Question:
I represent a company in Vietnam. On April 2, 2015, my company signed a contract to purchase a 30-ton pedestal crane with a company headquartered in South Korea. During the contract performance, a dispute arose concerning the quality of the goods. I would like to ask whether this contract can apply the United Nations Convention on Contracts for the International Sale of Goods 1980 (CISG) to resolve the dispute?
Answer:
Your contract may apply the CISG to resolve the dispute, but only under certain conditions. According to point (a) Clause 1 Article 1 of the 1980 CISG, the Convention automatically applies if both parties to the contract have their places of business in different countries and both countries are Contracting States to the Convention at the time the contract is concluded. In your case, the South Korean partner has been a CISG member since 2005, while Vietnam officially acceded to the CISG only on January 1, 2017.
Since the contract was signed on April 2, 2015, which is before Vietnam became a member, the Convention does not automatically apply unless the contract contains a choice of law clause.However, according to point (b) Clause 1 Article 1 of the CISG, the Convention may still apply if, under the rules of private international law, the contract is governed by the law of a Contracting State.
Therefore, if your contract includes a choice of law provision selecting South Korean law or the law of a third country that is a CISG member, or directly chooses the application of the CISG, then the Convention will apply. Hence, the applicability of the CISG in this case depends on whether the contract contains an appropriate choice of law clause.
Consultation: international commercial law services
