The title of this presentation raises numerous practical and legal questions on the choice of applicable law in international commercial arbitration in general, and specifically with respect to the application of the UNIDROIT Principles of International Commercial Contracts. In this paper, I shall deal only with the extent to which the UNIDROIT Principles can and should be applied in international arbitration, and look at some cases in which these Principles have been applied by international arbitrators. I will look, firstly, at situations where the parties have expressed a choice of law or of a determined or undetermined standard to be applied to their contract. In these circumstances, the question is whether and to what extent the UNIDROIT Principles can be applied in addition to an express choice of law, or to influence or interpret the general principles of some national law or other international standard. Secondly, I will look at the situation where there is no express choice of law and, then, when and if international arbitrators should apply the UNIDROIT Principles to regulate and determine substantive issues in a transnational commercial contract between parties from different countries. I will concentrate on the approach of legal counsel generally when contemplating the application of the UNIDROIT Principles. I will not deal with the legal and philosophical choice-of-law dilemma for arbitrators. Nor will I consider the extent to which international arbitrators can or should apply private international law rules to reach their conclusions. These are fundamental questions which go to the structure of the arbitral process and are addressed by Professor Lalive in his accompanying article. 1

Before turning to the two specific questions to be dealt with, it would be useful to look at the circumstances in which the UNIDROIT Principles themselves say that they apply. According to the Preamble to the Principles, 2 which expresses the intent of the drafters of the Principles, they are to apply not only where expressly chosen, but also to influence and be applied where general principles of law or lex mercatoria are applicable and where there is no clear rule of law. They are also intended to influence the interpretation and development of national and international law. These Principles have essentially an international character and include usages and practices regularly formed in particular trades. [Page86:]

1. Express choice of lex contractus by the parties

In practice, we know parties can and do select all manner of national and international laws, and non-national, even non-existent standards, to govern their contractual relations. This is applicable to almost every kind of commercial transaction. ICC statistics show that around 80% of matters that come to ICC arbitration have a predetermined choice-of-law provision. 3

On the basis of the doctrine of party autonomy, arbitrators must apply the law or standard selected by the parties. The question for us today is the effect, if any, which the UNIDROIT Principles may have on this express choice of the parties. The choice may be of some national law or other standard, or of the UNIDROIT Principles themselves.

We will look at each of these choices in turn under the headings (i) national law, (ii) lex mercatoria or general principles of law, and (iii) the UNIDROIT Principles.

1.1 Express choice of national law

This is the normal situation where a national law has been chosen by the parties. It provides certainty for the lawyers and comfort for the parties. National law is often selected because the stronger party insists on its law governing. In some cases, the national law chosen is a compromise neutral law, neither party wishing to accept the law of the other. This frequently involves or should require the parties seeking advice from a lawyer from the selected legal system to confirm that the contract is valid and will be effective under that national law.

As a general rule, in such circumstances, arbitrators will apply the national law chosen by the parties to govern their contractual relationship. When a dispute arises, the arbitrators will seek to determine and apply the specific substantive rules of that chosen national law to govern the issues they are asked to resolve. The lawyers for both parties will often argue that the substantive applicable rules are different, naturally supporting the cases of their respective clients.

The real issue for arbitrators in these circumstances is to determine exactly what the relevant specific rule is and to apply it to the facts of the case.

Frequently, the national law rule is non-existent or unclear. In such a circumstance it is for the arbitrators, having heard argument from the lawyers, to decide what that legal rule is. Generally, parties and arbitrators are influenced by the legal writings and philosophy of the national law in reaching conclusions as to the content of specific rules.

In an international case, there is an additional factor for determining how an unclear rule (and, in some cases, even a clear rule) can and should be determined and applied. This is recognized in many international arbitration rules which provide that, when applying the applicable law, arbitrators should also take account of 'the usages of the trade applicable to the transaction'4 or 'the relevant trade usages'. 5 This might in certain circumstances be considered as an implied choice of the UNIDROIT Principles standing beside an express choice of national law, i.e. the choice of an arbitration system requiring the [Page87:] application of trade usages may lead to the application of the UNIDROIT Principles. 6 However, in the absence of very clear and mandatory national legal rules, trade usages and therefore the anticipated or expected practices of the parties should be applied by arbitrators.

