Indira Carr. International trade law CONTENTS

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1 Indira Carr. International trade law CONTENTS Preface vii Table of Cases xxiii Table of Statutes lvii Table of Statutory Instruments Ixiii Table of European Legislation lxv Table of Other Legislation and Other Materilas Ixix Table of Abbreviations Ixxxiii Introduction Ixxxvii PART I INTERNATIONAL SALES OF GOODS OVERVIEW 3 1 STANDARD TRADE TERMS 5 INTRODUCTION 5 EX WORKS 6 CIF CONTRACTS 6 What is a CIF contract? 6 Judicial definition of a CIF contract 7 Is a CIF contract simply a sale of documents? 10 Duties of seller under CIF contract 12 Duty to procure and prepare documents 15 Invoice 15 Bill of lading 15 Insurance 17 Licences 20 Tender of documents 21 Seller's remedies 23 Passing of property 25 Passing of risk 27 Duties of buyer 28 Buyer's remedies 29 Variants of a CIF contract 32 CIF and arrival contracts 32 CIF CONTRACTS UNDER INCOTERMS Obligations of seller 33 Obligations of the buyer 35 C&F CONTRACTS 36 C&F AND INCOTERMS 37

2 FOB CONTRACTS 37 Duties of the seller under a classic FOB contract 39 Seller's remedies 41 Duties of the buyer 41 Buyer's remedies 43 Export and import licences 43 Passing of property 45 Passing of risk 45 VARIANTS OF AN FOB CONTRACT 46 FOB with additional services 46 FAS CONTRACTS 46 FOB contracts under INCOTERMS INCOTERMS a brief overview 50 CONCLUSION 52 FURTHER READING 56 2 THE VIENNA CONVENTION ON THE INTERNATIONAL SALE OF GOODS INTRODUCTION 57 THE VIENNA CONVENTION 61 Structure and features 61 Sphere of application 62 Exclusion of issues 67 Party autonomy and the Vienna Convention 69 Trade usage and the Vienna Convention 70 Interpretation of the Vienna Convention 71 Formation of a contract 73 Obligations of the seller 77 Obligations of the buyer 78 Passing of risk 82 Remedies 84 Exemption 93 CONCLUSION: RECENT INTERNATIONAL INITIATIVES 93 UNIDROIT Principles of International Commercial Contracts 93 Principles of European Contract Law 95 FURTHER READING 96

3 PART II REGULATING THE ELECTRONIC COMMERCE ENVIRONMENT OVERVIEW ELECTRONIC COMMERCE - LEGAL ISSUES AND HARMONISATION 103 INTRODUCTION 103 POLICY CONSIDERATIONS, E-COMMERCE AND INTERNATIONAL REGULATORY MEASURES 104 ELECTRONIC DATA INTERCHANGE (EDI) AND INTERCHANGE AGREEMENTS 107 UNCITRAL MODEL LAW ON E-COMMERCE 109 Background, guiding principles and harmonisation 109 Part I - e-commerce 111 Part II - carriage of goods 116 OTHER INTERNATIONAL INITIATIVES - THE INTERNATIONAL CHAMBER OF COMMERCE 117 THE EU DIRECTIVE ON E-COMMERCE 118 E-commerce, free movement of services and transparency provisions 118 Contractual matters 120 Liability of third party service providers 121 Implementation 121 CONCLUSION 122 FURTHER READING THE ELECTRONIC TRANSACTION AND SECURITY ISSUES 125 INTRODUCTION 125 ELECTRONIC SIGNATURES AND UNCITRAL 126 Founding principles 128 The Model Law on Electronic Signatures 130 THE EU DIRECTIVE ON ELECTRONIC SIGNATURES AND UK LEGISLATION: ELECTRONIC COMMUNICATIONS ACT 2000 AND THE ELECTRONIC SIGNATURES REGULATION ELECTRONIC MEDIUM AND COMPUTER MISUSE 139 Legislative developments in different jurisdictions 139

4 Council of Europe and computer crime 144 CONCLUSION - A BRIGHT FUTURE FOR E-COMMERCE? 157 FURTHER READING 158 PART III TRANSPORTATION OF CARGO OVERVIEW TRANSPORTATION OF GOODS BY SEA - CHARTERPARTIES 163 INTRODUCTION 163 TYPES OF CHARTERPARTIES 164 Voyage charterparty 164 Time charterparty 165 Demise charterparty 165 COMMON LAW IMPLIED OBLIGATIONS IN A VOYAGE CHARTERPARTY 166 Nomination of a safe port 166 Not to ship dangerous goods 171 COMMON LAW IMMUNITIES 171 USUAL EXPRESS TERMS 171 CONCLUSION 174 FURTHER READING BILLS OF LADING 177 INTRODUCTION 177 NATURE OF A BILL OF LADING 178 Bill of lading as a receipt 178 Bills within the Carriage of Goods by Sea Act Bills outside the Carriage of Goods by Sea Act Enforceability of indemnity agreements for issuing clean bills of lading 182 Bill of lading as evidence of contract of carriage 183 Bill of lading as contract of carriage 184 Bill of lading as document of title 185 Delivery against bills of lading 186 RIGHTS AND LIABILITIES OF CONSIGNEE/ENDORSEE 189 Problems caused by the Bills of Lading Act

