Inclusion of the Sanctions as the Overriding Mandatory Rules in Referring to the Governing law

Abstract

In case of reference to a law as governing law, whether determined through the application of conflict of laws rule or is agreed by the parties, the question is whether this reference to the governing law involves all its legal provisions such as, inter alia, those which merely protect public interests like the rules related to the sanctions, or not. If the parties are aware of the fact that they are subjected to the sanctions at the time of concluding a contract or choosing the governing law, a trade sanction imposed by the state of governing law would be treated like the other provisions of the governing law. Therefore, first, the trade sanction imposed by the state of governing law before the conclusion of a contract or after its conclusion and before choosing the governing law, will be treated the like the other provisions of the governing law. Second, the sanction, which is imposed after concluding a contract or after both parties agree on the governing law will be applied only if it can meet the same conditions which are necessary for the application of a sanction imposed by the state except the state of the governing law.

Keywords

• purpose of sanctions
• public interests
• private interests
• governing law
• overriding mandatory rules