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Reproduced with permission of Camilla B. Andersen & Ulrich G. Schroeter eds., Sharing International Commercial Law across National Boundaries: Festschrift for Albert H. Kritzer on the Occasion of his Eightieth Birthday, Wildy, Simmonds & Hill Publishing (2008) 35-47

Uniformity through Persuasive International Authorities:
Does Stare Decisis really Hinder Uniform Interpretation of the CISG?

Gary F. Bell [*]

INTRODUCTION

The very goal of the United Nations Convention on Contracts for the International Sale of Goods (CISG) is the uniformisation of many of the rules relating to the international sale of goods. The CISG created a uniform law (lex) through a uniform text but as we know, the same text may be interpreted in different ways, thus leading to a lack of infinity in law (ius).

Ever since the nationalisation of the law through national codifications in civil law jurisdictions and the concept of stare decisis (domestic-only binding authority) in common law jurisdictions, many judges have lost the once common habit of looking beyond one's own jurisdiction to find the law. It was once common on the European continent to look at the ius commune and the lex mercatoria (and their foreign interpretations) as legitimate extra-jurisdictional sources of law. Though most often not technically binding, the ius civilis was highly persuasive and led to an ius commune, a uniform law of sorts. In England before the formalisation of stare decisis it was not uncommon to find inspiration in Roman and canon law. Today however, because of the nationalisation of the law by the Nation-States and also in part because of the loss of Latin as a common legal language across civil law jurisdictions,[1] the modern judges, in many large model jurisdictions [2] (England, [page 35] USA, France, Germany), until recently almost never referred to foreign law, authors or cases.[3]

Article 7(1) CISG tells the national judges (and international arbitrators) that, 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 [...]. 'How is that to be done? This article will concentrate on how a common law judge can have regard to, and use foreign authorities on the CISG given or notwithstanding the doctrine of stare decisis and the generally accepted view that foreign authorities cannot be binding. I will argue first that the concept of stare decisis does not unduly hinder the promotion of uniformity in interpreting the CISG as this concept is far more flexible than it is sometimes assumed and allows the courts to take into account foreign sources. Even though I would argue that strict adherence to domestic stare decisis should be abandoned in interpreting the CISG, I will concede it is unlikely to be abandoned, but will argue that in fact this is not a major problem. For the same reason, I will argue that there is no need to develop an 'international stare decisis' for the CISG to be applied uniformly.

THE COMMON LAW CONCEPT OF STARE DECISIS AND WHETHER IT EXCLUDES FOREIGN SOURCES OF LAW -- MYTH AND REALITY

I will here look at the English concept of stare decisis as it would relate to an international treaty creating a uniform private law such as the CISG. I realise that England is not a party to the CISG, but since there is probably no common law jurisdiction that adheres to stare decisis more strictly and conservatively than England does, if English courts can look at foreign decisions and authors in interpreting similar treaties, the argument that stare decisis necessarily hinders a uniform interpretation of the CISG becomes untenable. [page 36]

I will also occasionally mention some other common law jurisdictions that do not adhere to a similarly stringent concept of stare decisis and therefore have an even greater ability to take into account foreign sources of law in overruling domestic precedents.

The Myth about Stare Decisis

It is first important to remind ourselves that stare decisis as we know it today is a rather recent phenomenon. We are often told that stare decisis, presented as the fact that courts are bound by the decisions of higher courts (vertical stare decisis) and in many instances are bound by their own previous decisions (horizontal stare decisis), is fundamental to the common law and in fact so fundamental that this is actually how the common law has developed throughout its history. This is simply not true. Precedents were indeed important in the development of the common law, but not necessarily binding precedents and it is only rather recently that the concept of binding precedent was formally defined and created in English law. Glenn states 'the common law grew through the accumulation of precedent, though no concept of stare decisis -- binding authority attaching formally to each decision -- could possibly have existed throughout most of its history.'[4] The common law therefore until recently evolved through the study of non-binding precedents -- persuasive authority -- just as I would hope common law judges today could come to an internationally uniform interpretation of the CISG through the study of non-binding foreign precedents.