The UNIDROIT Principles can equally be used as a means of interpretation of unclear provisions, or in order to fill the gaps of national law, or as an indication of the likely substantive national law rule. This follows from the UNIDROIT Principles becoming recognized and generally accepted as rules of international commercial law. Again, in the absence of clear rules of national law, arbitrators could, in relevant cases, apply the substantive UNIDROIT Principles. In such situations, they would take the UNIDROIT Principles into account unless they conflict with express or mandatory provisions in the chosen national law. This is the approach which arbitrators have in fact taken in several ICC awards.

In the final award of May 1997 in ICC case 7365, 7 two contracts had been entered into between a US company and the Iranian air force. Performance of the contracts was not completed before the Islamic Revolution of 1979. The contracts provided for the law of Iran to apply with the 'complementary and supplementary application of general principles of international law'. The tribunal held, with regard to the substantive applicable law, that, since both parties agreed to the application of international law and trade usages and on the ground of article 13(5) of the 1988 ICC Rules of Arbitration, the UNIDROIT Principles should be taken into account: 8

Since both Parties eventually agreed to the complementary and supplementary application of general principles of international law and trade usages, and based on Article 13(5) of the ICC Rules, the Tribunal shall, to the extent necessary, take into account such principles and usages as well. As to the contents of such rules, the Tribunal shall be guided by the Principles of International Commercial Contracts, published in 1994 by the UNIDROIT Institute, Rome.

In their award, the arbitrators referred expressly to articles 5.1 and 5.2 (in connection with termination and implied terms), 6.2.3 (in relation to 'good faith and fair dealing' as it applies to hardship) and 7.3.6 (regarding restitution) of the UNIDROIT Principles. They pointed out, however, that the application of the Principles was limited, insofar as the provisions they contained could be applied only 'as a complementary and supplementary rule, not as a rule in clear contradiction to an unambiguous provision of the Iranian law chosen by the Parties'. 9

ICC case 947910 concerned the interpretation of an agreement entered into between two companies created when a family partnership specializing in the manufacture of textiles was dissolved. The agreement contained a provision on applicable law. Taking into account article 13(5) of the ICC Rules of Arbitration and its reference to trade usages, the tribunal, in its final award, held that it should revert to the law applicable to the contract only when an answer to the issues raised by the parties was not found in the contract or in international trade usages.

ICC case 848611 concerned a contract for the sale of a manufacturing plant to a Turkish company. The buyer failed to pay for the goods due to financial difficulties and the Dutch manufacturer brought arbitration proceedings to claim damages for the unpaid order. In its final award of September 1996, the tribunal awarded damages for the claimant but provided that Dutch law was to be applied with restraint and taking into consideration the UNIDROIT Principles. The tribunal stated: [Page88:]

. . . this general provision is applied only with much prudence in internal legal practice within the Netherlands . . . The prime decisive factor here, according to art. 3.12 BW, is the 'legal conviction valid in the Netherlands'. In the case of application of the provision in an international context, this is replaced by the legal convictions valid in international contract law. The decisive characteristic here, however, is the principle of pacta sunt servanda, as expressed for instance in art. 1.3 of the UNIDROIT Principles of International commercial Contracts . . . These legal convictions are also to be taken into consideration when applying national law to international matters . . . The necessity and admissibility of interpreting national law in the light of the UNIDROIT Principles has also been specifically advocated for Dutch law . . . 12

The tribunal rejected the Turkish buyer's claim to justify termination due to unforeseen circumstances and stated:

The underlying principle in international trade is rather that the parties themselves assume the corresponding risks of performing and fulfilling the contract unless the risks are expressly otherwise distributed in the contract itself . . . Moreover, art. 6.2.1 of the UNIDROIT Principles states specifically that the mere fact that performance of a contract entails greater economic difficulties for one of the parties is not sufficient justification for accepting a case of hardship . . . 13

By contrast, in ICC case 8873, 14 an arbitral tribunal refused to apply the UNIDROIT Principles because they had not been expressly chosen by the parties. The case concerned a contract between Spanish and French companies for construction works in a third country. Due to price increases, one of the parties claimed the right to renegotiate the contract, relying on the hardship provisions of articles 6.2.2 and 6.2.3 of the UNIDROIT Principles. The tribunal said it would apply the UNIDROIT Principles only where they were expressly agreed by the parties or where the contract refers to '"general principles of law", the "lex mercatoria" or the like' as the applicable law. In this case, as the parties had chosen a particular domestic law to govern their contract and the rules concerning hardship did not correspond to those of the UNIDROIT Principles, the chosen rules prevailed.

