Judicial Convergence and International Commercial law

This post was contributed by Professor James Devenney, Module Convenor for International Commercial law.

Skyline and skyscrapers lit up at night.

It has been noted (E. Mak, Why do Dutch and UK judges cite foreign law? (2011) 70 Cambridge Law Review 420 at 449) that:

“…international and foreign law play an increasingly important role in the judicial decision-making of these national highest courts…Ever more often they also use non-binding foreign legal materials as a source of inspiration, and sometimes also to find additional supporting arguments for the decision in a specific case.”

Two more recent examples from the UK illustrate this point.  First, in Quadra Commodities SA v XL Insurance Co SE [2022] EWHC 431 (Comm) Butcher J. had to consider the operation of s.20A(1), Sale of Goods Act 1979 which provides:

“This section applies to a contract for the sale of a specified quantity of unascertained goods if the following conditions are met—

  1. the goods or some of them form part of a bulk which is identified either in the contract or by subsequent agreement between the parties; and
  2. the buyer has paid the price for some or all of the goods which are the subject of the contract and which form part of the bulk.”

In that case there was no identification of the bulk in the contract and so the issue was whether or not the bulk had been subsequently agreed by the parties.  More specifically it was argued that the bulk was identified through warehouse receipts.  However, the warehouse receipts only stated that the goods were stored at the warehouses of E; the warehouse receipts did not give the precise warehouse and indeed the evidence was that goods were moved between silos. Butcher J. accepted (at [111]) that “…a site, and even an extensive one, [with a number of warehouse] may constitute a defined ‘area’, and further that there may be cases where the parties agree that the bulk is all the goods of a certain type within that area”.  However, relying on a decision of the High Court of Singapore in RBG Resources Plc (in liq) v Banque Cantonale Vaudoise [2004] 3 SLR (R) 42, the learned judge held that the failure to specify the precise warehouse(s) meant the bulk had not been subsequently identified by the parties.

Secondly in Readie Construction Ltd v Geo Quarries Ltd [2021] EWHC 3030 (QB) the interpretation of s.49, Sale of Goods Act 1979 was in issue.  In that case it had been conceded that, on the facts, the supplier of the goods could only bring an action for the price if the requirements of s.49(2) were satisfied (s.49(1) was not applicable due to a retention of title clause).  The difficulty was that, under the contract, delivery of the goods was a pre-condition of the payment of the price.  Therefore, it was argued, that the price was not “payable on a day certain irrespective of delivery”.  This argument was rejected with the judge, Martin Spencer J., relying on a decision of the High Court of Singapore in Mitsubishi Corp RTM International Pte Ltd v Kyen Resources Pte Ltd [2019] SGHCR 6 where it was held that the phrase in question “means that the time for payment may be, but need not be contingent on delivery or the time of delivery” ([62]). 

Such use of foreign legal materials potentially provides a source of transnational commercial law through judicial convergence although the success of such endeavours is likely to depend on a wide range of factors including the extent of the infrastructure for the exchange of such materials as well as the spirit of their use.  Moreover, it may raise issues relating to the chances of success of any legal transplants (See, for example, LeGrand, The Impossibility of Legal Transplants (1997) 4 Maastricht Journal of European and Comparative Law 111).

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