International trade law

International Trade Law

Fifth Edition

International Trade Law offers a clear overview of the complexities of an international sale transaction

through informed analysis of case law, legislation, and international conventions and rules. Fully

updated with changes to the law and new directions in legal debate, this new edition considers:

• Standard trade terms including INCOTERMS 2010, the Convention on International Sales of

Goods 1980 and the UNIDROIT Principles for International Commercial Contracts 2004

• E-Commerce issues, including electronic bills of lading

• Insurance and payment mechanisms, such as letters of credit and the UCP 600

• International transportation of cargo, including the Rotterdam Rules

• Dispute resolution, incorporating jurisdiction, applicable law, arbitration and mediation

• Corruption and anti-corruption conventions, including the UK Bribery Act 2010

In addition to clarifying a range of topics through tables and diagrams, the book directs readers to

relevant further reading and online resources throughout, offering students an accessible resource

to this often challenging area of the law.

Indira Carr is Professor of Law at the University of Surrey.

‘Many of my students have commented on how useful Indira Carr’s book had been to them… .

This book is on the top of my list of suggested key textbooks.’

— Dr Simone Lamont-Black, Edinburgh University, UK

‘This is an excellently written, comprehensive and easy to navigate through book. It is an

indispensable resource for academics, practitioners and students.’

— Dr Jadranka Petrovic, Monash University, Australia

‘An excellent textbook pitched at just the right level for the modern student.’

— Dennis Crighton, Staffordshire University, UK

‘It is an excellent work on the major elements of international trade which accurately refl ects

the law and is essential for practitioners as well as students.’

— Masood Ahmed, University of Leicester, UK

‘Carr’s book is fl uently written and richly informative on the current state of the law and

practice in fi eld […] often bringing out the historical context of the international dynamics

of commercial transactions’.

— Dr Priscilla Schwartz, University of East London, UK

International

Trade Law

Fifth Edition

Indira Carr

MA (Delhi), BPhil (Liverpool), LLM, PhD (Exeter)

Professor of Law

University of Surrey

with contributions on Private

International Law by

Peter Stone

MA, LLB (Cantab), Barrister (Middle Temple)

Professor of Law

University of Essex

Fifth edition published in 2014

by Routledge

2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

Simultaneously published in the USA and Canada

by Routledge

711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2014 Indira Carr

The right of Indira Carr to be identifi ed as author of this work has

been asserted by her in accordance with sections 77 and 78 of the Copyright,

Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or

utilised in any form or by any electronic, mechanical, or other means, now known

or hereafter invented, including photocopying and recording, or in any information storage

or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered

trademarks, and are used only for identifi cation and explanation without intent

to infringe.

First edition published by Cavendish Publishing Limited 1995

Fourth edition published by Routledge-Cavendish 2010

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Carr, Indira.

International trade law / Indira Carr, Peter Stone. — Fifth edition.

pages cm

1. Foreign trade regulation—Great Britain. I. Stone, Peter, 1947- II. Title.

KD2460.C37 2013

343.4108’7—dc23

2013019442

ISBN: 978-0-415-65923-9 (hbk)

ISBN: 978-0-415-65925-3 (pbk)

ISBN: 978-1-315-87086-1 (ebk)

