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Our participation in the GJN conference of Prague

On 25th, 26th and 27th of May the GJN (Global Justice Network) spring conference took place in Prague. As a founding member of the GJN our firm has participated at this legal decisive event.

Established in 2007 the GJN gathers law firms from more than 40 different countries all over the world so as to coordinate and promote justice on every continent.

Since its foundation by Lieff Cabraser Heimann and Bernstein, LLP/LCHB (a repeatedly ranked No 1 litigation Law firm in the U.S), the GJN has always succeed to develop and deepen its activities. It provides now the possibility to pursue collective legal actions in order to achieve a more efficient defense of our clients.

The Prague conference provided an opportunity to discuss key issues or current challenges in the field of human rights, medical issues, financial litigation and more particularly at the collective claim against Volkswagen in Europe.

Regarding the Volkswagen case, some of GJN law firms have established a foundation under the name CLEAN (''Consumers Lead Emissions Accountability Network'') to enable European claimants to obtain damages, like Americans owners, through a class action.

Lastly, as a pioneering international organization, the GJN appears to be a necessity in that time of globalization. The trans-border cooperation is a new work method which has great advantages. In particular, it permits our firm to benefit from a large network of partners and associates and to maintain a prestigious presence in many different places. This is a truly innovative scheme by any standards: it enables a combination of in depth knowledge of local legal systems with the strength and quality level of international standards.

 

UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

CISG:  TO INCLUDE OR EXCLUDE?  THAT IS THE QUESTION

                              By Karen A. Monroe and Olga Larionova,  Wilk Auslander LLP , Geneva, Switzerland

 The Convention on the International Sale of Goods (CISG) plays an important role in the globalization of contract and trade law by increasing predictability.  As of May 2016, 85 states[1] have adopted the CISG and more than 4,500[2] cases worldwide have addressed its application. 

The top 6 countries for decisions relating to the CISG are Germany (534), China (432), The Russian Federation (305), The Netherlands (268), Switzerland (212) and the United States (183)[3].

Many European countries are signatories as are the U.S., Switzerland, and the Russian Federation.  Notably, the UK is not.[4]

Some basics

In general, the CISG applies only to the sale of goods.  If the counterparties to an agreement for the sale of goods decide to apply the law of the country of one of the parties, in general, that is the law that will apply.  However, if the parties agree to apply the law of the country of one of the parties and both parties' respective "home" country is a signatory to the CISG, the CISG and not the national "chosen" law will likely apply.  For example, in the U.S., which is a signatory, the CISG qualifies as American federal law, therefore pre-empting or superseding state law, including the Uniform Commercial Code.  Often overlooked is that a purely domestic transaction; for example, a contract for the sale of goods between two Swiss counterparties with Swiss law governing or between two U.S. counterparties with New York law governing, may in fact, be subject to the CISG if the Seller's goods will be delivered from a non-Swiss store or warehouse or are manufactured outside of Switzerland, in a CISG signatory country, same result for the U.S. 

Although some may state that "it is international sales 101" to exclude the CISG from contracts for the sales of goods, many times this is not done either  unintentionally or intentionally.   

 Pros and Cons

"Pros", or reasons for selecting the CISG, range from unfavorable local law to undeveloped local law where there are, then, advantages with the more developed and perhaps more favorable CISG.  The "cons", or reasons for not selecting the CISG, include that it is perhaps less known or lawyers have less experience with the CISG or known issues with the CISG.  For example, under U.S. law and other countries' laws one of the greatest issues for litigation is the "battle of the forms" issue occurring when a buyer submits a purchase order with its standard terms and conditions and the seller responds with its acceptance and its own standard terms and conditions.  The CISG follows the "mirror image" rule and the "last shot" rule.  Any difference between the offer and acceptance will convert the acceptance into a counter-offer which, typically, will be accepted by performance of the contract (this is the common law in the U.S.)  As a result, under the CISG the "last shot" rule applies—it will be the terms of the acceptance of the counteroffer that control[5]

CISG may apply without a written contract

For unwritten contracts:  If parties to a contract of sale do not "put it in writing" the CISG will apply; however, under the CISG a contract may fail for indefiniteness if the price is not stated or cannot be determined

Email:  With today's global marketplace and cross-border email exchanges, parties should make sure that those exchanges will not be deemed a contract because under the CISG a formal written contract is not required in order for it to apply.    