In summary, the position would appear to be that generally arbitrators will apply the UNIDROIT Principles, where they consider it appropriate, to supplement and support the application of the chosen applicable law. Much may well depend on whether the UNIDROIT Principles have a rule that is relevant and helpful in the particular case.

1.2 Express choice of lex mercatoria, general principles of international/commercial law

As already noted, the Preamble to the UNIDROIT Principles provides that the Principles 'may be' applicable when the parties have agreed that their contracts are governed by '"general principles of law", the "lex mercatoria" or the like'.

Some authors believe that the UNIDROIT Principles 'constitute a cornerstone in the lex mercatoria debate and may become the heart of the new lex mercatoria', 15 although they cannot be identified with lex mercatoria. 16 Other authors consider them to be a codification of general principles of law and lex mercatoria. 17 This may be an academic debate. In practice, already, the Principles are used to give concrete rules to lex mercatoria.

There are many instances in which arbitral tribunals have applied the UNIDROIT Principles where the parties have selected a non-national law to govern. [Page89:]

ICC case 881718 concerned the termination of an exclusive distributorship contract. The sole arbitrator issued a procedural order on the law applicable to the dispute and held that the United Nations Convention on Contracts for the International Sale of Goods (CISG) 'and its general principles, now contained in the UNIDROIT Principles of International Commercial Contracts, are perfectly suited to resolving the dispute'. 19 In this case the UNIDROIT Principles were used as a means of interpretation together with CISG.

ICC case 947420 concerned the breach of agreements for the supply of banknotes entered into between a state bank and a securities manufacturer. In its interim award of February 1999, the arbitral tribunal stated: 'Both parties accepted the Arbitral Tribunal's proposal to apply the "general standards and rules of international contracts" . . .' It went on to express the opinion that these principles 'are not directly expressed in a specific international convention' and can be found, among various sources, in the UNIDROIT Principles.

The application of the UNIDROIT Principles by arbitrators has been recognized and upheld by a United States court. 21 The arbitral tribunal had applied the UNIDROIT Principles in support of various aspects of its decision on the merits. The American defendant sought refusal of enforcement of the award under article V(1)(c) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards on the grounds that the tribunal's references to the UNIDROIT Principles and to principles of fairness, such as good faith and fair dealing, was outside the scope of the terms of reference. The United States District Court, Southern District of California, found:

The reference to the UNIDROIT Principles does not exceed the scope of the Terms of Reference. One of the issues presented to the Tribunal was whether general principles of international law apply to this dispute. That Cubic disagrees with the Tribunal's response to the question posed by the parties is not a reason to find that the Tribunal addressed issues beyond the scope of the Terms of Reference. The same is true for Cubic's assertions with regard to the Tribunal's references to equitable principles of contract law. 22

There are, however, cases where arbitrators have declined to apply the UNIDROIT Principles as part of lex mercatoria. For example, in the final award of March 1998 in ICC case 9029, 23 the arbitrators held that, at the present stage, the UNIDROIT Principles were not to be applied as part of lex mercatoria (although they may become so in the future).

1.3 Express choice of the UNIDROIT Principles by the parties

It is clear that where the parties expressly select the UNIDROIT Principles to apply to their contractual arrangements, these Principles should be applied just like the choice of any national law. As already seen, the Preamble to the Principles states that they are to be 'applied when the parties have agreed that their contract be governed by them'.

The parties are also free to agree that the Principles are to be applied for the purposes of interpreting or supplementing their contract. 24

On the other hand, a choice of the Principles does not affect the application of otherwise applicable mandatory rules of national, international or supranational origin. 25[Page90:]

Even where the UNIDROIT Principles are expressly chosen by the parties, there are some contractual areas for which they do not make provision. For example, they do not deal with the question of capacity or authority of parties, or the effect of immorality or illegality on an agreement. 26 In these circumstances, either the national law that would otherwise be applicable according to the normal conflict rules or some other international or non-national standard27 would apply to govern such circumstances.

There are cases in which the parties expressly agreed that the UNIDROIT Principles were to apply.

