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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
When entering into a contract, irrespective of its duration, parties should be fully aware of the importance of the choice of the law applicable to the merits. This is one of the most crucial questions in international contracts: in the event of a dispute, it is this law that will govern, for instance, the interpretation and validity of the contract, the rights and obligations of the parties, and the performance or otherwise of the contract.
Research conducted by the author into the breach of international2 distribution agreements (particularly those relating to franchise, 3 exclusive distributorship4 and selective distribution5 ) in ICC arbitral awards over a period of fifteen years, between 1984 and 1999, 6 has shown the full import of this choice. In 85% of cases, the parties chose a law applicable to the merits, their preference being for a single law. This left a mere 15% of cases in which the applicable law was determined by the arbitrators.
We shall first consider the reasons which led the parties to choose a law applicable to the merits and the implications of their choice (I). Secondly, we shall look at the methods adopted by arbitrators to determine the law applicable to the merits when the parties did not express their intentions (II). [Page38:]
I. The applicable law as chosen by the parties
French law relating to international arbitration, 7 like most systems of private international law, 8 upholds the principle of party autonomy. This means that the parties are free to designate a law applicable to their contract, even if there is no objective link between their choice and the agreement, provided their decision is not based on fraud or contrary to public policy.
The principle of party autonomy is also enshrined, with various shades of difference, in international conventions such as the Geneva European Convention on International Commercial Arbitration of 21 April 1961 (Art. 7(1)), the Rome Convention on the Law Applicable to Contractual Obligations of 19 June 1980 (Art. 3(1)) and the Hague Convention on the Law Applicable to Agency of 14 March 1978 (Art. 5). Article 17(1) of the ICC Rules of Arbitration of 1998 is drafted in the same vein, as is Article 28 of the UNCITRAL Rules of Arbitration of 25 June 1985.
In international distribution contracts, much use is made of this freedom given to the parties. As previously mentioned, they chose a law applicable to the merits in 85% of cases studied. Often they opted for the application of a continental law - Roman or Germanic9 - as the place where the parties carried on their distribution was usually in Europe. They were thus more inclined to opt for the application of a legal system with which they were familiar. The choice of a common law system was less widespread. 10
It may be noted that the parties sometimes empowered the arbitrators to act as amiables compositeurs in order to settle their dispute. This may have been to temper an overly strict application of a given law by endowing the arbitrators with powers of moderation.
In a few cases the parties chose to make their dispute subject to the United Nations Convention on Contracts for the International Sale of Goods or to give the arbitrators the possibility of referring to the stipulations of the contract to settle their dispute.
Although the fact that distribution is more widely practised in Europe than elsewhere may partly explain why parties choose a continental legal system, this is not the only reason. Their choice is made on the basis of other, additional criteria, which we shall consider below (A), before going on to discuss the implications of this choice on the parties and the arbitrators (B).
A. Criteria
The parties' choice of the law applicable to the merits appears to have been made on the basis of two criteria, one of which relates to their origins and the other to the flexibility of the chosen legal system.
The supplier was seen to impose its own national law in over half of the cases studied. This is hardly surprising given that it is in a dominating economic position when the [Page39:] contract is negotiated. A distributor wishing to become part of the supplier's distribution network, so as to benefit from the prestige of its name and know-how is always more ready to accept the other party's proposals, which include the clause relating to the law applicable to the merits. The choice of a continental legal system is largely explained by the predominance of European suppliers11 and that of a common law system is mainly due to the market presence of American suppliers.
Nevertheless, distributors have some room for manoeuvre, since in over a quarter of cases they managed to have their national laws chosen, showing that they are not entirely beholden to the suppliers. Acceptance of the distributor's law may be seen as a concession by the supplier when the contract is made, on account of the economic benefit at stake. It is in a supplier's interest to recruit a good performer as distributor. The choice of a continental legal system is again explained by the presence of European distributors12 and the choice of a common law system by the presence of American distributors.
When the parties do not manage to have one or other of their respective national laws chosen - which is somewhat rare - they opt for the application of a neutral system. In a half of cases this was Swiss law.
