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Reproduced with permission of Internationales Handelsrecht (6/2006) 228-238, published by Sellier, Eruopean Law Publishers

excerpt from

Some introductory remarks on the CISG [*]

Prof. Dr. Peter Huber, LL.M. (London), Mainz

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II. INTERPRETATION OF THE CONVENTION

As the CISG is an international legal instrument, the issue of interpretation requires special attention. The Convention itself gives some guidelines in Art. 7(1) CISG which have to be taken into account when trying to find the standards of interpretation that are admissible (2).

1. Guidelines in Art. 7(1) CISG

Art. 7(1) CISG provides a rule on the interpretation of the Convention which states that 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. This rule gives three guidelines for interpreting the Convention:

The first guideline is its international character. In the first place, therefore, the Convention has to be interpreted autonomously. This means that the terms of the CISG should not simply be regarded as having the same meaning as identical terms that may exist in the domestic legal system. They should rather be given a "CISG-meaning", based on the structure and the underlying policies of the Convention as well as on its drafting and negotiating history. Of course, this autonomous interpretation may lead to the result that the CISG-term actually has the same meaning as a corresponding domestic term. One should, however, not jump to that conclusion too easily, but only after a careful analysis.[5]

The second guideline is the need to promote uniformity in the application of the Convention. The ideal would be a situation where every court or tribunal that has to apply the CISG would interpret its provisions in exactly the same way and with the same results. In practice, of course, this aim is hard to realize, in particular because there is no supranational court having the power to decide with binding effect on the correct interpretation of the Convention. The courts should, however, try to take into account foreign case law (and academic writing) as persuasive authority when interpreting the CISG.[6] In fact, the relevant material is being made available by several databases and publications which are easily accessible (cf. in more detail below, III) so that there is at least a reasonable basis for complying with the uniformity guideline. It seems as though courts are more and more willing to do so.[7]

The third guideline is the observance of good faith in international trade. The meaning of that rule is not quite clear.[8] The first problem that arises is how to find the relevant standards of "good faith". Given the principle of autonomous interpretation, it seems to be rather obvious that one should not simply transfer domestic good faith concepts (of which state anyway?) into the Convention. In theory, it may be possible, however, to discern from usages and trade practices (which the Convention recognises in principle, cf. Art. 9 CISG), from other international instruments and from case law and academic writing certain standards concerning fair and reasonable behaviour in international trade relations. The practical application of that idea will, however, prove difficult.

The second problem that arises with regard to the "good faith"-reference is to determine its exact purpose. It is submitted that the reference to good faith should not be used as a "super-tool" to override the rules and policies of the Convention whenever one regards the solution to a particular case or problem as inadequate. Art. 7(1) CISG actually grants the good faith principle a rather limited role as one of several guidelines that can be used when interpreting the Convention. The good [page 229] faith principle is therefore not established as a supreme rule towering over the ordinary provisions of the CISG, but has a rather limited function in the process of finding out what the CISG states. In the author's opinion, it is conceivable that the good faith guideline may influence the concrete result of the interpretation of a provision where the other methods of interpretation offer differing options.

2. Standards of interpretation

Taking the guidelines of Art. 7(1) CISG into account one easily reaches the conclusion that the forum state should not simply refer to its domestic standards when interpreting the Convention. On the other hand, recent studies [9] have shown that despite certain differences in terminology many legal systems use similar standards or tools when interpreting statutory texts.

In the author's opinion the following criteria may be used when interpreting the Convention, always on the understanding that they are applied with due respect for the guidelines of Art. 7(1) CISG, in particular for the principle of autonomous interpretation and for the international character of the Convention: the wording the provision (in particular in the official languages [10] of the Convention, i.e. Arabic, Chinese, English, French, Russian and Spanish, with possibly a slight preference for English as being the dominating language at the Vienna Conference [11]); the drafting and negotiating history, in particular the travaux préparatoires;[12] the purpose of the provision and the underlying policy; the position of the provision within the framework of the Convention (systematic approach).

The use of comparative legal analysis when interpreting the Convention raises intricate questions. As a starting point it is submitted that one should be rather careful in that respect.[13] The CISG is not necessarily the common denominator of an exercise in comparative law, but the result of a political negotiation process that aimed at establishing a workable and well suited instrument for international sales. Having said that, it is of course not impossible that comparative legal analysis may play a role in interpreting the Convention, for instance where a particular rule has been transferred into the Convention from one or several legal systems. [page 230]

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V. GAP FILLING

1. Basic principle

As we have seen in the preceding paragraph, the "legal scope of application" of the CISG is in principle defined by Art. 4 CISG: The CISG governs the formation of the contract and the rights and obligations of the parties. Accordingly, Art. 14 ff. CISG provide specific rules on formation, and Art. 25 ff. CISG provide specific rules on the rights and obligations of the parties.

