LEGISLATIVE HISTORY
1980 Vienna Diplomatic Conference

The meeting was called to order at 10.05 a.m.

CONSIDERATION OF THE DRAFT PROVISIONS PREPARED BY THE SECRETARY-GENERAL CONCERNING IMPLEMENTATION, DECLARATIONS, RESERVATIONS AND OTHER FINAL CLAUSES AND OF THE DRAFT PROTOCOL TO THE CONVENTION ON THE LIMITATION PERIOD IN THE INTERNATIONAL SALE OF GOODS PREPARED BY THE SECREIARY-GENERAL (agenda item 3) (A/CONF.97/6) (continued)

Draft Protocol to the Convention on the Limitation Period in the International Sale of Goods (A/CONF.97/C.2/L.14, L.18 and Add.1, L.21, L.22) (continued)

1. The CHAIRMAN invited the Committee to continue its examination of the Austrian proposal contained in document A/CONF.97/C.2/L.22, as orally amended by the Austrian representative at the previous meeting. He reminded the Committee that the Austrian proposal, if adopted, would appear in the Protocol as article VII bis.

2. Mr. SAM (Ghana) said that, despite the Austrian representative's cogent introduction of his proposal and the interesting explanations offered by the Assistant Secretary, he could not help feeling that to stipulate that accession to a protocol dealing with peripheral matters should have the effect of accession to the convention, as amended by that protocol, was to put the cart before the horse. He had therefore regretfully to oppose the Austrian proposal.

3. Miss O'FLYNN (United Kingdom) said that she was satisfied with the principle underlying the Austrian proposal and did not share the doubts expressed by the representatives of the Federal Republic of Germany and Ghana. A protocol was clearly an ancillary document to which no State would accede unless its intention was also to accede to the convention which the protocol amended.

4. If, however, the objections formulated by the representatives of the Federal Republic of Germany and Ghana were widely shared, the problem could perhaps be resolved by amending article V(I) of the Protocol, already adopted by the Committee, to read: "This Protocol shall be opened for accession only to States that are already Contracting Parties in respect of the Convention of 12 June 1974."

5. Mr. WAGNER (German Democratic Republic) said that he supported the Austrian proposal, which was logical and well-founded.

6. The Austrian proposal for a new paragraph VII bis was adopted.

Article VIII

7. Mr. FARNSWORTH (United States of America) proposed that the words "unless it notifies a contrary intention" in the third line of article VIII should be replaced by the words "unless it notifies the depositary of a contrary intention".

8. It was so decided.

9. Mr. ENDERLEIN (Secretary of the Committee) pointed out that, in view of the decision just taken by the Committee to include article VII bis in the Protocol, a reference to that article should also be included in article VIII.

10. It was so decided.

11. Mr. LANDFERMANN (Federal Republic of Germany) said that, for the reasons he had put forward in connection with the Austrian proposal, he was not satisfied with article VIII. He would not, however, press the point.

12. The CHAIRMAN said that the statement by the representative of the Federal Republic of Germany would be duly noted.

13. Miss O'FLYNN (United Kingdom) said she noted the Protocol did not contain a denunciation clause. Such a clause was perhaps rendered unnecessary by article 56 of the Vienna Convention on the Law of Treaties, but the Committee should, in her view, give the matter some attention.

14. Mr. ROMAN (Assistant-Secretary of the Committee) said that, while the inclusion of a denunciation clause in the Protocol would be quite acceptable in terms of legal practice, a complex situation might result, however, if a State which was a Contracting Party to the Convention of 12 June 1974 became a Contracting Party to the Protocol and subsequently denounced it. The implications of the proposal had therefore to be carefully examined.

15. Mr. NOVOSSILTSEV (Union of Soviet Socialist Republics) said that international legal practice contained examples of much simpler ways of amending existing conventions than that currently under consideration, e.g. the 1929 Warsaw Convention. However, since the Committee had already adopted most of the articles of the Protocol before it, he agreed that consideration should be given to the inclusion of a denunciation clause, and suggested that the Secretariat should be invited to produce the draft text of such a clause.

16. Mr. SONO (Japan) pointed out that a provision for denouncing the Protocol might give rise to problems in connection with article VII bis, which the Committee had just adopted.

