Module IV·Article I·~2 min read
Conflict of Laws Rules: How Applicable Law Is Chosen
Private International Law
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The Problem of Choosing Applicable Law
When a Russian company sells goods to a German firm through a Singaporean intermediary, the question arises: which country's law governs the transaction? Conflict of laws—a clash of the laws of different states—is resolved through conflict of laws rules.
Party Autonomy
The fundamental principle is that the parties themselves select the applicable law. This is enshrined in most international agreements and national codes of private international law. Limitations: it is not permitted to circumvent mandatory rules (applicable regardless of the parties' choice) and public policy.
Hierarchy of Connecting Factors in the Absence of Choice
If the parties have not chosen the law, objective conflict of law connecting factors are applied:
- Lex loci contractus — the law of the place where the contract is concluded (historically, now rarely used)
- Lex loci solutionis — the law of the place of performance of the contract
- Characteristic performance — the law of the party effecting the characteristic performance (seller, contractor, lender)
- Closest connection — a general principle (Proper Law of Contract)
The Rome I Regulation (EU) codifies these rules for contractual obligations in the EU.
Recognition and Enforcement of Foreign Judgments
A foreign court judgment is not enforced automatically. Exequatur is required—the recognition and granting of permission for enforcement in a particular state. Grounds for refusal: violation of public policy, lack of jurisdiction of the foreign court, improper notification.
The 1958 New York Convention obliges states to enforce foreign arbitral awards. This is the main advantage of arbitration over state courts in international transactions.
Practical Assignment
A Russian company has obtained a judgment from a U.S. court of general jurisdiction (not an arbitral tribunal) in its favor against an American company. What is the procedure for enforcement of this judgment in Russia? What are the chances of success?
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