COMBAR North American Meeting 2016 Prof Avv Massimo

COMBAR North American Meeting 2016 Prof. Avv. Massimo Benedettelli The Influence of Modern Commercial Law on Shipping Cases: Arbitrating Shipping Contracts under the UNIDROIT Principles Venezia, 31 March 2016

“it would be an important professional fault to advise a party to use the UNIDROIT Principles” an English unnamed barrister (reported by S. Lake, An Empirical Study of the UNIDROIT Principles - International and British Responses, in Revue de droit uniforme, 2011, 669, at 689) “the British mindset encompasses a parochial attitude, fueled by fears of the unknown, of losing national identity, of losing income from the application of English law, and by an element of derogation towards academic practice” (S. Lake, ibid. )

OUTLINE I. SETTING OUT THE DRAMATIS PERSONAE II. NATURE, QUALITIES AND DEFECTS OF THE UNIDROIT PRINCIPLES III. ARBITRATING COMMERCIAL DISPUTES UNDER THE UNIDROIT PRINCIPLES: THE ROLE OF ARBITRATORS, COURTS, PARTIES … AND COUNSEL 2

I. SETTING OUT THE DRAMATIS PERSONAE Ø charter-parties, bills of lading, maritime insurances and international arbitration: a frequent, and proper, match Ø international arbitral tribunals “have no forum”: the wider discretion of arbitrators in selecting the applicable law Ø UNIDROIT: an international organization in which States are widely represented Ø the UNIDROIT Principles of International Commercial Contracts § § § Ø an “international restatement of general principles of contract law” drafted by a group of leading experts representing different legal traditions evolving over time (3 editions: 1994, 2004, 2010) the 2012 Model Clauses: using the UNIDROIT Principles § § as “the rules of law governing the contract” as “terms of the contract” as a means “to interpret and supplement the 1980 Vienna Convention on international sale of goods” as a means “to interpret and supplement the applicable domestic law, including any international uniform law instrument incorporated into that law” 3

II. Ø NATURE, QUALITIES AND DEFECTS OF THE UNIDROIT PRINCIPLES the UNIDROIT Principles: soft law which may evolve into custom? § a private, not binding instrument whose acceptance “will depend upon its persuasive authority” § a reasoned synthesis of the civil law and common law heritages in the field of contract law o the (prevailing) civil law influence: e. g. , good faith, hardship o some elements of the common law tradition: e. g. , disclosed agency, termination § a codification of o rules which are common to most legal systems o “best solutions” tailored to the needs of international business § a tool for creating/accelerating the production of customary law o opinio juris o diuturnitas 4

II. Ø NATURE, QUALITIES AND DEFECTS OF THE UNIDROIT PRINCIPLES The myth of the UNIDROIT Principles’ “neutrality” § rules of law, whether mandatory or enabling, always strike a balance among the conflicting interests of the contracting parties § also the UNIDROIT Principles, as State contract law, reflect “political” choices among alternative regulatory options § the UNIDROIT Principles may serve to overcome the “my law/your law” deadlock in negotiations 5

II. Ø NATURE, QUALITIES AND DEFECTS OF THE UNIDROIT PRINCIPLES the “incompleteness” of the UNIDROIT Principles § § Ø the lack of “depth” of the UNIDROIT Principles compared to State law § § Ø issues not addressed issues addressed only in the Comments to alert the parties as to alternative options State contract law is a sector within a wider legal system, what facilitates recourse to analogy State contract law benefits of centuries of jurisprudence and case-law as a result § § the regulation becomes less predictable the adjudicator must “fill the gaps” if the parties have not referred to another law, the adjudicator performs a “praetorian” law-making function in performing such law-making function the adjudicator may come close to deciding ex aequo et bono 6

III. Ø ARBITRATING COMMERCIAL DISPUTES UNDER THE UNIDROIT PRINCIPLES: THE ROLE OF PARTIES, ARBITRATORS, COURTS, … AND COUNSEL the choice of the UNIDROIT Principles by the parties § as “rules of law” being the only source of regulation of the contract § as “rules of law” to be applied together with State contract law o o § with the UNIDROIT Principles being the main source, State contract law filling “gaps” or prevailing if mandatory with State contract law being the main source, the UNIDROIT Principles working as a tool for interpretation/integration as “terms of the contract” 7

III. Ø ARBITRATING COMMERCIAL DISPUTES UNDER THE UNIDROIT PRINCIPLES: THE ROLE OF PARTIES, ARBITRATORS, COURTS, … AND COUNSEL the application of the UNIDROIT Principles by the arbitrators § to comply with the parties’ express or implied choice § by their own motion when the contract is silent as to the applicable law § as a tool to strengthen the reasons of the award 8

III. Ø ARBITRATING COMMERCIAL DISPUTES UNDER THE UNIDROIT PRINCIPLES: THE ROLE OF PARTIES, ARBITRATORS, COURTS, … AND COUNSEL the enforcement by courts of awards based on the UNIDROIT Principles § an unavoidable dimension for granting effectiveness to the UNIDROIT Principles: State courts § possible grounds for challenging awards based on the UNIDROIT Principles o breach of the arbitration agreement o breach of the lex arbitri o conflict with the forum’s public policy o fraude à la loi § State law may o prohibit the parties to submit contracts to non-State rules of law (Rome I, Art. 3. 1, recital 13) o prohibit arbitral tribunals to apply non-State rules of law failing the parties’ agreement (English Arbitration Act, Sect. 46. 3) § the courts’ likely pro-arbitration self-restraint 9

III. Ø ARBITRATING COMMERCIAL DISPUTES UNDER THE UNIDROIT PRINCIPLES: THE ROLE OF PARTIES, ARBITRATORS, COURTS, … AND COUNSEL the fundamental role of the parties’ counsel § to help their client in assessing whether the UNIDROIT Principles offer a better or worse regulation § to clarify which type of use the parties want to make of the UNIDROIT Principles § to check whether the choice of the UNIDROIT Principles is consistent with the lex arbitri § to check whether the choice of the UNIDROIT Principles leads to an enforceable award 10