17. The CHAIRMAN suggested that the Secretariat should be asked to prepare a draft denunciation clause, with due regard for the comments made by the representatives of the United Kingdom and Japan.

18. It was so decided.

19. Article VIII, as amended, was adopted.

Article IX

20. Mr. FARNSWORTH (United States of America) pointed out that article IX referred to "the Prescription Convention", whereas the other articles of the Protocol referred to "the Convention of 12 June 1974". He proposed that the texts of the various articles should be harmonized.

21. It was so decided.

22. Article IX, as amended, was adopted.

23. The CHAIRMAN invited the Committee to consider whether the brackets around the word "Arabic" in the second line of the final sentence of the Protocol should be deleted. Arabic was not one of the languages of the Prescription Convention.

24. Mr. SAM (Ghana) said that, in view of the fact that the delegation of Iraq was participating in the Committee's work, it was only fair that Arabic should be included among the languages in which the text of the Protocol would be equally authentic.

25. Mr. AL-TAWEEL (Iraq) said that, in addition to his own delegation, the delegation of Saudi Arabia was also participating in the Conference and Arabic had been adopted as one of the Conference's working languages. He requested, accordingly, that Arabic should be included among the languages in which the text of the Protocol was to be equally authentic.

26. In reply to a question by Mr. LANDFERMANN (Federal Republic of Germany), Mr. ROMAN (Assistant-Secretary of the Committee) said that, although there was no original Arabic text of the Convention of 12 June 1974, the fact that Arabic was one of the official languages of the current Conference meant that it was one of the languages in which the provisions of the Protocol were being discussed and in which any votes would be cast. There was thus no legal objection to the adoption of the Protocol in Arabic. The Arabic texts of the amended provisions of the 1974 Convention would be duly taken into account by the Secretariat when producing the Arabic translation of that Convention as amended.

27. The CHAIRMAN suggested that, in the light of the discussion, the brackets around the word "Arabic" in the final sentence of the Protocol should be deleted.

28. It was so decided.

29. The CHAIRMAN invited the Committee to consider the Statement by the Secretary-General on the Relationship of the Draft Convention on Contracts for the International Sale of Goods to the Convention on the Limitation Period in the International Sale of Goods (A/CONF.97/C.2/L.18/Add.1).

30. Mr. ENDERLEIN (Secretary of the Committee), introducing the document, pointed out that the word "this" in the first line of article 1 should be replaced by the word "the".

31. The CHAIRMAN said that, while annex II of the document was open for discussion, annex I had been included in the document for the purpose of information only and required no decision.

32. Mr. STENERSEN (Norway) pointed out that the document in question had been distributed quite recently and that his delegation had not yet had sufficient time to study it. He requested a postponement of the discussion.

The meeting was suspended at 10.50 a.m. and resumed at 11.35 a.m.

33. The CHAIRMAN invited the Committee to consider annex II to the Statement by the Secretary-General (A/CONF.97/C.2/L.18/Add.l).

34. Mr. LANDFERMANN (Federal Republic of Germany) said that the formula in annex II was a complicated one and it was difficult to deduce from it which article or articles of the Prescription Convention might need to be replaced, modified or retained.

35. In the circumstances, it might be useful to begin by considering annex I since to do so might clarify the situation. He proposed therefore that the Committee should start by examining annex I and decide which of the articles of the Prescription Convention were in keeping with the Contracts Convention.

36. Mrs. BELEVA (Bulgaria) said that, in the Russian version of annex II, article I, the words "notwithstanding the provisions of articles 1, 2(a), 3, paragraph 2, and 5 of this Convention" had been omitted.

37. The CHAIRMAN said that the Secretariat had taken note of the omission which would be rectified.

38. Mr. ROSENBERG (Union of Soviet Socialist Republics) said that he shared the concern of the representative of the Federal Republic of Germany and thought that it would be better firstly to consider and compare the pertinent provisions of the Prescription Convention and the Contracts Convention and draw the appropriate conclusions. It would then be possible to discuss the form that the Protocol should take and whether reference should be made to those articles which needed to be brought into line or whether those articles should be reformulated and included in the Protocol so that it could become the basis for accession and ratification. In his delegation's view, the latter was the more suitable solution.

