FOR EDUCATIONAL USE ONLY
Int. A.L.R. 2003, 6(3), 65-74
International Arbitration Law Review
2003
Article
USING THE UNIDROIT PRINCIPLES OF INTERNATIONAL COMMERCIAL CONTRACTS IN
INTERNATIONAL COMMERCIAL ARBITRATION
Anthony C. Sinclair.
Copyright (c) 2003 Sweet and Maxwell Limited and Contributors
Legislation: Principles of International Commercial Contracts 1994 (UNIDROIT)
Subject: ARBITRATION. Other related subjects: Conflict of laws. Contracts. International law
Keywords: International commercial arbitration; International contracts; Uniform laws
Abstract: Reviews the ways in which the UNIDROIT Principles of International Commercial
Contracts 1994 have been used by international commercial arbitration tribunals to meet
the intentions of parties. Discusses decisions on choice of law issues and when the
Principles are applicable, with reference to the contract's governing law clause and in
circumstances when it is impossible to establish the relevant rule of applicable law, and
their use when interpreting international uniform law instruments. Assesses their
effectiveness and increasing usefulness to business, counsel and arbitrators.
*65 I. An introduction to the UNIDROIT Principles of International Commercial Contracts
UNIDROIT, the International Institute for the Unification of Private Law, was formed
in 1926 within the framework of the League of Nations and is charged with the unification
of certain areas of transnational commercial law. In drafting the 1994 Principles of
International Commercial Contracts [FN1] ("the Principles"), the hope of the UNIDROIT
Working Group was to facilitate better transnational commercial relations by
disseminating softlaw standards of international contract law.
The Principles comprise 119 Articles divided into seven Chapters spanning "General
Provisions"; "Formation"; "Validity"; "Interpretation"; "Content"; "Performance" in two
parts: "Performance in General" and "Hardship"; and lastly "Non-Performance"
comprising four sections: "Non-Performance in General"; "Right to Performance";
"Termination"; and "Damages". Part II of the Principles is underway and may be finalised
later this year or the next; it is expected to deal with issues of agency, assignment, thirdparty rights, set-off, limitation of actions and waiver. [FN2] Part III is no doubt just over
the horizon and could include rules on the consequences of illegality and unjust
enrichment.
Preparation of the Principles has been largely based on comparative studies of various
national legal systems and international texts including in particular, the 1980 United
Nations Convention on Contracts for the International Sale of Goods ("CISG"). [FN3] The
drafters of the Principles apparently took some account of model contracts and contract
practice, [FN4] but their aim has not necessarily been to find compromises between legal
systems, or always to reflect commercial practice. In some articles UNIDROIT has sought
or developed an "ideal" solution to a particular issue; this lead Furmston, a rapporteur on
the drafting team, to admit that the Principles may occasionally reflect the drafters'
aspirations and policy preferences. [FN5] As will be indicated below, tribunals have, in
fact, occasionally ruled that certain articles go further than accepted in current
transnational practice. [FN6]
The movement to create uniform contract law, [FN7] of which *66 the UNIDROIT
Principles is but one element, [FN8] should not be considered merely an academic
exercise; it is a live subject, but only to the extent that it serves real needs of business
people. [FN9] On the evidence available to date, business people have almost never
expressly subjected their contracts to the Principles, [FN10] and courts are unlikely to
apply them unless asked and so have seldom done so. [FN11] However, the Principles
have become closely associated with international commercial arbitration and they have
been applied or referred to in a growing number of awards. [FN12] It is not the purpose
of this article to discuss in detail the application of particular articles, however, one may
observe generally that the provisions of Chap.7 on non-performance have been most
frequently applied; this is unsurprising as we are dealing here with dispute settlement.
Individually, Art.1.7 on good faith and fair dealing has been applied most often followed
by Art.7.4.9 on payment of interest for failure to pay money. Other articles frequently
cited are the main principles on contract interpretation, Art.5.3 on cooperation between
the parties and the articles on hardship.
Although it is fair to conclude that the vast majority of businesses continue to prefer
to subject their transnational commercial activities to a developed national system of law,
in certain situations the Principles are particularly apt precisely because they transcend
the constraints of any given national legal system. [FN13] In practice it is apparent that
the Principles are proving helpful to business people, counsel and arbitrators.
II. The uses of the UNIDROIT Principles in International Commercial Arbitration
It is quickly apparent from a discussion of the categories of application in the
preamble to the Principles that their exact role in the practice of international commercial
arbitration is floating and imprecise [FN14]; they hover between being a proper law and a
set of rules that may be incorporated into a contract by reference. The preamble sets out
the following possibilities:
"They shall be applied when the parties have agreed that their contract be governed
by them. They may be applied when the parties have agreed that their contracts be
governed by general principles of law, the lex mercatoria or the like.
*67 They may provide a solution to an issue raised when it proves impossible to
establish the relevant rule of the applicable law.
They may be used to interpret or supplement uniform law instruments."
This paper will discuss the use, and possible abuse, of the Principles in arbitration
practice, both in the situations in which the Principles themselves say they are to apply as
well as in the broader range of situations in which arbitrators do in fact refer to them.
Any abuse should not be overstated. Nevertheless, it does seem from an analysis of the
published awards that a minority of arbitrators shy away from detailed explanations of
the conflicts techniques employed, and occasionally make certain leaps of faith in their
reasoning, when they choose to refer to the Principles. [FN15]
They shall be applied when the parties have agreed that their contract be governed by
them
On the basis of party autonomy--that mantra of international commercial arbitration
almost universally recognised in national legislation, [FN16] treaty law [FN17] and
arbitration rules [FN18]--the arbitrator must apply the law or standard selected by the
parties provided that it is considered compatible with any applicable domestic law. In the
event of inconsistency, it should be only a clash with ordre public international or
mandatory rules of domestic law applicable to international transactions that would
exclude application of the parties' chosen law. [FN19] More often than not the parties'
choice can include a system of law having no objective connection with the transaction or
neutral rules of law having no connection with any legal system. For instance, Art.28(1)
of the UNCITRAL Model Law allows disputes to be decided "in accordance with such rules
of law as are chosen by the parties as applicable to the substance of the dispute." [FN20]
The term "rules of law" implies that arbitrators need not apply a system of national law,
or indeed any system at all, and so these arbitration laws would permit a Tribunal to
apply the UNIDROIT Principles.