5 Position of pledgees 190 Right to sue and bulk goods 191 The implied contract approach 191 The special contract approach 192 Liability in tort 192 Endorsement of bill of lading after delivery 193 THE CARRIAGE OF GOODS BY SEA ACT Rights of suit 193 Transfer of rights 194 Imposition of liabilities 197 BILLS OF LADING AND FRAUD 199 ELECTRONIC DATA INTERCHANGE (EDI) AND THE CARRIAGE OF GODS BY SEA ACT Advantages and disadvantages of using electronic documents 203 Electronic bills of lading: the SEADOCS scheme, CMI Rules for Electronic Bills of Lading 205 CONCLUSION 209 FURTHER READING BILLS OF LADING AND COMMON LAW 211 INTRODUCTION 211 IMPLIED OBLIGATIONS ON THE PART OF THE SHIPOWNER 211 Seaworthiness 212 Due disptach 217 Deviation 217 Negligence 221 IMPLIED OBLIGATIONS ON THE PART OF THE SHIPPER 221 SHIPOWNER'S IMMUNITIES 222 COMMON LAW EXCEPTIONS 222 Act of God 223 Act of queen's enemies 223 Inherent vice 223 CONTRACTUAL EXCEPTIONS 223 Perils of the sea 224 Arrest or restraint of princes 224 Hostilities and riots 224 Strikes 225 Latent defects 225 Fire 225

6 OTHER TERMS IN BILLS OF LADING 226 Responsibility for loading 226 Freight 226 Lien 220 CONCLUSION 231 FURTHER READING CARRIAGE OF GOODS BY SEA: BILLS OF LADING AND THE CARRIAGE OF GOODS BY SEA ACT 1971 (HAGUE-VISBY RULES) 233 INTRODUCTION 233 INTERPRETATION OF THE HAGUE-VT3BY RULES IN THE ENGLISH COURTS 235 CARRIER'S RESPONSIBILITIES AND LIABILITIES 237 Duty to provide a seaworthy ship 239 Cargo management 245 Documentary responsibilities 247 Duty to pursue the contract voyage 248 CARRIER'S IMMUNITIES 251 Unseaworthiness 251 Negligence in navigation or management of the ship 251 Fire 253 Perils of the sea 255 Act of God 255 Act of war, public enemies and riots 255 Act of authorities and quarantine 256 Act or omission of shipper 256 Strike and lock outs 256 Saving life or property and deviation 257 Wastage and inherent vice 257 Defective packing and marking 257 Latent defects 257 Catch-all exception 258 LIMITATION OF LIABILITY 259 Liability for 'loss or damage' 259 Liability on contract and in tort and availability of limitation 259 Calculation of liability 264 Loss of limitation 266 Time limitation 267

7 SHIPPER'S DUTIES AND IMMUNITIES 269 Delivery for loading 269 Shipper's guarantee 269 Dangerous goods 270 General average 272 Status of terms not included in the Rules 272 SCOPE OF APPLICATION 273 Incorporation of charterparty terms in bills of lading 278 Kinds of carriage 279 Kinds of cargo 280 Period of application 283 CONTRACTING OUT 285 THE FUTURE 288 FURTHER READING THE HAMBURG RULES AND RECENT INITIATIVES 291 INTRODUCTION 291 INTERPRETATION OF THE CONVENTION 294 SCOPE OF APPLICATION 295 Carrier's responsibilities and liabilities 298 Carrier's exceptions 303 Electronic data interchange (EDI) and the Hamburg Rules 304 CONTRACTING OUT 305 Carrier's rights 306 Liability limits 307 Shipper's responsibilities 308 Shipper's understanding to indemnify carrier 309 Choice of forum 309 Hamburg Rules - the future 311 RECENT DEVELOPMENTS 311 FURTHER READING INTERNATIONAL CARRIAGE OF GOODS BY AIR 325 INTRODUCTION 325 Warsaw Convention Warsaw Convention as amended by the Hague Protocol Guadelajara Convention Guatemala Protocol

