Markkinoiden juridinen toimintaympäristö Kalvot 4 Lainvalinta (kansainvälinen yksityisoikeus) Tuomioistuimen valinta ja toimivalta Vaihtoehtoiset riidanratkaisumenetelmät Matti Rudanko

2. International Sale of Goods Cases 1 B1 Ltd. and S1 Ltd. (Finnish companies) B1 buys a paper machine from S1. It is material for B, firstly, that it can be taken in use on due date without a production interruption when the old machine is delivered to a foreign buyer. Secondly, it has to be checked that the new machine fulfils the the production volume requirement of x tons/day. A protection against production interruptions for the first year should be ensured, too. Markkinoiden juridinen toimintaympäristö Kalvot 4

International Sale of Goods Cases, 2 B2 Ltd. Finnish, S2 Ltd. Swedish A successive deliveries of boots contract. S2 is to deliver to B2 in the beginning of every month during a year x pairs of boots according to specifications supplied by B2 separately for each lot. B2 can employ a carrier from its own group but wishes to make sure that the boots arrive in good order and condition. Markkinoiden juridinen toimintaympäristö Kalvot 4

International Sale of Goods Cases, 3 B3 Ltd. Finnish, S3 Ltd. English B3 buys from S3 a helicopter used in shows from the manufacturer for rescue use after getting acquainted with the brochures of the seller and the object. S3 offers to bring the helicopter to the place of business of B3. Markkinoiden juridinen toimintaympäristö Kalvot 4

International Sale of Goods Cases, 4 B4 Ltd. Finnish, S4 Ltd. French Delivery of three lots of cheese of x kg each from S4 to B4 at a price of y FIM/kg. The seller can take care of the carriage but wants to remain free from risks related to carriage of the goods. Markkinoiden juridinen toimintaympäristö Kalvot 4

International Sale of Goods Cases, 5 B5 an English consumer, S5 Ltd. Finnish Net sale of consumer goods. B5 is dissatisfied with the quality of the goods and also thinks to have received misleading information of it in the marketing. Markkinoiden juridinen toimintaympäristö Kalvot 4

Sopimuksen sisällön määräytyminen (normihierarkia) Pakottava lainsäädäntö Sopimus Kauppatavat Ei-pakottava lainsäädäntö Kansallinen kauppalaki CISG Mallilait ja –sopimukset (ICC, Uncitral) Itsesääntely (mm. vakioehdot) Markkinoiden juridinen toimintaympäristö Kalvot 4

Kaupan osapuolten väliset suhteet: FSGA / CISG Both are in force as national law the CISG is an international sales act, i.e., applies to international sales relations: if a reference is made to or a connecting factor concerns Finnish law, the CISG applies a mere reference to the law or to a court does not render a contract international if the parties want to apply the FSGA a special reference to it has to be made CISG rules on conclusion of contract do not apply if the places of business of the parties are situated in the Nordic countries (the Nordic reservation) The Nordic general reservation on the exclusion of Part II (formation of contract) cancelled New Nordic clarification: Contract Acts apply between them Thus, Contracts Act rules on formation of contract apply as Finnish law in case 2 Markkinoiden juridinen toimintaympäristö Kalvot 4

Act 1964 (see below) and CISG The [Finnish] Act on the Law applicable to International Sale of Goods, 1964 (Act -64) determines the choice of law scope of application: international sales relations limitations: consumer relations, sale of a registered ship etc. CISG concerns the contents of the sales relationship scope of application international sales relations limitations: household goods, securities, ships, electricity etc. Not applicable on contracts of mainly working Markkinoiden juridinen toimintaympäristö Kalvot 4

Rome I Regulation (Reg. (EC) No. 593/2008) Regulation on the law applicable to contractual obligations: connecting factors a reference to the law the closest reference; a contract referring to several states can also be divided the place of residence / management / business of the party liable for the characteristic performance, unless all circumstances refer to another state Markkinoiden juridinen toimintaympäristö Kalvot 4

Rome I Regulation 2 Special rules: real estates, transport, employment contracts etc. The validity of a contract (term) is decided according to the law applicable in case of validity even the mandatory provisions of another Convention state matter ordre public minimum level protection of consumer rights Markkinoiden juridinen toimintaympäristö Kalvot 4

International Private Law Contains the so-called connecting factor (point of reference) rules according to which the applicable law is chosen the rules are highly harmonized as a rule, the connecting factor rules of the country of the court (lex fori) is applicable the rules on the international jurisdiction (general judicial power) show the competent court state (there the competent court determined by national rules) In general: the home country of the defendant / place of contractual performance A consumer may sue also in her home state Markkinoiden juridinen toimintaympäristö Kalvot 4

International Private Law II the validity of the reference is considered according to the law referred to A reference to law is allowed and prescribes the applicable law ordre public: a foreign provision conflicting with the foundations of the national legal order is not applied in courts Markkinoiden juridinen toimintaympäristö Kalvot 4

