INTERNATIONAL COMMERCIALCONTRACTS
CONTRACTTERMS,APPLICABLELAW ANDARBITRATION
GIUDITTACORDERO-MOSS
UniversityofOslo
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www.cambridge.org Informationonthistitle: www.cambridge.org/9781316514238
DOI: 10.1017/9781009082822
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Contents
PrefacetotheSecondEditionpage xv
PrefacetotheFirstEdition xix
TreatiesandConventions xxii
EULegislativeInstruments xxiii
EUDocuments xxiv
DomesticLegislation xxvi
CourtDecisionsandAwards xxx
Introduction1
I.1ExplanationoftheTerm ‘Commercial’ 2
I.2ExplanationoftheTerm ‘International’ 3
I.3ThePublicInternationalLawDimension5
1InternationalContractPracticeandItsExpectationsinTerms oftheGoverningLaw8
1.1IssuesArisingOutofInternationalContractPractice8
1.2InternationalContracts11
1.3TheModelsforInternationalContractDrafting13
1.4TheDynamicsofContractDrafting18
1.5ExamplesofSelf-SufficientContractDrafting22
1.5.1BoilerplateClauses23
(a)EntireAgreementClause23
(b)NoWaiverClause25
(c)NoOralAmendmentsClause26
1.5.2SubjecttoContractClause27
1.5.3TerminationClause29
1.5.4ArbitrationClauses30
1.5.5OtherClauses32
1.6TheChimeraoftheAutonomousContract32
1.7TheRelationalContract34
1.8TheBalance38
2TheRoleofTransnationalLaw39
2.1Introduction39
2.2SourcesofTransnationalLaw46
2.2.1TradeUsages48
(a)ContractPractice48
(i)DetachedContracts49
(ii)StandardContracts50
(iii) ‘GoodCommercialPractice’ 51
(iv)AUniformContractPractice?52
2.2.2GeneralPrinciples54
(a)BattleoftheForms55
2.2.3GeneralPrinciplesofCommercialLawandofPublicInternational Law56
(a)AnExampleofCross-Fertilisation:InternationalAdministrative Law58
(b)AnExampleofFragmentation:UnilateralStateDeclarations andContractLaw64
2.2.4TheCISG66
2.2.5ThePrinciplesofInternationalCommercialContracts(UPICC) andthePrinciplesofEuropeanContractLaw(PECL)70
(a)TheUPICCandthePECL70
(b)UsesofthePrinciples73
(c)UseoftheUPICCtoInterprettheCISG?74
(d)UseoftheUPICCtoCorrectNationalLawinInvestment Arbitration?78
(e)AlsoBestRules82
(f)TheProblematicCentralRoleofthePrincipleofGood Faith83
(i)EntireAgreement87
(ii)NoWaiver90
(iii)SubjecttoContract91
(iv)Termination92
(g)AnAutonomousPrincipleofGoodFaith?92
2.2.6SoftSourcesHarmonisingSpecificSectors96
(a)INCOTERMS97
(b)UCP60099
(c)ModelContracts100
(d)TheUNCITRALModelLawonInternationalCommercial Arbitration101
(e)IBAGuidelinesonConflictofInterests101
(f)IBARulesonTakingofEvidenceandPragueRules102
(g)CorporateSocialResponsibility103
2.2.7SummingUp106
2.3NoReplacementoftheGoverningLaw106
2.3.1CanTransnationalLawbeChosenastheOnlyGoverning Law?107
2.3.2WhentheTransnationalLawConflictswiththeGoverning Law110
(a)TheUCP600111
(i)Case1111
(ii)Case2112
(iii)Case3113
(b)TheUPICC:IrrevocableOfferandConsideration114
(c)ISDAModelSwapAgreement115
(d)IBAGuidelinesonConflictofInterests116
2.3.3WhentheTransnationalLawCompeteswiththeContract Terms117
(a)AncillaryObligationsNotRegulatedintheContract118
(i)NoAssignment119
(b)CompetingContractRegulation120
(i)NoticeofDefect120
(ii)Hardship120
(iii)NoOralAmendments121
(c)DiscretionaryContractRights123
(i)SubjecttoContract123
(d)Conclusion124
2.3.4WhentheTransnationalLawHasGaps:Autonomous Interpretation125
(a)TheUPICC: ForceMajeure andChoiceBetween Contracts126
2.3.5WhentheTransnationalLawNeedsInterpretation:Autonomous Interpretation127
(a)TheCISG: ForceMajeure andtheRequirementofBeyond theControl129
2.4Conclusion133
3TheImpactoftheGoverningLaw135
3.1EnglishLawPrivilegesPredictability136
3.2CivilLawSystemsPrivilegeJustice,buttoDifferentExtents142
3.3ConvergencebetweenCivilLawandCommonLaw?145
3.4TheEffectsoftheGoverningLawontheInterpretationandConstruction ofContractualTerms155
3.4.1BoilerplateClauses155
(a)EntireAgreementClause155 (b)NoWaiverClause158 (c)NoOralAmendmentsClause159
3.4.2SubjecttoContract160
3.4.3TerminationClauses162
3.5ContractualTermsContradicting,SupplementingorBeingSupplemented byNon-mandatoryRulesoftheGoverningLaw165
3.5.1RepresentationsandWarrantiesClauses166
3.5.2LiquidatedDamages168
3.5.3ForceMajeure171 (a)Supplier’sFailure174 (b)ChoiceBetweenContracts176
3.5.4HardshipClause(MaterialAdverseChange)177
3.6ContractualTermsContradictingMandatoryRulesoftheGoverning Law179
3.6.1FirmOfferandConsideration180 (a)Revocation180 (b)RevocationandReliance181
