Do Mandatory Rules of Public Law Limit Choice of Law in International Commercial Arbitration

Mohammad Reza Baniassadi
The general principle of party autonomy allows contracting parties to choose the substantive law that will govern their contract. In the international arbitration arena, arbitrators are faced with the unanswered question of whether to apply or consider relevant mandatory rules ofpublic law which were not chosen by the contracting parties. Neither international arbitration conventions nor national arbitration laws have answered this important question. An arbitrator who decides to apply the
more » ... tory rules of public law faces three problems: 1) party perception that mandatory rules ofpublic law are an unnecessary interference with formation and performance of international contracts; 2) conflicts between the underlying public policy and the contracting parties' will; and 3) enforceability of the arbitration award. In this article, the author examines arbitrators' practical application of mandatory rules of public law and concludes with a discussion of how international public policy will affect an arbitrator's jurisdiction.
doi:10.15779/z38rp9x fatcat:hmtymtkw7fhxrhdxekvcu6kzd4