UNCITRAL Convention on Contracts for the International Sale of Goods 1980 - Essay Example

? UNCITRAL Convention on Contracts for the International Sale of Goods 1980 (CISG) On 11th April 1980, the United Nations formed a convention to deal with contracts for the sale of goods internationally. This convention was known as CISG or the Vienna Convention. The purpose of this rule was to contribute to the introduction of certainty in the exchanges and the decreasing costs (Borges 2008, pp. 332). They produced laws and regulations to preside over the international sales. Furthermore, they wanted to ensure that high quality of trade practices existed within the subscribed members of CISG. However, out of the seventy-eight member states that are part of the CISG, some leading economies such as India, Brazil, and the United Kingdom are yet to join (Borges 2008, pp. 333). The United Kingdom has its own reasons for not joining the CISG. We shall explore some of these reasons in the discussion. The CISG has experienced immense success since its formation, and its relevance has been felt in several countries due to its ability to provide modern, standardized legislation in the international sale of goods that apply whenever the contracts for the sale of goods have been completed between the parties with a place of business among the contracting states. According to Ferrari (2000, p. 120), one of the key reasons that led to the success of the CISG is that it was widely accepted by states from the entire geographical region, all the vital social, economic, and legal systems, and every stage of economic development. Its aim was that it was to be created in such a way that it was going to be easy to understand and interpret by each member states. Honnold states that the United Nations Convention on Contracts for the International sale of Goods was written in an extremely straightforward and understandable language, which refers to the events and things for which there are words of universal content. The CISG is a significant legislative achievement because it has a massive influence on the worldwide trans-border business laws. Different countries have their own reservations for joining the CISG (Schelechtriem & Schwezwer 2005, pp. 45). The main reasons as to why the United Kingdom had refused to join the convention is that they lacked the time to ratify it, and at the moment it is already not a legislative main concern. The reason as to why it is not a legislative priority at the moment is because there has been slight interest shown by the United Kingdom businesses. These business entities seek to show partnership with the CISG. Unless more interest is shown at this point, there will be no parliament action on the implementation of the act. The debate of whether the United Kingdom should join the CISG or not should be argued in both ways. In the previous years, the United Kingdom had seen it not necessary to amend its international sales regulation. However, the economic downfall the United Kingdom faced in the year, 2008, made it realize that it was time they made partnership with CISG legislation since it could be seen as denying its people of an extremely potentially useful option. Ratifying the convention so that it could be among many of the European Union nations, Africa, the United States, and the Latin American nations by the UK should also be a priority. However, there are some arguments that the Convention does not similarly benefit anybody. For this, we will also explore why there are such arguments. Countries that have adopted this legislation are capable of eliminating any vagueness in its domestic laws that deal with the international sale of goods. This has enabled the international trade to become hassle free and has also reduced dispute that may arise between trading countries. There are problems that are caused by the United Kingdom’s refusal to join the CISG (Rogowska 2007, pp.230). It has also caused troubles for the rest of the countries that trade with it because different arrangements have to be made. It is essential to realize that with the anticipated acceleration of the liberalization movements and globalization in the near future; demand for global harmonization of commercial law will be necessary. In such a situation, the United Kingdom’s insular attitude to the harmonization phenomenon can be highly regrettable. A time has come when we have to wake up and face with the reality; if not deal with it effectively. According to Sally Moss from the CISG, the United Kingdom government believes that there are other issues that are more pressing to the government at the moment than the CISG issue. For instance, they believe that the issues on energy, employment, and company law should be prioritized. The reason as to why they believe that CISG is of no considerable importance is because it lacks interest from the public. Sally Moss (2005, pp.485) claims that they have severally received letters from the ministers requesting them to ratify the CISG. For this reason, they believe that not implementing the convention is not affecting the economy of the United Kingdom to a large extent. The ministers have said that they will in return approve the convention when there is ample time. It would be a better idea if the