INTERNATIONAL TRADE AND BUSINESS LAW

(LUAT THUONG MAI QUOC TE)

Week 1: INTRODUCTION
I. HISTORY OF ITBL
* Ancient Time:
- 3500 Before Ch in Mesopotamia
- 1000 – 2000 Before Chris in China
- 1000 – 2000 TCN Before Chris in America
* Medieval Time:
- V – XIII
- All most customary law appeared in the Medieval
- ITBL developed in Europe
* Modern Time:
- XIV – XVIII: Trade in Europe
- XIX – 1945: Multinational Corporations
* Contemporary Time:
1945 – now
- Global Economic Integration
- Regional Economic Integration
- Protectionism come back

II. THE CONCEPT OF INTERNATIONAL TRADE AND ITBL

- Trade:
+ UNCITRAL: Broad Interpretation (hiểu theo nghĩa rộng)
+ WTO: Good, Services, Investment, IPR related Trade…
+ VN: For Benefit
 - ITBL:
+ In the past: Narrow Approach
+ Relative Distinguilại International trade (between states; international
organizations; regions); Thương nhân (International business) (legal
persons; natura person
 International trade law can be understood in the broadest sense
including international trade law with the main participation of states and
public trade law and international business law with participation of
business

III. PERSONS OF ITBL

1. Natural Person
2. Legal Person
3. States
- Sign or Participate in International Agreements
+ Multi
+ Bilateral
- Participate in Business Transactions: Natural or Legal Persons
- “Special Person”:
+ Take the priority in choosing law: In theory – Freedom of Contract;
In reality – Priority
+ Sovereign immunity: In theory – Principles of Equality; In reality:
State immunity
(Sovereignty – chủ quyền: legislation; executive; judiciary)
State’s Sovereign Immunity:
- No institutions or persons can judge a state
- State’s property can not be on mortgage for a suit
 - Foreign courts’ judgements against a state are not binding
Absolute State Immunity:
- Act of State Doctrine
- Banco Nacional de Cuba v Sabbatino (1964)
Waive Sovereign Immunity:
- Method of implementation:
+ Regulate in domestic law: Luật của Hoa Kỳ về miễn trừ chur quyền
của quốc gia nước ngoài năm 1976, Luật của Anh Quốc về mieenc trừ
quốc năm 1978
- Sign International Agreements: Công ước Washington về Trung tâm
giải quyết tranh chấp đầu tư quốc tế (ICSID) (1956)
4. International Organization
- Global:
- Regional:
5. Others
Regions, Custom territory, economic unions
EX: Hongkong, Macao, EU là thành viên của WTO; các tam giác, tứ
giác phát triển,…

IV. SOURCES OF ITBL

1. National/ domestic Law
- Legal documents
- National Precedents
- Others
Mutual Agreement:
- Each party’s law or third country
- The tribunal refuse to apply
 - Illegal agreement
- For public interest or order
Conflict of law
- Nationality
- Residence
- Place of object of the contract
- Place of formation of contract
- Place of performance of contract
2. International Law
- International Agreements dieu uoc
- International Customary tap quan
- International Precedents an le
- Others

THAO LUAN
ITBL:
international trade law
+ international commercial law ddieeuf chinhr quan heej giwax chur
theer tư, điều chỉnh cấp độ thấp hơn là cấp độ giao dịch, trade policy
International sales of constract

Actions:
- State
- Int’l organixation
- Traders: natural persons, Legal persons
- Others: separate custom (hair quan) territorty
Sources:
- National/ domestic law
 Legislations
 Precedents (case law)
- In’l law
 Treaty
 Custom
 Case law
 Others (model law, ….)
A Vietnamese trader doing business in “fashionable” clothes headquartered his
company in Hanoi. In November 2011, he travelled to Italy and ordered 1000 in
fashion suits for man. He returned to Hanoi and received the goods shipped by the
sea by the Italian seller to hai phong port after one month. Below are the legal
issues that traders may face in such a business transaction. Research the relevant
sources of law and answer the following questions:
1. Can contracting parties choose the applicable law?
Yes, nuóc t3 phải có quan hệ với việc thực hiện hợp đồng, cần make sure
understanding of law
pate
Could Vietnamese law, Italian law, or another nation’s law be applicable to this
business? What are the criteria governing the choice of law? Treaty mang tính
chất balance
Absent the choice of law, how to identify the applicable law for the contract?
Cơ quan giải quyết tranh chấp
Điều 683
 2. Whether the sale of clothes contract between the traders could be governed
by united nations convention on contracts for the international sales of good
1980 (CISG)?
Yes
At the same time can we gree that cisg and other sources of law yes
Icc
3. In the case where the Vietnamese trader considered that the goods sold by
the Italian partner are “out of fashion” suits, what is the competent forum to
solve their dispute?
Choice of course
4. In the case where the Italian trader loses the lawsuit following the Italian
court’s judgment, will this judgment have legal effect and be enforceable in
Vietnam?
Hợp định tương trợ tư pháp
Xme điều ước quốc tế có liên quan,

Lecture 2: international to basic principles of WTO law

 1. Trader without discrimination (MFN & NT)
1.1. Most – favored – nation (MFN)
- Under the two agreement, countries cannot normally discrimination
between their trading partners
- E.g: if a wto member grants another member a special favor (such as a lower
custom duty rate for are of their products) => it must do the same for all
other wto members
Most favored nation
a. MFN treatment under GATT
- Legal provision: GATT article I.1
With respect to customs duties and charges of any kind imposed on or in
connection with importation or exportation or imposed on the international transfer
of payments for imports or exports, and with respect to the method of levying such
duties and changes, and with respect to all rules and formalities in connection with
importation and exportation, and with respect to all matters referred to in
paragraphs 2 and 4 of articles III, any advantage, favor, privilege or immunity
granted by any contracting party to any product originating in or destined for any
other country shall originating in or destined for the territories of all other
contracting parties

Với mọi khoản thuế quan và khoản thu thuộc bất cứ loại nào nhằm vào hay có liên
hệ tới nhập khẩu và xuất khẩu hoặc đánh vào các khoản chuyển khoản để thanh
toán hàng xuất nhập khẩu, hay phương thức đánh thuế hoặc áp dụng phụ thu nêu
trên, hay với mọi luật lệ hay thủ tục trong xuất nhập khẩu và liên quan tới mọi nội
dung đã được nêu tại khoản 2 và khoản 4 của Điều III,* mọi lợi thế, biệt đãi, đặc
quyền hay quyền miễn trừ được bất kỳ bên ký kết nào dành cho bất cứ một sản
phẩm có xuất xứ từ hay được giao tới bất kỳ một nước nào khác sẽ được áp dụng
cho sản phẩm tương tự có xuất xứ từ hay giao tới mọi bên ký kết khác ngay lập tức
và một cách không điều kiện.

