Asian European Arbitration Centre

Choice of Law Clause

The Choice of Law Clause offers the possibility to clarify the applicable substantial law to a dispute. This might be a national law or a neutral set of rules.

Model Clause

  • Arabic

    يخضع العقد لـــــــــــــــــــــــ

    أ) قانون _____________________ [يتم ادراج اسم الدولة]، أو

    ب) اتفاقية الامم المتحدة بشأن عقود البيع الدولي للبضائع لسنة 1980 دون اعتبار لأي تحفظ وطني مكملةً بمبادئ اليونيدروا المتعلقة بالعقود التجارية الدولية، بالنسبة للمسائل التي لا تخضع لاتفاقية البيع الدولي للبضائع، والمبادئ مكملة بالقانون الوطني الواجب التطبيق لولا ذلك، أو

    ج) مبادئ اليونيدروا المتعلقة بالعقود التجارية الدولية مكملةً بالقانون الوطني الواجب التطبيق لولا ذلك.

  • Chinese

    以下法律适用选择条款由《亚洲欧洲仲裁中心汉堡仲裁规则》第35条规定:

    本合同应适用

    a) ____________________(国家)的法律,或者

    b)《1980年联合国国际货物买卖合同公约》,不考虑任何国家保留。对于《1980年联合国国际货物买卖合同公约》不涉及的情形,补充适用国际统一私法协会制定的《国际商事合同通则》和其他可以适用的国家法律的相关规定,或者

    c) 国际统一私法协会制定的《国际商事合同通则》,并补充适用其他可以适用的法律。

  • English

    The contract shall be governed by

    a) the law of the jurisdiction of ____________________ [country to be supplemented], or

    b) the United Nations Convention on Contracts for the International Sale of Goods of 1980 (CISG) without regard to any national reservation, supplemented for matters which are not governed by the CISG, by the UNIDROIT Principles of International Commercial Contracts and these supplemented by the otherwise applicable national law, or

    c) the UNIDROIT Principles of International Commercial Contracts supplemented by the otherwise applicable law.

  • German

    Das auf diesen Vertrag anwendbare materielle Recht ist

    a) dem materiellen Recht von ____________________ [Land hier einfügen], oder

    b) dem UN-Übereinkommen über Verträge über den internationalen Warenkauf von 1980 (United Nations Convention on Contracts for the International Sale of Goods of 1980 - CISG) ohne seinen etwaigen natioinalen Vorbehalt; ergänzt um die UNIDROIT Grundregeln für Internationale Handelsverträge für die Bereiche, die vom CISG nicht abgedeckt sind, und diese wiederum ergänzt um das ansonsten anzuwendende nationale Recht, oder

    c) die UNIDROIT Grundregeln für Internationale Handelsverträge, ergänzt um das ansonsten anwendbare Recht.

  • Japanese

    本契約は、以下の法に準拠する

    a) ____________________[国名を補充]の法域の法、

    b) いかなる国の留保にかかわらず、1980年国際物品売買契約に関する国際連合条約(CISG)、並びに、CISGにより規律されない事項に関しては、補足として、ユニドロワ国際商事契約原則及び適用される国内法、又は、

    c) 適用される法により補足される、ユニドロワ国際商事契約原則。

  • Korean

    계약의 준거법은 다음과 같다.

    a)    ____________________ [국가]의 법, 또는

    b)    국가별 유보를 배제한 1980국제물품매매계약에 관한 유엔협약(CISG). 단, CISG가 적용되지 않는 사항에 대해서는 국제사법위원회 국제상사계약원칙이 보충적으로 적용되고, 이는 또 다시 기타 적용 가능한 국내법에 의하여 보충됨, 또는

    c)    기타 적용 가능한 법에 의하여 보충된 국제사법위원회 국제상사계약원칙.

  • Portuguese

    O direito aplicável ao presente contrato é

    a) o Direito do(a)(e) ____________________ [inserir país aqui], ou

    b) a Convenção das Nações Unidas sobre Contratos de Compra e Venda Internacional de Mercadorias de 1980 (CISG), sem as eventuais reservas nacionais; suplementada, para as matérias não abrangidas pela CISG, pelos Princípios UNIDROIT sobre Contratos Comerciais Internacionais, e estes, por sua vez, complementados pela legislação nacional aplicável, ou

    c) os Princípios UNIDROIT sobre Contratos Comerciais Internacionais, suplementados pela legislação aplicável.

Explanatory Comments

  • Introduction

    If parties do not agree on a choice of law clause, any dispute about the contract will start by determining the applicable law. In the absence of a choice of law clause, the ASEAC Rules point out that the arbitral tribunal shall apply the rules of law which it determines to be appropriate. As a result, the parties are free to leave the decision of the applicable law to the arbitral tribunal.