3.6.2AmendmentstoaContract183 (a)UnilateralObligation183 (b)FactualBenefit185
3.7DoesArbitrationEnsureaUniformApproachtoContractual Terms?186
3.7.1ArbitrationasaUnitarySystem?189
3.7.2VariousApproaches190
3.7.3TheImportanceoftheSelectionofArbitrators194
3.7.4Conclusion197
3.8TheDraftingStyleDoesNotAchieveSelf-Sufficiency,butHasaCertain Merit198
4WhichState’sLawGovernsanInternationalContract?200
4.1Introduction200
4.2DeterminationoftheForumasaNecessaryFirstStep204
4.2.1Jurisdiction204
(a)ChoiceofForum206
(b)LackingChoiceofForumbytheParties208 (c)ClaimsAgainsttheParentCompanyforSubsidiary’sConduct Abroad210
4.2.2EnforceabilityoftheDecision213
4.3TheMostImportantConflictRuleforContracts:PartyAutonomy214
4.3.1WhichLawtoChoose217
(a)ChoiceofOneoftheParties’ Law217
(b)CriteriaforChoosingtheGoverningLaw218 (i)LiteralInterpretation:EnglishLaw219 (ii)PurposiveInterpretation:GermanicLaw220
(c)AccurateApplicationAssumesaThoroughUnderstanding oftheLaw221
4.3.2TacitChoiceofEnglishLawforInternationalContracts?223
(a)TheUseofCommonLawContractModels224
(b)TheGoverningLaw225
(c)Severability:DraftingStyleasaPartialChoiceofLaw?226
(d)DraftingStyleasaTacitChoiceofLaw?229
(e)DraftingStyleastheClosestConnection?232 (f)Conclusion233
4.3.3ChoosingTransnationalLaw?234
4.4WhatIfthePartiesHaveNotChosentheGoverningLaw?235
(a)TheRomeConventionProvidedforPresumptions236 (b)LooseInterpretation:Article4.2asaWeakPresumption237 (c)StrictInterpretation:Article4.2asaStrongPresumption238 (d)Conclusion238
(e)TheRomeIRegulation239
4.5AreAllRulesofAnyOtherConnectedLawsExcludedOncetheGoverningLaw IsChosen?241
4.5.1TheScopeofPartyAutonomy:IncidentalQuestions,Classificationand ExclusiveConflictRules242
4.5.2TheScopeofPartyAutonomyinArbitration247
(a)DoesPartyAutonomyExcludeAnyOtherConflict Rules?248
(b)ClassificationoftheIssues248
(c)CompanyLaw250
(d)LegalCapacity253
(e)WindingUpandInsolvency255
(f)Property257
(g)Assignment,SecurityInterestsandCollateral259
4.5.3OverridingMandatoryRules262
(a)CompetitionLaw265
(b)LabourLaw266
(c)AgencyContracts267
(d)Insurance268
(e)GoodFaithandFairDealing269
(f)CorporateSocialResponsibility270
4.5.4OverridingMandatoryRulesofThirdStates272
4.5.5ImpossibilityofthePerformanceDuetoaForeignLaw273
4.5.6IllegalityofthePerformanceUnderaForeignLaw274
4.5.7 Violationofthe OrdrePublic ofthe LexFori276
4.6PrivateInternationalLawandArbitration277
4.6.1TheRelevanceofPrivateInternationalLawinArbitration279
4.6.2WhichPrivateInternationalLawIsApplicable?281
5DoesArbitrationEnsureaSelf-SufficientContract?285
5.1BrieflyonArbitration287
5.1.1ArbitrationIsStillthePreferredMethodforDispute Resolution288
5.1.2SourcesApplicabletoArbitration291
5.1.3AdHocandInstitutionalArbitration293
5.2TheRelevanceofNationalLawtoInternationalArbitration296
5.2.1IsThereaDifferencebetweenInternationalArbitrationandDomestic Arbitration?297
5.2.2WhenDoesStateLawBecomeRelevanttoInternational Arbitration?298
(a)InternationalArbitrationandtheStateLawoftheSeatofArbitration (LexArbitri)300
(i)TheRelevanceofthe LexArbitri totheArbitral Procedure301
(ii)TheRelevanceofthe LexArbitri totheChallengeofanArbitral Award303
(iii)TheRelevanceofthe LexArbitri totheEnforcementofanArbitral Award304
(b)InternationalArbitrationandtheStateLawofthePlace(s) ofEnforcement305
5.3SpecificCriteriaforInvalidityorUnenforceabilityofArbitralAwards: IsanInternationalAwardReallyDetachedfromStateLaw?305
5.3.1ChallengetotheValidity306
5.3.2Enforcement307
5.3.3JudicialControlIsNotanAppeal308
(a)ScopeofJudicialControl309
(b)IntensityofCourtControl310
(i)TheIssueofJurisdiction312
(ii)TheIssueofPublicPolicy:TheMaximalistandtheMinimalist Approach314
(iii)TheBalance316
(iv)Preclusion?319
(v)TheConsequencesofCourtControl onArbitrability320
5.4GroundsforSettingAsideanAwardorforRefusing ItsEnforcement320
5.4.1LackofJurisdictionandIncidentalQuestions:InParticular onCorruption320
5.4.2InvalidityoftheArbitrationAgreement324
(a)ChoiceofLawbytheParties:Separability325
(b)AbsentChoicebytheParties: LexArbitri 328
(c)FormalValidity328
(i)ForFormalValiditytheStandardwasSetinNewYorkConvention, butThereHasBeenanEvolution328
(ii)UNCITRALModelLawontheValidityofArbitration Agreements330
