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Area of Operation of the International Sales Conventions,
László Réczei   * 

Application without Conflicts Rules

The Hague Conference of 1964 thought that this solution was highly complex and, accepting the recommendation of the Federal Republic of Germany, decided that ULIS should be applied without recourse to conflicts rules. The German delegation proposed that the courts of Contracting States should apply ULIS to all international sales, without more. This proposal was however supplemented by a compromise, viz. the permissible reservation to Art. III by which a Contracting country need apply ULIS only to deals with merchants whose places of business are situated in other Contracting States.  4 

Accordingly, the application of ULIS became unconditional, and [page 514] Art. II categorically precluded recourse to the rules of private international law once ULIS was applied. Since at that time a number of States had already undertaken in conventions to apply the law governing international contracts of sale in conformity with uniform Conflicts rules,  5  and declined to withdraw from these conventions, the reservation in Art. IV entered ULIS as a necessary compromise.  6 

Hence the "uniformity" of the uniform law was undermined at the very outset by allowing recourse to the reservations in Art. II, III and IV. The acceding state could, therefore, in a manner departing from the wording of the Convention, determine when it regarded theother state as "different" (Art. II), make the application of ULIS dependent on conflicts rules (Art. IV), and narrow the sphere of application by applying the uniform law only in respect of another Contracting country (Art. III).

Open Door to the Non-Acceding Countries The German recommendation met the demand for universality and would have advanced the spread of ULIS. The reservations aside, ULIS is part and parcel of the municipal law of the judge, who can apply it even when the country of neither Contracting party has ratified the Convention and even when the forum has no other connection with the transactions.  7 

This is a novel "legal effect" in the law of international conventions. According to the dominant opinion a country can only apply a convention it has ratified to another such country. A foreign convention cannot be forced upon a non-acceding country, nor can its benefits be conferred on a non-signatory. But according to ULIS this difficulty disappears when the acceding country incorporates ULIS into its own domestic law or promulgates it as such (Art. II).  8  The [page 515] misgiving that ULIS is applicable to merchants of countries which have not ratified the Convention does not concern the states that have ratified it. They have acceded to the Convention precisely because they want to apply it to themselves and to others.  9  If merchants of non-acceding countries desire to avoid the application of ULIS, they must avoid the court of an acceding country that waived the reservation in Art. III, i.e. to apply the Convention to another Contracting country only.  10 

Moreover, consider the following case: the Federal Republic of Germany ratified ULIS with the reservation provided in Art. III: the German courts will not therefore apply ULIS to deals between a German merchant and an alien whose country is not signatory to the Convention. Instead they will look to the German conflicts rule. However, if that rule points to the law of a signatory which ratified, without the Art. III reservation, German courts will still, by a round about way, apply ULIS.  11 

Hence ULIS will have to be applied:

1. between two signatory countries;

2. between a signatory and non-signatory when the forum is in the signatory country; [page 516]

3. between two non-signatories if the forum is in the territory of a signatory;

4. if the country of the forum is a non-signatory, yet in conformity with its conflicts law the law of a signatory has to be applied to the sales contract;

5. if, in conformity with Art. IV of the Convention, the parties stipulate the application of ULIS.

However, even in these cases ULIS cannot be applied:

1. between two countries if either of them has made the reservations in Arts. II, IV or V;

2. between a signatory and non-signatory state if the signatory state has made the reservation in Art. III;

3. if the Contracting parties preclude the application of ULIS (Art. III).

This multifariousness calls into doubt the success of ULIS as legislation purporting to regulate international sales under a uniform rule.


 4. Riese, "Die Haager Konferenz über die internationale Vereinheitlichung des Kaufrechts vom 2. bis 25. April 1964, Verlauf der materiellen Vereinheitlichung des Kaufrechts," 29 RabelsZ 10 (1965).

 5. See in particular the Hague Convention of 15 June 1955; Hague Conference on Private International Law, Documents, 8th Session, II, 225 (1957); English transl.: 1 Am. J. Comp. L. 275 (1952).

 6. "1. Any State which has previously ratified or acceded to one or more Conventions on conflict of laws in respect of the international sale of goods may, at the time of the deposit of its instrument of ratification or accession to the present Convention, declare by a notification addressed to the Government of The Netherlands that it will apply the Uniform Law in cases governed by one of those previous Conventions only if that Convention itself requires the application of the Uniform Law. 2. Any State which makes a declaration under paragraph 1 of this Article shall inform the Government of The Netherlands of the Convention or the Conventions referred to in that declaration."

 7. Almost all authors call attention to the open door of ULIS: Riese, supra n. 4 at 11; Tunc, "Commentary," Actes et Documents de la Conference Diplomatique sur l'Unification du Droit en Matière de la Vente Internationale 1: Actes 357, 362 (1964) Dölle, Kommentar zum Einheitlichen Kaufrecht xxxii(1976); Honnold, "The Hague Convention of 1964" 1965 Law and Cont. Prob. 327.

 8. This is not unprecedented. The Geneva Convention on Bills of Exchange of 1930 is at the same time the Hungarian Act on Bills of Exchange. Thus, if a dispute under an international bill must be decided according to Hungarian law, this will in effect be based on the Geneva Convention, even when the bill was signed by parties whose countries have not acceded to the Convention. Still, there is no special Hungarian law of bills, whereas ULIS exists parallel to municipal law.

 9. ". . . [T]hese difficulties will be deposited on the doorsteps of non-adopting states," Honnold, supra n. 7 at 333; Eörsi, "The Hague Conventions of 1964 and the International Sale of Goods," 11 Acta Juridica 321 (1969).

 10. Belgium, Israel and Italy have not resorted to this reservation. If, therefore the parties can foresee that a lawsuit might be instituted against them in any of these countries, they may by invoking Art. IV of ULIS exclude the application of the reservation. It is, of course, odd to exclude the application of a law that does not apply to the parties. On the other hand, if a party hopes to win on the basis of ULIS, all he has to do is to find grounds for the jurisdiction of any of the three states, and thereby subject the case to ULIS. This is an occasion for forum shopping and an example of uncertainty in law. The system of reservations allows only a ratifying state not to apply ULIS unconditionally; no similar protection is available to non-ratifying countries. So e.g. the Dutch act introducing ULIS (15 December 1971) requires its application even when, by either a foreign or a Dutch conflicts rule, Dutch law has to be applied (Dölle, supra n. 7 at 4). This also entails resort to renvoi, with the result that the Dutch court may apply domestic Dutch law by renvoi from a foreign conflicts rule. As to other acceding countries, the Dutch ratification may call into doubt the effectiveness of their reservation based on Art. III of the Convention: when country A has ratified with this reservation but country B has not acceded to ULIS, the Convention cannot be applied in country A in respect of a transaction in country B. Still, when for one reason or other the lawsuit is instituted in The Netherlands, and according to the Dutch conflicts rule the law of country A has to be applied, the Dutch judge will apply ULIS.

 11. Dölle, supra n. 7 at 16. A few questions still have to be answered: e.g. when the acceding country applies ULIS as foreign law, will it apply in conformity with the foreign interpretation? Is there a chance for legal remedy of the third instance (incase of a violation of the law)? According to Kropholler there is: "Der 'Ausschluss' des IPR im Einheitlichen Kaufgesetz," 38 RabelsZ 378 (1974).


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