§544. Choice of Law by the Parties. The first question which arises with regard to the sources of the law to be applied by the Court relates to the power of the parties in a case to determine the law to govern that case. If a proceeding is begun under a special agreement, that instrument may set forth rules of law which the parties have agreed upon as applicable to the case, or it may provide how a particular kind of law is to be appreciated, or it may provide that a particular rule of law is not to be applied; even in a proceeding begun by application, the parties may enter into a stipulation that particular rules of law are to be applied. The history of international arbitrations affords many examples of such action by the parties with reference to ad hoc arbitral tribunals. An outstanding case is the American-British treaty of May 8, 1871, relating to the Alabama Claims arbitration which laid down substantive rules for the tribunal to apply.1 General arbitration treaties, also, have frequently referred to the possibility of such provisions in special agreements, and they have often made the tribunal's application of international law subject to any special rules laid down in the compromis.2 A similar provision is contained in Articles 18 and 28 of the Geneva General Act of 1928, and in various conventions modeled on the General Act.3 In view of this history, it may be said to have become an accepted principle that in their search for the applicable law ad hoc arbitral tribunals are to be guided first of all by provisions agreed upon by the parties.
The question then arises whether the principle is applicable to a____________________
See also the agreements of Great Britain-Venezuela, February 2, 1897; Bolivia-Peru, December 30, 1902; and Colombia-Peru, April 13, 1910.