INTERNATIONAL INTERNATIONAL TRADE LAWTRADE LAW

By By Zeng Erxiu, Zeng Erxiu, BA, LLB, LLM, PhDBA, LLB, LLM, PhD

Law professor, attorney-at-lawLaw professor, attorney-at-law

PREFACE

Learning a language is not a matter of acquiring a set of rules and building up a large vocabulary, but a matter of using it. Thus, a student’s command of a language is judged not by how much he knows, but how well he can perform in public.

<International Trade Law> conducted in English will not only judge how well you can use your long-learned English, but will also improve your use of English.

Be confident in yourself!

You will make it!

Don’t grudge your time after you have spent almost ten years in learning English!

Textbook Ray August, International Business L

aw: Text, Cases,and Readings, 4th Edition, Pearson Education International , 2004

CONTENTS

I. Introduction to International and Comparative Law 国际法与比较法概论

II. Dispute Settlement 争议解决III. Trade in Goods 货物贸易IV.  Sales 买卖V.   Transportation 运输VI.  Financing 支付

REQUIREMENTS

I. Preview the relevant part of the reading material,especially the relevant cases, preparing for discussion in the classroom.[group work]

II. In the classroom, listen, take notes [no copy of ppt permitted]and speak out your understanding of what we have studied.

III. Enhance through reading relevant articles.

I. Introduction to International and Comparative Law

A. What is international law?什么是国际法B.The making of international law 国际法的制定C. Sources of international law国际法的渊源D. The scope of international law in actual practi

ce 国际法的范围E. International persons 国际法主体F. The rights of individuals under international l

aw 个人在国际法上的权利G. Comparison of municipal legal systems国内法律制度比较

A. WHAT IS INTERNATIONAL LAW?

The body of rules and norms that regulates activities carried on outside the legal boundaries of nations.

It regulates three international relationships:

1) Those between states and states.

2) Those between states and persons.

3) Those between persons and persons. Public international law; private international

law; international economic law， etc. ？

Is International Law Really Law?

International law is law, because nations and individuals regard it as law.

It is different from comity. Comity: The practice, or courtesy,

between nations of treating each other with goodwill and civility.

Comity is not law because countries do not regard it as something they are required to respect.

B. THE MAKING OF TERNATIONAL LAW

1. No Formal Law-making Machinery2. Basic Mechanism for Creating

International Law: Consensus of the international community.

General consent of the international community

Particular consent of a state

C. SOURCES OF INTERNATIONAL LAW

1. Definition: Those things which international tribunals rely upon in determining the content of international law.

2. Authorized Sources: Article 38(1) of the Statute of the International Court of Justice (ICJ) lists the sources which that court is permitted to use.

a. ICJ looks to: 1) International conventions; 2) International custom; 3) General principles of law. b. In interpreting these, the ICJ may also look to: 1) Judicial decisions. 2) Teachings of publicists.

3. Treaties and Conventions a. Definitions: 1) Treaties are agreements between one or more

nations. 2) Conventions are agreements sponsored by

international organizations. b. Reasons for binding effect: 1) Shared sense of commitment. 2) Because one country fears that if it does not

respect its promises, other countries will not respect their promises.

c. Rules governing treaties: 1) Traditionally customary. 2) Now codified in the Vienna Convention on the

Law of Treaties (in force since 1980).

Case 1-1. LEGAL STATUS OF EASTERN GREENLAND CASE(Denmark v. Norway)

Permanent Court of International Justice, 1933.

FACTS: In formal discussions leading up to the Paris Peace Talks, Denmark’s Ambassador told Norway’s Foreign Minister that Denmark would not object to Norway’s claim to Spitzbergen if Norway did not oppose Denmark’s claim to the whole of Greenland at the Paris Peace Talks. After consulting with his government, the Norwegian Foreign Minister told the Danish Ambassador “that the Norwegian Government would not make any difficulty in settling the question.”

ISSUE: Was the oral commitment made by the Foreign Minister binding on Norway?

4. Custom

Definition: Rules that have been around for a long time or which are generally accepted.

Customary rules are constantly changing. Establishing the existence of a customary law: Must

show two elements — one behavioral and one psychological:

1) the consistent and recurring action (or lack of action if the custom is one of noninvolvement) by states.

2) The custom must be regarded by states observing it as one that they must obligatorily follow.

Persistent objection result in a customary rule not applied to a state. Case 1-2

Case 1-2. THE ASYLUM CASE(Colombia v. Peru)

International Court of Justice, 1950. FACTS: Colombia granted political asylum in

its Lima, Peru embassy to Haya de la Torre. Peru refused to grant safe conduct to Haya de la Torre to leave the country. Colombia sued in the ICJ to obtain an order for the safe conduct.

