Larry_A_DiMatteo_-_International_Sales_Law_A_Global_Challenge-Cambridge_University_Press_2014

It is undisputed that good faith is an aid to interpreting the CISG. Additionally, the use of good faith as a general principle to assist in gap filling, as a collective term denoting derivative general principles for gap filling, and as a product of international usages or practices established by the parties are good fits and within the scope of Article 7(1). However, the use of good faith as a direct, positive obligation imposed on parties and as an independent source of rights and obligations that may contradict or extend CISG rules, are problematic in that they are outside the mandate of Article 7(1).

Some scholars have criticized the expansive use of the good faith concept as outside the scope of the CISG.62 Nonetheless, the majority of scholars and a majority of the reported (civil law) cases have embraced it as a sort of implied condition to the exercise of rights and duties under the CISG,63 as imposing a direct, positive obligation upon the parties,64 or, more broadly, as an independent source of rights and obligations that may contradict or extend the CISG.65 Such expansive use of good faith makes it de facto impossible to foresee to what extent courts and tribunals are willing to rewrite or rebalance a contract. A possible consequence may be that practitioners will more likely opt out of the CISG.66

Moreover, if the good faith principle is abused in being viewed “as a ‘super-tool’ to override the rules and policies of the Convention whenever one regards the solution to a particular case or problem as inadequate,”67 then the overall integrity and uniformity of application of the CISG will be endangered. The unlimited use of good faith also raises the concerns expressed by other commentators about the risks of purely subjective notions informed by personal, political, or religious convictions.68

Because good faith, or a lack thereof, depends on the circumstances of the cases, before rewriting the contract under the perceived authority of Article 7, a court or tribunal should carefully consider Articles 8 and 9.69 It is clear that good faith is not defined nor can it be, at least for purposes of the CISG.70 It would be improper for us to

62See, e.g., Camilla Baasch Andersen, “General Principles of the CISG – Generally Impenetrable,” in

Sharing International Commercial Law across National Boundaries: Festschrift for Albert H. Kritzer on the Occasion of his Eightieth Birthday (ed. C. B. Andersen and U. G. Schroeter) (London: Wildy, Simmonds & Hill, 2008), 13, available at http://cisgw3.law.pace.edu/cisg/biblio/andersen6.html.

63OLG Munchen,¨ February 8, 1995, n. 7 U 1720/94 (Ger.), available at http://cisgw3.law.pace.edu/cases/ 950208g1.html.

64Cour d’appel [CA] [Court of Appeals] Grenoble, February 22, 1995, n. 93/3275 (Fr.), available at http:// cisgw3.law.pace.edu/cases/950222f1.html.

65See, e.g., Troy Kelly, “Good Faith and the Vienna Convention on Contracts for the International Sale of Goods (CISG),” 3 Vindobona J. Int’l Com. & Arb. 15 (1999), available at http://www.cisg.law.pace.edu/ cisg/biblio/keily.html.

66Apparently, it is one of the reasons the United Kingdom has been reluctant to ratify the CISG. See Hofmann, “Interpretation Rules and Good Faith.”

67Peter Huber, “Some Introductory Remarks on the CISG,” in Internationales Handelsrecht (Sellier European Law Publishers, 2006), 228, available at http://www.cisg.law.pace.edu/cisg/biblio/huber.html.

68See Schlechtriem, “Good Faith in German Law,” 20.

69See Hof Arnhem [Hof = Gerechtshof = District Appeal Court] Arnhem, August 25, 1995, n. 94/305 (Neth.), available at http://cisgw3.law.pace.edu/cases/950822n1.html. See also Sergio M. Carbone, “L’attualita’ dei criteri interpretativi adottati nella CVIM,” paper presented at La Convenzione di Vienna del 1980 sui contratti di vendita internazionale: la prassi contrattuale, l’interpretazione giurisprudenziale e l’analisi dottrinale, Milan, Camera Arbitrale, October 7–8, 2011; Bruno Zeller, “The UN Convention on Contracts for the International Sale of Goods (CISG): A Leap Forward towards Unified International Sales Law,” 12 Pace Int’l L. Rev. 79 (2000), available at http://cisgw3.law.pace.edu/cisg/biblio/zeller3.html.