Different Languages

The provisions of the CISG were drafted to try to avoid using common law or civil law terms because such terms may not exist or be interpreted differently in different languages, in different jurisdictions. [6]  As those of us with cross-border practices know, especially when parties' "mother tongues" are in languages other than English, but the language of the contract is English, that the same word, business or legal concept, in English, may have different meanings in translation.  Indeed, there are many differences in meanings between legal and business terms in the American language and English language.   Of note is that there are six  "official" language versions of the CISG.[7]

 

Conclusions

Even if it is common practice to exclude the CISG, the number of cases involving interpretation of the CISG is increasing.  Globalization continues as does the internationalization of contract law and trade law.  Although I agree with the many commentators on the CISG that the CISG is beneficial because it increases the predictability of outcomes in international trade, I almost always exclude the CISG. 

To answer the question of whether to include or exclude the CISG, the answer remains, it depends.  However, and most importantly, is to be aware of the CISG's  potential application and then to analyze whether or not it should apply to the contract to avoid having the CISG  apply by default because the issue was not addressed in a written contract.  Typically the CISG exclusion clause is included in the governing law clause as follows:   "The provisions of the United Nations Convention on the International Sale of Goods shall not apply to this Agreement. "

Acknowledgment:

Wilk Auslander LLP is an international law firm with offices in Geneva, Switzerland and New York City. Karen A. Monroe and Olga Liarinova are partners on their Geneva office. (article reprinted with permission)

 


[1] UNICTRAL, Digest of Case Law on the United Nations Convention non Contracts for the International Sale of Goods, 2016 edition, Notes by the Secretariat, page xi, Note 2. http://www.checkpointmarketing.net/newsletter/linkShimRadar.cfm?key=67589776G3419J8082086&l=17348

[2] Id.  

[3] CISG Database/Institute of International Commercial Law, country case schedule:  http://www.cisg.law.pace.edu/cisg/text/casecit.html

[4] CISG database/table of contracting states including commentary regarding UK's absence as signatory: http://www.cisg.law.pace.edu/cisg/countries/cntries.html

 [5] Under the Uniform Commercial Code in the U.S. the "knock out" rule applies meaning the terms are only those to which both parties have agreed and not the common law or CISG law of "mirror image" and "last shot." 

[6]UNICTRAL, Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, 2016 edition, Notes by the Secretariat, page xi, Note 5. http://www.uncitral.org/pdf/english/clout/CISG_Digest_2016.pdf 

[7] UNICTRAL, Digest of Case Law on the United Nations Convention non Contracts for the International Sale of Goods, 2016 edition, Authentic Text and Witness Clause, page 437:  http://www.uncitral.org/pdf/english/clout/CISG_Digest_2016.pdf:  "Textual discrepancies among the six different language versions in which the Convention was approved (Arabic, Chinese, English, French, Russian and Spanish), each of which is declared "equally authentic" by the clause quoted above, are possible; differences in shades of meaning among the different language versions are, given the nature of language, perhaps inevitable

Important ruling by the European Court of Justice on borrowers’ protection

On the 9th of November 2016, the Court of Justice of the European Union in Luxembourg rendered an important ruling concerning the terms and conditions under which a Bank may grant a loan to individual persons within the European Union.

This ruling requires that banks and other credit institutions be obliged to provide their customers with detailed information on the individual terms and conditions of a loan agreement in a language that is understandable by the borrower before granting him a credit (Decision C-42/15). If these requirements are not met then the contract becomes partially null and void: The borrower must only pay back to the lender the original amount, without interests or any bank expenses.   

The European Court of Justice justified its decision on the contents of the European Directive 2008/48, Article 10, Paragraph 2.

The judgment was rendered on a prejudicial question submitted by a Slovak court on a case in which the borrower was unable to pay the credit repayment rates. According to this ruling, the conditions connected with the granting of the loan were insufficiently clarified. According to the European directive 2008/48, the following must be precisely described and defined in the contract:

  • Duration of the contract
  • Total amount of interest
  • Repayment date
  • Consequences in case of default
  • Detailed Interest
  • Total costs in case of non-payment
  • Conditions and costs for early termination
  • Description of legal means of contesting the contract
  • Possibility of extrajudicial procedures

This judgment is of  prime importance as it opens the possibility of direct application of the described terms and conditions that should accompany all lending contracts within the European member States.