The Reality about Stare Decisis even in England (and even more so elsewhere)

I will look at the English approach to stare decisis first as it applies to normal common law cases (1) and statutes (2) and then will look at the approach and attitude of the English courts when applying international treaties (3). I will then look at the experience of common law judges with uniform laws (4) and foreign sources of law (5). [page 37]

(1) The rules of stare decisis as they apply to common law cases in domestic matters

English law is rather clear on so-called vertical stare decisis. A lower court must follow a precedent establishing a rule of law rendered by a court higher up in its own hierarchy.[5] Is a court bound to follow its own precedents (horizontal stare decisis)? The House of Lords used to considered itself bound by its own precedents [6] but in 1966 issued a practice statement in which it stated that 'Their Lordships [...] recognize that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose, therefore to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so. This announcement is not intended to affect the use of precedent elsewhere than in this House.'[7] This is generally the case throughout the common law world: the final court of appeal is not absolutely bound by its own precedents.[8]

In England, the Court of Appeal is however bound by its own precedents -- only the House of Lords can reverse a previous decision of the Court of Appeal.[9] This does not seem to be the position in most other common law' jurisdictions where an intermediate court of appeal can often reverse its own earlier decisions.[10] Even in England there are exceptions to this rule, for example [page 38] when an earlier decision did not take into account the provisions of a statute (decision per incuriam.[11] And of course one can always distinguish cases ...

Stating the obvious, given these and similar rules on stare decisis, a decision on the CISG by a foreign court, not being part of the domestic structure of courts, would never be binding on a common law court through stare decisis.[12] There could be a binding precedent by a domestic court in a given common law country which is clearly inconsistent with the uniform interpretation of the CISG outside that country, and that precedent could be repeatedly followed by other courts in that country because of the doctrine of stare decisis. It remains however that in most common law jurisdictions the court of appeal could remedy the situation and in every common law jurisdiction, the highest court could certainly do so. One could also argue that even the English Court of Appeal could intervene (were England a party to the CISG or were cases under Article 1(1)(b) CISG be brought in front of English courts). If a previous decision of the Court of Appeal has not had regard to the CISG's 'international character and to the need to promote uniformity in its application',[13] one could argue that the decision was rendered per incuriam.[14]

There are therefore ways in common law jurisdictions of correcting early erroneous decisions that do not promote uniformity -- these need not be binding forever. Persuasive authorities from abroad could trigger the overruling of such decisions. [page 39]

(2) The rules of stare decisis when interpreting a statute

It should be added that in common law jurisdictions other than the United States, the CISG would usually be implemented by an Act of Parliament.[15] Interestingly there have been judicial statements to the effect that the binding nature of precedents on the construction of statutes should be very strictly limited to the very facts on which a court rendered judgement. For example the Privy Council stated:

'It is quite clear that judicial statements as to the construction and intention of an Act must never be allowed to supplant or supersede its proper construction and courts must beware of falling into the error of treating the law to be that laid down by the judge in construing the Act rather than found in the words of the Act itself.

No doubt a decision on particular words binds inferior courts on the construction of those words on similar facts but beyond that the observations of judges on the construction of statutes may be of the greatest help and guidance but are entitled to no more than respect and cannot absolve the court from its duty of exercising an independent judgment.'[16]

Therefore although a precedent interpreting the CISG would indeed be binding on an inferior court, the precedent should be restricted to the narrowest point needed to decide that case. Stare decisis would therefore have a real yet limited effect on the interpretation of the CISG in Commonwealth countries where it is implemented through statute. [page 40

(3) Stare decisis and the role of foreign sources when interpreting an international convention

The House of Lord in the case of Fothergill v Monarch Airlines Ltd [17] had to interpret an international treaty namely the Warsaw Convention of 1929 [18] which was incorporated into English law through the Carriage by Air Act 1961.[19] The Warsaw Convention, like the CISG, is an international treaty that creates uniform rules of private law.

