FUNDAMENTAL BREACH OF CONTRACT AND DEBTOR’S CONDUCT: WHAT’S FAULT GOT TO DO WITH IT?

Numerous provisions are connected to the notion of "the fundamental breach of the contract" in the International Convention on the International Sale of Goods (ICISG) among which are the right to cancel of the seller and buyer, right of the buyer to request the substitute goods, transferring the transactional guarantee and the predictable breach. The aforementioned concept is one of the most important and challenging concepts in the said Convention. Other international documents have used "fundamental non-performance of the contract" instead of that concept. The present article aims to answer this question that whether "fundamental breach of the contract" and "fundamental non-performance of the contract" are a single concept or are two distinct concepts, and if they are two different concepts, what are their similarities and distinctions? In order to answer this question, these two concepts are studied and analyzed in terms of definition, elements and effects. In the end, we will examine whether these concepts or similar cases are mentioned in Iranian civil law, and if not, to what extent are Iranian legal entities closely associated with these concepts? The Through this study it is determined that despite the difference in the definition, elements and effects of these two concepts, there is no substantive and basic difference between them. Furthermore, however the concept of a fundamental breach is not seen in the Iranian civil law, the mechanism embedded in the law of Iran (options) is close to the mechanism of the ICISG. In addition, the external instances of termination under Iranian civil law are far less than the external instances of termination under International Sale Convention.

