Aderonke. O.

Elesho* HARMONISATION OF LAWS AND THE POWER OF AUTONOMOUS GAP-FILLING IN TRANSNATIONAL COMMERCIAL LAW
INTRODUCTION It is no news that there exist trading relationships between parties who are from different jurisdictions thereby putting contracting parties in a precarious situation of been held liable/accountable for their act or failure to act in their capacity under jurisdictions which they are not familiar with. In order to minimise the risk involved in the international sales of goods, different attempts have been made over the years to make a complete code of law to be adopted by as many jurisdictions as possible. In the bid to harmonise laws and bridge the gap between legal systems regulating transnational commerce, there have been various attempts at creating a universal code that can be applicable. The CISG is the most recent effort at harmonization and it has a legislative history of over fifty (50) years and the conventions that preceded it are the convention relating to a Uniform Law of International Sale of Goods1 and the Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods2. However creating a unified code has proved more than problematic as the legal proponents or jurisprudences of countries seeking to be parties to the treaties have to be taken into consideration. The differences in this jurisprudence and legal technique was more evident in the divide between the civil law and common law systems, developed and developing countries and also the socialist and western legal systems3. This was made apparent by the play in Eorsis article4. THE CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (CISG)
1

* Legal Practitioner and LL.M Student, University of Hull (2011). United Nations, 1 July 1964, Treaty Series, vol. 834, The Hague, p. 107. 2 United Nations, 1 July 1964, Treaty Series, vol. 834, The Hague, p. 169. 3 Eorsi 4 Curran, G. V. (1995) The Interpretive Challenge to Uniformity, 15 Journal of Law and Commerce 175 in Keily, T (2003) Harmonisation and the United Nations Convention on Contracts for the International Sale of Goods, Nordic Journal of Commercial Law 1.

The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) came into force in 1988 with seventy-six states (76) having adopted it till date. There have been several attempts towards the unification of the laws that govern transnational commerce and this has its origin in the development of the lex mercatoria. The Governing Council of the International Institute for the Unification of Private Law drafted the first uniform law on sale of goods in 1935 and in 1964 at The Hague, the Uniform Law on the International Sale of Goods (ULIS) and the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF). Following the failure of States to adopt the Hague Conventions, the United Nations established the United Nations Commission on International Trade Law (UNCITRAL). The commission came up with the UNCITRAL Draft Convention in 1978 and in 1980 at the Vienna Convention; the 1978 Draft Convention was reviewed, amended and approved as the CISG. The rationale behind the creation of this law is for the harmonization of law governing the international sale of goods. In creating a multi-national treaty like the CISG, a lot of compromise has to be made between the parties during the drafting and often these compromises do not resolve the problems they seek to address5. Harmonization as a concept in itself is the process of replacing/supplanting domestic laws with internationally agreed rules and the reason behind this is to ensure that domestic laws deal with transnational problems and that the same laws are applicable to the buyer/seller whilst removing the problem of disputes arising between the parties been susceptible to adjudication by different legal systems. Many agencies and international organisations may be involved in the drive for harmonization and such organisations include the European Union, International Chamber of Commerce, and United Nations Commission on International Trade Law, World Trade Organization and International Institute for Unification of Private Law. Harmonization can be achieved with instruments such as Conventions, Model Laws, International Trade Terms, and Principles of Contract Law. It may be used in filling inherent gaps in domestic laws, it is helpful in facilitating international trade especially where domestic laws are silent on cross border issues and it serves as a neutral law that is not susceptible to domestic inferences, which also did not emerge out of a particular jurisdiction. However, the problems that arise from trying to harmonise laws is that the instruments usually take ages to be drafted as parties have to keep compromising on their stance for the instrument to materialise also, the measures adopted to harmonise will often times be inadequate as the
5

Rosett, A. (1984) Critical Reflections on Contracts for the International Sale of Goods, 45 Ohio State Law Journal pp.265-305