39. Mr. STENERSEN (Norway) said that his delegation, which endorsed the views expressed by the delegations of the Federal Republic of Germany and the USSR, did not find the existing draft acceptable.

40. The CHAIRMAN said that, if there were no objections, he would take it that the Committee wished to adopt the proposal by the Federal Republic of Germany and consider annex I article by article.

41. Mr. PLANTARD (France) said that it seemed to his delegation that annex I was for information only and that it should not lead to a discussion. He proposed that the Committee should begin discussing annex II.

42. Mr. LANDFERMANN (Federal Republic of Germany) said that his delegation maintained its proposal that the Committee should begin by considering annex I and then decide whether any changes needed to be made to article 2 of the Prescription Convention.

43. Mr. SONO (Japan) said that his delegation was also in favour of examining annex I first. The simplest approach might be to identify the areas in which parallels between the two Conventions were considered necessary, to consider formulas which would incorporate the ideas in question and to leave minor drafting changes to one side unless they affected the substance.

44. Mr. STENERSEN (Norway) said he agreed that the substance should be discussed first and the drafting afterwards.

45. Mr. PLANTARD (France) withdrew his proposal to proceed immediately to the consideration of annex II.

46. Mr. STENERSEN (Norway) referred-to the amendment proposed by his delegation (A/CONF.97/C.2/L.14) that articles 2 and 3 of the Prescription Convention should be deleted and replaced by a new article.

47. The CHAIRMAN suggested that the Committee should, for the time being, restrict itself to the study of the comparative table in annex I and then take up the relevant proposals.

48. He noted that there were no comments on the comparative texts of article 2 (b), (c), (d) and (e) of the Prescription Convention and articles 1(2), 9(a), 9(b) and 1(3) of the Contracts Convention [became CISG article 1(2) , CISG article 10(a) , CISG article 10(b) and CISG article 1(3) ].

49. Mr. ROSENBERG (Union of Soviet Socialist Republics) said, with reference to article 3 of the Prescription Convention and article 1(1) [became CISG article 1 ], subparagraphs (a) and (b) of the Contracts Convention, that there was a difference between the two articles. The Prescription Convention started from the assumption that it was to be applied only to Contracting States whereas the Contracts Convention made provision for other principles. His delegation could, however, agree to apply to the Prescription Convention the same provisions as those contained in the Contracts Convention.

50. Mr. LANDFERMANN (Federal Republic of Germany) said that, while his delegation also agreed that the reference to private international law in article 1(1)(b) of the Contracts Convention [became CISG article 1 ] should be applied to the Prescription Convention, it thought that that should be done in the way set out in its proposal (A/CONF.97/C.2/L.21).

51. The reference to private international law in the Contracts Convention meant, in most cases, that the Convention would apply only if the rules of private international law with regard to contracts of sale led to the application of the law of the Contracting State. However, if the same wording were adopted in the Prescription Convention, it would relate to the rules of private international law in respect of prescription and those rules varied from country to country. The result would thus be a difference in the spheres of application of the two Conventions.

52. If, for example, a contract under the rules of private international law came within the jurisdiction of country A, and if private international law were applied in respect of prescription in country B, country A being a Contracting State of both Conventions and country B being a party to neither Convention, the Contracts Convention would apply but the Prescription Convention would not.

53. Mr. SONO (Japan) said that article 3 of the Prescription Convention should be given very careful consideration. When the Prescription Convention was being adopted, much time had been spent on the problem of the application of private international law, since the characterization of the prescription period differed from State to State. His delegation thought it was vitally important to exclude private international law from the application of the Prescription Convention. Articles 1(1) and 3(1) of the Prescription Convention taken together stated that it was the duty of the Contracting States to apply the Convention and article 3 (2) further emphasized that private international law should be taken as excluded. However, if a text such as that of article 1(1)(b) of the Contracts Convention [became CISG article 1(1)(b) ] was included, the whole approach of the Prescription Conference would be reserved and the question of characterization would recur.

54. His delegation agreed with the two previous speakers that an amendment should be made, but not one based on article 1(1)(b) [became CISG article 1(1)(b) ]. It was important to ensure that the Prescription Convention was applied in uniform fashion, and that could not be achieved by bringing in the private international law of each State.