Previous articleNext article FreeCommentHarald UhligHarald UhligUniversity of Chicago and NBER Search for more articles by this author University of Chicago and NBERPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinked InRedditEmailQR Code SectionsMoreIntroductionThis is a truly wonderful and remarkable paper. It concerns an issue of prime importance: What are the economic consequences of fiscal disruptions and fears of sovereign insolvency? And it also asks: Why do fiscal insolvency issues appear to be so devastating in individual member countries of the European Monetary Union or EMU, while they do not seem to have much of an effect on the private sector, when they arise in individual states of the United States of America? This is a great question, getting right at the heart of the matter.The paper also throws in a comparison with Canada for good measure. Canada may be interesting, sure, and I can see that it provides yet a different set of possibilities. Its population is smaller than that of South Korea, for example, and it has about as many provinces: so, why Canada and why not South Korea? Or some other country of similar size? With all due respect to the Canadians: my guess is that only a rather limited amount can be learned about the functioning of the world economy and solutions to its various crises by observing Canada. I may be wrong. Nonetheless, I shall stick to the comparison of the EMU to the USA in my discussion.The authors provide a detailed and remarkably well crafted, insightful, and detailed analysis of key episodes and their facts for the USA and EMU (and Canada, of course), combining it with a rather thorough analysis of the underlying legal issues: thorough and convincing certainly for this discussant, who confesses to a lack of expertise on these matters.From these case-like studies, they draw the conclusion that the key difference lies in the legal structure. If Illinois or Puerto Rico or California goes bankrupt, they cannot impair private contracts and they cannot introduce their own currency. There is no private-sector fear of redenomination risk or large expropriation risk: taxes may go up a bit, but, in essence, the states are on their own. The situation is different in the EMU, where a Grexit, an exit of Greece from the euro zone, was discussed seriously and openly.The authors follow up on the wonderful and fact-oriented analysis with a brilliantly simple (but not simplistic!) model-based investigation. The model is not complicated and its mechanics are not particularly surprising, once properly understood: the model simply is the perfect vehicle to clearly and cleanly lay out the issues at hand.In the model, there is a benevolent government. The government as well as its citizens need to borrow in the first period. The citizens would borrow from some world financial market, while the government can choose to borrow from there or from its own citizens or some mix of the two. The government may face limits to taxation of its citizens in the second period. It may default on its repayment to its own citizens. It may default on its repayment to foreigners, and it may let its citizens default on their foreign debt. The authors consider various combinations of whether such defaults are allowed or limits to taxation exist. Any such default creates a fixed cost, possibly drawn at random from some distribution in the second period. Thus, if the choice is available, the government will compare that fixed cost to the utility pain of repayment in the second period and choose the default option, if that turns out to be more beneficial. All agents understand that in period one already, of course.The “euro zone countries” case has all choices available to the government. It can freely set taxes in the second period as well as freely choose any of the default options. Given the freedom to set taxes, the government is able to arbitrage away any differential in borrowing costs that might arise between government borrowing from abroad and private borrowing from abroad. For example, if private citizens could borrow more cheaply, the government effectively lets them do that on its behalf, then taxing whatever it needs. If the second-period default costs are known in period one already, for example, there is a fixed limit on how much the government and its citizens can borrow. Due to the arbitrage considerations, the government and its citizens then act as if they were facing one common and overall borrowing constraint, rather than one for the citizens and one for the government. As a result, the citizens face a constraint in borrowing from abroad precisely when the government does. This delivers the result that sovereign default fears in the euro zone countries case impair the private sector at the same time.The “California” case for US states imposes limits on taxation, while also taking the option of private defaults on foreigners off the table. Now, the constraints are the constraints of the government only: due to its options to default in period two and due to its taxation limits, it now faces constraints on how much it can borrow in period one, while its citizens do not. There are no repercussions from sovereign default fears on the private sector.This is a fine analysis indeed. It is terrific, insightful, useful, and deserves to be read and studied in many places. Indeed, it is highly accessible. By choice and design, this is not a high-wire act in economic formalism. Anyone with a decent undergraduate degree in economics or anyone with a bit of taste for logical and formal arguments should be able to digest this paper. I sincerely hope that many do so, beyond the narrow group of academics in their ivory towers. It is a transdisciplinary analysis of the best kind, combining economics with a discussion of judicial and historial matters.In essence the authors argue that if only Europe had adopted a common, centralized legal framework like in the USA, much of the private-sector problems during the euro zone crisis would not have arisen! It would have been so much better, if enforcement of private contracts were enforced from some central euro zone government, and if that central government, moreover, strictly enforced the no-exit-from-the-euro rule.This discussion would be incomplete if it only heaped praise on these fine authors. Let me then raise the skepticism that dictating common legal rules from a central government in Brussels or, for practical purposes, from Berlin really would be such a great solution for Europe. Anyone with a sense of history of Europe ought to entertain that proposal with considerable trepidation. This trepidation will provide the seed for my comments. But before turning to the details, let me take the liberty afforded to a discussant and get carried away for a bit, by commenting on a side issue in the conclusion of this fine paper.Did Academics Anticipate the Euro Zone Crisis Ahead of Time?In their conclusion, the authors remark that “When the member countries of the euro zone established their monetary union, neither academics nor policymakers anticipated that member states might experience external debt crises.”I disagree with that statement. Indeed, the Maastricht rules themselves were very much designed with the fear of an external debt crisis and its potential repercussions for the euro zone as a whole, in mind.And there certainly have been plenty of academics worrying about the consequences of introducing a common currency and the resulting interplay with fiscal policy. As evidence, let me start with my own contribution here: while perhaps not justified in terms of significance, this is a choice all too tempting to this discussant. In 2002, I participated in a conference organized by a branch of the European Commission in Brussels on the challenges created by a common currency. The explicit aim was the information of and communication with the educated public, and not “just” the usual circle of academics present at our conferences. Put differently, politicians with responsibilities in these matters as well as quality journalists should be able to access these papers, and the hope clearly was that they would. The conference papers were published in a 2003 Cambridge University Press volume edited by Marco Buti, the current director-general for ECFIN. The volume includes Uhlig (2003), my own paper.That paper devotes an entire section to “fiscal and monetary policy interaction: crisis scenarios.” I shall confess that I wrote that “I believe that the European monetary union will enjoy good sailing in pleasant weather for a long time to come.” Guilty as charged! But I continued by stating thatit is the task of academics like me to point out what might happen when conditions worsen. The commanding officers on board of the European ship may do well to be prepared for a storm, may do well to be prepared for the worst, even if the worst never takes place. A scenario that is worth thinking through, and in which the potential for dramatic coordination failures between the independent fiscal authorities is great is a scenario of a fiscal crisis or a banking crisis in Europe. This then is the topic to which I shall turn now. …Citizens of Europe and the United States look upon banking and exchange rate crises—as, for example, those in Asia, Russia or Latin America in recent years—as they look upon Malaria or starvation: horrible events, to be sure, but certain that they will never take place at home. That complacency may be misguided. Crisis scenarios are hard to imagine in good times such as these: it is the ability of imagination that is now required of the far-sighted reader. Unsustainable fiscal debt build-ups in member countries may not be a concern today, but can one and should one really exclude that they ever will be? If so, what are the consequences? I argue that this scenario merits careful prior analysis. I cannot do more here than raise some of the issues arising.And with that, I went ahead and tried to analyze the consequences. I shall confess that I did not have sufficient phantasy at the time to truly think through what would happen: for example, I never imagined that the ECB would so liberally interpret the no-bailout clause enshrined in the Maastricht treaty, as it has done.But still: as far as this discussant is concerned, I certainly felt that I had duly tried to warn the public. And for that, I did not want to be considered a crank either, who constantly claims that the world will end tomorrow. Perhaps now you understand my introduction and, in hindsight, misplaced optimism. It was meant as a piece of analysis for those who, like me, felt it advisable to think through disaster scenarios ahead of time and when everything appears to be calm. The paper was discussed by Vitor Gaspar, then head of research at the ECB, and later finance minister in Portugal: a first-rate thinker and someone who, per officio, might surely have been deeply concerned about this issue. I have only the best things to say about him, but it is a fact that neither was there much echo or interest by the ECB research department for any follow-up on that topic, nor was there any echo by the educated public, that is, politicians in power or journalists of any stripe, for which the whole affair had been arranged. Zero. Nothing. Nada. What is an economist to do? Ram it down their throats?I was not the only one: I