REMARKS ON THE MANNER IN WHICH THE UNIDROIT PRINCIPLES MAY BE USED TO INTERPRET OR SUPPLEMENT ARTICLE 76 OF THE CISG

Abstract

It is true to say that both the UNIDROIT Principles and the Convention are instruments which can be used to assist in the interpretation of contracts if they address the same issues. Indeed the Principles in the preamble state that they may be used to interpret or supplement international uniform law instruments.1 The ICC Court of Arbitration in Paris took advantage of this possibility in a case where no express choice of law clause was included in the contract. They referred to both article 76 CISG and article 7.4.6 of the UNIDROIT Principles as being relevant to assist in their deliberations.2 Arguably the tribunal was guided by the Official Comments on the UNIDROIT Principles which included a direct reference to CISG article 76: “The purpose of this article, which corresponds in substance to Art. 76 CISG, is to facilitate proof of harm where no replacement transaction has been made …”3 However, it must also be remembered that the CISG is part of municipal law, that is, courts are obliged to use it when applicable. At best, the UNIDROIT Principles can be used by courts to assist where the provisions of the CISG are not clear. Furthermore, such assistance can only be considered if CISG articles 7 or 8 have not produced a solution. It can be argued that if there is a gap in the CISG then the UNIDROIT Principles should be consulted if possible to fill the gap before recourse to domestic law is taken.4 A set of rules and principles is placed in a fairly simple-looking formula.5 The drafters of the Convention purposefully used earthy words devoid of municipal meaning and it must also be understood that articles within the CISG cannot be read in isolation. CISG Articles 7 and 8 clearly demand that all interpretation and application of any principle contained in the Convention must be undertaken within the four corners of the CISG.6 All principles and therefore all articles are an interlocking construct regulating the interactions of international contracting parties with the aim to maintain business relations as long as possible and afford compensation to parties without unduly disadvantaging the breaching party.