UN Convention on International Sale of Goods (CISG) and Jurisdiction Quiz

Jurisdiction in International Business

• Jurisdiction is a primary concern in international business transactions, and its determination varies across countries
• Criteria for determining jurisdiction include personal jurisdiction and subject matter jurisdiction
• Civil law countries emphasize technical jurisdictional aspects, while common law countries consider territorial presence and due process
• The Brussels Convention simplifies jurisdictional issues within the European Union, favoring the defendant's home jurisdiction

Choice of Laws and Conflict of Laws

• After determining jurisdiction, the applicable law must be determined
• Parties can specify the applicable law in contracts to avoid conflicts
• Arbitration is favored for international transactions due to its potential for quicker decisions, confidentiality, and enforceability under the NY Convention

Other Forms of Dispute Resolution

• Mediation can facilitate settlements based on compromise, particularly in business disputes

Forum Non Conveniens

• This doctrine deals with conflicts of jurisdiction and is more common in common law jurisdictions
• It allows a court to dismiss a case if another court or arbitration tribunal is deemed more appropriate for resolution

Enforcement

• Enforcement is crucial after resolution, considering whether assets exist in a particular country to satisfy judgments or awards
• The case of Taiwan demonstrates successful enforcement of an arbitral award, highlighting the importance of considering enforcement prospects before pursuing litigation or arbitration

Comparative Law in International Business

• Law remains national or subnational, with international contracts being governed by these laws
• Understanding local legal traditions, including civil and common law, is crucial for international business operations
• Ignorance of local legal contexts can lead to serious issues, exemplified by international incidents and conflicts

Global vs. National Legal Systems

• Businesses and NGOs must navigate conflicts between acting globally and adhering to national legal systems
• Historical examples illustrate the challenges faced when national laws of one country confront the international operations of businesses, leading to legal and ethical dilemmas

Major Legal Traditions

• Civil law and common law are the two predominant legal traditions globally, with civil law being the majority
• Other traditions, such as Islamic, Asian, Socialist, and mixed jurisdictions, also influence national and business law practices

Role of History in Legal Traditions

• Civil law has roots in Roman law, canon law, merchant law, and codification processes, reflecting a history of legal evolution aimed at coherence and certainty
• The common law tradition is characterized by judge-made laws and the principle of stare decisis, with a significant role for juries

Common Law Summary

• Ancient law in England was displaced by Norman law after the conquest in 1066
• The development of common law under Henry II led to the creation of a unified legal system for England and Wales
• The legal profession concentrated in London, and Parliament emerged as a sovereign power
• Judicial decisions remained a significant source of law
• The US experienced a shift towards "social realism" in legal philosophy, acceptance of administrative law, and significant government regulation

Other Legal Traditions

• East Asian Legal Tradition: China's legal tradition was influenced by Confucianism, which won over legalist perspectives
• Historical "legal imperialism" and "legal orientalism" have shaped China's view of international law, with a focus on sovereignty and equality principles
• Modern China has seen the interplay of civil, socialist, revolutionary, and American legal influences, particularly in the field of international business law

Islamic Law and Business

• Islamic law has a significant impact on business practices in countries like Saudi Arabia and Iran
• Financing under Islamic law offers alternative opportunities, especially after the 2008 financial crisis
• Judges and Islamic legal scholars play a critical role in developing financing methods
• The prohibition of interest in Islamic law ("riba") is central to Islamic finance

Legal Professionals

• Roles in various jurisdictions vary, including the US, UK, France, Asia, Africa, and Latin America
• Judges have varying degrees of influence on law and legal culture across jurisdictions
• Other legal professionals, like notaires and huissiers, perform specialized legal tasks in certain countries### UN Convention on International Sale of Goods (CISG)
• Provides a harmonized legal framework for international sales of goods
• Applies unless parties opt out

Jurisdiction

• Foundational aspect of dispute resolution
• Court or tribunal must have authority to hear a case and render a decision
• National laws vary in criteria for determining jurisdiction
• Civil law countries emphasize technical jurisdictional aspects, while common law countries consider factors like territorial presence and due process

Choice of Laws/Conflict of Laws

• Once jurisdiction is established, the next question is which law applies to the dispute
• Parties can choose applicable law in contracts to avoid uncertainty
• In absence of choice, courts apply conflict of law rules to determine which jurisdiction's laws to apply
• Courts may need to apply a law that is not their own, which can be challenging

Arbitration

• Offers speed, expertise, flexibility, confidentiality, and ease of enforcement of arbitral awards
• Major arbitration institutions include ICC, AAA, and LCIA
• Enforcing foreign arbitral awards is generally easier compared to enforcing court judgments across borders