ISSUE: Is Peru a party to a treaty governing asylum? Is there a customary rule of international law governing asylum? Must Peru observe that rule?

5. General Principles

General principles of law that are common to both (or all) the state parties to a dispute.

D. THE SCOPE OF INTERNATIONAL LAW IN ACTUAL PRACTICE

1. The Practice in International Tribunals a. Municipal law is regarded as being

subservient to international law. b. States have a general obligation to

bring their municipal law into compliance with international norms.

c. Procedurally municipal law is treated as “mere fact.”

2. The Practice in Municipal Courts International law is generally treated as correlative.-

Once a court determines that a particular rule of international law is applicable in a particular case, that law will be treated as law and not as a fact.

The court must determine whether or not the international law has been received into the local jurisprudence.

a) As for customary law: In most countries, customary international law is received in accordance with the doctrine of incorporation.

b) As for treaties: Reception rules depend upon two factors: (i) The nature of the treaty; and (ii) The constitutional structure of the ratifying state.

1] The nature of treaties — they may be: a]Self-executing treaty: One that contains

a provision that says the treaty will apply in the parties’ municipal courts without their having to adopt any domestic enabling legislation.

b] Non-self-executing treaty: One that has no such provision.

2] The structure of states — constitutions may assign to one or more state organs (or branches) the responsibility for entering into treaties.

Q: How about the application of customary law and treaties in our municipal court???

Case 1-3. SEI FUJII v. STATE United States, Supreme Court of California, 1952.

FACTS: A California law made land purchased by a Japanese who was ineligible for citizenship escheat to the state.

ISSUES: (1) Does California’s alien land law violate the UN Charter? (2) If it does, is the UN Charter automatically applicable? (3) Does the California law violate the US Constitution?

E. INTERNATIONAL PERSONS

1. States a. Definition: Political entities which have all of

the following: 1) A territory. 2) A population. 3) A government capable of entering into international relations. 4) A government capable of controlling its territory and peoples.

b. Kinds of states: 1) Independent states are free from the political control of

other states, and free to enter into agreements with other international persons.

2) Dependent states have formally surrendered some aspect of their political and governmental functions to another state.

3) Inchoate states lack some attribute required to be treated as a fully independent state; most commonly they lack territory or population.

c. Recognition: A unilateral declaration either explicit

(express) or implicit (tacit) by other states. 1) Effect: Implies that the recognized state or

government is entitled to the rights and privileges granted by international law.

2)Two kinds of recognition: a) Recognition of a state: Usually

granted when an identifiable government, people, and territory first come into existence.

b) Recognition of a government: May be denied even if recognition of the state continues.

When government should be recognized? 1] Theories about when governments should

be recognized: a] Declaratory doctrine: The legal existence

of a government happens automatically by operation of law whenever a government is capable of controlling a territory and its people.

b] Constitutive doctrine: A government does not truly come into existence until such time as it is recognized by other states and participates in the international arena.

Case 1-4. MATIMAK TRADING CO. v. KHALILY and D.A.Y. KIDS SPORTSWEAR INC.

United States, Second Circuit Court of Appeals, 1997. FACTS: Plaintiff, Matimak, a Hong Kong company, see

ks to sue Khalily and D.A.Y., two New York corporations, in a US federal court. Matimak seeks to invoke the federal court’s diversity jurisdiction in US Code § 1332(A)(2) to hear civil disputes between “citizens of a State and citizens of a foreign state.” The district court dismissed plaintiff’s suit on the grounds that it was not the citizen of a foreign State, because Hong Kong was not at the time recognized as being a foreign state by the United States government.

ISSUES: (1) Is Hong Kong a state? (2) Is Matimak a citizen of the United Kingdom? (3) Does § 1332(A)(2) allow stateless persons to sue in a US federal court?

2] Practical considerations concerning the recognition of governments.

a] Estrada Doctrine: To avoid any possible connotation that recognition also means approval, many governments have adopted a policy of never formally recognizing other governments.

This policy is named after the Mexican Foreign Minister who first stated it.

d. Territorial Sovereignty: The right to exercise the functions of a state within a territory.

1) Not an absolute right?

Other states may obtain servitudes,either by treaty or practice, to a limited use of certain territory.

a) Positive servitude: The exercise of a right-of-way.

b) Negative servitude: Prevents one state from doing something within its territory that causes injury to a second state.

