This outcome asks how international instruments become binding and what they do once they apply. The examiner likes it because small wording points, such as signature versus accession or consumer sales versus commercial sales, decide the answer.
The rule
A treaty or convention binds a state only once it becomes a party. Signature shows intent, and the state must not defeat the treaty's object and purpose. Ratification or accession makes it a party, and accession has the same legal effect as ratification. A model code or model law, such as the UNCITRAL Model Law, binds nobody until a state copies it into its own legislation. The CISG applies to international sales of goods between parties in different contracting states, but it excludes goods bought for personal, family or household use unless the seller neither knew nor ought to have known of that purpose. Under the New York Convention, courts must enforce foreign arbitral awards. They may refuse only on the limited grounds listed in the Convention and may not review the merits.
Worked example
State M signs a sales convention in 2023 but has not ratified it. State N did not negotiate it but accedes in 2024.
Step 1: M has only signed, so it is not a party. It must simply not act to defeat the convention's object and purpose.
Step 2: N has acceded. Accession has the same effect as ratification, so N is a party and bound.
Now a buyer in N orders a camera online from a retailer in M, for a holiday. Suppose M later ratifies, so both states are contracting states. The sale is international, but the goods are for personal use and the retailer's public website and home delivery show it should have known. The CISG is excluded.
If the buyer's order was a commercial purchase for resale, the CISG would apply.
An award made in State A is enforced in State B (both New York Convention states). B's court checks only the listed grounds, for example lack of notice or public policy, and does not re-decide the dispute.
Remember: signature does not bind a state, accession does, and a court enforcing an arbitral award under the New York Convention never reviews the merits.
Where candidates lose marks
Treating signature as fully binding and accession as a weaker commitment, when the position is the reverse.
Applying the CISG to an online consumer purchase simply because the parties are in different contracting states.
Letting the enforcing court refuse an award because it disagrees with the tribunal's findings of fact or law, or requiring prior confirmation in the state where it was made.
Try it: 4 questions
Ms Tran works for Harbour Hotels Co. In her own time she buys a camera for her personal holiday photography through the website of a retailer in another state. The retailer's website is open to the public, and the order is delivered to Ms Tran's home address. Her state and the retailer's state are both CISG contracting states. Which statement is correct?
Answer: D. The CISG excludes sales of goods bought for personal, family or household use. The only exception is where the seller neither knew nor ought to have known of that purpose at any time before or when the contract was concluded. Here the retailer's website is open to the public and the camera is delivered to a home address, so the retailer should have known it was a consumer sale. Option A overlooks the personal-use exclusion. Option B is wrong because the CISG does not depend on a party being a company, and its exclusion turns on the purpose of the purchase. Option C is wrong because the CISG does not exclude sales merely because they are made electronically.
Axle Forge Ltd, a car parts maker, holds an arbitral award made in State A against Drivetrain Supply Co. Both State A and State B are contracting states to the New York Convention. Drivetrain Supply Co's only assets are in State B, and Axle Forge Ltd asks a State B court to enforce the award. Which of the following statements best describes the grounds on which the State B court may refuse enforcement?
Answer: B. The New York Convention requires contracting states to recognise and enforce foreign awards. Refusal is allowed only on the limited, exhaustive grounds in the Convention. Examples are an invalid arbitration agreement, no proper notice or inability to present a case, an award beyond the scope of the submission, a defective tribunal or procedure, an award not yet binding or set aside, a non-arbitrable subject matter, or conflict with public policy. The court does not re-examine the merits. Option B is correct. Option A is the trap: it gives the court an appeal on the merits, which the Convention does not allow. Option C is wrong because the Convention removed any need for a double exequatur, so there is no need to have the award confirmed first in the state where it was made. Option D is wrong because the grounds are limited and not a general discretion.
Two states are involved with the same international convention on the sale of confectionery ingredients, which Cocoa Crest Ltd relies on in its trading. State M has signed the convention but has not ratified it. State N did not take part in the negotiations but has acceded to the convention. Which statement correctly states which state is bound by the convention's obligations and why?
Answer: C. Signature alone generally shows an intention to be bound later. It does not make a state a party. The signing state is only expected to refrain from acts that would defeat the object and purpose of the treaty. Accession is the means by which a state that did not sign becomes a party, and it has the same legal effect as ratification. Option A is wrong because signature does not create full obligations. Option B is wrong because it treats signature as binding and accession as weaker, which is the reverse of the position. Option D is wrong because the convention does not depend on UNCITRAL approval, and N is bound in international law through accession.
The government of State Q wants to improve the legal framework for cross-border commercial disputes handled by Ringtone Call Centres Ltd and similar businesses. It is deciding between ratifying an international convention on the topic and enacting a UNCITRAL model law on the same topic. Which statement correctly describes the difference in legal effect between the two instruments?
Answer: A. A convention is a treaty. A state becomes bound by it in international law when it ratifies or accedes to it, subject to any permitted reservations. A UNCITRAL model law is only a recommended template. It has no binding force until a state enacts it in its own legislation, and the state is free to adapt or omit provisions to suit its legal system. Option B is wrong because UNCITRAL's adoption of a text binds no state. Option C is wrong because a model law does not bind on adoption by UNCITRAL, and a convention binds on ratification or accession, not on UNCITRAL's adoption. Option D is wrong because a state is not obliged to enact a model law unchanged, and conventions generally cannot be applied selectively, apart from permitted reservations.
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What is the difference between signing, ratifying and acceding to a treaty?
Signing shows intent to be bound later and does not make a state a party. Ratification by a signatory makes it a party. Accession is how a state that did not sign becomes a party, with the same legal effect as ratification.
Does the CISG apply to consumer sales?
No. It excludes goods bought for personal, family or household use. The only exception is where the seller neither knew nor ought to have known of that purpose when the contract was made.
On what grounds can a court refuse to enforce a foreign arbitral award under the New York Convention?
Only on the limited grounds in the Convention, such as an invalid arbitration agreement, no proper notice, an award beyond the submission, a defective tribunal, an award not binding or set aside, a non-arbitrable subject, or public policy. The court cannot review the merits.