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C P Aquaculture (India) Pvt Ltd v. Aqua Star Pty Ltd [2023] VCC 2134 involved a dispute between an Indian seller and an Australian buyer concerning a contract for the sale of prawn and shrimp.

The County Court of Victoria noted that the parties were in agreement that the law of Victoria, a State of Australia, was the governing law.  Australia is a Contracting State to the CISG, whilst India is not.  Having established that Victorian law was the contract’s governing law, the Court went on to apply non-harmonised Australian contract and sales law, including the Goods Act 1958 (Vic).

Though the Court did not apply the CISG, as a result of its view that Victorian law applied, there were actually arguably very good reasons why it should have done so.

This contract, being between Indian and Australian parties, was a contract between parties in non-Contracting and Contracting States respectively.  The CISG cannot apply by virtue of Art. 1(1)(a) CISG in these circumstances.  However, it can still apply pursuant to Art. 1(1)(b) CISG.  Australia has not made an Art. 95 CISG declaration and, as a result, it must apply Art. 1(1)(b) CISG.

The Court recorded the Plaintiff’s view that non-harmonised Victorian law applied «because India has not adopted the … Vienna Convention».  However, as a result of Art. 1(1)(b) CISG, this is not a reason to disapply the CISG.  In fact, these circumstances are the very circumstances contemplated by Art. 1(1)(b) CISG as requiring the treaty’s application.

The Court also recorded the Defendant’s view that «this is because of failure on the part of either part[y] to allege and prove the terms of any other law as a proper law».  However, it is well established at the international level – and also under Australian caw law (see CISG-online case no 218) – that the CISG is «part of» a Contracting State’s law.  For this reason, since the CISG is «part of» Australian law, it is not actually necessary to prove the CISG as foreign law.

Without more, the parties’ agreement that Victorian law governed their contract is also insufficient to exclude the CISG’s application.  Choice of a Contracting State’s law in and of itself is inclusive of the CISG, as the CISG constitutes that part of the governing law dealing with international sales (see CISG Advisory Council Opinion No 16).

Had the CISG been applied, it would have been relevant to the parties’ dispute in numerous respects.  The CISG’s contract formation rules would have addressed the initial question as to whether there was a sale of goods contract.  Those rules would also have addressed whether or not the parties had entered into a binding compromise in relation to the seller’s claim for payment.  Notably, issues around consideration addressed by the Court (required for a compromise agreement under non-harmonised contract law) would have been irrelevant under the CISG, as a result of Art. 29(1) CISG.  As to the buyer’s counterclaim for breach of an express term that the goods be 100% antibiotic free, the meaning of that term would have been established under Art. 8 CISG’s contractual interpretation rules.  As to the buyer’s counterclaim for breach of a statutory implied term that the goods be antibiotic free (given a particular purpose that they be imported into Australia, having regulations that were said to require antibiotic free status), the principles set out in the New Zealand Mussels Case (CISG-online case no 144) would have applied.  And finally, inquiry around whether any compromise agreement had been repudiated would instead have been oriented around the CISG’s termination rules (see CISG-online case no 218).