70See Schlechtriem, “Good Faith in German Law,” 4–5.

A. International Arbitration and Its Popularity

International arbitration is an optional means of dispute resolution that, due to its flexibility and adaptability, is able to respond to new developments in international business and through its carefully crafted rules provide a fair process in resolving disputes. Compared with court litigation, arbitration is a private method of dispute resolution.4 The parties agree to submit any dispute or differences between them to arbitration.5 It is chosen by the parties as an effective way of resolving their dispute without recourse to national courts.6 However, similar to a court, the arbitral tribunal is entrusted to make a binding decision that, in contrast to a court decision, is always final.7 Furthermore, unlike judicial decisions, arbitration awards are more easily enforced internationally due to regional and worldwide treaties and conventions relating to the recognition and enforcement of foreign arbitral awards,8 in particular The Convention on the Recognition and Enforcement of Foreign Arbitral Awards or “New York Convention.”9 Presently, there are 149 member states to the New York Convention.10 To summarize, arbitration can be characterized as a hybrid or alternative legal system available by private agreement by parties seeking private proceedings, and culminating with internationally binding and enforceable awards.

What makes actors of international business seek arbitration? In spite of some weaknesses, arbitration displays various advantages over litigation.11 One major advantage, especially for multinational corporations, is the confidential nature of arbitral proceedings and awards. The level of confidentiality differs from arbitration board to arbitration board, although the decision on confidentiality issues normally remains with the parties.12

4See Julian D.M. Lew, Loukas A. Mistelis, and Stefan M. Kroll,¨ Comparative International Commercial Arbitration (The Hague: Kluwer Law International, 2003), 1. Their working definition of international arbitration is: “International arbitration is a specially established mechanism for the final and binding determination of disputes, concerning a contractual or other relationship with an international element, by independent arbitrators, in accordance with procedures, structures and substantive legal or non-legal standards chosen directly or indirectly by the parties.”

5See, e.g., Option 1 Article 7(1) or Option 2 Article 7 UNCITRAL Model Law on International Commercial Arbitration 1985 with amendments as adopted in 2006; Nigel Blackaby, Constantine Partasides, Alan Redfern, and Martin Hunter, Redfern and Hunter on International Arbitration, 5th ed. (Oxford: Oxford University Press, 2009), 5.

6Redfern and Hunter on International Arbitration, 1; David St. John Sutton, Judith Gill, and Matthew Gearing, Russel on Arbitration, 23rd ed. (London: Sweet & Maxwell, 2007), 8 (parties select tribunal); Martin Domke, Larry Edmonson, and Gabriel M. Wilner, Domke on Commercial Arbitration, 3rd ed. (St. Paul: Thomson/West, 2003), 1 (same).

7Lew et al., Comparative International Commercial Arbitration, 4 et. seq.; Redfern and Hunter on International Arbitration, 10.

8Redfern and Hunter on International Arbitration, 7.

9See also Rainer Hausmann, “Schiedsvereinbarungen,” in Internationales Vertragsrecht, 7th ed. (ed. C. Reithmann and D. Martiny) (Cologne: Verlag Dr. Otto Schmidt, 2010), 2018, 2025; Rolf A. Schutze,¨

Schiedsgericht und Schiedsverfahren, 5th ed. (Munich: C.H. Beck, 2012), 15.

10See http://www.uncitral.org/uncitral/en/uncitral texts/arbitration/NYConvention status.html.

11For the advantages and disadvantages of arbitration in comparison to national courts, see Hausmann, “Schiedsvereinbarungen”; Schutze,¨ Schiedsgericht, 13 et seq.; Herbert Stumpf, “Vorund Nachteile des Verfahrens vor Schiedsgerichten gegenuber¨ Verfahren vor ordentlichen Gerichten,” in Festschrift fur¨ Arthur Bulow¨ zum 80. Geburtstag (ed. K.-H. Bockstiegel and O. Glossner) (Cologne: C. Heymann, 1981), 271 et seq.

12See, e.g., Article 34 International Arbitration Rules of the American Arbitration Association; Sections 42, 43 DIS (Deutsches Institut fur¨ Schiedsgerichtsbarkeit)-Arbitration Rules (Schiedsgerichtsordnung).

