International conventions

A convention becomes binding on a state if it is ratified and has entered into force. The convention would then be a source of law in that state. In any state which has not ratified it, the convention is a non-state rule and its legal authority would be ascertained in the same way as that of other non-state rules.

International Conventions are not supranational law; at least not if supranational is defined as law issued by a (legislative) body above the state level. They do not have a direct effect like EU Regulations and there is no independent body overseeing how they are applied. Their application and interpretation are a matter for domestic courts. Courts tend to be parochial in their interpretation of international conventions. Baasch Andersen comments that of the 500 cases she read that concerned the application of the CISG only two referred to international case law.

There are two types of international commercial law conventions. The first type harmonises procedural law; mainly private international law. The second type harmonises substantive commercial law. Substantive law conventions can be divided in different categories. Most fall in the categories of international sales, carriage of goods, or international financing.

The Hague Conference of Private International Law (HCCH) promulgates conventions that harmonise conflicts of law. An example is the Convention on the Law Applicable to the International Sale of Goods of 195 5.’ On a regional level the EU has done significant work to harmonise private international law. International contract conflicts were regulated by the Brussels Convention on the Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (which harmonised conflicts of jurisdiction) and the Rome Convention on the Law Applicable to Contractual Obligations (which harmonised conflicts of law).¹⁰ The corresponding Brussels I Regulation and Rome I Regulation have replaced these.¹¹ In 1988 the Lugano Convention was signed. This is the analogue of the Brussels Convention and extended the regime to EFTA member states. The EU, Iceland, Switzerland, and Norway signed a new updated Lugano Convention in 2007.¹²

9 The Hague Convention of 15 June 1955 on the Law Applicable to International Sales of Goods

Official text: http://www.hcch.net/index_en.phpiact-convent ions. text&cid=31

(only available in French)

Another example is: The Hague Convention of 30 June 2005 on Choice of Court Agreements.

Official text: https://www.hcch.net/en/instruments/conventions/full-text/icid-98.

10 Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of27 September 1968 (Brussels Convention).

http://www.consilium.europa.eu/en/documents-publications/agreements-conventions/agreement/iaid-1968001

Convention on the Law Applicable to Contractual Obligations of 19 June 1980 (Rome Convention).

http://eur-lex.europa.eu/legal-content/EN/TXT/iuri-uriserv: 133109.

11 Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction, recognition and enforcement of judgments in civil and commercial matters (Brussels I).

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV:133054

And the updated version: Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I recast).

http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32012R1215 &from=EN

Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I)

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32008R0593

The Brussels Convention and the Rome Convention are still applicable in the overseas territories of the European Union member states and in Denmark which has not enacted the Rome I and Brussels I Regulations because of its opt-in status in the area of freedom, security and justice.

12 Strengthening cooperation with Switzerland, Norway, and Iceland: The Lugano Convention (2007)

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=URISERV:l 16029.

In this category should be mentioned the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.¹³ This convention, which is commonly known as the New York Convention, has 165 members.¹⁴ This makes it one of the most successful conventions in the wider area of international commerce.

The second category is that of substantive commercial law conventions. The first type of substantive law convention regulates international sales. The CISG is the most successful in this area and as of July 2020 it has 94 contracting states.¹⁵ These include the USA, France, Australia, Russia, and China. Notable absentees are the United Kingdom and India.¹⁶ New countries keep acceding to the CISG. In 2019 these included for instance Laos,¹⁷ Liechtenstein¹⁸, and the Democratic People’s Republic of Korea¹⁹ and in 2020 Portugal.²⁰ The CISG affected approximately 66% of global commerce in 2005.²¹ In 2009 this percentage had gone up to 70%-80%.²² The ‘sister convention’ of the CISG is the 1974 Convention on the Limitation Period in the International Sale of Goods²³ and has 30 ratifications as of January 2020.²⁴

• 13 For the full text in English see: http://www.newyorkconvention.org/english.
• 14 For a full list of contracting states see: http://www.newyorkconvention.org/countries.
• 15 For a full list of members please see: http://www.cisg.law.pace.edu/cisg/countries/ cntries.html.
• 16 On why the UK is not a member see for instance: Sally Moss, ‘Why the United Kingdom Has Not Ratified the CISG’ (2005) 25 Journal of Law and Commerce 483.
• 17 United Nations Information Series, the Lao People’s Democratic Republic accedes to United Nations Convention on Contracts for the International Sale of Goods (25 September 2019).

http://www.unis.unvienna.org/unis/en/pressrels/2019/unisl280.html.