Failing an international substantive law, the law applicable to the merits is chosen by the parties in light of their knowledge of a municipal law acquired through professional experience and from statutes, case law, scholarly opinion and publications. The legal provisions likely to be applied by the arbitrators in the event of a dispute can in this way be foreseen, as can the solutions they may reasonably be expected to reach. 13
Parties need to be mindful of a certain number of determining factors, such as the absence of special rules or conditions regarding the formation and effects of contracts or the lack of any rules offering them special protection. Existing civil codes do not generally contain any specific references to distribution contracts, which are often categorized as special, unnamed or untypical, bilateral contracts made between independent traders intuitu personae. Hence, any dispute may be settled by reference to general rules on obligations. Moreover, there would be no statutory requirement for the supplier to compensate the distributor, for instance for loss of customers or lack of notice, in the event of the contract being terminated or not being renewed.
This remark is true of most continental legal systems, be they Roman or Germanic (e.g. France, Germany, Italy, Switzerland), 14 except for Belgium, 15 which has special rules in this field. It also applies to common law systems, including the United States and the United Kingdom.
Although the parties are free to choose the law applicable to the merits, their freedom is not without limits. Not only do the parties have to respect this choice, but also the arbitrators, whose task it is to settle the dispute between the parties by applying the law they have chosen. [Page40:]
B. Scope
The choice of law is an expression of the parties' intentions at the time their contract is concluded, while it is being performed, or at any other moment, before or after a dispute has arisen. As such, the parties cannot call this choice into question, unless they prove it was made without their consent or in disregard of public policy, 16 imperative laws to which their contractual relations are subject, 17 or certain international standards like good faith. 18 It is not only the parties who have a duty to respect this choice, having made it themselves, but also the arbitrators, who accept their duties as defined and circumscribed by the parties.
The parties spontaneously applied the law they had chosen in most of the arbitral awards studied. Although there were some objections, these were rare: the awards show that it is difficult for a party to call the choice into question once it has been made. This difficulty is due to the freedom they are given in this connection. As a direct expression of the free will of the parties, the choice cannot be challenged as invalid by one of them - usually the distributor - should such party subsequently see that the application of such law is to its disadvantage.
This is certainly the case when the parties have clearly expressed their choice of the applicable law in their contract. One of them cannot then contend that they meant different laws to apply to different aspects of any disputes that might arise between them (e.g. formation or performance of the contract).
Known as dépeçage, the theory of applying different laws to different aspects of the contract was rejected by the sole arbitrator in case 8494. 19 Here, the arbitrator was required to rule on the validity of the termination by an English supplier of a distribution agreement for tobacco products made with a French distributor. The arbitrator first determined the substantive law chosen by the parties, since they had differing interpretations of article 13 of the contract, which read that 'this Agreement shall be construed and take effect as a contract made in England in accordance with the laws of England'.
For the distributor (claimant), French law was applicable to the merits, as France was where the material performance occurred. Only the formation and conclusion of the contract were to be governed by English law, not its performance.
The supplier called for English law to be applied overall, to the formation and form of the contract and the settlement of the substantive issues in dispute.
Referring to Article 13(5) of the ICC Rules of Arbitration of 1988, which required him to give consideration in all events to the provisions of the contract and trade usages, the arbitrator directly interpreted the clause and decided that English law was applicable. In his view, it would be surprising that parties bound by an international distribution contract should have laid down a clause on the form of the contract alone, overlooking the law applicable to the merits. If this had actually been their intention, they should have expressed it clearly and explicitly:
Article 13(5) of the ICC Rules provides that 'in all cases the arbitrator shall take account of the provisions of the contract and the relevant trade usages'. It is common for parties [Page41:] to provide for an applicable law to the merits by incorporating an 'applicable law clause' in their commercial agreement. It would be extraordinary to find that commercial usages in matter of international distribution contracts are to the effect that the parties would provide for the law applicable to the formal validity of their agreement while ignoring the law governing the substance.
If [claimant] and [defendant] so intended, this would be by any yardstick characterized as an exception to international commercial practice and would therefore have to be construed strictly.
If this were to have been the case, the Parties would have made it abundantly obvious. In the opinion of the Tribunal, this is not what the language of Article 13 of the Agreement achieves.
The Tribunal further concludes that if the Parties had wished to have two different laws governing their contract, English as to the form and French as to the substance, they would have clearly stated it to avoid the risk of subjecting to interpretation the legal rules under which their obligations were to be performed. This has not been the case.