am only reporting about my own case because I happen to know it particularly well. There have been plenty of warners and warnings, and with some effort one could produce a nice list of references, many of them misguided, to be sure, but others not. It was a fascinating mix of Kassandras and Quacks, and one could have spent some effort in sorting it all out. But the euro had been introduced and things seem to be working fine for now. Would the critics please shut up?But then things did go wrong, in a remarkably short amount of time. With a heavy dose of sadness and cynicism, I have to laugh about the broad masses of utterly uninformed and clueless journalists out there, who, in their ignorance of what is actually going on in our science, proclaim that we economists have not thought about these issues ahead of time or other crises for that matter, and that we had failed to warn and to analyze before they arrive. One really should not take journalists particularly seriously, of course. It is their job to sell newspapers and news journals, nothing more. These are just one more form of entertainment, competing with Hollywood movies, YouTube videos, and the constant bombardment of Twitter messages. Serious investigative journalism is expensive, and, it seems, in low demand by the public, paying for the newspapers that publish them (or, at least, paying for the products advertised in these newspapers). A journalist will much more easily entertain his or her readers by proclaiming a whole profession inept at doing its job. This assertion is assembled by essentially copying from other journalists, who have said exactly the same. This copying method, which appears to be so heavily favored by journalists these days, is cheap and assures that the journalist is in line with popular opinion and common views, since everyone is now saying the same. That does not make it any more true, of course, but it helps to sell the paper. And in a market economy that, really, is all that counts. I cannot complain about this equilibrium: I am merely pointing out its remarkable properties. Reasonably accurate information about the successes and failures of our profession is simply not what one should expect from journalists and their newspapers: that hope would be utterly misplaced.In any case, we academics should surely not fall in the trap of repeating these journalistic assertions in the conclusion of an otherwise fine paper, as appears to be done here, and thereby giving them the appearance of a backing by serious scientists. They do not deserve it. And with that, let there be enough of this diatribe and digression, and let me return back to the paper. I just had to get this one off my chest.Is It the Legal Framework?Let me then examine the central claim of the paper: the difference between the EMU and the USA is the legal framework. The authors conclude that “the experiences of Canada and the United States indicate that stronger institutional foundations are needed to mitigate the risk of government interference with private contracts.” What, exactly, is meant and implied by that? Let us think that through.Let me contrast Greece to Illinois here: Puerto Rico or California may be a more appropriate example, perhaps, but Illinois seems to be reasonably close to bankruptcy, at the moment of writing, to serve well for the illustration. The population of Illinois and Greece is about the same, the GDP of Illinois is more than twice as high, while the debt-to-GDP ratio in Illinois is around 20%, compared to 160% for Greece. So, why is Illinois close to bankruptcy? It is indeed limited in its ability to tax: the bulk of taxation is federal, and too much of an increase in Illinois taxes may lead to an exodus of firms and citizens. For Illinois, its pensions liabilities rather than outright government debt are looming large. The Illinois Supreme Court has decided that the Illinois Constitution thoroughly protects these pensions claims, since these benefits “shall not be diminished or impaired.” Greece also faces considerable pension obligations, though they may be of lesser importance there relative to the situation in Illinois. Greek banks were once heavily involved in lending to the Greek government, and some of it is still happening, despite most of the Greek debt now being held by official lenders. In contrast, it does not seem that the issue of Illinois debt is of much concern to banks in Illinois.According to the authors, Greece may interfere with the obligations of its citizens to foreigners, while Illinois cannot do so. I believe it is fair to interpret this difference to be about renumeration risk. Perhaps Greece exits the euro zone, reintroducing the drachma, and possibly additionally passing laws that all private debt amounts are now in drachma, rather than euros. There appears to be little possibility, on the other hand, for Illinois to leave the dollar zone and introduce its own currency. The difference, the authors argue, lies in the legal framework. Is that really it?The US Constitution indeed does not permit Illinois to introduce its own currency, but neither does the Maastricht treaty allow this for Greece. There is no exit provision. Moreover, the Maastricht treaty together with the Stability-and-Growth Pact very clearly disallows bailouts of the Greek sovereign by the European Central Bank or other governments in Europe, and imposes a variety of fiscal limits with ensuing deficit procedures, should they be violated. These treaties nearly passed as part of a proposed European Constitution: despite the rejection of passing a constitution outright, they were regarded as constitution-like. As far as I can tell, the Germans actually believed that these treaties were law and would be followed. In actual practice, that turned out to be wrong. So, at the end of the day, I argue, it does not just matter what the Constitution or its European equivalent says: what matters is, how it is interpreted and enforced. The constitution, society, politics, and military options: they all matter.To illustrate this, let me consider the hypothetical and arguably extreme scenario of an attempt by the government of llinois to exit from the dollar zone, and let me compare that to an attempt by the Greek government to exit from the euro zone.It would all begin with Illinois declaring its debt and pension obligations as unbearable and “austerity” as nonoption. It might ask the Federal Reserve Bank to buy Illinois debt and Illinois obligations to reduce its currently high yields. The Federal Reserve Bank would refuse. The Illinois legislature would then meet and introduce the “salamander” as currency (see Peter Greticos, “A Modest Proposal to Fix Illinois Finances,” Feb 3, 2015, rebootillinois.com). It devalues, renumerating govermnent contracts, including pension claims. While they are at it, they decide to turn all taxes Illinois They the Chicago Federal Reserve to be the Illinois Central Bank There would be a and to that surely would not be the The US Supreme Court would the by the Illinois government to be and between and would they The US would not allow Illinois to and military that Illinois out. many the union and is that It And it was a from Illinois, who in the of the is a It is not the of the Constitution that The society, politics, and military options: they all the end of the day, it is the of and military as well as the of the of the United States population to an Illinois that any serious in Illinois from even the dollar exit option, even if that is never out me compare this to an similar scenario in Greece. that Greece its debt as unbearable and “austerity” as a nonoption. It the ECB to its per to Greek banks or in to reduce yields. The ECB may actually do so, and, has done so in the But now this is not enough and that the Greek economic problems Greece the It devalues, renumerating government contracts, including in debt and pension There is no need to turn European taxes Greek they were Greek taxes to begin Greece has a central Greece would a and to that surely would not be the The European Court would the ECB to be but the Greek exit to be that European with the Greek government to a The European governments to off Greece European that no one a in Europe this, and, a of The Maastricht treaty Greece and defaults on its debt. at difference is not the legal rules or the by the Supreme The society, politics, and the military they all because everyone would that, at the end of the day, it is up to Greece to part of the euro zone or it for Greek politicians to entertain the option And surely no serious in Europe would entertain the option of an to see some common legal framework. Europe was there twice in the These times were not as a in a contrast to the United This part of European history may be more in the in these crisis scenarios than the in the of the constitution and does not have to go to this extreme to see that have a more to do with the of the banking and the of the central and only with the legal framework per one might to argue that they are but still scenario might look as the Greek government to disruptions of the Greek The ECB its to Greek The Greek banking are The ECB no from the Greek central The Greek economy There will be of private this with the similar scenario in Illinois. the Illinois government default on and pension go on The Federal Reserve never Illinois in the first place. The Illinois banks are not particularly to Illinois debt There would be no point in There will be private wonderful paper up an issue of prime importance: What are the economic consequences of fiscal disruptions and fears of sovereign and why is the situation so different between the USA and the on a transdisciplinary of and legal facts and economic as well as a model-based the authors argue that the difference is due to legal in Europe, governments may impair the ability of its citizens to foreign in in case of an exit from the euro zone, while this is out per the constitution in the United is an and it thinking more about these and so I have in my comments. I have that one to go than to look at the legal issues The Maastricht treaty may not be so different from the US in terms of for the common currency as a it is not just the Constitution that The society, politics, and the military they all As an example, an attempt of Illinois to from the union and to introduce its own currency in the lead to in the United By contrast, an attempt by Greece to from the European Union and introduce its own currency may be by a of by with no serious even a or to this from Legal does the the will and the ability to these are not meant to take away from this paper: they are meant to and the fine analysis there, and to and this It is a terrific, insightful, and paper indeed. It deserves to be read and studied in many places. By choice and design, the authors it to anyone with a decent undergraduate degree in economics or anyone with a bit of taste for logical and formal I sincerely hope that many take that option, beyond the of the ivory towers. The paper and the issues discussed deserve of University of This research has been by the I have an with a Federal Reserve the and the For of research and of the financial if please see but in What are the In Monetary and in EMU, Buti, Cambridge University in Previous articleNext article by NBER by the of by the of All the articles this and the A

