Lloyd's Maritime and Commercial Law Quarterly
THE VALIDITY OF “FLOATING” CHOICE OF LAW AND JURISDICTION CLAUSES
Adrian Briggs*
In recent years, the courts have decided a number of cases in which they were faced with clauses in contracts—often maritime contracts—in which the law governing the contract is not uniquely identified but left to the subsequent choice of one of the contracting parties. Such clauses are often associated with those which give the courts of a country yet to be chosen by one of the parties exclusive jurisdiction over disputes connected with the contract. The purpose of this note is to examine the way such contractual terms are dealt with by the English courts.
Clauses of the first type can conveniently be called “floating choice of law”1 clauses. They may be exemplified by the following wording:
The contract of carriage, the bill of lading and all disputes arising hereunder or in connexion therewith … shall … in the option of the carrier to be declared by him at the merchant’s request be governed (i) either by Iranian law … ; (ii) or by German law … ; (iii) or by English law.2
or by this:
… Nevertheless at the option of the assured the place of issue and delivery of the policy shall be considered the City of New York and all matters arising hereunder shall be determined in accordance with American Law and Practice.3
Clauses of the second type can be called “floating choice of forum” clauses, and may be illustrated by the following wording:
The contract of carriage, the bill of lading and all disputes arising hereunder … shall … in the option of the carrier to be declared by him on the merchant’s request be governed (i) either by … with exclusive jurisdiction of the courts of Teheran, Iran; (ii) or by … with exclusive jurisdiction of the courts in Hamburg; (iii) or by … with exclusive jurisdiction of the courts in London.4
or by this:
Any dispute arising under this Bill of Lading shall be decided in the country where the Carrier has his principal place of business … Notwithstanding the Carrier has the option to decide that the dispute may be determined by the Courts of any other country …5
* Fellow of St. Edmund Hall, Oxford.
1 The terminology seems to stem from a comment of Mustill, J., at first instance in The Armar, which is referred to in detail below. See fn. 22.
2 Adapted from The Iran Vojdan; see fn. 14 below.
3 Adapted from Armadora Occidental S.A. v. Horace Mann Insurance Co.; see fn. 29 below.
4 Adapted from The Iran Vojdan.
5 Adapted from The Frank Pais; see fn. 34 below.
508