Our Law firm -particularly active in the field of financial litigation- is closely examining the consequences of this ruling and intends to use it as jurisprudence on several ongoing Court cases on disputes with banks and other financial institutions  so as to assure a maximum and updated protection for its clients.

 

Volkswagen: Settlement of civil complaint in the States: Customers will have the right to return their vehicles and get compensations

diesel gateJudge, Charles Breyer, signed the settlement between VW and the owners of polluting diesel vehicles. It is one of the biggest settlements ever and the firm is forced to pay very high compensations to their represents and U.S. customers. According to first information, 1,1 billion euros are going to be paid to represents, 13,6 billion euros to customers. In this case every customer will get approximately 9.000 Euros as compensation. More than 10.000 vehicles will be returned and in consequence, the company will have to repair them to be able to put them on the market again. The juridical system of the U.S. is proven to be customer friendly for one more time.

What about customers from other countries, especially from Europe? Unfortunately, within Europe there is no juridical system allowing class-action lawsuits as it is in the U.S. Only Holland provides some similar options. Therefore, ‘Global Justice Network’, an international association of different law firms has founded in Holland the organization ‘CLEAN’. ‘CLEAN’ will fight for all customers. Our law office is also one of the founders and is representing normally, but not only, Swiss customers. Joining us is not bound on any economical expenses or obligations. That is why everyone owning a polluting diesel vehicle is asked to contact us immediately.

A week before the settlement agreement, lawyers from Global Justice Network, among them our represent Constantin Kokkinos, met in Brazil to talk about further steps in Europe. Differences between the European countries have been discussed. This meeting was the second one especially held for the Volkswagen case. The first one took place in San Francisco. American Lawyers, members of Global Justice Network, have done a great job and helped to achieve the U.S. settlement. They will cooperate with their European colleagues and their know-how will be most important.

The American ruling leaves hope that there will be a similar one for European customers even though the VW concern does not want this. Its directing board would prefer to just fixing the vehicles in question without any other further obligations or the right of return. The more customers will apply for compensation through our association the bigger is our chance of being heard by court and gain justice. That is why we are asking our readers for one more time to contact us if they own one of the polluting diesel cars: without any obligations or expenses for themselves.

First Instance Court Ruling "locks" the exchange rate on Swiss franc loans

                                                                                                                                                swiss franc loans

The first court ruling, in favor of Swiss franc loan borrowers, was published recently by the Multi-Member First Instance Court of Athens intensifying the conflict between the loan borrowers and their bank lenders.

According to court ruling No 334/2016, the Bank is obliged to accept payments of monthly installments as well as the partial or full discharge of Swiss franc loans based on the exchange rate of currency valid at the date of the conclusion of the relevant loan agreements and not based on the exchange rate at the day of payment. That makes a dramatic difference as most currencies including euro have been strongly devalued towards the Swiss franc over the last few years.

In particular, the First Instance Court rules the following:

  • The Bank is obliged to include all interests of installments and payments made by loan borrowers according to the exchange rate valid during the period of disbursement of the loan.
  • The Bank is obliged to accept partial or full payment of installments or the discharge of Swiss franc loans in euros valid at the time of payment of the loan in euros.
  • In case of denunciation of the loan agreement, the Bank must omit the conversion of the loan’s balance in euros based on the current sale price of Swiss francs, at the date of the denunciation.

 

Despite being a lower level court ruling with no immediate execution force, this judicial decision is a positive outcome for thousands of loan borrowers and it will certainly influence settlement of over 9 billion loan agreements denominated in Swiss francs. 

Furthermore, if this judgment is confirmed by Higher Courts it will constitute binding case law for forthcoming similar rulings eventually leading to a legislative intervention or Ministerial decision for settling the matter in compliance with the Court’s rulings.

 

ONE OF THE FEW LAW FIRMS TO DEAL WITH THE COMPLEX IATA BSP SYSTEM RULES AND REGULATIONS

Our roots in the Aviation law are very deep:  started over 30 years ago and covering almost every field of it. More specifically we are dealing with rules and regulations of the Montreal Convention, the Warsaw Convention, the IATA (International Air Transport Association) Regulations and Resolutions Procedures and also the ICAO (International Civil Aviation Organisation) Proceedings.