- Purpose: to product the equality of competitive opportunities for imports

from/exports to all wto members
- Scope of application (phạm vi và đối tượng áp dụng)
 De jure (in law) discrimination: origins – based measures
 De facto (in fact) discrimination: origin – neutral measures but
discriminatory in application
- The three tier test
(i) Any advantage, favor, privilege or immunity covered by art I.1 GATT
1994
(ii)Like products
(iii) Advantage not granted immediately and unconditionally to like
products
(i) Measures covered by art I.1: 2 types
 Border measures (những biện pháp thực thi tại biên giới, thu thuế ở sân bay
hải cảng bến cảng, hạn ngạch): custom duties, charges on export/import,
quota, tariff quota, import licenses, customs formalities
 Internal measures (behind the border measues) : internal taxes and internal
regulations affecting sales/distribution/use of products
 Advantage: not only those granted by WTO members to other members, but
also those granted by WTO members to non-WTO members
(ii) Like products
 EC – bananas III, AB report: like products should be treated equally (=>
unlike products may be treated differently)
 Not defined in GATT
 But clarified in GATT/WTO case law: e.g. japan – alcoholic beverages II,
AB report (not a closed list)
1. Product’s nature, properties and quality (physical characteristics)
2. Product’s end uses
3. Consumers’ tastes and habits
(iii) Immediate and unconditional granting of advantage to like products
 Immediate: without delay, no time lapses between granting advantage to a
product and all like products
 Unconditional: without any condition/criteria unrelated to product imported
(indonesia – autos, panel report)
- Irrelevant factors in determining MFN violation:
 Actual trade effects
 Discriminatory intent
- A measure that creates a more favorable competitive opportunity for some
WTO members causes violation of MFN
- General exception to all provisions (including MFN):
 General exceptions (art XX GATT 1994)
 Security exception (art XXI GATT 1994)
 Balance of payment exceptions and temporary application of quantitative
restrictions in a discriminatory manner (art XII, XVIII.B and XIV GATT
1994)
 Waivers (art IX.3 marrakesh agreement)
 Special and differential treatment provision in WTO agreements
- Particular exceptions to MFN:
 Regional integration (art XXIV GATT 1994): more favorable treatment
to trading partners within a FTA/CU
  Enabling clause (1979 decision on differential and more favorable
treatment, reciprocity and filler participation of developing countries)
preferential tariffs by developed members to imports from developing
members only (e.g.: generalized system of preferences – GSP schemes)
 Historical preferences (art I.2 -Art I.4 GATT 1994): tariff preferences
among some members of GATT 1947 only
 Frontier traffic (Art XXIV.3 GATT 1994): advantages accorded to
adjacent countries to facilitate frontier transactions
b. MFN treatment under GATS
- Legal provision: article II.1 GATS
With respect to any measure covered by this
1.2. National treatment (NT)
- Legal provision: art III GATT
 General principle (para. 1)
1. The contracting parties recognize that

Thảo luận
Thương mại đa phương ngoại lệ theo hiệp định về thuế
Có
Teaching is service suppliers
Qualification have to be equallity
Courses

Lecture 3: GATT, AOA, TBT, SPS

1. The general agreement on tariffs and trade 1994
1.1. Overview
- Original GATT (GATT 1947) provided rules of multilateral trading system
from 1 Jan 1948 until WTO entered into force on 1 Jan 1995
- GATT 1947 is no longer in force and has been replaced by GATT 1994
- GATT 1994 consists of:
 Provision of GATT 1947, as amended or modified up to 1 January 1995,
(date of entry into of the agreement establishing the WTO)
 Protocols and certifications relating to tariff concession
 Protocols of accession (to the GATT up to 31 December 1994)
 December
1.2. Tariffs
- Definition of tariff/custom duty
 Not defined in GATT 1994 or any other multilateral agreement on
trade in good
 A tariff is a financial charge in the form of a tax, imposed on goods
transported from one custom area to another (often from one country
to another)
- Tariff if the most commonly used and visible measure to determine market
access for goods
 Import tariffs are more popular and main focus of GATT/WTO
 Export tariffs are largely unbound in GATT/WTO
- Classification of tariff/custom duty (by manner of calculation)
 Ad valoum: a percentage of the vaule of the good
 Specific: an amount of money based on a unit of quantity such as
weight (kg), length (m), area (m2), volume (m3/litre), member (items,
pairs, dozens, packs)
  Mixed: an alternative between ad valorem duty and specific duty,
whichever duty is the higher/lower
 Compound: an ad valorem duty to which a specific duty is added or
less frequ
- Difference between tariff and other charges that may levied at the border
 Tariffs is not an “ internal tax” (e.g
 Tariffs represents a lawful instrucment of protection allowed by
GATT 1994 (
 Tariffs are suject to negotiation on reduction ( art XXVIIIbis GATT)
 8 rounds of trade Negotiations under GATT 1947 reduced average
customs duties
- Basic rules governing tariff negotiation
 reciprocity and mutual advantages
- schedule of concession
TRADE REMEDIES
1. anti-dumping in brief (choongs bans phas gias)
- article VI of the agreement on tariffs and traco (GATT) 1994 and the
agreement on the implementation of article VI of GATT 1994 – the “anti-
dumping agreement” – explicitly authorize the imposition of anti-dumping
measures by WTO members, under certain conditions.
- dumping is not illegal but unfair
- member countries can apply their own anti – dumping law as long as these
are incompatible with ADA
2. what is dumping
- Dumping is a form of price discrimination, which takes
place when the price of a product when exported to
 another country is less than the price of that same
product when sold in the market of the exporting
country.
(Article VI of the GATT and Article 2.1 of the Anti-
Dumping Agreement).