In ICC case 8331, 28 a memorandum of understanding was signed by Swedish and Iranian companies. There was no express choice of law but the parties agreed that the arbitral tribunal should apply the relevant agreements between them and, to the extent that it found it necessary and appropriate, the UNIDROIT Principles.

The tribunal decided that the legal status of the memorandum of understanding should be defined in the light of article 4.5 of the UNIDROIT Principles and the comments published by UNIDROIT concerning the effects to be given to contractual terms. It found that the parties were under an obligation to use their best efforts to ensure that the general description of their intentions was translated into specific and binding contractual terms. The arbitral tribunal also looked at the UNIDROIT Principles (articles 7.4.3 and 7.4.9) to determine the quantum of damages.

In a decision of the International Arbitration Court of the Chamber of Commerce and Industry of the Russian Federation, 29 a sales contract between a Russian trade organization and a Hong Kong company was silent as to the applicable law. In accordance with the express agreement of the parties, the tribunal applied a number of individual articles of the UNIDROIT Principles to regulate the substantive issues in dispute.

Likewise, in an ad hoc award in France, 30 concerning a loan agreement between a Russian trade organization and a US company, the parties agreed that the arbitral tribunal should apply Russian law 'if necessary supplemented by the UNIDROIT Principles'.

2. Absence of an explicit choice

I turn now to the situation where the contract is silent as to national or other law or other standards to be applied. As already noted, according to ICC experience, this occurs in around one in five cases.

In these circumstances, it falls to the arbitrators to select the national law or rules to apply to the particular dispute. This gives rise to the traditional question of whether the tribunal should apply conflict-of-laws rules (which one?) to determine the applicable substantive law. I will not deal with this issue here. I limit myself to the simple question of when and how the UNIDROIT Principles may be applicable.

Many arbitrators, in cases where there is no choice of law, seek to develop a neutral or non-national basis for determining the rules to be applied. Accordingly, they often explain that the substantive rules are the same in the national laws of the different parties and therefore there is no need for an express choice. They may also seek to apply some international rule or standard which either supports one or both national laws or which, for some reason, the tribunal considers to be appropriate and therefore applies in the circumstances. [Page91:]

The rationale is the same where arbitrators seek to apply 'lex mercatoria' or 'general principles of law'. As the rules applied under these headings are international or at least non-national, it is alleged that they are more appropriate and acceptable to parties from different legal systems who have agreed to bring their dispute to an private international forum. It is unclear whether this is in fact correct, but the concept and the practice is well known.

2.1 National courts

I am not aware of any national court judgments where the UNIDROIT Principles have been applied or their application even been considered in circumstances where there is no express choice of law in the contract.

There are cases, however, where national courts have adopted the UNIDROIT Principles to assist in the interpretation of a commercial contract. For example, the Court of Appeal of Grenoble, relying on articles 2.21 and 4.6 of the UNIDROIT Principles, held that it is a principle in international commercial law that, in the case of incompatibility between a standard clause and a clause which is not standard, the latter will apply, and that if contract terms supplied by one party are unclear, an interpretation against that party is preferred. 31

2.2 International arbitration tribunals

The circumstances for the application of the UNIDROIT Principles by arbitrators are similar to those for the application of lex mercatoria, general principles of law and similar concepts.

It is recognized that these concepts can generally be presumed to imply or include the UNIDROIT Principles themselves. On the other hand, it is a fact that the Principles are more specific. Here, there is a body of rules which can be applied to the particular circumstances of a case. With lex mercatoria or general principles of law, it is necessary to look for one or more of their various sources to determine if there is a relevant rule which can be found, followed and adopted for the particular case in point. Identifying the sources of lex mercatoria and the components of general principles of law is a far less concrete operation than the clear and simple identification of the UNIDROIT Principles.

The wording of the various national laws and arbitration rules as to the application of both national law and non-national law or other standards is supportive of this position. Some allow arbitrators to go directly to apply the substantive law or rules that they consider appropriate or applicable in the circumstances. 32 The language of these laws and rules does not limit choice to a national law or rule to be found in national or international law. The absence of such clear language, in my view, leaves arbitrators free to apply any 'rules of law' which they consider appropriate. Whilst this could be a national law rule or an international law rule, it could also be a rule drawn from a particular industry practice, international commerce, trade usage, past practice between the parties, or some appropriate international text, e.g. INCOTERMS, CISG, Hague Conventions and, most pertinently, the UNIDROIT Principles. As already noted, the Principles are the clearest and easiest in which to find concrete rules to regulate an international commercial contract.