The case does not shed much light on the doctrine of stare decisis (there was no relevant prior English decisions on the matter) but does indicate the extent to which English judges would be ready to look at foreign extrinsic sources such as the travaux préparatoires, foreign court decisions and foreign doctrine (scholarly writings) in deciding such cases. The majority of the law Lords held that the travaux préparatoires could be looked at [20] and took pain to explain that an international treaty that sought to create a uniform law should not be interpreted like an English statute, that the court should take a broader purposive approach and some Lords went as far as citing foreign cases and doctrine. Given that English courts are not known for easily having recourse of parliamentary debates for example, it seems that the House of Lords understood quite well the task at hand. The Lords did also refer to the authoritative French text without hesitation.

For an even bolder approach we can look at a decision on the same convention in which the U.S. Supreme Court said that it considered 'the [page 41] opinions of our sister signatories to be entitled to considerable weight'[21] and proceeded to cite a French case and a scholarly book written in French which described the position taken by European legal scholars.[22] Even more interestingly, the Court cited the French sources before stating that 'These observations are in accord with American decisions' which it only then proceeded to cite.[23]

I note that there is no equivalent of Article 7(1) CISG in the Warsaw Convention and that these courts looked at the foreign sources without being told that 'regard is to be had to [the] international character [of the Convention] and to the need to promote uniformity in its application.' They should therefore be even more willing to do so in applying the CISG.

In principle, common law jurisdictions do not seem to have any reservation against considering foreign sources as persuasive authority. The fact that internally some cases may be binding due to stare decisis does not prevent the courts from looking at foreign sources as well. 'Use of persuasive authority is not necessarily incompatible with the concept of binding law.'[24]

In fact, two CISG cases from the USA illustrate the openness of at least some common law courts to persuasive foreign authorities on the CISG. In MCC-Marble Ceramic Center, the court mentioned that 'the parties have not cited us to any persuasive authority from the courts of other States Party to the CISG' which shows that court would have considered such authorities as persuasive. [25] Another court decided that because an arbitration tribunal had properly taken into account a German precedent and applied one of the exceptions mentioned in that precedent, the tribunal had not exceeded its powers.[26] [page 42]

(4) The long experience of common law judges at interpreting a common text within the Commonwealth and within the United States

Because common law jurisdictions share a common language, they have in fact very often continued to cite each other particularly in commercial matters, especially in interpreting similarly worded statutes. For example, a decision of any Commonwealth country on a similarly worded Sale of Goods Act (and such Acts often followed the English model) would have persuasive authority in another country. In, fact, as Glenn noted, outside of France, Germany, the United Kingdom and the United States, 'the notion of persuasive authority is [...] often of greater importance than that of binding law and is used to justify extensive use of non-binding and non-national sources of law'.[27]

The courts in the United States would have a similar experience at following persuasive authorities from other jurisdictions in applying for example the Uniform Commercial Code (UCC) which is in force (at least to a large extent) in all states as state, rather than federal law. Therefore the decisions from one state are not binding on courts in another state yet are often followed.[28]

Common law judges therefore know how to handle uniform laws and decisions interpreting such laws from beyond there own jurisdiction. The doctrine of stare decisis does not seem to have hindered the effective search for a uniform interpretation of such uniform laws. [page 43]

(5) The long and increasing use of foreign law, cases and doctrine in common law jurisdictions

The use of foreign and international sources of law is increasing everywhere. In the European Union, more and more law is European in origin if not in form, and it is therefore no longer unusual for English courts to have to take into account the decisions of foreign courts. More and more commercial law is international in nature and it is now frequent in commercial matters and in arbitration to refer to legal sources from multiple jurisdictions. Common law courts around the world have taken notice. We have even recently seen the U.S. Supreme Court refer to foreign sources of law in deciding a U.S. constitutional case.[29]

The proposal that one should take into account foreign sources in interpreting a treaty which introduces a uniform law is likely to be less and less controversial in the years to come. This again is not necessarily incompatible with the doctrine of stare decisis.

There are indeed many common law cases interpreting the CISG which did not have regard to its international character and the need to promote uniformity in its application,[30] but there are many which did.[31] More importantly, most if not all the cases that fail to take into account foreign sources make no statement to the effect that they should not take into account foreign sources. It seems that ignorance of the foreign sources probably usually due to a lack of proper research by the lawyers involved in the case is the main sources of the problem, not the fact that in principle these judges think that they are not supposed to look at foreign cases in interpreting a treaty. There is therefore no theoretical obstacle to common law judges taking into account foreign sources. [page 44]

Does the CISG require the common law judge to abandon the doctrine of stare decisis?

