Material facts
The case between Alice and Frankfurt International Kitchen Warehouse (FIKW) involves an international commercial contract of sales. Alice is the buyer who imports domestic kitchen appliances to Australia. On the other hand, FIKW is the seller who manufactures those goods and is based in Germany. Both Alice and FIKW entered into contract where Alice agreed to purchase 30,000 toasters and 20,000 electric kettles which were to be manufactured by a subsidiary of FIKW located in Fiji. It was clear to both of these parties at the time of ratification the contract that the Fijian subsidiary had been producing products of low merchantable quality. As a result, the two parties admitted that the transaction could be in contrast with the German domestic law and also the Trade Practices Act 1974 (Cth) of Australia. To be on a safer side, they agreed in writing to use the law of another country, X, other than of Germany or Australia. Notably, none of the two parties of the contract has any connections with country X.
This transaction touches four countries. The first country is Germany, where FIKW is based. The second country is Australia, where Alice has her place of business. The third country is Fiji. This is where the goods are to be manufactured by a subsidiary of the German company, FIKW. The fourth and the last country is country X whose law is chosen by the parties to govern the contract in this scenario. This explains the fact that the laws of those four countries could govern this transaction in case of a dispute between the parties. From the scenario, the employees in Fiji went on strike in less than a month later. Consequently, FIKW was not able to deliver the goods on due date as per the terms of the contract. In case a dispute arises between Alice and FIKW, there will be need for intervention by law of one of these countries. But the laws of these countries could differ resulting into conflict of laws, (O’Brien, J. & Smith, R 1999). But since the dispute has to be solved, there is need to establish the process that could be used to handle the case if dispute arises between the parties.
Regal Issues
A regal issue arises in this case concerning the applicability of law of Fiji if a dispute arises between Alice and FIKW. Similarly, a second issue it evident regarding the possibility that Germany law may be applied to solve the dispute. In addition, Australian law could be applicable to govern this contract and it cannot be just ruled out. Finally, , there is need to asses the likelihood that law of country X may govern the contract if a dispute arises between the two parties. This begs these questions; can a dispute between the two parties be solved without leading to conflict of the laws of the different countries? Which law is likely to govern the contract?
Pertaining to the applicability of law of Fiji in this contract, it should be clear that the subsidiary of FIKW in Fiji is not party to the contract, (Lipstein, K1989). As such, there is no legal binding that exists between that subsidiary and Alice. Instead, the contract is between Alice and FIKW located in Germany. Though the subsidiary is selected to manufacture the goods, it is a separate entity that is not regally affected by a contract between the head office and Alice, (Stone, A. 2011) This explains that, though the law of Fiji may affect the subsidiary of FIKW located there, it may not affect the contract in this case
Concerning the possibility of application of German law in this case, it ought to be understood that Germany is party to the Rome convention in the first instance, (Collier J. G 2001).This convention gives autonomy to the parties to a contract to choose the law that is going to govern the contract. It stipulates that in case of dispute in international commercial contracts of sales leading to conflict in laws of different states, the law opted for by the parties is going to govern the contract. The rules of the Rome convention are well incorporated in German private international law, (Lew, J. D. M2003) and that convention be is part to the laws of that country. In this case, the parties made an option of law of country X to govern the contract between them. This explains that the law of Germany may not be used to solve a dispute between Alice and FIKW.
In this case, the law of Australia this country could affect the contract given that Alice has her business in that country. Australia is a member of commonwealth and also UNCITRAL arbitration rules 1985 among other international bodies, (Mayss, A. J 1999). Commonwealth rules are similar to the Rome statute, in that they embrace autonomy of the parties to an international commercial contract. It gives them freedom of choice of the law to govern the contract. The UNCITRAL arbitration rules 1985 are similar to commonwealth in that aspect. Rules governing international contracts have been reformed in Australia to conform to the requirements of the provisions of the laws of the two bodies as well as with other international bodies holding a similar view, (Morrissey, J. F. & Jack M 2008). Consequently, the law Australian supports to autonomy of the parties to an international commercial to choose the law that is will to govern their contract. Therefore, there is possibility that the law of Australia may not be applied to govern the contract in case a dispute between the two parties.
