File(s) under permanent embargo
Harmonisation of choice of law rules in commercial contracts in the One Belt One Road countries: Will the Hague principles on choice of law in international commercial contracts serve as a good model?
In October 2013, President Xi Jinping of the People’s Republic of China proclaimed his nation’s big dream of the One Belt One Road (hereinafter the ‘OBOR’) initiative. This project comprises the building of the ‘Silk Road Economic Belt’ and the ‘21st-Century Maritime Silk Road’. Its primary aim is to bring closer cooperation among countries in Asia, Africa, and Europe to enhance cross-border trade supported by seamless infrastructure. This dream is ideal only if countries along the OBOR route have the same legal system and adopt the same laws. In reality, the world is far from ideal. Diverse legal systems and laws will impede a vision of the seamless economy. The Hague Conference on Private International Law on 19 March 2015 approved a text of the ‘Principles on Choice of Law in International Commercial Contracts’ (hereinafter the ‘Principles’). Although these Principles are not a binding international convention, they may, as stated in the Preamble, ‘be used as a model for national, regional, supranational, or international instruments’. Moreover, courts or arbitral tribunals may refer to the Principles in reaching their decision. It is doubtful to what extent courts can utilise the Principles, bearing in mind they are bound by national conflict of laws rules. Far from harmonising the choice of law rules in international commercial contracts as the 'Rome I Regulation' does on the European level, the focus of the Principles is limited to upholding and reinforcing a concept of 'party autonomy'.
While the concept of party autonomy is enshrined in contemporaneous statutes and international conventions, the concept does not gain universal acceptance. Exceptions or limitations to the party autonomy also vary among the laws of each country. The hope is that the Principles will come into play purportedly to bridge such differences. Nevertheless, it is highly questionable to what extent the Principles are likely to achieve their aims. The author argues in this chapter that this new 'brainchild' of the Hague Conference on Private International Law is likely to meet with limited use and no success. As a long saga that led to the drafting of the Principles was well-elaborated in the Commentary attached to the Principles, it will not be repeated here. Nor is it possible to examine all 12 provisions - many of which are problematic. In this chapter, the author will focus his attention on certain aspects of the Principles to elaborate on his argument. These provisions are chosen for consideration in this chapter because they are contentious, they give rise to problems of interpretation, or else they do not reflect practices in certain OBOR jurisdictions. Of course, it is not possible and the author will not pretend that he has surveyed all conflict of law rules of all 67 countries along the OBOR route. To the extent possible, the author will refer to conflict of law rules of some of these countries for comparative purposes. This chapter is divided into two parts. In the first part, the concept of 'party autonomy' will be broadly explained and the author will then focus on the contentious Article 4, which purports to enhance the concept of party autonomy by allowing the parties to choose non-state laws. Also, in the same part, a short note will be made with regard to Article 5, addressing the tacit or the implied choice of law. In the second part, the author will discuss the exceptions to the party autonomy - namely overriding mandatory rules and public policy in Article 11.
Publication titleChina’s One Belt One Road Initiative and Private International Law
EditorsP Sooksripaisarnkit, SR Garimella
Department/SchoolAustralian Maritime College
PublisherRoutledge Taylor & Francis Group
Place of publicationOxford, UK
Rights statementCopyright 2018 individual chapters, the contributors