THE HAGUE PRINCIPLES ON CHOICE OF LAW IN INTERNATIONAL COMMERCIAL CONTRACTS

Dimitrios K. STAMATIADIS

Abstract


This article is dedicated to the one of the most important questions of the International Commercial Law. As a rule, it is widely accepted that the principle of party autonomy has been adopted, in respect of contractual obligations, by practically all national legislations in their provisions for private international law. At the same time, the Principles are silent regarding the option to choose trade usages as lex causae of the contract, and understandably so, since, from a systematic viewpoint, they cannot form a comprehensive set of rules capable of resolving basic issues of contractual obligations. Author believes that the Principles do not add any significant new features to the legal systems that have already developed and adopted the principle of party autonomy, with the exception of the possible application of non-national law before state courts. As a result, there have been formulated several useful conclusions which can be used in the science of the International Commercial Law.

PRINCIPIILE DE LA HAGA PRIVIND ALEGEREA LEGILOR ÎN CONTRACTELE COMERCIALE INTERNAŢIONALE

Acest articol este consacrat unor dintre cele mai importante probleme ce fac parte din dreptul internaţional comercial. De regulă, principiul autonomiei părţilor în contract este recunoscut ca unul fundamental în dreptul inter­naţional. Totodată, principiile păstrează tăcerea în ceea ce ţine de opţiunea de a alege uzanţele lex causae ale contrac­tului; prin urmare, ele nu pot fi privite ca reguli comprehensive şi susceptibile de a soluţiona problemele principale ale obligaţiilor contractuale. Autorul este de părere că principiile nu conţin nimic nou pentru legislaţiile naţionale în vigoare, deoarece nu au dezvoltat şi nu au adoptat ceva necunoscut pentru principiul autonomiei care este prevăzut în toate legislaţiile, cu excepţia unei posibile aplicări a legii supra-naţionale în instanţele naţionale de judecată. Prin urmare, au fost formulate unele conclusii care pot fi privite ca utile în ştiinţa dreptului internaţional comercial.


Keywords


international commercial contracts, the principal of party autonomy, contractual obligations, non-national law.

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References


On this principle of private international law see Weintraub R., Functional Developments in Choice of Law for Contracts, Collected courses of The Hague Academy of international law, (1984), vol. 187, p. 239, 271, who considers the principle of party autonomy as “the most widely accepted private international rule of our time”, while for Lorenz it is a “doctrine of convenience and business efficiency”, Lorenz W., Vertragsabscluß und Parteiwille im Obligationenrecht Englands (1957), p.154; see also Nygh P., Autonomy in international contracts, Oxford (1999), Basedow J., Theorie der Rechtswahl oder Parteiautonomie als Grundlage des IPR, RablesZ (2011), vol.75, p.75 et seq., Stamatiadis D., Party Autonomy in International Contract Law, Nomiki Vivliothiki (2011), Rühl G., Party Autonomy in the Private International Law of Contracts, in: Conflict of Laws in a Globalized World, Cambridge University Press, 2007, p.153 et seq.

See Regulation (EC) No 593/2008 (Rome Ι), the Inter-American Convention on the Law Applicable to International Contracts (The Mexico Convention, 1994) as well as other international conventions of the Hague Conference relating to various individual types of contracts in international transactions such as, Convention of 30 June 2005 on Choice of Courts Agreements, Convention of 5 July 2006 on the Law Applicable to Certain Rights of Securities held with an Intermediary, Convention of 22 December 1986 on the Law Applicable to Contracts for the International Sale of Goods, Convention of 14 March 1978 on the Law Applicable to Agency, Convention of 15 April 1958 on the Jurisdiction on the selected forum in the case of International sales of Goods, and Convention of 15 June 1955 on the law applicable to International sales of goods. Apart from these special types of contracts there has not been any statute regulating in general the contractual phenomenon in the field of private international law.

See Regulation (EC) No 864/2007 (Rome ΙΙ), Regulation (EC) No 650/2012 and Regulation (EU) No 1259/2010 (Rome ΙΙΙ) of the law applicable to divorce and legal separation.

Roughly three decades earlier a feasibility study was carried out on the development of an international convention for law applicable to contractual obligations, which indicated that there was probably only limited prospects of success for such a convention, with the result that the initiative was abandoned, see van Loon H., Feasibility study on the law applicable to contractual obligations, Prel. Doc. E of December 1983.