The parties' agreement may be set out in advance in a governing law clause in the
contract. There is no known award to date in which the parties have in fact done so, but
one should recall that they are still in their formative years; there is also evidence of
contracts that do refer to the Principles, so such cases may arise in time. [FN21]
Agreement to rely on the Principles may also be reached after a dispute has arisen in
the parties' terms of reference or during pleadings. There are many examples of awards
in which the Principles have been expressly chosen in this second way. In an ad hoc
arbitration held in Paris in 1997, the parties agreed after a dispute had arisen, that the
tribunal should apply Russian law, "if necessary supplemented by the UNIDROIT
Principles". [FN22] Parties have similarly agreed that their disputes be settled "in
conformity with the UNIDROIT Principles tempered by recourse to equity" [FN23]; that
the tribunal should apply the Principles to any question unresolved by the terms of their
contract [FN24]; or "to the extent that the tribunal considers it necessary and
appropriate". [FN25]
Where the parties have not chosen an applicable law to govern their dispute it falls
for the tribunal to apply the conflicts rules it determines applicable to identify the
governing law or rules of law, or in the case of the LCIA and ICC Arbitration Rules, for
instance, to directly determine that law or those rules of law. [FN26]
For example, in ICC Case 9875, the Tribunal could not identify any decisive
connecting factors in favour of Japanese or French law where the parties of those two
nationalities had failed to agree on the law applicable to a licensing agreement in respect
of a third country. Ruling that this agreement was "not appropriately governed by the
national law of one of the parties, failing agreement on such a choice", the tribunal held
that the most appropriate rules of law to be applied were the lex mercatoria, the content
of which were in part contained in the UNIDROIT Principles. [FN27]
*68 In arbitrations governed by institutional rules such as the LCIA or ICC, tribunals
are rightly free to apply the UNIDROIT Principles in the absence of the party's choice of
the applicable law. [FN28] That this freedom exists is supported by at least two facts.
First, Art.V of the New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards 1958 does not list errors in determining the law applicable to the merits
of the dispute as a ground for non-recognition or enforcement. [FN29] Secondly, many of
these arbitration rules also allow arbitrators to take account of trade usages, which may
legitimately include certain of the Principles. [FN30]
On the other hand, Art.28(2) of the UNCITRAL Model Law directs that, in the absence
of a choice of applicable law by the parties, the arbitral tribunal shall apply the law
determined by the conflicts rules that it considers applicable. Set against the use of the
term "rules of law", the latter wording, as adopted in some national arbitration laws,
[FN31] implies a narrower approach that would exclude direct recourse to the Principles
as the governing law.
In a select number of arbitrations, two elements (1) that a contract lacks an explicit
choice of law clause and (2) that it is made with a state or state entity, have been taken
as together indicating the application of general principles of law to the contract. Rather
than an implied choice of general principles as discussed in the following section, this is
the so-called "negative choice of law". [FN32] And in many of these ground-breaking
cases the UNIDROIT Principles have been referred to as a convenient guide in
determining the content of the applicable rules of law.
Mayer observes correctly that it is no coincidence that the leading cases on negative
choice have concerned contracts involving a state or government agency as party. The
tendency to interpret the silence of the parties as a negative choice does not normally
exist in commercial contracts between private parties because more often than not
silence reflects the parties' neglect or an inability to agree on a suitable formula. [FN33]
A further decisive factor other than mere silence must exist; one might be the parties'
desire to have a "level playing field" for the resolution of their case. This is where the
UNIDROIT Principles may have a part to play, "for they are not only appropriate and well
adapted to govern international cases but also neutral". [FN34]
The notion has been met with some scepticism. [FN35] Certainly arbitrators should
not too readily construe silence as a negative choice. Yet negative choice finds support in
a number of cases and academic writings. Lalive reports that it is his experience that,
occasionally, parties have in fact agreed, by their silence, to exclude the application of
any given national law including that of a third country, while failing to agree on any
satisfactory alternative formula. [FN36]
ICC Case 7375 [FN37] was a clear example of negative choice. It concerned a
contract for supply of goods from a US seller to a Middle Eastern government agency.
The tribunal considered that the parties had made a negative choice of law. It found that
the absence of a choice of law provision, together with the fact that one party was a
ministry of state, should be interpreted as implying a mutual intent to avoid the other
party's national law. The evidence disclosed that "none of the parties ... would have been
prepared to accept the other party's national law". [FN38] Nor was there any basis for
applying the national law of a third state; given the absence of any significant connection
between the transaction and any third country, such a choice would only be arbitrary. To
maintain the neutrality the parties had manifestly desired, the tribunal chose to apply
"those general principles and rules of law applicable to international contractual
obligations which qualify as rules of law and which have earned a wide acceptance and
international consensus in the international business community, including notions which
are said to form part of a lex mercatoria, also taking into account any relevant trade
usages as well as the UNIDROIT Principles, as far as they can be considered to reflect
generally accepted principles and rules." [FN39]
*69 ICC Case 8261 also involved the negative choice technique. A contract between
an Italian company and a government agency of a Middle Eastern country lacked a choice
of law clause. Apparently both parties had unflinchingly insisted on the application of
their own national law and failed to find a compromise solution. The tribunal gave a
preliminary ruling that it would base its decision on the terms of the contract
supplemented by general principles of trade law as embodied in the lex mercatoria.
Subsequently, when dealing with the merits, the tribunal referred to various articles of
the Principles without further explanation, thereby implicitly accepting the Principles, as a
whole, as a source of the lex mercatoria. [FN40] This bold stride may be contrasted with
the more circumspect steps of the Tribunal in ICC Case 7375. While asserting that the
Principles "contain in essence a restatement of those principes directeurs that have
enjoyed universal acceptance and, moreover, are at the heart of those most fundamental
notions which have consistently been applied in arbitral practice" [FN41] the tribunal
admitted that they had not undergone detailed scrutiny in all their aspects, and it
considered that there might be certain articles that did not reflect any international
consensus. As we shall see in the next section, the tribunal in ICC Case 7375 was more
reserved than some others in establishing links between the lex mercatoria and general
principles of law and the UNIDROIT Principles.
They may be applied when the parties have agreed that their contract be governed by
general principles of law, the lex mercatoria or the like
In the practice of international commercial arbitration it has become accepted that
international arbitrators may apply transnational rules of law including the so-called "lex
mercatoria" to resolve disputes, [FN42] thus arming the arbitrator with a greater range of
options with which to serve the parties' apparent expectations.
This development has not been without its detractors. Major criticisms of the lex
mercatoria have been (1) the problem of verification: whether in theory it can and in fact
it does exist [FN43]; (2) the problem of incompleteness: despite efforts to record the
content of the lex mercatoria it falls far short of comprising a definitive set of
comprehensive rules which can be applied to resolve a complex commercial dispute
[FN44]; and (3) the problem of selectivity: sceptics say that the lex mercatoria has the
defect of having been constructed selectively and in the abstract from too few textbooks.
And although it must be said that UNIDROIT has not attempted to codify the lex
mercatoria, in the UNIDROIT Principles we can see an attempt to reduce the law to a
single book.
Yet having in hand a single book may offer simple practical advantages: as a single
volume, published now in eight languages including the official five, the Principles may be
scrutinised, cited and filed with a tribunal. [FN45] In contrast to the lex mercatoria one
tribunal pointed out that
"rather than vague principles or general guidelines, the UNIDROIT Principles are
mostly constituted by clearly enunciated and specific rules coherently organised in a
systematic way ..." [FN46]
The second category of application in the preamble contemplates that the Principles
may be applied where the parties have agreed to govern their relations by general
principles of law, the lex mercatoria or the like. More and more in practice the UNIDROIT
Principles are used as a convenient guide to the content of these governing laws and as
the best solution to meet the parties' apparent expectations.
