- Arbitral Award
- ICC International Court of Arbitration 15089
HIGH-TECHNOLOGY SERVICE CONTRACT - BETWEEN TWO MIDDLE-EASTERN PARTIES - CONTRACT SILENT AS TO THE APPLICABLE LAW
ARBITRAL TRIBUNAL, HAVING FOUND THAT THERE WAS A ‘NEGATIVE CHOICE’ AS REGARDS THE PARTIES' RESPECTIVE DOMESTIC LAWS AND NO CLEARLY IDENTIFIABLE ‘OBJECTIVE’ CONNECTING FACTOR IN FAVOUR OF ANY PARTICULAR DOMESTIC LAW, DECIDED TO APPLY THE UNIDROIT PRINCIPLES IN ACCORDANCE WITH ARTICLE 17 ICC ARBITRATION RULES - UNIDROIT PRINCIPLES DEFINED AS AN INTERNATIONAL RE-STATEMENT (OR PRE-STATEMENT) OF MODERN CONTRACT LAW IN ITS MOST AUTHORITATIVE FORM, WELL-KNOWN IN INTERNATIONAL ARBITRATION PRACTICE AND ENDORSED BY THE UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW (UNCITRAL)
Claimant from Middle Eastern country A. Respondent from Middle Eastern country B. Contract relating to high-technology based services to be provided by Claimant. Contract does not contain a choice-of-law clause and provides as means of resolving disputes for ICC arbitration in London and language of the arbitration English.
A dispute arose with respect to certain instances of alleged non-performance.
Arbitral Tribunal: (1) arbitrator appointed by Claimant English; (2) arbitrator appointed by Respondent Lebanese; chairman of the Tribunal German.
Claimant argued, based on English case law, that there had been a tacit choice of English law as the law governing the contract. In the Claimant’s view, the use of the English language, the choice of London as seat of the arbitration and the neutrality of English law indicated that there had been such a tacit choice. Following an invitation by the Tribunal, the Claimant conceded, however, that application of the UNIDROIT Principles of International Commercial Contracts (UPICC) was an acceptable second-best solution.
Respondent argued in favour of the applicability of the law of country B. The Respondent submitted that certain rules of the lex mercatoria might be considered as an alternative but cautioned that the UPICC, taken in their entirely, were still too little known for them to be chosen as the law governing the contract.
In a Partial Award the Arbitral Tribunal decided that the law governing the contract shall be the UPICC, if and where necessary supplemented by the otherwise applicable law as determined in accordance with Article 17 ICC Rules. The Tribunal gave the following reasons: (1) There had been a ‘negative choice’ as regards the laws of A and B, and there had been no shared expectations of the parties in this respect. (2) There was no clearly identifiable ‘objective’ connecting factor or other conflict-of-laws rule. (3) The UPICC were shaped by the laws of the community of trading nations and constituted an international re-statement (and pre-statement) of modern contract law in its most authoritative form. (4) In the meantime, they were well-known, not least due to many hundreds of publications and more than 150 documented arbitral awards and court decisions. (5) The United Nations Commission on International Trade Law (UNCITRAL) had endorsed the UPICC.