(iii)ArticleIIoftheNewYorkConventionontheValidityof ArbitrationAgreements332
(iv)CompetitionbetweenStateLawandArticleIIoftheNewYork Convention335
(v)MaytheMore-Favourable-LawProvisionofArticleVII Assist?337
(vi)IstheProceduralRequirementofArticleIVan Obstacle?338
(vii)Conclusion340
5.4.3LegalCapacity341
5.4.4ConstitutionoftheArbitralTribunal343
5.4.5 ExcessofPower(UltraPetitaPartium and InfraPetita Partium) 344
5.4.6IrregularityofProcedure346
5.4.7RighttobeHeard347
5.4.8ConflictwiththeArbitrabilityRule347
(a)IncidentalQuestionsDoNotAffectArbitrability oftheDispute349
(b)TheScopeofArbitrabilityandCourtControl351
(c)ThreatstotheScopeofArbitrability354
(d)ArbitrabilityofIntra-EUInvestmentDisputes355
(e)TheLawGoverningArbitrability357
(i)InthePre-awardPhase358
(ii)InthePhaseoftheChallengetoanAward359
(iii)InthePhaseofEnforcementofanAward359
(iv)TheLawGoverningtheDisputeisIrrelevant360
(f)ArbitrabilityisEqualtothe OrdrePublic inInternationalDisputes withoutaConnectiontothe LexFori 361
5.4.9 Breachof OrdrePublic (PublicPolicy) 362
(a)AutonomousInterpretation363
(b)International OrdrePublic asaCorrectivetoPositive Ordre Public 364
(c)RelativeorTerritorial OrdrePublic asaCorrectivetoPositive Ordre Public 366
(d)TrulyInternational OrdrePublic asaTransnational Phenomenon367
(e)ConflictwithPrinciples,NotwithRules368
(f)FundamentalPrinciples370
(g)ActualViolationandIncidentalQuestions371
(h)ProceduralPublicPolicy373
(i)SubstantivePublicPolicy374
(i)CompanyLaw375
(ii)Insolvency377
(iii)PropertyandEncumbrances379
(iv)CompetitionLaw380
(v)EULaw382
(vi)LabourLaw;Insurance383
(vii)GoodFaithandFairDealing383
(viii)EmbargoandSanctions385
(ix)Corruption386
(x)CorporateSocialResponsibility,HumanRights387 (j)Conclusion387
5.4.10AnnulmentattheSeat388
5.5ThePoweroftheArbitralTribunalinRespectoftheParties’ Pleadings393
5.5.1TheProceduralRules394
5.5.2ArbitrationAgreementsandtheScopeoftheTribunal’sPowers394
5.5.3ArbitrationRules398
(a)Party’sDefault398
(b)AdverseInferences398
(c)AdditionalInformation400
(d)BurdenofProof401
(e)Impartiality401
(f)TheRighttobeHeard402
5.5.4ArbitrationLaw402
5.5.5TheUltimateBorders:ExcessofPower,RighttobeHeard,Procedural Irregularity405
5.6TheTribunal:AnUmpireoranInquisitor?406
5.6.1ExcessofPowerRegardingQuestionsofLaw:MaytheTribunalDisregardtheChoice ofLawContainedintheContract?409
(a)TheDifficultBorderlinebetweenaReviewoftheApplicabilityoftheLaw andaReviewoftheMerits410
(b)TheTribunalDisregardstheContract’sChoiceandAppliesAnotherNational Law411
(i)DisregardoftheContract’sChoiceinFavouroftheOtherwiseApplicable Law412
A.Violationofthe OrdrePublic ofthe LexArbitri? 413
B.ApplicationoftheChosenLawReferstotheExcluded Law414
C.ApplicationofPrivateInternationalLaw415
D.Conclusion415
(ii)DisregardoftheContract’sChoiceinFavourofaLawThatIsNotOtherwise Applicable416
(c)DisregardoftheContract’sChoiceofLawinFavourofTransnational Sources417
(d)Conclusion418
5.6.2ExcessofPowerRegardingQuestionsofLaw:MaytheApplicableLawbeDisregarded ifthePartiesDoNotSufficientlyProveIt?419
5.6.3ExcessofPowerRegardingQuestionsofLaw:MaytheTribunalDevelopItsOwnLegal Arguments?421
(a)NewQualificationsundertheSameSources421
(b)ApplicationofNewSources422
(c)NewRemedies424
5.6.4ExcessofPowerRegardingQuestionsofFact:IstheTribunalBoundtoDecideOnly onInvokedFacts?426
5.6.5RighttoBeHeard:InvitingthePartiestoComment427
5.6.6DistinctionbetweenDomesticandInternationalArbitration?430
5.6.7ProceduralIrregularity:Applicationof ‘Law’ orof ‘RulesofLaw’ 432
(ii)TheApplicationofTransnationalSourcesandProcedural Irregularity435
(iii)Conclusion436
5.6.8BurdenofProof:MaytheTribunalRequestAdditionalInformationtoUndermine UncontestedEvidence?436
5.7Conclusion439
Appendices 444
ArbitrationRulesandModelClauses444
SoftLaw445
Digests,Databases446
Bibliography 448
Index 471
Thissecondeditionupdatesthe firstbookpublishedin2014,toincludethelast decade’smostimportantdevelopmentsinthe fieldofinternationalcommerciallaw. Italsobenefitsfromtheexperiencegainedbyhavingusedthebookthroughoutthe lastdecade:extensiveeditorialchangeshavebeenmadetoenhancethebook’sclarity andhighlighttherelationshipbetweenitsdifferentparts.Iamverythankfultoallthe students,teachersandpractitionersaroundtheworldwhohaveadoptedthisbook andgivenmefeedback.