It will be noted too that arbitrators rarely retain the economic argument of the position of the distributor. Barring statutory provisions to the contrary, distributors more often than not fail in their attempts to show that they were not in a true negotiating position vis-à-vis the suppliers due to their weaker economic position.
In case 5073, 20 the parties entered into an exclusive distribution contract relating to the sale and installation of telephones in Argentina. After the parties had duly renewed the contract, the American supplier decided to terminate it at the end of the latest term. The supplier wished to reorganize its distribution network in the Argentinian market and entrust another group with the distribution of its products.
The distributor objected, upon which the supplier referred the matter to the ICC International Court of Arbitration in order for the termination of the contract to be upheld as valid and correct and to avoid being ordered to pay any compensation to the distributor.
The arbitral tribunal, sitting in Trinidad and Tobago, examined the dispute in the light of Californian law, as provided for in article 16 of the contract ('This Agreement shall be construed under and shall be governed in accordance with the laws of the State of California, U.S.A.').
The Argentinian distributor objected to the application of Californian law at the outset, arguing that it was an adhesion contract. This implied that the arbitral tribunal should not apply Californian law if its provisions were more to the distributor's disadvantage than those of Argentinian law. Rather, the arbitral tribunal should apply Argentinian law, as Argentina was the place where the contract was performed.
The arbitrators rejected this argument after ascertaining that, when the contract was made, there was no lack of consent between the parties over the choice of applicable law or the other clauses it contained. On the contrary, the distributor, which was one of the largest companies specializing in the sale and installation of telephones in Argentina, had had the opportunity to negotiate the terms of the contract. In particular, it had managed to have the place of arbitration changed from London to [Page42:] Trinidad and Tobago. The distributor failed to show the arbitral tribunal in what way the application of Californian law would have had particularly unfair consequences for it. Nor did it manage to prove that the application of Californian law violated certain mandatory provisions of Argentinian law. On the contrary, Argentinian law gave the parties a free choice of the law applicable to the contract in the event of a dispute, on the sole condition that the principles of Argentinian public policy were observed.
In practice, therefore, there is widespread acceptance of the parties' freedom of choice as to the applicable law. Subject to certain limits, which will be mentioned below, this choice is binding upon the arbitrators as well as on the parties. As pointed out by Professor Lalive, 21 it is one of the most universally recognized principles in private international law and international distribution contracts are no exception to the rule.
The reason why arbitrators should systematically apply the law chosen by the parties is that they derive their power from the will of the parties. By including an arbitration clause in their contract, the parties have indicated their wish to deny state courts jurisdiction over their dispute and to give jurisdiction instead to an arbitral tribunal, whose powers and the scope of whose remit they define. In accepting its remit and mentioning in the terms of reference the undisputed provisions of the contract by which the parties are bound, the arbitral tribunal adheres to these provisions itself. 22 However, it remains in command of the application and the interpretation of the law chosen by the parties.
In case 5384, 23 the sole arbitrator recalled the principle of party autonomy in international contracts. The contract, between a French supplier and a German distributor, relating to the distribution of metal tubes, had been terminated by the supplier on the ground that the distributor had not paid the outstanding amount due on the invoices.
After noting that the parties had provided for the application of French law, the arbitrator recalled that 'he does not have the power to substitute his own choice for that of the parties, when the applicable law has been clearly and unequivocally determined'. 24 The arbitrator therefore ruled on the merits of the principal claims and counterclaims of the parties by applying the French law chosen by the parties. This was also required of him by Article 1496 of the French New Code of Civil Procedure ('The arbitrator shall rule on the dispute in accordance with the rules of law which the parties have chosen.').
The arbitrators have a duty to respect the applicable law within the limits and to the extent set by the parties. However, this rule is tempered when the arbitrators have been empowered to act as amiables compositeurs. 25 They may then tone down the effects of the contract, but must refrain from distorting the true intentions of the parties. 26 They should also give reasons for their decisions, failing which an action could be brought for the award to be set aside. [Page43:]
II. The law determined by the arbitrators
When the parties have not specified the law applicable to the merits, it is incumbent upon the arbitral tribunal, in accordance with Article 17(1) of the ICC Rules of Arbitration, to apply 'the rules of law which it determines to be appropriate' and in all cases to 'take account of the provisions of the contract and the relevant trade usages'. In other words, the arbitrators must explain why they consider themselves justified in applying one law rather than another.