Typeset in Joanna

Project Managed and Typeset by: diacriTech

Outline Contents

Table of Cases xiii

Table of Statutes xlvii

Table of Statutory Instruments liii

Table of European Legislations lv

Table of Statutes and Other Instruments lxi

Table of Abbreviations lxxvii

Preface lxxxi

Introduction lxxxiii

Part I International Sales of Goods 1

Overview 3

1 Standard Trade Terms 5

2 The Vienna Convention on the International Sale of Goods 1980 59

Part II Regulating the Electronic Commerce Environment 95

Overview 97

3 Electronic Commerce – Legal Issues and Harmonisation 99

4 The Electronic Transaction and Security Issues 120

Part III Transportation of Cargo 149

Overview 151

5 Transportation of Goods by Sea – Charterparties 153

6 Bills of Lading 165

7 Bills of Lading and Common Law 197

8 Carriage of Goods by Sea: Bills of Lading and the Carriage of Goods

by Sea Act 1971 216

9 The Hamburg Rules and the Rotterdam Rules 267

10 International Carriage of Goods by Air 308

11 International Carriage of Goods by Rail 336

12 International Carriage of Goods by Road 351

13 International Multimodal Transport 373

vi | OUTLINE CONTENTS

Part IV Financing and Insurance 397

Overview 399

14 Marine Insurance 401

15 Letters of Credit 431

Part V Dispute Resolution 479

Overview 481

16 Civil Jurisdiction 483

17 Choice of Law 527

18 Foreign Judgments 569

19 Arbitration 584

20 Mediation (Conciliation): An Alternative Form of Dispute Resolution 609

Part VI Corruption 625

Overview 627

21 Fighting Corruption in International Business 629

Appendices 657

Index 685

Table of Cases xiii

Table of Statutes xlvii

Table of Statutory Instruments liii

Table of European Legislations lv

Table of Statutes and Other Instruments lxi

Table of Abbreviations lxxvii

Preface lxxxi

Introduction lxxxiii

Part I International Sales of Goods 1

Overview 3

1 Standard Trade Terms 5

Introduction 6

Ex works 6

CIF contracts 7

CIF contracts under INCOTERMS 2010 30

C&F contracts 34

C&F and INCOTERMS 34

FOB contracts 35

Variants of an FOB contract 44

FAS contracts 44

Conclusion 50

Further reading 50

2 The Vienna Convention on the International Sale of Goods 1980 59

Introduction 60

The Vienna Convention 63

Conclusion: Recent international initiatives 89

Further reading 93

Part II Regulating the Electronic Commerce Environment 95

Overview 97

3 Electronic Commerce – Legal Issues and Harmonisation 99

Introduction 100

Policy considerations, e-commerce and international regulatory measures 101

Electronic data interchange (EDI) and interchange agreements 103

UNCITRAL model law on e-commerce 104

Detailed Contents

viii | DETAILED CONTENTS

Other international initiatives – the International

Chamber of Commerce 112

The EU directive on e-commerce 112

The United Nations Convention on the use of electronic communications

in international contracts 115

Conclusion 118

Further reading 118

4 The Electronic Transaction and Security Issues 120

Introduction 121

Electronic signatures and UNCITRAL 122

The EU directive on electronic signatures and the UK legislation:

Electronic Communications Act 2000 and the Electronic Signatures Regulation 2002 130

