International Sale of Goods

Trade relations between the People’s Republic of China and Europe are constantly increasing, and it is then very important that actors of both sides acquire the knowledge of the legal system applied by the partner state.

For the solution of disputes arising out of the contracts of international sale of goods, in my point of view, to determine the competent court or courts is the first and probably the most important question to solve. The reasons are obvious. First of all, the choice of the competent court has great influence on the distribution of the litigation costs borne by the parties. In addition, to a great extent, it decides which country’s procedural law, even material law, will be applied hereto and therefore determines the outcome of the actions, even the recognition and enforcement of the judgment. Fist of all, the civil procedural rules that dominate the actions are up to the competent court. Second, the court will use its own nation’s laws of conflicts to decide the applicable material laws concerning the disputed contracts.

The comparison between the European and Chinese solutions concerning the identification of the applicable law to international sale of goods contracts is more and more easy. Both systems have now codified their rules for the determination of the law applicable to international contracts, including the sale of goods.

Mediation is one of the most precious estates of Chinese traditional culture. In some authors’ opinions, the “non-action” (wu song), “non-litigation” (fei song), and “humble lawsuit” (jian song) ideas of Confucianism are similar to the ADR idea. There are not much things involving laws and actions in Confucianism (for example, 听讼,吾犹人也,必也使无讼乎); the interpretations of those sentences are also different. In my opinion, the “non-action” theory is too ideal; the existence of a society in which there is no dispute is not possible. Confucianism only encourages people to “review themselves three times a day” to avoid conflict but not to try to solve the problems by lawsuit; it suppresses judicial action, and it can only be considered as a halfway ADR. Some authors consider that the “non-action” theory has obstructed the development of the rule of law.

In the morning, my colleagues have elaborated the European and Chinese solutions regarding the identification of the judge and the applicable law in the field of international sale of goods.

Traditionally, the enforcement of the arbitral awards relies on the voluntary performance of the parties as they have promised when they submitted their disputes to arbitration. According to a French author, about 90% ICC awards have been executed voluntarily. However, the enforcement of the arbitral awards is not obligatory. In fact, the unfavorable party can challenge the concerned award before the courts. Meanwhile, the other party that wins can also go to a judge to apply for the compulsory enforcement of the arbitral award if the losing party does not perform it voluntarily. From then on, the arbitral award is no longer completely independent of the laws of the territory where the award is relied upon because the judge will use the laws to review the concerned award. Once the arbitral award is presented in front of a judge, it is subject to the national jurisdictions. Thus, it is very important to have knowledge of the laws of the territory where the arbitral awards are to be executed. After all, no one would like to take the risk that after spending all the money and time for the arbitration, an arbitral award cannot finally be enforced or even is set aside by the courts.

The 1980 Vienna Convention is a perfect example of success in the sphere of international trade regulations, even more so if we take into account the number of times it has been ratified since being drafted in 1980. Eighty-three States, with very different legal traditions and different economic and political regimes are currently parties to the Convention. Moreover, some of these are key players in the international sale of goods, as is the case of the United States and China, which have been parties to the Convention since its inception, or the Russian Federation, for which the Convention entered into force on January 1, 1991. In fact, in the European Union, the only noncontracting States are the United Kingdom, Ireland, Portugal, and Malta, meaning there are only a few EU States that have not ratified the Convention. However, the fact that one such States is the United Kingdom is noteworthy, taking into account the important role it plays in international trade.

The application of the Unidroit Principles in disputes related to Sino-European contracts of sale of goods is rare. Indeed, figures are not impressive and only a very few decisions refer in one-way or another to them, even though most arbitral awards referring eventually to them remain unpublished. Recent developments in the Chinese conflict of laws’ rules on international contracts should, however, foster the use of the Unidroit Principles in contracts not subject to arbitration. Since it offers new perspectives for the Chinese and European companies concerning the applicable law to their sale of goods contracts, it seems legitimate to question which role could the Unidroit Principle play in this field. Even if the new Chinese conflict of rules system creates new possibilities to the parties to choose the Unidroit Principles as applicable law to their contracts, it does not seem exaggerated to say that the Unidroit Principles will continue to play a very residual role in the Sino-European contracts of sale of goods in the near future. More precisely, and as it was already predicted in general terms for all other contract, the Unidroit Principles shall not become ‘the’ applicable law but, rather, one of several bodies of legal rules on which adjudicators draw—no more but also no less.

Consumer protection constitutes a major policy objective in both the European Union (EU) (and its Member States taken individually) and China. Adequate protection of consumers requires the adoption of specific legislation in a variety of substantive and procedural (i.e., dispute resolution) areas. This chapter focuses on the latter aspect and deals with two particular issues relevant to international consumer transactions: (a) rules on international jurisdiction over consumer disputes and (b) the use, availability, and functioning of ADR procedures to resolve such disputes.

The law applicable to consumer contracts is an important issue concerning the international sale of goods. Very often, the consumer contracts concern sale of goods. For example, in Europe, the idea of protection of the consumers appeared in the 1970s with the development of the mail-order selling. Of course, goods were, at this period, in concern. Nowadays, consumer contracts are much more developed, especially because of the Internet. In international situations, the general conflict-of-laws rules of both systems seem to be unadapted.