18 UNCITRAL, Liechtenstein accedes to the UN Convention on Contracts for the International Sale of Goods (7 May 2019).

https://uncitral.un.org/en/news/liechtenstein-accedes-un-convention-contracts-international-sale-goods-cisg.

• 19 UNCITRAL Coordination Committee tor Australia, North Korea joins the CISG ( 14 April 2019) https://uncca.org.au/2019/04/14/north-korea-joins-the-cisg/.
• 20 United Nations Information Series, Portugal accedes to United Nations Convention on Contracts for the International Sale of Goods (24 September 2020).

https://unis.unvienna.org/unis/en/pressrels/2020/unisl305.html

Presidència do Conselho de Ministres Decreto No. 5/20 (7 August 2020) https:// dre.pt/application/file/a/139804918.

• 21 Franco Ferrari, Le Contrat de Vente International, Applicabilité et Application de la Convention de Vienne sur les Contrats de Vente Internationale de Marchandises (second edition, Helling & Lichtenhahn 2000).
• 22 Ingeborg Schwenzer and Pascal Hachent, ‘The CISG- Successes and Pitfalls’ (2009) 57 American Journal of Comparative Law 457,457.
• 23 For the full text see:

http://www.uncitral.org/uncitral/en/uncitral_tcxts/sale_goods/1974Convention_ status.html.

24 http://www.uncitral.org/uncitral/en/uncitral_texts/sale_goods/1974Convention_ status.html.

The CISG received a positive reception as evidenced by the number of ratifications; it is a ‘gem of a future amalgamation of all sales law.'^[1] Zweigcrt & Kotz call it ‘the greatest achievement of UNCITRAL.' The adoption of the CISG is ‘the most profound evidence of the move towards the unification of contract law.’

Criticism has also been levelled against the CISG. It is too general, and it gives too much room for different interpretations, which leads to diverging case law. The CISG is not comprehensive because it leaves out certain types of sales and some legal issues that arc integral to contract law arc not covered. Whilst this is true, this type of criticism conveniently overlooks that there are also shortcomings in domestic law.. This criticism is also not limited to the CISG and applies to conventions in general as was discussed in Section 3.5. Conventions are born out of compromises between legal systems and are formed by the lowest common denominator on which a majority of participants could agree.

Another type of substantive convention regulates the carriage of goods contract. For carriage of goods by sea the relevant conventions arc The Hague-Visby Rules, the Hamburg Convention of 1978, and the Rotterdam Rules of 2010. The Hague-Visby rules are the most prominent and most ratified. They find their origin in the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading drafted by the Comité Maritime International (CMI).

These so-called Hague Rules were amended in 1968 with a first protocol (Visby) and in 1979 with a second protocol (regarding Special Drawing Rights). As the title of the convention suggests The Hague-Visby Rules cover only carriages of goods under a bill of lading. The Rules have been widely adopted (covering the vast majority of sea trade volume) although not all contracting states have adopted the protocols.^[2] Participating states include France, USA, UK, Turkey, Japan, and Italy. The Hague-Visby rules arc mandatory and cannot be avoided by including a choice of law clause for a non-contracting state. For instance, in the UK the Carriage of Goods by Sea Act of 1971 gives article X of The Hague-Visby Rules the quality of mandatory law. The Hague-Visby rules arc applicable if the bill of lading has been emitted in a contracting state or if the transport begins in a contracting state. They can also be contracted into through the inclusion of a paramount clause in the contract.

The United Nations Convention on the Carriage of Goods by Sea (Hamburg Rules) has not enjoyed the same success as The Hague-Visby rules. They are largely ignored by the larger maritime economies as they are deemed more favourable to the shipper and less so to the carrier. They have attracted 34 ratifications from mainly low tonnage countries.

The Rotterdam Rules are to establish a uniform, updated, and comprehensive regime. They are so far ratified by five states (Spain, Togo, Cameroon, Benin, and the Republic of the Congo (Brazzaville)) and will not enter into force until ratified by at least 20 countries. Those countries that ratify the convention should renounce The Hague-Visby Rules and Hamburg rules if they are signatory to either when the Rotterdam Rules come into force. The hope is that the Rotterdam rules will become the leading convention on carriage of goods by sea, but this is of course dependent on the amount of ratifications it will receive.

