Research Proposal. Introduction

Transcription

1 Research Proposal Research Theme: Empirical Research on Contracting Practices in Singapore with Respect to the Usage of the United Nations Convention on the International Sale of Goods to Find Ways to Further Harmonize Trade Law Introduction The United Nations Convention on the International Sale of Goods (CISG) is one of the most successful international initiatives to unify laws on international commerce in terms of the number of countries that ratified the CISG 1. However, the number of ratifications does not necessarily prove the significance of the contributions that the CISG has made toward international harmonization of trade law. In fact, it is often said, based on some anecdotes and empirical data, that the CISG is actually not put into action in contracting practices among its member states (Gordon, 1998, Fitzgerald, 2008). Singapore is known to be one such country. Despite claims that traders would enjoy various benefits from the CISG (e.g., reduction of transaction costs, and more fairness under the law) (Castellani, 2009), there have been virtually no cases reported in Singapore thus far to which the CISG was applied. Considering the fact that it has been more than two decades since the CISG became part of Singapore law 2, such a continuous reluctance to use the CISG in Singapore, if there has indeed been such a reluctance, would be not only perplexing but also daunting to the attainment of the primary purpose of the CISG encouraging international trade through the harmonization of trade law. Therefore, the research I am proposing aims to uncover the actual roles that the CISG plays in international trading practices in Singapore. It will examine the Singaporean traders contracting practices in cross-border sales with respect to the usage of the CISG as the governing law, identify factors that impede the use of the CISG, and find solutions to overcome the impediments and promote international harmonization of trade law. 1 The CISG is an international treaty promulgated in It provides a default set of rules applicable to international commercial sales contracts for movable goods. The CISG is currently ratified by more than 80 countries. 2 Singapore adopted the CISG in 1995, and it took effect in Eriko TAOKA 1/6

2 Proposed Research Through the proposed research, I intend to answer the following questions: (i) In what contexts involving international sales conducted in Singapore is the CISG referred to, explicitly or impliedly, as the governing law? (Or, is the CISG indeed not used as the governing law in any type of cross-border sales in Singapore?); (ii) What are the factors in contracting practices that discourage the usage of the CISG?; and (iii) How can we overcome or mitigate the discouraging factors? (i) I will examine international trading patterns in Singapore by examining statistics on the import and export trade (e.g., the kinds of traded goods, the trade volume of each type of goods, major trading partner countries of each type of goods, and the size of the companies that engage in the trades). I will also investigate general contracting practices in cross-border sales contracts (e.g., in what types of transactions traders use standard form contracts, the frequency and contexts where traders negotiate over the governing law, and the frequency and situations where lawyers are involved in contracting practices). These examinations are intended to narrow down the contexts where the CISG could possibly be used as the governing law in international sales contracts. Based on these examinations, I will choose the types of industries, companies, and individuals (e.g., sales agents, workers in the legal affairs divisions of companies, in-house counsels, and lawyers) on which to focus an investigation of their contracting practices with respect to the use of the CISG. I will reach out to the targeted companies and individuals, and conduct surveys on their behavioral patterns in the contract negotiation and drafting stages with respect to the usage of the CISG. Face-to-face interviews will also be conducted. The questions for the surveys and interviews shall concern (a) the frequency of engagement in international sales for movable goods, (b) characteristics of counterparties (e.g., the size of the counterparty companies, and the countries of the counterparties), (c) characteristics of the transactions (e.g., the size of each transaction, and whether a transaction is carried out as a spot contract or a long-term one), and (d) the manners utilized to determine the governing law (e.g., whether parties negotiate over the governing law, how a party s negotiation power affects the determination of the governing law, and reasons behind the manners utilized to decide the applicable law). Considering the possibility that most traders use standard form contracts when entering into international sales contracts, I will also obtain standard form contracts and other business documents that contain standard terms and conditions (e.g., catalogues, quotation forms, purchase orders, and acknowledgment-of-order forms) from the Eriko TAOKA 2/6