All the documents related to this legal undertaking can be found on the Hague Conference website at under the link “Choice of Law in Contracts” and then “Preparatory Work”, see also Marta Pertegás & Brooke Adele Marshall, Harmonization Through the Draft Hague Principles on Choice of Law in International Contracts, Brook.J.Int’lL. 2014, vol.39, p.975, 980, Martiny D., Die Haager Principles on Choice of Law in International Commercial Contracts – Eine weitere Verankerung der Parteiautonomie, RabelsZ (2015), Vol.79, p.625 et seq.

The working group was composed of N.B. Cohen (USA), C.Croft (Australia), S.E. Darankoum (Canada), A.Dickinson (UK), A.Sadek El Kosheri (Egypt), B.Fauvarque-Cosson (France), L.Gama, E.Souza (Brazil), F.J.Garcimartín Alférez (Spain), D.Girsberger (Switzerland), Y.Guo (China), M.E. Koppenol-Laforce (Netherlands), D.Martiny (Germany), C.McLachlan (New Zealand), J.A. Moreno Rodríguez (Paraguay), J.L. Neels (South Africa), Y.Nishitani (Germany), R.Oppong (UK), G.Saumier (Canada), and I.Zykin (Russia).

Soft-law documents are instruments that have received general acceptance and recognition, mainly because of the status and prestige of the commissions or international organizations that draft them; they are updated regularly to keep track of current developments. Furthermore, they are of a neutral nature because they do not constitute the expression of the views of a single national legal order, but rather a synthesis of existing trends across a variety of legal systems, and they are prepared on the basis of the comparative method, thus comprising a uniform regulatory framework with a coherent content that is directly accessible and intelligible to the parties of an international transaction, see note 1 hereinabove, Stamatiadis D., op. cit., p.247, 248. On the European level, instruments of this kind that led to the emergence of a uniform legal frame in the field of contracts are the UNIDROIT Principles of International Commercial Contracts, the Principles of European Contract Law, and the more recent “Common Frame of Reference”, see Boele-Woelki K., Unifying and Harmonizing Substantive Law and the Role of Conflict of Laws, Martinus Nijhoff, Leiden/Boston (2010), p.75 et seq., Bonell. M.J., An International Restatement of Contract Law: The UNIDROIT Principles of International Commercial Contracts, Brill/Nijhoff, 3rd edn., 2005, Voulgaris J., The Application of the UNIDROIT Principles of International Commercial Contracts in Private International Law, Revue Hellénique de Droit Européen (2001), p.113 et seq., Stamatiadis D., The Application of the UNIDROIT Principles of International Commercial Contracts and Principles of European Contract Law by the Courts and Arbitral Tribunals, Revue Hellénique de Droit Européen (2007), vol. (27), p.1 et seq., see also Neels J.L., The nature, objective and purposes of the Hague Principles on Choice of Law in International Contracts, Yearbook of PIL 2013/2014, p.45 et seq.

See Draft Commentary on the Draft Hague Principles on Choice of Law in International Contracts (November 2013), p.4, 5, available on the official site of the Hague Conference, see above, note 5; Symeonides S., The Hague Principles on Choice of Law for International Contracts: Some Preliminary Comments, available online at: http://ssrn.com/abstract=2256661 [pdf], p.5, Martiny D., op. cit., p.625.

See Introduction to the Hague Principles on Choice of Law in International Commercial Contracts, para. Ι9.

See Marta Pertegás & Brooke Adele Marshall, op. cit., p.983.

See Preamble para. 1, commentary no.2.

Especially the countries of Latin America, see Symeonides S., op. cit., p.4, and references, Martiny D., op. cit., p.629.

Such as, for example, the recent Law 5393/2015 of Paraguay regarding applicable law in international contracts, which was formulated on the basis of the system embodied in the Hague Principles.

Accordingly, this set of Principles differs from respective definitions that either are attributed in a positive way to other international instruments, such as the Hague Convention of 1986 on the Law Applicable to Contracts for the International Sale of Goods (Art. 1(a), (b)) or approximate to the meaning of internationality in a broader framework, defining as international those cases that involve “conflict of laws” or a “choice between laws of different states”; see also Art. 3, Hague Securities Convention of 2006.

The Hague Securities Convention (2006), which in Art. 3 states that “This Convention applies in all cases involving a choice between the laws of different States”, moves in the same spirit as Art. 1(1) of the Rome Ι Regulation, which for the application of the specific legislative instrument requires the existence of “contractual obligations in civil and commercial matters … involving a conflict of laws”.