This position is supported further by the fact that many of these laws and rules require arbitrators either to take into account trade usages33 or to apply trade usages as a substantive standard, i.e. a contractual rule of law between the parties. 34[Page92:]

Of course, the application of any non-national standard is inevitably limited to respecting and upholding the otherwise applicable national laws. This is a fact of which parties and arbitrators must always be conscious.

A review of the few published cases involving the UNIDROIT Principles to date shows how, and the circumstances in which, arbitrators have and should apply the these Principles to given situations.

In ICC case 9797, 35 the arbitration clause in the interfirm agreements expressly provided that the governing rules were to be the terms of the agreements and the articles and bylaws of one of the parties to the agreements, and that the arbitrator, when interpreting these terms, was not bound to apply the substantive law of any jurisdiction but was rather to be guided by the policies and considerations in the preamble to the agreements and the aforementioned articles and bylaws and to have regard to general principles of equity. Relying on this express contractual provision, when the agreement and the bylaws were silent, the arbitral tribunal decided to apply, in accordance with article 17(1) of the ICC Rules of Arbitration, 'the rules of law it deems appropriate; those rules of law shall be the general principles of law and the general principles of equity commonly accepted by the legal systems of most countries'. 36 In seeking the specific rule to apply, the tribunal looked for non-national but internationally recognized rules and accordingly applied the UNIDROIT Principles, stating that these 'are a reliable source of international commercial law in international arbitration for they "contain in essence a restatement of those 'principes directeurs' that have enjoyed universal acceptance and, moreover, are at the heart of those most fundamental notions which have consistently been applied in arbitral practice"'. 37

ICC case 987538 concerned an exclusive licence between French and Japanese companies relating to the manufacture, sale and distribution of one of the parties' products in Europe. The agreement did not contain any provision on applicable law. Given the difficulty of finding decisive factors qualifying either Japanese or French law as applicable to the contract, the tribunal affirmed that a licence to manufacture products and to sell them in various part of the world 'is not appropriately governed by the national law of one of the parties, failing agreement on such a choice'. Therefore, the tribunal held that the most appropriate rules of law to be applied were those of lex mercatoria as elaborated by certain institutions like UNIDROIT.

In ICC case 7110, 39 a series of contracts between an English party and a Middle Eastern government agency was silent as to the applicable law. Several of the contracts made reference to the disputes being settled 'according to natural justice' and by ICC arbitration. The claimant argued for the application of general principles of law. The respondent, following the conflict rules in article 13(3) of the 1988 ICC Rules of Arbitration, argued that English law should apply as the law most closely connected with the contract. The arbitral tribunal found that the parties had quite clearly excluded the application of a national law; they had rejected each other's law and, by agreeing to international commercial arbitration, they intended the application of general legal rules and principles to govern the contracts. The tribunal further affirmed that 'such "negative" choice by the parties commands as much respect as any express choice of law would have commanded', 40 and that 'general legal rules and principles enjoying wide international consensus, applicable to international contractual obligations and relevant to the Contracts' were primarily reflected in the UNIDROIT Principles.

In consequence, without prejudice to taking into account the provisions of the Contracts and relevant trade usages, this Tribunal finds that the contracts are governed [Page93:] by, and shall be interpreted in accordance [with], the UNIDROIT Principles with respect to all matters falling within the scope of such Principles, and for all other matters, by such other general legal rules and principles applicable to international contractual obligations enjoying wide international consensus . . . 41

The tribunal gave its reasons for the application of the UNIDROIT Principles as:

(i) they are a statement of international legal principles applicable to international commercial contracts made by a distinguished group of international experts;

(ii) they are largely inspired by CISG, which has already attained wide international recognition and is generally considered as reflecting international trade usages and practices in the field of international sales of goods;

(iii) they were specially adapted to the subject matter of the arbitration; and

(iv) they are mostly constituted by clearly enunciated and specific rules coherently organized in a systematic way.

