Harmonization of International Commercial Contract Law:The Case of International Distribution Agreements

Author:by Gabriele Ruscalla
SUMMARY

Private international law and contract law have often been subject to certain degrees of harmonization, at federal, regional and international levels. As a matter of fact, the growing of globalization, the increase of transnational commercial contractual relations, the developments in telecommunications and technologies, the collapse of the Soviet Union and the financial and economic crises in... (see full summary)

 
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CONTRACT LAW ................................................................................................................................. 7

SECTION II ........................................................................................................................................... 12

  1. DISTRIBUTION V. COMMERCIAL AGENCY ...................................................................................... 12

  2. THE ISSUE OF THE APPLICABLE LAW TO DISTRIBUTION AGREEMENTS: THE RELATION BETWEEN EC REGULATION 593/2008 (ROME I) AND INTERNATIONAL DISTRIBUTION ..................... 16 3. THE RELATIONSHIP BETWEEN DISTRIBUTION AND E.U. ANTITRUST LEGISLATION ...................... 20 CONCLUSIONS ...................................................................................................................................... 22 *Trainee, International Arbitration Group, Shearman & Sterling LLP (Paris); Ph.D. Candidate, International Law and Economics, Università Commerciale Luigi Bocconi; Research Master (2010), Global Business Law and Governance, Université Paris I Panthéon-Sorbonne / Columbia Law School. I would like to thank Professor Giorgio Sacerdoti and Professor Osvaldo J. Marzorati for their useful comments and advices. Views expressed in this article reflect the author's opinions and do not reflect those of the Institutions which the author currently belongs to.

    HARMONIZATION OF INTERNATIONAL COMMERCIAL CONTRACT LAW SECTION I 1. Introduction Private international law and contract law(1) have often been subject to certain degrees of harmonization, at federal, regional and international levels. As a matter of fact, the growing of globalization, the increase of transnational commercial contractual relations2, the developments in telecommunications and technologies, the collapse of the Soviet Union and the financial and economic crises in Asia and South America3 have led both Member States and the business community to establish common rules - or at least common principles - in order to ensure the economic operators a legal certainty, to make easier their activities (thus favoring the development of the economic liberalism4) and to increase a free-market competition5. Even 3 BOCCONI SCH. L. STUDENT-ED. PAPERS, PAPER NO. 2011-07/EN 4 before these events, academic experts and practitioners had started studying both similarities and differences among the commercial domestic legislations by way of comparison(6).

    Before defining the phenomenon of "harmonization" and describing what methods have been undertaken to get it, it is interesting to point out that there are diverging opinions concerning its usefulness. As a matter of fact, even if relevant benefits of harmonization have been underlined (e.g. the managing of the legal risk, the improvement of the law, the increase of specialized knowledge in commercial law), some experts are still skeptical. With respect to the benefits, modernization of national laws and higher inclination of some Countries towards the adoption of an international harmonized legislation, whose process has seen the participation of a vast number of States, are probably the most important arguments(7). Furthermore, harmonization is a useful instrument in providing a neutral choice of law, as it has been shown in several arbitral cases where the tribunals have applied the UNIDROIT Principles8 as both a source of "general HARMONIZATION OF INTERNATIONAL COMMERCIAL CONTRACT LAW 5 principles of law" and as an instrument of interpreting and supplementing domestic laws(9).

    Finally, harmonization has been a useful tool in the unification of both substantial law and private-international law in specific matters, e.g. the sale of goods. As a matter of fact, while in 1955 the Convention on the Law Applicable to the International Sales of Goods was concluded under the aegis of the Hague Conference on Private International Law(10), in 1980 the United Nations Commission on International Trade Law (UNCITRAL) adopted the United Nations Convention on Contracts for the International Sale of Goods (CISG)11.

    With regard to the arguments against harmonization, one may distinguish three main (but the list is non-exhaustive(12)) schools of thought. First, some scholars have said that harmonization is not really necessary from an economic point of view; rather, it could be useful - but still not necessary - for cultural and political reasons13. Furthermore, reaching a comprehensive harmonization in commercial law is a difficult task14, as it has been demonstrated in systems that Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (Oxford University Press 2009).