Case 1: a domestic sale transaction Choice of Law 1 Case 1: a domestic sale transaction the Finnish Sale of Goods Act (FSGA) is applicable the parties may agree upon the application of the law of another country, too (The [Finnish] Act on the Law applicable to International Sale of Goods, 1964; Act -64) this type of agreement is in itself no international point of reference (does not give the contract an international character) Markkinoiden juridinen toimintaympäristö Kalvot 4

Case 2: a Nordic sales transaction Choice of Law 2 Case 2: a Nordic sales transaction Act -64: choice of law questions: the law of the seller’s country of residence / headquarters (observe that nationality does not matter) the law of the buyer’s country if the order is received there here: Swedish law if the order is received in Sweden, otherwise Finnish law FSGA / CISG (the International Sale of Goods Act) ? (no major differences between them) Markkinoiden juridinen toimintaympäristö Kalvot 4

Case 2 (cont.): Choice of Law 3 Reference to CISG state is at hand when parties have their places of business in different states and either these states are parties to the Convention or Convention state law is applicable on other grounds (according to the rules of international private law) Markkinoiden juridinen toimintaympäristö Kalvot 4

Case 3: an English seller Choice of Law 4 The UK has not joined the CISG Act 1964 does not apply to sale of an aircraft If the points of reference are ascertained in a Finnish court and there is no contractual reference to law): Case 3: an English seller Law applicable to contractual obligations in general The place of residence of the party charged with the performance typical to the contract Here: the seller -> the law of the UK (the British SGA) As Finnish law (not here), CISG would be applicable Rome I Regulation Markkinoiden juridinen toimintaympäristö Kalvot 4

France has joined the CISG Choice of Law 5 Case 4: a French seller France has joined the CISG Choice of Law (Act -64): if the decisive reference is to Finland: the order has been received there: the CISG the reference to France: likewise the CISG Markkinoiden juridinen toimintaympäristö Kalvot 4

Net sales, the buyer is an English consumer Choice of Law 6 Net sales, the buyer is an English consumer Choice of law: Act 1964 does not apply Rome I Regulation: The law of the country of residence of the consumer if the transaction is based on marketing goods there and the consumer has concluded the contract there Here: probably English law Markkinoiden juridinen toimintaympäristö Kalvot 4

So-called Soft Law in International Trade Model laws and general principles UNIDROIT Principles of International Commercial Contracts Principles of European Contract Law (EU) UNCITRAL Model Law on Electronic Commerce General contract terms and rules INCOTERMS ICC Documentary Credit Rules ICC Model International Sale Contract 1998 etc., e.g. NLM 10 (Nordic Countries: machines, mechanical, electricity and electronic devices) Markkinoiden juridinen toimintaympäristö Kalvot 4

Alternatives to Legally Binding Force of Contract Common investments etc. Public image factors “hostages”: e.g. advance performances, securities (collaterals) Common organizations Common voluntary arrangements to enhance party commitment to contract Public enforcement is still required as last resort (parties usually want to avoid it) Markkinoiden juridinen toimintaympäristö Kalvot 4

Agreed Conflict Management Systems ICC Rules of Optional Conciliation Official bodies (e.g. the Finnish Consumer Disputes Board competent to issue recommendations only) Reconciliation or settlement in court Maintaining business relations Avoiding market disorder The uncertainty, slowness and expensiveness of trial in court The uncertainty of enforcement Why parties prefer altenative dispute resolution systems (ADR) Markkinoiden juridinen toimintaympäristö Kalvot 4

The Court System General courts The international jurisdiction (general judicial power) A consumer may sue also in her home state Council Regulation (EC) 44/2001 on the jurisdiction of courts and the recognition and enforcement of judgments in civil and commercial law matters (Brussels I Regulation) The competent court state (there the competent court determined by national rules) In general: the home country of the defendant / place of contractual performance (at the plaintiff’s choice) Determined according to the applicable law Markkinoiden juridinen toimintaympäristö Kalvot 4

The parties may in general agree upon the competent court General courts The parties may in general agree upon the competent court Consumer and insurance disputes: the court of the home state of the consumer (a mandatory provision: no scope for contracting; a conflicting term is invalid) Markkinoiden juridinen toimintaympäristö Kalvot 4

The recognition and enforcement of judgments In general foreign judgments are not recognised Brussels I Regulation the jurisdiction of courts and the recognition and enforcement of judgments in civil and commercial law matters Exequatur procedure necessary (in court of the enforcing state) Bilateral or local multilateral conventions e.g. between the Nordic countries Arbitration awards: very extensive enforceability under the New York convention (large coverage) Markkinoiden juridinen toimintaympäristö Kalvot 4

Arbitration Quickness, expertise, flexibility, secrecy of trial New York convention (1958) on recognition and enforcement of arbitration awards UNCITRAL model law and Arbitration Rules Private court system with competence to issue awards enforceable by official authorities Parties agree upon site, language, legal order applied and the members of the tribunal Arbitration clause is binding only upon parties to the agreement ICC, Finnish Central Chamber of Commerce: appointment of arbitrators, rules etc. Ad hoc / permanent arbitration institutes Markkinoiden juridinen toimintaympäristö Kalvot 4