The leading published decision is, perhaps, ICC Case 7110 [FN47]; Boele-Woelki
suggested that it "may be regarded as the official entrée of the Principles into
international arbitration". [FN48] A series of contracts between an English supplier and a
Middle Eastern governmental agency were for the most part silent as to their applicable
law, although a number of them stipulated that disputes arising would be referred to ICC
arbitration to be resolved "according to natural justice". The supplier asserted that
"natural justice" was an English concept and that therefore the parties had made an
implied *70 choice that disputes would be resolved in accordance with English law. The
ministry asserted that "natural justice" was also an ancient idea recognised in its religious
laws, and moreover, in English law natural justice was an essentially procedural concept
of administrative law that was not applicable to contractual relations as such.
The tribunal found that the parties had clearly excluded the application of the national
law of either of them, and there was no basis by which to identify the law of any
particular third state as applicable. A majority of the tribunal concluded that the parties
had, by implication, intended the application of general legal rules and principles to
govern their contracts. The majority then proceeded to draw a link between general
principles of law and the UNIDROIT Principles, although it is true that when this solution
was proposed at the hearing counsel did not object. They observed that the UNIDROIT
Principles primarily embodied those general legal rules and principles applicable to
international contractual obligations and that they enjoyed a wide international
consensus. [FN49] One of the arbitrators dissented: in his view the parties could not
have contemplated reference to any set of rules as vague and uncertain as "general
principles". [FN50] Moreover, reference to the Principles could not remedy the defect
since they had not been conceived, let alone promulgated, at the time the contracts were
concluded. [FN51]
"Natural justice" may seem an unusual choice; lawyers may be even more concerned
by the governing law clause in ICC Case 9474. The parties had stipulated that any
disputes should be decided "fairly". [FN52] The parties agreed with the Tribunal's solution
that it would apply "the general standards and rules of international contracts", the
content of these being drawn from a range of international commercial instruments
including the Principles. [FN53] Perhaps even more puzzling is the 1995 LCIA case in
which a contract provided for the settlement of disputes on the basis on "Anglo-Saxon
principles of law". [FN54] Rather than embarking on potentially tortuous mediaeval legal
research, the Tribunal consulted the UNIDROIT Principles, although they did not explain
precisely why they were relevant.
ICC Case 9797 [FN55] was an extremely high-profile dispute concerning the break-up
of the global businesses of Andersen Consulting and Arthur Andersen. The arbitration
clause in the Member Firm Inter-Firm Agreements provided that the rules to govern
disputes were the terms of the agreements and the articles and memorandum of
association of Andersen Worldwide Société Coopérative, the joint businesses' Swiss
administrative organ. When interpreting these provisions the tribunal was directed that it
be not bound to apply the substantive law of any particular jurisdiction for the Andersen
businesses spanned around 75 countries. Instead, the tribunal should have regard to the
policies in the preamble to the inter-firm agreements and general principles of equity.
When interpreting this rubric, the arbitral tribunal determined that it would apply "the
general principles of law and the general principles of equity commonly accepted by the
legal systems of most countries." [FN56] For more specific guidance the tribunal looked
for nonnational but internationally recognised rules; it applied the UNIDROIT Principles
stating that these "are a reliable source of international commercial law in international
arbitration".
To similar effect are other, relatively more prosaic examples, [FN57] but it is by no
means all one-way traffic. The Tribunal in ICC case 9029 goes against the flow, refusing
to apply the Principles on the ground that
"although the UNIDROIT Principles constitute a set of rules theoretically appropriate
to prefigure the future lex mercatoria if they were consistent with international
commercial practice, at present there is no necessary connection between the individual
Principles and the rules of the lex mercatoria ..." [FN58]
Some arbitrators are also divided on the question whether the UNIDROIT Principles
can be applied as trade usages. [FN59] There are numerous awards that generally favour
their application. The content of "relevant trade usages" referred to in Art.17 of the ICC
Arbitration Rules has been taken to include the UNIDROIT Principles in more than one
ICC award. [FN60] One Tribunal accepted that for "trade usages and generally accepted
*71 principles of international trade" one may refer to the UNIDROIT Principles, these
being evidence of "admitted practices under international trade law". [FN61] An ad hoc
tribunal believed that the Principles constituted "usages of international trade reflecting
the solutions of different legal systems and of international contract practice" [FN62];
another that they codify international practices [FN63]; while another still stated that the
Principles are "an accurate representation, although incomplete, of the usages of
international trade." [FN64]
However, the fact that the Principles are appropriate in general does not necessarily
mean that the application of specific Articles as trade usages is called for in each and
every case. Three examples demonstrate the need for caution. The first case concerned a
construction contract for works to be performed in a third country. The governing law of
the contract was Spanish. [FN65] Price increases led the contractor to claim the right to
renegotiate the contract, invoking Chap.6 of the Principles on hardship. The contractor
argued that these were applicable on the ground that they represented relevant trade
usages, but the tribunal refused this, ruling that Arts 6.2.2 and 6.2.3, in particular,
neither corresponded to Spanish law nor current practices in international trade. [FN66]
Secondly, in ICC Case 7365 the tribunal expressed doubt that Art.7.4.9 on interest due
for failure to pay debts corresponded with generally accepted principles of international
trade. [FN67] And finally, in ICC Case 9029 the tribunal refused to apply the Principles as
trade usages generally on the ground that they do not always reflect business practice
and they are in many instances innovative. It concluded that
"recourse to the Principles is not purely and simply the same as recourse to an
actually existing international commercial usage." [FN68]
To summarise, some believe that the UNIDROIT Principles "constitute a cornerstone
in the lex mercatoria debate and may become the heart of the new lex mercatoria."
[FN69] This may or may not be true depending on what is understood by the lex
mercatoria. If we mean rules that reflect international custom and usages, it is not true in
every instance. Nor do the Principles always embody general principles of law relevant to
merchants distilled from comparative study. But the problem is not really even whether
this may be equated with that, but instead, to determine in the particular circumstances
of each case, what rules or laws the parties intended to apply when they referred to such
notions as the lex mercatoria, the general principles or the like. Typically this has been
held to be non-national rules, and these may often include the Principles.
There may well be a presumption that certain rules form part of the lex mercatoria
but this must be proved in each case. This will only be if the business community and
arbitrators believe that they "coincide with the rules which emanate from a true source of
lex mercatoria, namely general principles of law or trade usages." [FN70] The Principles
as a whole should not be too readily equated with general principles, the lex mercatoria,
or trade usages. [FN71] Too often this has been done with little explanation or
justification. UNIDROIT does not purport to be the legislative source of the lex mercatoria
and the Principles do not claim to codify it. [FN72] Recalling that they have been in
existence barely ten years, Farnsworth is not alone in considering it "quite remarkable"
that so many all too readily equate the Principles with a statement of general principles of
law. [FN73]
They may provide a solution to an issue raised when it proves impossible to establish the
relevant rule of the applicable law
The Preamble's third use for the Principles is to furnish a solution to an issue raised
when it proves impossible to establish the relevant rule of the applicable law. [FN74]
Bonell considers that this may arise because
"even highly sophisticated legal systems do not always provide clear and/or
satisfactory solutions to the special needs of current international commercial
transactions." [FN75]
One might raise an eyebrow at this statement as it is generally for elected legislators,
not private arbitrators, to determine whether a clear legal outcome is satisfactory. [FN76]
*72 Moreover, national legal systems are not strictly incomplete: a court can always
determine a solution to a novel issue from the context of other rules and the legal
system's underlying policies. [FN77] However, this is not necessarily the task of an
international arbitration tribunal that has no particular link with any national system.