instrument cannot deal with all the happenstance which may occur. It therefore results in an instrument being accepted by state parties which in itself is incomplete and the interpreters of the instruments are therefore entrusted with the act of either filling the gap or by applying rules of private international law and this in itself challenges the whole notion of harmonization as interpretation of statutes is jurisdiction sensitive. There are also a plethora of difficulties which contends with harmonization such as the difficulty of interpreting international conventions autonomously, without having regard to domestic laws even when there are similar concepts/terms used in both the domestic law and the conventions. The translation of the convention to other language versions also creates problems as words often times lose their direct meaning and utmost relevance in translation. The danger of the courts/ interpretative authority arriving at divergent interpretations may also undermine and make harmonization/unification impossible. In order to create uniformity in the legal regimes applicable to international trade, the enactment of uniform laws/conventions is insufficient and cannot create the certainty desired as the uniform application of the rules cannot be guaranteed 6. It is inevitably noticeable that same enacted words are given different interpretations in the different jurisdictions involved7. The preamble to the convention states clearly that the intent of the law is to promote uniformity in international trade. However, there has been a clear divide most importantly between the common law lawyers and the civil law lawyers and their approach to law which in itself is apparent in some certain provisions of the law. The CISG was borne out of a compromise between the many jurisdictions involved in the treaty making process and it has been referred to as a construction site/ a work in progress8 requiring further construction and development through analogy and interpretation. It is noteworthy that even with the attempt to unify the law relating to international sales, the CISG does not provide a complete code which will deal with all actions arising from the sale e.g. validity of sales contract and proprietary rights in goods sold Art. 4(a) and (b).

Ryan, L.M. (1995) The Covention on Contracts for the International Sale of Goods: Divergent Interpretations, 4 Tul. J. Intl & Comp. L. 99, 101. 7 Munday, R.J.C (1978) The Uniform Interpretation of International Conventions, 27 Intl & Comp. L. Q. 450. 8 Schlechtriem, P (2004) Interpretation, Gap-Filling and Further Development of the U.N Sales Convention, 279-306.

After all the provisions of the convention, the reality of having a uniform or harmonised system of law being made applicable to international transactions is subject to the interpretation of the convention and that is why Article 7 is so crucial to the success of the conventions possibility of achieving uniformity as it provides for the guiding principles to the interpretation of CISG. The gap-filling obligation of the CISG allows for the elimination of deficits in the provisions of the Convention, relating to those matters governed by the Convention9 and same shall be discussed hereunder. Article 7 provides that: (1) In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade. (2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law. As explicit and express as the provisions of Art. 7 of the CISG are, there is still no convergence on the court opinions, legal texts and scholarly articles as regard the purport of that provision. Article 7 can be said to prescribe three different rules for interpretation10:
1.

The interpretation of CISG in good faith and with regards to its international character; The rule of gap-filling when the convention does not contain any express rules on an issue; The rule relating to the relationship between the convention and national law.

2.

3.

GAP FILLING BY ANALOGY The convention allows for the filling of gaps by the use of analogy but the use of analogy will not arise in all instances as the use of general principles of interpretations has made this superfluous11.
9

Schlechtriem, see 8 above. Hellner, J. (1990) Gap-Filling by Analogy Art.7 of the U.N. Sales Convention in its Historical Context, International Law: Festskrift til Lars Hjerner, Stockholm, 219-233. 11 Hellner, J. See 10 above.
10

In determining what rules of interpretations are applicable, the dualist nature of uniform law suggests two methods of interpretation: (a) the method used in public international law; and (b) the method used in domestic law12. Mann suggests that uniform laws be interpreted by the rules of interpretation applicable to treaties13. However this reasoning is flawed by the fact that these rules are mainly based on the assumption that the treaty only has effect on its parties whilst provisions of the CISG regulates the rights of private persons and not the contractual parties to CISG. The rules of interpretation applicable to treaties are appropriate only with respect to part four of the convention14. The most obvious reasons against the application of domestic rules of interpretation is that there is not one set of rules applicable in all the state parties to the convention. Though there is a convergence amongst common and civil law countries with regard to the interpretation of international conventions15. It therefore becomes unclear as to what uniform method of interpretation should be applied? It has been suggested that the classical canon of civil law interpretation be applied which includes the wording (grammatical element), the context of the statute (systematic element), the legislative history (historical element), and the purpose of the statute (teleological element)16. The reason for adopting the civil law mode of interpretation is that the CISG intends to replace domestic laws on matters governed by it and ensure that gaps are filled within the context of the convention. This is the same position under the civil law wherein civil law codes where designed to replace the entire body of pre-existing law whilst this is not the case for common law jurisdictions wherein if there is a lacunae in the law, it can be settled by reference to case law. The convention on its own accord presupposes that it contains loopholes as it recognises that there are matters which may be governed the CISG but not expressly settled therein. Gapfilling functions under the convention are only permissible where the underlying principles of the convention would not be applicable or where the matters arising are such that is not dealt with under the convention.

12

Brandner, G. (1999) Admissibility of Analogy in Gap-filling under the CISG, Available at www.cisg.law.pace.edu/cisg/biblio/brandler.html Accessed on 29th of April, 2011. 13 Mann, F. A. (1946) The Interpretation of Uniform Statutes, 62 Law Quaterly Review, 279291 14 Honnold, Uniform Law 15 Brandner, see 12 above. 16 Brandner, see 12 above.