United Kingdom ratified the CISG. It is clearly odd for a leading trading nation such as the U.K not to be part of the CISG, and it is not easy to think of any rational reason as to why it is not. The strongest link still stands with the lack of parliamentary time and the lack of strong evidence where businesses have regarded ratification as a priority (Grebler 2005, pp. 467). This comes about because of the slight interest from the ministers to ratify the convention. First, in any case the business positions in the United Kingdom had a problem, and then the ministers would be quick in ratifying the conventions within the available opportunities. Secondly, there have been two formal consultations held for discussion as to whether the convention should be ratified or not. However, none of the convention’s objectives has seemed to have raised United Kingdom’s desire to ratify it. In the year, 1989, 1,500 documents were issued; however, only 55 responses were received, out of which 28 were in favor, 17 were against while 17 were neutral. In 1997, they issued 450 documents. This time they received 36 replies, of these responses 26 were in favor of the implementation, 7 opposed while 3 were neutral. This was a hardly ringing approval for accession. There could be surprises on the low level of responses, especially given the technical nature of this subject and its controllably uncontroversial nature. However, we should realize that the few responses were due to the lack of interest from some of the large and influential organizations. In the year 1997, some of these organizations which were against ratifications included the Law Society of Wales and England, BP, and the Commercial Bar Association (Murray et al. 2007, pp. 890). Those that were in favor included the British Telecom; who provided that they could also contract out of it, the Law Commission of England, British Gas, and British Airways. Interestingly, some of them who were in favor in 1989, seemed to have a change of mind come the year 1997. As we can see from these examples, it is not surprising as to why the ministers have severally failed to see the convention ratification as a priority. However, after consultation in 1997, the ministers did not give approval for the United Kingdom to proceed with the accession; therefore, a draft bill was prepared (Lee 1993, pp.110). This bill was to be introduced as a private member‘s Bill, rather than the Government Bill. This implied that the bill had to be introduced by a peer or a Member of Parliament who had interest in the subject. Unluckily, the peer in question fell seriously laid up, and the progress of the bill stalled. The bill maintained its status quo since it lacked resources in the department to push for it. However, it still remained mentioned as an aim that would be granted to the convention. In 2004, CISG faced changes in its organizational structure and Sally Moss became the head (Moss 2005, pp. 483). This made some members of the convention avail themselves in order to look closely at the implementation of the convention’s objectives. The convention realized that following the same legislation procedure would be cut down by lack of time; therefore, they sought to see whether there were alternative methods, which was not going to involve parliamentary legislation, so as to ratify the convention. Alternative methods were identified which included the use of a Regulatory Reform Order; RRO. Going down to the root of RRO, a burden would involve removing or reducing of the burden in the legislation. The CISG’s legal advice was that the introduced changes to be implemented would not qualify to remove a burden, or reduce any under the test contained in the Regulatory Reform Act (Okoli, 2011, p.183). Furthermore, an RRO would possibly apply only to Wales and England, leaving them to determine separately on how to implement the conventions in other countries such as Ireland and Scotland. So Regulatory Reform Order was not going to be the way forward. Therefore, they had to go back and look for another way of implementing prompt ratification through primary legislation. They then decided to conduct an informal mini-consultation that was going to elicit evidence. They hosted two meetings; the first meeting was for members of the business community while the second meeting was from academics and the arbitrators. There were some interest views that were gleaned (Rogowska 2007, pp.233). During the meeting with the business community; the general view was that if it was not broken, then there was no need to fix. Some of the arguments that were put forward included; That the convention was going to be pleasant news for lawyers while it was bad news for the clients. The implementation was going to involve a larger number of disputes. There was a danger of London losing an edge in the international litigation and arbitration. The second meeting with academicians and the arbitrators was altogether positive. Some of the arguments that were put forward included; Even if they failed to adopt the convention, the United Kingdom companies were not going to ignore it entirely. In case the contract was between companies in a country that had adopted the convention, then they were going to press for the convention to apply. Failure