Agence panafricaine pour le développement et l’intégration (APDI)
barriers to the functioning of community law
These limitations re-emphasized the fact that community laws are only a partial solution to the normal legal issues raised in cross-border transactions. The truth is that neither the harmonization nor the unification approach can create a truly transnational commercial legal framework.
Written by: Lord Fiifi Sampson
9/14/20245 min read
Whether on sides with the unification approach or the harmonization approach, there are inherent limitations which act as a barrier to the uniformity of national laws. These limitations re-emphasized the fact that community laws are only a partial solution to the normal legal issues raised in cross-border transactions. The truth is that neither the harmonization nor the unification approach can create a truly transnational commercial legal framework.
What characterizes a truly transnational commercial legal framework is that it must be certain, flexible, and at the same time, there should be a uniformity in its interpretation as well as high political willingness among the states to accept such legal framework. This is not always so for community law in international law practices and policies. In practice, there are some barriers which restrain community laws from having the characteristics of a truly transnational commercial legal framework. These barriers include drafting, languages, and use.
Because community laws are basically international instruments, the drafters, unlike domestic legislation, must ensure that the international instruments are translated to the various official languages of the community states. It is not only about translation here, but ensuring in addition that the language translated is authentic—that is, conveying the real message of the language translated. A task which is difficult to achieve in practice because the languages used therein are legal languages which have their own implications and effects according to the various legal systems. Whereas in certain jurisdictions, a legal word may have certain connotations or effects, in another jurisdiction, it may not have the same. A clear example is the use of the term “offer and acceptance” in the UN Convention on the International Sale of Goods. This word is a technical word which carries a rich heritage of legal doctrine in English common law. Where such an instrument appears before a common law judge, he would interpret such provision in line with the common law principles.
And this would distort the uniformity of interpretation sought to be achieved by community law among states because in a different legal system like civil law, the “offer and acceptance” has no such legal significance. Apart from the distortion in the uniformity of interpretation of the international instrument bred by the imperfect translation, the corollary effect is to give rise to forum shopping, something which community law seeks to eradicate. Forum shopping arises because of what is usually termed as antinomy in international trade law. Antinomy is an imminent or apparent contradiction or mutual incompatibility of two laws. Antinomy arises where, as a result of the uniform law realized either through unification or harmonization method, there exists a differential concept between one legal system and another legal system. Aside from the “offer and acceptance” scenario cited, two additional examples can be used to illustrate cases of antinomy:
One is Article 3(1) of CISG, which states that the contract is not a sale of goods if the buyer supplies a ‘substantial’ part of the material. Apart from this provision being a vague and subjective term, it opens the door to several interpretations. Article 3 in the German text uses the word ‘wesentlisch’, which has no perfect translation into English. From the perspective of English law, wesentlisch could mean that either ‘substantial’ or ‘essential’ can be used, but the German system uses ‘wesentlisch’ to mean essential. The implication is that if the German court were to settle a matter involving Article 3(1), it would reach a different conclusion from the English court if it were to interpret ‘substantial’ as it is in law. Since ‘substantial’ in law is not the same as ‘essential’ in law, a prudent merchant would always balance the legal effects and see which court may favor his business should litigation arise in the future.
Another example is the legal effect of a penalty clause in common law and civil law. Take for instance, in a model contract, there is a provision that a contractor is to pay an amount of Ghc 2,000 for every day in failing to complete a building within the contractual framework. By the common law standard, this is a penalty clause and hence unenforceable. On the flip side, under l’article 1231-5 du Code civil of French law, penalty clauses are enforceable. With these two apparent contradictions on the legal validity of penalty clauses, a person who seeks to benefit from the given provision would run to the French court to claim his penalty damages.
These are some of the challenges that stem from the imperfection of drafting international instruments. But even where the international instrument is perfectly drafted, the use of these international instruments would depend on the political willingness of the community states involved. If they choose to adopt or ratify the instrument, then it goes on to reinforce community law as a truly transnational commercial legal framework. But if states refuse to partake in the reconciliation and conciliation of their national law, community law or the harmonization of law serves no use at all.
What is therefore the way to take—should we abandon the quest for the harmonization of our national trade laws because of the challenges identified above, or should we move on with it despite those challenges? To my mind, the challenges identified above are not related to the community law itself. However, these are obviously human errors or other elements that threaten the realization of the benefits arising from community law. These errors could be minimized if proper institutions and structures are put in place to train legal personnel like Legal Academia, Judges, lawyers, and law students so as to learn and understand the complexity or tussle issues involved in international trade in order to enable them to provide cogent and practical solutions to them.
An inspiration could be taken from the École Régionale Supérieure de Magistrature (ERSUMA) set up under OHADA. Alternatively, the various universities in Africa should have courses to that effect, like international trade law, comparative law, international private law, etc., as part of the curriculum with competent and expert professionals to lecture these courses. With regard to the issues of uniformity of interpretation, this is minimized in international practice by the establishment of supranational institutions like an Apex court to which all the various national courts are subjected, such as the Common Court of Justice and Arbitration (CCJA) and the European Court of Justice (ECJ). However, the reality is that these implementations are expensive, but that is the price we ought to pay if we are really serious about achieving Agenda 2063, that is, the African Economic Community through the African Continental Free Trade Area (AfTCA).
As Roy Goodes said about 25 years ago: “What emerges from all these developments is that with the enormous growth of cross-border trade, it is no longer sufficient for a party to rely on his own national law, even where this is the law chosen to govern his contract, because no contract can lay down rules governing the priority of ownership and security interests as against third parties, still less can it secure the efficacy of such interests on an insolvency in a foreign jurisdiction. It is therefore in the interest of bankers and of commerce and industry to join with governments in working towards the harmonization of commercial law affecting the most important classes of transaction, such as international sales of goods, cross-border security, rules governing international payments, and the like.”
This comment was made in 1998, at a time when Europeans were investing significant amounts of human resources and money in harmonizing their commercial laws at the expense of the United Kingdom’s reluctance. Twenty-five years on, the benefits are there for everyone to draw their conclusions. A benefit which inspired the heads of state of Africa to sign the African Continental Free Trade Area (AfTCA) agreement. As it stands now, the stakes are high among the state parties to reap its benefits. That is the perfect time to involve all the relevant state parties and agencies to join the force in harmonizing our trade laws to facilitate cross-border transactions. If we wait upon that, interest dies now as a result of the impotence of the AfTCA, and when the necessity of harmonization of our commercial law is later realized, the spirit among state parties would not be high to join in the force. The destiny of AfTCA towards Agenda 2063, therefore, lies in the hands of the leaders in charge, and we can only work towards that if we put the proper foundation in place, which includes herein the harmonization of our trade law in order to facilitate cross-border transactions.