    However, it makes sense to have a clear joint mind on the applicable law and/ or the applicable rules of law. For that purpose, it does make sense for parties to agree already at the negotiation process of the contract on the applicable law and/or rules of law.

    The Model Choice of Law Clause contains both, the freedom to agree on a certain national law as well as the option to agree on a neutral set of rules.

    The model clause is provided in Art. 35 ASEAC Rules.

  • Option A

    a) the law of the jurisdiction of _______________ [country to be supplemented],

    Option A of the model choice of law clause proposes the classical choice of a national law. Sometimes parties have difficulties to agree on one specific national law as no party prevails by imposing its own domestic law or because the costs of research of a neutral law are perceived as too expensive. For such cases Options B and C indicate a possible way out.

  • Option B

    b) the United Nations Convention on Contracts for the International Sale of Goods of 1980 (CISG) without regard to any national reservation, supplemented for matters which are not governed by the CISG, by the UNIDROIT Principles of International Commercial Contracts and these supplemented by the otherwise applicable national law,

    Option B is a clause for international sales contracts or for mixed contracts with an element of sale. Option B essentially refers to the United Nations Vienna Convention on the International Sale of Goods (CISG). The CISG provides an uniform international sales law, which text and the international jurisdiction are easily accessible. By now, there is also international case law available online.

    Please note that option B in the choice of law clause refers to the CISG "without regard to any national reservation". That excludes the application of national reservations made by the countries where the parties come from. For example that excludes the (outdated) reservation made by the People's Republic of China under Article 96 CISG. The reservation requires written form with respect to the form of a contract and is thereby more rigid than the new Chinese contract law itself.

    As the CISG does not cover all issues, Option B provides that it is supplemented for those issues which it does not cover by the UNIDROIT Principles of International Commercial Contracts.

  • Option C

    c) the UNIDROIT Principles of International Commercial Contracts supplemented by the otherwise applicable law.

    Option C provides for a choice of parties to refer their contract to the UNIDROIT Principles of International Commercial Contracts in total. By now, there is access to over 400 decisions from arbitration tribunals and courts from around the globe.

  • UNIDROIT and the UNIDROIT Principles

    The UNIDROIT Principles of International Commercial Contracts (UNIDROIT Principles) are an innovative approach to the law governing international contracts. They are a non-legislative codification or "restatement" of the general part of the law of international commercial contracts. They have been prepared by a group of independent experts from all the major legal systems and geo-political areas of the world, set up by the International Institute for the Unification of Private Law (UNIDROIT), an intergovernmental organisation composed of 63 member States - including China and most European states.

    First published in 1994, in their present edition of 2010 the UNIDROIT Principles consist of a Preamble and about 200 articles divided into 11 chapters on general provisions, formation and authority of agents, validity, interpretation, content including third party rights and conditions, performance including hardship, non-performance and remedies, set-off, assignment of rights, transfer of obligations and assignment of contracts, limitation periods and plurality of obligors and of obligees. Each article is accompanied by comments and, where appropriate, by factual illustrations intended to explain the reasons for the black letter rule and the different ways in which it may operate in practice.

    The UNIDROIT Principles represent a mixture of both tradition and innovation. In other words, while as a rule preference was given to solutions generally accepted at international level ("common core" approach); exceptionally solutions best suited to the special needs of international trade were preferred even though they represented a minority view at domestic law level ("better rule" approach).

    Defined as "a significant step towards the globalisation of legal thinking" (J.M. Perillo), the UNIDROIT Principles may - and actually do - serve a number of important purposes in practice.

    They have been taken by a number of national legislatures as a source of inspiration for the reform of their domestic contract laws.

    Finally, and most importantly, arbitral tribunals increasingly refer in their decisions to the UNIDROIT Principles. In a number of decisions they have been applied as the rules of law governing the substance of a dispute, either because expressly so requested by the parties or because the contract referred to "general principles of law", "lex mercatoria" or the like. Arbitrators considered the UNIDROIT Principles a particularly authoritative expression of such supra-national or transnational principles and rules of law. In other decisions the UNIDROIT Principles have been used to interpret international uniform law instruments, in particular the CISG. In still other decisions they have been invoked in support of a particular solution adopted under the applicable domestic law or in order to fill gaps in the latter.

    At its 40th Plenary Session in 2007, the United Nations Commission on International Trade Law (UNCITRAL) formally endorsed the UNIDROIT International Commercial Principles and recommended their use by the international business community.