[FN78] And so the Principles may indeed be helpful to arbitrators where it is extremely
difficult or impossible to determine the content of that law. Also, an international
arbitration tribunal may be concerned to tailor its award to avoid the harsh consequences
of an unfair result: in such circumstances ambiguities and lacunae will seldom be too
difficult to find.
In an ad hoc arbitration in Auckland in 1995, [FN79] the law of New Zealand was
applicable. The tribunal had to determine the legal significance of the parties' behaviour
post-contract to a question of interpretation. The tribunal ruled that because New
Zealand law was "in a somewhat unsettled state" it would refer to the UNIDROIT
Principles for assistance, observing that "there could be no more definitive contemporary
statement governing the interpretation of contractual terms". To the same effect in
another award, the tribunal referred to Art.2.15 of the Principles on good faith in precontractual negotiations where this rule was not explicitly clear in the applicable domestic
law. [FN80]
Reasoning, such as in the Auckland award, is acceptable when the inadequacy is
obvious. Yet if the UNIDROIT Principles are systematically invoked to exclude or modify
the provisions of the chosen law, the parties' decisions will be undermined to the
detriment of business certainty, and quite probably, to the detriment of the Principles
themselves. So it has unsettled many that arbitrators sometimes will refer to the
Principles to assist them to interpret the applicable domestic law, and in some cases to
supplement it, even when it discloses no gap or ambiguity. [FN81] The UNIDROIT
Working Group did not foresee this development, yet it is proving a particularly
significant one: over half of the awards recorded to date use the Principles in this way.
[FN82]
From an analysis of these awards, however, it is apparent that arbitrators go to some
lengths to show that where they have determined an applicable domestic law it
nevertheless provides an identical solution to other potentially applicable laws, including
the UNIDROIT Principles. [FN83] So for instance, in a 1994 award of the Zurich Chamber
of Commerce the Tribunal referred to the UNIDROIT Principles to show that the Swiss
rule of interpretation it applied to a contract governed by Swiss law nonetheless reflected
a "worldwide consensus". [FN84] The ICC Tribunal in Case 5835 [FN85] resorted to the
UNIDROIT Principles to show that solutions based in Kuwaiti law, which it had determined
was applicable, did not diverge from international standards. [FN86] And in ICC Case
8908, which concerned the interpretation of a settlement agreement governed by Italian
law, the tribunal applied rules of the Italian Commercial Code and added that
"[t]he rules relating to interpretation and good faith in the UNIDROIT Principles (in
particular, Arts 1.7 and from 4.1 to 4.8), which are in all events a useful reference
framework for applying and judging a contract of an international nature, also confirm
what has been said." [FN87]
In supplementing their reasoning by reference to the Principles, arbitral tribunals may
have at least three positive effects in mind: (1) they presumably believe that the
Principles give further credibility to their decisions by showing that they are recognised
transnationally [FN88]; (2) it may well help prevent the "surprise factor" and any
controversies that could lead to judicial scrutiny of the award (particularly if the
applicable national system of law happened to be that of the nationality of a member of
the Tribunal [FN89]); and (3) this practice may also reflect a desire on the part of some
arbitrators to contribute to the harmonisation of transnational commercial solutions.
No known award involves application of the Principles to override an applicable
domestic law, and nor should it unless the parties have clearly intended to depart from
the applicable law in circumstances where they are free to do so. [FN90] The Tribunal in
ICC Case 5835 went close in its obiter comments when it wrote:
"[h]ad a narrower definition of 'gross mistaké been established under Kuwaiti law, the
Tribunal would have had to follow 'principles generally applicable in international
commercé." [FN91]
A later tribunal rightly rejected that possibility pointing out that the Principles could
only be applied "as a complementary and supplementary rule, not as a rule in clear
contradiction to an unambiguous provision of the ... law chosen by the parties". [FN92]
*73 They may be used to interpret or supplement international uniform law instruments
The use of the Principles as a means of interpreting or supplementing uniform law
instruments was always considered to be an important function. This is the final category
of application contemplated in the Preamble to the Principles and it reflects a growing
trend to interpret and supplement international uniform law instruments by the
application of common international standards. [FN93]
Some object that privately drafted soft-law instruments like the Principles are
inherently inappropriate to supplement or assist in the interpretation of public intergovernmental instruments, but for the majority of practitioners the theoretical
justification to apply the Principles in these circumstances is manifest. First, it is clear
that arbitrators may have reference to the Principles for this purpose where parties have
incorporated them into their contract by express reference. [FN94] Secondly, it is
arguable that the language of many of these conventions permits tribunals to refer to
them. For instance, Art.7 of the CISG states that
"[i]n the interpretation of this Convention regard is to be had to its international
character and to the need to promote uniformity in its application. ... [and] ...questions
concerning matters governed by this Convention which are not expressly settled in it are
to be settled in conformity with the general principles on which it is based ..." [FN95]
Lastly, Lalive has proposed that the Principles might be applied as a subsidiary means
for the determination of rules in the Convention on the grounds that they represent "the
teachings of the most highly qualified publicists of the various nations" within the
meaning of Art.38(3) of the Statute of the International Court of Justice. [FN96]
The Principles are generally more comprehensive than the CISG and have in practice
provided answers to ambiguities or gaps in it on a number of occasions (although the
Principles have also been applied or referred to in respect of other uniform law
instruments [FN97]). Most frequently cited in CISG cases are the solutions in Art.7.4.9 on
interest for failure to pay money due. ICC Case 8128 involved the use of the Principles in
a CISG case to determine the interest rate. [FN98] Two Tribunals of the Austrian
Chamber of Commerce quoted the Principles when applying the CISG's principle of full
compensation to justify an interest rate derived from the creditor's home state. [FN99]
And in ICC Case 8769 the sole arbitrator ruled that the claimant was entitled to interest
on sums awarded setting it at a commercially reasonable rate as provided in Art.7.4.9(2).
[FN1]
Other solutions, besides those pertaining to interest, have been derived from the
UNIDROIT Principles. In ICC Case 9117, which concerned merger clauses and written
modification clauses, the tribunal confirmed its interpretation of articles in the sale of
goods convention with reference to the Principles, in the process saying that these
"reflect a worldwide consensus in most of the basic matters of contract law". [FN2]
Equally exuberant, another tribunal declared that the general principles applicable to the
CISG are "now contained in the UNIDROIT Principles of International Commercial
Contracts". [FN3] These statements seem somewhat sweeping and overenthusiastic.
