The substantive Applicable law pursuant to the Code on International Private law of Switzerland (CIPL)]

Abstract

In proceedings in front of an arbitrary tribunal, at international such as also, at the national level, the question always arises as to the applicable substantive law. For the purpose of determining the applicable substantive law, the Arbitration largely recognized the principle of party autonomy. This subjective link to the applicable law enables the parties to agree in their arbitration agreement which law should be used by an arbitrary tribunal for the purpose of reaching a decision on a dispute covered by the arbitration clause. In this way the contracting parties have the option of choosing what they consider to be the best law. This paper deals with this choice of substantive law by the parties. In this context, the question is whether this party autonomy is subject to certain restrictions with regard to the choice of law. In the course of this work, this question will be examined, with a focus on the effects of mandatory norms on the applicable substantive law. After that the question would be, under which prerequisites an international arbitrary tribunal must observe such Mandatory rules. A closer look is needed to show what consequences may such an opting-out have on the consideration of Mandatory rules by the international arbitrary tribunal in the context of the applicable substantive law. B. The applicable substantive law in front of an arbitrary tribunal: Principle of party autonomy A state court is always the authority of a particular state and is therefore bound by the laws in force in the territory of that state. If the question of the substantive law applicable to the case arises before a state court in an international situation, the judge will therefore apply the conflict-of-law rules of his lex fori. An arbitrary tribunal, on the other hand, has no forum and therefore also no lex fori, so it does not just get the conflict of laws of the state of domicile but its lex arbitri. Thus, the choice of the seat of the arbitrary tribunal indirectly influences the choice of the applicable law to the extent that the conflict-of-law rules provided in the lex arbitri are applied to determine the applicable substantive law. In Switzerland, the lex arbitri for international arbitrary tribunals is found in Chapter 12 of the CPIL. In order to determine the law applicable to the dispute, the principle of party autonomy has prevailed in all modern lex arbitri, including Switzerland. The same applies to all institutional arbitration rules which contain a provision on the substantive applicable law. The parties are thus given the opportunity to instruct the arbitrary tribunal which legal rules it should base its assessment of the conflict on. In practice, the vast majority of arbitration clauses are linked to a choice of law clause. Only in the absence of such a choice of law clause does the arbitrary tribunal itself objectively determine the applicable law. It applies the conflict rule contained in the corresponding lex arbitri in this respect.