Originally from American Review of International Arbitration - ARIA

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The editors of the present issue have guided the drafting of these preliminary remarks by asking the following questions: What are mandatory rules? Where do they come from? How do they relate to “public policy”?

Because we are dealing with this issue in the context of international arbitration, we should be clear at the outset that we are mostly concerned here with international, perhaps transnational,  mandatory rules, leaving for another time a discussion on domestic mandatory rules. However, it may be useful to keep in mind domestic mandatory rules, at least in order to understand better the special category of mandatory rules which are the international ones.

It is also important to keep in mind that mandatory rules may be part of the lex causae, hence posing no real difficulty in their application. If they are part of another legal system than the lex causae, their application may be more controversial or difficult. It may be so much so, that instead of “applying” foreign mandatory rules, some would prefer to say that they are “given effect.” We will briefly return to this distinction in Section III of this paper.

We will start these brief comments with a few definitions (Section I). We will then turn to the various sources where we can find mandatory rules (Section II). We will end with some methodological remarks (Section III).

I.  THE DEFINITIONS

It is particularly important to start with a few clarifications on the concepts used since a lot will also depend on the language used.

For a long time, the English expression “mandatory rules” was equated with the French concept of “lois de police” (in German: “Zwingende Vorschriften” or in Italian “norme imperative”). It seems, however, that in recent literature and case law, particularly in the arbitration context, the concept of mandatory rules may take on a much broader meaning as it may encompass all kinds of norms which are mandatory in nature, i.e. which the parties cannot derogate from, hence which do not leave room for party autonomy, whatever their source or their name may be. This broad meaning would cover not only the lois de police or lois d’application immediate (Eingriffsnormen), but also any norm which would fall under the public policy/public order exception.