In the application of CISG, it is noteworthy that uniformity may be achieved in interpretation or application of the CISG. Uniform interpretation suggests that the different courts and arbitral tribunals should attribute the same meaning to the terminologies of CISG whereas uniform application suggests that the different courts and arbitral tribunals should achieve similar results17. A major hindrance in the way of achieving uniformity in the interpretation and/or application of the CISG is that there is no transnational/international court with appellate jurisdictions wherein appeals may lie from the decisions of the highest national courts or from arbitral proceedings. Which has the resultant effect of there not been a watch dog to monitor the appropriateness or otherwise of the application of the CISG by national courts. However in 2001 the CISG Advisory Council was formed with the aim of promoting uniform application of CISG by issuing advisory opinions on the interpretation and application of the CISG on request by either international organizations, professional bodies and adjudication authorities and it has given a total of nine (9) opinions. The UNIDROIT principles of International Commercial Contracts in its preamble state that it may be used to supplement international uniform law instruments. It is therefore a very contested and controversial issue whether the UNIDROIT principles can be used under the auspices of Article 7(2) as gap-filling materials for interpreting the CISG18. Though this is desirable, it cannot however be justified under Art.7 as the recourse of gap-filling must be existent within the provisions of the CISG and outside that it is the applicable rules of private international law. Article 7 states the need for uniformity in the application of the CISG as this is fundamental to the successful harmonisation of laws by international treaty and inasmuch as a compromise in CISG leads to derogation in its uniform application, it also detracts from the success of the CISG as an exercise in harmonisation19. The duty of Article 7(1) is that requiring autonomous interpretation of the convention20. It has also been argued that in creating the uniformity
17

Lookofsky, J. () Understanding the CISG, Kluwer Law International, 3rd ed, The Netherlands. P. 33 18 Huber, P. and Mullis, A. (2007) The CISG a new textbook for students and practitioners, sellier. European law publishers, Germany, p. 35. 19 Keily, T. (2003) Harmonisation and the United Nations Convention on Contracts for the International Sale of Goods, Nordic Journal of Commercial Law 1.
20

Diedrich, F. (1996) Maintaining Uniformity in International Uniform Law via Autonomous Interpretation: Software Contracts and the CISG, 8 Pace Int'l L. Rev. 303.

desired, autonomous interpretation or the consideration of CISG as an autonomous body of rules is not sufficient21. Therefore, it has been suggested that recourse must be had to decisions emanating from other jurisdictions and this is necessary to avoid diverging interpretations and applications of the CISG22. There is also the argument that despite the unperceived unpleasantness that may arise from giving domestic interpretation to some of the provisions of the CISG, there are some words which must be interpreted domestically such as the expression private international law23. One of the disadvantages of giving divergent interpretations to the provisions of CISG is that it ultimately encourages forum shopping. In filling a gap in the convention by analogy, the convention does not provide for the place of payment of damages whilst Art. 57(1) provides for the place of payment of price as the sellers place of business if there is no adverse contractual obligation. An analogy can therefore be drawn between payment of price and payment of damages as they can be likened and both can fall within payment. It can therefore be justifiable to apply Art. 57(1) to the payment of damages by analogy24. It is noteworthy that gap-filling under the convention may be done by recourse to general principles or by analogy. However, it is beyond the scope of this work to engage in an argument on whether gap-filling by analogy is admissible under the CISG. Gap-filling by general principles will necessarily involve the groundnurm upon which the convention is based and those principles which are consistent in the convention whilst gap-filling by analogy will amount to likening the provisions of a particular article in the convention to matters governed by the convention but not expressly settled by it. The general principle upon which the Convention is based connotes principles that serve as pillars to the convention. For a gap to be filled by analogy, the judge must satisfy itself that there is a link between the identified provision and the particular issue/gap been sought to be filled.

21

Bianca, C.M and Bonell, M.J. (1987)Article 7, in Commentary on the International Sales Law: The 1980 Vienna Sales Convention 65, 74. 22 Darkey, J.M (1995) A U.S. Court's Interpretation of Damage Provisions Under the U.N. Convention on Contracts for the International Sale of Goods: A Preliminary Step Towards an International Jurisprudence of CISG or a Missed Opportunity? 15 J.L. & Com. 139, 142 23 Ferrari, F. (1999) CISG Case Law: A New Challenge for Interpreters ? 17 Journal of Law and Commerce 245-26 24 Brandner, see 10 above.