8 Montreal Additional Protocols Nos Montreal Additional Protocol No APPROACH TO INTERPRETATION OF THE WARSAW CONVENTION IN THE ENGLISH COURTS 328 SCOPE OF APPLICATION OF THE WARSAW CONVENTION (UNAMENDED AND AMENDED VERSIONS) 329 CONTRACTING OUT 331 DOCUMENTARY RESPONSIBILITIES 331 Amended version 332 Unamended version 333 Montreal4 334 AIR WAYBILL AND NEGOTIABILITY 334 ELECTRONIC DATA INTERCHANGE (EDI) AND THE WARSAW REGIME 335 CARRIER LIABILITY 335 Period of responsibility 336 Liability limits 337 Payment of interest 338 Loss of limits of liability 339 Availability of limitation to parties other than carrier 342 CONSIGNOR'S RESPONSIBILITIES AND RIGHTS 342 CONSIGNEE'S RESPONSIBILITIES AND RIGHTS 343 PROCEEDINGS 344 Choice of forum 344 Arbitration 348 By whom 348 Time limitation 350 The future: the Montreal Convention 350 FURTHER READING INTERNATIONAL CARRIAGE OF GOODS BY RAIL 357 BACKGROUND 357 INTERPRETATION OF THE CIM 358 SCOPE OF APPLICATION 358 Kinds of cargo 359 Status of the railway as carrier 359 Combined transport 361 DOCUMENTARY RESPONSIBILITIES 361

9 ELECTRONIC DATA INTERCHANGE (EDI) AND THE CIM RULES 363 CARRIER'S RESPONSIBILITIES AND LIABILITIES 364 Period of responsibility 364 Liability for loss, damage and delay 364 Liability amount 366 Documentary formalities 367 CARRIER'S RIGHTS 367 CONSIGNOR'S RESPONSIBILITIES AND RIGHTS 368 Loading operations 368 Responsibilities in respect of customs documents and packing of goods 368 Payment of charges 368 Choice of route and transit 369 Modification of contract 369 CONSIGNEE'S RESPONSIBILITIES AND RIGHTS 370 Charges 370 Delivery 370 Modification of contract 370 PROCEEDINGS 371 By whom 371 Against whom 372 Choice of forum 372 Time limitation 372 CIM RULES AND RECENT DEVELOPMENTS 373 FURTHER READING INTERNATIONAL CARRIAGE OF GOODS BY ROAD 375 INTRODUCTION 375 INTERPRETATION OF THE CMR BY THE ENGLISH COURTS 375 SCOPE OF APPLICATION 376 Combined transport 378 CONTRACTING OUT 380 DOCUMENTARY RESPONSIBILITIES 381 ELECTRONIC DATA INTERCHANGE (EDI) AND THE CMR 384 CARRIER'S LIABILITIES AND RIGHTS 384 Roadworthy vehicle 384 Period of responsibility 384

10 Liability for loss, damage and delay 384 Carrier liability and 'cash on delivery' 387 Liability amount 387 Availability of limitation 388 Loss of limitation of liability 389 Carrier's rights 389 SENDER'S RESPONSIBILITIES AND RIGHTS 390 Dangerous goods 390 Packing 390 Customs formalities 391 Choice of route 391 Modification of contract 391 CONSIGNEE'S RIGHTS AND RESPONSIBILITIES 392 Modification of contract 392 Freight and supplementary charges 392 PROCEEDINGS 392 By whom 392 Against whom 393 Jurisdiction 394 Arbitration 395 Time limitation 395 CMR - THE FUTURE 397 FURTHER READING INTERNATIONAL MULTIMODAL TRANSPORT 399 INTRODUCTION 399 FREIGHT FORWARDER - AGENT OR PRINCIPAL? 401 Responsibilities and liabilities of an agent 405 Agent's rights 406 UNIFICATION EFFORTS BY THE INDUSTRY 406 BIFA Standard Trading Conditions 407 FIATA NEGOTIABLE MULTIMODAL BILL OF LADING 410 Applicability of FIATA Bill terms 411 Responsibilities, liabilities and rights of the freight forwarder 411 Consignor's responsibilities 412 Provision for combined transport in unimodal conventions 413 The United Nations Convention on International Multimodal Transport its future 414 CONCLUSION 416 FURTHER READING 425