2) Acquiring territory: This is done either by:

a) Occupying land not claimed by another sovereign.

b) The transfer of territory from one sovereign to another.

Case 1-5. THE TRAIL SMELTER ARBITRATION (United States v. Canada) Canadian-United States International Joint Commission, Arbitral

Tribunal, 1938 and 1941.

FACTS: A Canadian lead and zinc smelter at Trail, British Columbia, was polluting the waters of the Columbia River that then ran into the state of Washington. After negotiations between the US and Canada, the latter agreed to refer the matter to an International Joint Commission. The Commission’s Arbitral Tribunal awarded the US $350,000 in damages, but did not order the smelter to cease operating. In 1941, the US sought to have the operation of the smelter enjoined.

ISSUE: Can Canada be enjoined from causing harm to a US river?

e. Changes in Territorial Sovereignty. 1) Consequences as to treaty rights and obligatio

ns: Successor states must observe: a) Treaties which implement general rules of inter

national law. b)“Dispositive” treaties: Treaties concerned with ri

ghts over territory, such as boundaries and servitudes.

2) Nationals of a territory that is acquired by a successor state will keep the nationality of the predecessor state unless a different result is agreed to in a treaty of cession or by municipal legislation.

3)Public property located within a territory becomes the property of the successor state, while property located in third states belongs to whichever government the third state recognizes.

Case 1-6. ARAB REPUBLIC OF SYRIA v. ARAB REPUBLIC OF EGYPT

Brazil, Supreme Court, 1992. FACTS: After Syria and Egypt merged to form the

United Arab Republic (UAR) in 1958, Syria turned over its embassy in Brazil to the UAR. Following the dissolution of the UAR in 1961, the Egyptian diplomat who had been the UAR’s last ambassador to Brazil refused to return the embassy to Syria. In 1981, the Syrian ambassador in Brazil brought suit in the Brazilian Supreme Court seeking an order to require Egypt to turn over the embassy property to Syria.

ISSUES: (1) Does this dispute involve state succession? (2) If so, is it a matter for a municipal court to decide?

4)Private property rights of individuals do not lapse because of a change in government.

5)A successor state is bound by the private contractual obligations of its predecessors.

6) A successor that acquires part or all of a territory is proportionately responsible for the territory’s national debt.

2. International Organizations a. Intergovernmental Organizations (IGOs). 1) Defined: Permanent organizations set u

p by two or more states to carry on activities of common interest.

2) Characteristics common to IGOs: a) They are created by two or more states. b) They are meant to pursue interests co

mmon to their creators. c) They function autonomously as indepe

ndent international persons.

3) Creation: Created much in the fashion of a corporation.

a) Charter or constituent instrument, sets out its aims and objectives, internal structure, resources, and express powers. Example: United Nations Charter.

4) Legal capacity: Includes the capacity to carry on diplomatic relations with a state or to sue or be sued in an international or municipal court. a) Acquired by recognition

1] from its own state members: automatically. 2] from non-member states: specifically certif

ied.

Case 1-7. ARAB MONETARY FUND v. HASHIM and others (No. 3)

England, High Court, Chancery Division, 1990.

FACTS: The Arab Monetary Fund was created by a group of Arab states as an intergovernmental organization with an “independent juridical personality and ... in particular, the right to ... litigate.” A decree issued in the United Arab Emirates gave the Agreement the force of law through the UAE. The AMF sued the defendants alleging that they had misappropriated AMF funds. The defendants asked to have the suit dismissed, arguing that the AMF

had no legal personality in England and, therefore, could not bring suit there. England had not formally recognized the AMF.

ISSUES: (1) If the governments that created an IGO are recognized, must the IGO be separately recognized? (2) May an entity, which is not recognized as an IGO, be treated as an ordinary juridical entity (and therefore be subject to the jurisdiction of a foreign court)?

5) Examples: a) The United Nations (UN). （ http://

www.un.org/english/） b) The European Union (EU). (http://

europa.eu.int/index_en.htm) 1] Supernational powers: Within its s

cope of applicability, community law is superior to the laws of the member states.

a] Member states are required to bring their internal laws into compliance with EU laws.

b] EU law is directly effective within the member states.

Case 1-8. EUNOMIA DI PORRO & CO. v. ITALIAN MINISTRY OF EDUCATION

European Communities, Court of Justice, 1971. FACTS: Italy collected an export tax on a painting Eun

omia de Porro exported from Italy (an EC member state) to Germany (also an EC member state). Previously the EC Court of Justice had held that Italy was in default of its obligations under Art. 16 of the EEC Treaty, which required it to abolish export duties between member states. When Eunomia de Porro sued to get its tax payment back, the Italian trial court referred the matter to the EC Court, asking it to determine if Art. 16 were directly effective in Italy.