Sentenza 238/2014 of the Italian Constitutional Court (ItCC) highlights the important role domestic courts play in international law. More than prior examples, it illustrates the ever more autonomous and self-confident stance of domestic courts on the international plane. But the ruling of the Italian Constitutional Court also shows that more engagement with international law does not necessarily mean that domestic courts enhance the effectiveness of international law and become ‘compliance partners’ of international courts. The Sentenza rather suggests that domestic courts in times of global governance and increased activity of international courts see their role at the intersection of legal orders also as ‘gate-keepers’, ready to cushion the domestic impact of international law if deemed necessary. The judgment of the ItCC thus offers a new opportunity to examine the multifaceted and complex role of these important actors that apply and shape international law, while always remaining bound by domestic (constitutional) law. This paper does so by exploring how domestic courts deal with rulings of the World Court. It shows that despite the fact that in numerous situations domestic courts could act as compliance partners of the ICJ, in reality more often than not, they have refused to do so and deferred in the implementation of its judgments to the political branches. Assessing this practice, the paper argues that domestic courts should take a more active stance and overcome the purely interstate view which seems at odds with present day international law. While it seems too far-reaching to expect domestic courts to follow international courts unconditionally, the paper cautions that the risk of setting dangerous precedents by openly defying international judgments is considerable. Given that there is no simple way out for domestic courts in cases of conflict between international and domestic (constitutional) law, courts should carefully balance the different interests at stake, namely the interest of an effective system of international adjudication on the one hand and the protection of fundamental domestic principles on the other hand, keeping in mind that at the end of the day a functioning international legal system will to a large extent depend on them.