Arbitrators should never dispense with careful textual and contextual analysis to
establish, in each instance, that the particular rule to be applied does properly express
the general principles upon which a particular convention is based. [FN4]
*74 III. Cross fertilisation, ongoing development, and the future for the UNIDROIT
Principles
While the membership of the UNIDROIT Working Group is prestigious and broadly
representative of major legal systems, the Principles have no necessary applicability. The
Principles are not an inter-governmental instrument; they are a private soft-law
instrument. As a restatement of transnational contractual law, by their very nature, the
Principles are an "ongoing and continuous exercise" [FN5] of development and finetuning. This private soft-law form usefully permits ongoing development and at the same
time it also allows businesses, counsel and arbitrators to rely on the Principles, as a
whole or selectively, as and when the occasion arises. [FN6]
The Principles are not a complete statement and their intrinsic quality has
occasionally been questioned, in their substance, and in their ability to regulate
transnational transactions effectively. [FN7] But the prevailing mood seems to be that the
Principles are generally good and well adapted to meet the definite needs of transnational
commerce. [FN8] If this proves to be true over time, and as rules on further topics are
published, the Principles of International Commercial Contracts have every chance of
enduring success. Judge Brower is not too ambitious in saying that the Principles have
the potential, at least, to "lead a trend towards a common law of international
commercial transactions". [FN9]
Brower's vision remains far in the future. What of the significance of the Principles in
international commercial arbitration to date? Statistics suggest they have so far played
only a meagre role. The Unilex website lists only 62 known awards that have referred to
the Principles. [FN10] ICC Court of Arbitration statistics reveal that in only around 2 per
cent of cases do the parties refer disputes to transnational legal principles, [FN11] and of
the 600 or so ICC awards made during the 1999-2000 period only 14 referred specifically
to the UNIDROIT Principles. [FN12] Yet statistics never paint the whole picture and it
must be acknowledged that in their relatively short existence the Principles have proved
useful in a number of high-profile cases. [FN13] With increasing awareness of the
Principles through education and publication of awards in which they have been applied it
is likely that the Principles will be more frequently relied upon in the future. [FN14]
Circumspect and careful use of the Principles by arbitrators will in turn positively
influence the Principles themselves by fine-tuning and fleshingout their meaning. [FN15]
FN Ph.D. student, Gonville and Caius College, University of Cambridge. This paper was
presented at the LCIA/Arbitrators' & Mediators' Institute of New Zealand joint seminar on
International Commercial Arbitration held in Auckland,
New Zealand on February 20, 2003. The seminar was designed to address current topics
of interest in international commercial arbitration and was part of a focus on Australia
and New Zealand by the LCIA, IBA and AMINZ in early 2003. The seminar was chaired by
V. V. Veeder Q.C., Chairman of the LCIA Board and Vice-President of the LCIA Court and
David Williams Q.C., Vice-President of the Arbitrators' & Mediators' Institute of New
Zealand and member of the LCIA Court.
FN1. UNIDROIT, Principles of International Commercial Contracts (Rome, UNIDROIT,
1994), www.unidroit.org/english/principles/pr_main.htm.
FN2. See UNIDROIT, Report of Fifth Session (June 3-7, 2002) of the Working Group for
the Preparation Part II of the UNIDROIT Principles of International Commercial Contracts,
and Study L--Misc.24 (2002), www.unidroit.org/english/principles/wg-2002.htm.
FN3. United Nations Convention on Contracts for the International Sale of Goods 1980,
UN Doc. A/Conf./97/18 Annex I (April 10, 1980) GAOR, 33rd Session, Supp. 35
(A/35/35) 1489 U.N.T.S. 3, reprinted (1980) 18 I.L.M. 639.
FN4. M. Fontaine, "The UNIDROIT Principles: An Expression of Current Contract
Practice?" (2002) ICC ICArb. Bull. Special Supp. 95 at 96; also K.-P. Berger, "Lex
Mercatoria Online: The Central Transnational Law Database at www.tldb.de" (2002) 18(1)
Arbitration Int. 83 at p.86.
FN5. M. P. Furmston, "UNIDROIT General Principles for International Commercial
Contracts" (1996) 10 Journal of Contract Law 11.
FN6. e.g. ICC Case 8873 (1999) 10(2) ICC ICArb. Bull. 78 at 80 see below; the Principles
also diverge from other uniform contract law instruments including the European
Principles, Art.1.101(3): see H. Raeschke-Kessler, "The UNIDROIT Principles in
Contemporary Contract Practice" (2002) ICC ICArb. Bull. Special Supp. 99 at p.101.
FN7. On the unification movement see, e.g. R. David, "The International Unification of
Private Law" in International Association of Legal Science, International Encyclopaedia of
Comparative Law: Legal Systems of the World, Their Comparison and Unification, Vol.II
(The Hague, Mohr Tübingen Martinus Nijhoff, 1972).
FN8. On the contribution of the UNIDROIT Principles to the unification movement see,
e.g. M. J. Bonell, "Unification of Law by Non-Legislative Means: The
UNIDROIT Draft Principles for International Commercial Contracts" (1992) 40 A. J. Comp.
L. 617. See also, e.g. Principles of European Contract Law (The Hague, Kluwer Law
International, 1999), www.ufsia.ac.be/~estorme/PECL2en.html; and see O. Lando,
"Principles of European Contract Law: An Alternative to or a Precursor of European
Legislation?" (1992) 40 A. J. Comp. L. 573.
FN9. M. Mustill, "The New Lex Mercatoria: The First Twenty-five Years" in M. Bos and I.
Brownlie (eds), Liber Amicorum for Lord Wilberforce (Oxford, Clarendon Press, 1987) at
p.149; reprinted in (1988) 4 Arbitration Int. 87 (hereafter "Mustill").
FN10. 53 respondents to the CENTRAL inquiry in 2000 indicated that they were aware of
one or more cases in which the Principles had been expressly chosen by the parties as
the rules of law governing their contract: K.-P. Berger, "The CENTRAL Enquiry on the Use
of Transnational Law in International Contract Law and Arbitration --Selected Results
from the First Worldwide Survey on the Practice of Transnational Commercial Law"
(2000) 15(9) Mealey's International Arbitration Report 26; reprinted in (2000)
Association Suisse de l'Arbitrage Bulletin 654 (hereafter, Berger, "The CENTRAL
Enquiry"); www.transnational-law.de.
