International Character and the Need to Promote Uniformity in the Application of the CISG

In the last post (Overview of CISG, Issues of Interpretation in the CISG and Good Faith, International Trade and Article 7 (1) of the CISG), we talked about Article 7 (1) of the CISG. We discussed the meaning of good faith in the context of international trade. In the present post, we shall talk about the phrases “international character” and “need to promote uniformity” mentioned in Article 7 (1) of the CISG. Article 7 (1) states 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 and the observance of good faith in international trade.”

The ‘International Character’ of the CISG

The CISG directs interpreters to have regard to the "international character" of the provisions of the CISG. A number of decisions exist that uphold the international character of the CISG and do not take recourse to domestic concepts to interpret the CISG.[1] There are many international cases in this respect.

In St. Paul Guardian Insurance Co. et al. v. Neuromed Medical Systems & Support GmbH, et al.,[2] it is stated that ‘the CISG aims to bring uniformity to international business transactions, using simple, non-nation specific language’. In MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D'Agostino, S.p.A.,[3] the need to refrain from reading domestic concepts into the CISG is addressed, as it states that ‘courts applying the CISG cannot substitute familiar principles of domestic law when the Convention requires a different result.’

An interesting differentiation between the UCC and the CISG was done in Calzaturificio Claudia S.n.c. v. Olivieri Footwear Ltd.[4] It was stated that:

‘Although the CISG is similar to the UCC with respect to certain provisions, it differs from the UCC with respect to others, including the UCC's writing requirement for a transaction for the sale of goods and parole evidence rule. Where controlling provisions are inconsistent, it would be inappropriate to apply UCC case law in construing contracts under the CISG.’

The "Need to Promote Uniformity" in the Convention's Application

In the CISG, the elements of "internationality" and "uniformity" are connected with each other because they are present in the same part and same article of the convention. This has been done as an autonomous approach to interpretation is necessary for the functioning and existence of both.[5] Also, regard must be given to the international, rather than national, interpretation so as to ensure uniformity in the application of the CISG. In order to ensure the success of CISG, it is important that CISG must be read and understood in a uniform manner by its users. But this is not an easy task. [6]

A nationalistic approach in the interpretation of the convention would be clearly counter-productive to the intent of the creation of the CISG. CISG was created as a uniform law that would help the states to avoid using divergent interpretations.[7] A number of such negative results arising out of "nationalistic" approach have been pointed out by the courts all over the world.[8] The House of Lords, in Scruttons Ltd. v. Midland Silicones Ltd.,[9] stated that:

“It would be deplorable if the nations, after protracted negotiations, reach agreement and that their several courts should then disagree as to the meaning of what they appeared to agree upon.”

It is important that international texts like the CISG should not be read through the lenses of domestic law.[10] This could be a result of the thought process of the judges to place the uniform law against the background of their own municipal law (lex fori) and to interpret the uniform law on the basis of principles with which they are already familiar with. Such reading clearly threatens the goal of international uniformity in interpretation of the CISG.[11]

Thus we see that the recognition of the autonomy of international sales law and its international characterisation are interconnected, and that they both serve the uniformity of interpretation and application of the Convention.

In the next post, we shall talk about Article 7 (2) of the CISG and the Gap filling exercise mentioned in it.

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[1] Ibid.

[2] St. Paul Guardian Insurance Co. et al. v. Neuromed Medical Systems & Support GmbH et al., U.S. Federal District Court, Southern District of New York, 26 March 2002.

[3] MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D'Agostino, S.p.A., U.S. Circuit Court of Appeals (11th Circuit), 29 June 1998.

[4] Calzaturificio Claudia S.n.c. v. Olivieri Footwear Ltd., U.S. Federal District Court, Southern District of New York, 6 April 1998.

[5] Phanesh Koneru, The International Interpretation of the UN Convention on Contracts for the International Sale of Goods: An Approach Based on General Principles, 6 Minn. J. Global Trade 105, 106 (1997).

[6] Ibid.

[7] Alejandro M. Garro, Reconciliation of Legal Traditions in the U.N. Convention on Contracts for the International Sale of Goods, 23 Int'l Law. 443, 481 (1989).

[8] Ibid.

[9] 1962 A.C. 446, at 471 (Eng. H.L.).

[10] Supra note 7.

[11] Ibid.