All that has been said thus far is that the common law is open to persuasive foreign authority. The methodology of modern common law, its doctrine of stare decisis, does not prevent the use of foreign cases as persuasive authority, and does not seem to have prevented a uniform interpretation of uniform laws.

What would happen if there were a domestic binding precedent that went directly against what would have become a very clear incontestable uniform interpretation in all other countries of the same provision of the CISG. Should the common law judge abandon his obligation to follow a binding precedent and follow the international uniform interpretation instead?

It should be said that I know of no such clear case and that may be because indeed such situations would be rare. Again the highest court, and in most jurisdictions outside England the intermediate Court of Appeal could correct the inconsistency and follow the internationally sanctioned interpretation. But should a judge clearly bound under its national law not follow a precedent?

Even if there is a binding precedent, in my view the obligation of the judge under Article 7(1) CISG, which is integrated into the national law, does remain and he or she must have regard for the international character of the CISG and the need to promote uniformity in its application. It is therefore important that he look at foreign sources even if at first he seems bound by a precedent. Looking at foreign sources might help him find a way of distinguishing the precedent. But should there be no way of distinguishing, should he not follow the domestic precedent? I can think of two arguments that could be made to try to convince a judge not to follow precedent in such a case.

The first is to argue from the common law's first principles. The very reason for the doctrine of stare decisis in the common law is the belief that like cases should be treated alike and that there should be certainty of outcome in law. If the rules of stare decisis are strictly applied domestically to interpret the CISG it could lead to a situation where a domestic case on the CISG continues to be applied when the international consensus on the issue has come to be the exact contrary position. Like cases would not be treated alike. This could lead to forum shopping and the uncertainty of outcome associated [page 45] with such forum shopping. One could therefore argue that the need for certainty and uniformity in outcome -- the very reason that justifies stare decisis in the first place -- should lead the common law judge to abandon stare decisis when applying an international uniform law such as the CISG.

A second argument could be that Article 7(1) CISG does mandate a change in the methodology of the common law. Already the CISG has required that the common law Parol Evidence Rule and Statute of Frauds be abandoned.[32] By stating that '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 [...]' one could argue that the CISG requires the common law judge to abandon the doctrine of state decisis. I doubt however that in the absence of clearer language, common law judges will be easily convinced.

In my view however, it is not essential that the doctrine of stare decisis be formally abandoned for the CISG to be interpreted uniformly even in common law jurisdictions. As we have seen, there is much more flexibility in the application of the doctrine of stare decisis today than is often assumed. What is important is that the common law judges eventually abandon domestic decisions that go against prevailing international precedents. This does not necessarily mean that stare decisis should be abandoned, but might mean that an inconsistency between an internally binding precedent and the prevailing international precedents should lead to a quick overruling by the competent higher court. It could be argued that an inconsistency with an international interpretation is good enough a reason for a higher court to review a precedent and reverse it. In the end I believe that there is enough flexibility in the way stare decisis is applied today in most common law jurisdictions to allow for a uniform interpretation of the CISG. There can be international uniformity notwithstanding domestic stare decisis.

CONCLUSION: NO NEED FOR AN INTERNATIONAL STARE DECISIS IN ORDER TO HAVE A UNIFORM INTERPRETATION

I have concluded that it is unlikely that the common law courts will completely abandon the principle of stare decisis and therefore some domestic [page 46] decisions on the CISG may become binding domestically. These courts must nonetheless have regard to the international character of the CISG and occasionally overturn binding domestic precedents that are inconsistent with the uniform international interpretation of the CISG. That begs the question -- how is one to determine what constitutes a uniform international interpretation? Should there be an international principle of stare decisis?

