Summary of Commercial Law

Table of Contents {#table-of-contents.TOCHeading} ================= [Topic 1: International commercial law -- Lecture 1 1](#topic-1-international-commercial-law-lecture-1) [I. Introduction 1](#introduction) [II. Institutions of International character 2](#institutions-of-international-character)...

Table of Contents {#table-of-contents.TOCHeading} ================= [Topic 1: International commercial law -- Lecture 1 1](#topic-1-international-commercial-law-lecture-1) [I. Introduction 1](#introduction) [II. Institutions of International character 2](#institutions-of-international-character) [III. Institutions of regional character 4](#institutions-of-regional-character) [Key Facts of the Case: 5](#_Toc186803052) [Key Ruling: 5](#_Toc186803053) [Why Is Cassis de Dijon Important? 5](#_Toc186803054) [Impact: 5](#_Toc186803055) [IV. International commerce and the codification of international commercial law 6](#international-commerce-and-the-codification-of-international-commercial-law) [Topic 2: Competition law -- Lecture 4 7](#topic-2-competition-law-lecture-4) [I. The regulation of international free competition 7](#the-regulation-of-international-free-competition) [II. International and EU unfair commercial practices 7](#international-and-eu-unfair-commercial-practices) [III. EU competition law, IV. Freedom of movement of goods under EU law 7](#eu-competition-law-iv.-freedom-of-movement-of-goods-under-eu-law) Topic 1: International commercial law -- Lecture 1 ================================================== Introduction ------------ **What makes a commercial transaction international?** - A commercial transaction becomes international when it involves parties, goods, services, or financial elements that cross national borders. **Comparative advantage of international commerce**   - Used to describe logic of international commercial relationships - International commerce will foster commerce, productivity and growth. - Specialized producers in different countries.     **The law has national limitations**   - How does one regulate several sovereign countries. When you want to regulate something that transcends national boundaries. - Linking factors that limits a countries national laws in international relations Institutions of International character --------------------------------------- **USA, the EU and the WTO. They are all unions. They have different levels of autonomy.**   - Federal government, full sovereignty.   - EU not considered sovereign over the individual member nations.   - WTO, the rules are only applied when one wants to trade internationally, allow a larger possibility of sovereignty.   - The UK system is a dualist system, always need a sovereign act by congress to make that act binding for the individual. When the WHO decides something, UK congress also have to pass it. **Traditional international commercial relationships**   - Tariffs for everyone who want to import goods into the sovereign country.   - Tariffs inhibit international commercial relationships   - 1947, GATT   - Free trade regional areas   - EU is not just a free trade organization, also a political union.     **Modern dilemma between free trade and to conserve values of the individual nations.**   - WTOs acts cannot be invoked directly before the courts of a member state is it is not also passed by congress of that nations. - The binding nature of WTO cannot be compared to a national act.   - EU is different, some of its norms can directly produce regulations. **4 Principles of the World Trade Organization:**       1. **Most favoured nation:**   - Most favored nation refers to a status conferred by a clause in which a country promises that it will treat another country as well as it treats any other country that receives preferential treatment. Most favored nation clauses are frequently included in bilateral investment treaties. - **2 Main Exceptions:** - Members of GATT are form another free trade agreement among themselves(EU is the most prominent example) -   - Developing countries can receive preferential treatment, and the county offering doesn't have to offer that to everyone in GATT. 1. **National treatment on taxes and regulations** - Products from other countries cannot have stricter regulations than equivalent products made within the country. - Example, a car produced abroad cannot have stricter safety demands than a domestic made car.     - Made to stop quantitative import restrictions   1. **Trade without discrimination/Fair competition**   - **Focus: WTO has han anti-dumping agreement.** - Dumping - Selling an excess of products for a lower price. - Flooding the market with products so cheap that domestic producers cant compete. - Often selling at a loss - Then when the domestic producers go under, the dumpers will have a monopoly of the market, and can raise prizes. 1. **Predictability through binding and transparency Interdependence**   - Countries commit to keeping their trade barriers (e.g., tariffs) at or below agreed levels and to operate transparently by publishing trade policies and practices.   - 2008 crisis, subprime mortgage crisis. - Mortgages were sold as credit, and sold to other financial institutions. - Delocalization of production, choice to choose the best place to set up business, which give the best benefits.   - Companies can sue countries, example, cigarette companies vs. Poor countries. **The limits of the free markets.**     - Unless there is a common legal institution, the concept of free movement of goods must prevail. (called the Washington consensus)   - *Philip Morris v. Uruguay* - *Phillip Morris v. Australia*   - It is thought that less commercial regulation will strengthen the world economy, therefore raising standard of living.   - Currently in an age of growing national wish to regulate.   - Currently a change towards a more nationalistic and less international.   - Reagan/thatcher administration responsible for the deregulation of trade. Institutions of regional character ---------------------------------- ### Free market in the EU:   - Member states cannot have tariffs among themselves.   - Restrictions in or out of countries are forbidden.   - Germany raising quality standards was seen as a blocking to the free trade and flow of goods.   - \"where goods cannot cross borders, tanks will\" ### Cassis de Dijon: The **Cassis de Dijon** case (Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein, 1979) is a landmark ruling by the **European Court of Justice (ECJ)** that established the principle of **mutual recognition** in the European Union (EU). It is significant because it greatly advanced the free movement of goods within the EU by limiting the ability of Member States to impose trade restrictions. []{#_Toc186803052.anchor}Key Facts of the Case: - **Background**: Rewe-Zentral AG wanted to import Cassis de Dijon, a French fruit liqueur, into Germany. However, German law required a minimum alcohol content for liqueurs (25%), and Cassis de Dijon only had 15-20% alcohol. Germany prohibited its sale. - **Issue**: Was the German regulation, which effectively restricted imports of Cassis de Dijon, compatible with EU law on the free movement of goods? []{#_Toc186803053.anchor}Key Ruling: The ECJ held that: 1. **Quantitative Restrictions and Equivalent Measures**: Any national rules that hinder trade between Member States are prohibited under **Article 34 TFEU** unless justified. 2. **Principle of Mutual Recognition**: If a product is lawfully produced and marketed in one EU Member State, it should generally be allowed to be sold in any other Member State. 3. **Rule of Reason**: National regulations that restrict trade may be justified only if: - They serve a legitimate public interest (e.g., health, safety, consumer protection). - The measure is proportionate and does not unnecessarily restrict trade. In this case, the ECJ found the German rule on alcohol content unjustified because it did not serve a legitimate purpose and disproportionately restricted trade. []{#_Toc186803054.anchor}Why Is Cassis de Dijon Important? 1. **Mutual Recognition Principle**: - It ensures that goods legally sold in one Member State can be sold in others without unnecessary barriers. - Encourages market integration within the EU. 2. **Limits on National Regulations**: - Member States cannot impose arbitrary or protectionist rules that hinder trade between countries. 3. **Foundation for the Single Market**: - The ruling is a cornerstone of the EU\'s single market and has been widely cited in subsequent free movement of goods cases. []{#_Toc186803055.anchor}Impact: - Led to **harmonization** of product standards across the EU to avoid conflicting national rules. - Boosted trade and economic integration by removing unjustified trade barriers. - Influenced how the ECJ balances national interests and EU principles. International commerce and the codification of international commercial law --------------------------------------------------------------------------- **Notable commerce organizations:**   **UNIDROIT** - Private organization - Academics suggest improvements to regulations of international commercial relations - Principles:   - Parties are free to set the terms of their agreement. - Example: Businesses can decide payment methods, delivery terms, etc., as long as they follow the law. - Contracts must be honored once agreed upon. - Example: If a buyer and seller agree on a price, they can't back out without valid reasons. - Parties must act honestly and fairly. - Example: No hiding important information or misleading the other party. - Decisions and actions must be reasonable based on the situation. - Example: Extending a deadline if delivery is delayed due to unforeseen events. - Parties can choose the rules or laws governing their contract. - Example: Two companies from different countries can agree to follow UNIDROIT principles or a specific national law. - The principles focus on global business practices, not specific national laws. - Example: They aim to provide solutions that work across borders. - If something goes wrong, parties must try to reduce losses. - Example: A buyer who receives faulty goods should seek repairs instead of ignoring the issue.     - **National courts actively use these principles to justify decisions.**   **CISG**   **ICC (International chamber of commerce)** - Private institutions - International arbitration board  Topic 2: Competition law -- Lecture 4 ====================================== The regulation of international free competition ------------------------------------------------ **Regulation of International Free Competition** **1. European Union (EU)** The EU has one of the most comprehensive legal frameworks to regulate competition. - **Primary Legislation**: - **Article 101 TFEU**: Prohibits agreements between companies (e.g., cartels) that prevent, restrict, or distort competition. - Example: Price-fixing, market-sharing, or limiting production agreements. - **Article 102 TFEU**: Prohibits abuse of a dominant market position. - Example: Predatory pricing, refusal to supply, or unfair trading conditions. - **Merger Regulation**: Ensures mergers or acquisitions don't harm competition by creating monopolies or dominant players. **2. World Trade Organization (WTO)** The WTO promotes free and fair competition through agreements and principles. - **General Agreement on Tariffs and Trade (GATT)**: - **Article XI**: Prohibits quantitative restrictions (e.g., quotas) that limit imports or exports. - **Article XXIV**: Permits regional trade agreements (e.g., EU) but ensures they don't create barriers for other nations. - **Trade-Related Aspects of Intellectual Property Rights (TRIPS)**: Balances intellectual property protection and competition by preventing abuse of IP rights to restrict trade. **3. United States (US)** The US has strict anti-trust laws that regulate both domestic and international competition: - **Sherman Act (1890)**: - **Section 1**: Prohibits contracts, combinations, and conspiracies that restrain trade. - **Section 2**: Bans monopolization or attempts to monopolize a market. - **Clayton Act (1914)**: Prohibits anti-competitive mergers and acquisitions. - **Federal Trade Commission (FTC) Act**: Enforces competition laws and prohibits unfair business practices. **4. United Nations Conference on Trade and Development (UNCTAD)** UNCTAD focuses on fair competition in developing countries. - **UN Set of Principles on Competition (1980)**: - Encourages international cooperation to prevent restrictive business practices in global trade. **5. OECD Guidelines** The **Organisation for Economic Co-operation and Development (OECD)** provides recommendations to harmonize competition laws and policies internationally. **Key Concepts in the Regulation of Free Competition** 1. **Anti-Competitive Agreements (Cartels)**: - Agreements between competitors to fix prices, limit production, or share markets are prohibited. (EU: Article 101 TFEU; US: Sherman Act Section 1). 2. **Abuse of Dominance**: - A dominant company cannot exploit its position unfairly (e.g., excessive pricing, exclusionary practices). (EU: Article 102 TFEU; US: Sherman Act Section 2). 3. **Merger Control**: - Mergers are reviewed to ensure they don't harm competition. (EU Merger Regulation; US Clayton Act). 4. **State Aid and Subsidies**: - Governments cannot provide financial aid that distorts competition unfairly. (EU: Articles 107-109 TFEU). 5. **International Trade Rules**: - WTO rules prevent unfair trade practices like dumping (selling below cost to eliminate competitors) and excessive import restrictions. (WTO Anti-Dumping Agreement, GATT Articles VI and XI). II. International and EU unfair commercial practices ------------------------------------------------ III. EU competition law, IV. Freedom of movement of goods under EU law -----------------------------------------------------------------   **Topic 3: The international protection of Intellectual Property Rights - Lecture 2 and 3**   I. CONCEPTS, GOALS AND GENERAL ASPECTS OF THE INTERNATIONAL PROTECTION OF INTELLECTUAL PROPERTY RIGHTS.   II\. INTERNATIONAL REGULATION.   III\. EU REGULATIUON.   **Topic 4: The international dimension of companies - Lecture 5**   I. EUROPEAN SINGLE MARKET AND COMPANY LAW.   II\. RECOGNITION AND FREE ESTABLISHMENT OF COMPANIES UNDER EU LAW.   **Topic 5: International Contracts: general regime Lecture 8, 9, 10, 11**   I. INTRODUCTION.   II\. THE ROME I REGULATION.   **Topic 6: International Contracts: particular contracts - Lecture 6, 7, 8**   I. INTRODUCTION.   II\. CISG: THE VIENNA CONVENTION ON THE INTERNATIONAL SALE OF GOODS 1980.   III\. NDAs, AGENCY, DISTRIBUTION, FRANCHISE AGREEMENTS. - **Lecture 12**   **Topic 7: Dispute Resolution in International Commerce - Lecture 13, 14, 15,**   I. INTERNATIONAL JURISDICTION: BRUSSELS I REGULATION - GROUNDS OF JURISDICTION, - LIS PENDENS, - RELATED ACTIONS AND RECOGNITION / - ENFORCEMENT OF FOREIG JUDGMENT   II\. ADR: INTERNATIONAL COMMERCIAL ARBITRATION - **Lecture 16** - CONCEPT OF ARBITRATION; - ARBITRATION AGREEMENT; - DUTIES OF ARBITRATORS; - ARBITRAL PROCEEDINGS; - INTERNATIONAL ARBITRAL AWARDS   **Topic 8: Dispute Resolution in International Commerce - Lecture 15?**   I. JURISDICTION.   II\. LAW APPLICABLE.