The topic of this seminar is Applicable law in international arbitration.

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Applicable law in International Arbitration is one of the issues which are of cardinal importance. Whether party wins or loses may depend on law which is applied to a dispute.

We divide the question of applicable law into two sub-questions:

Which law should be applied to merits of a dispute

Which law shoudl be applied to a procedure

1. Law applicable to merits of a dispute

Parties are free to choose the law applicable to merits of a dispute. Therefore parties often include choice-of-law clauses in their contracts. 

Nevertheless, parties sometimes do not choose law applicable to a dispute. There is many reasons for it. For instance, they could not reach an agreement concerning applicable law. Then, it is for the arbitrators to choose the law applicable to merits of a dispute. 

2. Law applicable to a procedure

Parties are generally also free to choose the law applicable to procedure. 

3. Lex mercatoria

International businesses are often willing to resolve their dispute via arbitration. One of the reasons for doing so is that they believe that arbitrators understand the functioning of international trade. Thus, businesses expect that arbitrators might apply law as is known amongst businesses. Lex mercatoria emobodies the idea that there has been specific legal system developed on the basis of legal usages, contractual practices, standard terms and general principles of business law which serves for the needs of international trade. Lex mercatoria, therefore, denotes law of international merchants. By the same token, lex mercatoria as a legal system does not originate in state power, but it has been developed by businesses for businesses. 

Glossary :

Applicable Law = law which is applied to a dispute

Choice-of-law clause = a clause in a contract whereby parties choose the law applicable to existing or future dispute.

Law applicable to merits of a dsipute = law which governs substantive-law questions, e.g. damages. 

Law applicable to procedure = law which governs procedural questions, e.g. means of evidence. 

Lex mercatoria = law of international merchants, which originates in international business usages, contractual practices, standard conditions and general principles of international business law.

Law chosen by arbitrators = Law or legal rules applied to mertis of a dispute in case parties have not chosen applicable law to their contract

Rules of Law = Parties and arbitrators may often choose  "rules of law" (e.g. UNIDROIT Principles)  instead of "law" as law aaplicable to the dispute.

Study materials:

Here you can find interesting material.

ROZEHNALOVÁ, Naděžda. Rozhodčí řízení v mezinárodním a vnitrostátním obchodním styku. 2. aktualiz. a rozš. vyd. Praha : ASPI, 2008. 386 s. ISBN 9788073573249

Here you can find powerpoint presentation.

Your task for this seminar is following:

Please go through the articles and study materials and try to learn something about Law applicable to arbitration. We will discuss it after presentation.

The task for the GROUP 3 (Petr Šmerkl (207102), Bohuslav Lichnovský (325464))

- please prepare a power point presentation about the topic of seminar

     In your presentation should be :

• description and analysis of the topic of this seminar
  
• analysis of the law applicable to the merits of dispute
• analysis of the lex mercatoria

At the end of this seminar you should be able to answer these question:

1. Are at least some of the international arbitrators entitled to choose lex mercatoria as applicable law, if parties has not given any giudeline regarding applicable law?

2. Consider following statement: Parties are always free to choose applicable procedural law in international arbitration.

3.  May parties agree that the dispute arising from their contract will be decided on the basis of other than legal rules?

4. Consider following statement: Arbitrators must always use conflict rules in order to find applicable law to merits of a dispute.

5. Consider following statement: Arbitrator deciding the case as amiable compositeur may completely disregard a contract between parties.

6.  Do the rules of international arbitration centres (e.g. ICC) play any role regarding applicable law? If so, which one(s)?

7. Parties included in a contract following clause: "All disputes arising from this contract will be decided in amiable composition by a sole arbitrator."

Does this clause entitle the arbitrator to completely disregard mandatory rules of applicable law?

8. Consider following statement: The choice of arbitration institution by parties cannot have an impact on applicable law.

9. May Principles of International Commercial Contracts be applied on merits of a dispute in international arbitration?

10. Consider following statement: Procedural law applicable in international arbitration is always governed by lex arbitri.