Vignesh writes about how faulty Chinese healthcare products is not just legally but also ethically wrong.

Today when the world is facing the pandemic of Covid-19 Dr. Tedros Adhanom Ghebreyesus the Director-General of WHO (World Health Organization) in one of his press briefings stated that the only way to deal with this pandemic is test, test, and test. Today all the countries are aware of the fact they have to increase their testing capacity. China has sold rapid antibody test kits to various countries. Many nations such as Spain, Italy, United Kingdom, and many nations have reported these kits to be faulty with 30 percent accuracy. Is it humanitarian of China to sell such kits when the world is witnessing a huge spike in Covid-19 cases? By China selling these faulty rapid antibody test kits are they in violation of International Trade law? First let us understand what are International trade and its basic aspects.

International trade is the sale and purchase of goods and services across international borders. International trade is governed by a vast set of rules codified in treaties and trade agreements. To clarify, the rules we are referring to are those governing the actions of states and governments with regard to international trade. We buy goods and services from other countries because we cannot domestically produce all the goods and services that each individual consumer wants and needs. The reason for this is that each country has different factors of production.

 Factors of production are the resources used to build an economy and produce goods and services; they are land, labor, and capital. Each country is endowed with different combinations of these factors, and therefore each country is capable of producing different combinations of goods and services. When domestic production is greater than domestic demand for a good, excess production is traded on the international market. The act of selling domestically produced goods to international consumers is known as exportation. The act of purchasing goods from a foreign country in order to sell them domestically is known as importation.

                             One of the very important conventions in regards to the sale of international goods is the United Nations Convention on the International Sale of Goods 1980. United Nations Convention on Contracts for the International Sale of Goods – CISG is a treaty that is a uniform international sales law.

 The CISG was developed by the United Nations Commission on International Trade Law – UNCITRAL and was signed in Vienna in 1980. The CISG is sometimes referred to as the Vienna Convention. It came into force as a multilateral treaty on 1 January 1988, after being ratified by 11 countries. It has been described as a “great legislative achievement” and the “most successful international document so far in unified international sales law.

The CISG is considered one of the core international trade law conventions. The adoption of the CISG provides modern, uniform legislation for the international sale of goods. It may apply to a contract for the international sale of goods when the rules of private international law point at the law of a Contracting State as the applicable one; or by virtue of the choice of the contractual parties, regardless of whether their places of business are located in a Contracting State.

                                  China has signed the United Nations Convention on the International Sale of Goods 1980 (CISG) on 30/09/1981. It has ratified CISG on 11/12/1986.  A very important concept in International law is ‘Pacta sunt servanda.’ Pacta sunt servanda is a Latin term which means agreements must be kept. It is the principle in international law that says that international treaties should be upheld by all the signatories. The rule of pacta sunt servanda is based upon the principle of good faith. The basis of good faith indicates that a party to the treaty cannot invoke provisions of its domestic law as a justification for a failure to perform. The only limit to pacta sunt servanda is the peremptory norms of general international law known as “jus cogens” which means compelling law.

                        China has blatantly violated by the United Nations Convention on the International Sale of Goods 1980. China has violated the Article35 of the United Nations Convention on the International Sale of Goods 1980. Let’s understand Article 35 of United Nations Convention on the International Sale of Goods 1980 which states -:

Article 35

(1) The seller must deliver goods which are of the quantity, quality, and description required by the contract and which are contained or packaged in the manner required by the contract.

 (2) Except where the parties have agreed otherwise, the goods do not conform with the contract unless they:

 (a) Are fit for the purposes for which goods of the same description would ordinarily be used;

 (b) Are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract, except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller’s skill and judgment;

 (c) Possess the qualities of goods which the seller has held out to the buyer as a sample or model;

 (d) Are contained or packaged in the manner usual for such goods or, where there is no such manner, in a manner adequate to preserve and protect the goods

 (3) The seller is not liable under subparagraphs (a) or (d) of the preceding paragraph for any lack of conformity of the goods if at the time of the conclusion of the contract the buyer knew or could not have been unaware of such lack of conformity.

Let’s have a look at Article 35 (1) Are fit for the purposes for which goods of the same description would ordinarily be used. Did china give other nations a description of the fact that Anti-body test kits had an accuracy of 30 %? Or did it assure nations that these Anti-body kits would be highly accurate? We all are aware that china assured nations that their anti-body test kits would be completely accurate. It is sad for a fact China is yet in denial that their Anti-body test kits are not accurate.

Let’s have a look Article 35 (2) a and b it states (a) Are fit for the purposes for which goods of the same description would ordinarily be used; (b) Are fit for any particular purpose expressly or impliedly made known to the seller at the time of the conclusion of the contract except where the circumstances show that the buyer did not rely, or that it was unreasonable for him to rely, on the seller’s skill and judgment;

Let’s analyze Article35 (2) (a) and (b) Any Anti-body test kit sent from China should be used for the purpose of testing. Are these kits fit for the purpose for which goods of the same description? Are these test kits useful for any particular purpose? Clearly we understand not only one country but 7-10 countries have reported faulty kits which cannot be used for any purpose. This clearly shows by selling their Anti-body test kits China has violated Article35 (1) & (2) a, b.

The next question which immediately arises is there provision for remedies in the United Nations Convention on the International Sale of Goods 1980? Yes, there are provisions in Section 3 Article 45 which states-;

(1)  If  the  seller  fails  to  perform  any  of  his  obligations  under  the    contract or this Convention, the buyer may:

(a) Exercise the rights provided in articles 46 to 52;

(b) Claim damages as provided in articles 74 to 77.

 Will China be held accountable and be made paid compensation? This basically depends on if any country files a complaint against China at the WTO or the international court of arbitration. Has China not violated Article 3 of Universal declaration of human rights 1948 indirectly by supplying faulty personal protective gears and test kits putting lives of many at risk? Yes, we are aware of the fact Universal declaration of human rights is not legally binding doesn’t China even respect basic human rights?   The only defense which China has at this point in time is ‘sovereign immunity.’ Sovereign immunity is a judicial doctrine that prevents the government or its political subdivisions, departments, and agencies from being sued without its consent. The doctrine stems from the ancient English principle that the monarch can do no wrong.  Yes China has violated Trade laws but however, time will only decide whether China will be held accountable.

– Vignesh Narayanan,

Writer, Bharat Bhagya Vidhata