Book Description

The vast bulk of claims in international commercial arbitration are contractual in nature. Viewed through that lens, what comes to occupy centre stage in the arbitration of disputes is the choice of applicable contract law. This book breaks new ground by for the first time focusing in depth on the contract law chosen by the parties to be applied to disputes. The author uses a comparative-inductive methodology to analyse why – according to statistics of the International Chamber of Commerce – English, New York, and Swiss contract law outperform transnational and other contract law regimes in the choice-of-law provision of business contracts. He finds that these three bodies of law share a firm commitment to enforcing the contract as written, thus prioritizing certainty, stability, and predictability, and clearly recognizing the parties’ right to determine for themselves (and have arbitrators and courts respect) central issues such as risk allocation and price. Starting from a detailed comparative examination of traditional and contemporary theories of contract, the author develops a minimalist approach that is acceptable to lawyers with a civil or common law background and that facilitates dealmaking by providing a clear set of hard-edged rules in four areas – formation of contracts, invalidity and public policy, contract interpretation, and damages for breach – and showing how each of the three contract regimes that are dominant in practice manifests his approach. With its emphasis on pragmatic adjudication grounded on facts and consequences rather than on conceptualisms and generalities, the book greatly enhances the ability of arbitrators to make decisions based on legal arguments that fit the setting of international commercial arbitration. It is sure to become established as a tool to achieve the defined objective of facilitating cross-border commercial transactions as well as providing arbitrators with a set of rules for the interpretation of contractual provisions and the quantification of damages. ‘Peter Sester confronts the reality that disputes in commercial arbitration are overwhelmingly contract-based, and properly directs our attention away from the contract by which the parties agreed to arbitrate to the contract by reference to which they intended their disputes to be adjudicated. This is a most welcome move and one that cannot help stimulate those whose interests are similarly situated on the frontier between the law of arbitration and the law of international contracts.’ Prof. George A. Bermann Columbia University, New York City ‘This is a book that is not only useful but also close to market expectations. ... Summing up, I would like to congratulate Peter Sester for giving us a free-market society book. He provides his readers with much food for thought and a remarkable admonition not to replace the parties’ work with public policy considerations.’ Prof. Dr Peter Nobel Emeritus Universities St. Gallen and Zurich, Switzerland