Soft Law as a Replacement or Corrective of National Law in Investment Arbitration?
Originally from European International Arbitration Review
The purpose of this paper is to ascertain to what extent, in investment arbitration, the UNIDROIT Principles of International Commercial Contracts (“UPICC”) give an adequate alternative to national contract law or may be used as a corrective of national law.
The UPICC are a soft law compilation of principles in the area of general contract law, meant to be applied to commercial contracts having a foreign element. The UPICC were published first in 1994 by the UNIDROIT, an international organisation established in 1926 with the purpose of unifying private law. The latest edition, the fourth, is dated 2016.
The UPICC are not an international convention and do not have a binding effect. Their effect is based on their persuasive authority. They are meant to systematically formulate the main general principles prevailing in the field of cross-border contracts in a way that may be applied uniformly in all jurisdictions, irrespective of the legal tradition of the interpreter. They are not merely a record of existing principles: they are, in part, a codification of generally adopted principles of international contracts and, in part, new rules (‘best solutions’) developed by a large group of experts from around the world.
This paper is meant to verify the relationship between state law and the UPICC in investment arbitration. One of the chimeras in international dispute resolution is the possibility to apply one unitary regime to the merits of all disputes, irrespective of the national connections of each dispute.