The freedom they are given in the ICC Rules of Arbitration is also found in other sets of rules, such as the UNCITRAL Rules of Arbitration (Art. 33(1)), and in international conventions, such as the European Convention on International Commercial Arbitration (Art. VII(1)).
Various methods are used, with arbitrators readily applying rules of conflict (A) or alternatively using the so-called voie directe (B).
A. Use of appropriate rules of conflict
Under this method, the arbitral tribunal selects the rule of conflict it considers best for determining the applicable law. It may decide to apply the rule of conflict of the seat of the arbitration, or the rules of conflict of the various systems which have some connection with the matter at issue, or, lastly, decide to refer to the general principles of private international law.
This method puts arbitrators in parallel with state courts, as the applicable law is determined by applying 'the rules of connection in force in the state where the arbitral tribunal has its seat'. 27 In practice, as evidenced by the present study, this method is in decline, as it is a mistake to liken arbitral tribunals to state courts. The two derive their jurisdictional powers from quite different sources: the former from the will of the parties, the latter from the state to which they belong. Furthermore, unlike courts, arbitrators have no forum. 28
Here, the arbitrators apply all the rules of conflict which have a connection with the matter brought before them. The aim is to achieve a convergence of the various rules towards a single law that corresponds to the legitimate expectations of the parties. 29
To determine the applicable law, the arbitrators may first of all refer to the conflict of laws system of the states from which the parties originate.
In case 7319, 30 the dispute was between a French supplier and its Irish distributor, alleged to have illegally refused to pay the outstanding amount due for delivery of bicycles agreed upon by both parties. The agreement was to be governed by the rules [Page44:] and regulations applicable to EEC countries ('This agreement shall be construed in accordance with and governed by Laws and Regulations applying to members of the European Economic Community.').
In the supplier's view, the contract was to be governed by the general principles of law applicable to the twelve Member States of the EEC. The parties did not intend to choose a particular law, but rather an international system of law, similar to lex mercatoria.
The distributor pointed out that the clause relating to the law did not in fact have any particular meaning other than showing there was a lack of agreement between the parties. It was therefore up to the arbitrator to determine the law applicable to the merits.
The arbitrator began by studying the initial draft contract which had been sent to the supplier by the distributor. In this draft the distributor had suggested Irish law as the applicable law, supplemented, 'where applicable', by the laws and regulations of the EEC. These two references were subsequently removed during negotiations, leaving the clause as worded in the final version of the contract. The arbitrator concluded that the parties did not intend their dispute to be subject to EEC law, even if the mandatory nature of this law made it binding upon the parties as a part of the national law of each Member State.
The arbitrator then decided to apply both French and Irish rules of conflict, which had a direct connection with the dispute and pointed to the application of the law that had the closest connection with the contract. This, he concluded, was Irish law as the principal obligations arising out of the contract were performed in Ireland. The English form and wording of the contract reflected general practice in English-speaking countries.
In contrast to case 7319, the arbitral tribunal in case 845131 decided to apply not only the rules of conflict of each of the parties, but also those of the place(s) of the arbitration. The contract, between a Russian supplier and a Spanish distributor, concerned car distribution. The Spanish distributor initiated arbitration proceedings against the supplier claiming the latter had not taken the necessary steps to protect it against parallel imports and that the supplier had infringed the exclusivity clause between the parties. The arbitration provided that the dispute should be settled by ICC, with Stockholm as the place of arbitration. When the terms of reference were signed, the parties mutually agreed that Geneva would thenceforth be the place of arbitration.
The arbitrators simultaneously applied four rules of conflict, namely those of each of the parties, plus those of the two places of arbitration, even though the parties had changed the place of arbitration from Stockholm to Geneva. They justified their choice on the basis of the freedom they were given in determining the applicable law by the ICC Rules of Arbitration (Art. 13(3) of the 1988 version). Their method was all the more justified as the various rules of conflict led to the application of the law of the country with the closest connection with the contract, namely Spanish law: the contract was performed in Spain and this was also where the distributor was established. [Page45:]
This is a method rarely used by arbitrators in connection with international distribution contracts. It involves extracting common principles from the main systems of private international law. Its rarity may be due to the fact that it is based on a comparative analysis, which cannot always be clearly distinguished from the comparative method strictly speaking. Rather, it is combined with the latter or the use of international law at the seat of the arbitration when the arbitrators consider it wise not to restrict themselves to a single process when justifying their approach.
