30 Oct 2020


Hong Kong Businesses and the CISG: The ‘Must Knows’ from International Court Practice

Department of Justice of Hong Kong SAR
Asian Academy of International Law

In celebration of the 40th anniversary of the United Nations Convention on Contracts for the International Sale of Goods (CISG), one of the most successful and widely recognised international commercial law treaties, this webinar shed light upon the ‘must knows’ from international court practice that has developed under the CISG, including those of particular relevance to Hong Kong businesses and legal practitioners. Apart from two Hong Kong-based moderators, Mr Adrian Lai (of AAIL) and Mr Wong Hing Hong, Peter (of DoJ), it was honoured with the presence of Professor Dr Ulrich G. Schroeter, a world-leading expert on CISG, and well received by audiences coming from the academic, business, legal and government sectors of different countries or regions.

After a brief introduction, Professor Schroeter addressed the current views in overseas commercial practice regarding the application of the CISG to Hong Kong.  He observed that, with China being a Contracting State, some foreign courts and legal practitioners were under the impression that CISG was applicable to Hong Kong as well, such that Hong Kong businesses would face uncertainties in foreign commercial court practice in that regard.

After that, Professor Schroeter moved on to some of the practically important features of CISG. First, with reference to Article 7 on the interpretation of CISG, he commented that a related practice of courts to have regard to foreign case law applying the CISG and the availability of CISG case law and the opinions of the CISG Advisory Council collected in online databases would arguably be seen as an advantage of applying the CISG. That said, according to Article 6, he also noted the flexibility of CISG that parties were given the right to exclude the application of CISG by opting out, as long as such an exclusion clause was included and there was a clear statement of intention from both sides.

Then, Professor Schroeter briefly reviewed the requirements for the inclusion of standard terms by reference under CISG, before delving into a detailed discussion on buyer’s duty under Articles 38 and 39 to inspect the goods after delivery and notify the seller within a reasonable time of discovering any non-conformities of the goods. He emphasised that the exact nature of the non-conformity of the goods had to be precisely notified and that, with rare exception, the buyer would lose all his remedies in the case of missing (or late) notification.

Before concluding, Professor Schroeter addressed the high threshold for contract avoidance, citing various articles of the CISG to demonstrate that under the CISG, avoidance of the contract is generally a remedy of last resort. He also touched upon the issue of exemption from obligation to pay damages in case of impediment beyond a party’s control under Article 79, suggesting that the exemption was not equivalent to an automatic discharge of contract and was only applicable when the impediment was unforeseeable. The webinar ended with panel discussion and Q&A session with the audiences.

What attendees say

• Excellent contents! It was up to date and concise!
• The speaker expounded on the law clearly.
• It was very informative and precise.
• Excellent delivery. It was very clear.
• It was a great introduction to the CISG.



Hong Kong Businesses and the CISG: The ‘Must Knows’
from International Court Pratice

Professor Dr Ulrich G. Schroeter