NOTE: This brief remark on International Business Transactions has been created by Mr. Manel Atserias Luque on May 28th, 2017. The author has used some Professor Franco Ferrari’s quotes, which are indicated with «…».
Levels of unification of law (unification process)
1st. Uniform substantive law
1.1. Unlimited uniform substantive law
– Convention providing a uniform law for bills of exchange and promissory notes of 7 June 1930
– Convention providing a uniform law for checks of 19 March 1931
1.2. Limited uniform substantive law
– United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) (CISG)
– UNIDROIT Convention on International Factoring (Ottawa, 28 May 1988)
– UNIDROIT Convention on International Financial Leasing (Ottawa, 28 May 1988)
2nd. Uniform private international law
Stages of the comunitarization of the (European Union) private international law of obligations
a) Contractual Obligations
– 1980 Convention on the Law Applicable to Contractual Obligations (The Rome Convention)
b) Non-Contractual Obligations
International Uniform Law
1. Positive and negative approach
The international uniform law is «a set of identically worded legal rules that are binding on a general level in at least two jurisdictions where they are supposed to be interpreted and applied in the same manner» [positive approach]. One of the most important features of international uniform law is «the intended identity of the legal rules» (animus unificandi) created by states. Lawmakers want this uniform law to be interpreted and applied in the same manner in an international context.
It is necessary that there is always an animus unificandi among states to refer to the international uniform law. Therefore, the harmonized law, which is only created to reduce (not to remove) the existing differences among legal rules of different jurisdictions, is not part of this category [negative approach]. Furthermore, some hypotheticals ―such as (i) the identity (e.g. same worded legal rules) among laws of different jurisdictions, and (ii) the unilateral reception (receiving state) of foreign legal rules (model state)― cannot be considered uniform law either because there is no an intentional creation among states. In all cases, each judge will interpret and apply the legal rules through his or her domestic concepts and interpretative methods.
Nonetheless, it is important to emphasize that a ‘pure’ uniform law does not and will not exist ever. We must consider that most UN international agreements are drafted in different official languages. Furthermore, if national courts of contracting states must interpret and apply these international legal rules, there will always be a certain degree of divergence.
For this reason, Professor Ferrari is right when he says that «the starting point for determining whether there is uniform law is the degree of intended similarity of the legal rules in question».
2. Levels of unification of law
Depending on the topic and purpose, there are two different levels of unification of law: the first one is the international uniform substantive law, which can be unlimited or limited. The second one is the uniform private international law.
As to the uniform substantive law, it is important to distinguish two subtypes of unification, which also have a different level of impact regarding the unification process:
On the one hand, the unlimited uniform substantive law is the set of legal rules that applies to both domestic and international situations. Therefore, the judge of the forum will apply the same substantive law in both cases, regardless of there is or not an internationality element in the dispute. This is the maximum level of unification, but it is very strange to find this kind of international agreements. Some examples are the ‘Convention providing a uniform law for bills of exchange and promissory notes of 7 June 1930’ and ‘the Convention providing a uniform law for checks of 19 March 1931’.
On the other hand, the limited uniform substantive law is the set of legal rules that solely governs international situations. The judge of the forum will only apply these legal rules to trans-border cases ―in other words, situations connected to more than one country―. Therefore, if the dispute is domestic, the interpreter will only use the national law to resolve the case. Some examples are the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) (CISG), and UNIDROIT Conventions on International Factoring and on Financial Leasing (Ottawa, 28 May 1988).
Lastly, the uniform private international law (conflict of laws) is the set of legal rules that determine what substantive law the judge of the forum has to apply to resolve the case. In other words, the uniform private international law does not provide a substantive solution to decide the dispute.
Both levels of unification of law have a common purpose, namely: «to avoid the unequal treatment to which the application of different legal rules may lead in a specific instance». Nonetheless, the intensity of these categories of uniform law will be different depending on what concrete goal lawmakers want to achieve. While the uniform substantive law provides a substantive solution to resolve a situation directly, the uniform private international law determines what substantive law the judge of the forum will have to apply to decide the case (conflict of law).
The most desirable situation for individuals and companies in the business area is, of course, the uniform substantive law. This unification of substantive legal rules strengthens the legal certainty, reduces forum shopping, and transactions costs.