It is noteworthy that the ICC Commission on International Commercial Practice has recommended that model contracts should not be made subject to one particular national law, but rather to the clauses of the contract itself and general principles of law, 32 or indeed the UNIDROIT principles. 33 The Commission and its various working groups were sensitive to the fact that reference to a national law devoid of rules specifically governing agents, franchisees or intermediaries involved in international trade could result in the application of rules for national intermediaries that would be quite different from what the parties expected. Reference to general principles of law was thus thought to be the best solution, as it certainly allows the arbitrators freedom in settling the point at issue. They can therefore weigh the importance of each connecting factor in the specific context of distribution contracts and the obligations assumed by the parties. By setting one law against another, they determine which best meets the expectations of the parties. The criteria derived from a conflict of laws approach to the applicable law are also to be found in the more direct methods.
B. Other methods of determining the applicable law
Since Article 17(1) of the ICC Rules of Arbitration calls for the arbitral tribunal to 'apply the rules of law which it determines to be appropriate', it may choose not to adopt a conflict of laws approach, but to make direct use of localizing factors or interpretation of the contract.
Under this method, it is the arbitrators themselves who make the connection between the contract and a given law on the basis of links they consider to be relevant. 34 They have a duty to assess the economic importance of each factor noted in order to determine the law applicable to the merits. They are free in their assessment, as this is a factual matter. Some factors will be virtually decisive, others less so. By combining them all, the arbitrators will justify the relevance of their choice of law.
It may be observed that arbitrators refer almost systematically to the place where the contract is performed, or more exactly the place of the performance that is characteristic of the contract, in this case where the distributor distributes the products. The reference to such a factor is all the more understandable as distribution contracts are not mere sales contracts. The obligations assumed by each of the parties, especially the distributor, should be stressed. It is the distributor's characteristic performance that enables the arbitrators to decide that the contract is more closely [Page46:] connected to the place where it is performed than to any other. It should not be forgotten that the distributor must penetrate the local market and increase sales of the supplier's products. The distributor must therefore buy the supplier's products and sell them in the territory exclusively granted to it, while generally abiding by any minimum purchase and minimum turnover clauses. Hence it is logical to apply the law that best fits in with the economy of the contract, that is to say the law of the place of distribution.
In case 4451, 35 the sole arbitrator, sitting in Paris, was required to rule on the validity of the termination of a wallpaper distribution contract by a German supplier. The reason given for termination was that the Spanish distributor had not achieved the minimum number of orders required and had not correctly covered the market.
The arbitrator decided in favour of the application of Spanish law, as Spain was where the characteristic performance took place. The distributor had achieved the minimum purchasing requirement and carried out investments there:
Failing an express choice of law, modern jurisprudence generally admits that the place of performance of a contract is the best indication pointing to the law which the parties intended to apply, especially when, as in the present instance, it is confirmed by other specific indications . . .
The most significant obligations arising from a sales exclusivity is the performance by distributor of its duties, especially when minimum quantities are established and important investments are foreseen.
Distributor's main obligations had to be performed in Spain, where deliveries by supplier were to be effected CIF. Spanish law must therefore be considered as the applicable law.
The obligation of the seller must also be considered synthetically as the obligation to grant a territorial exclusivity. This obligation is localized in the territory . . .
Despite the importance of the place of the characteristic performance as a connecting factor, it should not be forgotten that there are other localizing factors to which arbitrators may refer. However, unlike the first, which seems self sufficient, these factors are grouped together by the arbitrators. Their force, which would be only relative if they were treated separately, lies in their convergence towards a given law.