Electronic medium and computer misuse 132

Conclusion: a bright future for e-commerce? 147

Further reading 148

Part III Transportation of Cargo 149

Overview 151

5 Transportation of Goods by Sea – Charterparties 153

Introduction 154

Types of charterparties 155

Common law implied obligations in a voyage charterparty 156

Common law immunities 161

Usual express terms 161

Conclusion 163

Further reading 164

6 Bills of Lading 165

Introduction 166

Nature of a bill of lading 166

Rights and liabilities of consignee/endorsee 177

The Carriage of Goods by Sea Act 1992 181

Bills of lading and fraud 186

Electronic data interchange (EDI) and the Carriage of Goods by Sea Act 1992 189

Conclusion 195

Further reading 195

7 Bills of Lading and Common Law 197

Introduction 198

Implied obligations on the part of the shipowner 198

Implied obligations on the part of the shipper 206

Shipowner's immunities 207

Common law exceptions 208

Contractual exceptions 208

Other terms in bills of lading 210

Conclusion 215

Further reading 215

DETAILED CONTENTS | ix

8 Carriage of Goods by Sea: Bills of Lading and the Carriage of

Goods by Sea Act 1971 216

Introduction 217

Interpretation of The Hague-Visby Rules in the English Courts 218

Carrier's responsibilities and liabilities 220

Carrier's immunities 232

Limitation of liability 238

Shipper's duties and immunities 247

Scope of application 251

Contracting out 262

The future 265

Further reading 265

9 The Hamburg Rules and the Rotterdam Rules 267

Introduction 268

The Hamburg Rules 270

Scope of application 271

The Rotterdam Rules (The UN Convention on Contracts for the International

Carriage of Goods Wholly or Partly by Sea) 296

Conclusion 306

Further reading 306

10 International Carriage of Goods by Air 308

Introduction 309

The Warsaw system 309

Approach to interpretation of the Warsaw Convention in the English courts 312

Scope of application of the Warsaw Convention (unamended and

amended versions) 312

Contracting out 314

Documentary responsibilities 315

Air waybill and negotiability 317

Electronic data interchange (EDI) and the Warsaw regime 317

Carrier liability 318

Consignor's responsibilities and rights 324

Consignee's responsibilities and rights 325

Proceedings 325

The Montreal Convention 331

Further reading 335

11 International Carriage of Goods by Rail 336

Introduction 337

Interpretation of the CIM 338

Scope of application 338

Documentary responsibilities 340

Electronic data interchange (EDI) and the CIM rules 342

Contracting out 343

Carrier's responsibilities and liabilities 343

Carrier's rights 345

Consignor's responsibilities and rights 346

Consignee's responsibilities and rights 347

x | DETAILED CONTENTS

Proceedings 348

Conclusion 349

Further reading 350

12 International Carriage of Goods by Road 351

Introduction 352

Interpretation of the CMR by the English courts 352

Scope of application 353

Contracting out 356

Documentary responsibilities 357

Electronic data interchange (EDI) and the CMR 359

Carrier's liabilities and rights 360

Sender's responsibilities and rights 365

Consignee's rights and responsibilities 367

Proceedings 367

CMR – the future 372

Further reading 372

13 International Multimodal Transport 373

Introduction 374

Freight forwarder – agent or principal? 376

Unifi cation efforts by the industry 380

Fiata negotiable multimodal bill of lading 383

Conclusion 388

Further reading 395

Part IV Financing and Insurance 397

Overview 399

14 Marine Insurance 401

Introduction 402

Scope and nature of marine insurance contracts 402

Principles of marine insurance law 407

Warranties on the part of the insured – implied and express 415

Deviation 417

Liability of insurer 418

Institute cargo clauses (A), (B) and (C) 421

Conclusion 429

Further reading 429

15 Letters of Credit 431

Introduction 432

Open account 432

Bills of exchange 433

Documentary bill 436

Letters of credit 437

Performance bonds/guarantees and standby letters of credit 470

Other means of minimising risk of non-payment 473

Conclusion 476

Further reading 477

DETAILED CONTENTS | xi

Part V Dispute Resolution 479

Overview 481

16 Civil Jurisdiction 483

Introduction 484

The defendant's domicile 487

Submission by appearance 491

Ordinary contracts 492

Tort claims 498

Ancillary jurisdiction 501

Jurisdiction clauses 505

Simultaneous actions 519

Interim relief 524

Conclusion 526

Further reading 526

17 Choice of Law 527

Introduction 528

The proper law – express choice 531

The proper law – implied choice 534

The proper law – closest connection 537

Particular issues 545

English public policy and overriding mandatory rules 548

Certain particular types of contract 553

Torts and restitutionary obligations 564

Conclusion 568

Further reading 568

18 Foreign Judgments 569

Introduction 570

European judgments 570

External judgments 577

Conclusion 583

Further reading 583

19 Arbitration 584

Introduction 585

Characteristics 585

Arbitration in international commercial contracts 590

Arbitration under English law 592

Foreign arbitral awards 604

Conclusion 607

Further reading 608

20 Mediation (Conciliation): An Alternative Form of Dispute Resolution 609

Introduction 610

International developments 612

Developments in England 614

Features and associated issues 615

Mediation online 621

xii | DETAILED CONTENTS

The EU Directive on mediation in civil and commercial matters 622

Conclusion 624

Further reading 624

Part VI Corruption 625

Overview 627

21 Fighting Corruption in International Business 629

Introduction 630

Defi ning corruption 632

The OECD Convention 634

The OECD and the UK Bribery Act 2010 637

The UNCAC 642

Business codes of conduct 653

Conclusion 654

Further reading 655

Appendix 1 657

Appendix 2 661

Appendix 3 665

Appendix 4 677

Appendix 5 679

Appendix 6 681

Appendix 7 683

Index 685

A

7E Communications v Vertex Antennentechnil

[2007] 2 All ER (Comm) 798 CA … 507

ABCI v Banque Franco-Tunisienne [2003]

2 Lloyd’s Rep 146 (CA) … 500

Abdullah M Fahem & Co v Mareb Yemen

Insurance Co and Tomen (UK) Ltd [1997]