3 targeted companies. And I will analyze the documents to see how the governing law and the applicability of the CISG are addressed in them. (ii) The gathered data will be analyzed to elucidate contracting patterns with respect to the usage of the CISG (e.g., what size of companies in what industries do/do not use the CISG as the applicable law in their transactions with companies of what characteristics). And the actual roles of the CISG in cross-border sales in Singapore will be revealed. The identified roles of the CISG in contracting practices as well as the reasons provided by the targeted traders for their contracting practices will be examined from the viewpoints of behavioral economics and sociology, through which the theoretical and practical accounts for the usage/non-usage of the CISG, as well as the obstacles against the usage of the CISG, will be presented. (iii) Drawing from studies on contracting behavior in law and economics, sociology, and behavioral science, I will probe ways to alleviate or overcome the identified obstacles, and present solutions for furthering international trade through harmonization of trade law. Significance of the Research (i) The proposed research will be the first attempt to provide an accurate account of the continuous disinclination to use the CISG, and evaluate the actual impact and usefulness of the CISG. Although a handful of past works aimed to explicate the hesitation to use the CISG in the business practices in the United States and European countries, the explanations provided by the works do not seem sufficient or convincing. The prevalent research methodology taken in them was to investigate legal professionals degree of familiarity with the CISG: sending out questionnaires to lawyers, judges, and law professors, asking the frequency with which they refer to the CISG in their practices and their degree of comprehension of the CISG, and analyzing the gathered data. Showing legal practitioners overall lack of knowledge about the CISG, those works argued that the legal practitioners unfamiliarity with the CISG was a cause for the non-usage of the CISG in contracting practices (see, for instance, Gordon, 1998, Fitzgerald, 2008). However, lawyers inadequate knowledge about the CISG does not seem like a convincing explanation for the non-usage of the CISG in contracting practices. Since it is impossible to learn every kind of existing law in law schools, there are many kinds of laws that students graduate from their law schools without knowing. Lawyers learn unfamiliar laws through their practices if they deem it necessary. If lawyers are not familiar with the CISG, therefore, this indicates that contracting practices where they work do not give them impetus to learn about the CISG. This lack of impetus in contracting practices should be viewed as the real cause for the persistent non-usage of the CISG. Rather than being the cause, lawyers unfamiliarity with the CISG is likely a resultant Eriko TAOKA 3/6

4 phenomenon of the non-usage of the CISG itself. Hence, in order to identify the cause for the non-usage of the CISG, we need to examine contracting practices with respect to the usage of the CISG. Furthermore, considering the fact that small- and medium-sized enterprises (SMEs) are not always financially capable of hiring in-house counsels or lawyers even though SMEs are the major players in cross-border transactions, there must be a large number of transactions that are carried out without the involvement of lawyers. This also indicates the necessity to directly reach out to traders and investigate their actual contracting practices in order to identify the roles of the CISG in cross-border transactions. There are some works attributing the non-usage of the CISG to the paucity of case law involving the CISG and accompanying unpredictability of the application of the CISG (Gordon, 1998). It is also sometimes said that the CISG is not popular among common law-trained lawyers because of their lack of familiarity with the judicial techniques required for interpreting the CISG, which is codified in harmony with civil law tradition (Nottage, 2005). However, these accounts do not seem persuasive, either. The number of past cases is large enough to assure predictability, and the cases and commentaries to the CISG are easily accessible online (e.g., via CLOUT and the Pace University CISG website). More fundamentally, as was stated, if lawyers see the necessity to acquire information and skills, such as case law and judicial techniques, they would obtain them. Therefore, if lawyers are not equipped with the knowledge and skills necessary for employing the CISG, this would also suggest that there are some causes embedded in the contracting practices lawyers are involved in that permit those lawyers to get by without learning information and skills essential for making use of the CISG. By investigating Singapore s contracting practices concerning the usage of the CISG, and revealing the hindrances against the usage of the CISG in the contracting practices, the proposed research will provide an accurate account of the constant hesitancy to use the CISG in Singapore. The actual impact the CISG in Singapore will be accurately assessed against this accurate account. No research similar to the proposed one has ever been conducted in Singapore or any other country as far as I am aware of. (ii) The proposed research will be conducive for the advancement of international trade conducted not only in Singapore but also other countries. Singapore has been very active in the promotion of international trade by creating various infrastructures. The latest ones include the establishment of the Singapore International Commercial Court (SICC) and the Singapore International Mediation Centre (SIMC). And the adoption of the CISG is one of the long-established legal infrastructures. By properly assessing the efficacy of the CISG, we will be able to consider whether and how acceding an international treaty can effectively advance harmonization of trade law, and encourage cross-border transactions. This will surely be beneficial for Singapore in its efforts to promote international trade. Eriko TAOKA 4/6