Whenthe firsteditionwaspublished,itwasmeantto fillagapininternational commerciallawyers’ legaleducation.Iamgratefulthatthemainpurposeofthisbook hasbeenappreciated:itwaswrittenasthebookIwouldhavelikedtohavereadbefore startingmycareerasaninternationalcommerciallawyer.Atthattime,several programmesforprospectiveinternationalpractitionerswerealreadyofferedby variousinstitutions.Still,Iconsidereditmightbeusefultoprovide acomprehensiveoverviewofhowthedifferentaspectsofthelawinteractwitheach otherinthecontextofinternationalcontracts:contractlaw,comparativecontract law,transnationallaw,privateinternationallawandarbitration.Traditionally,each oftheseaspectswastaughtseparately;thisbookattemptedtobringthemtogether andshowthesignificancethattheseaspectshaveforeachotherandultimatelyforthe enforceabilityoftherightsandobligationsthatareformalisedinaninternational contract.
Inthepastdecade,therehasbeenaproliferationofprogrammesforprospective internationalpractitioners.Numerouscourseshavebeencreated,particularlyat postgraduatelevel,toconveythespecialknowledgerequiredforinternationalpractice.However,thelaweducationstillreflectstheclassicaldivisionofdisciplines: contractlaw,comparativecontractlaw,transnationallaw,privateinternationallaw andarbitrationarestilltaughtasseparatedisciplines.
Thisseparationdoesnotnecessarilycorrespondtothelifecycleofaninternational commercialcontract.Whentheexplanationofanissuestopsatthebordersofone discipline,withoutconsideringassumptionsorimplicationsthatbelongtotheother disciplines,itrunstheriskofconveyinganincompletepicture.
Whileitistruethatacompletepicturecanbebuiltafterhavinglearntallother disciplinesandhavingputtogetherallpartialpicturesformedineachofthedisciplines,thereisariskthatsomegapsremain.Tonamesomeexamples:comparativelaw
explainsthatthereisaconvergencebetweenthecivillawandthecommonlaw –thusleavingtheimpressionthatthesamecontractclausehasthesamelegaleffects irrespectiveofthegoverninglaw;cont ractlawexplainshowcourtsinterpret contracts – thusleavingtheimpressionthatarbitrationisfreerfromthegoverning law;privateinternationallawexplainsthatthepartiesmayinstructthearbitral tribunaltoapplysourcesdifferentfromnationallaws – thusleavingtheimpression thatthetransnationallawprovidesaun iformandcomprehensiveregulationof internationalcontracts.
Theseimpressionsare,toacertainextent,incorrect;butitdoesnotbelongto comparativelawtoanalysecontractpractice – thisisamatterofcontractlaw;itdoes notbelongtocontractlawtoanalysetherestrictionsonenforceabilityofarbitral awards – thisisamatterofarbitrationlaw;anditdoesnotbelongtoprivate internationallawtoanalysetheharmonisationofsoftlaw – thisisamatterof transnationallaw.
Atthesametime,theseimpressionsarenotnecessarilycorrectedafterhaving studiedcontractlaw,arbitrationlawortransnationallaw.Theliteratureoncontract law,arbitrationlawandtransnationallawdoesnotnecessarilydealdirectlywiththe issuesthatareimpliedbytheotherdisciplines.
Thefunctionofthisbook,therefore,isstillrelevant:toinvestigatetheenforceabilityofcontracttermsfollowinginternationalcontractsfromthephaseofnegotiations tothephaseofinterpretationandperformanceofthecontract,tothearisingof disputesand finallytheenforcementofdecisionssolvingthedisputes – irrespectiveof whichacademicdisciplinetheissuesmaybelongto.
Asaconsequenceofthisoriginalscope,thebookdoesnotgiveanexhaustive explanationofallthetraditionalcontentofeachofthedisciplinesthataretouched upon(contractlaw,comparativecontractlaw,transnationallaw,internationalcommerciallaw,privateinternationallaw,arbitrationlaw).Rather,itanalyseswhich sourcesareapplicabletothecontractinthedifferentphases,andhowthewillofthe partiesinteractswiththesesources.Theintentionistogivealegalmapofthemain issuestotakeintoconsiderationwhendealingwithinternationalcontracts.The numerousreferences,particularlytointernetresources,willpermitreadersto find specificdetailsoncetheyhaveidentifiedtheissuesandthesourcesapplicabletothem.
Afeatureofthisbookdeservesmentioning:inadditiontobeingbasedonrelevant sourcessuchaslegislation,caselawandliterature,itisheavilyinspiredbymyown practice – initiallyasacorporatelawyer,andlaterasanarbitrator.Thisisreflectedin theexamplesthataregiventoillustratedifferentissues.Asmypracticeincluded, fromthelastdaysoftheSovietUnionanduntilrecently,transactionsandarbitration betweenWesternandRussianparties,alotofexamplesassumepreciselythisparty composition.Whenthe firsteditionwaswritten,therewasnothingremarkablein bringingasanexampleacontractbetween,say,aNorwegian,aUkrainianand aRussianparty.Today,thegeopoliticalsituationhaschangeddramatically,and suchapartycompositionisunthinkable.Theexamplescouldhavebeenrewritten.
However,Idecidedtoleavethemastheywere:inpartbecausetheyarefullyjustified fromanhistoricalpointofview,andinpartinthehopethattheywillsoonagain becomerealistic.