FN11. e.g. New Zealand Court of Appeal: Hideo Yoshimoto v Canterbury Golf
International Ltd [2001] 1 N.Z.L.R. 523 at para.[89]; Bobux Marketing Limited v Raynor
Marketing Ltd [2002] 1 N.Z.L.R. 506 at para.[39]; Cour d'appel Grenoble, France:
Société Harper Robinson v Société Internationale de Maintenance et de Réalisations
Industrielles, January 24, 1996, noted www.unilex.info; SCEA GAEC Des Beauches
Bernard Bruno v Société Teso Ten Elsen GmbH & COKG noted (1997) Revue Critique de
Droit International Privé 762; Bonell (1997) 1 Unif. L. Rev. 34, 42; http://cisgw3.law.pace.edu/cases/961023f1.html; Federal Court of Australia: Hughes Aircraft Systems
International v Airservices Australia (1997) 146 A.L.R. 1; European Court of Justice:
Fonderie Officine Meccaniche Tacconi SpA v Heinrich Wagner Sinto Maschinenfabrik
GmbH (HWS) 2002 ECJ Celex Lexis 3455; Supreme Court of Venezuela: Bottling
Companies v Pepsi Cola Panamericana, October 9, 1997, noted www.unilex. info; and
see, e.g. M. J. Bonell, "The UNIDROIT Principles and Transnational Law" in K.-P. Berger,
(ed.) The Practice of Transnational Law (London, Kluwer, 2001) at pp.23, 25 et seq.
FN12. Many of the awards discussed in this paper have been summarised in F. Marrella
and F. Gélinas, (eds) "The UNIDROIT Principles of International Commercial Contracts in
ICC Arbitration" (1999) 10 ICC ICArb. Bull. 26; "Extracts from ICC Awards Referring to
the UNIDROIT Principles of International Commercial Contracts 1999-2001" (2001) 12(2)
ICC ICArb. Bull. 60 and in the
pages of the Uniform Law Review. For further details on all awards, including unpublished
awards, reference should be had to the online database UNILEX on CISG and UNIDROIT
Principles: International Caselaw and Bibliography available at www.unilex.info, recently
published in hard form: M. J. Bonell (ed.) The UNIDROIT Principles in Practice (Ardsley,
NY, Transnational, 2002).
FN13. Especially in the case of contracts between a private person and a state or state
entity: see J.R. Crawford and A.C. Sinclair, "The UNIDROIT Principles and their
Application to State Contracts" (2002) ICC ICArb. Bull. Special Supp. 57.
FN14. See, e.g. U. Drobnig, "The UNIDROIT Principles in the Conflict of Laws" (1998) 3
Unif. L. Rev. 385, 386; M. J. Bonell, An International Restatement of Contract Law: The
UNIDROIT Principles of International Commercial Contracts (New York, Transnational
Publications, 1994) at p.138.
FN15. cf. P. Lalive, "The UNIDROIT Principles as Lex Contractus, with or without an
Explicit or Tacit Choice of Law: An Arbitrator's Perspective" (2002) ICC ICArb. Bull.
Special Supp. 77.
FN16. See United Nations Commission on International Trade Law, UNCITRAL Model
Law on International Commercial Arbitration, (1985) UN Doc. A/40/17, Annex I, adopted
June 21, 1985, Art.28(1) (hereafter "UNCITRAL Model Law").
FN17. e.g. Rome Convention on the Law Applicable to Contractual Obligations 1980
[1980] O.J. L266/1; Washington Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States 1965, 575 U.N.T.S. 160 (hereafter "ICSID
Convention"), Art.42(1).
FN18. LCIA Arbitration Rules (1998), Art.22.3; ICC Arbitration Rules (1998), Art.17(1);
AAA International Arbitration Rules (1997), Art.28; WIPO Arbitration Rules (1994),
Art.59; cf. UNCITRAL Arbitration Rules (1976), Art.33(1).
FN19. Principles, Art.1.4; and, e.g. M. P. Furmston, "The UNIDROIT Principles and
International Commercial Arbitration" in Institute of International Business Law and
Practice (ed.), The UNIDROIT Principles for International Commercial Contracts: A New
Lex Mercatoria? (ICC Pub. No.490/1) (ICC Publishing, Paris, 1995) 199; F. Dessemontet,
"Use of the UNIDROIT Principles to Interpret and Supplement Domestic Law" (2002) ICC
ICArb. Bull. Special Supp. 39 at p.40 (hereafter "Dessemontet").
FN20. UNCITRAL Model Law (1985), Art.28(1).
FN21. Above n.10.
FN22. Unpublished ad hoc award of April 4, 1997, Paris.
FN23. Unpublished Milan National and International Arbitration Court Award in Case A1795/51 of December 1, 1996.
FN24. Unpublished Chamber of Commerce and Industry of the Russian Federation Award
in Case 88/2000 of January 25, 2001.
FN25. Final Award in ICC Case 8331, (1999) 10(2) ICC ICArb. Bull. 65.
FN26. LCIA Rules, Art.22(3); ICC Arbitration Rules (1998), Art.17(1); Netherlands
Arbitration Institute Rules, Art.46; WIPO Arbitration Rules (1994), Art.59.
FN27. Partial and Final Awards in ICC Case 9875 (2001) 12(2) ICC ICArb. Bull. 95 at 97.
FN28. See also ICC Case 9029, ibid. at 88, 91; cf. ICC Case 9419, (1999) 10(2)
ICC ICArb. Bull. 104, a case under the former ICC Rules, in which the arbitral tribunal
declined to apply the Principles because they
"cannot constitute a normative body in themselves that can be considered as
applicable supranational law to replace a national law, at least as long as the arbitrator is
required to identify the applicable law by choosing the rule of conflict that he considers
most appropriate."
FN29. New York Convention on the Recognition and Enforcement of Foreign Arbitral
Awards 1958, 330 U.N.T.S. 3, Art.V. See also "Resolution on Transnational Rules"
adopted at the 65th International Law Association Conference, Cairo, April 26, 1992
reprinted in E. Gaillard (ed.) Transnational Rules in International Commercial Arbitration
(ICC Pub. 480/4) (ICC Publishing, Paris, 1993) at p. 36.
FN30. On which see below; LCIA Rules 1988, Art.22(3); AAA International Arbitration
Rules 1997, Art.28(2); ICC Rules of Arbitration 1998, Art.17(2); UNCITRAL Arbitration
Rules 1976, Art.33(3).
FN31. e.g. UK: Arbitration Act 1996, s.46(3); Germany: Code of Civil Procedure,
§1051(1), (2); Italy: Code of Civil Procedure, Art.834(2).
FN32. cf. Principles of European Contract Law, above n.8, Art.1.101(3)(b) which allows
application of general principles "when the parties have not chosen any system or rules of
law to govern their contract."
FN33. P. Mayer, "The Role of the UNIDROIT Principles in ICC Arbitration Practice" (2002)
ICC ICArb. Bull. Special Supp. 105 at pp.111-12 (hereafter "Mayer").
FN34. H. G. Naón, "Closing Remarks" (2002) ICC ICArb. Bull. Special Supp. 149 at p.150
(hereafter "Naón").
FN35. e.g. K.-P. Berger, "International Arbitral Practice and the UNIDROIT Principles of
International Commercial Contracts" (1998) 46 A. J. Comp. L. 129 (hereafter "Berger").
FN36. Lalive, op. cit. n.15 at p.81.
FN37. Partial Award of May 1996, ICC Case 7375 (1996) 11(12) Mealey's International
Arbitration Report A-1; (1997) 3 Unif. L. Rev. 598; M. J. Bonell "UNIDROIT Principles: A
Significant Recognition by a United States District Court" (1999) 3 Unif. L. Rev. 651, 65657; Berger, op. cit. n.35 at p.143.