ISSUE: Is Art. 16 directly effective?

2] EU institutions: a] European Commission b] Council of the European Union c] European Parliament d] European Economic and Social Council e] Committee of regions f] European Court of First Instance g] European Court of Justice h] European Central Bank. i] European Court of Auditors

c) Other Intergovernmental Organizations 1] General Intergovernmental Organizations a] African Union (

http://www.africa-union.org/root/au/AboutAu/au_in_a_nutshell_en.htm )

b] Council of Europe ( http://www.coe.int/ ) c] Organization of American States ( http://

www.oas.org/main/english/ ) 2] Specialized Intergovernmental Organizations a] Customs Unions: e.g., European Union b] Free Trade Areas: e.g., North American Free Trade

Area (NAFTA) c] Economic Consultative Associations : e.g., Organi

zation for Economic Cooperation and Development (OECD)

b. Nongovernmental Organizations (NGOs).

1) Nonprofit NGOs serve as coordinating agencies for private national groups in international affairs.

2) For-profit NGOs (transnational corporations (TNCs) or multinational enterprises (MNEs)) are businesses operating branches or subsidiaries or joint ventures in two or more countries.

1. Traditional view: Individuals traditionally have no rights — only duties — under international law.

a. Law of State Responsibility allows a state to seek compensation for one of its injured nationals.

F. THE RIGHTS OF INDIVIDUALS UNDER INTERNATIONAL LAW

2. A contemporary — and still evolving — view: Individuals do have the ability to exercise the rights of an international person.

a. Individuals have basic human rights.

b. Individuals may sue states in some international tribunals.

G. COMPARISON OF MUNICIPAL LEGAL SYSTEMS

1. Comparative Law: The study and analysis of the different municipal law systems.

a. Legal “families”: 1) Romano-Germanic Civil Law. 2) Anglo-American Common Law. 3) Islamic Law. b. These are divided into subfamilies. c. There are also hybrids. d. There are also some practices that are

unique to a particular country.

2. The Romano-Germanic Civil Law System a. Oldest and most influential of the legal families. b. Sources include: 1) Corpus Juris Civilis (“The Body of Civil Law”) of

Roman Emperor Justinian completed around 534 AD. 2) Canon law: the church law of the medieval Roma

n Catholic Church. 3) Jus commune: laws based on Roman law, cano

n law, and the interpretations of glossators and commentators, and common to Europe at the beginning of the Renaissance.

4) Lex mercatoria: common commercial rules and procedures used throughout Europe in the Renaissance.

5) National codes: seventeenth century nationalism led to the writing of national legal codes in Europe.

c. Most influential national codes: 1) French Civil Code (Code Napoleon) of

1804. a) First modern code. b) Underlying principles taken from the French

Revolution: 1] The right to possess private property. 2] The freedom to contract. 3] The autonomy of the patriarchal family. c) Organized structurally in much the same

fashion as the Justinian Code. 1] Many of its provisions were taken from: a] Jus commune. b] French royal ordinances. c] Academic writings. d] Customary law.

d) Differences from the German Code: 1] Written in a short period of time. 2] Its style and form are one that is

straightforward, easy to read, and understandable to everyone.

e) It contains flexible general rules rather than detailed provisions.

2) German Civil Code of 1896. a) Reason it was not enacted until 1896: 1] Germany first had to become a nation. 2] Scholars known as “Pandectists” spent

years doing preliminary studies and drafting the code.

b) Characteristics of the German Code: 1] Incredibly precise and technical. 2] Special terminology is used. c) Differences from the French Code: It

is meant exclusively for the use of trained experts (not lay readers).

d. Countries with Civil Law systems distinguish between the civil law and public law.

1) Public law evolved separately from the movement for codification of civil or private law.

a) Civil law (for civilian lawyers) is only the law contained in the codes and its auxiliary statutes (that is, the law of persons, family law, property law, succession law, the law of obligations, commercial law, labor law, and criminal law).

b)Public law is constitutional and administrative law

2) Public law is treated in a variety of ways in the civil law countries.

a) Many civilian lawyers regard constitutional law as a form of political science.

b) Germany has a branch of administrative courts to review the acts of its government agencies.

c) France created a Council of State to protect individual rights and supervise the administrative processes of government.

e. Changes in the twentieth century. 1) A movement away from relying only on

the civil code. 2) Special legislation and judicial

interpretations have become more influential. 3) With the advent of European Union, there

is now a movement toward harmonizing the laws of the Union’s member states.