Asforthe firstedition,thiseditionhasbenefitedgreatlyfromthediscussionsheld inthesessionsoftheUNCITRALWorkingGroupII,inwhichIstillhavethehonour ofparticipatingastheNorwegiandelegate.
Inaddition,Iwouldliketoacknowledgethepreciousinsightgainedfrommy membershipoftheInternationalCourtofArbitrationoftheInternationalChamber ofCommerce(ICC),ofwhichIhavethehonourofbeingamembersince2018;from myparticipationintheNorwegiandelegationtotheHagueConferenceduringthe negotiationsofthe2019HagueJudgmentsConvention,aswellasfromthevarious academicforainwhichIhadandhavethepleasureofparticipating – amongwhich IwishparticularlytomentiontheHagueAcademyofInternationalLaw,theCenter forTransnationalLitigation,Arbitration,andCommercialLawofNewYork University,SciencesPoÉcoledeDroit(Paris),theGroupeeuropéendedroitinternationalprivé(GEDIP)andtheInternationalAcademyofComparativeLaw.
IwouldliketothanktheDepartmentofPrivateLawoftheLawFaculty,University ofOsloforitscontinuedsupport.Thanksalsotomyresearchassistant,EllenBennin Brataas,whocompiledthebibliographyandlistofreferences.
IwouldliketothankCambridgeUniversityPress,particularlymyeditorMarianne Nield,fortheirverypleasantandprofessionalcooperationinconnectionwiththe publicationofthisbook.
ThissecondeditionisupdatedasperSeptember2022.
ThisisthebookthatIwouldhavelikedtohavereadwhenIstartedmycareerasaninhouselawyerinanItalianmultinationalcompanyaboutthirtyyearsago.Working withinternationalcontracts,Isoonstartedwonderingaboutvariousaspectsof contractdrafting.Whyareinternationalcontractswritteninastylethatiscompletely differentfromtheirdomesticcounterpartsandwhyaretheywritteninthesamestyle irrespectiveofthelawthatgovernsthem?Istheresomesortoftransnationallawthat allowsforthegoverninglawtobedisregardedandrequiresthatcontractsbewritten inacertainway,independentlyofthejurisdictioninwhichtheywillbeimplemented? Isnationallawmaderedundantbytheextremelydetailedstyleofthecontracts?Does thechoice-of-lawclausewritteninthecontractmeanthatthepartiesmayexcludethe applicabilityofanyotherrulesfromanyotherlaws?Doesthearbitrationclause writteninthecontractmeanthatthepartiesmayrelyfullyonthetermsofthe contractandthechoiceoflawmadetherein,andneednotbeconcernedwithany othersources?
ThesequestionscontinuedpresentingthemselvesafterIwentovertoaNorwegian multinationalcompany,andbecameevenmorepressingwhenIstartedfollowing thiscompany’slegalinterestsinwhatwassoontobecometheformerSovietUnion. Afternumerousyearsasacorporatelawyer,inwhichathoroughanalysisofthese questionsinevitablyhadtoyieldtonewprojectsandmoreurgentmatters,my generousemployergavemetheopportunitytospendsometimeresearchingsome oftheseissues.TheresultwasaPhDthesisattheInstituteofStateandLawinthe RussianAcademyofSciences,Moscow,undertheknowledgeablesupervisionof ProfessorAugustA.Rubanov.Thiswastheintroductiontomyacademiccareer: theRussianPhDwasfollowedbyaPhDattheUniversityofOslo,underthe invaluablesupervisionofProfessorsSjurBrækhusandHelgeJ.Thue.Sincethen, about fifteenyearshaveelapsed,duringwhichIhavedevotedmyresearchand teachingattheUniversityofOslotothelistofquestionsthatIhadcompiledinmy nearly fifteenyearsasacorporatelawyer,andtotheadditionalquestionsthat continuetoariseinconnectionwitharbitrationproceedingsthatIaminvolvedin orlegaladvicethatIamrequestedtorender.
Theresultsofthesealmostthirtyyearsofdwellingonthepracticalandacademic aspectsofinternationalcontracts,theirsourcesandtheirenforceabilityarereflected inthisbook.Academically,thequestionsarisingfrominternationalcontractsfallinto
separatedisciplines:contractlaw,comparativecontractlaw,privateinternational law,civilprocedureandinternationalarbitration.Scholarsmayspecialiseinacouple ofthesedisciplines,butrarelyinallofthem.Therefore,itisnotverycommonforall oftheimplicationsofinternationalcontractstobedealtwithinonebook.Inpractice, however,questionsariseoutofinternationalcontractsintheircomplexity,irrespectiveoftheacademicdisciplinewithinwhichtheyfall.Thisexplainstheopening sentenceofthispreface,statingthatthisisthebookthatIwouldhavelikedtohave readwhenIstartedworkingwithinternationalcontracts.
Inadditiontothetextbeingbasedonmyownresearchandmypracticalexperience,thematerialpresentedheretakesadvantageoftheresultsoftworesearch projectsthatIhaveorganisedattheUniversityofOslo.
The firstproject,theso-called ‘Angloproject’ ,was financedbytheNorwegian ResearchCouncilanditranfrom2004to2009.Itstartedfromtheobservationthat internationalcontractsarewrittenonthebasisofcommonlawmodels,evenwhen theyaresubjecttoacivilgoverninglaw,andaseriesofso-calledboilerplateclauses wereanalysedtoassesstheirfunctionintheoriginalcommonlawmodelsandto verifywhatlegaleffectstheseclausescouldachieveundercivillaws.Theproject producedthreePhDthesesandaseriesofmaster’stheses(alistmaybefoundat www .jus.uio.no/ifp/english/research/projects/anglo/index.html)andresultedinabook: GiudittaCordero-Moss(ed.), BoilerplateClauses,InternationalCommercial ContractsandtheApplicableLaw (2011).