There was a similar analysis in ICC case 7375, 42 which bore certain similarities to the case discussed above. It concerned several contracts between a US manufacturer and a Middle Eastern buyer. Faced with a contract that was silent as to the applicable law, the tribunal took the view that that neither party would have been prepared to accept the other party's national law. In light of this 'implied negative choice', it decided to apply general principles and rules of law applicable to international contractual obligations which were widely recognized and accepted in the international business community. In so doing, it would include concepts regarded as part of lex mercatoria and take account of relevant trade usages and the UNIDROIT Principles, to the extent that these could be considered as a reflection of generally accepted principles and rules.

A similar decision was made in ICC case 8502, 43 which concerned a contract for the supply of rice between a Vietnamese exporter and French and Dutch buyers. Once again, the contract was silent as to the applicable law, but it did refer to international trade usages and specifically to INCOTERMS 1990 and UCP 500. The tribunal considered this to be an indication of the parties' 'willingness to have their Contract governed by international trade usages and customs'. Accordingly, it applied 'trade usages and generally accepted principles of international trade'. To this end, it announced that, when circumstances required, it would refer to CISG or the UNIDROIT Principles 'as evidencing admitted practices under international trade law'. This it did when deciding how damages were to be calculated.

When empowered to act outside the strict application of the law, arbitrators may be able to draw help from the UNIDROIT Principles, as a commercial, international and fair body of rules. This occurred in ICC case 8874, where the sole arbitrator was required to settle a dispute acting as amiable compositeur and in accordance with principles of equity. Having decided that interest was to be paid by the respondent on outstanding payments, the arbitrator looked to the UNIDROIT Principles to fix the appropriate rate. 44 Similarly, in an ad hoc arbitration in Argentina, 45 although the parties relied on specific provisions of Argentine law, they also authorized the arbitrators to act as amiables compositeurs. The tribunal decided to apply the UNIDROIT Principles because they constituted 'usages of international trade reflecting the solutions of different legal systems and of international contract practice'. In a further case conducted under the rules of the [Page94:] Chamber of National and International Arbitration of Milan, a sole arbitrator, who had been empowered to act ex æquo et bono, applied the UNIDROIT Principles in deciding that the termination of a contract was invalid. 46

Conclusion

When making submissions to a tribunal for the application of the UNIDROIT Principles the position would appear to be as follows:

(i) Where parties have expressly selected a national law to govern, arbitrators should be prepared to apply the UNIDROIT Principles where the relevant substantive rule of the applicable national law is ambiguous or does not contain a clear provision, provided there is a relevant and appropriate UNIDROIT Principle for the specific situation.

(ii) Where the parties have agreed to the application of lex mercatoria or general principles of law, arbitrators will often find an appropriate and relevant rule in the UNIDROIT Principles.

(iii) If the parties expressly agree the UNIDROIT Principles should apply, then they should be applied by arbitrators subject to any mandatory law.

(iv) Where the parties have not agreed on an applicable national law, but the case is clearly international and neither party is willing to submit to the national law of the other, arbitrators should, where appropriate, apply an international standard such as lex mercatoria, general principles of law or the UNIDROIT Principles. As the UNIDROIT Principles are a clear, manifest body of rules, with respect to which there are both travaux préparatoires and legal writings, as well as increasing case law relating to their application, they can be directly applicable. Equally, arbitrators can use the Principles to help elucidate or interpret the agreed contract terms.

(v) Where arbitrators have selected lex mercatoria, general principles of law or some similar set of rules, or are even acting as amiables compositeurs or ex æquo et bono, the UNIDROIT Principles provide concrete rules which may be applicable for the specific contract involved. Where such rules are applicable they can and should be applied by arbitrators.

1
See P. Lalive, 'The UNIDROIT Principles as Lex Contractus, With or Without an Explicit or Tacit Choice of Law: An Arbitrator's Perspective', hereinabove, pp. 77-83.

2
'Preamble (Purpose of the Principles): These Principles set forth general rules for international commercial contracts. They shall be applied when the parties have agreed that their contract be governed by them. They may be applied when the parties have agreed that their contracts be governed by "general principles of law", the "lex mercatoria" or the like. They may provide a solution to an issue raised when it proves impossible to establish the relevant rule of the applicable law. They may be used to interpret or supplement international uniform law instruments. They may serve as a model for national and international legislators.'

