only one(or neither)party has its relevant place of business in a Contracting State,as long as the rules of private international law lead to the law of a Contracting State.According to article 6 of the CISG,the parties may exclude the CISG's application(totally or partially)or derogate from its provisions.By allowing the parties to exclude the CISG or derogate from its provisions,the drafters affirmed that the most important principle pertaining to that category is that of party autonomy.It has been 30 years since China,as a Contracting State,acceded to the CISG.However,the ways the CISG is applied differ from court to court,resulting from the defects in law and national preconceptions of the judges or arbitrators(collectively referred to as the “adjudicators”).In practice,the adjudicators apply the CISG by either resorting to the conflict of laws rules and/or invoking the principle of prioritized application of international treaty rather than applying the CISG directly and autonomously even though the conditions for direct application are satisfied,one of the reasons for which is the adjudicator's lack of understanding of the CISG's nature as a substantive uniform law convention in civil and commercial matter.As a substantive uniform law convention in civil and commercial matter,its main purpose is to resolve conflicts between civil and commercial laws of different countries.The direct application of such international treaties as the CISG and the use of conflict of laws rules represent two different ways of application.The latter begins with an analysis of the nature of the international civil or commercial relationship to determine what national laws should be applied.Therefore,it does not directly stipulate the rights and obligations of the parties.However,the former is quite the opposite in its way of application.It does not require the recourse to conflict of laws rules,but directly applies the provisions in international treaties to determine the rights and obligations of the parties.Therefore,it avoids making choices between the laws of different countries,and thus resolves civil and commercial law conflicts between different countries in a more comprehensive,direct,and thorough manner.Therefore,the provisions of a substantive uniform law convention in civil and commercial matter must be given priority over the conflict of laws rules,which is required by the theory of modern private international law on the relationship between direct adjustment method and indirect adjustment method.Otherwise,the direct adjustment method would be useless.There are other cases in which the adjudicators still refer to Article 142(2)of the General Principles of the Civil Law even though the conditions for direct application of the CISG are satisfied,one of the reasons for which is the misunderstanding of the nature of the principle of prioritized application of international treaties.Actually,this principle falls into the category of conflict of laws rules instead of part of the applicable law.More difficult problems are posed if the parties choose the law of China to govern their contract.Some court decisions suggest that such a choice amounts to an implicit exclusion of the CISG while the others take a different view.The very essence to the dispute is the standing of the CISG as an international treaty in the hierarchy of sources of Chinese law.Since neither our country's Constitution nor the Legislation Law stipulates how international treaties are transformed or adopted into the domestic legal regime,the Chinese parties are not directly bound until the content of the Convention is transferred into domestic law.With respect to the official action taken by the State after joining the CISG,the Supreme People's Court issued Circular on Issues Concerning the Trial and Implementation of Foreign-related Civil and Commercial Cases and Interpretation of the Supreme People's Court on Several Issues Relating to Application of the Law of the People's Republic of China on Application of Laws to Foreign-related Civil Relations.Suffice it to say that the CISG has been adopted into domestic law.To resolve judicial chaos in this regard,the adoption of the Supreme People's Court to issue judicial interpretations and guidancecases is still the most convenient and most ideal method that can directly affect judicial practice.Of course,from a broader perspective,in the future,we could also refer to the “reporting system” of arbitration to establish a step-by-step reporting system applicable to treaties,and even set up a special department responsible for the application of international treaties within the Supreme People's Court.As regards the indirect application of the CISG,since China has declared an Article 95 reservation,judges in China shall not apply the CISG by virtue of Article 1(1)(b).Now that the realistic significance of China's making this reservation no longer exists,against the backdrop of freer trade under the WTO system as well as the“One Belt One Road Initiative”,such reservation made on the basis of political,legal and other considerations at that time is of no legal foundation or practical significance.Therefore,Chinese government should withdraw such reservation in a timely manner.In the field of international civil and commercial dispute resolution,international civil litigation and international commercial arbitration(hereinafter referred to as“CIA”)are the