Download International Contracts Slide Set 6

Kansainväliset
sopimukset
Kalvot 6
Lainvalinta (kansainvälinen yksityisoikeus)
Tuomioistuimen valinta ja toimivalta
Vaihtoehtoiset riidanratkaisumenetelmät
Matti Rudanko
2. International Sale of Goods Cases 1
B1 Ltd. and S1 Ltd. (Finnish companies)
• B1 buys a paper machine from S1. It is material for B,
firstly, that it can be taken in use on due date without a
production interruption when the old machine is
delivered to a foreign buyer. Secondly, it has to be
checked that the new machine fulfils the the
production volume requirement of x tons/day. A
protection against production interruptions for the first
year should be ensured, too.
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International Sale of Goods Cases, 2
B2 Ltd. Finnish, S2 Ltd. Swedish
• A successive deliveries of boots contract. S2 is
to deliver to B2 in the beginning of every month
during a year x pairs of boots according to
specifications supplied by B2 separately for
each lot. B2 can employ a carrier from its own
group but wishes to make sure that the boots
arrive in good order and condition.
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International Sale of Goods Cases, 3
B3 Ltd. Finnish, S3 Ltd. English
• B3 buys from S3 a helicopter used in
shows from the manufacturer for rescue
use after getting acquainted with the
brochures of the seller and the object. S3
offers to bring the helicopter to the place
of business of B3.
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International Sale of Goods Cases, 4
B4 Ltd. Finnish, S4 Ltd. French
• Delivery of three lots of cheese of x kg
each from S4 to B4 at a price of y
FIM/kg. The seller can take care of the
carriage but wants to remain free from
risks related to carriage of the goods.
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International Sale of Goods Cases, 5
B5 an English consumer, S5
Ltd. Finnish
• Net sale of consumer goods. B5 is
dissatisfied with the quality of the goods
and also thinks to have received
misleading information of it in the
marketing.
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Kaupan osapuolten väliset suhteet: FSGA / CISG
the CISG is an international sales
act, i.e., applies to international
sales relations:
Both are in force as national law
• if a reference is made to or a connecting factor
concerns Finnish law, the CISG applies
• a mere reference to the law or to a court does not
render a contract international
if the parties want to apply the
FSGA a special reference to it has
to be made
CISG rules on conclusion of
contract do not apply if the places
of business of the parties are
situated in the Nordic countries
(the Nordic reservation)
• The Nordic general reservation on the exclusion
of Part II (formation of contract) cancelled
• New Nordic clarification: Contract Acts apply
between them
• Thus, Contracts Act rules on formation of contract
apply as Finnish law in case 2
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Act 1964 (see below) and CISG
The [Finnish] Act on the Law
applicable to International
Sale of Goods, 1964 (Act -64)
determines the choice of law
• scope of application: international
sales relations
• limitations: consumer relations, sale of
a registered ship etc.
CISG concerns the
contents of the sales
relationship
scope of application
• international sales relations
• limitations: household goods,
securities, ships, electricity etc.
• Not applicable on contracts of mainly
working
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Rome I Regulation (Reg. (EC) No. 593/2008)
Regulation on the law applicable to contractual
obligations: connecting factors
a reference to the law
the closest reference; a contract referring to several states can
also be divided
the place of residence / management / business of the party
liable for the characteristic performance, unless all
circumstances refer to another state
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Rome I Regulation 2
Special rules: real estates, transport,
employment contracts etc.
