International Business Transactions, Fakhri, University of Oregon, Fall 2015
Public International Law
· Sources
o International Court of Justice as a result of the Vienna Convention. (International Conventions)
· Everyone signs, and then all of the countries much individually ratify it.
· Treaty enters into force upon a trigger (e.g., 30 countries ratify this agreement then it will be enforced).
o International Customs
· State practice and general practicing of international law.
· E.g., borders, regional borders, IP addresses, state int'l relations practice. Oinio juris: belief that the practice was conducted under the belief that it was legally binding. Treaty against death penalty on minors is a classic example.
o General Principles
· Civilized vs. Uncivilized (think 1950s colonialism).
· Broad comparisons of legal systems to determine if a legal system has been established in modern thought. E.g., good faith, equity, relevant facts, evidence.
o Teachings of experts
· Judicial decisions and teachings of the most highly qualified thinkers of their subject nations.
· Soft Law
o Law that isn't necessarily enforced but may be thought on/cited, and eventually transformed into law.
· Application in the U.S.
o Whether it is a treat or custom will determine how it is implemented in the US.
o Ratified treaties automatically come into US law as common law.
· Called incorporation, Packlett Habana.
o Treaties, according to the USCON, is supreme law of the law (supremacy clause).
· Can it transform into law? (transformation)
· “Self-executing.” Executes and can be implemented as law if it is under the power of congress to be enforced.
· Non-state actors
o Anyone who is not a state agent, they are not the protagonists in Public Int'l Law. NGOs, social movements, etc.
· Int'l Institutions — next time. Figure 2-1 keep it as a reference.
ICJ (Int’l Court of Justice)
· The International Court of Justice (ICJ) is the principal judicial organ of the United Nations (UN), established in June 1945 by the Charter of the United Nations and began work in April 1946.
· The Court’s role is to settle, in accordance with international law, legal disputes submitted to it by States and to give advisory opinions on legal questions referred to it by authorized United Nations organs and specialized agencies.
· The Court is composed of 15 judges, who are elected for terms of office of nine years by the United Nations General Assembly and the Security Council.
Int’l Investment Law
· The current int’l legal framework governing investment (like other areas of IBT) is a patchwork consisting of various types of treaties:
o BIT (Bilateral Investment Treaties);
o Regional economic treaties such as the NAFTA;
o Sector-specific treaties such as the Energy Charter Treaty;
o Ad hoc tribunals such as the Iran-U.S. Claims Tribunal; and
o Multilateral treaties dealing with some aspects of FDI such as the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.
· “ICJ was not a very effective mechanism for protecting FDI. One of the obstacles to the use of the ICJ to protect foreign investment is that only states have standing to appear before the ICJ. Private parties, such as multinational corporations, cannot appear directly but must have their interests represented by their governments, which severely hampered the ICJ’s effectiveness as an arbiter of private investment disputes.”
BIT (on page 383)
· Admission of the Investment
· Fair and Equitable Treatment
· “Full Protection and Security”
· Expropriation
· Compensation
· Dispute Settlement
ICSID (Int’l Centre for the Settlement of Investment Disputes)
· The World Bank came up with a plan for settlement of dispute not between states, but between private parties on one side, host states on the other… The result wa the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States. The Convention established the Int’l Center for Settlement of Investment Disputes (ICSID) within the World Bank, and the Convention became known generally as the ICSID Convention.
Conflict of Private Int'l Law and Public Law (p. 23)
· The needs of interstate and international systems
· The relevant policies of the forum
· The relevant policies of other interested states and the relative interests of those states in the determination of the particular issue
· The protection of justified expecta
· Established by UN in 1966.
· Dedicated to formulating modern rules on commercial transactions and to furthering the harmonization and unification of the law of international commerce.
· Among the major results of the Commission is the Convention on Contracts for the International Sal of Goods, a.k.a. CISG (1980), which has established a comprehensive code of legal rules governing contracts for the international sale of goods.
o CISG is not a mandatory public law but a supplementary private one; the parties can exclude the application of the CISG, vary the effect of its provisions, and the terms of the contract will override any conflicting terms in the convention.
§ Art. 1~3 identify the transactions subject to the CISG
· Art. 1: the test of internationality
§ Art. 4~5 define the issues that are governed by the CISG
· Art. 4: excludes Law of Agency (domestic law), choice of forum (private int’l law) and how standard terms are incorporated into the contract.
§ Art. 6 Opt-out provision
§ Art. 7~13 concerns the interpretation of CISG.
· Art. 7(1): The CISG should interpreted so as to “promote the observance of good faith in int’l trade.”
· Art. 7(2): Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law; sources you can use to interpret “general principles:
o UNIDROIT Principles, Lex Mercatoria (Ind. Practice), Public Int’l Law (maybe other treaties), Legislative history, Int’l Case Laws like CLOUT.
· Art. 9(2): Incoterms may be incorporated into CISG through this section; it could also be incorporated through Art. 32 but this is more narrow and, thus, so Art 9 is better.
