Macquarie University LAW 898 International Commercial Law Assignment

This document presents a student's comprehensive solution to an International Commercial Law assignment, addressing various aspects of international trade and contract law. The assignment explores a scenario involving the sale of beef between a Japanese restaurant and a supplier, examining the application of the CISG (Convention on Contracts for the International Sale of Goods) to the contract. It analyzes the implications of damaged goods, remedies available to the buyer, and the subsequent sale of the damaged beef. The assignment further delves into a dispute involving a letter of credit, examining the roles of the insurer, the bank, and the impact of discrepancies in documentation. The solution also considers the role of the Singapore International Arbitration Centre (SIAC) and the application of UNCITRAL arbitration rules in resolving commercial disputes, emphasizing the importance of international trade law harmonization. The document includes references to relevant legal literature and provides a detailed analysis of the legal issues presented in the commercial contract scenario.

International commercial law
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Table of Content

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Answer 1..........................................................................................................................................2
Answer 2..........................................................................................................................................2
Answer 5..........................................................................................................................................3
Answer 6..........................................................................................................................................3
Answer 7..........................................................................................................................................4
References........................................................................................................................................6

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Answer 1
At the time of voyage Mr Wagyu, who runs WWW, a prestigious restaurant in Japan, has to bore
the risk of the damage that occurred due to the shipment of the beef. It can be seen that 20,000
kg’s of beef has been delivered to WWW by BBB’s beef. The damaged goods from BBB’s beef
includes 5,000 kg’s of beef. However, the remaining 15,000 kg’s are in good condition. As per
WWW, the damaged beef is of acceptable quality if used immediately1. Mr Wagyu realised the
fact that the damaged beef can be used within two days or else it will be used as pet food.
Moreover, by offering a special half-price deal on all the beef dishes, Mr Wagyu utilised 500 kg's
of beef in his restaurants over two days. Mr Wagyu earned a good profit over the two days
because of great volumes of consumers despite of offering the dishes at discount prices. The
super sales proved to be good for his business. Furthermore, he sold 1,500 kg’s of beef to other
restaurants for instant use. On the other hand, Mr Wagyu sold the rest of the 3,000 kg of affected
beef for pet food at $2 per kg.
Answer 2
CISG governs this contract that took place between Mr Joe and Mr Wagyu as it possesses the
rules that govern the interpretation and making of international contacts for selling goods. It also
offers rules governing remedies and regulations of the parties to such transactions. Thus, this
contract has been governed by CISG as both of them agreed that Joe would deliver 20,000 kg's
of prime beef cuts to Mr Wagyu in Tokyo at $10 per kg, four times each year. Both of them
agreed to utilise Incoterms 2010 CIF as it can be used in transactions in which they are involved
in.
It can be said that under CISG, Mr Wagyu has executed the relevant things in selling the
damaged 3000 kg for pet food at discount price. According to CISG, the buyers possess the right
to claim the damages and decrease the price of the goods2. The buyers are allowed to sell the
1 The Transnational Dimension of Statutory Interpretation–Tragically Overlooked in a Global
Commercial Environment (Zeller, B. 2019, pp.15-150).
2 The CISG and the United Kingdom—Exploring Coherency and Private International Law,
(Hayward, B. 2018, pp.607-641).

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goods at a low price to get profit. Hence, Mr Wagyu has offered the damaged beef dishes at a
discount price to the consumers to earn profit.
Answer 5
NSW Marine Protect, who is Joe's insurer, refused to pay Joe as they felt that Joe has failed to
inform that the refrigeration unit may be faulty. According to the NSW Marine Protect, it is the
responsibility of Joe to inform them regarding this issue so that they could have been changed
the premium by taking charge3. As a result, Joe’s bank, National Australia Bank (NAB) took the
money back from his account, as the letter of credit was not paid. This resulted in a dispute in the
commercial contract.
Such refusal is reasonable as a seller needs to pay the credit amount till the end of the month that
is generally 5% of the total credit amount. Not paying the credit amount on time allows the
insurer to decrease the credit limit in the future, high credit score and increase in the annual
charges as well as deducting a considerable amount of money from the bank. Therefore, in this
case, the deduction of the amount and the refusal to pay to Joe is determined to be reasonable
and appropriate.
Answer 6
The Bank of Tokyo has refused to pay the Letter of Credit to NAB the nominated bank of Joe.
As per the Bill of Lading, 20 tons of prime beef while the letter of credit stated the goods as
20,000 kgs of Premium beef4. However, the Bank of Tokyo felt that it was not a correct match.
Whereas, based on this situation, NAB took the money back from Joe's account stating the fact
that the letter of credit was not paid and it is considered to be a disagreement within a
commercial contract.
3 The Hague Choice of Law Principles, CISG, and PICC: A Hard Look at a Choice of Soft
Law (Marshall, B. 2018, pp.175-217).
4 The law governing international commercial contracts and the actual role of the Unidroit
Principles (Bonell, M. 2018, pp.15-41).