Recital (23) of the Rome (Ι) Regulation provides that: “As regards contracts concluded with parties regarded as being weaker, those parties should be protected by conflict of law rules that are more favourable to their interests than the general rules”. On the issue of the protection of the weaker party of the transaction in private international law, see the study by v. Hoffmann B., Über den Schutz des Schwächeren bei Internationalen Schuldverträgen, RabelsZ (1974), vol.38, p.396 et seq.; see also Lando O., The EC Draft Convention on the Law Applicable to Contractual and Non-Contractual Obligations, RabelsZ (1974), vol.38, p.6 et seq.

See Restatement (Second) of Conflicts of Laws, Section 187.

See Art. 1 (1), commentary No.1.11.

See Art. 1 (3), commentary No.1.24.

See in particular Nygh P., op. cit., p.3 et seq., Wicki A.A., Zur Dogmengeschichte der Parteiautonomie im Interna-tionalen Privatrecht, Winterhur 1965, Schmeding J., Zur Bedeutung der Rechtswahl im Kollisionsrecht, RabelsZ (1977), Vol.41, p.299 et seq., Stamatiadis D., see note 1 hereinabove, p.29 et seq.

See Recital (11) of the Rome I Regulation.

As noted by Borchers: “courts of all conflicts stripes have flocked to the Second Restatement’s broad endorsement of party autonomy in §187”, Borchers Patrick J., ‘Choice of Law in the American Courts in 1992: Observations and Reflections’, Am.J.Comp.L (1994), Vol.42, p.125, 135.

See Jayme E., Betrachtungen zur “dépeçage” im Internationalen Privatrecht, in: FS G. Kegel, 1987, p.253, Papasiopi-Pasia Z., ‘Dépeçage: A new concept of European and Greek PIL, Revue Hellénique de Droit Européen (1996), p.741 et seq., Emilianidis A., The new European PIL of Contracts, Sakkoulas SA, Athens-Thessaloniki (2009), p.114 et seq., Stamatiadis D., op. cit., p.257 et seq., Nygh P., op. cit., p.128 et seq.

Nygh P., op. cit., p.130-131, Münch/Komm-Martiny, Art. 27 EGBGB, Bd 10 (2006), p.1704.

G.P. Calliess, in Calliess (ed.), Rome Regulations, Wolters Kluwer (2011), Art. 3 Rome I mn 48.

See on this point Marta Pertegás & Brooke Adele Marshall, op. cit., p.988.

On the evolution of the particular provision, see Michaels R., Non-State Law in the Hague Principles on Choice of Law in International Contracts, available via the following link: http://ssrn.com/abstract=2386186, [pdf], p.8 et seq., Marta Pertegás & Brooke Adele Marshall, op. cit., p.996 et seq, Saumier G., The Hague Principles and the choice of non-State “Rules of Law” to govern an international commercial contract, Brook. J. Int’l L. (2014), vol.40, p.5 et. seq.

The term is used as per the meaning in Art. 28(1) UNCITRAL Model Law and 21(1) ICC Rules to indicate a-national law, i.e. rules that do not derive from a state legislator but are rather a product of the initiative of intergovernmental organizations such as UNIDROIT (UNIDROIT PRINCIPLES OF INTERNATIONAL CONTRACTS 2010) and UNCITRAL, academic groups and teams of technocrats, such as, for example, the Lando Commission (Principles of European Contract Law 2003), the European Group on Tort Law (Principles of European Tort Law 2005), the Commission on European Contract Law and the Study Group on a European Civil Code (Draft Common Frame of Reference 2008), as well as various international professional associations that work in the framework of markets or industries, such as, e.g., the market for diamonds, cereals, coffee et al.: see Pamboukis Ch., The lex mercatoria as applicable law in international obligations, Ant. Sakkoulas, Athens-Komotini (1996), p.39 et seq., Symeonides S., ‘Party Autonomy and Private Law-Making in Private International Law: The Lex Mercatoria that isn’t’, in: FS Kerameus K. (2009), p.1397.

In other words, this amounts to selection of a foreign law as governing law (kollisionsrechtliche Verweisung) and not as mere incorporation of the chosen rules as contractual terms (materiellrechtliche Verweisung), see Kropholler, J., Internationales Privatrecht, Mohr Siebeck, Tübingen 2006, p.293, Pamboukis Ch., op. cit., p.131, Stamatiadis D., op. cit., p.23.

Note that the examination in particular of the argumentation set forth in defense of the positions for accepting (or not) a-national rules by state courts would require much more space than allowed by the present study. On this subject, see Nygh P., op. cit., p.60 et seq. and 185 et seq., and respective references, Stamatiadis D., op. cit., p.194 et seq., and respective references.

See Martiny, in Reithmann/Martiny, Intern. Vertragsrecht (2004), No. 71 et seq., Pambouki Ch., op. cit., p.127 et seq.