to adopt this convention was going to impinge negatively on London, as a forum for arbitration and litigation. There was political benefit that was rebutting the negative view in the United Kingdom reluctance in the contribution towards the international trade law initiative. However, both meetings received few participants, and they were left with the feeling that they had not received the true representatives’ view from the individuals affected by the CISG. There were raised concerns on the way forward. They decided to raise the profile of meeting in the ministers’ eyes by going for talk once again. This time round they decided to produce a document that was probably going to result into a more robust support for the United Kingdom presentation. McQueen & Clive (2012) asserts that they needed to demonstrate its implementation as going to bring, strong, and quantifiable economic benefits to the country. Most importantly was that it was necessary to reveal that the small business were not going to be adversely affected; and that the convention was going to make international trading much simpler. The CISG tried to make this document look simpler and user friendly; therefore, they set out clearly the differences that were there between the current English Law and the provisions that were in the convention (Germain, 48-67). They also outlined how the Convention was going to work in practice. The CISG have tested the questions on small businesses panels so as to ensure that this document is accessible to them; they are targeting their consultation so as to ensure that those who are affected by the convention have a chance of considering their implications and for their businesses. Finally, it is necessary to underline how vital it is for the business community to press hard for the ratification of the convention by the United Kingdom. The CISG should make this desire clear to the U.K government and push extremely hard for it (Rogowska 2007, pp.230). The business community should not wait for the CISG to consult and make that decision; it is their interest for the U.K to accede to this convention. Therefore, it is the onus the business community to make their feelings known to the government. If practical problems are to be solved in some way, there has been an escape of mandatory applications of local consumer protection laws. The contract basing on one set of laws instead of many has simply failed when it comes to business to business cases. At practical levels, it would also be inconvenient for the business offering goods on the websites to offer two sets of laws; one of them being if the customer is a small business or if the customer is a consumer, it would be impossible to tell which is which, some goods would come as consumer-based while some would come as trader-based (Grebler 2005, pp. 467). The objective here is the help of the CISG to help business and not to hinder them. A government aiming for full economic growth would remove barriers to trade, as well as make its country trade friendly (Chuah 2009, pp. 26). This could deservedly get it a lot of credit for strongly supporting such solutions. My personal preference; however, remains on the application of the CISG; I see no reasonable grounds for depriving people of an option that is potentially useful. Bibliography Borges, Ricardo, 2008. The UK and the UN Convention on Contracts for the International Sale of Goods (CISG): To Ratify or not to Ratify? Journal of International Maritime Law, 14(4), pp. 331-338. Bridge, M., 1999. The International Sale of Goods: Law and Practice. Oxford: Oxford University Press. Chuah, Jason, 2009. Law of International Trade. 4th ed. London: Sweet & Maxwell, 23-26. Ferrari, F., 2000. The CISG and its Impact on National Contract Law-General Repport. UNAM, pp. 122-170. Germain, C.M., 48-67. The United Nations Convention on Contracts for the International Sale of Goods: Guides to Research and Literature. UF Law Scholarship Pepository, p.1996. Grebler, E., 2005. The Convention on International Sale of Goods and Brazilian Law: Are Differences Irreconciable. Journal of Law and Commerce, pp. 467-76. Lee, Robert, 1993. The UN Convention on Contracts for the International Sale of Goods: OK for the UK? Journal of Business Law. Oxford: Oxford University Press. McQueen, H.L. & Clive, E., 2012. What if the UK quickly ratified the CISG? [Online] Available at: http://www.law.ed.ac.uk/epln/blogentry.aspx?blogentryref=8916 [Accessed 7th November 2012]. Moss, S., 2005. Why the United kingdom has not Ratified the CISG. Journal of Law and Commerce, pp. 483-85. Murray, Carole et al, 2007. Schmitthoff’s Export Trade. 11th edition. London: Sweet & Maxwell, 851-896. Okoli, Pontian, 2011. A Case for Reviewing the System of Remedies under the CISG. International Company and Commercial Law Review, 22 (6), pp. 181-184 Rogowska, Anna, 2007. CISG in the UK: How does the CISG Govern the Contractual Relations of English Businessmen? International Company and Commercial Law Review, 18 (7), pp. 226-230 Schelechtriem, P. & Schwezwer, I., 2005. Commentary on the UN Convention on the International Sale of Goods (CISG). Oxford: Oxford University Press. Staff, P.L.R., ed., 2002. Review of the Convention on Contracts for the International Law. London: Springer. Read More