There are also numerous conventions for carriage of goods by other means of transportation. These include the Budapest Convention on Carriage of

Goods by Rivers,³⁸ the Convention concerning International Carriage by Rail supplemented by the Vilnius Rules,³⁹ the Warsaw Convention on Carriage of Goods by Air,⁴⁰ the Montreal Convention on Carriage of Goods by Air,⁴¹ and the Geneva Convention on Transportation of Goods by Road.⁴² The United Nations Convention on International Multimodal Transport of

38 Budapest Convention on the Contract for the Carriage of Goods by Inland Waterway (CMNI) 22 June 2001

This is a regional convention for the European Continent and has so far been ratified by 15 states and entered into force on 1 April 2005

Full text: http://www.unece.org/fileadmin/DAM/trans/main/sc3/cmniconf/ cnini.pdf.

39 Convention concerning International Carriage by Rail (COTIF) of 9 May 1980, as amended by the Vilnius Protocol of 3 June 1999

This convention is applicable in Europe, the Maghreb, and Middle East between states that have ratified the convention

The Intergovernmental Organisation for International Carriage by Rail (OTIF) was set up to establish international rail carriage legislation through uniform laws.

Full text of the convention: http://www.otif.org/en/about-otif/conventions-cotif. html.

40 The Convention for the Unification of Certain Rules Relating to International Carriage by Air of 12 October 1929 (Warsaw Convention.) This convention is applicable to both carriages of goods and persons. It was amended by The Hague Protocol of 1955. The Warsaw convention has been ratified by 152 states and The Hague protocol by 137 states. This was followed by the Guadalajara Convention in 1961 (84 contracting states), Guatemala Protocol of 1971 which has never entered into force and the Montreal Protocols 1, 2, 3 4, in 1975. Of these protocols 1,2 and 4 have entered into force (respectively with 48,49, and 53 members)

For the full text in English see: http://www.vayama.com/pdf/warsawConvention. pdf.

41 Convention for the Unification of Certain Rules for International Carriage by Air of 28 May 1999 (Montreal Convention)

The development of the Montreal Convention occurred for much the same reasons as the Rotterdam Rules. It was felt that the Warsaw Convention and subsequent amendments needed to be modernised and unified. The Montreal Convention draws upon the Warsaw Conventions and its protocols and unifies these into a new instrument. The Convention has been successful with 133 contracting states:

http://www.icao.int/secretariat/legal/List%20of%20Parties/Mtl99_EN.pdf.

Currently the Warsaw Convention (+ protocols) and the Montreal Conventions coexist. The Montreal Convention takes precedence between contracting states if both are ratified.

For full text see: http://www.jus.uio.no/lm/air.carriage.unification.convention. montreal.1999/.

42 Convention on the Contract for the International Carriage of Goods by Road of 19 May 1956(CMR) (Geneva Convention) this has been ratified by 55 (mainly European) states:

https://treaties.un.org/Pages/ViewDetails.aspx?src=TRE AT Y&mtdsg_no=XI-B-1 l&chapter=ll&lang=en

For the full text see:

http://www.jus.uio.no/lm/un.cmr.road.carriage.contract.convention.1956.amended. protocol. 1978/doc.html.

Goods of 1980 has not entered into force.^[3] Conventions that regulate carriage of goods are the most successfill category of international conventions. This has especially been the case for carriage of goods by sea and air. The need for harmonisation was clear earlier than in other areas of international commercial law. European countries are strongly represented in carriage of goods by rivers and terrestrial transports. This is explained by the geography of the European continent: many small countries combined with a highly developed economy, which means transportation of a high volume of goods and peoples across borders.

A third category of conventions regulates international financing. Examples are the UNIDROIT Convention on International Factoring and the UNIDROIT Convention on International Financial Leasing of 1988. These arc in force in respectively nine and ten countries. UNTDROIT also drafted the Convention on International Interests in Mobile Equipment of 2001 (Cape Town Convention), which has 80 contracting states.

The above are the most prominent examples of conventions in international commerce. If conventions are not in force or not in force in a particular state, they are not binding law. In those cases, they can be considered non-state rules as they have an international origin, their substance regulates international private relations between merchants, and they are weakened along the lines of obligation and delegation, following Abbott and Snidal’s model.^[4]

