Choice of law in international commercial arbitration
University of British Columbia
Master of Laws - LLM
The problems faced by an arbitrator in determining which law to apply to the substance of the dispute before him are considerable. His problems are alleviated when he finds a contractual clause specifying an express choice of law; he therefore gives effect to the parties choice of Taw. However, when parties fail to indicate in their contract a law to govern their disputes, an arbitrator, unlike a judge does not have national rules to guide him in determining this law. The problems faced by an arbitrator has been subject to extensive debates and many authors have advocated solutions to these problems which daily face the arbitrators. These discussions have centered around the issue whether an arbitrator should apply conflict of law rules, non-national rules or base his decision on an autonomous legal order, commonly referred to as the New Lex Mercatoria. The proponents of the latter view argue that arbitrators should not take into consideration any conflict of law rules or base their decisions on a national legal order. This concept of New Lex Mercatoria, appears to be gaining considerable support amongst arbitrators. It is argued by the supporters of this view that the principle of party autonomy, which is universally recognized by all trading nations, allows arbitrators to base their decisions on this non-national legal order. This thesis too is also directed to the study of the above mentioned issues. An analysis of the above mentioned views show that the New Lex Mercatoria is still vague and uncertain. It will be argued that it is premature to advocate an autonomous legal order which is yet to be recognized by national legal systems. It is shown that party autonomy is greatly affected by protective legislation of the state and by issues of public policy. Therefore this thesis concludes that an arbitrator ought to refer to conflict of law rules in order to ensure enforceability of the arbitration award. While the present state of affairs is hardly conducive to international trade, an autonomous legal order requires the joint efforts of not only the business world but of national legal systems acting as international legislators.
Law, Peter A. Allard School of