A good illustration of the approach described above is found in case 5866. 36 The dispute was between a French distributor and an Italian supplier alleged to have unilaterally breached the exclusive tractor distribution contract by appointing a new representative for its products in the licensed territory. The sole arbitrator inferred that French law was applicable as France was the territory in which the characteristic performance of the agreement in question was to be performed. Moreover, there were additional factors that concurred in pointing towards the application of French law. The contract was concluded in Paris, which was also the place of arbitration. The language of the contract was French and the currency of payment French francs.
When the contract is performed in several territories, the arbitrator may decide that the head office of the distributor, as the party performing the material obligations relating to the distribution, is the determining factor. This was the factor retained by the arbitrator in case 7189, 37 for instance, which concerned a distribution contract relating to kitchen equipment. The Italian supplier brought proceedings against the American distributor for failing to pay invoices. The arbitrator decided that American [Page47:] law was applicable to the merits as the products were distributed mainly in the North American market. All economic activity had been directed by the distributor from its head office in Florida:
The Contract is essentially a distribution agreement . . . The territory of exclusive distribution covers 'North America' (defined to include 'the United States with all its territories and possessions, and Canada'). However, it is clear that the parties considered the United States as the focal point of distribution. Goods were to be shipped to a 'designated United States port' . . . Spares and parts were contemplated to be kept 'in inventory in the U.S.A.' . . . and payments were to be made in the 'United States dollars' . . . The sales would take place principally in the United States and it was there that the Defendant had to perform his obligation under the Contract . . . The whole emphasis was upon the sale of goods to the North American public. The Defendant, who was domiciled in Florida in the United States . . ., undertook to establish a headquarters in Florida . . . The focal point of the distributor's management and control functions was always contemplated to be, and in fact was, at his domicile in Florida. The governing law is the law of Florida.
Another way in which arbitrators may show their freedom is by limiting their consideration to the clauses of the contract when settling disputes. Article 17(2) of the ICC Rules of Arbitration authorizes them to do so 'in all cases', that is to say whether or not the parties have agreed upon an applicable law. This method does not call for any special comment. An example is found in case 8628, 38 where the dispute was between a German distributor and an American supplier over the exact date of expiry of an exclusive contract for the distribution of guitars. Each party called for the dispute to be settled in accordance with its respective national law. After studying the terms of the contract and the facts established during the discussions, the arbitrators decided that neither of the parties had wished their relationship to be subject to a particular law. Since the contract constituted the law of the parties, they had thus agreed to have the dispute settled on the basis of the contractual provisions, in accordance with general principles for interpreting contracts:
The parties have specifically agreed that the Arbitration Committee shall 'exercise its own judgement as to the body of law it shall use in rendering its decision'.
We are satisfied that both parties intended that their relationship should be governed by the terms of the contract which is the law between the parties. We find therefore that to the extent that the national law of either of the parties may be at odds with rights or obligations which are expressed in the contract, then the contract interpreted according to internationally recognized principles of contract law must prevail.
It may be concluded from the above discussion that arbitrators tend to decide upon the law applicable to the merits that best meets the expectations of the parties, whatever the method used. Their freedom of choice is limited only by respect of the parties' intentions and international public policy. This solution no doubt favours the distributor, but it does not stem from a deliberate wish to protect the latter. On the contrary, arbitrators endeavour to localize the performance of the obligation at issue objectively from the point of view of its overall economic function.
1 The opinions expressed in this article are those of the author alone and should not be interpreted as binding upon ICC.
2 Their international nature is determined with reference to economic rather than legal criteria. These concern the circumstances of the dispute, performance of a contract by a distributor in one or more countries other than that in which the supplier is established, and questions affecting international trade. See especially Fouchard, Gaillard, Goldman, On International Commercial Arbitration, edited by E. Gaillard & J. Savage (Kluwer Law International, 1999) para. 78; Cass. civ. 1re, 21 May 1997, Jaguar, [1997] Rev. arb. 537 (Annot. Gaillard); Cass. civ. 1re, 5 January 1999, Zanzi, [1999] Rev. arb. 260 (Annot. Fouchard).
3 A franchise contract is an agreement whereby the franchisor in possession of a trademark and tried and tested economic or technical know-how agrees to allow the franchisee to use these items upon payment of a fee. The latter agrees properly to exploit the technique provided and to obtain supplies from the franchisor. See especially The ICC Model Franchising Contract (ICC Publication 557); D. Ferrier, Droit de la distribution (Litec, 1999) para. 587.