3
According to the Statistical Report of the ICC Court, in 82% of cases in 1999 and 77% of cases in 2000 the parties had agreed upon the applicable substantive law. See (2000) 11:1 ICC ICArb. Bull. 10, (2001) 12:1 ICC ICArb. Bull. 11.

4
e.g. UNCITRAL Arbitration Rules, art. 33(3).

5
e.g. ICC Rules of Arbitration, art. 17(3).

6
See award in ICC case 7365 discussed below.

7
See database on international case law relating to the UNIDROIT Principles of International Commercial Contracts at: www.unilex.info

8
See also final award in ICC case 8547, (2001) 12:2 ICC ICArb. Bull. 57; final award in ICC case 10346, ibid. 106. In the partial award in ICC case 10022, ibid.100, the tribunal clarified that the reference to 'the relevant trade usages' contained in article 17 of the ICC Rules of Arbitration includes but is not limited to the UNIDROIT Principles.

9
This award was unsuccessfully challenged in the US courts on the basis that the application of the UNIDROIT Principles was beyond the authority of the tribunal.

10
(2001) 12:2 ICC ICArb. Bull. 67.

11
(1999) 10:2 ICC ICArb. Bull. 69, (1999) XXIVa Y.B. Comm. Arb. 162 [English translations, original in German].

12
(1999) 10:2 ICC ICArb. Bull. 69 at 70.

13
Ibid.

14
(1999) 10:2 ICC ICArb. Bull. 78 [original in French].

15
Gesa Baron, 'Do the UNIDROIT Principles of International Commercial Contracts Form a New Lex Mercatoria?' (1999) 15 Arbitration International 115 at 116.

16
See also Hans van Houtte, 'The UNIDROIT Principles of International Commercial Contracts' (1995) 11 Arbitration International 373.

17
M.J. Bonell, 'The UNIDROIT Principles and Transnational Law' (www.unidroit.org/english/publications/review/articles/2000-2.htm), at footnote 20, quotes P. Lalive, 'L'arbitrage international et les Principes UNIDROIT' in M.J. Bonell & F. Bonelli, eds., Contratti Commerciali Internationali e Principi UNIDROIT (Milan: Giuffrè, 1997) 71 at 80.

18
(1999) 10:2 ICC ICArb. Bull. 75, (2000) XXV Y.B. Comm. Arb. 355 [English translations, original in Spanish].

19
(1999) 10:2 ICC ICArb. Bull. 75 at 77.

20
(2001) 12:2 ICC ICArb. Bull. 60.

21
US District Court S.D. California, 7 December 1998, see (1999) XXIVa Y.B. Comm. Arb. 875.

22
Ibid. at 879.

23
(1999) 10:2 ICC ICArb. Bull. 88.

24
In so doing they seek to lend an 'international character' to such interpretation or supplementation (cf. UNIDROIT Principles, art. 1.6).

25
UNIDROIT Principles, art. 1.4.

26
UNIDROIT Principles, art. 3.1.

27
e.g. Council of Europe Civil Law Convention on Corruption dated 4 November 1999.

28
(1999) 10:2 ICC ICArb. Bull. 65.

29
www.unilex.info

30
www.unilex.info

31
Cour d'appel de Grenoble, 24 January 1996, [1997] Rev. arb. 87. See also Federal Court of Australia, 30 June 1997, Hughes Aircraft Systems International v. Airservices Australia, www.unilex.info

32
e.g. LCIA Rules, art. 22.3; Netherlands Arbitration Institute Rules, art. 46; WIPO Arbitration Rules, art. 59.

33
e.g. AAA International Arbitration Rules, art. 28.2; LCIA Rules, art. 22.3.

34
e.g. ICC Rules of Arbitration, art. 17(2); UNICITRAL Arbitration Rules, art. 33(3).

35
(2001) 12:2 ICC ICArb. Bull. 88.

36
Ibid. at 89.

37
Ibid. at 89. The arbitrator here quotes ICC award 7375, mentioned below.

38
(2001) 12:2 ICC ICArb. Bull. 95.

39
(1999) 10:2 ICC ICArb. Bull. 39.

40
Ibid. at 46.

41
Ibid. at 49.

42
www.unilex.info

43
(1999) 10:2 ICC ICArb. Bull. 72.

44
(1999) 10:2 ICC ICArb. Bull. 82.

45
www.unilex.info

46
(1999) XXIVa Y.B. Comm. Arb. 196.