HC Deb 03 July 1967 vol 749 cc1181-4

Lords Amendment: In page 2, line 2, after "States" insert "and in respect of what territories".

10.26 a.m.

The Minister of State, Board of Trade (Mr. George Darling)

I beg to move, That this House doth agree with the Lords in the said Amendment.

This Government Amendment was brought in in another place in order to remove doubts that had been expressed in the proceedings on the Bill in this House about the meaning of the words "contracting States" in Clause 1(5). This subsection provides for Orders in Council to be made stating what are the contracting states in which contracts of sale under the appropriate Articles of the Uniform Laws are to be applied by persons in the United Kingdom. Under Article XIII of the Convention a State which is a party to the Convention may declare that the Convention applies to all or to any of the territories for which it is responsible.

The proposed Amendment will enable an Order in Council to be made under subsection (5) to declare not only whether a State is party to the Convention but also to declare in respect of what territories it is a party. All this is essentially legalistic, but the Amendment will make the Orders in Council far more informative and will therefore help to remove some of the anxieties that have been expressed. It was then said that there was no proper provision for giving the full facts about the scope of the application of action which may be taken under the Convention.

Mr. Graham Page (Crosby)

The right hon. Gentleman has explained the position briefly, and has said that the Amendment dealt with essentially a legalistic point. I believe that it is also a very practical Amendment, and one which my hon. Friends and I would support. But although the House applauds the intention of the Amendment to bring about uniformity in the terms employed in connection with the sale of goods between persons having places of business in different states, none of us has found it an easy Bill to understand.

When, at this stage—having successfully pieced together the jigsaw of events described in Clause 1—I am told that there is another piece of that jigsaw to be slotted into place, I have to go back to the beginning and start again and try to understand where it fits in. Clause 1 makes the Uniform Law on the International Sale of Goods, as set out in the Annex to the 1964 Hague Convention, part of the law of the United Kingdom. It provides that it shall apply to a contract for the sale of goods if and only if the parties express the intention that it shall apply, as provided in subsection (3), and if and only if the places of business of the parties to the contract are in the territories of different contracting states, as mentioned in Paragraph 1 of Article 1 of Schedule 1.

What are not different States for this purpose are defined in Paragraph 5 of Article 1 of Schedule 1. I must stress that the Bill does not tell us what are different States; it tells us what are not different States. The two points arising on that, which are directly related to the Lords Amendment are, first, that the Convention itself is not part of the Bill, so that the declaration under Article 2, as described in Paragraph 5 of Article 1 of Schedule 1 is something of an unknown quantity. The Convention is not before us. We have only the Annex set out in Schedule 1.

10.30 a.m.

Secondly, the Bill does not tell us which are the contracting States. We shall not know for some time, and they must, therefore, be defined in the Bill instead of named. Clause 1(5) tries to overcome the difficulties that may arise when a matter comes before our courts. It answers the questions, "Who are the contracting States?" and, "When are two States not different States?", by saying that a declaratory Order in Council on them shall be conclusive.

But the answers to those two questions would not settle every case, and this is where the Lords Amendment comes in. As the right hon. Gentleman said, when a contracting State says that the uniform law shall apply, under Article 13 of the Convention it can say whether it shall apply to the whole of that contracting State or to a part of its territories. Therefore, we need to know, if there is to be certainty in the application of our laws, whether a contracting State has made a limited ratification or signature of that nature, whether it has said when signing the contract, "This shall apply only to this part of our territory." This country itself will have to make limitations when it signs as a contracting State, because, for example, the Isle of Man and the Channel Islands will make their own decisions as to whether to use the uniform laws and to ask for an Order in Council under Clause 4.

I understand that our dependent territories, which might well be considered as part of us as a State, will apply the uniform laws by means of their own legislation if they wish. But we shall then have to make a limitation excepting dependent territories when we sign as a contracting State. I give that as an example of how it will affect this country, but several Common Market and other countries which have dependent territories must be in the same position, and will wish to impose a limitation upon their signature to the Convention saying that some of their dependent territories are not to be included.

It is essential to businessmen and tradesmen in this country entering into contracts with people in other States not only to know which are contracting States to the Convention, and which States are to be grouped together as not being different States, but also to know the area of each contracting State to which the Act might apply. They might obtain that information from trade journals or the Board of Trade Journal or in some similar way. But, surely, the value of making an Order in Council under Clause 1(5) is that it will be conclusive evidence in the courts. The litigant will not be put to the expense of having to prove, say, that a certain territory in a certain State does or does not come within the Act.

Therefore, if we accept the Amendment, the Bill when it is an Act will not only be a better form of information to the businessman when he is contracting with those in other States, but it will be of great assistance to the litigant, if any of those contracts come before our courts, that the court will be able to accept an Order in Council as conclusive evidence.

Mr. Darling

Perhaps I may say just a word about making the facts fully known to businessmen in this country. The Lords Amendment will not greatly help them. As the hon. Gentleman said, it will, of course, be a considerable help if litigation should arise, but as soon as we reach the point of issuing Orders in Council we intend to give the fullest publicity to the business community about the whole range of territories and the extent of the laws and so on to which the Orders in Council will apply.

Question put and agreed to.