- Arbitral Award
- ICC International Court of Arbitration 12701
- Parties unknown
MEMORANDUM OF UNDERSTANDING - SILENT AS TO APPLICABLE LAW - APPLICATION BY ARBITRAL TRIBUNAL OF UNIDROIT PRINCIPLES AS THE LAW APPLICABLE TO THE MERITS OF THE DISPUTE PERFECTLY LEGITIMATE PROVIDED THERE IS NO SUBSTANTIVE CONNECTION BETWEEN CONTRACT AND PARTICULAR DOMESTIC LAW
In a dispute arising from a Memorandum of Understanding (MOU), which was silent as to the applicable law, one of the parties invoked the application of “general principles of law” and in particular of the UNIDROIT Principles. The Arbitral Tribunal pointed out that in the context of an international arbitration there is no fundamental obstacle, as a matter of principle, to the application of general principles of law and in particular of the UNIDROIT Principles; however in the case at hand such an approach would not seem to be appropriate, first because the mere silence of the parties as to the applicable law was not sufficient evidence for their intention to exclude the application of any domestic law, and second because both there was a substantive connection between France and the purpose and implementation of the MOU under consideration so as to perfectly justify the application of French law.
“Regarding the Claimant’s position that the general principles of law should be applied, there is of course no fundamental obstacle, as a matter of principle, to the application of general principles of law, and in particular the UNIDROIT Principles could be applied to decide the merits of a dispute in an international arbitration. However, in the face of the substantive connections between France and the purpose and implementation of the MOU discussed above, the Claimants have failed to identify any convincing reasons why general principles of law should apply in preference to the French law. In particular, the Parties’ silence in their MOU regarding the applicable law does not manifest a deliberate intention to exclude the application of a national law, and no evidence has been cited to suggest that this was in fact the Parties’ intention.
Accordingly, the Sole arbitrator decides that French law is the applicable law to the merits of the dispute between the Parties.”
E. Jolivet, L'harmonisation du droit OHADA des contrats: l'influence des Principes d'UNIDROIT en matière de pratique contractuelle et d'arbitrage, in Unifrom Law Review, p. 127 et seq. (p.137 fn 28)}}