55. The proposals by the Federal Republic of Germany and Norway were thus very interesting, as they brought the rules of private international law into play in relation only to contracts of sale and not to prescription. Moreover, if the text contained in subparagraph (b) of the proposal by the Federal Republic of Germany were adopted, article 3(2) might become unnecessary. If, on the other hand, article 1 of the Contracts Convention [became CISG article 1 ] were combined with article 3 of the Prescription Convention, the object of that proposal would be nullified.

56. Mr. SAM (Ghana) said he endorsed the view of the previous speaker. It was important to remember that the Prescription Convention was an attempt to avoid the introduction of the rules of private international law and the Committee should take care to restrict their application to contracts of sale and not to prescription. His delegation supported the proposals by the Federal Republic of Germany and Norway, which went a long way towards solving the problem of annex II, article 1.

57. Mr. FARNSWORTH (United States of America) said that his delegation also had difficulty in accepting a simple incorporation of the rules of private international law. It even had some difficulty in accepting the proposal by the Federal Republic of Germany.

58. Article 30 of the Prescription Convention, taken in conjunction with article 13, was designed to enable a creditor to stop the running of a period by bringing an action, generally in his own State. That was possible under the Prescription Convention as long as it applied only if both parties were from Contracting States. If the situation were changed by the Protocol so that one party might be from a Contracting State and the other from a non-Contracting State, the creditor in the non-Contracting State would be unable to stop the running of the period by suing the debtor in his own State, because article 30 would not apply. The result would be to deny a creditor in a non-Contracting State a right which a creditor would have if he were from a Contracting State.

59. Mr. LANDFERMANN (Federal Republic of Germany) said he believed that a distinction should be made between the Contracting States mentioned in article 3(1) of the Prescription Convention and those mentioned in article 30 of that instrument. According to the provisions of the former of those articles, the Convention would apply "only if, at the time of the conclusion of the contract, the places of business of the parties to a contract of international sale of goods are in Contracting States". However, the acts and circumstances referred to in article 13, and more particularly the commencement of judicial proceedings against the debtor, could be initiated by the creditor in a State other than the one in which he had his place of business. Whether or not those acts and circumstances would have effect for the purposes of the Convention in accordance with article 31 would depend on whether that other State was a party to the Convention.

60. Mr. FARNSWORTH (United States of America) said he agreed that creditors could sue in States other than those in which they had their places of business, however costly and time-consuming an exercise that might be.

61. What was important in his view was the fact that even if the proposal by the Federal Republic of Germany were adopted, it would not ensure that a creditor whose place of business was in a non-Contracting State would have the right to sue in his own country for the purposes of article 13 and thus secure the cessation of the limitation period. He could, of course, commence judicial proceedings but they would remain without effect, because the State in which he had his place of business was not a party to the Convention.

62. Mr. SONO (Japan) said that, although it was unfortunate that a creditor in a non-Contracting State should be denied resort to article 30 because the State in which he had his place of business was not a party to the Prescription Convention, the responsibility for that situation lay with the State in question and not the authors of the Convention.

63. During the preparation of that instrument, great care had been taken in article 2(a) to define an international contract of sale of goods; after a great amount of thought, it had been decided to limit its field of application by paragraph 1 of article 3. That limitation had consequently been reflected in article 30, whose provisions were almost unprecedented and the successful application of which depended on their being confined to Contracting States.

64. Miss O'FLYNN (United Kingdom) said that her delegation believed that there could be no objection per se to differences between the spheres of application of the two Conventions. While they were concerned with related fields of law, they were not so closely connected as to be unable to operate satisfactorily in independence. She had as yet heard no convincing argument in favour of aligning the sphere of application of the Prescription Convention with that of the draft Contracts Convention, and shared the doubts of the representative of the United States with regard to the implications of such an alignment for articles 13 and 30 of the former. She was thus unable to support the proposals in that connection.

65. Mr. PLANTARD (France) said he disagreed with that view. It would be of great help to States which contemplated accession to both instruments if their scope were coincident, if not identical.