We are proud to be one of the few aviation law firms in Europe (if not the only one!)  to deal with disputes of travel agencies working with the  International Air Transport Association. IATA represents most scheduled airlines world’s airlines, some 265 carriers or 83% of the total air traffic. IATA manages a worldwide electronic ticketing system called the Billing and Settlement Plan (BSP) which allows for reservation, sale and payment of air plane tickets by travel agencies around the world. This is a very complex system as, at the close of 2014, there were BSP operations in 181 countries and territories. The system currently serves 400 participating airlines with an on-time settlement rate of 99.98%. In 2014, IATA's BSP processed $255.7 billion.

ELC was involved with this complex issue several times, mostly representing travel agencies which were accredited by IATA to issue ticket online through its BSP ticketing system. 

In particular, we have successfully defended travel agents from Denmark, the U.K. the U.S. and Greece  on their issues with IATA in front of the Travel Agency Commissioner (an internal arbitration proceedings under IATA Regulation) and also on arbitration proceedings under the ICC Rules.

ELC PIONEERS THE VW ISSUE ON THE MADRID GJN WORLD CONFERENCE

As a founding member of the Global justice Network (GJN), our law firm participated in the GJN Spring Conference which was held in Madrid on May 26-28 , 2016. It was a very successful event where over 40 participants took part in,essentially  focusing on the Volkswagen collective claims issue. Two out of our three US partner law firms were retained from the US Judge for representing concerned American VW owners in class action. In Europe where unfortunately such legal tool does not exist claiming the consumer's rights is more difficult and in any case fairly complicated.This difference in our legal systems could well be behind the motivation of the giant German manufacturer to announce that it intends to indemnify American concerned VW owners but not the European ones. Nevertheless the plaintiff law firms members of the GJN with a solid proven record on such issues have pioneered the way of attempting to protect European consumers through an interesting legal possibility that exists only in the Netherlands where we also have a major law firm as a founding partner and have established along with the other members of our network a stichting (foundation) under the acronym CLEAN so as to participate in a collective claim, for and on behalf of European concerned VW owners who were affected by the fraud. So much is to be seen within the forthcoming months during which all concerned European consumers are invited to join the action without any obligation of their part.

In addition to the VW diesel issue , the event offered workshops on financial litigation, human rights and pharmaceutical and medical devices. ELC's partner Constantin Kokkinos who is honored to be part of GJN's executive committee intervened on several topics during that conference on the VW Diesel issue as well as on cross border financial litigation matters.  


           

                       

Our Irish partner attorney B‎rain O'Reilly passed away

We are very saddened to hear of our GJN treasurer and collegue 's loss, Brian O'Reilly.

We will sorely miss his sense of humour, honesty and efficiency.

Our prayers and thoughts are with his family during this difficult time

.Brian O'Reilly

GJN Spring 2016 Conference Madrid 26-28 May 2016

Our lawyers are taking part in GJN’s Spring 2016 Conference which is held in Madrid, Spain. It focuses on cross border litigation and offers workshops on financial litigation, human rights and pharmaceutical and medical devices. A panel composed by lawyers from 15 different nationalities including our American colleagues from Lieff Cabraiser, Keller Rohrback and Jack Russo are also discussing about Volkswagen “Clean Diesel” litigation, focusing on the evolution of the case in the US where things are moving quicker and more efficient than in Europe.

BREAKING NEWS: EGYPTAIR MS804 PLANE CRASHED

EgyptAir flight MS 804 from Paris to Cairo has crashed in the Mediterranean Sea, somewhere between the south of the Greek island of Karpathos and the southeast of the island of Crete. The plane was carrying 56 passengers and 10 crew members, whose fate is unknown. The nationalities of the passengers were reportedly as follows: 30 Egyptians, 15 French citizens, two Iraqis and one person each from Britain, Belgium, Sudan, Chad, Canada, Kuwait, Saudi Arabia, Portugal and Algeria. Our law firm, as part of the Global Justice Network  (whose members are recognized as being among the most experienced aviation accident lawyers  in the world), is closely monitoring the situation and assessing its impacts in conjunction with its international partners.