The breach of a international sales contract by one party gives the other party a right to recover damages, but we are here concerned with more specialized remedy - avoidance of the contract. In the UN Convention on the International Sale of Goods (CISG) as in national legal systems, avoidance is not available for every breach of contract. The question whether the party affected by the disturbance may avoid the contract instead of being restricted to a claim for damages or other remedies with the contract continuing in force, depends of the seriousness of the breach of contractual obligation. In the Convention, a party may avoid the contract when the other party commits a 'fundamental breach'. The party affected by breach must suffer a detriment which must be such 'as substantially to deprive him of what he is 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 circumstances would not have foreseen such a result'. The definition of 'fundamental breach of contract', as a fruit of world-wide compromise, is not always easy to apply both for the parties and the judges and it's notions of 'substantial detriment' and 'foreseeability' may give rise to divergent judicial interpretation and application. .

This chapter expounds on the legal definition of the term ‘fundamental breach of contract’ in Article 25. It mentions how the term has been characterized as the linchpin of the CISG’s system of remedies as it determines whether a sales transaction that has run into difficulties will continue to be performed or terminated. Moreover, Article 25’s vague and less than clear wording had been the main reason for theoretical controversies and difficulties in the provision’s practical application. The chapter looks into the fundamental breach of contract as a unitary concept. It also includes specific cases of breaches of the buyer and seller’s obligations and breach of not party-specific obligations.

