EFFECTIVENESS OF INDICATION OF LEX MERCATORIA IN A CHOICE-OF-LAW CLAUSE IN INTERNATIONAL COMMERCIAL CONTRACTS

Abstract

The rule of unlimited choice of law for contractual obligations results from the rule of conflict of law autonomy of contracting parties’ will, generally accepted in the international turnover. Concerns are raised by the matter of parties’ indication of transnational rules of law or so-called „soft law” acts, which will be applicable to the contract concluded within international commercial transaction. Being included in the “lex mercatoria” notion, they constitute – besides international legislation (uniform law) – one of the elements of the international commercial law. The practice of international trade requires application of legal solutions corresponding to its specific features, which are often not provided by national laws. Neutral solutions deriving from the business practice and understood by the turnover participants in the same way, constitute an alternative to the choice of a national law. The effectiveness of indication of lex mercatoria in a choice-of-law clause depends on whether a potential dispute resulting from the contract will be resolved by a national court or an arbitral tribunal. Unlike national courts, arbitral tribunals respect the parties’ choice of lex mercatoria for the proper law of the contract. Due to a general character of rules of law, it is recommended to indicate in the choice-of-law clause a specific set of transnational rules prepared for transactions of international trade (such as UNIDROIT Principles of International Commercial Contracts). The effectiveness of such clauses is not in principle questioned by national courts in most countries in procedures of recognition and enforcement of foreign arbitral awards.

Keywords

• lex mercatoria in a choice-of-law clause, international commercial contracts, international trade usages, principles of law and “soft law” acts, arbitration jurisdiction