- Dumping is calculated on the basis of a fair

comparison between the normal value (the price of
the imported product in the “ordinary course of trade”
in the country of origin or export) and the export
price (the price of the product in the
importing country)
2.1. normal value
- general rule: the normal value is generally the price in the ordinary course
of trade for the like product at issue when destined foe consumption in the
exporting country market
>>>> what is ordinary course of trade
- alternative methods: article 2.2 provides two alternatives for the
determination of normal value
(i) the comparable price of the like product when exported to an appropriate
third country (provided that this price is representative); or
(ii) the constructed normal value of the product, which is calculated on the
basis of the cost of production, plus a reasonable amount for
administrative, selling and general cost
2.2. export price
- general rule: the export price will normally be based on the transaction price
at which the foreign product sells the product to an importer in
- ALTERNATIVE METHOD When the transaction price cannot be used, the
export price can be based on a constructed export price determined on the
basis of the price at which the imported product is first resold to an
independent buyer.
3. calculation of the margin of dumping
- normal value – export price)/ (export price). 100% = dumping margin
- dumping margin >= 2%
- dumping margin < 2%
4. substantive requirements for the application of anti-dumping measures
- the anti-dumping agreement provides that an anti-dumping measures shall
be applied only after determining, pursuant to an invesgation intiated and
conducted in conformity with the provisions of the agreement
- the three following cumulative conditions:
 dumped imports
 injury to the domestic industry producing the like product; and,
 causal link between the dumped imports and the injury.
- hangf hoas cos hnahf vi bans phas gia
5. initiation of investigation at the request of the domestic industry
- this requirement for plaintiff: by or on behalf of the domestic industry (the
so-called “standing” requirement)
- for example, the application shall be considered to have been made “by or
on behalf of the domestic industry” if:
 it is supported by those domestic producers collective output
constitutes more than 50 per cent of the total production of the like
 product produced by that portion of the domestic industry expressing
either support for or opposition to the application.
 No investigation shall be initiated when domestic producers expressly
supporting the request account when domestic producers expressly
supporting the request for less than 25 per cent of total production
- nguyên đơn đại diện cho ngành sản xuất trong nước (2 điều kiện: nhưng nsx
chiếm 50?% bày tỏ ý kiến số nhà sản xuất chống phá giá, 25% tổng sản
lượng của ngành sản xuất của họ. các biện pháp chống bán phá giá áp dụng
liên quan đến thuế liên quan đến chính sách vĩ mô của quốc gia, sự tổn hại
nhỏ bé
6. termination of investigation without merit
 There is not sufficient evidence of either dumping or injury, the
margin of dumping is de minimis (less than two per cent, expressed as a
percentage of the export price); or

 The volume of imports is negligible (the volume of dumped imports

from a particular country is found to be less than three per cent of total
imports of the like product; unless imports which individually account for
less than three per cent collectively account for more than seven per cent
of imports of the like product in the importing country).
(Article 5.8 of the Anti-Dumping Agreement)
7. Undertakings
- It establishes the principle that undertakings between any exporter and the
importing Member may be entered into, but only after a preliminary
affirmative determination of dumping, injury and causation has been made.
- It also establishes that the acceptance of price undertakings is voluntary on
the part of both exporters and investigating authorities.
- In addition, an exporter may request that the investigation be continued after
an undertaking has been accepted:
- If a final determination of no dumping, no injury or no causation results, the
undertaking shall automatically lapse,
- where such a determination is due in large part to the existence of a price
undertaking.
(Article 8 of the Anti-Dumping Agreement )
8. provisional measures
- No provisional measures may be applied sooner than 60 days after initiation
of an investigation.
- Provisional measures may take the form of a provisional duty or, preferably,
a security by cash deposit or bond equal to the amount of the preliminarily
determined margin of dumping
- The Anti-Dumping Agreement also contains time limits for the imposition
of provisional measures — generally four months, with a possible extension
to six months at the request of the exporter
- (Article 7 of the Anti-Dumping Agreement)
9. Application of anti-dumping duties
- Anti-dumping measures take the form of customs duties, which may be in
excess of the bound tariff provided in the Schedule of concessions of the
Member applying the measure.
- The Anti-Dumping Agreement provides that it is desirable that the
imposition of the duty be permissive and that the duty be less than the
margin of dumping if such "lesser duty" would be adequate to remove the
injury to the domestic industry.
 - In any case, anti-dumping duties cannot exceed the margin of dumping
calculated during the investigation
- (Article of the Anti-Dumping Agreement)
10.Duration and review of anti-dumping measures
- Article 11 of the Anti-Dumping Agreement establishes rules for the
duration of anti-dumping measures and requirements for periodic review
of the continuing need, if any, for the imposition of the measures.
- Article 11.3 (known as the "sunset clause") provides that anti-dumping
measures shall normally terminate no later than five years after first
being applied, unless a review initiated prior to that date establishes that
the expiry of the duty would be likely to lead to continuation or
recurrence of dumping and injury. The duty may remain in force pending
the outcome of such a review.
- This five-year "sunset" provision also applies to price undertakings.
THẢO LUẬN
Bị phạt khi 3 đk xảy ra: có bán phá giá, có thiệt hại xảy ra với nền sx trong nước,
có mqh nhân quả giữa
ADA - Seminar
A. Quick quiz
1. Are exporters in a WTO member allowed to dump their products in export
markets?

