Choice Of Law: Problems In International Commercial Arbitration

INTRODUCTION

A. DETERMINATION OF THE APPLICABLE LAW BY THE PARTIES

When an arbitrator has to decide which law to apply for the solution of the dispute, he may find a contractual clause providing an express choice of law¹: "The validity, construction and performance of this contract shall be governed by and in accordance with the law of..." or similar provisions. The parties may provide for the application of some national law or for some nonnational set of rules.

IF THE PARTIES CHOOSE A NATIONAL LAW

In such situation, the arbitrator has to decide: should he test the autonomy of the parties in choosing the applicable law under a conflict of laws system or should he recognize that freedom without relying on any conflict of laws rule? The party autonomy is widely recognized both in common law and civil law. However, not every country gives parties unlimited freedom to choose the applicable law. Since every right, power or duty of a person has its root in the law