• [1] Louis Marques, International Uniform Commercial Law: towards a progressive consciousness (Ashgate, Aidershot 2005) 2. 2 Konrad Zweigert and Heinz Kôtz, An introduction to comparative law (Tony Weir tr, third edition, Oxford University Press 1998) 27. 3 Larry A DiMatteo, International Contracting: Law and Practice (Wolter Kluwer Law & Business 2013) 235. 4 Jan M Smits, ‘Convergence of Private Law in Europe’ in Esin Ôrucü and David Nelken ( Editors) Comparative Law, A Handbook (Hart Publishing 2007) 224. 5 CISG Article 2 For an analysis on legal issues which are excluded from the CISG see: Stefan Kroll, ‘Selected Problems Concerning the CISG’s Scope of Application’ (2005-2006) 25 Journal of Law and Commerce 39. These include pre-contractual negotiations and capacity. 6 José Angelo Estrella Faria, Future Directions of Legal Harmonisation and Law Reform: Stormy Seas or Prosperous Voyage? (2009) 14 Uniform Law Review 5, 9. 7 The 1924 Bills of Lading Convention and its 1968 and 1979 Protocols (Hague-Visby Rules). http://www.comitemaritime.org/Thc-1924-Bills-of-Lading-Convention-and-its-1968-and-1979-Protocols-Hague-Visby-Rules/0,2799,19932,00. ht ml.
• [2] For a full list of countries and their accession to carriage of goods by sea conventions: Hill Dickinson, Cargo Conventions: Comparing Hague, Hague/Visby, and Hamburg Rules, Shipping at a Glance Guide 1. http://www.hilldickinson.com/pdf/Cargo%20conventions.pdf. 2 Carriage of Goods by Sea Act 1971 and Carriage of Goods by Sea Act 1992. 3 United Nations Convention on the Carriage of Goods by Sea (The Hamburg Rules) 30 March 1978. http://wwtv.uncitral.org/uncitral/en/uncitral_texts/transport_goods/Hamburg_ rules.html. 4 http://www.uncitral.org/uncitral/en/uncitral_texts/transport_goods/Hamburg_sta-tus.html. 5 The United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea of 11 December 2008 (Rotterdam Rules). http://www.uncitral.org/uncitral/en/uncitral_texts/transport_goods/ 2 0 0 8rot terda m_ru les. ht m 1. 6 For the current status of the Rotterdam Rules: https://uncitral.un.org/en/texts/transportgoods/conventions/rotterdam_rules/ status.
• [3] For the full text of the convention see: http://www.jus.uio.no/lm/un.multimodal.trans-port.l980/doc.html It will enter into force upon ratification by 30 states. Given the date of the convention this is unlikely to happen. 2 UNIDROIT Convention on International Factoring of 1988. http://www.unidroit.org/instruments/factoring UNIDROIT Convention on International Financial Leasing of 1988. http://www.unidroit.org/fr/leasing-ol-2/leasing-anglais. 3 Convention on International Interests in Mobile Equipment of 2001. http://www.unidroit.org/instruments/security-interests/cape-town-convention The Cape Town Convention has four protocols. The Aircraft protocol, which has 77 contracting states, is in force. The Rail Protocol, the Mining and Agricultural and Construction Equipment, and the Space Protocol are not yet in force. 4 Some other examples The UN Convention on the Use of Electronic Communications in International Contracts (2005)- entered into force in 2013 and has 7 parties The UN Convention on the Assignment of Receivables in International Trade (2001) - has one ratification and has not entered into force The UN Convention on International Bills of Exchange and International Promissory Notes (1988) - has 5 parties and has not entered into force The UN Convention on Independent Guarantees and Stand-by Letters of Credit (1995) - entered into force in 2000 and has 8 parties The UN Convention on the Liability of Operators of Transport Terminals in International Trade (1991) - has 4 parties and has not entered into force UNIDROIT Convention on Agency in the International Sale of Goods (1983) - 4 ratifications and has not entered into force.
• [4] Kenneth W Abbott and Duncan Snidal, ‘Hard and Soft Law in International Governance’ (2000) 54 International Organization 421,422. 2 Roy Goode, ‘Usage and its Reception in Transnational Commercial Law’ in Jacob S Ziegel and Shalow Lerner (editors), New Developments in International Commercial and Consumer Law, proceedings of the 8th Bienal Conference of the International Academy of Commercial and Consumer Law (Hart Publishingl998) 9. 3 Ibid, 9. 4 The Republic of Nicaragua v. The United States of America (1986) International Court of Justice. 5 Jim C Chen, ‘Code, Custom, and Contract: The Uniform Commercial Code as Law Merchant’ (1992) 27 Texas International Journal 91, 98. 6 UCC § 1-303. Course of Performance, Course of Dealing, and Usage ofTrade. 7 Chase Manhattan Bank v. Milton May (1962) 311 F.2d 117 (3d Cir.).