Furthermore, the distrust that often arises in an unknown, foreign jurisdiction can be eliminated when the parties choose arbitration based on a widely accepted body of arbitration rules.13 The parties choose the composition of the arbitral tribunal and the place of arbitration.14 Despite the perception that arbitration is an inexpensive means of dispute resolution,15 this is not always the case.16 What can be said is that unlike litigation, the parties have more control over the costs of the proceeding. Equally, the parties control the arbitral procedures. They are able to choose an appropriate procedural law or leave the decision to the tribunal’s discretion.17

B. International Arbitration Rules

Apart from regional and international agreements relating to the recognition and enforcement of foreign arbitration awards, arbitration is governed by arbitration rules with detailed provisions concerning the procedure and other essential issues. An example is the UNCITRAL Arbitration Rules 1976 (revised 2010), which are widely accepted and used by arbitration institutions all over the world. In 1985, UNCITRAL realized the need for uniformity in the area of arbitration and introduced the UNCITRAL Model Law on International Commercial Arbitration, subsequently amended in 2006. The Model Law’s goal is to provide greater uniformity over the various existing and conflicting arbitration rules and national arbitration laws. Numerous countries have adopted the Model Law in the years following its publication. This chapter will reference both mentioned sets of rules, as well some rules of well-known arbitration institutions, such as the rules published by the International Chamber of Commerce (ICC).

III. The CISG and Arbitration

There are a number of indications and areas of law favoring a harmonic relationship between the CISG and international arbitration. Several of these will be noted here and will be followed by brief consideration of the reasons for this harmony.

A. Statistical Evidence

The frequency at which arbitral tribunals apply the CISG can only be ascertained through statistical investigations. Loukas Mistelis,18 using the PACE CISG Database,

13See Hausmann, “Schiedsvereinbarungen,” 2018, 2025; Schutze,¨ Schiedsgericht, 13 et seq.

14See, e.g., Articles 7 and 18 UNCITRAL Arbitration Rules (as revised in 2010).

15See Mitchell L. Marinello, “Protecting the Natural Cost Advantages of Arbitration,” available at http:// apps.americanbar.org/litigation/litigationnews/practice areas/corporate naturalcost.html (2010). See also Hausmann, “Schiedsvereinbarungen,” 2018, 2025; Lew et al., Comparative International Commercial Arbitration, 9; Schutze,¨ Schiedsgericht, 15.

16Some arbitration institutions with the parties’ consent publish the cost of the arbitral awards. In an award rendered in 2001 by the Arbitration Institute of the Stockholm Chamber of Commerce (SCC Case 117/1999, available at http://www.jfarmesto.com/documentos/Commentary%20to%20a%20Separate%20Arbitral% 20Award-SCC%20Case%20117–1999.pdf), the arbitration costs were 182,000.00 EUR. The amount in dispute was 990,500 EUR. Hence, the costs were nearly 20% of the value in dispute.

17Lew et al., Comparative International Commercial Arbitration, 5.

18Loukas A. Mistelis, “CISG and Arbitration,” in CISG Methodology (ed. A. Janssen and O. Meyer) (Munich: Sellier European Law Publishers, 2009), 375, 386 et seq. See also Ugo Draetta, “La Convenzione delle

undertook the most detailed investigation of this kind in 2008. His survey showed that, toward the end of 2008, over a quarter of the 2,000 decisions contained in the database were made by an arbitral tribunal. By August 2013, 818 of the 2,872 documented cases in the PACE database were arbitral awards. According to Mistelis’s survey, the application of the CISG was determinative in 57% of arbitral cases; in 22% of cases, the law was determined by conflict of law rules; in 11% of cases, the law was determined by choice of law; and in 2% of cases, the law was determined by general principles of law. In 8% of the cases, no reason was given as to why the CISG was applied.19

However, considering the arbitral institutions’ confidentiality policy, it is very likely that the real number of arbitration cases involving the CISG is markedly higher. Based on the PACE database, Mistelis estimates that fewer than 5% of arbitration awards are published.20 On that basis he concludes that the CISG was applied in 4,250 to 5,000 arbitration cases by the end of 2008.21 If he is correct, then arbitral tribunals have decided 70 to 80% of CISG-related cases.22 At the least, one can conclude that there are several thousands of nonpublished international arbitration cases in which the CISG was applied.23

B. Application of the CISG by Arbitral Tribunals: Choice of Law

The determination of the applicable law in an arbitral proceeding is primarily made by the parties’ choice law, such as selecting a domestic law by opting out of the CISG as provided in Article 6 CISG. In addition, arbitration laws and rules provide guidance as to deciding applicable law24 by recognizing the preeminence of party autonomy. There are three scenarios in determining whether the CISG is applicable law: the parties expressly choose the CISG (“direct choice”), the parties choose the law of a contracting state (“indirect choice”), or the parties exclude the CISG (“opt out”).