FN38. ibid., A-36, para.[280].
FN39. ibid., A-42, para.[312] (emphasis added).
FN40. Unpublished award in ICC Case 8261.
FN41. ICC Case 7375, (1996) 11(12) Mealey's International Arbitration Report A-42,
para.[314]; cited with approval in the ICC Case 9797, (2000) 15(8) Mealey's
International Arbitration Reports A1; (2001) 12(2) ICC ICArb. Bull. 88.
FN42. e.g. ICC Case 8385 (1997) 124 J.D.I. 1061 (trans. Y. Derains, (2002) ICC ICArb.
Bull. Special Supp. 9 at 13). A selection of the authors influential in this development
includes C. Schmitthoff (ed.) The Sources of the Law of International Trade (Praeger,
New York, 1964); B. Goldman, "Frontiers de droit et Lex Mercatoria" (1964) 9 Archives
du Philosophie du Droit 177; O. Lando, "The New Lex Mercatoria in International
Commercial Arbitration" (1984) 34 I.C.L.Q. 747; B. Goldman, "The Applicable Law:
General Principles of Law--The Lex Mercatoria" in J. D. M. Lew (ed.), Contemporary
Problems in International Arbitration (Kluwer/Queen Mary College Centre for Commercial
Law Studies, London, 1986) at p.113.
FN43. Mustill, op. cit. n.9 at pp.87, 96; F. A. Mann, "Private Arbitration and Public Policy"
(1985) C.J.Q. 257 at p.264: "What this so called law is or should be is a complete
mystery. It is hardly necessary to emphasis that no such law exists." And see ICC Case
4237 of 1984, (1985) XX Ybk. Comm. Arb. 53, 55: "the contents of lex mercatoria are
not easy to determine."
FN44. Mustill, ibid. at pp.87, 110-114; cf. K. P. Berger, The Creeping Codification of the
Lex Mercatoria (Kluwer, The Hague, 1999) 5, and "The CENTRAL Enquiry", op. cit. n.10.
FN45. See, e.g. L. Y. Fortier, "The New, New Lex Mercatoria, or Back to the Future"
(2001) 17 Arbitration Int. 121 at p.125.
FN46. ICC Case 7110, (1999) 10(2) ICC ICArb. Bull. 39 at 49.
FN47. ICC Case 7110, ibid., Partial Awards of June 1995, April 1998 and February 1999,
The Hague.
FN48. K. Boele-Woelki, "Principles and Private International Law: The UNIDROIT
Principles of International Commercial Contracts and the Principles of European
Contract Law: How to Apply Them to International Contracts" (1996) 4 Unif. L. Rev. 652
at p.661.
FN49. ICC Case 7110, (1999) 10(2) ICC ICArb. Bull. 39 at 49.
FN50. ibid. at 52.
FN51. ibid.
FN52. cf. the power to decide as an amiable compositeur, e.g. ICC Case 8874 (1999)
10(2) ICC ICArb. Bull. 82; ad hoc Award of December 10, 1997, Buenos Aires, applying
the UNIDROIT Principles.
FN53. Interim Award in ICC Case 9474, (2001) 12(2) ICC ICArb. Bull. 60.
FN54. Unpublished LCIA Award of 1995.
FN55. ICC Case 9797, (2000) 15(8) Mealey's International Arbitration Reports A1; (2001)
12(2) ICC ICArb. Bull. 88. For comment, M. J. Bonell, "A 'Global' Arbitration Decided on
the Basis of the UNIDROIT Principles: In re Andersen Consulting Business Unit Member
Firms v Arthur Andersen Business Unit Member
Firms and Andersen Worldwide Société Coopérative" (2001) 17(3) Arbitration Int. 249.
FN56. ibid. at 89.
FN57. ICC Case 8264, (1999) 10(2) ICArb. Bull. 62; Partial and Final Awards in ICC Case
9875 (2001) 12(2) ICC ICArb. Bull. 95 at 97; ICC Case 8547, (2001) 12(2) ICC ICArb.
Bull. 57; ICC Case 10346 (2001) 12(2) ICC ICArb. Bull. 106; and ICC Case 7365,
Ministry of Defense of Iran v Cubic Defence System summarised in M. J. Bonell, "Cases
Applying and Interpreting International Uniform Law Instruments" (1999) 4 Unif. L. Rev.
796 and 1014, unsuccessfully challenged at the enforcement stage, the US District Court
ruling that reference to the Principles did not exceed the tribunal's terms of reference:
Ministry of Defense of Iran v Cubic Defense Systems 29 F. Supp., 2nd Series (S.D. Cal.
1998) 1168; reprinted in (1999) XXIV Ybk. Comm. Arb. 875.
FN58. ICC Case 9029, (1999) 10(2) ICArb. Bull. 88 at 90.
FN59. See LCIA Arbitration Rules (1998) Art.22.1; ICC Arbitration Rules (1998),
Art.17(2); AAA International Arbitration Rules (1997), Art.28(2); WIPO Arbitration Rules
(1994), Art.59(a); UNCITRAL Arbitration Rules (1976),
Art.33(3); Art.VII of the Geneva Convention on International Commercial Arbitration
1961 484 U.N.T.S. 364.
FN60. e.g. ICC Case 10022 (2001) 12(2) ICC ICArb. Bull. 100.
FN61. ICC Case 8502 (1999) 10(2) ICC ICArb. Bull. 72 at 74.
FN62. Ad hoc award of December 10, 1997, Buenos Aires; see also ad hoc award of
December 4, 1996, Rome.
FN63. ICC Case 10114 (2001) 12(2) ICC ICArb. Bull. 100 at 102.
FN64. ICC Case 9479, ibid. at 67 and 69.
FN65. ICC Case 8873 (1999) 10(2) ICC ICArb. Bull. 78; (1998) 125 J.D.I. 1017.
FN66. See also ICC Case 9419, ibid. at 104.
FN67. ICC Case 7365, op. cit. n.57.
FN68. ICC Case 9029 (1999) 10(2) ICArb. Bull. 88 at 90.
FN69. G. Baron, "Do the UNIDROIT Principles of International Commercial Contracts Form
a New Lex Mercatoria?" (1999) 15 Arbitration Int. 115 at p.116.
FN70. Mayer, op. cit. n.33 at p.111; H. van Houtte, "UNIDROIT Principles of International
Commercial Contracts and International Commercial Arbitration: Their Reciprocal
Relevance" in Institute of International Business Law and Practice (ed.), The UNIDROIT
Principles for International Commercial Contracts: A New Lex Mercatoria? (ICC Pub.
No.490/1) (Paris, ICC Publishing, 1995), p.181 at p.184.
FN71. See, e.g. H. van Houtte, "The UNIDROIT Principles of International Commercial
Contracts" (1995) 11 Arbitration Int. 373; M.J. Bonell, "A 'Global' Arbitration Decided on
the Basis of the UNIDROIT Principles: Re Andersen Consulting Business Unit Member
Firms v Arthur Andersen Business Unit Member Firms and Andersen Worldwide Société
Coopérative" (2001) 17(3) Arbitration Int. 249 at p.252.