Filling gaps under the CISG is particularly difficult because of the nature of uniform law as there are no generally established rules of law as may be found under domestic law by virtue of the constitution or a common system of acceptable values. In giving autonomous interpretation to the CISG, a United States District Court in the case of Zapata Hermanos Sucesores v. Hearthside Baking Co.25 Refused to adopt the American Rule which requires litigants in federal court actions to bear their own expenses and the Court therefore awarded the counsels fees as foreseeable consequential damage. The imprecise nature of some of the provisions of CISG in achieving a compromise does actually create problems in achieving uniformity. There is ambiguity in the jurisdictional scope of the CISG as Article 1(1) provides that: The convention shall apply to contracts of sale of goods between parties whose place of business is in different states: (a) When the States are in Contracting States; or (b) When the rules of private international law lead to the application of the law of a Contracting State. The interpretation of this provision may as well lead to the application of the rules in domestic sale of goods26. Also, the CISG failed to define goods which therefore leads the uniform application of the CISG to the full ambits of the court on its consistent definition of goods and problems may exist where certain commodities are categorised as goods in some States and where others States do not categorise such as goods. i.e software27. Harmonisation also becomes difficult where the law does not give a firm standing as to its position on specific performance. Article 42 and 62 provides that both the buyer and the seller may request for specific performance of the contract inasmuch as they have not sought to other remedies which would be inconsistent with specific performance. However, Article 28 then provides that States that do not recognise specific performance are not required to give such a
25

(2001) 6 The Vindobona Journal of International Commercial Law and Arbitration 30-38. However, this decision has been the subject of an appeal to the Federal Appelate Court and the Supreme Court. 26 Bailey, J (1999) Facing the Truth: Seeing the Convention on Contracts for the International Sale of Goods as an Obstacle to a Uniform Law of International: the divergent views of software in the International Community, Sales 32 Cornell International Law Journal p.273 at 301. 27 Cox, T. (2000) Chaos versus Uniformity, Business Law International, 359.

judgement. This impairs the unification of law as each State may apply its own laws and can be described as a classical model of conflicts rule rather than that of a uniform rule28. Article 98 provides that states make some reservations authorised by the CISG by Article 92, 93, 94, 95 and 96. These provisions is a challenge to the uniformity which the rule tries to achieve as State parties may reservations on certain provisions of the CISG thereby creating a situation of uncertainty for parties who want to contract with such States. It therefore places some other restrictions on such parties have they have to be conversant with the reservations which the State parties have made and how the national law provisions of such states on the subjects of reservations. The provision on reservations in CISG is detrimental to a uniform application of the rules and it takes away the certainty of law between contracting parties. Inasmuch as there are already gaps which might itself inhibit uniformity of laws amongst member states, however the crucial success of the CISG is solely determinant on the effectiveness or otherwise of Article 7 of the CISG as it states the objectives of the convention which must be given due regard and it is the single most discussed Article in the CISG 29. By virtue of this provision, regard must be had to the international character and the need to promote uniformity in the application and the observance of good faith in international trade. It also provides that matters not expressly governed or settled by the convention must be settled in conformity with the general principles of CISG and in the absence of those principles, in conformity with the applicable rules of private international law. The purport and intent of this Article is that in the interpretation of the CISG, its multi-national treaty nature must be put into consideration. Therefore, in the interpretation of CISG the techniques of legislative interpretation that would otherwise suffice in domestic application must be avoided30. To promote uniformity of interpretation, Article 7 of the Convention seeks to guide judges and the basis of Article 7 is that a judge must exercise restraint when interpreting the CISG by not interpreting the terminology according to the reasoning in national (domestic) law but that focus must be put on the general objectives of the CISG such as ensuring uniformity, and promoting the observance of good faith in international trade. Where the CISG does not regulate an issue, then the judge may otherwise consult domestic law as determined by private international rules.
28

Eorsi,G. (1983) A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods, 31 American Journal of Comparative Law, p 333-356. 29 Enderlein, F and Maskow, D. (1992) United Nations Convention on Contracts for the International Sale of Goods, 54 Oceana 30 Keily, T., see 19 above

