UNCITRAL – SINGAPORE SEMINAR ON :
35 YEARS OF THE CISG :
Achievements and Perspectives
Brunei and the International Sale of Goods
by Dr. Colin Y.C. Ong
Senior Partner, Dr. Colin Ong Legal Services (Brunei)
President, Arbitration Association Brunei Darussalam
Email: contacts@onglegal.com
(All views expressed in this paper are strictly personal and forms the private view of the author only)
General Introduction
 The ASEAN Economic Community is fast approaching.
 Commercial laws such as contract law need to be
harmonised at some point in time.
 Contracting parties from different countries come with
different legal traditions
 They can have very different approaches and expectations
in international trade transactions.
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General Introduction
 The CISG is the perfect instrument that can be used
to kick start such harmonisation.
 CISG only applies to agreements for sale and supply
of goods where both parties have their place of
business in contracting States to the CISG, or
 when the rules of private international law lead to the
application of the law of a State that is a party to the
CISG, so long as it has not been modified or excluded
by the parties.
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Introduction to the Brunei Legal System and Brunei Law
 Two parallel systems of law operate in Brunei Darussalam.
 Statutory laws regulating civil and mercantile activities and
disputes are based upon the common law system.
 Primarily are based on English Statutes and codified laws.
 For civil matters, parties to a dispute can agree to have the
Judicial Committee of the Privy Council in the UK as the
court of final appeal.
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Introduction to the Brunei Legal System and Brunei Law
 Criminal cases now subject to both Penal Code (Cap 22)
and the Sharia Penal Code Order 2013 (as of April 2014. )
 Sharia Penal Code expanded jurisdiction of sharia
courts (to include offences such as murder, rape and theft.)
 Such offences were previously under civil criminal
courts.
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Brunei Civil & Commercial Law
 Brunei has a Contracts Act (Cap 106) and a Specific
Relief Act (Cap 109) that applies to civil cases.
 Both Acts embody a codified system of contract law
and laws of equity based on English common law.
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Brunei Civil & Commercial Law
 The Application of Laws Act (Cap 2).
 This statute essentially stipulates that the common
law of England and the doctrine of equity, together
with statutes of general application, as administered
or in force in England prior to 25 April 1951, shall be in
force in the Sultanate. The important proviso to this is that the said
common law, doctrine of equity and statutes of general application shall only
be in force so far as circumstances permit. They are also subject to be qualified
by local circumstances and customs.
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Brunei Civil & Commercial Law:
Sale of Goods Act
 The Sale of Goods Act (Cap 170) applies to all matters
concerning the sale of goods.
 Modeled after the UK Sale of Goods Act.
 Bruneian courts will look to decisions of the English
courts dealing with corresponding provisions.
 Brunei has not ratified the CISG yet.
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Possible Pragmatic Reasons why Brunei
has not yet signed up to the CISG
 Brunei is blessed with rich natural resources and its
economy is dependent on the hydrocarbon industry.
 It is not a trading nation like Singapore.
 No coordinated effort by any public or private sector
interests to join the CISG.
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Possible Pragmatic Reasons why Brunei
has not yet signed up to the CISG
 MOFAT Ministry needs compelling reasons to
consider the benefits that may be had by signing up
to the CISG.
 UNCITRAL itself does not appear to have ever
organised any seminar in Brunei to promote the CISG.
 Need to generate interest to ratify the CISG.
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Possible Perception of Clash of Legal Culture
 Officials are more naturally familiar and comfortable
with English law and English statutes.
 A majority of Civil law countries had input into the
CISG. Some provisions veer towards Civil Law.
 Civil law methodology is applied when it comes to
reading general principles within the CISG.
 some of the key areas that may be of concern to
certain quarters in implementing the CISG.
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Possible Perception of Clash of Legal Culture
 Concerns that the CISG is less suitable to commodity sales
(including crude oil) than the Brunei Sale of Goods Act.
 CISG has stricter provisions on contract avoidance in case
of non-conforming goods and documents.
 Articles 25 and 49 of CISG provide that a fundamental
breach is a precondition for avoidance of a contract,
 Under the Brunei SOGA, any non-conformity would be
considered as a breach of condition will in itself be a
ground for termination of the contract.
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Possible Perception or Clashes of Legal Culture
 Brunei courts and lawyers will have to deal with issues
of statutory interpretation and the principle of good
faith with respect to Article 7 of the CISG.
 Article 7 (1) of the CISG provides that "In the
interpretation of this Convention, regard is to be had to
its international character and to the need to promote
uniformity in its application and the observance of
good faith in international trade." [My Emphasis]
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Possible Perception of Clash of Legal Culture
 Good Faith is a fundamental Civil Law concept not
easily reconcilable under the Common law.
 Unless there are lawyers that are trained or
experienced in both Civil and Common law handling
such matters, there can be a clash of legal cultures.
 Valid point also for Singapore and Malaysia, which
share similar English Common law traditions
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Possible Perception of Clash of Legal Culture
 The traditional approach of statutory interpretation
applied by Brunei courts is almost identical to those
of English courts.
 The Judicial Committee of the Privy Council is still the
Brunei Court of Final Appeal in Civil matters.
 Common law approach of statutory interpretation is
different from approach used in civil law jurisdictions.