66. The difficulties invoked by the representative of the United States with regard to the transposition to article 3 of the Prescription Convention of article 1(1)(b) of the draft Contracts Convention [became CISG article 1(1)(b) ] were not, in his opinion, very serious. What was envisaged in that subparagraph was a situation in which the rules of private international law led to the application of what was by definition a "foreign" law, i.e. one devised for the purposes of national, rather than international transactions. The fact that the machinery of articles 13 and 30 might, or might not, come into play was fundamentally immaterial; irrespective of whether the places of business of the parties to a contract of international sale of goods were in Contracting States, or whether the rules of private international law led to the application of the law of a Contracting State, a suit instituted in a non-Contracting State would remain without effect.

67. In the light of those considerations, he said that he could see no difficulty in extending the provisions of article 1(1)(b) of the draft Contracts Convention [became CISG article 1(1)(b) ] to the Prescription Convention. The application of those provisions would entail the non-application of article 13 of the international instrument, since by their very application, "foreign" and not international law would be invoked.

68. Mr. ENDERLEIN (Secretary of the Committee) said that the current discussion underlined a fundamental issue as far as the Protocol as a whole was concerned. Faced with the draft articles of the Contracts Convention and the corresponding articles of the Prescription Convention, the Committee should ask itself what, in the latter, should be changed in the interests of harmonization; what did not require change; and what should at all costs be preserved.

69. As far as the second of those questions was concerned, the Secretariat had indicated, in document A/CONF.97/C.2/L.18/Add.1, annex I, those articles of the two instruments in which there was no difference of substance. Those articles were thus virtually interchangeable, and the Committee might well decide to replace the formulation in the Prescription Convention by that in the Contracts Convention.

70. On the other hand, certain articles in the Prescription Convention should, in the opinion of the Secretariat, be preserved; the articles in question were listed in the final phrase of article I in annex II to the Statement by the Secretary-General (A/CONF.97/C.2/L.18/Add.1) which read "notwithstanding the provisions of articles 1, 2(a), 3, paragraph 2, and 5 of this Convention".

71. Of those articles, article 3(2) was also the subject of a note in annex I of the document, which suggested that, even if the sphere of application of the Prescription Convention were to include the provisions of article 1(1)(b) of the Contracts Convention [became CISG article 1(1)(b) ], that paragraph could remain unchanged. That suggestion by the Secretariat was echoed in the note to be found on page 3 of the English text of the Norwegian proposal (A/CONF.97/C.2/L.14), which stated that it was "well founded that the Prescription Convention should apply irrespective of what rules of international law regarding prescription may lead to." And, as had been pointed out earlier in the discussion, what those rules led to differed greatly from State to State.

72. Several representatives had referred to article 30 of the Prescription Convention which, as he recalled, had been the subject of lengthy debate during the Prescription Conference. Notwithstanding the eventual inclusion of the word "Contracting" before "State" in the second line of that article, considerable support had been expressed for the idea that any suit brought in any State should have effect for the purposes of the Convention in a Contracting State.

73. In the opinion of the Secretariat, the Committee was entitled to review the provisions of that article and, if it so desired, to propose the deletion of the controversial adjective, thereby aligning the scope of the Prescription Convention with that of the draft Contracts Convention as provided for under article 1(1)(b) [became CISG article 1(1)(b) ].

74. Mr. LANDFERMANN (Federal Republic of Germany) said he considered that the Committee's immediate task was to decide among three options as far as article 3 of the Prescriptions Convention was concerned: it could leave that article unchanged, as suggested by the representative of the United Kingdom; it could transpose to the article the provisions of article 1(1)(b) of the draft Contracts Convention [became CISG article 1(1)(b) ] -- although no member of the Committee appeared to favour that solution; or it could adopt one or other of the proposals by Norway and the Federal Republic of Germany in documents A/CONF.97/C.2/L.14 and A/CONF.97/C.2/L.21 respectively.

75. Mr. SONO (Japan) said he agreed with the previous speaker but wished to point out that the proposal by the Federal Republic of Germany was concerned only with contracts of sale, and excluded the application of the rules of private international law to the characterization of prescription.

76. Mr. ENDERLEIN (Secretary of the Committee) said that the delegation of the Federal Republic of Germany also proposed the deletion of article 3(2) which placed the question in an entirely different light.