1. Direct Choice

With regard to national courts, it is debatable whether EU-private international law in the form of the Rome I Regulation25 allows the parties to directly choose nonnational

Nazioni Unite del 1980 sui contratti di vendita internazionale di beni mobili e l’arbitrato,” 25 Diritto Del Commercio Internazionale 633 (634 et seq.) (2011); Nils Schmidt-Ahrendts, “CISG and Arbitration,” 49 Belgrade L. Rev. 211 (213 et seq.) (2011).

19See Mistelis, “CISG and Arbitration,” 375, 388 et seq.

20Loukas A. Mistelis in UN Convention on Contracts for the International Sale of Goods (CISG) (ed. S. M. Kroll,¨ L. A. Mistelis, and P. P. Viscasillas) (Munich: C.H. Beck, Hart & Nomos, 2011), Article 1 CISG, para. 18.

21Mistelis, “CISG and Arbitration,” 375, 387.

22Mistelis, “CISG and Arbitration,” Article 1 CISG, para. 18.

23However, one has to take into account that national court decisions on the CISG are not always published and this fact impacts any statistical analysis.

24See, e.g., Article 28(1) UNCITRAL Model Law on International Commercial Arbitration 1985 (with amendments as adopted in 2006), Article 59(a) WIPO Arbitration Rules and Article 21(1) and (2) ICC Arbitration and ADR Rules.

25Regulation (EC) No 593/2008 of the European Parliament and the Council of June 17, 2008, on the law applicable to contractual obligations (Rome I), published in the Office Journal of the European Union 2008 L 177/6. The regulation came into force on December 17, 2009, replacing the “Rome Convention”

law or only the law of a state.26 Although this problem has been discussed in cases where the parties directly chose the CISG, it does not arise in relation to arbitration because Article 1(2) of the Rome I Regulation does not apply to arbitration proceedings27 and in general, arbitration procedures are more flexible. Arbitration laws and rules – for example Article 28(1) UNCITRAL Model Law on International Commercial Arbitration 1985 and 2006,28 Article 59(a) WIPO Arbitration Rules,29 and Article 21(1)-(2) ICC Arbitration and ADR Rules30 – give priority to the parties’ agreement as to choice of law. As a result, these regulations offer a wider range of choice by expressly allowing the parties to choose the “rules of law” they consider appropriate to their agreements.31

2. Indirect Choice and Opting Out

There are few differences between litigation and arbitration when the CISG is applied through an indirect choice of law by the parties or not applied when they opt out of its application. In arbitration proceedings, if the parties to an international sales contract were to choose the law of a contracting state to the CISG as the law governing, the arbitration tribunal would apply the CISG as an integral part of this state’s law in the same way as a domestic court.32

in most of the EU member states (Article 24.1 Rome I) and in the UK the “Contract (Applicable Law) Act 1990.”

26See Article 3(1) Rome I Regulation. For a good overview, see Jan van Hein in Europaisches¨ Zivilprozessund Kollisionsrecht EuZRP/EuIPR (ed. Th. Rauscher) (Munich: Sellier European Law Publishers, 2011), Article 3 Rome I Regulation, para. 62 et seq.; Dieter Martiny in Munchener¨ Kommentar zum Burgerlichen¨ Gesetzbuch, 5th ed. (ed. F. J. Sacker¨ and R. Rixecker) (Munich: C.H. Beck, 2009), Article 3 Rome I Regulation, para. 28 et seq., 31.