Case 1-10. RAULIN v. FISCHER England, King's Bench, 1911.

FACTS: Ms. Fischer, while recklessly riding a horse in Paris, collided with Monsieur Raulin, seriously injuring him. A French trial court heard a criminal complaint brought by a procurator. At that proceeding, Raulin, the victim, intervened in the proceeding as he was allowed to do by the French Code of Civil Procedure, and asked for damages. The court convicted Fischer of criminal negligence and imposed a sentence of one month in prison and a fine of 100 francs. Following expert testimony, the court also awarded Raulin 15,000 francs in damages and 917 francs in costs. Raulin later brought suit in England to enforce his French judgment.

ISSUE: Should a common law court refuse to recognize an award of civil damages handed down by a civil law criminal court?

3. The Anglo-American Common Law System

a. Historical origins: 1) In 1066, the Normans conquered

England and William the Conqueror began to centralize the governmental administration of his new kingdom.

2) The name “common law” is derived from the theory that the king’s courts represented the common custom of the realm, as opposed to the local customary law practiced in the county and manorial courts.

3) The development of the principles of the common law were largely the product of three courts created by Henry II (1133-1189):

a) Court of Exchequer, which settled tax disputes. b) Court of Common Pleas, which dealt with matters t

hat did not involve a direct interest of the king, such as title to land, enforcement of promises, and payment of debts.

c) Court of King’s Bench which handled cases of a direct royal interest, such as the issuance of “writs” (written decrees) to control unruly public officials.

Eventually, the jurisdiction of the King’s Bench was used to control abuses of power by the king himself, establishing a fundamental doctrine of the common law: the supremacy of the law.

4) These courts were important in developing case law — the common law practice of using the decisions of courts (precedents) as a source of law.

a) This is the principal factor that distinguishes the common law from the Romano-Germanic civil law.

b. The “common law” must be distinguished from the law which evolved out of:

1) Equity: A principle of justice developed by the king’s chaplain, or chancellor, to provide parties with a remedy when none was available in the king’s courts.

2) Admiralty (the laws governing sailors) and other specialized jurisdictions.

c. The common law’s distribution around the world is different from the way in which the civil law was distributed.

1) The principal nations that use the common law (Australia, Canada, India, Ireland, New Zealand, and the United States) have a direct political and historical linkage to England.

a) The common law is not easily received by other countries because:

1] It is based on a matrix of case law and statutes. 2] It uses the jury system and the doctrine of

supremacy to limit the actions of the government. 3] It uses a complex terminology.

2) The civil law countries (most of the rest of the World) are not connected by any political or historical connection.

a) The civil law is widespread because it is the easier of the two legal traditions for a country to receive.

1] It is encapsulated in convenient codes.

2] It deals primarily with private law that is of little threat to the local political system.

4. The Islamic Law System a. Known as Shari’a. b. Sources in the order of their importance: 1) The Koran. 2) The Sunnah or decisions and sayings of t

he Prophet Muhammad. 3) The writings of Islamic scholars who deri

ved rules by analogy from the principles established in the Koran and the Sunnah.

4) The consensus of the legal community.

c. History. 1) In the tenth century AD (third century H),

the Islamic legal community decided that further improvement of the scholars’ analysis of divine law was impossible.

a) The legal community “closed the door of ijtihad” (independent reasoning).

1] This froze the evolution of Islamic law in time. 2] Shari’a judges and scholars may only apply the

law as it was set down by the early writers. 2) Recently some have advocated reopenin

g the door of ijtihad, but this has been vehemently opposed by Islamic fundamentalists.

d. Note that the Shari’a is primarily a moral code.

1) It is principally concerned with ethics.

a) In this respect, it contains many principles in common with the civil law and the common law.

2) It is much less concerned with promoting commerce and international relations than the secular legal systems.

Case 1-11. - LIBYAN AMERICAN OIL COMPANY (LIAMCO) v. GOVERNMENT OF THE LIBYAN ARAB REPUBLIC

Dr. Sobhi Mahmassani, Sole Arbitrator, 1977. FACTS: The Libyan American Oil Company’s (LIAMC

O’s) oil concessions in Libya were nationalized in 1973. When no compensation was received (despite promises), LIAMCO took the matter to arbitration, seeking compensation for its lost properties. Libya, meanwhile, informed all its concessionaires that it rejected arbitration as an affront to its sovereignty and it refused to participate in this proceeding.

ISSUE: Is a sovereign bound by its contractual commitments?