Art. 7(1) stresses uniformity and on that basis if a word is unclear and allows for two different interpretations, one which is supported by legislative history and the other by objectiveteleological reasons, then the former is to be preferred. This reasoning can be adduced faulty, as it does not project the purpose of the convention and for any mode of interpretation to be adopted, it must first take cognizance of the character of the convention and it is irrelevant that from legislative history, a compromise could not be reached. The second interpretation of the teleological reasons must be adopted as it will further the purpose of the convention and a divide in the history of the text cannot be fostered in interpretation. For states to ratify a convention, it means that the common will as expressed in the convention should prevail as against domestic law, and thus there should be no resort to such domestic laws or the application of a functional equivalent but differently construed national rules31. In interpreting the CISG, the Court in Delchi Carrier S.p.A. v. Roterex Corp32 the court noted that there was no case law that had interpreted the CISG and that the language and general principle which the Convention was based upon will be looked into. However, the court erroneously ignored its obligations under Article 7 and stated that case law interpreting the Uniform Commercial Code may be considered by the court where the language of the relevant CISG provisions tracks the UCC provisions. In this mistaken position, the court went ahead to state that the principle of limiting damages to foreseability as contained in Article 74 of CISG was established in Hadley v. Baxendale which is a case based on English law and therefore not known to CISG. Also, in Calzaturificio Claudia S.n.c. v. Olivieri Footwear Ltd the court erroneously stated that case law interpreting Article 2 of the Uniform Commercial Code may also be used to interpret the CISG where the provisions of both statutes have similar language33. Courts should be able to rely on cases emanating from other jurisdiction with those cases acting as precedents or having persuasive authority in the least. There is however a great amount of danger in relying on decided cases as this may create an avenue wherein the courts engage in distinguishing, over-ruling and even manipulating precedents34. It must also not be forgotten that the differences in the language variation and the domestic idiosyncrasies of the

31 32

Filanto S.p.A v. Chilewich International Corp, 789 F. Supp.1229, 1237 (S.D.N.Y. 1992). 71 F.3d 1024 (U.S. Ct. App. 2d. Cir. 1995) Available at http://www.cisg.law.pace.edu/cases/951206u1.html Accessed on 10th April, 2011. 33 No. 96 Civ. 8052 (HB)(THK) (S.D.N.Y. 1998) 34 Hillman, (1997) Cross Reference and Editorial Analysis, Article 7 in Zeller, B (2000) The UN Convention on Contracts for the International Sale of Goods (CISG) A Leap Towards Unified International Sales Law, 12 Pace International Law Review 1, 79-106.

10

different contracting state parties, makes it difficult for foreign decisions/precedents to be accessible or in the least relevant. The requirement of reading CISG with regard to its international character requires that they be projected against an international background35. The judge must be guided by foreign decisions and take into consideration the interpretation of the CISG from other jurisdictions36. Giving an interpretation does not merely involve the judge considering the domestic interpretation from another jurisdiction or adopting the majority rule amongst the domestic interpretations available but it places a special burden on the judiciary37. It is important to avoid differing constructions of CISG as this is most likely if national courts base their interpretation on the use of legal concepts as it exist in the legal system of the forum 38. It is suggested that the European Model may provide some guidance to judges in the giving of international interpretation to CISG as the European Court of Justice whilst interpreting the Brussels Convention on Recognition and Enforcements of Judgements has given its terms an international meaning not based on the meaning given in a contracting state. The court in Lufttransportunternehmen GmbH & Co. KG v. Eurocontrol ruled that reference must not be made to the law of one of the states concerned but, first, to the objectives and scheme of the convention and secondly to the general principles which stem from the corpus of the national legal systems39. Because the general principles of the CISG represent the common ground on which the Convention was made, an interpretation based on such principles will not be parochial or domestic in nature and it will most represent the spirit of international co-operation and the success of the European Model has shown that an interpretation based on the general principles is feasible in international trade40. Lord Scarman in Fotherhill v. Monarch Airlines stated that uniformity is the purpose of most international conventions and also that the ability to consider foreign judgements is the is to be

35

Honnold, J. (1991) Uniform Law for International Sales Under the 1980 United Nations Convention, Kluwer Law International, The Hague, 2rd ed 36 Sussane Cook, V. (1998) The Need for Uniform Interpretation of the 1980 United Nations Convention on Contracts for the International Sale of Goods, 50 University of Pittsburgh Law Review, 197-226. 37 Koneru, P. (1997) The International Interprtation of the UN Convention On Contracts for the International Sale of Goods: An Approach Based on General Principles, 6 Minnesota Journal of Global Trade, 105-152. 38 U.N Secretariat, (1979) Commentary on The Draft Convention on Contracts for the International Sale of Goods, U.N. Doc.A/CONF.97/5 39 [1976] E.C.R. 1541. 40 Koneru, P. See 37 above

11

enabled and that the English Court will use the same aid of interpretation available in other jurisdictions.... Article 7 (1) does not solve the problem of interpretation simpliciter, all it does is that it provides that whatever mode of interpretation adopted, it must take cognizance of the international character of CISG41. It is noteworthy that Article 7(2) does not state explicitly the general principle which the courts should consider in interpreting the CISG. However the general principles of the CISG may be derived from a consideration of the entire text, the travaux preparatoires and the core threshold upon which the Convention was predicated such as the need to promote uniformity in international trade law. The necessity of interpreting the CISG on its general principles is to prevent interpretations of the Convention based on domestic law or the resultant effect of tribunals creating new rules not based on the textual provisions of the CISG and also the effect of creating a jus commune42. Another avenue for gap-filling arises with the rate of interest and there has been a considerable amount of inconsistent case law on this point. Three different theories have therefore arisen from the law that governs rate of interest in a contract that is subject to CISG.
a. b.

