48. International agreements as a source of international commercial law

The harmonization of commercial law has frequently been brought about by the adoption and ratification of treaties (primarily multilateral) that govern selected areas of commercial law. In counries all over the world, the ratification of a particular international treaty makes it applicable and mandatory in a national legal system and in international commerce with participation of nationals of a country being a party to such treaty.

Ukrainian constitution as well as Russian ones states that the international treaties ratified by parliament are the integral part of the national law; and moreover the legal norms of international treaties prevail, which means that if the national norms foresee different provision than a ratified international treaty, than the rule containing in the international treaty should apply.

Among international treaties two main types may be differentiated – multilateral and bilateral agreements. The bilateral agreements dealing with international commerce usually concern the protection of international investments and avoiding double taxation rules. At the same time, the international treaties are usually concern the different aspects of the trade and commerce – sale and purchase, international settlements, international carriage, customs issues etc.

49. International organisations and multilateral international treaties in sphere of international commerce

As for the multilateral agreements, they are created by such organizations as:

- European Union

- Organization for the Harmonization of Business Law in

Africa (OHADA)

- International Institute for the Unification of Private

Law (UNIDROIT)

- Organization of American States (OAS)

- United Nations Commission on International Trade Law

(UNCITRAL)

- Hague Conference on International Private Law

- United Nations Conference on Trade and Development (UNCTAD)

- World Trade Organisation (GATT – general agreement on tariffs and trade – for goods, GATS – general agreement on trade in services and the Trade-Related Aspects of Intellectual Property - TRIPS)

-WIPO – World Intellectual Property Organisation

- World Customs Organisation\Organisation Mondiale des Douanes – international harmonized goods nomenclature

Among the most important international treaties and conventions are 1980 UN Convention on Contracts for International Sale of Goods (CISG), 2005 UNCITRAL - United Nations Convention on the Use of Electronic Communications in International Contracts at UNCITRAL , 1996 WIPO Copyright Treaty, 1988 Unidroit Convention on Financial Leasing and Unidroit Convention on International Factoring, UN New York Convention on Limitation Period in International Sale Contracts of 1974 (elaborated by UNCITRAL), and 1958 UN New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (elaborated by Uncitral).

50. Definition of international commercial and international trade customs

A legal science defines a custom as a set of rules which are widely recognized, applicable systematically, are clearly defined and corresponding to the public order rules of a nationals being party to transaction. According to United Nations Charter, an international custom is a proof of existence of widely accepted rules recognized as legal rule.

51. When international commercial and trade customs apply?

Commercial custom provides guidance in the interpretation of contracts, their legal meaning and effect. If standard contracts, standard clauses or rules on the interpretation of such contract clauses are published by semi-official international agencies such as the International Chamber of Commerce, the de facto recognition and use of such contractual patterns and rules may lead to a new commercial custom or reflect an already existing one. The international commercial customs would be applicable if parties agreed to apply them to a contract or a court\international arbitral tribunal decided to apply them to a dispute. But even more based on UN Convention of international sales of goods 1980, an international customs or usages in the trade may be implied although in fact parties were not aware of its existence – as long as the usage is in international trade widely known to and regularly observed by parties to contracts of a similar type involved in a particular trade concerned.

52. Role of ICC and other organisations in unification of international commercial and trade usages

ICC takes a leading role in unification of trade usages\commercial customs by elaboration of uniform customs and practice and model contracts together with other organizations such as FIDIC and UNECE – such model contracts, best practices, general conditions, guides etc are inevitably used in international commerce and trade by practitioners although such documents are qualified as “soft law” having presumably less mandatory character then international treaties. However in most cases, the parties to international commercial transaction are choosing to use such models and to base its contract on it due to following understanding of commercial customs\trade usages and their increasing importance. International Chamber of Commerce (www.iccwbo.org), i.e. main document is INCOTERMS - International Commercial Terms which define certain terms used in international trade that are frequently incorporated into international sales contracts. ICC also elaborates uniform customs and practice for documentary credits, ICC uniform rules for contract guarantees, and ICC rules of Arbitration.

53. Soft law as a source of international commercial law

Soft law – is not international treaties dealing with contract law and signed by countries, but unification of trade customs, standards, principles or best practices related to international commercial law created, drafted or sponsored by the intergovernmental or non-governmental organizations.

While these types of documents do not rise to the level of an enforceable treaty, they have been influential in the practice of international commercial law and have been cited by courts and arbitrators as sources of authority.

Main documents of soft law : Unidroit Principles on International Commercial Contracts; Principles of European Contract Law issued by the Commission on European Contract Law; INCOTERMS issued by International Chamber of Commerce, ICC uniform customs and practice for documentary credits, ICC uniform rules for contract guarantees, ICC rules of Arbitration.