As, however, no legislator is perfect and as the provisions of .the CISG sometimes had to take the form of a compromise between differing positions of the negotiating states, there will be certain questions which are not specifically solved by the CISG although they fall into its legal scope of application (i.e. concern the formation of the contract or the rights and obligations of the parties). A good example for such an "internal gap" of the Convention is the place of performance for money claims. In so far as the buyer's obligation to pay the contract price is concerned, Art. 57 CISG provides a detailed rule on the place of performance. In so far as other money claims (for instance the seller's obligation to pay back the price after an avoidance of the contract, Art. 81(2) CISG) are concerned, however, there is no specific rule on the place of performance.

Of course the drafters of the Convention could simply have shrugged their shoulders and left the "gap-filling" to the applicable (domestic) law. They did, however, not do so, but decided on a more Convention-based approach which is now contained in Art. 7(2) CISG: Questions concerning matters governed by the CISG which are not expressly settled in the CISG are to be settled in conformity with the general principles on which the CISG is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law (of the forum). This means that when one is faced with a situation as the one above [48] one should first check whether there is a general principle underlying the CISG that provides the answer to the problem before resorting to the applicable (domestic) law.

In practice, gap-filling with the help of general principles of the CISG is quite frequent. Several general principles have been identified in an abstract manner by courts and academic writing, among them the principle of party autonomy (derived from Art. 6 CISG), the principle of freedom of form (derived from Art. 11 CISG), the principle of favour contractus (meaning that avoidance of the contract should only be granted as a last resort, derived from Art. 49, 64 CISG), the principle of full compensation (subject of course to the foreseeability rule of Art. 74 CISG).[49] What is more, the predominant opinion finds a general principle concerning the burden of proof in the Convention (see below 3). [page 234]

Such abstract enumerations may help to develop a "feeling" for the underlying policies of the CISG, but they should not be regarded as ready-made instruments for handling the specific issues of the case at hand. In fact, the question of gap-filling by using general principles should be addressed separately for each specific "gap".[50] It is further submitted that when "finding" the general principle, one should try to draw parallels to existing provisions. In the example mentioned above one could for instance regard Art. 57 CISG as an expression of the general principle that monetary obligations are to be performed at the place of business of the monetary creditor unless the parties have agreed otherwise.

2. Use of the Principles of International Commercial Contracts?

It is a very controversial issue whether the Unidroit Principles of International Commercial Contracts [51] may be used as "gap filling material" for the CISG under Art. 7(2) CISG.[52] The Unidroit Principles themselves explicitly "offer" that possibility as their preamble states that they may be used (inter alia) to supplement international uniform law instruments. In fact, this has been done in arbitral practice.[53] It is submitted, however, that although it may be as such desirable and reasonable, the use of the Unidroit Principles for gap-filling under Art, 7(2) CISG is hard to justify. In fact, Art. 7(2) CISG makes it clear that the gap has to be filled by recourse to general principles which are to be found within the CISG. The use of provisions from an external instrument which came into existence considerably later than the CISG is not really in line with that rule.[54] This does not mean, however, that the Unidroit Principles cannot play any role in the gap filling process: So they can be used to corroborate a principle that one has already deduced from the Convention.[55] What is more, it may be possible to argue that both the CISG and the Unidroit Principles draw their fundamental policy decisions from the same common ground so that it might happen that the Principles actually state a general principle that underlies the CISG as well although it has not been clearly formulated there. Even this line or argument will, however, require that one finds some indication of the principle in question within the CISG itself.

What is more, provisions of the Unidroit Principles may find application to CISG-governed contracts on other grounds.[56] They may be applicable for instance as part of usages or practices under Art. 9 CISG, by virtue of a choice of "law" by the parties (the details of course being subject to the private international law of the forum) or as an expression of the good faith principle which is contained in Art. 7(1) CISG.[57]

3. In particular: burden of proof

It is submitted (albeit disputed) that the issue of burden of proof falls within the legal scope of the Convention, but is (in most provisions) not expressly settled there. It is therefore an internal gap that should be closed by reference to the general principles of the CISG.[58] It is further submitted that one can deduct such general principles on the burden of proof from several provisions, in particular from Art. 79, 25 and Art. 2 lit. (a) CISG: The basic rule on the burden of proof is that the party who wants to use a provision of the CISG in order to gain advantage from it has to prove that the factual preconditions of that provision are met.[59] The burden of proof may shift if the Convention so stipulates or in other exceptional cases (for instance where it would be excessively burdensome for that party to adduce the necessary evidence whereas it would be easy for the other side to do so). [page 235]

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FOOTNOTES

* The present article is based on the introductory chapter of Peter Huber / Alastair Mullis, The CISG -- A new textbook for students and practitioners, which will be published by Sellier, European Law Publishers in spring 2007.