2. Can a shrimp producer in a WTO member request for the application of a

countervailing measure against actionable subsidy by the government of another WTO
member on steel products?
3. The interest rate of borrowing state capital in a WTO member is 6 percent and
this capital is open to any company. However, the commercial interest rate is 7.5 percent.
Can the state loan at 6% be considered as an actionable subsidy?
 4. In 2012-2015 imports of shoes into country X – a WTO member increases by 5 %
each year. The domestic production of X remains constant over this period. Can a finding
of “increased imports” consistent with Article 2.1 of the Agreement on Safeguard
Measures?
5. The investigating authority finds that the volume of fertilizer imports has
consistently decreased during 2012-2015. However, it also finds that due to the serious
mistake in management, Company X accounts for 70% of the country’s total production of
fertilizer kept suffering from huge losses during 2014-2015. In conclusion, the authority
assumes that the domestic industry is suffering serious injury and a safeguard measure
should be imposed on imported fertilizer. Is that conclusion consistent with the Agreement
on Safeguard Measures?

B. Case study

1. Upon receiving request from Company A and Company B, Vina- a WTO member
decides to initiate an antidumping investigation against steel nails imported from Bana and
Hana – also two WTO members. The period of investigation is determined as 1 January
2016 – 31 December 2016.
2. In 2016, Company A and Company B accounted for 10% and 30% respectively of
the Vina’s total production of steel nails. Company C accounting for 40% of Vina’s total
production objects the investigation while Company D accounting for 20% does not favor
or object the investigation.
3. Company X is a steel nail producer in Bana and has exported this product
to Vina for more than 4 years. In order to facilitate its sale to Vina, in 2015, Company X
established a subsidiary Y in Vina to import the steel nail it manufactures. The price X
charges Y is artificially higher than the price Y charges customers in Vina.
4. In 2016, Company X exported 100,000 tons of steel nails to Country A while it
sold only 5 tons in Bana. However, the sell price in Bana is much lower than the export
price to Vina.
Questions to solve:
a. Is Vina’s antidumping investigation initiation supported by the ADA?
 b. How does the authority in Vina determine the export price of X?
c. X argues for the use of sell price in Country B as the normal price of steel nails in
an antidumping investigation by Country A. This argument is rejected by the
authority in Country A. Is such rejection consistent with the ADA? Why or why not?

C. Case study

Sir is a tailor company manufacturing men`s suits from Vietnam, they have successfully produce a
line of new suits calls Sir Bespoke. This type of suit has become very popular in EU. Now the UK,
Italy and Spain suit industry is struggling and employment in this industry is shrinking
dramatically.

EU decides to impose quota on import of suits to 50 million suits a year. The quota is divided as
follows: Bangladesh ( 30 million), China (10 million), others ( 10 million). Last year the export
from Vietnam was 10 million suits. The quota was published on the official website. Foreign
companies could apply for import license which is granted by the EU board. The representatives of
EU suit manufacture also sit on the board. Moreover, EU requires that the importation of suits
should be through the port Rostock, Germany. The justification was not given.

Several governments from EU have requirement that government departments and arm forces can
only buy cloth from domestic manufacture. In addition, all cloth repair work should be done by
domestic companies.

Fearing the quota and other measures above, Sir company decided to set up its own chain of
distribution in export countries. However, under regulations of EU, the number of shops is limited
due to economic need. In addition, the employee should be EU citizen and speak domestic
language.
You are a junior lawyer, working at International Law Company Thanh and Partners, based in
Hanoi. The director of the law company asked you to prepare a summary of the above case on
consistency of trade barriers according to WTO regulations and present to your client, Sir
company.
 D. Case study
1. Country A has four major producers of garment: Viet Thang, May 10, Nha Be and Dong Xuan.
Their total market share is 80% of domestic market. The rest is divided among many other small
manufactures. In recent years, the export to country Y of those four companies from country A has
significantly increased.

In the contrary, the garment industry of country B has contracted rapidly because of the cheap
import from country A. Thus, many producers went to bankrupt. The four remaining
biggest producers which represent 60% of total production in country B, want to oppose import
from country A. They asked the government to impose anti-dumping measure on the garment from
country A to decrease to import volume from country A. Their argument is that the garment from
country A is sold at the price below the cost of production. Particularly, the t-shirts produced
by Dong Xuan and Nha Be. However, during the investigation, El Pano, one of the four biggest
producers in country B, has revoked the claim and established a joint venture with
Dong Xuancompany to manufacture garment in Cambodia.

The garment association of country A was informed on the investigation of anti-dumping. Deterred
by the situation, government of country A turns to Advisory Centre for legal advice. The
government A wants to know: Under which conditions, country B can impose anti-dumping
measures consistent with WTO regulations? Whether duties can be imposed on all garment from
country A? When the duties can be imposed and how long is the duration of imposition? What is
the maximum level of application?
You are the junior lawyer at the Center. The Director of the Advice Center has required you to
prepare a legal brief addressing the concerns of government from country A and present to the
representative from country A.

2. Let us assume that Medatia and Vanin are WTO Members. Vanin Vegi is a producer of
vegetables in Vanin. Due to the excessive production of tomatoes in the world during the current
year and the increased availability of tomatoes on the international market, Vanin Vegi is unable to
sell its tomatoes. If Vanin Vegi does not find a market for its tomatoes, it will face great losses.
Vanin Vegi decides to sell its tomatoes in Medatia at prices below the market price for tomatoes of
similar quality in Medatia. Vanin Vegi prices 1 kg of tomatoes at $1.00 in Medatia, while it prices
the same tomatoes at $US 2 in Vanin. Medatian tomato producers are experiencing a slump in their
tomato sales. They consider that the reason for this is the imports of tomatoes from Vanin at lower
prices.
Question 1
Assume you are an expert on WTO law and Medatian tomato producers ask for your advice on
what type of trade remedy they can request their government to apply to imports of tomatoes
from Vanin.
Question 2
Assume you are the authority in charge of anti-dumping investigations in Medatia: what would you
have to do after receiving the request of the domestic producers of tomatoes for the application of
anti-dumping measures to Vanin Vegi tomatoes?

