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永衡原创 | 新冠疫情与国际贸易 Novel Coronavirus and International Trade

日期: 2020-03-26
浏览次数: 23


How to smoothly trade under the influence of the epidemic, effectively avoid risks and reduce losses when problems ariseThe view of legal practice involved in some common problems caused by the epidemic, particularly delayed contract performance shall be shared here, which I hope to be helpful.



Defining the risk transfer.

风险的转移就意味着责任归属主体的变更。为了简化明确国际贸易中的交易细节,国际商会制定了《国际贸易术语解释通则》(建议深究不同版本中贸易术语的不同含义,国际商会刚刚做出的Incoterms2020对不同贸易术语加入了新的含义,不同版本的贸易术语含义有所不同)。打个比方来说,Incotems2000 中FOB,当货物在指定的装运港越过船舷时,卖方完成交货,风险转移给买方,卖方不再承担违约责任。也就是说,尤其在发生类似于运输延迟方面的问题的时候,抛开不可抗力的问题不谈,先看风险转移节点。

   The transfer of risk means change of the Party with responsibility. In order to simplify and clarify the details of transactions in international trade, the International Chamber of Commerce formulated the (INCOTERMS 2020, which has just been made by the International Chamber of Commerce, adding new connotation to different terms, and different versions of trade terms have different meanings). For example, FOB in Incoterms2000,when the goods delivered pass the ship's rail at the named port of shipment, the delivery by the Seller is completed, the Goods risk is then transferred to the buyer, and the seller no longer bears the liability for breach of contract.That is to say, especially when problems similar to transportation delays occur, put aside the issue of force majeure, look into the risk transfer first.



Application of Force Majeure.


   When the goods risk has not yet passed, the discussion over application of force majeure is inevitable. However, it should be noted that the application of force majeure requires certain conditions:





1. The contract agreement applies.

    The basic principles of encouraging facilitating transactions and party autonomy will tend to comply with the explicit content of the contract between buyers and sellers.Therefore, no matter what law applies in international trade contracts, in case two parties explicitly agree and accurately describe the situation of the epidemic, then the party who fails to fulfill the contractual obligations is exempted from liability for breach of contract once the clause applies. However, what many people neglect is how to agree on the subsequent treatment in the case of the application of this clause. Most of the contract content is only for the application of force majeure clause 'negotiation between two parties' and other similar content, but do not include on how the subsequent contract should be performed. In this case, if the consultation fails, it will easily lead to disputes.

I came across a case of this kind when I worked in a British Barrister’s Chamber, one of the parties was a shipyard in China.In the case of force majeure stipulated in the contract, the basis for continuing to perform the contract has ceased to exist due to time delay, international situation, crude oil price and other reasons, the purpose of signing the contract can not be realized, and the negotiation between the two parties fell apart, resulting in the buyer and seller entering a long litigation procedure.







2. Application of law.

   Once there is no clear agreement in the contract in relation to force majeure, there shall be three situations in terms of the application of law. It is clear that if the applicable law is clearly agreed in the contract, it is relatively easy to deal with.

   A brief explanation of the legal system in the world, mainly divided into civil law and common law, and can be less rigorous called statute law and case law to facilitate understanding (in fact, there is also certain written legal provisions in the case law system countries, which shall not be discussed further in this occasion).Statutory law countries are based on the law enacted and issued by the legislature, and the case law countries are based on past precedents as the basis for subsequent disputes.

(1)Application of Chinese law.

    The law of our country clearly stipulates the specific content of force majeure. On top of that, from the interpretation of the legal provisions since the outbreak of the epidemic in China, the situation that affects the performance of the contract due to the epidemic can be exempted from the liability for breach of contract, and the parties can negotiate separately to discuss the way of future contract performance.In the case of applying the laws of other written law countries, it needs to be analyzed in accordance with the legal provisions.

(2) Application of case law system.

    As mentioned earlier, in principle, in addition to the content of the contract, there is no specific legal provision to restrict the contractual obligations of the seller and the buyer.Therefore, there is no explicit provision on the application of force majeure to exempt the liability for breach of contract. Although there is an exception to the common law theory of Contract Frustration.However, the applicable conditions of this theory are too harsh, and the possibility of its application is very slim in the current situation of the epidemic.




3.In extreme conditions, the contract does not stipulate the epidemic force majeure and applicable laws.

    In case the two parties can not reach an agreement on the applicable law, the principle of closest connection is generally adopted to determine the applicable law for disputes. In a case I represented in a domestic court, I had similar problems and helped foreign clients apply foreign laws in Chinese courts according to the above principles.



In addition, if our delay in fulfilling contractual obligations is deemed to be affected by force majeure and thus exempted from liability for breach of contract, then the termination of the contract or the cancellation of the order by the client, as often said, may constitute an illegal termination of the contract, which may entitle us to claim damages for breach of contract from the client, or even to continue to perform the contract at the same time.



Choice of Dispute Resolution


Even if the above legal facts have been determined, it does not necessarily mean that there is no room for manoeuvre.This is why the dispute resolution is an important reason for us to include it in the contract.




  In the absence of a valid agreement on commercial arbitration, it is crucial to strive for jurisdiction in their own favor.Why?Once the judge of the court hears the case through litigation, it will inevitably involve problems in fact finding and law application.In fact, fair trial as a major premise, whether from the cultural background or behavior habits, the judge is more likely to understand the behavior of the party from the country rather than opposite; As far as the application of law is concerned, even if a court in one country needs to use the law of another country to hear a case, as a judge in the country where the court is located, his judgment is likely to draw a conclusion first and then use the law of another country to interpret this conclusion, thus resulting differently in different jurisdictions. The impact of the epidemic will to some extent aggravate this possibility .



2. International Arbitration

The choice of arbitrators has similar impact on the case as the judges of the Court. They will understand the case according to the legal interpretation system they already know; The award made by the arbitration institution can be further enforced only after the validity approval procedure of the country where the enforcement is located.At present, more than 120 countries and regions have acceded to the New York Convention, so there is a certain guarantee for the enforcement of awards.However, because the legal systems of different countries are vastly different, it is still necessary to adjust the strategies according to the different situations in different jurisdictions, including but not limited to the time span, property preservation, enforcement and bankruptcy system.


    Generally speaking, for the contract being performed, because the application of law and the transfer of risk have been determined, we need to perform the contract, collect and confirm evidence, analyze specific details of the case in a way that is beneficial to ourselves in order to make reasonable preparations as soon as possible.


    In view of the impact of the epidemic on international trade, we should consider the legal risks that may be caused by various provisions in the future, and make a reasonable trade-off.

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