FN72. Principles, "Introduction", viii. On the attempts to record the rules of the lex
mercatoria, see Berger, "The CENTRAL Enquiry", above n.10; cf. Mustill, op. cit. above
n.9 at p. 110.
FN73. E. A. Farnsworth, "The Role of the UNIDROIT Principles International Commercial
Arbitration (2) A US Perspective on their Aims and Application" (2002) ICC ICArb. Bull.
Special Supp. 21, 27.
FN74. Principles, preamble, and see "Commentary", para.5.
FN75. M. J. Bonell, "The UNIDROIT Principles and Transnational Law" (2000) 5 Unif. L.
Rev. 199 at 214.
FN76. Dessemontet, op. cit. n.19 at p.47.
FN77. Mayer, op. cit. n.33 at p.116.
FN78. See ICC Case 1512 (1976) I Ybk. Comm. Arb. 128 at 129.
FN79. Unpublished ad hoc award of 1995, Auckland, on which see D. A. R. Williams, "The
Further Development of International Commercial Arbitration through the UNIDROIT
Principles of International Commercial Contracts" (1996) 2 New Zealand Business Law
Quarterly 7.
FN80. ICC Case 9651, (2001) 12(2) ICC ICArb. Bull. 76 at 79.
FN81. See, e.g. Bonell, op. cit. n.75; Dessemontet, op. cit. n.19.
FN82. ibid.
FN83. Dessemontet, op. cit. n.19 at p.48.
FN84. Unpublished Zurich Chamber of Commerce Award of 1994; also ICC Case 9117,
(1999) 10(2) ICC ICArb. Bull. 96.
FN85. ICC Case 5835, ibid. at 33.
FN86. See also ICC Case 8240, ibid. at 60; ICC Case 8540; ICC Case 9333, ibid. at 102;
ICC Case 8223, ibid. at 58; ICC Case 9593, ibid. at 107; unpublished Award of the
Arbitral Court of the Economic Chamber and the Agrarian Chamber of the Czech Republic
of December 17, 1996; unpublished ad hoc Award of January 28, 1998, Helsinki.
FN87. ICC Case 8908, ibid. at 83, 86.
FN88. Y. Derains, "The Role of the UNIDROIT Principles in International Commercial
Arbitration (1): A European Perspective" (2002) ICC ICArb. Bull. Special Supp. 9 at p.10.
FN89. F. Bortolotti, "The UNIDROIT Principles and the Arbitral Tribunals" (2000) 5 Unif. L.
Rev. 141, 142.
FN90. Dessemontet, op. cit. n.19 at p.43.
FN91. ICC Case 5835, (1999) 10(2) ICC ICArb. Bull. 33.
FN92. ICC Case 7365, op. cit. n.57.
FN93. M. J. Bonell, "The UNIDROIT Principles as a Means of Interpreting and
Supplementing International Uniform Law" (2002) ICC ICArb. Bull. Special Supp. 29, at
33 and references cited therein.
FN94. ibid. 32.
FN95. CISG, Art.7.
FN96. P. Lalive, "Comments", (2002) ICC ICArb. Bull. Special Supp. 137.
FN97. e.g. ICC Case 8547, (2001) 12(2) ICC ICArb. Bull. 57 with respect to the 1964
Hague Uniform Laws on the International Sale of Goods and the rules on Formation of
Contracts for the International Sale of Goods. Similar expressions to that contained in
Art.7 CISG are found in, e.g. UNIDROIT Convention on Agency in the International Sale
of Goods, Art.6(1) reprinted (1983) 22 I.L.M. 249; 1988 Ottawa Convention on
International Factoring, Art.4(1) reprinted (1988) 27 I.L.M. 943; 1988 Ottawa Convention
on International Financial Leasing, Art.6(1) ibid. at p. 931; 1991 United Nations
Convention on the Liability of Operators of Transport Terminals in International Trade,
Art.14 (A/CONF. 152/13 Annex). The Principles as a tool for interpretation has also been
discussed with respect to the 1956 Convention on Contracts for the International Carriage
of Goods by Road 399 U.N.T.S. 190, and the 1924 Brussels Convention for the Unification
of Certain Rules relating to Bills of Lading 120 L.N.T.S. 155: Bonell, op. cit. n.93 at pp.
30-31.
FN98. ICC Case 8128, (1996) 123 J.D.I. 1024.
FN99. See www.unilex.info.
FN1. ICC Case 8769, (1999) 10(2) ICC ICArb. Bull. 75.
FN2. ICC Case 9117, ibid. at 96.
FN3. ICC Case 8817, ibid. at 75; (2000) XXV Ybk. Comm. Arb. 355, 367.
FN4. Bonell, op. cit. n.93 at p.33; P. P. Viscasillas, "UNIDROIT Principles of International
Commercial Contracts: Sphere of Application and General Provisions" (1996) 13 Arizona
Journal of International and Comparative Law 383 at p.404.
FN5. Bonell, op. cit. n.14 at p.255.
FN6. For a discussion of the influence that soft law instruments can have see, e.g. O.
Schachter, "The Twilight Existence of Nonbinding International Agreements" (1977) 71
A.J.I.L. 296. ICC's INCOTERMS are one successful example of how soft law terms may
become widely adopted over time, see, e.g. M. C. Rowe, "The Contribution of the ICC to
the Development of International Trade Law" in N. Horn, and C. Schmitthoff (eds) The
Transnational Law of International Commercial Transactions (Deventer, Kluwer, 1982) at
p.51.
FN7. See Naón, op. cit. n.34.
FN8. M. Furmston, "United Kingdom" in M. J. Bonell, (ed.) "A New Approach to
International Commercial Contracts" (The Hague, Kluwer, 1999) at p.380.
FN9. C. N. Brower, "The Privatization of Rules of Decision in International Commercial
Arbitration" in R. Briner, L. Y. Fortier, K. P. Berger and J. Bredow (eds) Law of
International Business and Dispute Settlement in the 21st Century: Liber Amoricum KarlHeinz Böckstiegel (Carl Heymanns Verlag KG, Köln, 2001) at pp.111, 121.
FN10. As of February 20, 2003.
FN11. Of 541 new cases filed at the ICC in 2000, in 77% there was an express choice of
law clause, and of those, 75% designated a national law: Naón, op. cit. n.34.
FN12. Mayer, op. cit. n.33 at p. 106.
FN13. Including a significant number of state contract disputes: see Crawford and
Sinclair, op. cit. n.13; K.-H. Böckstiegel, "The Application of the
UNIDROIT Principles to Contracts involving States or Intergovernmental Organizations"
(2002) ICC ICArb. Bull. Special Supp. 51.
FN14. See also Dessemontet, op. cit. n.19; Berger, "The CENTRAL Enquiry" op. cit. n.10
at p.28.
FN15. See also O. Lando "Assessing The Role of the UNIDROIT Principles in the
Harmonization of Arbitration Law" (1995) 3 Tul. J. Intl & Comp. L. 129.
INTALR 2003, 6(3), 65-74
END OF DOCUMENT
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