1-11, 2-2 6,
Ii. Jurisdiction of the two dispute settlements system
3.

WEEK 10: CISG

1. United nation convention on contracts for international sales of goods
- ADOPTED IN A CONFERENCE IN Vienna in 1980
- Came into force in 1988
- Composed by UNCITRAL ( united nation
Four parts:
Part 1: rules on the scope of its applications and rules of interpretation
Part 2: formation of contract
Part 3: the right and obligation of byers and
2. The scope of application
 2.1. The scope of application
This convention applies to contracts of sale of goods between parties whose places
of business are in different states
Neither on the nationality of the parties nor the civil or commercial character of the
parties or of the contract
- When the states are contracting states
- When the rules oof private international law lead to the application of the
law of a contracting state
- The dispute settlement body choose to apply
- Sellers and buyers choose to apply
More than one POB
If a party has more than one place of business is that which has the closest
relationship to the contract and its performances (article 10 CISG)
Notification
Any state may declare at the time of the deposit of its instrument of ratification,
acceptance, approval or accession that it will not be bound by subparagraph (1)(b)
of article 1 of this convention
Good defined A movable tangible object
CISG exclude things:
(1) Goods bought for personal family or household use
(2) Auction sales
(3) Sales on execution or otherwise by authority of law
(4) Stocks, share, investment securities, negotiable instrument or money
(5) Ships, vessels, hovercraft or aircraft gias trij hangf hoas quas lowns cos
coong uowcs rieeng
(6) Electricity mawtj hang ddieenj k ddk mua bans twj do treen thij truowng
2.2. The scope of non application
Article 2
Contract in which the preponderant part of the obligations of the party who
furnishes the goods consists in the supply of labour or other services (articles 3(2))
Article 5, liability of the seller for death or personal injury caused, the good to any
person
Article 6 the parties may exclude the application of this convention
Dungf coong uowcs khacs k cos ngaix là công ước CISG bij loaij trwf maf trong
howpj ddoongf pahir cos rox ddieeuf khoanr vieecj coong uwocs vien k dduwocj
chonj
3. Formation of contract
3.1. Form
A contract of sale need not be concluded in or evidenced by writing and is not
subject to any other requirement as to form. It may be proved by any means,
including witnesses (article 11)
a contracting state whose legislation requires contract of sale to be conducded by
writing (article 96)
3.2. Offer (article 14(1))
a. Definition
Offer: a proposal addressed to one or more specific persons constitutes an offer if it
sufficiently definite and indicates the intention of the offeror to be bound in case of
acceptance
Sufficiently: Good name, quantity, price
Tw do howpj ddoongf neen cacs been cos theer twj neeu cacs ddieeuf khoanr
To one or more specific persons
- Purpose: to distinguish an offer with an invitation to make offers
- Reason: to unidentified persons: an invitation to make offer (invitation to
treat)
 - Unless: the contrary is clearly indicated by the person making the
proposal
Efectiveness ò ofer
Legal an offer can
An revocable offer may be revoked if the revocation reaches the offeree before he
has dispatched an acceptance
An irrevocable (k theer huyr) offer may be withdraw if the withdraw reaches the
offeree before or at the same time as the offer
Send => reaches offer =>revoke send acceptance
Irrevocable offer
(a) If it indicates. Whether by stating a fixed time for acceptance or otherwise,
that it is irrevocable; or
(b) If it was reasonable for the offeree to rely on the offer as being irrevocable
and the offeree has acted in reliance in the offer
Article 16(2)
Acceptance
Articles 18
- A statement made by or other conduct of the offeree indicating assent to
an offer is an acceptance im lawngj k cos gnhaix laf chaps nhaanj
- Silence of
Form of acceptance
- By statement
- Conduct of the offeree indicating assent to an offer (the act is performed
within the period of time)
Effectiveness of acceptance
- At the moment the indictation of assent reaches the offeror within the
time he has fixed
 - If no time is fixed, within a reasonable time
Counter offer (hoanf gias chaof = chaof hangf nguwocj laij)
- A reply to an offer which purpose to be an acceptance but contains
additions, limitations or other modifications is a rejection of the offer and
constitutes a counter-offer
- Additional or different terms relating among other things, to the:
Price
Payment
Quality ang quantity of the goods
Place and time of delivery
Extent of one party’s liability to the other or the settlement or dispute
>>>>>> are considered to alter the terms of the offer materially
4. General standard for performance
Fundamental breach of contract (article 25)
- A breach of contract committed by one of the parties of fundamental if it
results in such detriment to other party as substantially to deprive him of
what he us entitled to expect under the contract
- Unless the party in breach did not foresee and a reasonable person of the
same kind in the same circumstance would not have foreseen such a
result
Avoidance
Article 49
A buyer can avoid a contract if either
(1) The seller commits a fundamental breach (25)
(2) The buyer gives the seller a Nachfrist noctice

Which cases will be concerned to exclude CISG?

