Choice of Law in International Commercial Arbitration

By Okezie Chukwumerije | Go to book overview

This writer has searched diligently without success for evidence of a legal obligation to renegotiate independent of contractual stipulation. Evidence of renegotiation in particular cases where renegotiation was sanctioned by the parties hardly congeals into a positive norm because the process in such cases flows from the parties' approval of renegotiation. Despite the obvious benefits of renegotiation, the obligation to renegotiate constitutes an integral part of other obligations flowing from a contractual document. Thus, the obligation to renegotiate is dependent on contractual stipulations and, additionally, on the provisions of the proper law of the contract. Absent an obligation to renegotiate under the terms of the contract or provisions of the proper law, one fails to see the grounds on which a legal obligation to renegotiate can be established. 148 It is the proper law of the contract that verifies the parties' obligation to renegotiate, or, in some cases, mandates renegotiation itself. It is also the proper law of the contract that determines the legal consequences of a refusal to renegotiate. 149

Thus, while the practice of renegotiation is encouraged, there is at present no inherent obligation of parties to a State contract to renegotiate. Nevertheless, it is instructive to note that parties often agree to renegotiate even in the absence of a prior contractual stipulation, especially in the context of long-term contractual relationships. 150

If the process of renegotiation fails, parties to a State contract would have to resort to arbitration in cases where they agree to submit their dispute to arbitration. In these instances, the arbitral tribunal would have to apply some law to the merits of the dispute. As argued above, national law offers the most comprehensive and accessible set of rules to govern the complex contractual dealing often involved in State contracts.

International law and general principles of law, which have seduced many a legal scholar, are all too often so abstract and fluid as to be unhelpful in resolving complex disputes. Beneath the veneer of generalities such as good faith and pacta sunt servanda, there is an unsettling paucity of concrete and readily identifiable rules in international law or general principles to govern complex commercial relations.

Most legal systems contain sophisticated and comprehensive sets of rules that are continually amended or updated to adapt them to everchanging developments in the business sector. In contrast, international law and general principles often lack detailed and clear rules. National law therefore affords the best option for parties to a State contract who seek definition and determinacy in their relationship.


NOTES
1.
See "Declaration on the Establishment of a New International Economic Order" U.N. Resolution 3201 (S-VI), U.N. doc. A/RES/3201 (S-VI) May 9, 1974.

-168-

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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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