I do not think that the CISG, by enjoining us all to have regard for its 'international character and to the need to promote uniformity in its application',[33] had in mind a principle of stare decisis. In any event, in the absence of a hierarchy of courts with one unique international court at its apex, stare decisis as it is known in the common law cannot function properly.[34] Foreign cases are therefore not binding and can only be persuasive authority, but we must nonetheless have regard to such cases.[35] But how and what cases should be persuasive? There is no clear answer to this question but I particularly like the analogy to the civilian concept of 'jurisprudence constante'[36] -- non-binding precedents which become even more persuasive if they are "constants" i.e. consistent over time. Again, this is no different than what the common law court have done in interpreting similarly worded statutes and the U.S. courts in interpreting uniform laws. In a sense both the common law and the civil law do know from experience that one can achieve a very high degree of uniformity without binding precedents. There can be international uniformity without an international concept of stare decisis. [page 47]


FOOTNOTES

* Associate Professor, Director of the Asian Law Institute, Faculty of Law, National University of Singapore. I wish to thank Darius Chan for his excellent research assistance.

1. National laws, judgements and scholarly writings are in the national language rather than Latin.

2. By 'model jurisdictions' I refer to jurisdictions, the laws or codes of which are models for other nations. These jurisdictions therefore perceive themselves as a source of the law, whereas countries that have received such laws (Canada, Singapore, Belgium etc.) would at least look at the foreign law and cases from the original or model countries -- Belgians would look at French cases with interest, Singaporeans at English cases similarly.

3. Glenn does point to these four jurisdictions as those least likely to look at foreign sources of law as persuasive authorities: Glenn, HP (1987) 'Persuasive Authority' (32) McGill Law Journal 261.

4. Glenn, HP (2004) Legal Traditions of the World: Sustainable Diversity in Law (2d ed) Oxford University Press at 237.

5. Decisions of the House of Lords are binding on the courts below; for example: The Mostyn [1928] AC 57 at 82 (House of Lords). Decisions of the Court of Appeal and binding on the Courts below: for example Consett Industrial and Provident Society v Consett Iron Co [1922] 2 Ch 135 at 172 (CA).

6. The London Streets Tramways Co. Ltd v The London County Council [1898] AC 375 (House of Lords).

7. Practice Statement (Judicial Precedent) [1966] 1 WLR 1234 (House of Lords).

8. For example, in 1994 the Singapore Court of Appeal (now the final court) issued a practice statement similar to the one issued by the House of Lords. Other common law jurisdictions' practices (rather than statements) confirm a similar position.

9. Davis v Johnson [1979] AC 264 (House of Lords).

10. See for example Nguyen v Nguyen (1990) 64 Australian Law Journal Reports 222 (High Court of Australia). In the United States, in the case of the U.S. Court of Appeals [11th Circuit], 29 June 1998 (MCC-Marble Ceramic Center v Ceramica Nuova D'Agostino), available at: <http://cisgw3.law.pace.edu/cases/980629u1.html>, the Federal Court of Appeals of the 11th Circuit did not follow the 5th District case of U.S. Court of Appeals [5th Circuit], 15 June 1993 (Beijing Metals v American Business Center), available at: <http://cisgw3.law.pace.edu/cases/930615u1.html> on the interpretation of the CISG. MCC-Marble Ceramic Center held that the Parol Evidence Rule was incompatible with the CISG, and therefore did not follow the precedent set by Beijing Metal.

11. Young v Bristol Aeroplane Co. Ltd [1944] K.B. 718 (Court of Appeal).

12. 'Decisions of courts in one country have no binding authority in any other; there is no cross-border stare decisis doctrine [...]. But foreign decisions may have, if well reasoned, persuasive authority, and will then be followed by other courts and arbitration tribunals.' Schlechtriem, P in Schlechtriem, P and Schwenzer, I (eds) (2005) Commentary on the UN Convention on the International Sale of Goods (CISG) (2nd ed) Oxford University Press at Art 7 para 14.

13. Article 7 CISG.

14. See Young v Bristol Aeroplane Co. Ltd supra fn 12.

15. In most Commonwealth countries, customary international law is automatically integrated to the national law but treaties become part of domestic law only through an Act of Parliament.

16. Ogden Industries Pty Ltd v Lucas [1970] AC 113 at p 127 (Privy Council) (Lord Upjohn in a unanimous judgement).

17. [1981] AC 251.