Nd1: scope of application
When is the CISG
ND2: D14- 24
Nd3: dd25 contract performance
Scope: phạm vi về mặt lãnh thổ
Reservation: bảo lưu
- Nd của gia kết exclude goods, transaction, legal issues US- chiness
ND 2: OFFER + acceptance = contract

1. International Commercial Terms (INCOTERMS 2010)

1.1 Overview of INCOTERMS • History

• Incoterms (the International Rules for the Interpretation of Trade Terms) are a set
of standard terms on shipment used in international sale contracts

• Published by Paris-based International Chamber of Commerce (ICC)

• First version in 1936

• Amendments and additions in 1953, 1967, 1976, 1980, 1990, 2000, 2010, 2020

• Incoterms 2010: came into effect from 1 Jan 2011

• Objective: Simplify and clarify the most commonly used trade terms used in
foreign trade  Avoid the uncertainties of different interpretations in different
countries
 LECTURE 7: international commercial terms and laws on international
payment

OUTLINE:

- international commercial (INCOTERMS 2010)

- laws on international payment (UCP 600)
1. International Commercial Terms (INCOTERMS 2010)
- Phiên bản mới của incoterms không loại trừ hiệu lực của những phiên bản cũ
nên các bên khi sử dụng điều kiện cơ sở giao hàng phải ghi rõ các nguồn nào
mà họ muốn sử dụng
- Các bên có quyền sửa đổi nội dung của những điều kiện cụ thể để phù hợp
với hợp đồng nhưng không được làm sai bản chất của điều kiện đó nếu
không điều kiện sẽ bị vô hiệu
1.1. Overview of INCOTERMS
 Scope
 Rights and obligations of parties (seller and buyer) to the contract of
sale in the delivery of the goods (tangible)
-> Tasks, Costs and Risks involved in delivery
- NOT:
 Apply to contract of carriage (between shipper and carrier)
  Apply to contract of insurance (even though CIF, CIP impose
obligation of seller to pay for insurance coverage)
 Transfer of title to the goods (largely governed by national laws)
 Breaches of contract, remedies and exemptions of liability
 Notes on use of incoterms 2010
o Incoterms are international trade customs -> Parties must explicitly
incorporate in the sale contract, e.g. “FOB Hai Phong Port, Vietnam,
Incoterms 2010”
o New versions of Incoterms shall not terminate the validity of previous
versions -> Specify the exact version to be applied
o Incoterms do not make up a complete contract of sale, e.g. price,
methods of payment, breach of contract and others to be dealt with
through express terms or governing law in the contract
o Choose the appropriate Incoterms rule: depending on the goods,
means of transport, additional obligations (e.g. insurance)
o Specify the place or port as precisely as possible:
• EXW, FCA, FAS, FOB, DAT, DAP, DDP: named place is place of
delivery (where risk passes from seller to buyer)
CFR, CIF, CPT, CIP: named place is place of destination to which
carriage is paid (not place of delivery)
o Incoterms cover legal obligations of parties, do not indicate when a
trader should do something because it is prudent or advisable
o Incoterms 2010 may be applied for both domestic and international
sale contracts
1.2. Sepecific terms

• Classification of Incoterms 2010 rules

• 11 rules (reduced from 13 in Incoterms 2000): two distinct classes

• Rules for any mode or modes of transport (even if no maritime transport and
even if ship is used for part of the carriage)

 EXW: Ex Works
 FCA: Free Carrier
 CPT: Carriage Paid To; CIP: Carriage and Insurance Paid To
 DAT: Delivered At Terminal; DAP: Delivered At Place; DDP: Delivered
Duty Paid

• Rules for sea and inland waterway transport (place of delivery and place of
destination are both ports)

- FAS: Free Alongside Ship; FOB: Free On Board

- CFR: Cost And Freight; CIF: Cost Insurance And Freight
Obligation of parties for each rule are grouped under 10 headings

INTERCORMS 2010







 (1) EXW -graphic illusstration

 “Ex Works”: Seller delivers when it places the goods at the disposal of the
buyer at the seller’s premises or at another named place (i.e., works, factory,
warehouse, etc.)
 Seller does not need to load the goods on any collecting vehicle
 If seller loads the goods, they do so at buyer’s risks and expense
 If buyer cannot directly or indirectly obtain export clearance, they
should not use EXW
 Buyer bears all costs and risks involved in taking the goods from the agreed
point, if any, at the named place of delivery
 Buyer: both export and import clearance
 Minimum obligation for Seller
 (2) FCA – graphic illstration

FCA – guidance note

 “Free Carrier”: Seller delivers the goods to the carrier or another person
nominated by the buyer at the seller’s premises or another named place
 Carrier: the party with whom carriage is contracted
 Seller: export clearance; Buyer: import clearance
 (3) FAS- GRAPHIC ILLUSTRATION


FAS – guidance note

 “Free Alongside Ship”: Seller delivers when the goods are placed alongside
the vessel (e.g., on a quay or a barge) nominated by the buyer at the named
port of shipment
 Risk of loss of or damage to the goods passes when the goods are alongside
the ship, and the buyer bears all costs from that moment onwards
 Seller: export clearance; Buyer: import clearance
(3) FOB – graphic illustration

(FOB – Guidance note

• “Free on Board”: Seller delivers the goods on board the vessel
nominated by the buyer at the named port of shipment
 Risk of loss of or damage to the goods passes when the goods are on board
the vessel, and the buyer bears all costs from that moment onwards
 FOB may not suitable when goods are packed in containers and handed over
to carrier before loaded on board -> Use FCA
 Seller: export clearance; Buyer: import clearance
(4) CFR

 “Cost and Freight”: Seller delivers the goods on board the vessel or procures
the goods already so delivered
 Seller must contract for and pay the costs and freight necessary to bring the
goods to the named port of destination
 Risk of loss of or damage to the goods passes when the goods are on board
the vessel (not at port of destination)
 Seller: export clearance; Buyer: import clearance
(5) CIF

• “Cost, Insurance and Freight” means that the seller delivers the goods on
board the vessel or procures the goods already so delivered
- Seller must contract for carriage and pay the costs and freight necessary to
bring the goods to the named port of destination
- Seller also contracts for insurance cover (minimum) against the buyer’s risk
of loss of or damage to the goods during the carriage
 Risk of loss of or damage to the goods passes when the goods are on board
the vessel
 Seller: export clearance; Buyer: import clearance
(6) CPT

 “Carriage Paid To”: Seller delivers the goods to the carrier or another person
nominated by the seller at an agreed place
 Seller must contract for and pay the costs of carriage necessary to bring the
goods to the named place of destination
 Seller: export clearance; Buyer: import clearance
(7) CIP

