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In 2020, the French courts rendered three important decisions or series of decisions in relation to international commercial contracts and international arbitration. These related to:
(1) the right of an international arbitral tribunal to apply the UNIDROIT Principles of International Commercial Contracts (the “UNIDROIT Principles”) in circumstances where the parties to a contract had not agreed on the governing substantive law;
(2) the impact of Covid-19 on a force majeure clause in electricity supply contracts; and
(3) the different approaches taken by French and English courts in deciding what law governs an arbitration agreement and, consequently, what law determines who may be a party to that agreement.
The French courts’ decisions are discussed in the same order below.
1. FRENCH COURTS UPHOLD AN INTERNATIONAL ARBITRAL TRIBUNAL’S DECISION TO APPLY UNIDROIT PRINCIPLES
As is well known, the UNIDROIT Principles are a “soft law” instrument designed by leading civil law and common law experts to reflect best international contract practice. The UNIDROIT Principles can be used in multiple ways. Principally, they may serve as: (i) a model for national or international legislation dealing with the law of contract; (ii) the governing law of a contract; or (iii) a source to interpret or supplement the governing law of a contract.
Since their first edition in 1994, the UNIDROIT Principles have been influential in the reform of contract law in numerous countries including China, France and Russia. They are being increasingly referred to by international arbitral tribunals and national courts and have been used by them in more than 500 reported cases.1