4 A distributorship contract is an agreement whereby the supplier agrees to provide the distributor with products for the latter to distribute usually in a specified geographical area. The contract may or may not be of an exclusive nature. Exclusivity is said to be 'one-way' if the distributor is free to distribute other products besides those of the supplier. It is said to be 'mutual' if the distributor enjoying geographical exclusivity undertakes not to distribute products that compete with those of the supplier. See especially The ICC Model Distributorship Contract (Sole Importer-Distributor), ICC Publication 518; D. Ferrier, supra note 3, para. 520; J. le Calvez, Les aspects juridiques des conventions de concessions exclusives (thesis, Paris II University, 1979).
5 A selective distribution contract is an agreement whereby the producer chooses approved distributors for its products. These distributors are chosen on the basis of an objective and impartial assessment according to certain criteria regarding the quality and quantity of their resources. Such contracts usually cover luxury or high technology goods. See especially D. Ferrier, Droit de la distribution, supra note 3, para. 479. The ICC Commission on International Commercial Practice has recently begun work on drawing up an ICC model selective distribution contract.
6 C.Q.C. Truong, La rupture des contrats internationaux de distribution dans les sentences arbitrales CCI (thesis, Paris II University, 2000).
7 See generally M. de Boisséson, Le droit français de l'arbitrage interne et international (GLN, 1990) at 587ff; P. Bellet & E. Mezger, 'L'arbitrage international dans le nouveau code de procédure civile' (1981) 70:4 Rev. cri. dr. internat. privé 611; Ph. Fouchard, 'L'arbitrage international en France après le décret du 12 mai 1981' (1981) 109 J.D.I. 374; Article 1496 of the French New Code of Civil Procedure: 'The arbitrator shall decide the dispute in accordance with the rules of law which the parties have chosen . . .'
8 See M. Blessing, 'Regulations in Arbitration Rules on Choice of Law' in ICCA Congress Series No. 7, 12th International Arbitration Congress, Vienna, 3-6 November 1994 (Kluwer Law International 1996, rev. reprint 1999) 391; P. Mayer, Droit international privé (Paris: Montchrestien, 1996); J. Lew, Applicable Law in International Commercial Arbitration (Oceana Publications, 1978) at 75; A. Redfern & M. Hunter, Law and Practice in International Commercial Arbitration, 2d ed. (London: Sweet & Maxwell, 1991) at 79.
9 The list is led by France and Switzerland, followed by Germany, Italy and Spain and, less frequently, Belgium, the Netherlands, Denmark and Sweden.
10 The laws of the United States or the United Kingdom are the most common choices. It is rare for the laws of Australia, Canada or Hong Kong to be chosen.
11 France is the clear leader, followed by Italy, Germany and, less frequently, Sweden, Denmark and Switzerland.
12 France is the clear leader, followed by Spain and, less frequently, Germany and Switzerland.
13 See Y. Derains, 'The ICC Arbitral Process - Part VIII: Choice of the Law Applicable to the Contract and International Arbitration' (1995) 6:1 ICC ICArb. Bull. 10.
14 For an overall view of each system, see especially AIJA/IAYL Law Library, Commercial Agency and Distribution Agreements: Law and Practice in the Member States of the European Free Trade Association, 2d ed. (Graham & Trotman/Martinus Nijhoff and International Association of Young Lawyers, 1993).
15 Law of 27 July 1961, amended by Law of 13 April 1971, Belgian Moniteur (29 December 1961).
16 See Fouchard, Gaillard, Goldman, supra note 2, para. 1533.
17 See Fouchard, Gaillard, Goldman, supra note 2, para. 1515.
18 See Fouchard, Gaillard, Goldman, supra note 2, para. 1443.
19 Partial Award of 1997 [unpublished].
20 Partial Award of 1986, (1988) XIII Y.B. Comm. Arb. 53.
21 ICC Award 1512 in S. Jarvin & Y. Derains, Collection of ICC Arbitral Awards (1974-1985), ICC Publication 433, at 39.
22 M. Blessing, 'Choice of Substantive Law in International Arbitration' (1997) 14:2 J. Int'l Arb. 39; J.D.M. Lew, Applicable Law in International Commercial Arbitration (Oceana Publications, 1978) 71-83, para 101; M. Rubino-Sammartano, International Arbitration Law (Deventer-Boston: Kluwer, 1990) at 34; O. Lando, 'The Law Applicable to the Merits of the Dispute' in J.D.M. Lew, ed., Contemporary Problems in International Arbitration (Centre for Commercial Law Studies, Queen Mary College, University of London, 1986) 101 at 104; P. Lalive, 'Ordre public transnational (ou réellement international) et arbitrage international' [1986] Rev. arb. 329 at 353; Fouchard, Gaillard, Goldman, supra note 2, paras. 1422-1423, 1509.