27See, e.g., Jan van Hein in Europaisches¨ Zivilprozessund Kollisionsrecht EuZRP/EuIPR, Article 1 Rome I Regulation, para. 38 et seq. As to the opposite opinion, see Peter Mankowski, “Rom I und Schiedsverfahren,” 57 Recht der Internationalen Wirtschaft 30 et seq. (2011).

28Article 28(1) UNCITRAL Model Law on International Commercial Arbitration 1985 and 2006: “The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute.”

29Article 59(a) WIPO Arbitration Rules: “The Tribunal shall decide the substance of the dispute in accordance with the law or rules of law chosen by the parties.”

30Article 21(1) ICC Arbitration and ADR Rules: “The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute,” and Article 21(2) ICC Arbitration and ADR Rules: “The arbitral tribunal shall take account of the provisions of the contract.”

31In the light of such provisions it is questionable whether the parties can also agree to apply the CISG in arbitration proceedings (so-called opt in) to contracts not covered by the CISG (e.g., where the contract deals with a subject other than the sale of goods). Generally speaking, this would appear to be permitted by both the literal meaning of these rules and the flexible character of arbitration based on party autonomy. However, when choosing the CISG directly, the parties cannot opt out of mandatory national rules (e.g., provisions regarding consumer protection). See Ingeborg Schwenzer and Pascal Hachem in Commentary on the UN Convention on the International Sale of Goods (CISG), 3rd ed. (ed. P. Schlechtriem and I. Schwenzer) (Munich: C.H. Beck, 2010), Article 6 CISG, para. 3; Peter Schlechtriem and Petra Butler,

UN Law on International Sales: The UN Convention on the International Sale of Goods (Heidelberg: Springer, 2009), 21 et seq. See also Gruber, “The Convention on the International Sale of Goods,” 15, 26.

32This is illustrated in ICC Arbitration Case No. 6653, March 26, 1993 (Steel bars case), available at http:// cisgw3.law.pace.edu/cases/936653i1.html. The written contract, concluded in 1988, contained a clause stipulating that French law was to apply. The CISG took effect in France in January 1988. The tribunal held that the sales contract was governed by the CISG because the parties had chosen French law, which incorporated the CISG by the time the contract was concluded.

If the CISG is applicable but the parties decide in favor of a certain national law or other rules and exclude the CISG, then the arbitration tribunal, as well as national courts, will respect such exclusion.33 However, courts will, at times, not honor a choice law that is unrelated to the transaction as applicable conflict of laws rules provide that. In contrast, arbitration tribunals will always honor the parties’ choice of law.

C. Application of the CISG in the Absence of a Choice of Law: Direct Method

The relationship between the CISG and international arbitration is also proven harmonic when the parties refrain from determining the law applicable to their contract and the arbitration tribunal applies the direct method (or voie directe) to determine the applicable law.34 One has to consider that unlike national courts, arbitral tribunals are not bound by a state’s private international law rules or by the CISG.35 Instead, arbitral tribunals are bound by the applicable arbitration rules in determining the applicable substantial law for the arbitration proceedings.36 If the parties fail to choose the applicable law, the arbitration tribunal’s application of the CISG only arises from the tribunal’s own regulations. In doing so, the different regulations generally stipulate two different approaches: the indirect and the direct method of application.37 According to the indirect method of application, the arbitration tribunal determines the applicable law by means of “the law determined by the conflict of laws rules which it considers applicable.”38 Modern arbitration laws and rules, however, do allow for a direct choice of rules and standards without the need to apply conflict of laws rules.39 A particularly clear example

33See Arbitration Tribunal of the Russian Federation Chamber of Commerce and Industry, October 22, 1998, Case No. 196/1997, available at http://cisgw3.law.pace.edu/cases/981022r1.html. In that arbitration, the parties did not agree on a choice of law, but both referred to provisions of the Russian Civil Code during the arbitration proceedings. The tribunal (corresponding to decisions of many national courts in similar cases) held that such a reference did not necessarily mean that the parties intended to exclude the CISG. In any event, it applied the CISG and used the Civil Code of the Russian Federation as a subsidiary statute.

