Answer Key Itl

Q.
Q.2 (a)Most-favoured-nation (MFN): treating other people equally Under the WTO

agreements, countries cannot normally discriminate between their trading partners. Grant
someone a special favour (such as a lower customs duty rate for one of their products) and
you have to do the same for all other WTO members. Article 1 of the General Agreement on
Tariffs and Trade (GATT)
(b) National treatment: Treating foreigners and locals equally Imported and locally-produced
goods should be treated equally — at least after the foreign goods have entered the
market. Article 3 of GATT
Q.3 (a)(i) Article 2 (e) of CISG, the Convention does not apply to international sales of ships-
therefore, CISG will not be applicable to the present case.
(ii) Article3(1) Contracts for the supply of goods to be manufactured or produced are to be
considered sales unless the party who orders the goods undertakes to supply a substantial part
of the materials necessary for such manufacture or production- therefore, CISG will not
consider the present transaction as sales, thereby will not apply.
(b) Obligations of Buyer (Dinory Ltd.) under CISG-
i. Ar 38- examination of goods by the buyer

ii. Ar 39- notice of unconformity to the seller, 39(2)- within 2 years from the dare of delivery
iii. Ar 53 – pay the price of the contract
iv. Ar 54 – make arrangements to effect payment
v. Ar 47. The buyer may fix an additional period of time of reasonable length for
performance by the seller of his obligations.
Q.4
Q.5 (a) Lord Sumner in Equitable Trust Co. of New York v. Dawson Partners Ltd, expressed
the doctrine of strict compliance in the words-“there is no room for documents which are
almost the same, or which will do just well.”
Soproma SpA v. Marine & Animal by-products corporation, where several defects in the bill
of lading as compared to the letter of credit were identified by the bank and thereby the
payment was rejected, which was held lawful by the court.
J H Rayner & co Ltd v. Hambros Bank LTd- the court held that the description of the goods
in the different documents has to tally, otherwise rejection of payment by the bank is justified
under the doctrine of strict compliance.
Moralice (London) Ltd v. E D & F Man, bank is entitled to reject the documents even if the
discrepancy in the quantity is minimal.
(b) DDP Delivered Duty Paid. In Incoterms DDP the seller fulfils his obligation to deliver
when the goods have been available at the named place in the country of importation. The
seller has to bear the risks and costs including duties, taxes and other charges of delivering
the goods thereto, cleared for importation.
Incoterms-EXW. "Ex works" means that the seller fulfils his obligation to deliver when he
has made the goods available at his premises (i.e. works, factory, warehouse, etc) to the
buyer. ... The buyer bears all costs and risks involved in taking the goods from the seller's
premises to the desired destination.
Q.6 (a). Under Section 34 of the Act, a party can challenge the arbitral award on the
following grounds-
 the parties to the agreement are under some incapacity;

 the agreement is void;
 the award contains decisions on matters beyond the scope of the arbitration
agreement;
 the composition of the arbitral authority or the arbitral procedure was not in
accordance with the arbitration agreement;
 the award has been set aside or suspended by a competent authority of the country in
which it was made;
 the subject matter of dispute cannot be settled by arbitration under Indian law; or
 the enforcement of the award would be contrary to Indian public policy.
(b). An appeal shall lie from the following orders (and from no others) to the court authorised
by law to hear appeals from original decrees of the court passing the order, namely: -
(a)refusing to refer the parties to arbitration under section 8
(b) Granting or refusing to grant any measure under section 9;
(c) Setting aside or refusing to set aside an arbitral award under section 34.
(c). Section 8- Power to refer parties to arbitration where there is an arbitration agreement.
Q.7 (a) Back-to-back letters of credit consist of two letters of credit (LCs) used together to
finance a transaction. A back-to-back letter of credit is usually used in a transaction involving
an intermediary between the buyer and seller, such as a broker, or when a seller must
purchase the goods it will sell from a supplier as part of the sale to his buyer.
(b). Any restriction imposed on the free flow of trade is a trade barrier. Trade barriers can
either be tariff barriers (the levy of ordinary negotiated customs duties in accordance with
Article II of the GATT) or non-tariff barriers, which are any trade barriers other than tariff
barriers. Barriers take the form of tariffs (which impose a financial burden on imports) and
non-tariff barriers to trade (which uses other overt and covert means to restrict imports and
occasionally exports).There are four types of trade barriers that can be implemented by
countries. They are Voluntary Export Restraints, Regulatory Barriers, Anti-Dumping
Duties, and Subsidies. We covered Tariffs and Quotas in our previous posts in great detail.
(c).
BASIS FOR
GATT WTO
COMPARISON
Meaning GATT can be described as a set of rules, WTO is an international

multilateral trade agreement, that came organization, that came into
into force, to encourage international existence to oversee and
trade and remove cross-country trade liberalize trade between
barriers. countries.
Institution It does not have any institutional It has permanent institution

existence, but have a small secretariat. along with a secretariat.
Participant nations Contracting parties Members
Commitments Provisional Full and Permanent
Application The rules of GATT are only for trade in The rules of WTO includes
goods. services and aspects of
intellectual property along with
the goods.
Agreement Its agreement are originally multilateral, Its agreements are purely
but plurilateral agreement are added to it multilateral.
later.
Domestic Allowed to continue Not allowed to continue

Legislation
BASIS FOR
GATT WTO
COMPARISON
Dispute Settlement Slow and ineffective Fast and effective

System
(d). A bill of lading is a legal document issued by a carrier to a shipper that details the type,
quantity, and destination of the goods being carried. A bill of lading also serves as a shipment
receipt when the carrier delivers the goods at a predetermined destination. This document
must accompany the shipped products, no matter the form of transportation, and must be
signed by an authorized representative from the carrier, shipper, and receiver.

Answer Key Itl

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Answer Key Itl

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Q.

Q.2 (a)Most-favoured-nation (MFN): treating other people equally Under the WTO

(b) Obligations of Buyer (Dinory Ltd.) under CISG-

i. Ar 38- examination of goods by the buyer

 the parties to the agreement are under some incapacity;

(a)refusing to refer the parties to arbitration under section 8

(b) Granting or refusing to grant any measure under section 9;

Meaning GATT can be described as a set of rules, WTO is an international

Institution It does not have any institutional It has permanent institution

Participant nations Contracting parties Members

Commitments Provisional Full and Permanent

Domestic Allowed to continue Not allowed to continue

Dispute Settlement Slow and ineffective Fast and effective

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