23 Final award of 1987 [unpublished].
24 Translated from original text: 'l'arbitre n'a pas le pouvoir de substituer son propre choix à celui des parties, dès qu'il existe une détermination claire et non équivoque du droit applicable'.
25 See generally Fouchard, Gaillard, Goldman, supra note 2, para. 1500; M. de Boisséson, supra note 7, para. 344; E. Loquin, 'Pouvoirs et devoirs de l'amiable compositeur. A propos de trois arrêts de la Cour d'appel de Paris' [1985] Rev. arb. 199 esp. at 212, and L'amiable composition en droit comparé et international (Paris: Librairies techniques, 1980).
26 See especially ICC awards 1512 of 1971, 2708 of 1976 and 2694 of 1977 in S. Jarvin & Y. Derains, Collection of ICC Arbitral Awards (1974-1985), ICC Publication 433, at 4, 297 and 320; see also ICC case 3267: partial award (1979), ibid. at 376, J.D.I. 107 (1980) 961, and final award (1984), Y.B. Comm. Arb. XII (1987) at 87, and ICC award in case 2119 in S. Jarvin & Y. Derains, Collection of ICC Arbitral Awards (1974-1985), ICC Publication 433, at 355 and J.D.I. 106 (1979) 997 (Annot. Y. Derains).
27 Fouchard, Gaillard, Goldman, supra note 2, para. 1541 et seq.; see also M. de Boisséson, supra note 7, para. 652 et seq.; W. L. Craig, W. W. Park, J. Paulsson, International Chamber of Commerce Arbitration, 3d ed. (ICC/Oceana Publications, 2000) para. 17.02 (i); M. Blessing, supra note 8; M. Storme & F. de Ly, ed., The Place of Arbitration (Ghent: Mys & Breesch, 1992).
28 See e.g. the critical comments on the adage qui eligit judiciem, elit jus, especially in case 4434 (1983) in S. Jarvin & Y. Derains, Collection of ICC Arbitral Awards (1974-1985), ICC Publication 433, at 458.
29 See especially Fouchard, Gaillard, Goldman, supra note 2, para. 1547; Craig, Park, Paulsson, supra note 27, para. 17.02(ii); Y. Derains, 'L'application cumulative par l'arbitre des systèmes de conflit de lois intéressés au litige' [1972] Rev. arb. 99 and 'Attente légitime des parties et droit applicable au fond en matière d'arbitrage commercial international' (paper presented to Comité français de droit international privé, 25 January 1985, Trav. Comité fr. D.I.P., CNRS, 1987) 81.
30 Partial award of 1992, (1994) 5:2 ICC ICArb. Bull. 56; summary in F. Gélinas, 'La jurisprudence arbitrale de la Chambre de commerce internationale', Gaz. Pal., 922 January 2000, 19 at 22.
31 Award of 1998 [unpublished].
32 See Article 2 of The ICC Model Commercial Agency Contract, ICC Publication 496; Article 5 of The ICC Model Distributorship Contract, supra note 4; and Article 6 of The ICC Model Franchising Contract, supra note 3.
33 See Article 11 of The ICC Model Occasional Intermediary Contract (Non-Circumvention and Non-Disclosure Agreement), ICC Publication 619.
34 See especially Fouchard, Gaillard, Goldman, supra note 2, para 1552; Craig, Park, Paulsson, supra note 27, para 17.02(v).
35 Award of 1984 [unpublished].
36 Final award of 1988 [unpublished].
37 Final award of 1992 [unpublished].
38 Interim award of 1997 [unpublished]; see especially Craig, Park, Paulsson, supra note 27, para. 17.03(i).