    BOCCONI SCH. L. STUDENT-ED. PAPERS, PAPER NO. 2011-07/EN 6 have experienced the process, such as the United States of America(15). The main obstacle to the harmonizing process in the USA (but it is a common feature of all the "supranational" single markets) is the power of the interest groups and lobbies conflicting each other16. If such a problem is present in a federal State, where there should be - at least in theory - the US citizens' (or states') acceptance of the prevalence of other US citizens' (or states') interests (because at the end the benefit of an individual or a group of individuals is a benefit for the federal nation as a whole), how would it be likely to avoid these interest conflicts in a non-federal State as the European Union?(17) Other experts have highlighted that unification of commercial laws is not only unnecessary, but it is also detrimental to the well-functioning of the international business transactions, because it is simply a result of compromises of legal certainty and of favoring interests of specific groups(18).

    Finally, there are authorities who believe in the harmonization of international commercial law only when its purpose is not "providing an answer to all legal controversies that might arise in practice"(19), but rather establishing integrated rules governing the commercial transactions without any replacement of national commercial laws20.

    HARMONIZATION OF INTERNATIONAL COMMERCIAL CONTRACT LAW 2. Traditional and Modern Approaches in Harmonization Of International Contract Law In general, the doctrine and the experts have found three main approaches that have been used to integrate diverging laws in a single legal system. The first method is the harmonization of laws, that "sert à établir les grandes lignes d'un cadre juridique en laissant aux différentes parties prenantes à l'intégration le soin de compléter l'ossature commune par des dispositions qui correspondent mieux à leurs valeurs, à leurs préférences ou à leurs niveau de développement˝(21).

    The second way, the unification, "consiste à instaurer, dans une matière juridique donnée, une réglementation détaillée et identique en tous points pour tous les États membres tout en leur laissant le choix de la modalité de mise en oeuvré des normes communes˝(22). Finally, through the uniformization, is "pour une matière précise, minutieusement élaboré un cadre normative contenu dans un instrument unique auquel les parties prenantes adhèrent sans pouvoir y déroger ni sur le fond, ni sur la forme˝23. As it is easy to understand, a legal system subject to harmonization would be less integrated than systems where unification or uniformization are applied. This is mainly because of two reasons: first of all, the harmonized laws do not cover all the elements of a specific legal field, thus allowing national laws to be applied when it is necessary; second, and as a consequence of the first reason, with harmonization, national authorities have still substantial powers in some specific sectors. Thus, harmonization is considered to be relatively accessible, whereas unification and uniformization are utopian, especially at the international level.

    7 BOCCONI SCH. L. STUDENT-ED. PAPERS, PAPER NO. 2011-07/EN 8 In order to decide which method is the best for a legal integration at regional or international level, several factors should be considered, such as cultural, historical, geographical, economic, political and social peculiarities(24). The higher the sharing of these factors by the involved countries, the more likely the opportunity to get a good legal integration and, as a consequence, an uniformization25.

    As regards the instruments that have been adopted with the intention to integrate commercial laws, two examples are worth being quoted: the U.S. Uniform Commercial Code (UCC) and the Principles of European Contract Law (PECL)(26). Despite its name, the UCC has not resulted either in an uniformization or unification of laws, but it is rather an instrument of legislative harmonization27. In particular, the UCC is not of commercial nature because it refers to other specific regulations concerning consumers' protection; it only provides for a compilation of rules Another private initiative has seen the light in 1992, when European academics and judges founded the 'Accademia dei Giusprivatisti Europei' with seat in Pavia, Italy. The Academy has been aiming at establish a draft of European Contract Code. As for now, the first book has been published covering general issues on contracts.

    HARMONIZATION OF INTERNATIONAL COMMERCIAL CONTRACT LAW 9 concerning the most important commercial transactions: thus, it is not a code. It is not uniform because of the possibility given to the States to modify or not to adopt some of its parts(28).

    With respect to the PECL, they were elaborated as soft law with the idea (probably) to become a European Contract Code(29). This is a valid consideration, especially if one looks at the four freedoms provided for by the European Union law: free movement of goods, persons, services and capitals. Thus, contrary to the proposal of Savigny's disciples to maintain the PECL as soft law harmonizing instruments30, the adoption of a European Contract Code is deemed to facilitate the four flows, by making...

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