Systemic and Topical Mapping of the Relationship of the Draft Common Frame of Reference and Arbitration

Abstract

The work endeavors to blaze a trail to the uncharted relationship of the most meaningful recent product in the area of European private and commercial law – the Draft Common Frame of Reference (DCFR) – and international commercial arbitration. The focus is on three areas of private and commercial law – i.e., sales, franchise and secured transactions (collateral) law (systemic mapping) – and on the specific issues of culpa in contrahendo (liability for breaking the negotiations), remedies for breach of contracts and force majeure (topical mapping).

The main findings of the paper are the following:

First, as arbitration of sales disputes has become quite normal by now, the DCFR – especially the six-volumes of Comments thereto (Oxford University Press publication) – could turn into a valuable tool of orientation for laws of Europe.

Secondly, Europe could learn from the rich experiences of the United States as far as the arbitration of franchise and financial contracts (including disputes related to self-help repossession) is concerned. This is of importance because the DCFR is recommending introduction of business format franchise as a nominated contract and out-of-court enforcement (self-help) as important building block of a new secured transactions law for Europe; both essentially stemming from the United States.

Thirdly, primarily due to the backpedaling of the European Union, however, the advancement of the DCFR as a tool for arbitrators is doomed to be very slow. One of the problems is that, save some isolated efforts, nobody is really working on spreading the information on the DCFR, in particular in arbitral circles.

Fourthly, the DCFR (esp. the Comments) might prove to be, however, a valuable tool for comparatively oriented scholars and for teaching European private and commercial law.

Last but not least, perhaps the most important contribution of the DCFR are enshrined in Book IX and X, the two clearly most forward-looking parts of this soft law instrument. Inherent in these are two important recommendation for Europe: while the message of Book IX is that Europe should embrace the unitary model of secured transactions law originating in Article 9 of the Uniform Commercial Code, Book X stresses the need of the introduction of the concept of ‘trust.’

Keywords: force majeure, culpa in contrahendo, arbitration of franchise disputes, arbitration of secured transactions claims, self-help repossession