The validity of a contract (term) is
decided according to the law
applicable in case of validity
even the mandatory provisions of
another Convention state matter
ordre public
minimum level protection of consumer
rights
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International Private Law
Contains the so-called connecting factor (point of reference) rules according to
which the applicable law is chosen
the rules are highly harmonized
as a rule, the connecting factor rules of the country of the court (lex fori) is
applicable
the rules on the international jurisdiction (general judicial power) show the
competent court state (there the competent court determined by national rules)
• In general: the home country of the defendant / place of contractual performance
• A consumer may sue also in her home state
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International Private Law II
A reference to law is
allowed and
prescribes the
applicable law
• the validity of the reference
is considered according to
the law referred to
ordre public: a foreign
provision conflicting
with the foundations
of the national legal
order is not applied in
courts
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Choice of Law 1
Case 1: a
domestic
sale
transaction
• the Finnish Sale of Goods
Act (FSGA) is applicable
• the parties may agree
upon the application of the
law of another country, too
(The [Finnish] Act on the
Law applicable to
International Sale of
Goods, 1964; Act -64)
• this type of agreement is in
itself no international point
of reference (does not give
the contract an
international character)
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Choice of Law 2
Case 2: a
Nordic sales
transaction
• Act -64: choice of law
questions:
• the law of the seller’s
country of residence /
headquarters (observe that
nationality does not matter)
• the law of the buyer’s
country if the order is
received there
• here: Swedish law if the
order is received in Sweden,
otherwise Finnish law
• FSGA / CISG (the International
Sale of Goods Act) ? (no major
differences between them)
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Choice of Law 3
Case 2
(cont.):
• Reference to CISG state
is at hand when
• parties have their
places of business in
different states and
• either these states are
parties to the
Convention or
• Convention state law is
applicable on other
grounds (according to
the rules of international
private law)
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Choice of Law 4
Case 3: an
English
seller
• The UK has not joined the CISG
• Act 1964 does not apply to sale of an aircraft
• If the points of reference are ascertained in a Finnish
court and there is no contractual reference to law):
Rome I
Regulation
• Law applicable to contractual obligations in general
• The place of residence of the party charged with the
performance typical to the contract
• Here: the seller -> the law of the UK (the British SGA)
• As Finnish law (not here), CISG would be applicable
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Choice of Law 5
Case 4: a French seller
France has joined the CISG
Choice of Law (Act -64):
• if the decisive reference is to Finland: the order
has been received there: the CISG
• the reference to France: likewise the CISG
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Choice of Law 6
Net sales, the buyer is an English consumer
Choice of law: Act 1964 does not apply
Rome I Regulation:
• The law of the country of residence of the consumer if
the transaction is based on marketing goods there and
the consumer has concluded the contract there
• Here: probably English law
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So-called Soft Law in International Trade
Model laws and general principles
• UNIDROIT Principles of International Commercial Contracts
Principles of European Contract Law (EU)
UNCITRAL Model Law on Electronic Commerce
General contract terms and rules
• INCOTERMS
ICC Documentary Credit Rules
ICC Model International Sale Contract 1998
etc., e.g. NLM 10 (Nordic Countries: machines,
mechanical, electricity and electronic devices)
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Alternatives to Legally Binding Force of Contract
Common voluntary
arrangements to
enhance party
commitment to
contract
• Common investments etc.
• Public image factors
• “hostages”: e.g. advance performances, securities
(collaterals)
• Common organizations
Public enforcement
is still required as
last resort (parties
usually want to
avoid it)
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Agreed Conflict Management Systems
Reconciliation or
settlement in
court
• ICC Rules of Optional Conciliation
• Official bodies (e.g. the Finnish Consumer
Disputes Board competent to issue
recommendations only)
Why parties
prefer altenative
dispute
resolution
systems (ADR)
• Maintaining business relations
• Avoiding market disorder
• The uncertainty, slowness and expensiveness of
trial in court
• The uncertainty of enforcement
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The Court System
General courts
•Council Regulation (EC) 44/2001 on the
jurisdiction of courts and the recognition and
enforcement of judgments in civil and
commercial law matters (Brussels I Regulation)
The international
jurisdiction (general
judicial power)
•The competent court state (there the
competent court determined by national rules)
•In general: the home country of the defendant /
place of contractual performance (at the
plaintiff’s choice)
•Determined according to the applicable law
A consumer may
sue also in her home
state
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General courts
The parties may in general agree upon
the competent court
Consumer and insurance disputes: the
court of the home state of the consumer
• (a mandatory provision: no scope for contracting; a
conflicting term is invalid)
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The recognition and enforcement of judgments
In general foreign judgments
are not recognised
Exequatur procedure necessary
(in court of the enforcing state)
• Brussels I Regulation
• the jurisdiction of courts and the recognition and enforcement of
judgments in civil and commercial law matters
Bilateral or local multilateral
conventions e.g. between the
Nordic countries
Arbitration awards: very
extensive enforceability under
the New York convention (large
coverage)
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Arbitration
Private court system with
competence to issue awards
enforceable by official
authorities
• Quickness, expertise, flexibility, secrecy of trial
• New York convention (1958) on recognition and enforcement of arbitration awards
• UNCITRAL model law and Arbitration Rules
Parties agree upon site,
language, legal order applied
and the members of the tribunal
Arbitration clause is binding
only upon parties to the
agreement
Ad hoc / permanent arbitration
institutes
• ICC, Finnish Central Chamber of Commerce: appointment of arbitrators, rules etc.
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