Thesecondresearchproject,theso-called ‘APA’ (ArbitrationandPartyAutonomy) project,isstillrunning,andis financedbytheUniversityofOsloandtheNorwegian multinationalcompaniesStatoilASA,OrklaASA,YaraASA,aswellasthelaw firms SelmerandDLAPiper.Thisprojectverifiestowhatextentpartyautonomymeets restrictionswhenacontractcontainsanarbitrationclause.Theprojecthassofar resultedinvariousinternationalconferencesandaseriesofmasterstheses(alistmay befoundat www.jus.uio.no/ifp/english/research/projects/choice-of-law/),aswellasin abook:GiudittaCordero-Moss(ed.), InternationalCommercialArbitration:Different FormsandtheirFeatures (2013).
Inaddition,thisbookbenefitsfrommylecturingactivity, firstofallatthe UniversityofOslo,butalsoattheCentreforEnergy,PetroleumandMineralLaw andPolicy,Dundee,attheLLMinInternationalTradeLaworganisedbytheILO,the UniversityofTurinandtheUniversityInstituteofEuropeanStudies,atTheHague AcademyofInternationalLaw,aswellasatthenumerousuniversitiesandorganisationswhereIhavelecturedasaguest.Thequestionsanddiscussionsfollowing alectureorthepresentationofapaperareoftenusefultoillustrateorclarifymatters, andcangiveinspirationfornewissues.
Anotherimportantsourcethatthisbooktakesadvantageofismyparticipationin theUNCITRALWorkingGrouponArbitration,whereIwasthedelegateforNorway duringtherevisionoftheUNCITRALArbitrationRulesandthepreparationof astandardoftransparencyfortreaty-basedarbitration.Thediscussionsinthe
WorkingGroupandtheassistancegivenbytheUNCITRALSecretariathaveprovidedaninvaluableinsightintothedifferentapproachestovariousaspectsof arbitration,aswellasintothelogicofinternationalcooperation.
IwouldliketothankthemembersoftheDepartmentofPrivateLawoftheLaw Faculty,UniversityofOslo,ofwhichIampresentlytheDirector,fortheirsupport andforhavingbornewithmewhileIwas finalisingthisbook.Thanksalsotoresearch assistantsNanetteChristineFlatbyArvesenandOivindK.Foss,oftheAPAproject, whohavecompiledthebibliography.
IwouldliketothankCambridgeUniversityPress,andparticularlySenior CommissioningEditorSineadMoloney,fortheirverypleasantandprofessional cooperationinconnectionwiththepublicationofthisbook.
Finally,IwouldliketoexpressmysincereappreciationandgratitudetoFinola O’Sullivan,EditorialDirectorofLawatCambridgeUniversityPress,forherintelligent andcontinuingsupport.
Treaties,Laws,Decisions
TreatiesandConventions
1924InternationalConventionfortheUnificationofCertainRulesofLaw relatingtoBillsofLading,andProtocolofSignature(HagueRules).
1945StatuteoftheInternationalCourtofJustice,59Stat1031;TS993;39 AJILSupp215(1945).
1948UniversalDeclarationofHumanRights(adoptedbytheUNGeneral AssemblyResolution217A(III)of10December1948),217A(III).
1950ConventionfortheProtectionofHumanRightsandFundamental Freedoms(adopted4November1950,enteredintoforce 3September1953),UNTS213(ECHR).
1955HagueConventionontheLawApplicabletoInternationalSalesof Goods.
1958NewYorkConventionontheRecognitionandEnforcementofForeign ArbitralAwards,10June1958.
1964UNIDROITUniformLawontheFormationofContractsforthe InternationalSaleofGoods(ULF).
1964UNIDROITUniformLawontheInternationalSaleofGoods(ULIS).
1965WashingtonConventionontheSettlementofInvestmentDisputes betweenStatesandNationalsofOtherStates(ICSID).
1968BrusselsConventiononJurisdictionandtheEnforcementofJudgments inCivilandCommercialMatters(ConsolidatedversionCF 498Y0126(01)).
1968ProtocoltoAmendtheInternationalConventionfortheUnificationof CertainRulesofLawRelatingtoBillsofLading(Hague–VisbyRules).
1969ViennaConventionontheLawofTreaties,UNTS1155.
1974NewYorkConventionontheLimitationPeriodintheInternational SaleofGoods,UNTS1511No26119.
1978UnitedNationsInternationalConventionontheCarriageofGoodsby Sea(HamburgRules).
1980UnitedNationsViennaConventiononContractsfortheInternational SaleofGoods,1489UNTS3(CISG).
1988UNIDROITConventiononInternationalFactoring.
1994EnergyCharterTreaty.
1997OECD(OrganisationforEconomicCo-operationandDevelopment), ConventiononCombatingBriberyofForeignPublicOfficialsin InternationalBusinessTransactions.
2003UnitedNationsConventionAgainstCorruption,A/58/422.
2004UnitedNationsConventiononJurisdictionalImmunitiesofStatesand TheirProperty,A/RES/59/38.
2005HCCHHagueConventiononChoiceofCourtAgreements.
2010OrganizationfortheHarmonizationofBusinessLawinAfrica (OHADA)UniformActRelatingtoGeneralCommercialLaw.
2019HCCHHagueConventionontheRecognitionandEnforcementof ForeignJudgmentsinCivilorCommercialMatters.
EULegislativeInstruments
Conventions
1958TreatyontheFunctioningoftheEuropeanUnion,Consolidated versionOJC326/392012.