34See Ingeborg Schwenzer and Simon Manner, “The Claim is Time-Barred: The Proper Limitation Regime for International Sales Contracts in International Commercial Arbitration,” 23 Arbitration Int’l 293, 306 et seq. (2007); Benjamin Hayward, “New Dog, Old Tricks: Solving a Conflict of Laws Problem in CISG Arbitrations,” 26 Journal of Int’l Arbitration 405, 412 et seq. (2009); Lew et al., Comparative International Commercial Arbitration, 434 et seq.; Mistelis, “CISG and Arbitration,” 375, 385 et seq.

35See also Peter Huber and Alastair Mullis, The CISG: A New Textbook for Students and Practitioners

(Munich: Sellier European Law Publishers, 2007), 67; Schmidt-Ahrendts, “CISG and Arbitration,” 211, 214 et seq.

36Such rules often allow arbitral tribunals to apply conflict of law rules in order to determine the applicable law. Under certain circumstances, such as according to article 28 UNCITRAL Model Law on International Commercial Arbitration, arbitral tribunals are obliged to use conflict of law rules. Other rules, such as Article 17(1) ICC Rules of Arbitration, in some cases, allow the arbitral tribunal to determine the applicable law by itself without restriction.

37This chapter does not consider the use of the CISG by the arbitration tribunals as lex mercatoria or international trade usage. As to these problems, see Andre´ Janssen and Matthias Spilker, “The Application of the CISG in the World of International Commercial Arbitration,” 77 Rabels Zeitschrift fur¨ Internationales Privatrecht 132, 146 et seq. (2013).

38See, e.g., Article 28(2) of the UNCITRAL Model Law on International Commercial Arbitration.

39Examples of authorization to choose law voie directe include the following laws: Swiss Article 187(1) Bundesgesetz uber¨ das Internationale Privatrecht (IPR, Federal Statute on International Private Law); Article 834(1) of the Italian codice di procedura civile (CPC, Civil Procedure Law); Section 1051(2) of the German Zivilprozessordnung (ZPO, Code of Civil Procedure).

of such a direct method of application is provided in the Rules of Arbitration of the London Court of International Arbitration. Article 22.3 stipulates that:

[T]he Arbitral Tribunal shall decide the parties’ dispute in accordance with the law(s) or rules of law chosen by the parties as applicable to the merits of their dispute. If and to the extent that the Arbitral Tribunal determines that the parties have made no such choice, the Arbitral Tribunal shall apply the law(s) or rules of law, which it considers appropriate.

By virtue of this provision, the arbitral tribunal is endowed with the widest possible discretion to act. The ICC Arbitration and ADR Rules take a similar approach. According to its Article 21(1), if there is no choice of law by the parties, an arbitral tribunal “shall apply the rules of law which it determines to be appropriate.”40 Other arbitration rules contain comparable provisions.41

Applying the rules of law that the tribunal deems appropriate “gives the tribunal broad discretion for its decision.”42 At the same time, even a tribunal capable of applying the CISG voie directe has to substantiate its choice to a certain extent,43 although this is not always the case in practice.44 Tribunals that are entitled to choose the substantial law by such a voie directe tend to apply the CISG in two ways. In the majority of cases, they apply the CISG because it is convenient in terms of material scope. In such cases, they verify (like a national court) whether the requirements for the applicability under Articles 1 CISG et seq. have been satisfied (despite the fact that they are not bound by the CISG).45 In some cases, the CISG tribunals note that the CISG is applicable because both parties were based in contracting states without directly applying Article 1 CISG,46 or they apply the CISG without explanation.47

40The ICC Arbitration Rules were revised in 2011, effective January 1, 2012. The old version contained this provision in Article 17(1). The same wording is used in the World Intellectual Property Organisation (WIPO) Rules (Article 59(a)) and in the International Arbitration Rules of the International Centre for Dispute Resolution of the American Arbitration Association (AAA/ICDR; in Article 28(1)).

41See, e.g., Article 34.1 ACICA Rules, which states: “The Arbitral Tribunal shall apply the law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the Arbitral Tribunal shall apply the rules of law which it considers applicable.”

42As the ICC stated in a case worth reading: ICC Arbitration Case No. 10274 of 1999 (Poultry feed case), available at http://cisgw3.law.pace.edu/cases/990274i1.html.

43Beda Wortmann, “Choice of Law by Arbitrators: The Applicable Conflict of Laws Systems,” 14 Arbitration Int’l 97, 101 (1998); Hayward, “New Dog, Old Tricks,” 405, 412 et seq.; Hong-Lin Yu, “Choice of Law for Arbitrators,” 4 Int’l Arbitration L. Rev. 152 (2001).

