CYIL 2012

PARALLEL NATIONAL AND INTERNATIONAL LAWS ȃ CZECH LAW AND THE PROPOSED… 2.3 Czech Republic, the CISG, and CESL Because of the existence of a separate law International Trade Code 39 when adopting the CISG, Czechoslovakia made an Article 95 reservation that the CISG only applied under CISG Article (1)(a) jurisdiction (both parties are from Contracting States of the CISG) and not under Article 1(b) jurisdiction, which provides that the CISG applies when only one party is from a country who has adopted the CISG and the rules of private international law (conflict of laws) direct the court to that country’s law. 40 Interestingly, the Czech and the Slovak Republics in their agreement of succession did not confirm the old reservation, but it is most likely to be interpreted as remaining. The Article 95 reservation has only been used by a handful of countries, but includes the People’s Republic of China and the United States. However, if a Czech business is involved in a foreign litigation in a country that has not acceded to the CISG, that country’s conflict of laws rules may point to Czech law as the applicable law. The foreign court may feel free to apply the CISG rather than apply the more out of date International Trade Code. It may reason that the Article 95 reservation only applies to Czech courts. Another important reservation is Article 96. Article 11 of the CISG states that no writing is needed to conclude an international sales contract. However, CISG Article 12 allows countries to opt out of Article 11 through an Article 96 declaration. In such cases, the formalities found in national laws, such as a need for a written contract or a notarial certification, would prevail when applying the CISG in the courts of the countries that made Article 96 reservations. Most of the countries that opted out were from former and current socialist legal systems such as Belarus, Estonia, Hungary, Latvia, Lithuania, Ukraine and the Russian Federation, as well as the People’s Republic of China. Oddly, some countries that require a writing in sale of goods contracts under national law elected not to opt out of the “no writing” requirement. One of those countries was the United States. Under the UCC any sale of goods of five-hundred USD or more must be evidenced by “some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought.” 41 There have been only two Czech CISG court cases reported in the CISG Database, but both of them were appealed to the Supreme Court. Both cases were well-reasoned with the Supreme Court enforcing the CISG as the governing law of the cases. In the Carpet Case, 42 a buyer purchased carpet for its hotel. The contract contained the buyer’s specifications for the carpet, as well as the purpose for which it 39 The International Trade Code will be replaced with the recently adopted Private International Law Act – Act No. 91/2012 Sb to enter into force on 1 January 2014. 40 Dr. Fritz Enderlein, “Vienna Convention and Eastern European Lawyers”, IBA Section on Business Law, International Sales Quarterly (June 1997) 12-14, available at http://www.cisg.law.pace.edu/cisg/ biblio/vienna.html. 41 UCC § 2-201(1). 42 Czech Republic 29 March 2006 Supreme Court ( Carpet case ), available at: http://cisgw3.law.pace.edu/ cases/060329cz.html.

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