ConventionontheLawApplicabletoContractualObligations80/934/ECC (1980)OJ(L266/1)1(RomeConvention).
ConventiononJurisdictionandtheRecognitionandEnforcementof JudgmentsinCivilandCommercialMatters,30/10/2007(Lugano Convention).
ConventiononContractsfortheInternationalSaleofGoodsapprovedbythe UnitedNationsCommissiononInternationalTradeLawtogetherwith acommentarypreparedbytheSecretariat(A/CONF./97/5)(draft).
Directives
CouncilDirective86/653/EECof18December1986onthecoordinationof thelawsoftheMemberStatesrelatingtoself-employedcommercial agents.
SecondCouncilDirective88/357/EECof22June1988onthecoordination oflaws,regulationsandadministrativeprovisionsrelatingtodirect insuranceotherthanlifeassuranceandlayingdownprovisionsto facilitatetheeffectiveexerciseoffreedomtoprovideservicesand amendingDirective73/239/EEC.
CouncilDirective90/619/EECof8November1990onthecoordinationof laws,regulationsandadministrativeprovisionsrelatingtodirectlife assurance,layingdownprovisionstofacilitatetheeffectiveexerciseof freedomtoprovideservicesandamendingDirective79/267/EEC.
CouncilDirective93/13/EECof5April1993onunfairtermsinconsumer contracts,OJL95,21April1993.
Directive2000/12/ECoftheEuropeanParliamentandoftheCounciland repealingCouncilDirective93/22/EEC.
Directive2002/47/ECoftheEuropeanParliamentandoftheCouncilof 6June2002on financialcollateralarrangements.
Directive2004/39/ECoftheEuropeanParliamentandoftheCouncilof 21April2004onmarketsin financialinstrumentsamendingCouncil Directives85/611/EECand93/6/EEC.
Directive(EU)2019/771oftheEuropeanParliamentandoftheCouncilof 20May2019oncertainaspectsconcerningcontractsforthesaleofgoods, amendingRegulation(EU)2017/2394andDirective2009/22/EC,and repealingDirective1999/44/EC.
Regulations
Regulation(EC)No864/2007oftheEuropeanParliamentandoftheCouncil of11July2007onthelawapplicabletonon-contractualobligations (RomeII).
Regulation(EC)No593/2008oftheEuropeanParliamentandoftheCouncil of17June2008onthelawapplicabletocontractualobligations.(RomeI).
Regulation(EC)No4/2009of18December2008onjurisdiction,applicable law,recognitionandenforcementofdecisionsandcooperationinmatters relatingtomaintenanceobligations.
Regulation(EU)No1215/2012oftheEuropeanParliamentandofthe Councilof12December2012onjurisdictionandtherecognitionand enforcementofjudgmentsincivilandcommercialmatters(recast) (BrusselsI).
Regulation(EU)2015/848oftheEuropeanParliamentandoftheCouncilof 20May2015oninsolvencyproceedings(recast).
Regulation(EU)2017/2394andDirective2009/22/EC,andrepealing Directive1999/44/EC.
EUDocuments Commission
EuropeanCommission, CommissionNotice – Guidelinesontheapplicability ofArticle81oftheECTreatytohorizontalcooperationagreements(Text withEEArelevance).6January2001,OJC003,pp.2–30.
EuropeanCommission, CommunicationfromtheCommissiontotheCounciland theEuropeanParliamentonEuropeanContractLaw,COM(2001)398 final.
EuropeanCommission, GreenpaperontheconversionoftheRome Conventionof1980onthelawapplicabletocontractualobligationsinto aCommunityinstrumentanditsmodernisation,COM(2002)654 final.
EuropeanCommission, CommunicationfromtheCommissiontothe EuropeanParliamentandtheCouncil – AmorecoherentEuropeancontract law – Anactionplan,COM(2003)68 final.
EuropeanCommission, CommunicationfromtheCommissiontothe EuropeanParliamentandtheCouncil – EuropeanContractLawandthe revisionoftheacquis:thewayforward,COM(2004)651 final.
EuropeanCommission, CommunicationfromtheCommission – Notice –GuidelinesontheapplicationofArticle81(3)oftheTreaty(TextwithEEA relevance).27April2004,OJC101,pp.97–118.
EuropeanCommission, FirstAnnualProgressReportonEuropeanContract LawandtheAcquisReview,COM(2005)456 final.
EuropeanCommission, ProposalforaregulationoftheEuropeanparliament andthecouncilonthelawapplicabletocontractualobligations(RomeI), COM(2005)650 final.
EuropeanCommission, EvaluationReportontheFinancialCollateral ArrangementsDirective (2002/47/EC)COM(2006)833.
EuropeanCommission, ProposalforaregulationoftheEuropeanparliamentand ofthecouncilonaCommonEuropeanSalesLaw,COM(2011)635 final(CESL).
EuropeanCommission, CommissionStaffWorkingDocumentGuidanceon restrictionsofcompetition ‘byobject’ forthepurposeofdefiningwhich agreementsmaybenefitfromtheDeMinimisNotice,SWD(2014)198 final.
EuropeanCommission, CommunicationfromtheCommissiontothe EuropeanParliament,theCouncil,theEuropeanEconomicandSocial CommitteeandtheCommitteeoftheRegionsontheapplicablelawtothe proprietaryeffectsoftransactionsinsecurities (COM(2018)89 final).
EuropeanCommission, ProposalforaregulationoftheEuropeanparliamentandofthecouncilonthelawapplicabletothethird-partyeffectsof assignmentsofclaims ,COM(2018)96 fi nal(2018/0044)(COD).