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Answer 7
Singapore International Arbitration Centre (SIAC) is determined to be a not-for-profit arbitration
organisation which is located in Singapore. The organisation administers arbitrations under the
United Nations Commission on International Trade Law (UNCITRAL) arbitration rules and its
own rules. However, in this particular contract that took place between BBB and WWW, the
arbitrator could have applied the (UNCITRAL) arbitration law. This particular law helps in
promoting the unification and progressive harmonisation of international trade law5. It
acknowledges the need for regional regulations, rules for harmonizing and international set of
standards that are governed by international trade. It will prevent SIAC from facing any such
issues related to the occurrence of damage and unpaid letter of credits. With the help of this law,
SIAC may promote their contribution in uniform laws, existing model and international
conventions6.
This particular law also promotes the implementation of practice and customs, wider acceptance
of international trade terms, promotes codification, uniform and model laws along with
international conventions7. With the help of this law, the arbitrator would have promoted various
ways of ensuring the application of international conventions and uniform interpretations based
on international trade law. It would have helped WWW and BBB to disseminate and collect the
information related to modern legal developments and national legislation. It possesses
legislative guidelines that would have provided a detailed evaluation of legal issues in a
particular area related to local and national context to WWW and BBB8. With the help of this
5 The Interplay of CISG Cultural, Legal, Historical and Religious Variances and their
Impact on the Treatment of the CISG (Petrovic, J. 2016, pp.71-94).
6 The Use of Soft Law in the Creation of Legal Norms in International Commercial Law: How
Successful Has It Been (Gabriel, H. 2019, pp.413-432).
7 Autonomous Interpretation versus Homeward Trend versus Outward Trend in CISG
case law (Ferrari, F. 2017, pp.244-257).
8 Cost and Burden of Proof under the CISG–A Discussion amongst Experts (Kröll, S. 2017,
pp.203-244).

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law, WWW and BBB could have applied the UNCITRAL Model Law on Secured Transactions
(2016). This model can be used by Joe efficiently at the time of doing transactions

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References
Bonell, M. 2018, The law governing international commercial contracts and the actual role of the
Unidroit Principles. Uniform Law Review, 23(1), pp.15-41.
Ferrari, F. 2017, Autonomous Interpretation versus Homeward Trend versus Outward Trend in
CISG case law. Uniform Law Review, 22(1), pp.244-257.
Gabriel, H. 2019, The Use of Soft Law in the Creation of Legal Norms in International
Commercial Law: How Successful Has It Been?. Michigan Journal of International Law,
40(3), pp.413-432.
Hayward, B. 2018, The CISG and the United Kingdom—Exploring Coherency and Private
International Law. International & Comparative Law Quarterly, 67(3), pp.607-641.
Kröll, S. 2017, Cost and Burden of Proof under the CISG–A Discussion amongst
Experts. International Trade and Business Law Review, 20, pp.203-244.
Marshall, B. 2018, The Hague Choice of Law Principles, CISG, and PICC: A Hard Look at a
Choice of Soft Law. The American Journal of Comparative Law, 66(1), pp.175-217.
Petrovic, J. 2016, The Interplay of CISG Cultural, Legal, Historical and Religious Variances and
their Impact on the Treatment of the CISG. Legal, Historical and Religious Variances
and Their Impact on the Treatment of the CISG, 20, pp.71-94.
Zeller, B. 2019, The Transnational Dimension of Statutory Interpretation–Tragically Overlooked
in a Global Commercial Environment. Nordic Journal of Commercial Law, (1), pp.15-15.