It is not difficult to study the Convention on Contract for the International Sale of Goods

27/12/2016 08:12

Discussing with the correspondent of the Customs Newspaper, Mr. Phan Trong Dat,  the Deputy Secretary General of the Vietnam International Arbitration Centre said that in the context of strong international economic integration, if enterprises do not want to lose out on international sales contract disputes, they should study the United Nation‘s Convention on Contract for the International  Sale of Goods (CISG) and this study is not complicated and difficult.

it is not difficult to study the convention on contract for the international sale of goods

How do you assess the role of understanding the CISG for Vietnam’s enterprises?

In the fact the international sale contract’s disputes in the Vietnam International Arbitration Centre show that 60% of disputes are related to the International Sale of Goods. Vietnam’s partners have disputes with 60 different countries. There have been 85 countries join CISG. Hence, the detailed study of CISG prior to and during disputes in an international sale contract, is very important.

Many regions and countries apply CISG, such as in ASEAN, now Vietnam and Singapore joined CISG. Therefore, when the 2 parties sign the sale contract, they need to apply CISG. If the Vietnam enterprises sign the sale contract with the other country in ASEAN but is not Singapore, when the disputes occur, if the 2 sides also agreed on the legal framework to apply in advance and the Arbitration Council decide to apply the Vietnam’s Law and that time, the CISG will be automatically applied.

How are the attention as well as the knowledge of Vietnam’s enterprises on the legal issues in general and CISG in particular, Sir?

With more than 90% of the small and medium size enterprises, and currently most Vietnam enterprises are more interested in the trade issue and less interested in the legal issues in general, Vietnam Commercial Law or CISG and other legal issues

At the Arbitration Central, many small and medium size enterprises and especially the top enterprises when disputes occurr and the sale contract was analyzed, it showed many loopholes in the contract’s provisions. Even though, there were many problems and contradictions in the sale contract. The enterprises get the experience from the disputes to correct them, but in fact that “It is too late to lock the stable when the horse has bolted”. Those mistakes and losses do not affect large enterprises but cause serious consequences for small and medium size enterprises

In your opinion, are the understandings and the application of CISG complicated or difficult for enterprises?

Basically, CISG is not much different from the regulations under Vietnam’s Commercial Law. The prominent different is that Vietnam’s Law on the sale of goods mainly regulates on the sales contract in the domestic area, but CISG regulates the international sale of goods. Hence, in my opinion the understanding and application of CISG is not difficult for enterprises. The contents which are regulated in CISG are very easy to understand. There is a lot of case law on this issue. The enterprises’s duty is to actively study the different methods. If the enterprise understands the Vietnam Commercial Law and applied the same provisions, then further understanding on CISG is very easy because of the high consistency between them and nearly have the difference.

Could you tell me about the case in which the enterprise did not pay attention to study CISG, when disputes occurred, how will they have to suffer the loss?

In the fact, if the enterprises do not pay attention to the law, it is no problem. Because, the sales contract which is signed by the parties will shows the agreements among them. If the sales contract has loopholes and mistakes but the parties still agree to implement and the dispute does not occur, there is no problem. The key issue is that the enterprise must enhance their sense to prevent the risk and resolve the disputes when they arise.

it is not difficult to study the convention on contract for the international sale of goods

The enterprises of manufacturing and exporting wood even though have not known about the CISG

Clearly, when disputes arise and the party which has the lesser understanding of the law will suffer the loss, foremost is money. For example, in the case of the Vietnam enterprise which is the claimant having a full understanding of the law, so the ability of winning in the legal suit is higher. In contrast, in the case where the Vietnam enterprise is the defendant who has a full of understanding of the law, it will help the enterprise limit the loss in the legal suit.

In the next time, how will the VIAC have the aim to support enterprises in studying and applying the CISG?

Currently, the State Management Authorities are planning to support enterprises in studying and applying the CISG. In the last time, when Vietnam is not a member of CISG, the VIAC resolved disputes which are applied under CISG. By January 1, 2017, Vietnam will officially apply the CISG, expecting that the cases of resolving disputes which are applied under CISG will increase. With many umpires who are the experts in the field of the internal trade and have deep knowledge of the law and get experience from other enterprises. In the next time, the VIAC will actively build the essential training for enterprises and organize training on the CISG and I hope that enterprises will interest and participate.

Thank you!


By Nguyen Thanh/Ngoc Loan

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