44See ICC Arbitration Case No. 10274 of 1999 (Poultry feed case), available at http://cisgw3.law.pace.edu/ cases/990274i1.html. See also International Commercial Arbitration (ed. W. M. Reisman, W. L. Craig, W. Park, and J. Paulsson) (New York: Foundation Press, 1997), 708 (may choose, but must follow a legal system).

45Many ICC cases serve as examples: ICC Arbitration Case No. 9448 of July 1999 (Roller bearing case), abstract available at http://cisgw3.law.pace.edu/cases/999448i1.html; ICC Arbitration Case No. 9978 of March 1999 (Penalty clause case), available at http://cisgw3.law.pace.edu/cases/999978i1.html; ICC Arbitration Case No. 10274 of 1999 (Poultry feed case), available at http://cisgw3.law.pace.edu/cases/990274i1

.html.

46See, e.g., China, July 26, 2002, CIETAC Arbitration proceeding (Green beans case), available at http:// cisgw3.law.pace.edu/cases/020726c1.html. See further ICC Award 7531/1994, January 1, 1994, available at CISG-online Case No. 565 http://www.globalsaleslaw.org/index.cfm?pageID=29&action=search.

47Iran/U.S. Claims Tribunal, July 28, 1989 (Watkins–Johnson v. Islamic Republic of Iran), available at http:// cisgw3.law.pace.edu/cases/890728i2.html.

In a case concerning the international law of sales, arbitration panels have significant freedom in selecting the law to be applied. The tribunal is simply entitled to choose the CISG as a rule of law whenever it considers the CISG to be the appropriate law. It can apply the CISG even if it is not directly or indirectly applicable under the facts of the case. And an arbitral tribunal can choose to apply only parts of the CISG.

D. Some Observations

This study has shown up to now the relationship between the CISG and international arbitration. It is noticeable from Mistelis’s survey that the CISG is very often applied (57%) by the choice of arbitral tribunals. It appears that whenever parties relinquish the decision on the appropriate law to the arbitrators, they tend to apply the CISG. But if these two elements, CISG and international arbitration, can be brought together effortlessly, and if this happens so frequently in practice, what are the underlying reasons?

1. Party Autonomy and Transnational Spirit

The CISG and international commercial arbitration have, as far as the structure is concerned, several features in common.48 First, as well as arbitration, the CISG is based upon private autonomy or, more precisely, party autonomy. As a contract law code, the CISG’s dominant theme is party autonomy, acting mostly as a series of default rules to fill in gaps in contracts and to assist in the interpretation of contracts. Likewise, international arbitration is voluntarily entered into by the parties’ agreement.49 Secondly, according to Article 1 CISG, the CISG applies to contracts for sale of goods between parties whose places of business are in different countries, that is, the CISG, as a whole, is designed for cross-border sales. International commercial arbitration is by definition focused on the transnational transactions. Both the CISG and international arbitration possess a transnational spirit.

2. Practical Reasons

It is in the nature of things that national courts would rather apply national laws. Even if national courts are concerned with international issues, they are accustomed to applying national law. Arbitral tribunals, however, are not as focused on national law and are accustomed to applying hard and soft international sources of law. There is a bulk of arbitration institutions that for the most part deal with international disputes. For these arbitral tribunals, being concerned with various systems of law and applying them is part of their daily business. They regularly apply both different national legal systems and transnational laws, and as such there is a greater tendency to apply the CISG.50 Furthermore, unlike the vast majority of national laws, the CISG is easily accessible to the parties as well as to the arbitrators. There are official UN versions of the CISG in

48See on this also Ugo Draetta, “La Convenzione delle Nazioni Unite del 1980 sui contratti di vendita internazionale di beni mobili e l’arbitrato,” 25 Diritto Del Commercio Internationale 633, 634 (2011).

49Note, however, the CISG is an opt-out instrument, while international arbitration is “opt in” (agreement of the parties).

50See also Larry A. DiMatteo et al., International Sales Law: A Critical Analysis of CISG Jurisprudence (New York: Cambridge University Press, 2005), 13.