2 Lloyd’s Rep 738 … 585

ABKCO v Music Collection [1995] RPC 657

(CA) … 500

Abouloff v Oppenheimer (1882) 10 QBD

295 … 572, 579

Abu Dhabi National Timber Co v Product Star

Shipping Ltd, The Product Star (No 2) [1993]

1 Lloyd’s Rep 397 … 157

Ace European v Howden Group [2012] EWHC

2427 (Comm) … 536

Ace Imports Ltd v Companhia de Navegacao

Lloyd Brasileiro The Esmeralda [1988]

1 Lloyd’s Rep 206 (Sup Ct NSW, 12 August

1987, Australia) … 243, 228

Ace Insurance v Zurich Insurance [2001]

1 Lloyd’s Rep 618 (CA) … 490

ACP Capital v IFR Capital [2008] EWHC 1627

(Comm) … 508

Adamfi Video Production Gmbh v Alktok Studisa

Kisszovetkezet, Municipal Court, Budapest

AZ 12.G.41.471/1991/21, 24 March 1992

abstract available CLOUT database at http://

www.uncitral.org … 74

Adams v Cape Industries [1990] Ch 433 … 579,

582

Adler v Dickinson [1954] 2 Lloyd’s Rep 267 … 239

AG Duisburg, 13 April 2000 49 C 502/00

available at http://cisgw3.law.pace.edu/

cases/00413g1.html … 71, 76

AG v Glen Line Ltd (1930) 46 TLR 451 … 413

AG World Exports v Arrow Air Inc 22 Aci

Cas 18 … 318

Agapitos v Agnew, The Aegeon No 2 [2002]

EWHC 1558 (Comm) … 416

Agios Dimitrios, The [2005] 1 Lloyd’s

Rep 23 … 598

Agnew v Länsförsäkringsbolagens [2001]

1 AC 223 … 497, 501

Agricultores Federados Argentinos v Ampro SA

[1965] 2 Lloyd’s Rep 157 … 41

Agrosin Pte Ltd v Highway Shipping Co Ltd, The

Mata K [1998] 2 Lloyd’s Rep 614 … 228

Ahmad Al-Naimi v Islamis Press Agency Inc

[2000] 1 Lloyd’s Rep 522 … 597

AIG Group v The Ethniki [2000] 2 All ER

566 (CA) … 507

Aiglon v Gau Shan [1993] 1 Lloyds

Rep 164 … 502

Air Crash Disaster Near New Orleans on 9 July

1982 821 F 2d 1147 (a decision of the

Federal Court of Appeal of the United States,

5th Circuit) … 327

Air Transworld v Bombadier [2012] EWHC 243

(Comm) … 531

Airbus Industrie v Patel [1999] 1

AC 119 … 523

Ajax Tool Works Inc v Can-Eng Manufacturing

Ltd, US District Court, Northern District

of Illinois 01 C 5938, 29 January 2003

available at http://cisgw3.law.pace.edu/

cases/0130129u1.html … 77

Akai v People’s Insurance [1998] 1 Lloyd’s

Rep 90 … 529, 552

Al Hadha Trading Co v Tradigrain SA and Others

[2002] 2 Lloyd’s Rep 512 … 602

Al Jubail, The [1982] 2 Lloyd’s Rep 637 … 405

Al Palazzo Srl v Bernardaud di Limoges SA, Italy

26 November 2002 District Court Rimini

translation

of case available at http://cisgw3.law.pace.edu/

cases/930524g1.html … 79

Table of Cases

xiv | TABLE OF CASES

Alan (WJ) and Co Ltd v El Nasr Export and Import

Co [1972] 2 QB 189; 2 All ER 127 … 26

Albacora SRL v Westcott and Laurance Line

[1966] 2 Lloyd’s Rep 53 … 227, 228,

237, 361

Albazero, The [1974] 2 All ER 906 (Brandon J),

reversed on other grounds [1977] AC 774;

