|
(3) Combined laws (or the tronc commun doctrine); identifying the common parts of the two different systems of laws of parties and applying the common parts to the matters in dispute.
(4) Concurrent laws; a measure of protection, applying national law only insofar as it accords with either public international law or some other system with accepted minimum standards, to the private party to the contract where the other party is state itself or state entity.
(5) Transnational law (including the general principles of law; international development law; the lex mercatoria; codified terms and practices; and trade usages) there is an approach, which enjoys the strong support of some commenter, is to eschew national laws altogether, and apply what is often described as the transnational law, the supposed generally accepted customs and usages of modern international trade. Whether this is a viable and whether it should be adopted if the parties in their contract or arbitration agreement have not sanctioned it, is a matter of controversy, which cannot be entered into here.
(6) Equity and good conscience (amiable compositeurs); parties may require arbitrators to settle the dispute by determining on the basis of what is “fair and reasonable”, rather than on the basis of law.
There are some exceptional circumstances in which a contractual choice of law will not be given effect. Firstly, when the chosen law conflicts with the mandatory provisions and public policies of the country where the arbitration is to take place. Mandatory rules are common in the areas of consumer protection and labour relations, and they are often enacted to protect local residents from being exposed to the law or tribunals of a foreign country. Article 34(2)(b) of the Model Law claims obedience to the public policy of the forum, and Rome Convention provided that ‘Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract.’ Which refers to the mandatory rules of the forum may be applied to exclude the otherwise applicable substantive law. In the English system of private international law, a choice by parties must be ‘bona fide and legal’ and a merely ‘eccentric or capricious’ choice of law will have no effect. However given that international arbitration agreement are usually entered into between parties of relatively equal bargaining power the scope of operation of mandatory rules in the area may be limited in practice. The economic and political laws of the forum country which form part of its public policy will, in most cases, not claim to be applicable to contracts which have no connection with the forum country. Moreover the parties cannot escape from the mandatory provisions of that legal system with which the contract has its most substantial connection and which, for this reason, the court would have applied if there had not been an expressed or implied choice of law.
(b) Implied or tacit choice
In the absence of an express choice of law, does it mean the parties have abandoned the right to choose the applicable law? The arbitral tribunal must presume it may be possible that the parties have intended to choose the applicable law and try to look for it. This is often referred to as a tacit choice of law. It may also be known as an implied, inferred or implicit choice. The implied choice intention is “demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case” .
|
