Problem with relative grading system?
I think grad schools are used to dealing with different grading schemes.  This is one reason, why GREs exist also.  But they can probably infer that top 10-20% is an A.  Bottom 50% is bad, etc.  Maybe even implicitly compensating for differences in how competitive the undergrad is.

Maybe grad schools aren't perfect but they seem to even be able to (in the US) evaluate students from all over the globe to try to pick the better ones.  Although even the US is very different from school to school.