See Calavros C., Das UNCITRAL-Modellgesetz über die internationale Handelsschiedsgerichtsbarkeit, Gieseking, Bielefeld (1988), p.122 et seq.

Bonell M. J., An International Restatement of Contract Law: The UNIDROIT Principles of International Commercial Contracts (3rd ed. 2005), p.9 et seq.

Para. (2) of the Preamble of the UNIDROIT Principles states that: “They shall be applied when the parties have agreed that their contract be governed by them”.

a. Art. 1:101 – Application of the Principles [2] These Principles will apply when the parties have agreed to incorporate them into their contract or that their contract is to be governed by them.

Art. 9(2): “The Court will take into account all objective and subjective elements of the contract to determine the law of the State with which it has the closest ties. It shall also take into account the general principles of international commercial law recognized by international organizations”.

Art. 10: “In addition to the provisions in the foregoing articles, the guidelines, customs, and principles of international commercial law as well as commercial usage and practices generally accepted shall apply in order to discharge the requirements of justice and equity in the particular case”.

Regarding these views see Juenger F.K., “The Inter-American Convention on the Law Applicable to International Contracts; Some Highlights and Comparisons”, Am.J.Comp.L (1994), vol.42, p.381, 392; idem, “Contract Choice of Law in the Americas”, Am.J.Comp.L (1997), Vol.45, p.195, 204; Schilf S., Allgemeine Vertragsgrundregeln als Vertragsstatut, Mohr Siebeck (2005), p.347-359.

COM (2002) 654 final, question 8.

All the views expressed on the issue can be found at the following online address: http://ec.europa.eu/justice/news/ consulting_public/rome_i/news_summary_rome1_en.htm (date: 17.09.2016).

See Recitals (13) and (14) Rome I Regulation.

See Prel. Doc. No 1 of October 2012, p.13 et seq.

For a general evaluation of practical challenges of Art. 3 see Saumier G., op. cit., p.22 et seq.

Art. 3, commentary No. 3.10.

Art. 3, commentary No. 3.11.

See Martiny D. op. cit., p.638.

Art. 3, commentary No. 3.13.

Art. 3, commentary No. 3.15.

See v. Bar Chr., IPR II, C.H.Beck, München (1991), p.309, Stamatiadis D., op. cit., p.100 et seq.

See Hague Sales Convention of 1986 (Art. 5), Hague Sales Convention of 1955 (Art. 5), Hague Agency Convention (Art. 2) and Mexico Convention (Art. 5).

Art. 5, commentary No.5.3.

See Symeonides S., op. cit., p.11-13.

These include the Restatement (Second) of Conflict of Laws, § 187(2)(b).

For overriding mandatory rules see Bogdan M., Private International Law as Component of the Law of the Forum (General Course on PIL), Hague Academy of International Law (2012), p.239 et seq., Papassiopi-Passia Z., Mandatory Rules and Substantive Choice of Law Rules, Thessaloniki (1989), Hartley T.C., ‘Mandatory Rules in International Contracts: The Common Law Approach’, Recueil des cours, vol. 266 (1997), p.337 et seq., Stoll A., Eingriffsnormen im Internationalen Privatrecht-Dargestellt am Beispiel des Arbeitsrechts, Peter Lang, Frankfurt a.M. (2001).

Art. 11, commentary No.11.8.

Art. 11, commentary No.11.9.

See Stamatiadis D., op. cit., p.358 et seq.

Note that a similar solution is adopted in Art. 11(2) of the Mexico Convention (1994).

See Art. 9, commentary No. 9.3.

Regarding choice-of-forum clauses, see Briggs A., Agreements on Jurisdiction and Choice of Law, Oxford (2008), p.61 et seq.

It is argued as well that the Principles apply also to the question of the validity of choice-of-forum agreements. This argument reflects the spirit of the Hague Convention on Choice of Court Agreements (2005), which – although it does not deal separately with dual-choice contracts – provides that the validity of the choice-of-forum agreement shall be determined by the law (including private international law) of the state of the court chosen by the parties (Article 5(1) and Article 6(a)). As a result, if this state has adopted the Principles, the choice-of-forum agreement shall be governed by the law chosen by the parties in the main contract, Symeonides S., op. cit., p.28.

See also Saumier G., op. cit., p.23.

Such as the Brooklyn Law School Symposium, “What Law Governs International Commercial Contracts? Divergent Doctrines and the new Hague Principles”, and more recently the Conference in Lucerne on the Hague Choice of Law Principles held on 8/9 September 2016.


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