With recourse to the CISG general principles, the rate of interest are discerned;43 The rate of interest is determined in conformity with the law applicable by virtue of the rules of conflicts of law of the forum44; The rate of interest is determined by the law of the forum without reference to its rules of conflicts of law45.

c.

Therefore, the first step in interpretation is to look within the letters/wordings of CISG also, the consultation of cases in a persuasive manner and scholarly writings as noted by the court in the

41 42

Zeller Koneru., see 37 above 43 Arbitral Proceeding SCH-4318 and SCH-4366 of 15 June 1994 at the Internationales schiedsgericht der bundeskammer der gewerb of Austria, Available at http://digitalcommons.pace.edu/cgi/viewcontent.cgi?article=1274&context=pilr&seiredir=1#search="Arbitral+Proceeding+SCH4318+of+15+June+1994+at+the+Internationales+schiedsgericht+der+bundeskammer+ der+gewerb+of+Austria" Accessed on 29th of April, 2011. 44 Callaghan, J.J. (1995) U.N. Convention for the International Sale of Goods: Examining the Gap-filling Role of CISG In Two French Decisions, 2 Journal of Law and Commerce 183, 198199 Available at www.cisg.law.pace.edu/cisg/wais/db/articles/p183.html Accessed on 20th of April, 2011. 45 See Delchi Carrier, note

12

Fothergill case. This ensures that the international character and the promotion of uniformity is guaranteed. The reference to good faith in Art.7(1) indicates that good faith is one of the general principles of the CISG46. This requirement of good faith can be evidenced in the interpretation of Article 19(2) and 21(2) are provisions of the convention which require that its interpretation must be made with the observance of good faith in international trade47. It is noteworthy that the requirement of good faith is only applicable to the application of the convention and not in any way related to the conduct of the parties. However, Eorsi argues that the interpretation of the contract cannot be separated from the convention48. Some general principles of the CISG, which can be deduced from the provisions of the CISG are: reasonableness Art. 8(2), 35(2) and other Articles in the CISG. Also estoppel as contained in Art. 16(2)(b) and 29(2). Also, party autonomy can be derived from Art. 6, freedom of form from Art. 11, principle of favour contractus from Art. 49, 64 and full compensation subject to the principle of forseeability under Art. 74. Bonnell also states that the dispatch rule under Art. 27 is a general principle49. To make the CISG a uniform law, its mere adoption by states is not sufficient. In achieving uniformity, the importance of travaux preparatoires, scholarly writings, judicial decisions and arbitral awards cannot be underestimated as they all contribute to the harmonization efforts50. In gap-filling lookofsky proposes that on determination on whether declaration of avoidance has been justifiably revoked, even though CISG provides for avoidance51, it however does not

46

Schlechtriem, P. (1986) Uniform Sales Law The UN-Convention on Contracts for the International Sale of Goods, Available at www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html Accessed on 29th of April, 2011. 47 Eorsi, G. (1984) Galston & Smite d., General Provisions, International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Available at www.cisg.law.pace.edu/cisg/biblio/eorsi1.html Accessed on 26th April, 2011 pp. 2-1 to 236. 48 Eorsi, G. See 47 above. 49 Bianca, C.M and Bonnel, M.J. (eds.) (1987) Commentary on the International Sales Law, Milan:Guiffre, Fred B. Rothman & Co., Pg. 80; Ferrari, F. (1994-95) Uniform Interpretation of the 1980 Uniform Sales Law Available at http://www.cisg.law.pace.edu/cisg/biblio/franco.html Accessed on 3rd of May, 2011. 50 Povrzenic, N. () Interpretation and Gap-filling under the United Nations Convention on Contracts for the International Sale of Goods, Available at http://www.cisg.law.pace.edu/cisg/biblio/gap-fill.html Accessed on 3rd of May, 2011. 51 Art. 26, 75, 76, 81,

13

address this issue. Therefore, the court/tribunal may settle this matter within the general principle of estoppel52. Under the CISG, the applicable concept of good faith is not based on any specific national good faith concept but rather on an international trade standard53. The purport of good faith as an interpretation guideline is unclear. However, it is certain that the CISG intends to instil the good faith principle amongst contracting parties. The CISG urge judges to consider private international law when the CISG does not provide guidance. This could in itself widen the gap between jurisdictional applications of the CISG if the differences in application of rules of law where to be considered in different jurisdictions. Resort to foreign decisions as guide for interpretation does not per se suffice as a measure to avoid divergent interpretations of the CISG as the approach of the courts to stare decisis then determines the level to which the decision guides. It is also noteworthy that if courts where strictly bound to apply the decisions already given, then this would amount to hardship wherein courts would be bound to give decisions based on an already decided point irrespective of whether the decision was erroneous54. The term good faith is not adequately described under the convention and as a principle; it can be likened to fairness, fair conduct, reasonable standards of fair dealing, decency, reasonableness, decent behaviour, a common ethical sense, a spirit of solidarity and community standards of fairness55. However, good faith is not an obligation to act altruistically and abandon self-interest as a governing motive in contractual obligations it may however prevent a party from abusing a legal right56.

