Internet and International Commercial Law - Dissertation Example

Internet and International Commercial Law The advent of Internet made global market place instantly accessible. However, the application of information technology (IT) in the conduct of business has given rise to several legal issues such as formation of contracts. Many international organizations have intervened to remove legal uncertainties and difficulties in the interest of promotion of electronic commerce. The Internet which once was used privately, was opened to public use since mid-1990s.1 Information came to be freely circulated globally through computer networks across the world. The Internet has become the platform for sellers to show case their goods and services which the buyers and consumers alike could access them readily at competitive prices. Internet legal hassles increase with the ever increasing usage of internet internationally. Although disputes are resolved through long existing treaties, conventions and jurisdictions, some issues relating international applications and internet regulations are yet to be addressed. The United States law is the frequently applied law to set right legal issues arising out of international internet legal difficulties concerning e-commerce of not only Americans but also people outside the American jurisdiction, Just as the United States have legislated Internet-related laws, there are Cyber-Crime Conventions, the Hague Conventions on Jurisdictions and judgments, rulings of the World Intellectual Property Organisation and the United Nations Internet Governance available for applications in the international commerce transactions. The Hague Choice of Court Convention aims to remove uncertainty in the issues of jurisdiction, judgement recognition in online transactions governed by International business-to-business to agreements. Obviously consumer transactions are not included. The Hague Convention’s provision for honouring of forum selection clauses will ensure incorporation jurisdiction in the international contract agreements and in turn facilitate recognition of the relevant court’s judgment as also its enforcement globally i.e amongst the signatory countries. It is noteworthy that a domestic agreement cannot designate a foreign court. Apart from International Internet law, International Internet case law has also developed over the years. For example, choice of law and recognition of judgement were an issue in La Ligue Contre Le Racisme et L'Antisémitisme v. Yahoo, in which a French court issued its judgement regarding an Internet case dealing with sale of Nazi-related items. This became an issue in the United States when the French court’s judgement was sought to be enforced in the U.S. As most of the International Internet disputes in the United States claim jurisdiction outside the U.S., parties to the dispute application of non-American law. In Dow Jones v Gutnick, the High Court of Australia decided in favour of an Australian to bring action for defamation on a U.S. party for an Internet article published on American Server and downloaded in Australia.2 United Nations Convention on the Use of Electronic Communications in International Contracts This convention of 2004 aims to eliminate legal uncertainty in the use of electronic communications during the course of international commerce as the uncertainty is a potential obstacle to international commerce. Besides elimination of uncertainty, the convention aims to bring in uniform rules to be adopted so as to remove obstacles said above and to remove possible problems that may be encountered in the operation of international trade law instruments such as Letter of Credit etc. The uniform rules also recognize the parties’ freedom to select media and technologies of their choice so as to uphold the principles of technological neutrality and functional equivalence. This would ensure that electronic means chosen by the parties are in compliance with law. Thus this Convention applies where parties to a contract are from different countries. Article 1 states that if the contract does not specify places of business or the places are not disclosed either in dealings or exchange of information, their different countries of origin should be disregarded. As already stated in Hague Convention, this convention also does not include contracts of personal nature, or for family or household purposes. It does not also include stock exchange transactions, foreign exchange transactions, interbank payment systems, agreements, transfer of security rights in sale, loan or holding of or repurchase of securities or other financial or instruments held with an intermediary as stipulated in article 2 (1) (b). 3 Article 2(2) specifically excludes “bills of exchange, promissory notes, consignment notes, bills of lading, warehouse receipts or any transferable document or instrument that entitles the bearer or beneficiary to claim the delivery of goods or the payment of a sum of money “4 Parties have also the freedom to exclude application of this convention or to “derogate from or vary the effect of any of its provisions”5 Article 8 provides for legal recognition of electronic documents that preclude denial of validity or enforcement because of its electronic form. 6 Article 9 states that an electronic communication is considered as in written form if information contained in it capable of access and use for subsequent reference for the purpose of meeting a contractual requirement that it should be in writing. Article 12 provides for the formation of contract through the interaction between an automated message system and a natural person or interaction of automated message systems on both sides. Article 14 states that in case of error in electronic communication, the originating party has the right withdraw the relevant portion of error if the system does not provide rectification.7 In this context, it must be mentioned that Hague convention referred elsewhere has not been ratified by many nations including the E.U., U.S. and China. It must be admitted that it takes time to ratify treaties since conflict of interests among countries often come in the way. Yet the un-ratified treaties serve as references for “national and regional legislation.” The “technique-neutral approach of the Hague convention generally called “choice of court convention “enhances the validity of ‘exclusive choice of court’ agreements by electronic means vide Article 3 of the Hague Convention. Both these conventions if adopted would lend legal certainty of international electronic contracts and predictability of location of parties in the cyberspace.8 The “Rotterdam Rules”, the short name for the United Nations Convention on Contracts for International Carriage of Goods Wholly or Partly Sea 2008” is a substantive law that recognizes the relevance of electronic documents meant for transport.9 The Choice of Court Convention (the Hague Convention) in its article 3 envisages five requirements. .One, there must be an agreement between two or more parties; second, it must be in the prescribed form; third, it should designate courts of one State excluding all other courts; fourth, the court or courts designated must be located in a Contracting State; and fifth, the designated courts must emanate from a particular legal relationship. The five requirements provides for three possibilities of meeting the exclusive choice of court agreements. 1) Reference to a Contracting State (e.g. the courts of the United Kingdom); 2) specific court in a Contracting State (e.g. the District Court of London) and 3) two or more specific courts in the particular Contracting State (e.g. District Court of London or District Court of Manchester). If the agreement provides for courts of two Contracting States (U.K. and U.S.A.), this Exclusive Choice of Court Convention will not apply. In short, the four basic rules of the Choice of Court Convention are 1) that chosen court must be ready to hear the case, 2) If a court is not designated in the agreement, it must refuse jurisdiction, 3) the parties are entitled to recognize and enforce agreements only at the designated courts and 4) States can declare that they will recognize and enforce judgements of courts of other Contracting States designated in ‘non=exclusive choice of court agreements’.10 Problem Statement The above background illustrates the clarity of the elements of uncertainty that could arise in eCommerce at the International level. The proposed research aims to examine changes to the traditional international law prompted by the advent of Internet and whether the Internet serves to promote the International Trade better than before, in general. Objectives a) How far the International Commercial Arbitration Processes stand benefited by the Internet means of communications, in particular b) How have the International Trade practices such as Letters of Credit and Bills of Lading been benefited by the electronic means, in particular. Dissertation structure The structure of the proposed dissertation will consist of five chapters, 1) Introduction, 2) Literature Review, 3) Research Methodology, 4) Data Findings and Discussion and 5) Conclusion, Reflections and Recommendations Conclusion The above proposal has briefly outlined the roadmap for the research on the effect of electronic means of communication on the International Trade Law with special reference to Choice of Courts, Choice of Law, and recognition and enforcement of judgement and awards. References Read More