5 The results of the proposed research will also be conducive to the advancement of international trade outside Singapore, because the CISG has long been part of Singapore law, and therefore, the Singapore experience will be a reliable touchstone against which other countries that share similar reluctance to use the CISG can be tested. Furthermore, uncovering the actual roles of the CISG in Singapore trading practices and the obstacles against the utilization of the CISG will be specifically useful to other ASEAN countries, as well. Although most ASEAN member states have not acceded the CISG yet, there is a growing trend toward adopting the CISG in the ASEAN region 3. Since one country s attitude toward the use of the CISG affects the attitudes of its trading partners 4, uncovering the roles played by the CISG in contracting practices as well as the barriers against the use of the CISG in Singapore, and finding ways to lift those barriers, will be essential to advance international trade in the ASEAN region through the adoption of the CISG. 3 Vietnam acceded the CISG in 2015, and it will take force in There is also ongoing discussion to adopt the CISG in Thailand. 4 In a sales contract between a Singaporean trader and a Vietnamese trader, for instance, if the Singaporean trader is reluctant to resort to the CISG, his inclination naturally affects the determination of the governing law for the contract. Eriko TAOKA 5/6

6 List of Preliminary Readings Michael Wallace Gordon, Some Thoughts on the Receptiveness of Contract Rules in the CISG and UNIDROIT Principles as Reflected in One State s (Florida) Experience of (1) Law School Faculty, (2) Members of the Bar with an International Practice, and (3) Judges, 46 Am. J. Comp. L. 361 (Supp. 1998). John E. Murray, Jr., The Neglect of CISG: A Workable Solution, 17 J. L. & Com. 365 (1998). Arthur L. Rosett and Michael Wallace Gordon, United States, in Michael Joachim Bonell ed., A New Approach to International Commercial Contracts (Kluwer Law International, 1999). William S. Dodge, Teaching the CISG in Contracts, 50 J. Legal Educ. 72 (2000). Charles Sukurs, Harmonizing the Battle of the Forms: A Comparison of the United States, Canada, and the United Nations Convention on Contracts for the International Sale of Goods, 34 Vand. J. Transnat l. L (2001). Jacob Ziegel, The Scope of the Convention: Reaching Out to Article One and Beyond, 25 J. L. & Com. 59 (2005). Luke Nottage, Who s Afraid of the Vienna Sales Convention (CISG)? A New Zealander s View from Australia and Japan, 36 V.U.W.L.R. 815 (2005). Peter L. Fitzgerald, The International Contracting Practices Survey Project: An Empirical Study of the Value and Utility of the United Nation s Convention on the International Sale of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts to Practitioners, Jurists, and Legal Academics in the United States, 27 J. L. & Com. 1 (2008). Martin F. Koehler and Guo Yujun, The Acceptance of the United Sales Law (CISG) in Different Legal Systems An International Comparison of Three Surveys on the Exclusion of the CISG s Application Conducted in the United States, Germany, and China, 20 Pace Int l. Rev. 45 (2008). Luca G. Castellani, Promoting the Adoption of the United Nations Convention on Contracts for the International Sale of Goods (CISG), 13 Vindobona J. Int l. Com. L. & Arb. 241 (2009). Luiz Gustavo Meira Moser, Choice of Law in Practice A Global Empirical Survey, in Ingeborg Schwenzer ed., 35 Years CISG and Beyond (Eleven International Pub., 2016) at 17. Eriko TAOKA 6/6