11 PART IV FINANCING AND INSURANCE OVERVIEW MARINE INSURANCE 431 INTRODUCTION 431 SCOPE AND NATURE OF MARINE INSURANCE CONTRACTS 432 Obtaining marine insurance cover 432 Payment of premium 434 Different kinds of policies 435 PRINCIPLES OF MARINE INSURANCE LAW 438 A contract of utmost good faith 438 Insurable interest 443 Subrogation and double insurance 444 Assignment 446 WARRANTIES ON THE PART OF THE INSURED - IMPLIED AND EXPRESS 447 Implied warranties (seaworthiness, legality) 447 Express warranties 449 DEVIATION 449 LIABILITY OF INSURER 450 Doctrine of proximate causation 450 Types of losses 451 INSTITUTE CARGO CLAUSES (A), (B) AND (C) 453 Historical background 453 Institute Cargo Clauses (A) 454 Institute Cargo Clauses (B) 457 Institute Cargo Clauses (C) 457 CONCLUSION 458 FURTHER READING LETTERS OF CREDIT 465 INTRODUCTION 465 OPEN ACCOUNT 465 BILLS OF EXCHANGE 466 DOCUMENTARY BILL 470 LETTERS OF CREDIT 471

12 Law relating to letters of credit 471 Letters of credit: their nature and advantages 473 Stages in a documentary credit transaction 473 Characteristics of letters of credit - autonomy and strict compliance 478 Ambiguous instructions from buyer and linkage of documents 485 Types of letters of credit 486 The opening of a letter of credit 494 Waiver and variation 496 Tender of documents by seller (beneficiary) 496 Obligations of the bank(s) to the seller 499 The fraud exception 502 Information technology (IT) and letters of credit 504 PERFORMANCE BONDS/GUARANTEES AND STANDBY LETTERS OF CREDIT 505 Performance bonds/guarantees 505 Standby letters of credit 507 OTHER MEANS OF MINIMISING RISK OF NON-PAYMENT 510 CONCLUSION 513 FURTHER READING 514 V DISPUTE RESOLUTION OVERVIEW CIVIL JURISDICTION 521 INTRODUCTION 521 THE DEFENDANT'S DOMICILE 525 SUBMISSION BY APPEARANCE 530 ORDINARY CONTRACTS 531 TORT CLAIMS 538 ANCILLARY JURISDICTION 540 Co-defendants 541 Third parties 543 Counterclaims 543 JURISDICTION CLAUSES 544 INSURANCE, CONSUMER AND EMPLOYMENT CONTRACTS 549 Insurance 550 Consumer contracts 553 Employment contracts 556

13 SIMULTANEOUS ACTIONS 558 INTERIM RELIEF 562 CONCLUSION 564 FURTHER READING CHOICE OF LAW 565 INTRODUCTION 565 THE PROPER LAW - EXPRESS CHOICE 569 THE PROPER LAW - IMPLIED CHOICE 573 THE PROPER LAW - CLOSEST CONNECTION 575 PARTICULAR ISSUES 580 ENGLISH PUBLIC POLICY AND MANDATORY RULES 584 CERTAIN PARTICULAR TYPES OF CONTRACT 588 Consumer contracts 588 Employment contracts 591 Insurance contracts 593 CONCLUSION 598 FURTHER READING FOREIGN JUDGMENTS AND AWARDS 599 INTRODUCTION 599 EUROPEAN JUDGMENTS 599 EXTERNAL JUDGMENTS 606 CONCLUSION 614 FURTHER READING ARBITRATION 615 INTRODUCTION 615 CHARACTERISTICS 615 ARBITRATION IN INTERNATIONAL COMMERCIAL CONTRACTS 621 Institutional arbitration 621 Ad hoc arbitration 623

14 ARBITRATION UNDER ENGLISH LAW 623 Applicable substantive law 627 Stay of court proceedings 629 Challenging arbitral awards 630 Recent trends: arbitration online 635 FOREIGN ARBITRAL AWARDS 637 CONCLUSION 641 FURTHER READING MEDIATION (CONCILIATION): AN ALTERNATIVE FORM OF DISPUTE RESOLUTION 643 INTRODUCTION 643 INTERNATIONAL DEVELOPMENTS 646 DEVELOPMENTS IN ENGLAND 648 FEATURES AND ASSOCIATED ISSUES 649 Mediation agreement 649 Confidentiality and mediator immunity 652 Settlement agreement and enforceability 654 MEDIATION ONLINE 656 RECENT DEVELOPMENTS 657 CONCLUSION 658 FURTHER READING 658 APPENDICES 661 APPENDIX 1: GENCON (AS REVISED 1922 and 1976) 661 APPENDIX 2: GENCON (AS REVISED 1922 and 1994) 665 APPENDIX 3: NYPE APPENDIX 4: CONGENBILL 681 APPENDIX 5: GENWAYBILL 683 APPENDIX 6: MULTIDOC APPENDIX 7: NEGOTIABLE FIATA MULTIMODAL TRANSPORT BILL OF LADING 687 Index 689

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