Citizenship, according to Bernard Weatherill, the Speaker of the House of Commons, has to be learned like everything else. Yet schools fail to provide even the most basic instruction, and young people have little idea of their rights and responsibilities as future members of political society. Those who do volunteer and take part in community service at whatever age find hurdles to participation. Hence the Speaker's Commission was established to consider the encouragement and development of 'Active Citizenship' by first defining it, then reviewing existing initiatives, and finally by considering devices for recognising its application. The first task was eased somewhat by appointing to the Commission those who could be expected to know what they were looking for, since the prototype active citizen may have much in common with the man on the Clapham omnibus beloved of lawyers both are more imaginary than real. Educationalists and industrialists made up the majority of the 34 members of the Commission, with the remainder of the group including a couple of bishops and a politician from each of the three main parties (but no apparent token Scot; and many more men than women). 'Active citizenship' is a hybrid concept involving lofty ideals, part Palmerstone (the proud assertion 'civis Britannicus sum' is again to imply protection against injustice and wrong), part Roosevelt New Deal (the essential attribute of citizenship as the ability and willingness to pull one's weight). Knowledge, skills, opportunities and encouragement are all needed to get more of us involved both in political society and also in voluntary work. That Active Citizenship is a Good Thing is taken as self-evident; it enriches giver, recipient, the community and, ultimately, democracy. Gone are the days of Bagehot and disdain and contempt for the lower orders; all are now equal partners in the task of strengthening democracy and community life. For twenty months the Commission contemplated citizenship. It sought guidance and experience from a wide and possibly disparate group of organisations, including the British Institute for International and Comparative Law, the Family Policy Studies Unit and the Prince's Trust. It held meetings and seminars, and undertook research. Its agenda included discussions on the philosophy of citizenship, the constitutional aspects of citizenship, citizenship and caring, the youth service and citizenship, and industry and citizenship. Citizenship was explored, examined, probed and dissected. At the end of the day, though, its recommendations were on the whole more muted than radical, more self-evident commonsense than dramatic iconoclasm. First, civics training should begin in infant school and continue right through until university, with certain occupational groups (including doctors, civil servants, police ofElcers and judges) receiving additional specific training. Second, the law should be made more accessible both by codiifying it and by improving access to it. Third, each citizen should be able to 'live the life of a civilised human being according to the

We cannot discuss international law and its possible evolution towards a new international law of development without briefly reminding ourselves of what law is and how it emerges. What makes law, in other words? Law, a legal system, first of all presupposes a community. In the international case this is a community of autonomous states. Next—to achieve an effective system—there must be consensus on both the means and the ends of regulation of relations within that community or an authority with power to execute the rules of that system. At the end of the day the international community has depended, and continues to depend, on a blend of consensus and authority. Next, there must be structure, an organised network of institutions for the determination of rules (“sources”), for the resolution of conflicts and for the carrying into effect of decisions on those rules and conflicts. Thus law cannot exist without purpose; the law embodies goals which may be limited or extensive in their reach—the law is for something, some end. Lastly, of course, there must be rules which specify how the system is to work, and the actual content of the relations prescribed. In the evolution which we have witnessed since the Second World War international law has moved in all these respects; and this movement is quite vital for the theme of international law and development.

