Choice of Law in International Commercial Arbitration

By Okezie Chukwumerije | Go to book overview

problem of determining the governing law in the absence of the parties' agreement would directly apply the law most closely connected to the contract. It is to be hoped that the next international project on arbitration will adopt this straightforward approach to choice of law by arbitrators. Canadian legislations have led the way in this respect.


CONCLUSION

The lesson to be learned from the discussion in this chapter seems to be that parties to international contracts should endeavor to make an express choice of law to govern their contract, preferably national law. Such a choice simplifies matters a great deal: the principle of party autonomy makes such choice binding on arbitrators, subject of course to mandatory provisions of relevant laws.

As we have seen, arbitral practice regarding the determination of an applicable law in the absence of the parties' choice is still in a state of flux, with different arbitrators adopting different approaches. While the method of applying the law most closely connected to the transaction seems to be the emerging common practice in this regard, parties are better advised to put this matter beyond doubt by stipulating their own choice of law.


NOTES
1.
P. North and J. Fawcett, Cheshire and North Private International Law, 11th ed. ( London: Butterworths, 1987) at 449.
2.
For example, Article 187(1) of the Swiss Private International Law Statute, 1987, provides that an "arbitral tribunal shall decide the case according to the rules of law agreed upon by the parties." In the same vein Article 1054 of the Netherlands Code of Civil Procedure stipulates that "If parties have made a choice of law, the arbitrator decides in accordance with the rules of law chosen by the parties." See also P. North, "The E.E.C. Convention on the Law Applicable to Contractual Obligations (1980): Its History and Main Features" in P. North, (ed.) Contract Conflicts: The E.E.C. Convention on the Law Applicable to Contractual Obligations--A Comparative Study ( Amsterdam: North-Holland Publishing Company, 1982) 3 at 12; and G. Wetter, "Choice of Law in International Arbitration Proceedings in Sweden" ( 1984) Swedish and Int'l Arb. 16.
3.
O. Lando, "The Law Applicable to the Merits of the Dispute" in P. Sarcevic (ed.) Essays on International Commercial Arbitration ( London: Graham and Trotman, 1989) 129 at 134.
4.
J. Lew, Applicable Law in International Commercial Arbitration: A Study in Commercial Arbitration Awards ( Dobbs Ferry, NY: Oceana Publications, 1978) at 75.
5.
See W. Craig, W. Park, and J. Paulsson, International Chamber of Commerce Arbitration, 2d ed. ( Dobbs Ferry, NY: Oceana Publications, 1990) at 621.
6.
Extracted in S. Jarvin and Y. Derains, Collection of ICC Arbitral Awards: 1974-1985 (Deventer, The Netherlands: Kluwer Law and Taxation Publishers 1990) 3 at 4-5,

-134-

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Choice of Law in International Commercial Arbitration
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface xi
  • Chapter One - General Introduction 1
  • Introduction 1
  • Notes 19
  • Chapter Two - the Arbitration Agreement 29
  • Introduction 29
  • Conclusion 61
  • Notes 62
  • Chapter Three - Law Governing Arbitration Proceedings 75
  • Introduction 75
  • Conclusion 97
  • Notes 98
  • Chapter Four - Law Governing Substantive Issues 107
  • Introduction 107
  • Conclusion 134
  • Notes 134
  • Chapter Five - Issues in the Law Applicable to State Contracts 143
  • Introduction 143
  • Conclusion 164
  • Notes 168
  • Chapter Six - Mandatory Rules of Law in International Commercial Arbitration 179
  • Introduction 179
  • Conclusion 194
  • Notes 194
  • Chapter Seven - Conclusion 199
  • Introduction 199
  • Selected Bibliography 205
  • Index 215
  • About the Author 219
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