52 53

Lookofsky, see 17 above Magnus, U. (1998) Remarks on Good Faith: The United Nations Convention on Contracts for the International Sale of Goods and the International Institute for the Unification of Private Law, Principles of International Commercial Contracts, 10 (1) Pace International Law Review. 54 Ferrari, F., see 23 above. 55 Lcke, H. K. (1987) Good Faith and Contractual Performance, in P. Finn (ed), Essays on Contract, Sydney, The Law Book Company Limited, p.160. 56 Keily, T., Good Faith and the Vienna Convention on Contracts for the International Sale of Goods (CISG), Vindobona Journal of International Commercial Law and Arbitration, Issue 1, 15-40, Available at http://www.cisg.law.pace.edu/cisg/biblio/keily.html Accessed on 3rd May, 2011.

14

To some authors good faith is solely relevant as a tool of interpretation which interpreters must have recourse to in order to avoid reaching inequitable results whilst to some other authors; good faith is necessarily directed at contracting parties to the contract of sale57.

CONCLUSION The CISG has gained much momentum in the past years and this trend will be ever continual with the acceptance of many countries to treat foreign decisions as persuasive58. Autonomous gap-filling is indeed advantageous to the promotion of uniform law as it eradicates the dependency on the law of the forum and provides for certainty of law between the parties.

BIBLIOGRAPHY INTERNATIONAL CONVENTIONS

The Convention Relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods, of 1964. The Convention on Contracts For The International Sale Of Goods (CISG), 1980. UNIDROIT principles of International Commercial Contracts Uniform Law of International Sale of Goods, of 1964. Calzaturificio Claudia S.n.c. v. Olivieri Footwear Ltd No. 96 Civ. 8052 (HB)(THK) (S.D.N.Y. 1998) Delchi Carrier S.p.A. v. Roterex Corp 71 F.3d 1024 (U.S. Ct. App. 2d. Cir. 1995) Available at http://www.cisg.law.pace.edu/cases/951206u1.html Accessed on 10th April, 2011.

CASE LAW

Filanto S.p.A v. Chilewich International Corp, 789 F. Supp.1229, 1237 (S.D.N.Y. 1992). Zapata Hermanos Sucesores v. Hearthside Baking Co.

57

Bianca, C.M and Bonell, M.J. (1987)Article 7, in Commentary on the International Sales Law: The 1980 Vienna Sales Convention 65, 74 and Schlechtriem, P. (1986) Uniform Sales Law The UNConvention on Contracts for the International Sale of Goods, Available at www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html Accessed on 29th of April, 2011 58 Zeller, B (2000) The UN Convention on Contracts for the International Sale of Goods (CISG) A Leap Towards Unified International Sales Law, 12 Pace International Law Review 1, 79-106.

15

BOOKS

Bianca, C.M and Bonell, M.J. (1987)Article 7, in Commentary on the International Sales Law: The 1980 Vienna Sales Convention 65, 74. Honnold, J. (1991) (2nd ed) Uniform Law for International Sales Under the 1980 United Nations Convention, Kluwer Law International, The Hague. Huber, P. and Mullis, A. (2007) The CISG a new textbook for students and practitioners, sellier. European law publishers, Germany, p. 35. Lookofsky, J. (2007) Understanding the CISG, Kluwer Law International, 3rd ed, The Netherlands. P. 33 Lcke, H. K. (1987) Good Faith and Contractual Performance, in P. Finn (ed), Essays on Contract, Sydney, The Law Book Company Limited, p.160.

ARTICLES

Bailey, J (1999) Facing the Truth: Seeing the Convention on Contracts for the International Sale of Goods as an Obstacle to a Uniform Law of International: the divergent views of software in the International Community, Sales 32 Cornell International Law Journal p.273 at 301.