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Possible Perception of Clash of Legal Culture
 Civil law courts and arbitrators interpret statutes
taking into account literal meaning of the wording
and grammatical structure of each sentence.
 Will look at the legislative history (travaux preparatoires)
and scholarly writings of professors and the context
of any legal rule.
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Possible Perception of Clash of Legal Culture
 The intent of Brunei Parliament's intention has to
appear directly from the text of the statutes, legal
doctrines and legislative history (travaux preparatoires of
the CISG) would not play an important part for
statutory interpretation.
 Brunei/English law do not have obligations to
negotiate in good faith in contracts.
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Possible Perception of Clash of Legal Culture
 House of Lords decision of Walford v Miles [1992] 2
AC 128. Lord Ackner held [at 138] that "A duty to
negotiate in good faith is as unworkable in practice as it
is inherently inconsistent with the position of a
negotiating party. It is here that the uncertainty lies....
while negotiations are in existence either party is
entitled to withdraw from those negotiations, at any
time and for any reason."
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Possible Perception or Clashes of Legal Culture
 In short, the HoL did not allow a party to rely upon
any good faith duty to negotiate in good faith.
 This was found to be incompatible with the nature of
negotiations in which each party negotiates and looks
after its own interests.
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Possible Perception of Clash of Legal Culture
 Another good faith article is Article 16(2)(b) of the CISG,
which deals with the irrevocability of an offer in situations
where there is reasonable act of reliance on such
irrevocability.
 Similarly, Article 40 of the CISG prevents the seller from
relying on a failure of timely notice of non-conformity by
the buyer if the seller himself knew of or could not have
been unaware of the non-conformity.
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However Brunei was First Country in Asia-Pacific to adopt
the 2006 Amendments to the Model Law on Arbitration
 Article 6 of the CISG provides that “The parties may
exclude the application of this Convention or, subject to
article 12, derogate from or vary the effect of any of its
provisions.”
 Hopefully, Brunei would not make any reservations
and may adopt the CISG without any reservations. In
drafting its International Arbitration statute in 2009,
Brunei became the first country in the Asia-Pacific to
adopt the 2006 MAL Article 17 provisions.
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However Brunei was First Country in Asia-Pacific to adopt
the 2006 Amendments to the Model Law on Arbitration
 There is nothing in the rules of the CISG that would
offend public policy or mandatory principles of
Brunei's civil or syariah laws;
 It is important that Brunei does take immediate steps
forward to sign onto the CISG Convention before it
finds itself as one of the few ASEAN countries that are
left behind in this field.
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However Brunei was First Country in Asia-Pacific to adopt
the 2006 Amendments to the Model Law on Arbitration
 There is nothing in the rules of the CISG that would
offend public policy or mandatory principles of
Brunei's civil or syariah laws;
 It is important that Brunei does take immediate steps
forward to sign onto the CISG Convention before it
finds itself as one of the few ASEAN countries that are
left behind in this field.
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Brunei Accession Process of Treaty
 No specific law governing treaty-making process in
Brunei Darussalam.
 However, as Article 4(1) of the Constitution provides
that the supreme executive authority of Brunei
Darussalam is vested on His Majesty the Sultan and
Yang Di-Pertuan, his consent would therefore be
required before any steps are taken to negotiate
and/or sign a treaty or similar documents.
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Brunei Accession Process of Treaty
 This requirement would similarly apply to the
ratification of any such treaty.
 Thus, it can be said that the treaty-making power in
Brunei Darussalam is an executive function coming
within the supreme executive power of His Majesty
the Sultan and Yang Di-Pertuan.
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Good for Brunei and all other ASEAN members to join CISG
 A harmonised international sale of goods law within
ASEAN will increase legal predictability for
international transactions, and this will translate into
reduced transactional costs.
 It may also assist in maintaining strong economic,
cultural ties, and prevents unnecessary tensions.
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Good for Brunei and all other ASEAN members to join CISG
 Good if all ASEAN member states adopt the CISG without
making reservations when adopting the Convention, as
reservations will significantly limit the CISG's effect on the
unification of Sales law within the ASEAN.
 ASEAN member states should not fear adopting the CISG
as the CISG can assist ASEAN in harmonising a small
portion of contract law. Article 1(1) of the CISG itself makes
it clear that its application is limited to contracts for the
international sale of goods.
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Good for Brunei and all other ASEAN members to join CISG
 The CISG will also allow resolution of disputes by way of
international arbitration.
 Experienced commercial arbitrators are likely to have a
greater familiarity with the content of the CISG than
domestic judges from the signatory countries.
 Where the counter party is located in a country which is a
signatory to the New York Convention, the local courts will
enforce arbitral awards from any other contracting states.
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(All views expressed in this paper are strictly personal and forms the private view of the author only)
UNCITRAL – SINGAPORE SEMINAR ON :
35 YEARS OF THE CISG :
Achievements and Perspectives
Brunei and the International Sale of Goods
by Dr. Colin Y.C. Ong
Senior Partner, Dr. Colin Ong Legal Services (Brunei)
President, Arbitration Association Brunei Darussalam
Email: contacts@onglegal.com
(All views expressed in this paper are strictly personal and forms the private view of the author only)