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Berger, Klaus Peter, The Concept of the "International Useful" Construction of Domestic Law
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The Concept of the "Internationally Useful" Construction of Domestic LawProfessor Dr. Klaus Peter Berger, LL.M., Center for Transnational Law (CENTRAL), University of Cologne, GermanyI. The Basic ApproachII. An Example from Arbitral PracticeIII. The LimitsIV. The Comparative Persuasiveness of the RestatementsConclusion
The Concept of the "Internationally Useful" Construction of Domestic Law
"In choosing a certain domestic legal system a party does not mean certain foreseeable solutions for legal problems that may arise out of the contract; rather, he accepts the characteristic margin of possible and correct decisions which is typical for the solution of these legal problems under that particular legal system."5
Within this natural 'margin' the judge or arbitrator may decide to apply an internationally useful method of construction which finds a solution that takes into account the particularities of international trade and the economic interests of the parties.6
II. An Example from Arbitral Practice
The concept of the internationally useful construction of domestic law has been applied in an ICC arbitral award from 1996. In that case the seller refused to pay the sales price. He based this refusal on a dramatic drop in the price of the product and currency depreciations in his country which made it impossible for him to receive adequate financing from his bank. In his view, the circumstances justified the hardship defence under Art. 6:258 of the Sixth Book of the Dutch Civil Code (Burgerlijk Wetboek, BW), the law applicable to the contract.7 The sole arbitrator rejected this argument. He hinted at Dutch legal doctrine8 which maintains that Art. 6:258 BW must be construed in a restrictive manner. To support this view in an international context, he interpreted Art. 6:258 BW in light of the UPICC. The arbitrator emphasized that Art. 6:258 BW is lex specialis to the general rule expressed in Art. 6:248 (2) and Art. 3 (12) BW, allowing the judge to consider certain contractual provisions inapplicable on grounds of reasonableness and fairness ("redelijkheid en billijkheid"). According to Art. 3:12 BW, "Dutch common opinion of law" is the determining factor to interpret the requirements of reasonableness and fairness in the Dutch Civil Code. In international cases, the arbitrator reasoned, this domestic common opinion is replaced "by the common opinion in international contract law". In his view, this international opinion is influenced in a decisive manner by the principle of the sanctity of contracts (pacta sunt servanda) as expressed in the UPICC, arbitral case law and international doctrine.9
III. The Limits
The arbitrator's reference to domestic Dutch doctrine in the ICC Award reveals the limits of this approach. The theories on statutory construction are always domestic doctrines. Thus, this method of construction always remains subject to the constraints of the relevant domestic law.10 In accordance with this view, the arbitrator in the ICC Award reported above felt entitled to interpret the Dutch Civil Code in the light of the UPICC because he found support for his view in Dutch legal literature.11 Since the UPICC were considered by Dutch lawmakers in the preparation of the new Civil Code, the judge or arbitrator is entitled to use them as a sort of filter in international cases. The domestic law is viewed and analysed against the background of the Principles. A rule or principle of Dutch law is applied to the individual case only if it is in conformity with the UPICC. The comparative efforts employed by the Dutch lawmakers in the drafting process12 justify the comparative approach in the practical application of the law in legal practice. This ensures that Dutch contract law is applied in a sensible and interest-oriented manner in international transactions.13
It follows from the above that the mere existence of a Restatement of European contract law does not per se justify a fundamental change in these domestic theories on statutory construction. This is the price for their "soft law" character. Therefore, the viability of the "internationally useful" construction of domestic law always requires a solid dogmatic groundwork in the respective European jurisdictions whose law is applied.
"The step [to accept a duty to pay compensation based on the benefit received] would find strong support in Art. 2.16 (2) UPICC. This would increase substantially the weight of this argument and would tip the balance in favour of such an approach, given that German legal doctrine is undecided and open on this issue. This would apply in particular if Art. 2.16 (2) UPICC is grounded on a broad comparative basis and does not result from a more or less isolated idea of its drafters."16
IV. The Comparative Persuasiveness of the Restatements
1 See for this concept Berger, The Creeping Codification of Transnational Law, 1999, at pp. 183 et seq. ; Berger, in Festschrift Sandrock (2000), at pp. 49 et seq.; E.A. Kramer, in C.J. Meier-Schatz (Ed.), Die Zukunft des Rechts (1999), at pp. 71, 82, n. 52.
2 See Wichard, (1996) 60 RabelsZ 269, 299 et seq.
3 Cf. Esser, Vorverständnis und Methodenwahl in der Rechtsfindung (1970), p. 123.
4 See Wichard, op. cit. supra n.2, at p. 300 suggesting that under German law, the Principles might influence the 'internationally useful interpretation' of Sec. 254 (duty to mitigate damages) and 275 (impossibility) of the Civil Code.
5 Aden, (1984) RIW 934, 937.
6 Berger, (1992) J.Int'l.Arb. No. 4 at pp. 5, 14.
7 ICC Award No. 8486, (1998) Clunet 1047 with note Derains, idem, pp. 1050 et seq. (= (1999) Yearbook Commercial Arbitration XXVI 162 et seq.).
8 See generally Hondius, in Weyers (Ed.), Europäisches Vertragsrecht (1997), at pp. 45, 69 et seq.
9 (1999) Yearbook Commercial Arbitration XXVI 166 et seq.
10 Schödermeier, Sonderprivatrecht für internationale Wirtschaftsverträge, p. 198: "All in all, the statutory construction according to the functional considerations of international practice is embedded in the values of the respective domestic legal system - there is trust in international practice, but it is controlled and verified according to the own fundamental legal values. Domestic laws can hardly be denied this influence." (translation by the author).
11 G. Kuijer, Ars Aequi, Ars Aequi Libri (1996) pp. 16, 19.
12 It is argued that due to this thorough comparative preparation of the Dutch Civil Code, the Dutch lawmaker "may have found its own style, based on continental-european ius commune", Zweigert/Kötz, Einführung in die Rechtsvergleichung (3rd ed. 1996), p. 101.
13 See A. Rosett, (1998) Am.J.Comp.L. 354: "[The Principles] ... supply common-sensical approaches to problems that have long eluded common sense".
14 Berger, op. cit. supra n. 1, at p. 190; Wichard, op. cit. supra n. 2, at pp. 300 et seq.
15 See Hartkamp, in ICC (ed.), UNIDROIT Principles of International Commercial Contracts: A New Lex Mercatoria? (1995), Rome, at pp. 254, 259: "Whenever a rule [of domestic law] leaves room for interpretation, profit may be made from the [UNIDROIT] Principles".
16 Canaris, in Basedow (ed.), Europäische Vertragsrechtsvereinheitlichung und deutsches Recht (2000), at pp. 5, 31 (translation by the author).
17 See Basedow, in Basedow (ed.), Europäische Vertragsrechtsvereinheitlichung und deutsches Recht (2000), at pp. 2.
18 See for this dual purpose of the functional comparative analysis Berger, supra n. 1, at 147.
19 Bonell, An International Restatement of Contract Law, 2nd ed. 1997, at p. 48.
20 Bonell, op. cit. supra n.19, at p. 88; Bonell, (1996) Unif.L.R. 29, 234.
21 Lando/Beale, Principles of European Contract Law, Parts I and II, 2000, at p. 195.
22 See supra n. 16.