EuropeanCommission,DecisionC(2018) finaloftheEuropeanCommission of24May2018,CaseAT.39816.
EuropeanCommission, Commissiondecisionof29.6.2018onoutsideactivitiesandassignmentsandonoccupationalactivitiesafterleavingtheService Brussels,C(2018)4048 final.
EuropeanCommission.Directorate-GeneralforJusticeandConsumers. Studyonduediligencerequirementsthroughthesupplychain: finalreport (PublicationsOffice,2020).
EuropeanCommission, ProposalforaDirectiveonCorporateSustainability DueDiligence,COM(2022)71 final.
CounciloftheEuropeanUnion, DiscussiononthetopicoftheCommon FrameofReference(CFR)intheCounciloftheEuropeanUnion, initiatedbythePresidencyon28July2008 ,8286/08JUSTCIV68 CONSOM39.
CourtofJustice
CourtofJusticeoftheEuropeanUnion,Opinion1/17,30April2019.
Parliament
EuropeanParliament,ResolutionoftheEuropeanParliamentontheAnnual LegislativeProgrammeofMarch16,2000,29/12/2000,OJC377.
EuropeanParliament. ‘AnnualreportfromtheCounciltotheEuropean ParliamentonthemainaspectsandbasicchoicesoftheCommonForeign andSecurityPolicy(CFSP),2009EuropeanParliamentresolutionof 11May2011ontheannualreportfromtheCounciltotheEuropean ParliamentonthemainaspectsandbasicchoicesoftheCommonForeign andSecurityPolicy(CFSP),presentedtotheEuropeanParliamentin applicationofPartII,SectionG,paragraph43oftheInterinstitutional Agreementof17May2006(2010/2124(INI))’ . OfficialJournalofthe EuropeanUnion,2012/C377E/06.
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DomesticLegislation
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CódigoCivilyComercialdelaRepúblicaArgentina(aprobadoporlaLeyN° 26.994de1deoctubrede2014,ymodificadoporelDecretoN°62/2019de 21deenerode2019)(CivilandCommercialCode).
Austria
GesetzüberdasinternationalePrivatrecht – IPR-Gesetz of15June1978, BGBl.No304/1978(PrivateInternationalLawAct).
Belgium
CodeJudiciaireof10October1967(CodeofCivilProcedure).
Brazil
FederalLawNo9,307/1996,amendedbyFederalLawNo13,129/2015 (ArbitrationAct).
LawNo13.655,IntroductoryActtotheNormsofBrazilianLaw(IANBL).
France CodeCivil.
Codedeprocédurecivile(CodeofCivilProcedure).
Germany
BürgerlichesGesetzbuch(BGB)(CivilCode). EinführungsgesetzzumbürgerlichenGesetzbuche(EGBGB)(Introductory ActtotheCivilCode).
DeutschesRichtergesetz(DriG)(JudiciaryAct). Handelsgesetzbuch(CommercialCode). Zivilprozessordnung(ZPO)(CodeofCivilProcedure).
Italy
CodiceCivile(CivilCode). PrivateInternationalLawActNo218of1995.
Japan
ActNo78of2006onGeneralRulesforApplicationofLaws. PrivateInternationalLawAct.
Lebanon
CodeofCivilProcedureLegislativeDecreeNo90/83.
Netherlands CodeofCivilProcedureBook4(ArbitrationAct).
Norway
MaritimeCodeof27May1932No3.
MinistryofJustice’sReportontheSalesofGoodsActandonratificationof theCISG,Ot.prp.nr.80(1986–87).
SaleofGoodsActof13May1988No27.
MinistryofJustice’sReportontheActonchoiceoflawforinsurance contracts,Ot.prp.nr.72(1991–92).
AgencyActof19June1992No96.
ActontheLawApplicabletoInsuranceAgreements27November1992 No111.
CompanyActof13June1997No44.
LawCommissionReportontheArbitrationAct,NOU2001:33. ArbitrationActof14May2004No25.
CriminalActof20May2005No28.
DisputesActof17June2005No90.
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Parliament ’ sReportonrati fi cationoftheConventiononImmunities, St.prp.nr.33(2005 – 2006).
CustomsActof21December2007No119. ContractsActof31May2018No4.
Actrelatingtoenterprises’ transparencyandworkonfundamentalhuman rightsanddecentworkingconditionsof18June2021No99.
Paraguay
Law1879/02forarbitrationandmediation(ArbitrationAct). Law5393of2015onthelawapplicabletointernationalcontracts.
Peru
LegislativeDecree1071(ArbitrationAct).
Portugal
Law63/2011(ArbitrationAct).
Russia
LawonInternationalCommercialArbitration1993.
Sweden
LawCommissionReportontheArbitrationAct,SOU1994:81. GovernmentalReportontheArbitrationAct,prop1998/99:35. Act1999:116(ArbitrationAct).
Switzerland
CodeofObligations,SR/RS22. PrivateInternationalLawAct(PILA).
Turkey
ActNo5718/2007onPrivateInternationalandProceduralLaw.
UnitedKingdom
LawReform(FrustratedContracts)Act1943. MisrepresentationAct1967. UnfairContractTermsAct(UCTA)1977. SaleofGoodsAct1979. ArbitrationAct1996.
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UnitedStates
FederalArbitrationAct1925.
AmericanLawInstitute,Restatement(First)ofConflictofLaws(1934). AlienTortsAct1948. UniformCommercialCodeoftheUnitedStates.
AmericanLawInstitute,Restatement(Second)ofConflictofLaws(1971). AmericanLawInstitute,UnitedStatesRestatement(Second)ofContracts (1981).
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