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2. Several states, however, have declared a reservation against the application of the rule in Art. l(1)(b) CISG under Art. 95 CISG.

3. See for instance (German) Bundesgerichtshof, 3 April 1996, <http://www.cisg-online.ch> Nr. 135; (Swiss) Bundesgericht, 28 October 1998, <http://www.cisg-online.ch> Nr. 413; (Austrian) Oberster Gerichtshof, 7 September 2000, <http://www.cisg-online.ch> Nr. 642; Müller-Chen, in: Schlechtriem / Schwenzer Commentary, Art. 49 Nr. 2; Schlechtriem , in: Schlechtriem / Schwenzer Commentary, Art. 25 Nr. 21a; Fountoulakis, Internationales Handelsrecht (IHR) 2003, 160, 161.

4. For more detail see P. Huber, CISG -- The structure of remedies, to be published in Rabels Zeitschrift für ausländisches und internationales Privatrecht (RabelsZ) 2007.

5. See in more detail Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 10 ff.

6. Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 12.

7. See for instance some of the Italian decisions which contain an impressive amount of comparative and international sources, e.g. (Italian) Tribunale di Vigevano, 12 July 2000, <http://www.cisg-online.ch> Nr. 493.

8. See Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art.7 Nr. 17 f.

9. See in particular Vogenauer, Die Auslegung von Gesetzen in England und auf dem Kontinent, Beiträge zum ausländischen und internationalen Privatrecht, 2001.

10. Cf. the Final Clause of the Convention.

11. Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 21 f.

12. See for instance the publications in the Official Records, in the UNCITRAL Yearbooks and on <http://www.uncitral.org>, <http://www.cisg.law.pace.edu>.

13. For a rather cautious approach see also Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 26.

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48. I.e. that one finds oneself within the legal scope of the CISG without there being a specific CISG rule on the problem at hand.

49. For more detail see Ferrari, in: Ferrari / Fletchner / Brand, The Draft Digest and Beyond, p. 60 ff.; Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 30.

50. Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 30.

51. For further information on the Unidroit Principles see <http://www.unilex.info>. A similar issue arises with regard to the Principles of European Contract Law.

52. For a more detailed discussion of that issue see Ferrari, Juristenzeitung (JZ) 1998, 12; Ferrari, in: Schlechtriem / Schwenzer (4th German Edition), Art. 7 Nr. 59 ff.; Ferrari, in: Ferrari / Fletchner / Brand, The Draft Digest and Beyond, p. 169 f.; Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 30.

53. See Arbitral Award, ICC 8128/1998, <http://www.cisg-online.ch> Nr. 526.

54. Ferrari, in: Ferrari / Flechtner / Brand, The Draft Digest and Beyond, p. 169 f.

55. Ferrari, in: Ferrari / Fletchner / Brand, The Draft Digest and Beyond, p. 170. Examples in case law are: (French) Cour d'Appel Grenoble, 23 October 1996, <http://www.cisg-online.ch> Nr. 305; Arbitral Award, Internationales Schiedsgericht der Bundeskammer der gewerblichen Wirschaft in Österreich SCH 4366, 15 June 1994, <http://www.cisg-online.ch> Nr. 691.

56. Examples where the Principles have been referred to in practice (albeit without precisely stating on which basis) are: Arbitral Award, ICC 9117/1998, 1 March 1998, <http://www.cisg-online.ch> Nr. 777; Arbitral Award, ICC 8117/1997, 1 December 1997, <http://www.cisg-online.ch> Nr. 750.

57. Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 7 Nr. 36.

58. But see for a different view (burden of proof governed by the applicable domestic law): (Swiss) Bezirksgericht Saane, 20 February 1997, <http://www.cisg-online.ch> Nr. 426; Arbitral Award, ICC 6653, 1 January 1993, t <http://www.cisg-online.ch> Nr. 71; Khoo, in: Bianca/Bonell, Commentary on the International Sales Law, The 1980 Vienna Sales Convention (1987), Art. 2 Nr. 3.2.

59. See Ferrari, in: Ferrari/Fletchner /Brand, The Draft Digest and Beyond, p. 164; Schlechtriem, in: Schlechtriem / Schwenzer, Commentary, Art. 4 Nr. 22; (German) Bundesgerichtshof, 9 January 2002, <http://www.cisg-online.ch> Nr. 651; (Italian) Tribunale di Vigevano, 12 July 2000, <http://www.cisg-online.ch> Nr. 493.

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Pace Law School Institute of International Commercial Law - Last updated January 22, 2007
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