Originially from Conflict of Laws in International Commercial Arbitration

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I.INTRODUCTION 

The notion of mandatory rules of law occupies a central place in the world of private international law, chiefly as a limitation on party autonomy.  Due to the centrality of party autonomy to international commercial arbitration, it has understandably achieved prominence in that world as well.  The notion of mandatory rules of law is not, however, without ambiguity; the meaning and effect attributable to them are subject to discussion. 

II.THE DOUBLE MEANING OF “MANDATORY”  

In many contexts, a norm or rule of law is described as “mandatory” if it cannot be derogated from by private parties in their exercise of party autonomy.  A mandatory rule, in other words, is one that the parties cannot, as the saying goes, “contract around.”2  Presumably a powerful public interest (including the need to protect weaker parties) justifies barring parties from ordering their affairs in a fashion contrary to the mandatory norm.3 

In other circumstances, a norm is considered mandatory in the sense that a court must apply that norm, even if the court, under the usual operation of its conflict of law rules, would ordinarily apply some other body of law (often referred to casually as “the otherwise applicable law”).4  The notion that a legal principle is so important as to displace the otherwise applicable law is often captured by the terms – such as the term loi de police in French – used to denote rules that are mandatory in this sense.5