Brandner, G. (1999) Admissibility of Analogy in Gap-filling under the CISG, Available at www.cisg.law.pace.edu/cisg/biblio/brandler.html Accessed on 29th of April, 2011. Callaghan, J.J. (1995) U.N. Convention for the International Sale of Goods: Examining the Gap-filling Role of CISG In Two French Decisions, 2 Journal of Law and Commerce 2011. 183, 198-199 Available at www.cisg.law.pace.edu/cisg/wais/db/articles/p183.html Accessed on 20th of April,

Cox, T. (2000) Chaos versus Uniformity, Business Law International, 359. Curran, G. V. (1995) The Interpretive Challenge to Uniformity, 15 Journal of Law and Commerce 175 in Darkey, J.M (1995) A U.S. Court's Interpretation of Damage Provisions Under the U.N. Convention on Contracts for the International Sale of Goods: A Preliminary Step Towards an International Jurisprudence of CISG or a Missed Opportunity? 15 J.L. & Com. 139, 142.

Diedrich, F. (1996) Maintaining Uniformity in International Uniform Law via Autonomous Interpretation: Software Contracts and the CISG, 8 Pace Int'l L. Rev. 303.
16

Enderlein, F and Maskow, D. (1992) United Nations Convention on Contracts for the International Sale of Goods, 54 Oceana Eorsi,G. (1983) A Propos the 1980 Vienna Convention on Contracts for the International Sale of Goods, 31 American Journal of Comparative Law, p 333-356. Eorsi, G. (1984) Galston & Smite d., General Provisions, International Sales: The United Nations Convention on Contracts for the International Sale of Goods, Available at www.cisg.law.pace.edu/cisg/biblio/eorsi1.html Accessed on 26th April, 2011 pp. 2-1 to 2-36.

Ferrari, F. (1999) CISG Case Law: A New Challenge for Interpreters ? 17 Journal of Law and Commerce 245-26. Ferrari, F. (1994-95) Uniform Interpretation of the 1980 Uniform Sales Law Available at http://www.cisg.law.pace.edu/cisg/biblio/franco.html Accessed on 3rd of May, 2011. Hellner, J. (1990) Gap-Filling by Analogy Art.7 of the U.N. Sales Convention in its Historical Context, International Law: Festskrift til Lars Hjerner, Stockholm, 219-233. Hillman, (1997) Cross Reference and Editorial Analysis, Article 7. Keily, T (2003) Harmonisation and the United Nations Convention on Contracts for the International Sale of Goods, Nordic Journal of Commercial Law 1. Keily, T. (1999) Good Faith and the Vienna Convention on Contracts for the International Sale of Goods (CISG), Vindobona Journal of International Commercial Law and Arbitration, Issue 1, 15-40, Available at http://www.cisg.law.pace.edu/cisg/biblio/keily.html Accessed on 3rd May 2011.

Koneru, P. (1997) The International Interprtation of the UN Convention On Contracts for the International Sale of Goods: An Approach Based on General Principles, 6 Minnesota Journal of Global Trade, 105-152.

Magnus, U. (1998) Remarks on Good Faith: The United Nations Convention on Contracts for the International Sale of Goods and the International Institute for the Unification of Private Law, Principles of International Commercial Contracts, 10 (1) Pace International Law Review.

Mann, F. A. (1946) The Interpretation of Uniform Statutes, 62 Law Quaterly Review, 279-291. Munday, R.J.C (1978) The Uniform Interpretation of International Conventions, 27 Intl & Comp. L. Q. 450.

17

Povrzenic, N. () Interpretation and Gap-filling under the United Nations Convention on Contracts for the International Sale of Goods, Available at http://www.cisg.law.pace.edu/cisg/biblio/gap-fill.html Accessed on 3rd of May, 2011

Ryan, L.M. (1995) The Covention on Contracts for the International Sale of Goods: Divergent Interpretations, 4 Tul. J. Intl & Comp. L. 99,101. Rosett, A. (1984) Critical Reflections on Contracts for the International Sale of Goods, 45 Ohio State Law Journal pp.265-305 Schlechtriem, P (2004) Interpretation, Gap-Filling and Further Development of the U.N Sales Convention, 279-306. Schlechtriem, P. (1986) Uniform Sales Law The UN-Convention on Contracts for the International Sale of Goods, Available at www.cisg.law.pace.edu/cisg/biblio/schlechtriem.html Accessed on 29th of April, 2011.

Sussane Cook, V. (1998) The Need for Uniform Interpretation of the 1980 United Nations Convention on Contracts for the International Sale of Goods, 50 University of Pittsburgh Law Review, 197-226.

U.N Secretariat, (1979) Commentary on The Draft Convention on Contracts for the International Sale of Goods, U.N. Doc.A/CONF.97/5 Zeller, B (2000) The UN Convention on Contracts for the International Sale of Goods (CISG) A Leap Towards Unified International Sales Law, 12 Pace International Law Review 1, 79-106.

18