Choice of Law in Third-Millennium Arbitrations: The Relevance of the UNIDROIT Principles of International Commercial Contracts

By Marrella, Fabrizio | Vanderbilt Journal of Transnational Law, October 2003 | Go to article overview

Choice of Law in Third-Millennium Arbitrations: The Relevance of the UNIDROIT Principles of International Commercial Contracts


Marrella, Fabrizio, Vanderbilt Journal of Transnational Law


TABLE OF CONTENTS

I.   INTRODUCTION
II.  ON CHARACTERIZATION
III. ON PRELIMINARY QUESTIONS
IV.  ON CHOICE OF LAW APPLICABLE TO THE MERITS
     OF THE DISPUTE
     A. Models of Choice
     B. The UNIDROIT Principles in Action
        1. UNIDROIT Principles as a
           Lex Contraetus
        2. Positive Choice of Law by the Parties:
           ICC Award Number 7110
        3. Negative Choices and Application
           of the UNIDROIT Principles by
           Arbitrators: Award Number 7375
     C. Is Renvoi Really Phantomatic?
V.   UNFORESEEN APPLICATIONS OF THE UNIDROIT
     PRINCIPLES: INTERPRETATION OF THE
     NATIONAL LEX CONTRACTUS
     A. A New Instrument for International
        Arbitrators, the TNT Test
     B. A First Example: ICC Award Number 8264
     C. A New Risk for the Development of
        International Arbitration: The
        Lex Cognita Approach
     D. Transnational Rules and International
        Uniform Law Conventions
        1. Arbitral Practice
        2. One Practical Example: ICC
           Award Number 8769
        3. Future Applications
     E. Excluding the UNIDROIT Principles
VI.  UNIDROIT PRINCIPLES DO NOT CLASH WITH
     STATE CONTROL MECHANISMS
VII. CONCLUSION

I. INTRODUCTION

In 1584, Lanfranco da Oriano, one the first scholars of commercial arbitration in the period of the Law Merchant, published an essay in Venice in which he noticed that the "subject of arbitration is of a great utility but it is always badly explained by legal scholars." (1) Five centuries later, many businessmen still agree with Lanfranco since their perception of the law of international trade seems completely different from that of many legal scholars, including their lawyers.

In truth, a reconciliation of the two visions is possible since it is the most important task of any (good) international arbitrator. This task is easier today with reference to the UNIDROIT Principles for international commercial contracts. The growth of a global economy rooted in the cosmopolitan nature of commerce and the development of new means of transportation and communication demand the prompt formation of a uniform transnational commercial law. (2) Whether one agrees or disagrees with lex mercatoria doctrines, one must accept the fact that a significant number of awards have made reference to them, whatever that means. (3) Legal scholars have tried to solve the Babel of law dilemma, which was announced with much worry by the French comparatist Rene David, by creating a compilation of principles intended to provide one codified answer to the challenge of lex mercatoria. The dawn of the third millennium witnesses the spread of one of the twentieth century's most striking legal innovations: the codification of general principles of international commercial contract law under a nonbinding format by an international organization. New actors of international trade call for new rules, and the winds of change are affecting the regulatory activity patterns of some international organizations. A striking example is UNIDROIT.

The International Institute for the Unification of Private Law (UNIDROIT) was established at the beginning of the 20th century in order to promote the international uniformity of state legislations. However, UNIDROIT has elaborated an international code in which general principles of contract law specifically adapted for non-national transactions have been compounded. (4) Paradoxically, this Institute aimed at conventional unification of law (5) has carried out the work of scientific unification of transnational commercial law, something never tried before.

Today, every reader of the imposing legal literature on the UNIDROIT Principles is confronted by a phenomenon which has reunited international, private, and comparative law scholars in common reflection, and has torn down the common state-centered partitions of legal science, at least in continental Europe. …

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