The concept of fundamental breach forms a cornerstone of international commercial contract law, as it determines the circumstances in which a party may terminate the contract and seek appropriate remedies. In the context of cross-border transactions, where parties often come from different legal traditions, a clear understanding of this doctrine is essential to ensure legal certainty and protect legitimate commercial expectations. The notion of fundamental breach is addressed under both the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts (UPICC), though these instruments adopt distinct approaches. The CISG sets a structured framework, requiring that the breach substantially deprive the injured party of its contractual expectations and that this result be foreseeable to the breaching party. In contrast, the UPICC focuses on substantial non-performance and considers additional elements, including whether strict compliance was of the essence, whether the non-performance was intentional or reckless, and whether future performance can reasonably be relied upon. These differing approaches raise important questions regarding their practical implications for parties to international commercial contracts. The authors conclude that while both frameworks aim to balance legal certainty with fairness, the CISG provides a more defined standard, whereas the UPICC offers greater flexibility by focusing on the impairment of the aggrieved party’s contractual interests.

The fire in Libya's Rabta chemical factor in March 1990 may have been an accident, a hoax perpetrated by the Qaddafi government, or an act of foreign sabotage designed to set back Libya's development of chemical weapons. International law does not generally condone the use of force against another state except in self‐defense. Given the Libyan government's support for terrorist groups, its anti‐Western ideology, and its incipient production of poison gas, the Rabta factory might be perceived as a genuine threat by Western governments. A case for necessity can therefore be made to justify sabotage of the Rabta factora as “anticipatory” or preemptive self‐defiiese. If indeed the fire was sabotage, it was carried out with premeditated proportionality and minimum loss of life. Caution must still be exercised to prevent anticipatory self‐defense from being abused as a legal license by governments to intervene at will into the internal affairs of other states. At the end of the day, responsibility for preventing proliferation of chemical weapons lies with Western governments, who must impose more stringent restrictions banning sale and export of that production technology abroad. International law provides regulations for state conduct in foreign relations, but the law does not enforce itself. It remains for national governments to uphold those rules.

In this Issue

The Nile basin regime: A role for law?

This essay, a chapter in a book on international investment law and comparative public law forthcoming from Oxford University Press, reviews the applicability of international investment law to tax administration and enforcement. It begins with a review of the principles of international investment law that are relevant to the assessment and enforcement of municipal tax imposts. It then explores tax administration practice in a variety of states. This overview seeks to achieve two results. First, as an inductive matter it use state practice to sketch a baseline of common, and presumably acceptable, administrative practices. An investor normally should be deemed to expect a state to employ administrative practice that reflects the exigencies of tax assessment and collection and the reasonable need of the administrator for flexibility and dispatch. Second, the review highlights ways in which common practices can be perverted to impair investments, rather than to advance the appropriate revenue goals of the state. At the end of the day, the line between acceptable discretion and perversion of tax administration to get around obligations to foreign investors remains blurred and debatable. This chapter represents a first step at illuminating the problem and the countervailing arguments. It concludes with a modest prospectus for future research.

This study undertakes a philosophical examination of the intersection of international criminal law and human rights law, revealing the paradoxical tensions between the pursuit of justice and the protection of human rights. Through a critical analysis of the normative foundations of these two fields, this research discloses the differing ontological and epistemological assumptions underlying international criminal law and human rights law. Employing a qualitative research methodology, this study conducts an in-depth examination of the major international criminal law and human rights law instruments, including the Rome Statute of the International Criminal Court and the Universal Declaration of Human Rights. Additionally, this research undertakes a critical discourse analysis of the jurisprudence of international criminal law and human rights law institutions, including the International Criminal Court and the European Court of Human Rights. This study argues that the paradox of justice at the intersection of international criminal law and human rights law stems from the differing conceptions of justice and human rights that underlie these two fields. While international criminal law prioritizes retributive justice and the punishment of perpetrators, human rights law emphasizes restorative justice and the protection of human dignity. To reconcile this paradox, this research proposes a philosophical framework that integrates the insights of both fields. Drawing on the concepts of "justice as recognition" and "human rights as capabilities," this study develops a novel approach to understanding the intersection of international criminal law and human rights law. The findings of this study contribute to a deeper understanding of the complex relationships between justice, human rights, and international law. This research informs strategies for enhanced cooperation and accountability between international criminal law and human rights law institutions, ultimately promoting a more just and equitable international legal order. This study employs a qualitative research methodology, including critical discourse analysis and philosophical inquiry. The research questions guiding this study include: What are the differing ontological and epistemological assumptions underlying international criminal law and human rights law? How do these differing assumptions give rise to the paradox of justice at the intersection of international criminal law and human rights law? How can a philosophical framework that integrates the insights of both fields reconcile this paradox?. The study's findings suggest that a philosophical framework that integrates the insights of both fields is necessary to reconcile the paradox of justice. The research also highlights the importance of enhanced cooperation and accountability between international criminal law and human rights law institutions in promoting a more just and equitable international legal order. The key lessons from this study include the importance of understanding the complex relationships between justice, human rights, and international law, and the need for a philosophical framework that integrates the insights of both fields. The study also emphasizes the importance of enhanced cooperation and accountability between international criminal law and human rights law institutions.