In relation to the law of country X, it has been explained earlier that the international law largely supports that the law chosen by the parties to a contract ought to rule in case of dispute. Both Australia and Germany are likely to refer the case to be solved in country X as required by their domestic laws as well as the international laws applicable to the case. As a result, the possibility of conflict of laws of the different countries is eliminated. Therefore, there is likelihood that a dispute arising between Alice and FIKW may be solved using the laws of country X, (Young, T2009)
Relevant Law
Several laws are applicable to the case between Alice and FIKW. To start with, article 3 (1) of the Rome convention stipulates that the law chosen to govern an international commercial contract by the parties shall be applied in case a dispute arises between or among the parties, (Chuah, & Kaczorowska 2000). This provision is relevant to this case since it explains the fact that law that is likely to be govern a dispute between Alice and FIKW is the law of country X for solution. This applies in this case indirectly given that it guides the decision by Germany law authorities. It also eliminates possibility that there could be conflict of German law with other laws that could affect the contract, (Greenberg, S. et al 2011)
Article 29 (1) of the UNCITRAL arbitration rules 1985 also gives a similar direction to article 3 (1) of the Rome convention, (Naón, H. A. G., 1992 p. 39). This law is consistent with Australian law of international trade, (Lew, J. D. M2003).Therefore, it means that Australia law authorities are likely to take a similar position as in this provision. Therefore this provision minimizes possibility that there will be conflict arising due to deviation from the law of Australia by the laws of the other nations in this case. Finally, the above provisions settle the fact that there is likelihood of application of law of country X in solving a dispute between the parties in this case.
Conclusion
The international law is meant to harmonize the laws of countries or regions and reduce possibility of conflict of laws of different states. A link of laws of different countries is created by the case between Alice and FIKW and could lead to conflict of laws. This has been solved through application of international laws. The law of Fiji is excluded since it is explicitly inapplicable in this contract. As it has been illustrated in this case, the possibility of application of law of Germany is low. Similarly, the law of Australia may not apply to the case. Evidently, the law that is likely to govern this case is the law that was chosen by the parties to the contract. Thus, there is likelihood that the law that may apply in case a dispute arises between Alice and FIKW.
b)
The Scenario
The case between with Frankfurt International Kitchen Warehouse (FIKW) and the Fijian employees involves an international contract of an organization and private parties. FIKW is located in Germany and has a subsidiary that is located in Fiji. In this scenario, FIKW negotiated a contract of sale with Alice whose business is based in Australia. Both agreed that the goods to be bought by Alice are going to be manufactured by the subsidiary located in Fiji. But within the same month, Fijian employees went on strike. Consequently, FIKW was unable to produce and deliver the goods in due time as per the contract. These facts might result in a dispute between FIKW and the Fijian employees. In solving the dispute, there is need to understand the applicability of the laws of Germany and Fiji and avoid possible conflict between the laws of the two countries. The following process provides guideline to handling the case.
Regal issues
In this case a dispute arises between the parties in this case, two regal issues would arise. First, the law of Germany could be applicable to solve a dispute between the two parties in this case. Secondly, there is likelihood that the law of Fiji will apply to solve the dispute. This leads us to the question; how can a dispute be solved between FIKW and the Fijian employees without leading to conflict of laws and which law is likely to apply?
In relation to the German case, this country is party to the international labour organization, (Bagheri, M., p. 198 200). The provisions of this organization direct that a contract of employment which involves laws of more than one country should be governed by the law chosen by the parties at commencement of the contract, (Redfern, A, 2004). In addition, this law stipulates that in absence of law of choice, such a contract should be governed by the law in which the employee usually performs the contract. In this case, it is not clear whether the parties to the contract opted for any particular law. If they chose the law of Germany, it means that the contract will be governed by that law. But if they did not choose any or chose another law other than the German law, there is likelihood that the law of Germany may not apply to govern the contract, (Wood, P., R 2007)
Similarly, Fiji is a signatory to the rules of the international labour organization. These rules are part of private international law of Fiji too, (Hill, J, 2004, p. 259). Consequently, the law of Fiji may govern the contract if the parties opted for it when affecting the contract. In addition, since the employees in this case are residing in Fiji, from where they provide their services, there is likelihood that the law of Fiji may govern the contract. However, this will not be so if the parties had taken another law to govern the contract.
Relevant law
Several laws are applicable in this case. Firstly, article 3 (1) of the international labour organization rules states that an employment contract shall be governed by the law chosen by the parties during commencement of the contract, (Born, G., p 541). This law is relevant to this case particularly if there had been a specific law chosen by the parties to govern the contract. In addition article 6(2) (a) of the rules of this organization stipulates that in absence of choice of law to govern the contract by the parties, the law that shall govern the contract is the law of the country from which the employee normally performs the contract, (Berger,K., P). This law settles the fact that the law of Germany may not be applicable to govern the contract in case the parties had opted for any law. Instead, it is the law of Fiji that shall be applicable, ( Renuich, A., 2006)
Conclusion
In conclusion, there is higher possibility that the law of Fiji would govern a dispute that may arise between FIKW and the Fijian employees compared to law Germany. This is more so if both these two parties had not chosen any law to govern the contract. However, the law of Germany could be applicable if the parties had opted for it to govern the contract as opposed to the law of Fiji. If the parties opted for another law other than the laws of Fiji and Germany, it means that there is high possibility of that aw governing the contract. Therefore, the law of the country that is likely govern the contract between FIKW and Fijian employees will be dependent on whether there was a law chosen to govern the contract or not.
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