The recent decision of the Court of Appeal in Trust Risk Group SPA v Amtrust Europe Ltd [2015] EWCA Civ 437 builds on the principles set out in Fiona Trust and has provided important clarification on the approach that English courts will take in the event of conflicts of express jurisdiction clauses in related agreements. However, in the case of the problem of costly and unnecessary litigation arising from poorly worded choice of law clauses, the most effective way to amend is not to provide U.S. courts with new interpretive tools to address the gaps and ambiguities of poorly worded choice of law clauses. Rather, the most effective method is for the Law Academy to respond directly to the needs of the parties responsible for drafting choice of law clauses. While this can be done by developing model choice clauses for modern international enterprises,31 it is necessary to do more than offer model clauses. The Law Academy can support parties more effectively by identifying and analyzing problems that often arise in the choice of applicable law decision and that many parties seem to be unaware of or misunderstand. In this way, the parties can make an informed decision on these issues at the beginning and achieve the desired result. The review of section II.B of the United Nations Convention on Contracts for the International Sale of Goods32 is a striking example of an area where many parties need to make more informed decisions. Current legislation generally contains a clause excluding conflict-of-laws principles. There are two main reasons for this: Professor Coyle`s article points out that the empirical study of the parties` expectations shows that the U.S. parties are completely unaware of some of the gaps and ambiguities in the general choice of law clauses.36 This lack of awareness among the parties of some of the fundamental issues associated with modern legal choice analysis, stresses that the U.S. parties need to pay more attention to these issues in order to make informed decisions. The Law Academy can respond to this need by identifying the problems that the parties most often ignore and by conducting a scientific analysis of these issues.
A well-drafted contract contains both an applicable law and a jurisdiction clause. However, difficulties may arise if the parties conclude two (or more) separate contracts in which these clauses are in conflict. Choosing arbitration over litigation as the preferred method of dispute resolution requires a well-written arbitration agreement. Refined construction guns for the judiciary cannot meet this need. Without a well-written arbitration agreement, the dispute may be the only alternative.49 Among the issues that the written arbitration clause must address is the scope of arbitration (i.e., claims that the parties agree are subject to arbitration). Most parties do not want to submit every conceivable claim to arbitration, as this would compromise one of the advantages of arbitration: a narrow scope to streamline the resolution of certain problems. Professor Coyle points out that one of the ambiguities of generic choice of law clauses is that they do not specify all claims that are subject to choice of law.50 This ambiguity is less likely in arbitration agreements because the parties who choose to arbitrate must make a conscious decision as to the scope of the claims submitted to arbitration. In indicating the scope of requests for arbitration, the parties are also required to consider the scope of claims subject to choice of law, since the same type of claims submitted to arbitration is also subject to choice of law. While the parties to a choice of law clause may not pay attention to this issue, the parties to an arbitration clause will generally consider it because the scope of the arbitration is a fundamental issue that all parties must address. Contracting parties will generally consider a provision of “applicable law” that identifies the correct law of a contract by express intent.
The substantive issues of the contract are governed by an applicable legal provision, provided that it is valid in good faith and does not undermine public order. These provisions determine the privileged jurisdiction of the applicable law of a contract (p.B. “the laws of Ontario”, “the federal laws of Canada”, etc.) and clarify the intention of the parties, regardless of the court having jurisdiction over a dispute. If you look at the interpretation of arbitration clauses, Fiona Trust & Holding Corporation v Primalov [2007] UKHL 40 is very influential. In the present case, it has been found that, when interpreting an arbitration clause, there is a strong presumption that the commercial parties intended that all disputes arising from the relationship between the parties would be settled by the same court. The most effective way to avoid costly and unnecessary litigation resulting from the use of poorly worded or standardized choice of law clauses is for the parties to draft choice of law clauses and provide courts with interpretive tools to resolve ambiguities in poorly worded clauses. The Law Academy can help the parties achieve this result. But parties are best served when they have not only better model clauses, but also a better understanding of the many complex issues of modern choice of law that many parties overlook. This gap is particularly acute in international contractual disputes.
An understanding of the issues that arise when analyzing the choice of law will help parties make informed decisions that they cannot make if they simply adopt model clauses that they do not fully understand. The Law Academy can address an important need by responding directly to the needs of the parties, allowing them to make an informed choice on the many issues associated with choice of law clauses. With the help of the Law Academy, parties can draft or adopt effective choice-of-law clauses that avoid costly and unnecessary litigation. If a party originates from an EU Member State (other than Denmark) and another from Mexico or Singapore, the provisions of the Hague Convention on Jurisdiction Agreements (Hague Convention) must be taken into account, according to which exclusive jurisdiction clauses must be recognised and applied. .