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2.1 Applicable law in the absence of a choice of law clause
Where parties to an international arbitration agreement have not expressly chosen the applicable law,
the arbitral tribunal must determine the law in accordance with the provisions of the UNCITRAL Model
Law on International Commercial Arbitration, as incorporated into the International Arbitration Act 15
of 2017. Article 28(2) of the Model Law provides that, in the absence of a choice by the parties, the
tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.1 This
grants the tribunal a discretion to select the appropriate conflict rules, rather than being bound to a
specific national system. In practice, the tribunal will typically identify the legal system most closely
connected to the contract. Factors such as the place of business of the parties, the place of performance,
and the place of arbitration (here, Durban) will be relevant.2 Given that the seller is based in South
Africa and arbitration is seated in Durban, South African law may be strongly considered, although
German law or international instruments could also be relevant depending on the connecting factors.3
2.2 Duties of the buyer and seller under CIF (Cost, Insurance and Freight)
Under a CIF contract as defined in Incoterms 2020, the seller bears extensive obligations relating to
shipment and documentation. The seller must:
Deliver the goods on board a vessel at the port of shipment.4
Conclude a contract of carriage to the named port of destination (Hamburg).5
Procure marine insurance for the buyer’s benefit covering the risk during transit.6
Provide the buyer with the necessary documents, including the bill of lading, insurance policy,
and invoice.7
Risk passes from the seller to the buyer once the goods are loaded onto the ship at the port of shipment.8
1
UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended 2006) art 28(2).
2
A Redfern and M Hunter Law and Practice of International Commercial Arbitration (6th edn, OUP 2015) 215.
3
International Arbitration Act 15 of 2017 s 6.
4
JH Van Niekerk and WG Schulze The South African Law of International Trade (4th edn, Juta 2020) 146.
5
ibid.
6
ibid 147.
7
ibid.
8
ibid 148.
2.1 Applicable law in the absence of a choice of law clause
Where parties to an international arbitration agreement have not expressly chosen the applicable law,
the arbitral tribunal must determine the law in accordance with the provisions of the UNCITRAL Model
Law on International Commercial Arbitration, as incorporated into the International Arbitration Act 15
of 2017. Article 28(2) of the Model Law provides that, in the absence of a choice by the parties, the
tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.1 This
grants the tribunal a discretion to select the appropriate conflict rules, rather than being bound to a
specific national system. In practice, the tribunal will typically identify the legal system most closely
connected to the contract. Factors such as the place of business of the parties, the place of performance,
and the place of arbitration (here, Durban) will be relevant.2 Given that the seller is based in South
Africa and arbitration is seated in Durban, South African law may be strongly considered, although
German law or international instruments could also be relevant depending on the connecting factors.3
2.2 Duties of the buyer and seller under CIF (Cost, Insurance and Freight)
Under a CIF contract as defined in Incoterms 2020, the seller bears extensive obligations relating to
shipment and documentation. The seller must:
Deliver the goods on board a vessel at the port of shipment.4
Conclude a contract of carriage to the named port of destination (Hamburg).5
Procure marine insurance for the buyer’s benefit covering the risk during transit.6
Provide the buyer with the necessary documents, including the bill of lading, insurance policy,
and invoice.7
Risk passes from the seller to the buyer once the goods are loaded onto the ship at the port of shipment.8
1
UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended 2006) art 28(2).
2
A Redfern and M Hunter Law and Practice of International Commercial Arbitration (6th edn, OUP 2015) 215.
3
International Arbitration Act 15 of 2017 s 6.
4
JH Van Niekerk and WG Schulze The South African Law of International Trade (4th edn, Juta 2020) 146.
5
ibid.
6
ibid 147.
7
ibid.
8
ibid 148.
