News

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.

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

On the 9^th 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.

Judge, 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.