77. He suggested that, before taking any action on the various proposals concerning article 3, the Committee might wish to continue its comparison of the articles in the two instruments, to see whether any other changes were required.

78. Mr. HJERNER (Sweden) said that the harmonization exercise had been initiated for the purpose of accommodating situations which had not been foreseen at the time of the Prescription Conference and -- more specifically -- in order to provide definitions of such terms as "place of business", "consumer sales" and the like.

79. The issue under discussion, which centred on article 1(1)(b) of the draft Contracts Convention [became CISG article 1(1)(b) ], was by no means a new one, and he submitted that the Prescription Conference -- having carefully weighed all the implications -- had consciously and deliberately decided that the scope of the Prescription Convention should be narrower.

80. Moreover, the revision of article 30 of that Convention required by any extension of article 3 would be a difficult and delicate task, in view of the complex relationships between court actions, national judgements and legal procedures in different States, quite apart from the fact that two parties, one of which had its place of business in a Contracting State and the other in a non-Contracting State, could have many reasons for establishing contracts in accordance with the law of the former.

81. Even if the proposal by the Federal Republic of Germany were adopted, it would not be sufficient to state that the rules of private international law must make the law of a Contracting State applicable to the contract of sale; it would have to be made quite clear that the law of the Contracting State was to be represented by the rules for international sales.

82. In the light of those considerations, he thought that it would be extremely difficult -- if not indeed outside its mandate under General Assembly resolution No.33/93 -- for the Committee to attempt to extend the scope of the Prescription Convention in respect of non-Contracting States.

83. Mr. SONO (Japan) said he could not agree with the remarks by the previous speaker, which he interpreted as signifying opposition to the proposal by the Federal Republic of Germany.

84. He believed that no further discussion should take place with regard to article 30 of the Prescription Convention. More generally, he observed that to permit what was tantamount to a re-opening of the debate on the international effect of that Convention would be to place those States which had ratified it in an invidious position.

85. Lastly, if the proposal by the Federal Republic of Germany were adopted, he would propose that article 3(2) of the Prescription Convention be deleted, and it was his understanding that other delegations would support that proposal.

86. In reply to a question by the CHAIRMAN, Mr. HJERNER (Sweden) said that his remarks had been addressed to article 3 (1) of the Prescription Convention, which he would prefer to leave unchanged. He had endeavoured to point out that the adoption of subparagraph (b) in the amendment proposed by the Federal Republic of Germany (A/CONF.97/C.2/L.21) would raise many complex issues, including the questions of revising article 30 of the Prescription Convention and of the difference in the relationships between the rules of private international law on the one hand and prescription and international sale on the other.

87. Above all, he believed that if the extension of the scope of the Prescription Convention was envisaged, the implications should be examined in their entirety, and not in piecemeal fashion.

88. After a procedural discussion in which Mr. SAM (Ghana), Mr. PLANTARD (France), Mr. SONO (Japan) and Mr. HJERNER (Sweden) took part, the CHAIRMAN invited the Committee to vote on the question whether paragraph 1 of article 3 of the 1974 Prescription Convention should be retained.

89. The proposal was rejected by 10 votes to 5, with 4 abstentions.

90. Mr. ENDERLEIN (Secretary of the Committee) suggested that, in view of the fact that one of the outstanding proposals (that by the Secretariat) was related not only to article 3(1) of the Prescription Convention but also to a number of other questions, further voting might be deferred until those questions had been more fully discussed.

91. Mr. SONO (Japan), speaking on a point of order, asked that the vote on article 3(1) be completed.

92. Mr. SAM (Ghana) said that, while he agreed with the previous speaker's interpretation of the rules of procedure, he appreciated the reasons for the suggestion by the Secretary of the Committee.

93. Noting that, for reasons of time, the meeting was about to be adjourned, he asked whether, at the start of its next meeting, the Committee would continue its vote or examine the questions to which the Secretary had alluded.

94. The CHAIRMAN said that it was for the Committee itself to answer that question when it next met. The circumstances were exceptional, and a pause for reflection might be salutary; he hoped that members of the Committee would not be too strict in invoking the rules of procedure.

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