Forum Non Conveniens

• Doctrine allows a court to dismiss a case if another court or arbitration tribunal is deemed more appropriate for resolution
• More commonly used in common law jurisdictions

Enforcement

• Crucial final step in dispute resolution
• Judgment or award is only as good as its ability to be enforced against a party's assets
• Potential for enforcement should be a strategic consideration from the outset of any dispute resolution process

Extraterritorial Jurisdiction

• Concerns the application of a country's laws to activities outside its territory
• Nationality, effects doctrine, and explicit Congressional intent are grounds for extraterritorial jurisdiction
• Recent developments, such as Morrison v. Australian National Bank, have limited the scope of extraterritorial jurisdiction

Business and Human Rights

• Dynamic interplay between law and ethics in business
• Post-Enron, there has been a trend towards integrating ethics into the business law framework
• Challenges in business strategy include anticipating legal and ethical challenges in areas such as privacy, anti-bribery, and environmental and human rights violations

Comparative Law in International Business

• Understanding local legal traditions, including civil and common law, is crucial for international business operations
• Ignorance of local legal contexts can lead to serious issues
• Major legal traditions include civil law, common law, Islamic, Asian, Socialist, and mixed jurisdictions

Influence of History on Legal Traditions

• Civil law has roots in Roman law, canon law, merchant law, and codification processes
• Common law tradition is characterized by judge-made laws and the principle of stare decisis
• The passage of time and geopolitical shifts have affected the prominence of these traditions

Role of Legal Professionals

• Roles of legal professionals vary across jurisdictions, including the US, UK, France, Asia, Africa, and Latin America
• Lawyers have played significant roles in independence movements and have varying degrees of influence on politics and the legal system across Asia

Corruption and the Legal Profession

• Examples of corruption involving the legal profession in various regions
• Endemic court corruption is a significant challenge within the legal profession and judicial system### Comparative Law in International Business
• Comparative law is crucial in international business due to differences in national laws and legal traditions
• Understanding local legal traditions, including civil and common law, is essential for international business operations
• Ignorance of local legal contexts can lead to serious issues and conflicts

Common Law Principles

• Common law contract theory is largely "amoral" and influenced by economic liberal philosophy
• No concept of "fault" in common law contracts, unlike civil law
• A contract in common law requires a mutual intention to create legal obligations, manifested through offer and acceptance
• Consideration, or a bargained-for exchange, is generally required, but its importance has been diminished over time
• Contracts may be void from the outset or become void due to illegality, mistake, misrepresentation, fraud, or duress

Civil Law Principles (French and German Law)

• French contract law is codified, with Article 1134 of the Civil Code highlighting the freedom of contract
• Offer and acceptance are similar to common law, but there is no consideration requirement
• "Vices de consentement" are akin to common law's voidable contract principles
• German law is similar to French law, with the concept of "Culpa en contrahendo" for pre-contractual liability
• Commercial impracticability has been recognized due to historical economic conditions and the broad application of good faith in contract dealings

European Law

• The EU's core objective is to remove trade barriers, such as tariffs and customs duties, among member states
• National courts must interpret their own laws within the context of EU law, leading to complex interactions
• The free movement of goods has been largely successful, but the movement of people and services has encountered more challenges

International Contracts

• Certain areas of business have developed an internationally recognized legal framework, such as the Incoterms for trade
• Incoterms are crucial for allocating risk in international trade
• Payment and financing provisions are often integrated with Incoterms
• The documentary credit system relies on letters of credit, which have a long history and are crucial for international trade

Jurisdiction

• Jurisdiction is foundational because a court or tribunal must have the authority to hear a case and render a decision that will be recognized and enforceable
• Different countries have different rules for asserting jurisdiction, which can lead to jurisdictional conflicts
• The Brussels Convention and its successor, the Brussels I Regulation, simplify jurisdictional issues within the EU

Choice of Laws/Conflict of Laws

• Parties can often choose the applicable law in their contracts, which helps avoid uncertainty
• In the absence of choice, courts will apply conflict of law rules to determine which jurisdiction's laws to apply
• Applying foreign law can be challenging, especially when that law is from a different legal system or in a different language

Arbitration

• Arbitration can offer speed, expertise, flexibility, confidentiality, and ease of enforcement of arbitral awards
• Several institutions specialize in administering international arbitrations, including the ICC, AAA, and LCIA
• These institutions provide frameworks for the arbitration process that are recognized globally

Dispute Resolution

• Mediation is a non-binding process where a neutral third party helps the disputing parties reach a settlement
• The doctrine of forum non conveniens allows a court with jurisdiction to dismiss a case if there is a more appropriate forum available to the parties

Enforcement

• Enforcement is a crucial final step, and the potential for enforcement should be a strategic consideration from the outset of any dispute resolution process