two most important ways of dispute settlement.When it comes to the application of the CISG,we must not ignore the impact of the particularity of ICA on the application of the CISG.Such impact is reflected in the direct and indirect application of the CISG,the application upon the parties' mutual consent,and the determination by the adjudicators.As regards direct application,whether the arbitral institutions in a Contracting State are obligated to directly apply the CISG as the courts do in a Contracting State still remains controversial.From foreign jurisprudence,such circumstance where an arbitral tribunal directly applies the CISG is rare.Nevertheless,according to “mixed theory” regarding the nature of the ICA,direct application by the arbitral tribunal could be justified.With respect to the indirect application of the CISG,since China has made reservations under Article 95 of the CISG against Article 1(1)(b),indirect application of the CISG is not available to Chinese courts.Some scholars have suggested that arbitral tribunals can be free from the state's reservation taking into account the contractual and autonomouscharacter of the ICA.However,this kind of view may encounter obstacles in our country,because our country's arbitration system is deeply influenced by administrative organs.With regard to the consensual application upon the parties' choice,the issue of controversy is whether the parties may designate the CISG 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 CISG 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 that the CISG 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 discussion,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 CISG.In the case where the adjudicators decide to apply the CISG,if the conditions under which the CISG is directly applied have not been met and the parties to the contract have not chosen to apply the CISG,the court can only apply the CISG in accordance with the conflict of laws rules while in IAC the arbitrators may apply the CISG by resorting to the conflict of laws rules and even directly apply the CISG as rules of law they find appropriate.In the interpretation of the CISG,the international treaty should be viewed from an international perspective and the national preconceptions of the domestic law should be removed as much as possible.The confusion in practice also stems in part from theoretical chaos.In this regard,the case database that is publicized globally is a very powerful resource.The UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods is also very important for reference.As is found by the Supreme Court of the PRC,“the Digest is not part of the CISG,and hence cannot be the applicable law for this trial,but it can be used as anapposite reference as to how the relevant provisions of the CISG are to accurately be interpreted.” However,there are few cases where foreign jurisprudence or international scholarly writing is cited in Chinese jurisprudence with respect to the application of the CISG.Business operators involved in the international sale of goods must not only understand and prevent the risks in the formation of contracts in advance,but must also learn to make full use of the “rules of the game”.As far as the parties' are concerned,there exists uncertainty whether the CISG could be applied and uncertainty about the sales law to which their transaction will be subject,be they heard by a national court or brought before an arbitral tribunal.Therefore,it is recommended to agree on the application of the CISG in the contract.This agreement is particularly important for traders involved in the international sale of goods in Hong Kong and Macau.Also,in most cases it is necessary for a subsidiary law to be selected because the scope of the CISG is limited.In addition,business operators might be expected to find it attractive to arbitrate their disputes rather than resort to the courts as IAC is better equipped to deliver decisions that reflect the autonomous meaning of the CISG,not only because arbitration offers a neutral forum,but also for reasons of the possibility for the parties to appoint experts acknowledged in international trade matters or in the particular trade sector as arbitrators and procedural efficiency supported by the interplay of national arbitration laws and international conventions such as the New York Convention.Three decades of China's accession to the CISG has witnessed the development and boost of China's economy.Many other countries in the transitional period of economy regard China as an example of economic development.The application of the CISG to these countries means the same as that to China and will increase the predictability of the law and promote a comprehensive,modern and effective legal framework for cross-border transactions.Full respect for the parties' right to choose the appropriate law and the differences in the culture and legal background of theparties in different countries,and adherence to internationally recognized legal values and legal principles such as fairness,freedom and equality through concise and comprehensive reasoning to clarify legal concepts is an important step in enhancing China's global governance power and is China's contribution to the unity of the application and interpretation of the ICSG.
Keywords/Search Tags:CISG, Application, Litigation, Arbitration
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