• “Carriage and Insurance Paid to”: Seller delivers the goods to the carrier or
another person nominated by the seller at an agreed place (same as CPT)
 Seller must contract for and pay the costs of carriage necessary to bring the
goods to the named place of destination
 Seller also contracts for insurance cover (minimum) against the buyer’s risk
of loss of or damage to the goods during the carriage
• Seller: export clearance; Buyer: import clearance
(8) DAT

• “Delivered at Terminal”: Seller delivers when the goods are placed at the
disposal of the buyer at a named terminal at the named port or place of
destination (unloaded)
• Terminal includes any place, whether covered or not, such as a quay,
warehouse, container yard or road, rail or air cargo terminal.
 Seller bears all risks involved in bringing the goods to and unloading them at
the terminal at the named port or place of destination.
 Seller: export clearance; Buyer: import clearance
(9) DAP

• “Delivered at Place”: Seller delivers when the goods are placed at the disposal
of the buyer on the arriving means of transport ready for unloading at the
named place of destination
• Seller bears all risks involved in bringing the goods to the named place
• Seller: export clearance; Buyer: import clearance
(10) DDP

 “Delivered Duty Paid”: Seller delivers the goods when the goods are placed
at the disposal of the buyer, cleared for import on the arriving means of
transport ready for unloading at the named place of destination
 Seller bears all the costs and risks involved in bringing the goods to the
place of destination
 Seller: both export and import clearance 
 Maximum obligation for Seller
 2. Laws on international payment
2.1. Documents in international payment

• URC 522: Financial documents vs Commercial documents

– Financial documents

- Cheque

- Bill of Exchange

- Promissory Note

 Law on Negotiable Instruments 2005 governs these instruments

in Vietnam

• Cheque: a mandate from the customer to his bank to pay according to his
instructions or order
• Bill of Exchange: A written, dated, and signed instrument containing an
unconditional order by a drawer that directs a drawee to pay a definite sum of
money to a payee on demand or at a specified future date

• URC 522: Financial documents vs Commercial documents

Commercial documents

 Commercial invoice, C/O, Certificate of inspection, Packing list

 Transport documents: Bill of lading, Airwaybill
 Insurance documents

2.2. Methods of international payment

• Remittance: Open account and Cash-in-advance

• TelegraphicTransfer(T/T)
• MailTransfer(M/T)
Advantages & Disadvantages?

When to use?
• Collection of Payment: Exporter entrusts the collection of payment to its bank

– Governing law: ICC Uniform Rules for Collections, Publication No. 522 (URC
522)

– Categories: Art 2 URC 522

• Clean Collection: Collection of financial documents not

accompanied by commercial documents

• Documentary Collection: D/P (documents against payment) vs. D/A (documents

against acceptance)

Advantages & Disadvantages? When to use?

• Documentary Credits

 Article 2 UCP 600: Credit means any arrangement, however named or

described, that is irrevocable and thereby constitutes a definite undertaking
of the issuing bank to honour a complying presentation.
 A documentary letter of credit (L/C) is defined as:\

1. The definite undertaking of a bank,

2. issued in accordance with the instructions of their customer, 3. addressed to, or
in favor of, the beneficiary,

4. wherein the bank promises to pay a certain sum of money (or to accept or
negotiate the beneficiary’s drafts up to that sum) in the stated currency,
5. within the prescribed time limits,
6. upon the complying presentation,
7. of the required and conforming documents.

• DocumentaryCredits

• Parties in a documentary credit transaction: • Applicant (Importer - Buyer)

• Beneficiary (Exporter - Seller)
• Issuing Bank

• Advising Bank
• Confirming Bank

• TypesofL/C
Irrevocable and Revocable L/C
• Unconfirmed and Confirmed L/C
• Sight Payment, Acceptance and Deferred Payment L/C • Others

• GoverningLawsforDocumentaryCreditTransactions

• Uniform Customs and Practice for Documentary Credits (e.g. UCP 600)

 International Standard Banking Practice for the Examination of Documents under

Documentary Credits (e.g. ISBP 745)
 The Supplement to the Uniform Customs and Practice for Documentary Credits for
Electronic Presentation (e.g. eUCP v 2.0)

• UniformRulesforBank-to-BankReimbursement(e.g.URR725)
 2.3. The Uniform customs and practise for documentary credits (UCP 600)

• Application of UCP 600

(1) Scope of Application

(2) Principle of Autonomy of the Credit

(3) Principle of Strict Compliance

 (4) Standard of Examination of Documents

• Application of UCP 600

(1) Scope of Application

• Article 1 UCP 600

The Uniform Customs and Practice for Documentary Credits, 2007 Revision,
ICC Publication no. 600 ("UCP") are rules that apply to any documentary credit
("credit") (including, to the extent to which they may be applicable, any standby
letter of credit) when the text of the credit expressly indicates that it is subject to
these rules. They are binding on all parties thereto unless expressly modified or
excluded by the credit.

UCP does not automatically have the force of law, then incorporation in the
credit is needed

UCP binding on all parties upon incorporation, but parties can amend,
supplement or exclude the use of UCP articles

• Application of UCP 600

(2) Principle of Autonomy of the Credit

Article 4 UCP 600

A credit by its nature is a separate transaction from the sale or other contract on
which it may be based. Banks are in no way concerned with or bound by such
contract, even if any reference whatsoever to it is included in the credit.
Consequently, the undertaking of a bank to honour, to negotiate or to fulfil any
other obligation under the credit is not subject to claims or defences by the
applicant resulting from its relationships with the issuing bank or the beneficiary.

The beneficiary’s breach of the underlying sale contract does not entitle the bank
to withhold payment of a credit (conditioned only on tender of documents)

The guiding rule is “pay first, argue later” (except for fraud by beneficiary)

(3) Principle of Strict Compliance

 Documents tendered must strictly comply with those that have been called
for in the documentary credit (L/C)
 Small discrepancy can cause the bank to reject the documents and payment
to beneficiary
 Article 14(d) UCP 600

d. Data in a document, when read in context with the credit, the document
itself and international standard banking practice, need not be identical to,
but must not conflict with, data in that document, any other stipulated
document or the credit.

