Volume 30, No. 3

The Living Law: Reasonableness in the Standard Practices of International Trade and Business

Drafting Commercial Practices and the Growth of Commercial Contract Law
Boris Kozolchyk

This article discusses the development of secured lending practices in Republican and Imperial Rome and draws lessons from the difficulties experienced in generating practices acceptable to lenders and borrowers alike. Itcompares the Roman experience with that of twentieth century bankers from many nations relying upon contemporary standard practices to draft viable commercial letter of credit practices for banking associations worldwide. Why was it that six centuries of contractual and extra-contractual practices, accompanied by countless administrative and judicial decisions, did not produce viable secured transactions practices in Rome, while it took only half of a century to draft viable Letter of Credit (LOC) practices for bankers and their customers throughout the world?

The Diamond Industry and the Industry’s Dispute Resolution Mechanisms
Ersoy Zirhlioglu

According to researchers, up to 3.3 billion years ago and almost 500 miles below the earth’s surface, carbon started its journey in evolving under extreme pressure and heat, which resulted in the most valued commodity on earth, the Diamond. Although the diamond plays a big role in the proposals of marriage in today’s world, this tradition does not go back more than a few decades. Even though in 1377, Emperor Maximilian gave the first reported diamond engagement ring to Mary of Burgundy, diamonds were beyond the public’s reach until the discovery of diamonds near Hopetown, south of Kimberley in South Africa, which gave birth to the modern diamond industry.

In this article, I will examine the diamond industry’s features with special regard to the dispute resolution mechanism of diamond dealers. After this introduction, in Part II, the background history will be examined. Special attention will be given to the diamond industry and diamond dealers, along with the reason for Jewish predominance in the industry. In Part III, sui generis issues of the diamond industry will be reviewed. The unique difficulties of the diamond transactions will be analyzed to understand the reason why diamond dealers needed a special set of rules to solve their disputes. The differences between private and public legal systems will also be analyzed. In Part IV, key reasons for enforcing the contracts in the diamond industry will be shown. The role of reputation and trust in the industry will also be reviewed. In Part V, the process of dispute settlement among diamond dealers will be explained. The special rules of diamond dealers’ clubs and the World Federation of Diamond Bourses will also be reviewed.

The Electronic Express Sea Waybill as Perceived in Sea-Land Service, Inc. v. Lozen International, L.L.C. and Later Case Law
Lili Sehayek Niv

In this article, I will examine the electronic express sea waybill as perceived by the U.S. court in the Sea-Land, Inc. v. Lozen International L.L.C. case and in later case law citing it. The overview will lead us to the freight forwarders’ world, both in practice and from a legal point of view, and describe in essence my evolving research. I will proceed through a reflecting corridor, describing hastily the first signs of a common practice by air freight forwarders towards a paperless process. Then I will advance to the next part of this article, which will describe the facts in the Sea-Land case, followed by an analysis of the court’s ruling, focusing on the electronic express sea waybill of lading, the Ninth Circuit Court of Appeals’ attitude toward it, and its validity and the application of the Carriage Of Goods by Sea Act (COGSA) to it. I shall argue that interestingly enough, the court’s core decision in the Sea-Land case regarding those issues is summarized in two footnotes. Concisely, the court acknowledges that in this particular case, the non-electronic bills of lading  controlled the shipment; however, it does not rule, not even as an obiter dictum, whether the terms of a traditional bill of lading control all shipments sent via electronic express sea waybills or whether COGSA applies to electronic shipping documents. The latter part of this article will examine later U.S. case law, and I will conclude the article with an examination of whether or not the rules set forth in the Sea-Land case regarding the electronic express sea waybill of lading were reinforced, evolved, or remained unchanged.

Sectoral Dispute Resolution in International Banking (Documentary Credit Dispute Expertise: DOCDEX)
Chang-Soon Thomas Song

Unlike the business community, which uses arbitration extensively to resolve disputes arising from their international contracts, the international banking community does not use arbitration; instead, it mainly resorts to litigation, despite the high cost and time involved.

This article posits that an expert-panel based dispute resolution system, such as the Documentary Credit Dispute Expertise, as called DOCDEX by bankers, would be a good alternative to such litigation. The DOCDEX has its experts base their decisions on reasonableness and international standard practice, while deciding disputes that arise from letters of credit and bank guarantees. While a judge decides the issues after hearing evidence presented during trial by experts, the DOCDEX panel of experts can decide the issues based on their own extensive experience of standard practice in international banking.

GAFTA Arbitration as the Most Appropriate Forum for Disputes Resolution in Grain Trade
Iryna Polovets, Matthew Smith, & Bradley Terry

The main focus of this study is the arbitral mechanism established under GAFTA, the international association dealing with trade in grain, animal feedstuffs, pulses, rice, and other soft commodities. The article first provides a general overview of several GAFTA standard clauses, such as domicile, default, and exclusion of international conventions. It then briefly explores what type of arbitrations GAFTA offers. The article proceeds elaborating on GAFTA Arbitration Rules Form No. 125, which governs the resolution of disputes arising virtually from all GAFTA contracts. It highlights the salient features of the Rules that distinguish GAFTA from other commercial arbitration tribunals and make it the most appropriate forum for resolving disputes arising in grain trade. Finally, the article explores GAFTA’s approach to inducing compliance with arbitral awards via “public shaming” on GAFTA’s website and through the judicial enforcement of arbitral awards under the New York Convention.

Importation of Mexican Produce into the United States: Procedures, Documentation, and Dispute Resolution
John F. Munger

The purchase of Mexican fruits and vegetables (Produce) for import across the U.S. border and sale in the United States is a large and important industry on both sides of the border. Imported Mexican fruits now account for 37% of all of the fruit import value and 69% of all vegetable import value imported into the United States, and that percentage is growing each year. However, Produce import transactions are not only complex, but they must move with abnormal speed in order to avoid spoilage and devaluation of the Produce itself before reaching market. Further, these transactions also involve many
“players,” most of whom play several different roles in the process. Combine these problems with differences in laws, language, and culture of the many parties involved, American and Mexican, and the process can be difficult to understand and manage.

Despite these many problems, the industry has had remarkable success in adopting very effective mechanisms to make these transactions work efficiently and fairly. As a result, the U.S. consumer is able to enjoy a variety of fine fruits and vegetables grown in Mexico2 and transported quickly to market in prime
condition, and the industry continues to grow and prosper more each year.

The purpose of this article is to identify exactly how such cross-border sales of perishable goods have been made to work by those involved, from the Grower/Seller to the ultimate Dealer and Retailer. In particular, this article will focus on the steps, methods, and procedures used by the parties to carry out such transactions, and which ultimately allow these transactions to work as effectively and efficiently as they do.



Posted in Volume 30, Volume 30