The recent emergence of Joint Statement Initiatives (JSIs) – that is, negotiating initiatives among a subset of the World Trade Organization (WTO) membership – has reignited the debate over lawmaking in the WTO. As things stand, the WTO operates on the basis of a widespread expectation that consensus needs to be achieved for any decision to be taken. Agreements that produce rights and obligations only among a subset of the membership (‘plurilaterals’, or Annex 4 agreements) are also subject to the consensus rule and thus remain exceptional. Are JSIs the first move towards redressing the current equilibrium in favour of agreements among a subset ofWTO members and, if so, can they be integrated within the current regime absent amendments? Even though consensus decision-making does not necessarily lead to failed negotiations, it is undoubtedly a significant contributory factor when parties hold diverse and unaligned priorities. Contracts signed in the WTO involve increasingly heterogeneous players with diverse priorities. In this article, we argue that the first-best approach to moving away from the current legislative stasis at the multilateral level is to acknowledge that it is high time to consider how to allow an additional degree of ‘variable geometry’ within the multilateral trading system. A textual legal basis for this approach, however, is missing within the WTO legal order. An acceptable alternative would be to acknowledge that the WTO adjudicators (WTO panelists and Appellate Body members), and not the members, will be the ultimate gatekeepers deciding whether agreements among a subset of members can coexist as part of the current multilateral trade framework understood within the context of international law. A necessary precondition for this alternative approach to flourish will, of course, be the resolution of the current judiciary crisis of the WTO. In either scenario, what will matter at the end of the day is that inter se agreements (that is, agreements among a subset of the WTO membership) will not affect the enjoyment of acquired rights by non-participants nor frustrate the objectives of the multilateral trading system.

In a 2015 article, my coauthor, Susy Frankel, and I warned that shifts in international lawmaking — from the World Intellectual Property Organization, to the World Trade Organization (WT)O), and then to bilateral investment treaties and free trade agreements — have erected, in the terms used in the Conference at which this paper was presented, a high hedge around intellectual property rights, one that may protect these rights from state action designed to protect constitutive values and further legitimate sovereign needs. Since that article was published, two investor-state dispute settlements (ISDS) involving intellectual property have been resolved by final award. In both cases, the state prevailed, suggesting to many that the hedge may not be as impenetrable as we suggested. In this piece, I argue that this view is wrong. A comparison of an ISDS case challenging tobacco legislation to a similar challenge in the WTO demonstrates that ISDS is a highly pernicious constraint. It creates opportunities for forum shopping and raises the cost of defending regulatory activity. The framing of investment disputes means that even actions that comply with international law can be challenged as undermining investments or denying fair and equitable treatment. To complicate matters, investors may be more eager to bring disputes than state entities. At the same time, the professional arbitrators who hear ISDS disputes may be less likely to take account of the state’s obligations to serve the needs all its citizens. Furthermore, they may be more likely to decide disputes in ways that encourage further challenges. As a result, ISDS hedges cast a heavy shadow on state action and may chill important state activity. Clipping the hedge requires the drafters of investment obligations and the tribunals that hear ISDS disputes to take account of the intangibility of IP rights in determining when IP is sufficiently localized in the host state that it should be considered protectable by that state’s investment obligations. Further, I explore institutional changes, such as the standing tribunal proposed by CETA and other ways to discourage ISDS challenges. At the end of the day, however, one must question whether ISDS, which allows foreigners to challenge a government’s choices, is an appropriate vehicle for maintaining hedges — for striking the right domestic balance between the interests of IP holders and those of the public.