The international commercial (trade) law is a set of the legal norms of inter-state regulation (international treaties, acts of international organizations, “lex mercatoria”), as well as the norms of national legislation governing relations arising in the implementation of international commercial activities.

International commercial (trade) law is not a separate legal system, branch or sub-branch of international law. It is rather a comprehensive legal concept that includes the norms and provisions of different international regulations, treaties, conventions and guidelines (including standard contracts, unified forms and incoterms).

The nature of the interaction of international trade law with various national trade (business, civil) laws is essentially the same as the interaction between the international private law and national laws. Thus, the subject of international legal regulation in the area of practical application of international trade law is the actions of states to ensure the contiguity of control activities in international trade. The subjects of international trade are:

  • Material things (finished products, machinery and equipment, commodities);
  • Services (transport, communication, scientific and technical, financial and credit, insurance, information and computing, travel, etc.);
  • Intellectual property (copyright, patent rights, etc.);
  • Property rights and non-property rights

All of them are included in the concept of goods. The regulation of markets is carried out at various levels: global, regional, bilateral, industry.

Sales contracts are a fundamental element of international trade, so uniform regulation of such contracts is of key importance in the development of international trade. Indeed, uncertainties caused by situations where the set of rules applicable to resolving a dispute has not been established in advance can become a serious obstacle to international trade. This fact fully justifies transnational efforts to achieve legal uniformity in order to promote consistency in the application of the international trade law.

Going far beyond the results achieved so far, the unification set forth in the UNCITRAL document the United Nations Convention on Contracts for the International Sale of Goods (CISG; the Vienna Convention 1980) provided an opportunity to strengthen the security of international trade, as well as contributed to the evolution of relevant national legislation. In addition to the development of national law, the Convention also had a significant impact on other international instruments on unification of international trade contracts, namely:

  • Principles of International Commercial Contracts (UNIDROIT);
  • Principles of European Contract Law;
  • Principles, Definitions and Model Rules of European Private Law: Draft Common Frame of Reference (DCFR);
  • Common European sales law (CESL)

Among the parties to the Convention (CISG) there are countries with all legal traditions – from Civil law to Common law. The Convention is adopted by countries representing all economic systems; hence, the Convention concurrently provides the legal framework for the international sale of goods and serves as a uniform legal instrument compatible with different legal systems.

Lawyers from IQ Decision UK will help you with various types of international commercial contracts in accordance with the conventions prepared by the International Institute for the Unification of Private Law (UNIDROIT) and model documents of the International Chamber of Commerce (ICC) with the appropriate use of International Commercial Terms (Incoterms) of the following groups:

  • Group “E” (departure);
  • Group “F” (main carriage unpaid);
  • Group “C” (main carriage paid);
  • Group “D” (arrival)

Dispute Resolution

The agreement on rules and procedures governing the resolution of disputes within the framework of the WTO provides for the following procedures for settling international trade disputes:

  • Consultation;
  • General conciliation procedures (good offices, conciliation and mediation);
  • Special conciliation procedures (the panel and the appellate body);
  • Arbitration

In other words, depending on the subject of the dispute, it is possible to use both diplomatic methods of resolving disputes (consultations, good offices) and legal procedures (arbitration). The parties may also use other arrangements of dispute settlement innate to the WTO, such as special conciliation procedures in the form of the panel and the appellate body.

Our experienced international lawyers from IQ Decision UK will also assist you in effectively resolving trade disputes through conciliation procedures or at the International Court of Arbitration in the International Chamber of Commerce (ICC).

International Trade Relations

It is necessary to determine the range of relations that are governed by international commercial (trade) law. These relations are of a commercial (trade) and international nature.

The entrepreneurial (commercial, trade) relations between business entities are private-law relationships that are aimed at realizing the interests of private individuals, based on equality and independence of participants.

The sources of international commercial (trade) law:

  • National law;
  • Judicial precedent;
  • Customary legal practice;
  • International treaties;
  • International conventions

Considering the sources of international commercial (trade) law, it is impossible to ignore such a category as “lex mercatoria” (in Latin trade law). Despite the existing discussion about the legal nature and content of this definition, in most cases it is understood as the group of non-state regulators of foreign economic operations, the main activity of ​​which is non-national regulation, as well as self-regulation.

In the context of globalization of international economic relations, the unification of the legal regulation of international trade transactions continues to be one of the imperative issues of international economic cooperation. The existence of inconsistent differences in the regulation of transactions in the national legal systems seriously complicates the process of concluding and executing international commercial contracts. The removal of these obstacles, the creation of a uniform legal regime and its international unification will undoubtedly contribute to the effective development of international trade.

Currently, an important component of international commercial (trade) law is the law of the World Trade Organization (WTO). The WTO rules are aimed at eliminating administrative boundaries in the movement of goods, works, services and intellectual property, which means narrowing the scope of state sovereignty and transferring some of the powers of autonomous states to an international organization.

The WTO is both an organization and an online database of legal texts and documents. It is a kind of multilateral trade agreement defining the rights and obligations of governments in the field of international trade. The legal basis for the WTO activities are as follows:

  • The General Agreement on Tariffs and Trade (GATT of 1994);
  • The General Agreement on Trade in Services (GATS);
  • The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

The WTO agreements were ratified by the parliaments of all its member states (164 countries).

The main tasks of the WTO are the liberalization of international trade, ensuring its fairness and predictability; promoting economic growth and improving the economic well-being of people around the globe.

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WTO deals with its tasks by monitoring the implementation of multilateral agreements, holding trade negotiations, resolving trade disputes in accordance with the WTO mechanism, as well as providing assistance to developing countries and studying the national economic policies.

The WTO sets out the principles of international trade law that legally bind the international trading system into a coherent whole. These principles include:

  • Principle of the development of free trade;
  • Principle of liberalization of the legal regime of international trade;
  • Principle of protection of the national market;
  • Principle of freedom of transit;
  • Principle of economic non-discrimination;
  • Principle of granting most-favored-nation (MFN) treatment.

The subjects of international commercial (trade) law are participants in international commercial relations. These include individuals engaged in entrepreneurial activities, legal entities, and sovereign states in the case of their participation in trading activities. It turns out that independent states act not only as repositories of power that exercise authority in  society, but also as subjects of private, civil relations regulated by the norms of international private law.

The important role played by the Principles of International Commercial Contracts should be pointed out. The aforementioned document was developed by the International Institute for the Unification of Private Law (UNIDROIT). These principles can serve as a model for legislation on treaties, used to interpret and supplement unified legal documents.

With regard to the regulation of international contractual relations in the field of international trade, there is a tendency in modern Common law countries to move from a law containing an enormous number of detailed rules to the so-called “skeletal” legislation. The common law states are increasingly turning to the idea of codifying and consolidating their legislation and eventually adopting universal uniform trade codes.

IQ Decision UK international trade lawyers provide professional legal advisory services to individuals and foreign companies operating worldwide. IQ Decision UK’s experienced lawyers advise their clients on the relevant international trade rules, laws, and compliance issues regarding the Free Trade Agreements (FTAs) and the WTO law and may represent a party before the International Trade Center (ITC), the British Chambers of Commerce (BCC), the U.S. Department of Commerce and the Dispute Settlement Board (DSB) of the World Trade Organization (WTO).

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