GUEST - 2011-07-29 02:25:32
I am doing a project to formulate an international contract based on the undertakings made by individual and a company from different states. The facts in the undertaking go as follows;-
The buyer from South Africa wants to conclude an agreement with a privatised Russian aircraft company to buy 50 civilian helicopter over a period of five years. The later is prepared to undertake to deliver at least one helicopter every month and to provide the buyer regularly with the necessary spare parts. It also is willing to undertake to train the buyer's pilots and mechanics within the period of five years.
It is also given as a fact that although this agreement will be with a private company, it is vulnerable to state intervention.
It is also given as a fact that me and the buyer, whom I am supposed to consult, have no knowledge about Russian law and courts.
While the buyer insists that the agreement cannot be concluded subjet to Russian law or courts; the Russian company likewise resolute that the contract cannot be governed by a legal system based on Roman-Dutch law which dates back to the precodification period in Europe.
The Russian company undertakes to ger the necessary export permission from the Russian authorities; they insist that payment is to be made in Russian roubles.
The project expects me to advise the buyer on the type of contract to be concluded addressing all the legal risks invilved and suggesting ways in which to counte them. In advising the buyer, I need to address the following:
a) to identify the legal issue arisig from the problem;
b) to describe the applicable law with respect to the issue;
c) to apply the law to the facts presented, i.e., to argue the case; and
d) based on the argument, to reach to a conclusion.
In an attempt to do the job, I have made up miy mind to follow the undelisted approach;
- as it is an international agreement of sale, I began my work by deciding to choose a legal system which is not solely depend on either of the parties(in the same manner which conforms with the parties choice as given in the fact);
- in choosing the governing or proper law to gover their agreement, I have in my mind to choose the international lex mercatoria;
- as to the applicable laws the contract to be subjected, I have in my mind to choose the Convention on the Law Applicable to Contracts for the International Sale of Goods, Hague, Cotober 30,1985, UNIDROIT Principles of International Commercial Contracts 2010;
-as to the enfocement of the contract, I have in my mind to choose an arbitration forum, for the exercise of which, I preferred to apply the UNCITRAL Model Law on International Commercial Arbitration for the substantive law and ICC arbitration rules of 1998 for procedural matters and the ICC of paris to be the arbitration tribunal to conduct the arbitration while sitting in Paris. For the applicable law to govern the potential arbitration awards. UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards(New York, 10 June 1958) is in my first preference;
- as to INCOTERMS, CIF based on documentary credit is in my list the contract to be subject to ;
- as to the applicable clauses, a hardship clause, price clause(for the fact that no price tag has been disclosed in their undertaking), change in value of money clause etc. are included in my list.
Having the above appoach in mind, I am a bit blured as to how international lex mercatoria would be expressed as a governing law in such type of contract? Moreover, I am not certain as to whether the different conventions, principles and law I have choosen are compatible or not. Last but not least, the various clauses that have to be incorporated in the contract donot seem for me only the onse I have mentioned above. This is therefore, to seek any help in commenting, suggesting and etc., in the areas I have just narrated in this foregoing paragraph along with in any areas pertinent to the facts revealed.
I highly appreciate and thank for the generous reply to my query.
ofroitzheim - 2011-08-02 16:33:10
Well I don't think I get your question(s) correctly. Can you please split your text in seperate questions? That would be much easier to answer.
But I've to warn you, that this discussion board is not meant to provide comprehensive legal advice. You probably will not find anyone who will work on the whole case for you.
Guest: GUEST - 2011-08-11 21:40:00
Dear Dipl. iur. Oliver Froitzheim
I thank your very much for responding to my quiries in the discussion forum.
I would like to tell you that I realize the limitations with regard to your posed concerns. However, my intention is all about to acquire a supportive ideas like yours so that I can relate with my understanding of the subject and decide which course of action to follow. Having said so, to clarify my query for you as to what I am looking for I would say the followings:
Having the above points in mind, what exactly I am expecting is that:
Thanks in advance for dealing with my query.
With best regards.
I copied your post in this topic. Somehow you opened a new topic.
ofroitzheim - 2011-09-14 10:40:45
I am sure that Prof. Berger will answer this question in a while. But there are some articles findable with Google. e.g. http://www.arbitration-icca.org/media/0/12223880790810/application_of_the_lex_mercatoria.pdf
I am not sure wheather or not I get you correctly. The "convention on the Laws applicable to Contracts for the International Sale of Goods" is not compareable to the CISG since the former deals only with international private law and conflict of laws. There are no rules about the substance of a dispute. The CISG, however, is substantive law. Unfortunately the CISG is not applicable to your contract. If you should include the Unidroit principles depends on your specific dispute. There are some articles about those principles available. http://tinyurl.com/3ff6h8b
I am not sure, but I think that you can include the CISG as standard terms to your contract. Then it will be applicable as long as it is not in conflict with the applicable law (e.g. national law).
What do you mean with "substantive" in relation to the UNCITRAL Model Law. The UNCITRAL Model Law is procedural law. I think you want to choose the procedural rules for the arbitral tribunal. In order to do so, you should not mix different sets of rules since both are dealing with the same thing. Please note that the ICC has new Rules which might be of importance for you. http://www.iccwbo.org/court/arbitration/id4199/index.html
Be sure that you use the standard clause (http://www.iccwbo.org/court/arbitration/id4114/index.html). It is always a safe path to chosse the standard clause provided by an arbitration organisation. Every self-made clause can never be better (most often they are quite the opposite) than the standard clause. But you can add some provisions like the place of arbitration, the language etc. A good illustration of your options to add the ICC clause is provided by the German Institution of Arbitration (DIS). Check http://dis-arb.de/en/17/clause/dis-arbitration-clause-98-id3
It seems that you did not deal with international arbitration very often. I don't know where your residence is, but it is possible that near you is a arbitration organisation which offers conferences and lectures on international arbitration. If you are below a certain age (often it is 40 years) many organistaion offer free membership or for a significantly reduced price. Membership to those organisations and participation of thier events will enhance your understanding of international arbitration.
Hope this helps.