 Article 18(c) UCP 600

c. The description of the goods, services or performance in a commercial

invoice must correspond with that appearing in the credit

(4) Standard for Examination of Documents

Article 5 UCP 600

Banks deal with documents and not with goods, services or performance to which
the documents may relate.

Banks are concerned only with the apparent good order of the documents

 Banks do not care about the actual conditions of goods (e.g. damage upon
arrival)

Article 14(a) UCP 600

A nominated bank acting on its nomination, a confirming bank, if any, and the
issuing bank must examine a presentation to determine, on the basis of the
documents alone, whether or not the documents appear on their face to constitute a
complying presentation.

Examination of documents “on the face” to confirm a “complying presentation”,

not the genuineness of the statements contained in the documents

 Complying presentation? Art 2 UCP 600: In accordance with (i) the terms and
conditions of the credit, (ii) the applicable provisions of UCP and (iii) international
standard banking practice (ISBP)

tín dụng chứng từ được cấp theo UPC 600 bởi một tổ chức phát hành ở quốc gia Y
được yêu cầu trong trường 46a "tài liệu bắt buộc" trong số tài liệu sau:
báo giá ngân hàng cách ly từ ngân hàng hạng du khách quốc tế phải trả ở quốc gia
X tương đương với EUR XXX (bảo lãnh chỉ ra một số tiền) có giá trị đến xxx
(người nhận bảo lãnh cho biết ngày khắc phục)
LỜI NÓI CỦA NGƯỜI THAM GIA không có dấu hiệu rõ ràng rằng đó là "thanh
toán tại quốc gia X" chứ không phải bất kỳ tham chiếu rõ ràng nào về quốc gia X
là nơi thanh toán

ngân hàng xác nhận đã chấp nhận bảo lãnh đã xuất trình nhưng ngân hàng phát
hành đưa ra sự khác biệt sau đây "bảo lãnh ngân hàng từ ngân hàng quốc tế không
được thanh toán ở nước X

phải thanh toán ở nước phát hành không thể ngân hàng của quốc gia khác
UCP quy định chứng từ giấy tờ,

WEEK 12: INTERNATIONAL COMMERCIAL DISPUTE RESOLUTION

* Litigation
* ADR:
- Arbitration
- Mediation/Conciliation
- Negotiation
1. LITIGATION
1.1. Fundamental features of Litigation
 A formal process conducted in a public courtroom
 Trial
 A compulsory procedure
  Appointed Judges – parties have limited input
 General Jurisdiction: variety of dispute
 Transparency
 Extensive use of attorneys
 Appeal possible
1.5. Extraterritorial Enforcement
 Conventions
o Brussels Convention on Jurisdiction and Judgements in Civil and
Commercial Matters-regional
o Lugano Convention-European Free Trade Areas
o Extraterritorial Validity of Foreign Judgements-Organization of
American States
o Hague Convention on Recognition and Enforcement of Foreign
Judgement – very few signatory nations
2. International Commercial Arbitration
1.1. Meaning of Arbitration
 Fouchard, Gaillard & Goldman in international Commercial Arbitration:
 Arbitration is a device whereby the settlement of a question, which is of
interest for two or more person, is entrusted to one or more other person –
the arbitrator or arbitrators – who derive their powers from a private
agreement, not from the authorities of a State, and who are proceed and
decide the case on the basis of such an agreement. (France)
 Law & Practice of international Commercial Arbitration:
 Two or more parties faced with a dispute which they cannot resolve
themselves, agreeing that some private individual will resolve it for them
and if the arbitration runs its full course… it will not be settle by a
compromise, but by a decision.
 Vietnamese Law on Commercial Arbitration 2010:
 Commercial arbitration means a dispute resolution method agreed by the
parties and conducted in accordance with the provisions of this Law.
1.2. Doctrine Basis of Arbitration
Party autonomy
  Agreement to arbitrate
 Selection of arbitrator(s)
 Autonomy in arbitral proceedings
1.3. Fundamental Features of Arbitration
 An alternative to national court
 A private mechanism for dispute resolution
 Selected and controlled by the parties
 Final and binding determination of parties’ rights and obligations
1.4. Relationship between Arbitration and Court
 Supporting role
 Supervising role:
o Where the parties in dispute already have an arbitration agreement
but one party institutes court proceedings, the court must refuse to
accept jurisdiction unless the arbitration agreement is void or
incapable pf being performed
o Forum shopping: lua chon co che giai quyet tranh chao
1.5. Meaning of International
 Convention on the Settlement of Investment Disputes between States and
Nationals of States 1965 or ICSID Convention or Washington
Convention
 Convention on the Recognition and Enforcement of Foreign Arbitral
Awards 1958 (The New York Convention 1958):
o This Convention shall apply to the recognition and enforcement of
arbitral awards made in the territory of a State other than the State
where the recognition and enforcement of such awards are sought,
and arising out of differences between persons, whether physical or
legal. It shall also apply to ar
 UNCITRAL Model Law:
o An arbitration is international if: the parties to an arbitration
agreement have, at the time of the conclusion of that agreement,
their places of business in different States.
 UNCITRAL
  Article 3 Law on CA 2010 (11, 12)

1. Dispute resolution
- Distinguish between negotiation and mediation
Mediation cos swj tham gia caur been thws 3 vaf ddk ddaof taoj ddre
Cos swj rawnf buoojc veef kq giwax cacs been
Vai trò của hào giải viên k phải là quyết định và quyết định của hoà giải viên k
phải là bắt buộc mà mang tính kiến nghị
- Mediation and arbitration
Phán quyết trọng tài k có sự rằng buộc, can not be appeal
Trọng tài viên k đk tiếp xúc, nếu tiếp xúc phải đk công khai, hoà giải viên có thể
gặp riêng các bên
- Arbitration and court

- Ad-hoe arbitration and institutional arbitration

- Hearing venue and arbitration seat