Considering Ratification of CISG by Bangladesh: Should there be a Reservation to Article 1(1) (b)?

Md Habib Alam, Md Anowar Zahid

Abstract


International Commercial transactions observed astounding growth during the twentieth century. This was because of the development of market economy, expanded markets for finished goods and emerging new markets for raw materials from the developing countries. Available means of communication made reliable transactions for traders throughout the world. Advanced technology provided easier and faster transports worldwide. Alongside the growth of international commerce, problems began coming into view among the nations. Scholars and academics started thinking how to regulate international trade when individual states would enter into contracts that could be governed by different standards and usages. Realizing such needs, around 1930 the International Institute for the Unification of Private Law (UNIDROIT) under the support of the League of Nations started creating an international agreement that could harmonize the international sales law. Harmonization or unification was halted by the Second World War and the efforts did not begin until 1960s. A number of states held a Conference in the Hague, Netherlands in April 1964, which adopted two Conventions which were (a) the Convention relating to a Uniform Law on the Formation for International Contracts for the Sale of Goods (ULFC), consisting of thirteen articles and (b) Convention relating to Uniform Law on the International Sale of Goods (ULIS), consisting of fifteen articles. Only nine states ratified the two Conventions. Most of the states including the United States refused to ratify the Conventions. At this backdrop, the General Assembly of the United Nations established United Nations Commission of International Trade Law (UNCITRAL) in 1966. UNCITRAL was given a mandate to promote the improving harmonization and unification of the international trade law. Accordingly, it prepared a draft of the United Nations Convention on Contracts for the International Sale of Goods (CISG) which was adopted at a Conference in Vienna on April 10, 1980 and Eleven States ratified the CISG on 11 April, 1980. The CISG entered into force on January 1, 1988. As of today (October 2015), 83 states have ratified the CISG including major trading nations like US, Canada, Mexico, France, Italy, Germany, China, Australia, Singapore. Still Bangladesh has not ratified it, even though she has trading relations with all these states. If Bangladesh ratifies the CISG, the governing law for the sale of goods contracts with parties from those states would be the same, namely CISG. This will make the trading easy as there will be no bickering between the contracting parties with respect to the governing law. Both sides will be on the same footing. For this reason, the authors of this paper hold a view for the ratification of CISG by Bangladesh. Having taken that stand, the authors are concerned about one policy issue. That is, should Bangladesh accept CISG as the applicable law for a sale of goods contract made between her traders and any other traders from any other states or only those states that have ratified the convention. This is the subject matter of Article 1(1)(b) read with Article 95. This paper investigates this matter with a critical assessment of the legal implication of making vis-à-vis not making a reservation to Article 1(1)(b) and comes to conclusion that Bangladesh should make reservation to keep up the priority of domestic law in the transaction that involves a party from a state which is not the matter of the CISG.

Aus. J. Law, Ethics & Gov. Vol 2(1), April 2016, P 1-35


Keywords


International sales; Ratification; convention; Act

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