To begin with the final remarks of this thesis, I would point out that the so-called legal environment from which the R3RUE arose had much in common with the different doc-trines of the CISG. If disgorgement should become feasible under the CISG, I argue that it would require a further and more principled reading of Art. 84. This could grant it a distinctly recognized feature as embodying a general principle favoring disgorgement. As noted above, there might already be some signs of this happening.
As we recall, the disgorgement rule of the R3RUE stems jointly from doctrines of resti-tution and damages. Now, as Art. 84’s reading seems to have evolved from constituting the general principle of unjust enrichment to ‘reflecting the idea of disgorgement’, it might not be wholly unreasonable to consider the prospect of the CISG adopting or tol-erating some of the ideas manifested in the R3RUE as time goes by. As regards the CISG, possible changes in the interpretation of the relevant provisions and principles might also be contingent on further developments of different domestic legal systems, of which there are already examples at this point, the U.S put aside.320
As for the R3RUE, it remains to be seen, whether it signals a genuinely significant devel-opment within American contract law, and much will rely on the large-scale reception of the updated Restatement by the U.S. courts. But in any case, this recent development regarding more established and explicit support for disgorgement in the U.S. should not be disregarded. The changes may not be rapid or even conclusive, but, perhaps, they should persuade the international sales law community to take another look at the CISG in the light that is cast by the developments in the R3RUE.
As a contingent notion, the principle regarding damages as essentially aiming at compen-sation by virtue of Art. 74 should, nevertheless, affect the possible application of dis-gorgement so that it would only be available when the conventional remedy of compen-sating the calculable loss of the injured party fails to provide adequate protection for his or her performance interest. This would also be in line with the reasoning in the R3RUE.
The reality is that the requirement for uniform application of the CISG makes it difficult for a single court or tribunal to draw the conclusions that would have to be drawn in order to establish a precedent in regard of disgorgement. And rightly so. In addition, the cases
320 Schmidt-Ahrendts (n 20), at 96; Israel & O’Neill (n 194), at 6; Arts. 6:78, 6:104 Dutch Civil Code.
74 where there would be reasonable grounds for even making a claim for disgorgement are in all likelihood in short supply.
I would argue that the best way forward would be a specific CISG Advisory Council Opinion, that, if drafted in a balanced manner, could lend restricted or conditional support for granting disgorgement in certain exceptional cases. Even if such support would be seen as unattainable or unwarranted, the Advisory Council could at least clarify the most paramount issues to consider in cases in which compensatory damages appear to be inad-equate.
At this point, the CISG Advisory Council Opinion No. 6 has taken the stance that over-compensation must be avoided when awarding damages. This also supports the view that for disgorgement to be awarded under the CISG, it would require further interpretation or analogical application of Art. 84 or certain general principle therein. It should be noted that the Advisory Council’s Opinion No. 6 specifically and exclusively analyzed the ap-propriate interpretation and quantification of damages and, quite understandably, did not attempt to provide an encompassing interpretation of the entire remedial doctrine or ad-dress the disgorgement issue explicitly.
Recourse to the domestic law being an ultima ratio measure within the doctrine of the CISG should also push the authorities of the Convention into pursuing an articulated and more convincing conclusion on this matter. After all, the relief valve of Art. 7(2) should not be interpreted as an easy path around the challenging task to determine the correct interpretation of the text and the general principles of the CISG.
As regards the question of good faith in international trade, the U.S. is the only common law country that has included good faith into its statutory regime.321 Section 1-203 of the UCC states that “Every contract or duty within this Act imposes an obligation of good faith in its performance or enforcement.”.322 From this perspective, it is worth noting that the U.S, in particular, has forwarded the above-described developments regarding dis-gorgement.
In passing, it is also noteworthy that the new Contract Law of the People’s Republic of China has likewise included the principle of good faith into several articles. Article 6,
321 Bruno Zeller, ‘Good Faith - Is it a Contractual Obligation?’, Bond Law Review Vol 15, Issue 2 (2003) 215-239, at 215.
322 This was reinforced in section 205 of the Restatement of Contracts (Second), where a duty of good faith and fair dealing was also imposed on the parties in contract performance and enforcement.
75 referred to as the most important one, reads: “The parties shall abide by the principle of honesty and good faith in exercising their rights and performing their obligations.”.323 What is remarkable in the theory/remedy of disgorgement is that it boldly and markedly challenges the good faith principle to its core. It electrifies the debate around the content, usage, and utility of the principle as the idea of disgorgement can be seen as creating a type of litmus-test in posing the question of whether a principle intended to promote hon-esty, trust, protection of reasonable expectations and co-operation can be simply put aside in order to uphold a certain long-standing rule.
Despite these considerations, an honest recognition of disgorgement’s nature as an outlier is in place. However, it is often the case that the outliers or ‘hard cases’ provide the most fruitful viewpoint through which the weighing of different legal principles can occur.
Finally, should an interpretation prevail that under the CISG, disgorgement of profits is simply not feasible as regards to the full compensation principle, I am confident that all interested parties would welcome a more comprehensive analysis of the general princi-ples arriving at such a conclusion.
As a final remark, I would entertain a possible compromise solution of allowing courts to use their discretion on this matter in a similar fashion as they are able to do with specific performance. Specific performance, like disgorgement, is a remedy that might be consid-ered appropriate in some legal systems but not in others. The fact that the Convention allows specific performance has not caused significant problems or friction among dif-ferent member states. Arguably, one reason for this is the limitation of Art. 28, according to which a court is not bound to order specific performance unless the court would do so under its own law.
Analogical application of this provision to disgorgement would naturally require, in the first place, the conclusion that in some cases disgorgement could be awarded under the Convention. Specific performance was and is viewed quite differently among the signa-tory states. It was debated at the time of drafting the CISG,324 and the outcome was that the remedy shall be subjected to a discretionary review of a court as to whether a specific relief would be granted under the court’s domestic law.
323 Zeller (n 321), at 216; Contract Law of the People's Republic of China, Chapter I, Article 6.
324 See generally Walt (n 301).
76 Should disgorgement be allowed in some limited set of circumstances, given the above-discussed connections and similarities between specific performance and disgorgement awards, for example, as regards specific interest in unique goods or other circumstances that might render monetary damages insufficient,325 the limitation of Art. 28 might serve to restrict the above-mentioned ‘sweeping implications’.326
In summary, this thesis’ aim was to draw necessary attention to certain national tenden-cies and universal legal theories relating to wider acceptance of disgorgement of profits in contract law. The writer’s contention is that based on the general principles of the CISG the possible applicability of disgorgement as an ultima ratio remedy should not be ruled out categorically. However, such application should necessitate further recognition of Art. 84 as enabling this function, and possibly an analogous limitation to that of Art. 28.
325 Cunnington identifies five situations regarding specific performance: Cases where there is no market substitute, cases where damages are too difficult to quantify, cases where the breaching party will not be able to pay damages, cases where only nominal damages are available and cases where the type of loss is not recoverable, Ralp Cunnington ‘The Inadequacy of Damages as a Remedy for Breach of Contract’ in Charles EF Rickett Justifying Private Law Remedies (Hart Publishing, Oxford, 2008) at 115.
326 Roberts (n 17), at 142.