18. Convention for the Unification of Certain Rules Relating to International Carriage by Air, signed at Warsaw on 12 October 1929 and the Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, done at The Hague on 28 September 1955.

19. 1961 (9 and 10 Eliz. 2 C. 27) (UK).

20. For the CISG, because it came into force after 1969, Articles 31 and 32 of the Vienna Convention on the Law of Treaties, 1969 would govern the issue of extrinsic aids in interpreting the CISG, at least for those countries that are parties to the 1969 Convention. See Zeller, B (2003) Four-Corners -- The Methodology for Interpretation and Application of the UN Convention on Contracts for the International Sale of Goods, chapter 4, available at: <http://www.cisg.law.pace.edu/cisg/biblio/4corners.html#chp4>.

21. Benjamins v British European Airways, 572 F.2d 913 at 919 (2d Cir. CA, 1978), cert. denied, 439 U.S. 1114 quoted and approved by the Supreme Court in Air France v Saks 470 U.S. 392 (US Sup. Ct, 1985) at 404.

22. Air France v Saks 470 U.S. 392 (US Sup. Ct, 1985) at 404.

23. These were lower Court decisions not binding on the Court, but nonetheless American sources were cited after foreign sources, which is in some ways quite amazing. Air France supra fn 23.

24. Glenn 'Persuasive Authority' supra fn 4 at 263.

25. MCC-Marble Ceramic Center supra fn 11 at fn 14.

26. U.S. District Court [E.D. La.] 17 May 1999 (Medical Marketing v Internazionale Medico Scientifica), available at: <http://cisgw3.law.pace.edu/cases/990517u1.html>.

27. Glenn 'Persuasive Authority' supra fn 4 at 263

28. Commenting on Medical Marketing supra fn 27, Schlechtriem, P (1999) Case commentary -- Conformity of the goods and standards established by public law -- Treatment of foreign court decision as precedent, available at: <http://www.cisg.law.pace.edu/cisg/wais/db/cases2/990517u1.html#cco> states 'the decision of the U.S. federal court is remarkable because it treats a foreign court decision as precedent, or at the least as "authority" and thus treats uniform international law similar to American law with the -- for American courts self-understood -- consideration given to decisions of their neighboring states under the (American) common law. In other words, it treated the CISG as a kind of international common law, the application and development of which is in the hands of the courts of all nations party to the Convention, which must therefore also give consideration to decisions made in other countries -- in this case, "the law as articulated by the German Supreme Court".'

29. Lawrence v Texas 539 U.S. 558 (US Sup. Ct, 2003).

30. For example, a U.S. case that cited no foreign authority stated 'Case law interpreting analogous provisions of Article 2 of the [UCC], may ... inform a court where the language of the relevant CISG provision tracks that of the UCC', U.S. Court of Appeals [2nd Circuit], 6 December 1995 (Delchi Carrier v Rotorex). available at: <http://cisgw3.law.pace.edu/cases/951206u1.html>.

31. See for example Medical Marketing supra fn 27.

32. See MCC-Marble Ceramic Center supra fn 11 (held there is no Parol Evidence rule in the CISG and mentioned in obiter that the CISG rejects the Statute of Frauds).

33. Article 7 CISG.

34. This is noted by Lookofsky, J (2004) 'Digesting CISG Case Law: How Much Regard Should We Have?' (8) Vindobona Journal of International Commercial Law and Arbitration 181 at 185.

35. District Court Vigevano (Italy), 12 July 2000 (Rheinland Versicherungen v Atlarex), available at: <http://cisgw3.law.pace.edu/cases/000712i3.html> which stated, according to a translation of the case available at the site cited, the following: 'foreign case law, contrary to what a minority of authorities have argued, is not binding on this Tribunal. It must nevertheless be considered in order to assure and to promote uniform enforcement of the United Nations Convention, according to its article 7(1) [of the CISG].'

36. The analogy is found in Hackney, P (2001) 'Is the United Nations Convention on the International Sale of Goods Achieving Uniformity?' (61) Louisiana Law Review 473 at 478, available at: <http://www.cisg.law.pace.edu/cisg/biblio/hackney.html>.


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