Party Autonomy and its Limits: Convergence Through the New Hague Principles on Choice of Law in International Commercial Contracts

Abstract

The approaches taken by legislators, national courts and arbitral tribunals to choice of law in international commercial contracts differ both in terms of the law which the parties may choose and the limits of that choice. Given the importance of this issue for international commerce, the Hague Conference on Private International Law has sought to create some consistency in approach. It has developed an instrument which reinforces party autonomy and espouses the principle that the law chosen by the parties will govern the contract to the greatest possible extent, subject to clearly defined limits. The Hague Principles on International Commercial Contracts seek to harmonize approaches to choice of law in two ways. First, they provide a universal model including best practice solutions that lawmakers can use to create, supplement, or develop their choice of law rules. Secondly, the Hague Principles seek to “level the playing field” between arbitration and litigation. The Hague Principles allow parties to choose not only State law but also non-State law irrespective of whether they arbitrate or litigate their dispute while at the same time ensuring that the parties’ choice of the law does not have the effect of excluding imperative norms (overriding mandatory rules and rules of the ordre public). After tracing the development of the Hague Principles this article explores each of these aspects, and offers points of comparison with the conflict of laws rules applicable in the United States, the European Union, and China.

Keywords: Choice of law, comparative law, international commercial contracts, law reform, soft law, non-State law, Hague Conference on Private International Law, United States of America, party autonomy, arbitration, battle of forms, ordre public, overriding mandatory rules