An “Unconventional Truth”: Conflict of Laws Issues Arising under the CISG

Abstract

The United Nations Convention on Contracts for the International Sale of Goods, 1980 (CISG) 1 is the uniform international sales law of countries that account for two-thirds of all world trade. AfterN ten years of preparatory work by UNCITRAL, the CISG was adopted in April 1980 at the United Nations Diplomatic Conference attended by sixty-two states. It later entered into force in January 1988. From a contractual perspective, the CISG is generally regarded as the most widely adopted international convention dealing with international business transactions. All Canadian provinces have adopted and enacted the CISG, including Ontario under the International Sale of Goods Act. Currently, 73 countries are parties to the CISG, with the notable exceptions of the United Kingdom, Brazil and India.2 The number of international court and arbitration decisions is increasing exponentially.3 Yet, Canadian jurisprudence is lagging far behind. Some possible reasons are: 1. Lack of familiarity with the CISG among contracting parties, primarily due to simplistic contracts, invoices and purchase orders which do not contain a choice of law clause, opting in or out of the CISG; 2. The “Fear Factor”: Commercial lawyers drafting international contracts may be unfamiliar with the CISG’s benefits and prefer provincial sale of goods legislation or other domestic sales legislation. Oftentimes, the choice of law and choice of forum clauses are the last to be considered or negotiated;4 3. Canadian litigators have yet to embrace the CISG’s default applicability when drafting pleadings; and, 4. Canadian judges are not yet as familiar with the CISG as their international counterparts, particularly European judges, who benefit from a wealth of CISG caselaw, the Principles of European Contract Law (PECL),5 UNIDROIT Principles 6 and other international legal instruments. 7 This article will discuss the applicability of the CISG from a Canadian conflict of laws perspective---both in terms of jurisdiction and choice of law. A detailed review of the CISG or choice of law doctrine is beyond the scope of this article.8 The objectives are more modest. The analysis is framed by providing an outline of the key jurisdictional and choice of law principles developed within Canadian jurisprudence. Following a brief contextual overview of the CISG, Articles 1(1) (a) and 1(1) (b) and Article 6 of the CISG are highlighted, with specific reference to recent Canadian and foreign judicial decisions and foreign arbitral awards involving Canadian parties. The article concludes with a clarion call to justice stakeholders, particularly, Canadian commercial lawyers and judges, to better understand and apply the CISG in the future.