[1978] 3 All ER 129; [1976] 2 Lloyd’s Rep

467 … 22, 24, 179

Alberta Inc v Katanga Mining Ltd [2008] All ER

(D) 61 (Nov) … 489

Albon v Naza Motor Trading [2007] 2 All ER

719 … 540, 543

Ali Shipping Corporation v Shipyard Trogir

[1998] 2 All ER 136; [1998] 1 Lloyds Rep

643 … 589, 619

Aliakmon, The [1986] 2 All ER 145; 1 Lloyd’s

Rep 1 … 182

Alliance Bank JSC v Aquanta Corp [2011] EWHC

3281 (Comm) … 564, 565, 567

Allianz v West Tankers (Case C-185/07)

10 February 2009; on a reference from the

House of Lords [2007] UKHL 4 … 523

Allison v Bristol Marine Insurance Co (1876)

1 App Cas 209 … 212 – 13

Aluminium Industrie Vassen BV v Romalpa

Aluminium Ltd [1976] 1 Lloyds

Rep 443 … 22

American Airlines Inc v Hope [1973] 1 Lloyd’s

Rep 233 … 403

American Motorists Insurance Co v Cellstar Corp

[2002] 2 Lloyd’s Rep 216; [2003] ILPr

22 (CA) … 536, 562, 563

American Union Transport Inc v United States of

America [1976] AMC 1480 … 424

Amin Rasheed v Kuwait Insurance Co [1984]

1 AC 50 … 531, 535

Amsteslot, The [1963] 1 Lloyds Rep 223 … 382

Amtsgericht Alsfi eld, 12 May 1995, 31C 534/94,

available at http://www.unilex.info … 64

Amtsgericht Duisburg, 13 April 2000 49C

502/00 available at http://cisgw3.law.pace

.edu/cases/000413g1.html

Anderson Owen Ltd, Re [2009] EWHC 2837

(Ch) … 492

Andrea Merzario Ltd v Internationale Spedition

Leitner Gesellschaft GMBH [2001] 1 Lloyd’s

Rep 490 … 368

Andrew Weir Shipping Ltd v Wartsila UK Ltd

[2004] EWHC 1284 (Comm) … 504

Angelic Grace, The [1995] 1 Lloyd’s Rep 87

(CA) … 523

Anglo Overseas Transport Ltd v Titan

Industrial Corp Ltd [1959] 2 Lloyd’s Rep

152 … 380

Anglo-African Co v Lamzed (1866) 35 LJ CP

145; (1866) LR 1 CP 226 … 211

Anglo-Russian Merchant Traders Ltd v Batt

[1917] 2 KB 679 … 20

Anglo-Saxon Petroleum Co v Adamastos Shipping

Co [1958] 1 All ER 725; [1957] 1 Lloyd’s Rep

79 … 239, 253, 268

Anna Oden, The (Cass fr 5 July 1989, reported in

[1990] ETL 221) … 355

Antaios Compania Naveria SA v Salen Rederierna

AB, The Antaios [1985] AC 191; [1984]

3 All ER 229 … 599, 600, 601

Antares, The see Kenya Railways v Antares

Co Pte Ltd, The Antares [1987] 1 Lloyd’s

Rep 424

Anterist v Crédit Lyonnais (Case 22/85) [1986]

ECR 1951 … 506

Antigoni, The [1991] 1 Lloyd’s Rep 209 … 237

Anton Durbeck v Den Norske Bank [2002] EWCA

Civ 1173; partly reversed on other grounds

[2003] QB 1160 (CA) … 491, 499

Antwerp United Diamond BVBA and Another v

Air Europe [1996] QB 317 … 321

Apostolides v Orams (Case C-420/07) [2009]

ECR I-3571 … 573

Apple Corps v Apple Computer [2004]

ILPr 34 … 542

Applied Implant Technology Ltd and Others v

Lufthansa Cargo AG and Others; Nippon

Express UK Ltd v Lufthansa Cargo AG [2000]

2 Lloyd’s Rep 46 … 320

Aqualon UK Ltd v Vallana Shipping Cort [1994]

1 Lloyd’s Rep 669 … 354, 376

Arab African Energy Corporation Ltd v

Olieprodukten Nederland BV [1983] 2 Lloyd’s

Rep 419 … 602

Arab Bank Ltd v Ross [1952] 2 QB 216 … 434

Aramis, The [1989] 1 Lloyd’s Rep 213

(CA) … 179, 182

Arbitration Case of Bulgarian Chamber of

Commerce and Industry 14/98 Bulgaria,