Choice of Law in Contract and Thai Private International Law: A Comparative Study *

By Prasit Pivavatnapanich **

Introduction
It is widely accepted that choice of law in contract is one of the most fascinating and complicated topics in private international law(1). In this field, (2) there are two important facets that require careful examination. The first is that the parties agree to choose a definite foreign substantive law as an applicable law governing the contract concluded between the parties concerned, know to legal scholars as a principle of party autonomy, autonomie de la volonte in French or parteiautonomie in German.

The second is that no clause apparently or indirectly laid down in contract concluded on both sides recognizes an applicable law. Most jurists regard the situation where the contracting parties do not agree to, or fail to, choose an expressed or implied chosen law as a case of an absence of choice of law.
The present work focuses mainly on the principle of party autonomy in private international law, or widely know as conflict of laws. In this article, reliance on three methodologies, namely a historical method, a comparative approach and an analytical concept, is very useful for readers to comprehend a characteristic of choice of law in contract.

The Rise and Development of Party Autonomy
For a better understanding of the freedom of contracting parties to choose foreign law as an applicable there are several methods to enable readers to understand the rule of party autonomy. Who was the author of this principle? With regard to the origin of the will of parties, there are two conflicting academic views. Some claim that the autonomy doctrine was first articulated in the writings of French jurist, Dumoulin (3) whilst others do not perceive party autonomy as a brainchild of Dumoulin because the freedom of contract at that time did not have the same meaning as understood by contemporary jurists understand (4). Anyway, the present author does not wish to fritter time away on this purely academic problem.
Historically, there are, summa devisio, two camps in legal literatures, namely, the champion and the opposition of party autonomy (5). The group of jurists, who Expressed the merits of party autonomy, came to realize the sanctity of freedom of contract or the intention of contracting parties.
However, detractors of party autonomy realized that a volition of contracting parties submitting themselves to the chosen law could not, and should not, be above positive law. The rationale materiel lies in the fact that every contract must be treated equally under the same law. Also, in the United States, the theory of Governmental Interest Analysis proposed by an American processor named Brained Currie excluded party autonomy from the realm of conflict of laws (6). This view, in the past, was widespread and predominant in France (7) and the Netherlands (8). Nowadays, such a restricted approach is no longer adopted both in the practices of courts and legal literatures.

The Chosen Law by The Contracting Parties: Freedom of Contract
The principle of the autonomy of contracting parties, or the lex voluntalis (9), which is conceived as dispositivum not jus cogens, well established by the practices of Supreme Courts in western countries (10), is a cardinal rule of choice of law in contract(11). The party autonomy has been explicitly recognized by leading civil codes, case law and statutes of many countries throughout the world, including Authoritative works, such as in England (12), Scotland(13), Germany(14), Switzerland(15), Italy(16) the Netherlands (17) the Scandinavian countries (18) and, then, was transplanted into the new World, the United States (19).

Part 2

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* The present author would like to express many thank to the staff of the law library of the Council of State, allowing the writer to borrow books and access travaux preparatories of the Act on Conflict of Law B.E. 2481. Note that a form of citation throughout this work relies on the Blue Book.

** Assistant Professor, Department of International Law and Department of Civil Law, Faculty of Law Thammasat University

(1) See Mathias Reiman, Savigny's Triumph? Choice of Law Contract Cases at the Close 0 the Twentieth Century, 39 Virginia Journal of International Law Association 571, 575 (1999); Edith Friedler, Party Autonomy Revised: A Statutory Solution To A Choice of Law Problem, 37 University of Kansas Law Review 471 (1989); P.M. NORTH, CHESHIRE AND NORTH PRIVATE INTERNATIONAL LAW 196 (1979).

(2) Most writers agree that the word "contract" used in the context of choice of laws only refers to "contractual obligations " , rather than a contract creates a juridical status and relationship in family law. See MARTIN WOLFF, PRIVATE INTERNATIONAL LAW 413 (1962)

(3) See Edith Friedler, Party Autonomy Revised: A Statutory Solution to A Choice of Law Problem, 37 University of Kansas Law Review, at 475.

(4) See Ole Lando, Contracts, in Lipsteine (ed.), International Encyclopedia of Comparative Law, vol. III, Chapter 24 (1976) at 6.

(5) See Mathias Reiman, supra note 1, at 576.

(6) See Edith Friedler, supra note 1, at 486.

(7) See Ole Lando, supra note 4, at 17

(8) See SYSEON C. SYMEONDES PRIVATE INTERNATIONAL LAW AT THE END OF THE 20TH CANTURY: PROGRESS OR REGRESS? SYMEON C. SYMEONDES (ed.) 311 (2000).

(9) See MARTIN WOLFF, supra note 2, at 414.

(10) See FILIP DE LY,INTERNATIONAL BUSINESS LAW LEX MERCATORIA 64-65 (1992).

(11) See Frank Vischer, General Course on Private International Law, Hague Recuil des Coures // 125 (1966); Friedrich K. Juenger, Contract Choice of Law in the Americas, 45 American Journal of Comparative Law 195, 199 (1997).

(12) See DICEY MORRIS ON THE CONFLICT OF LAWS vol. Two, LAWRENCE COLLINS (ed) 1188(1993); J.H.C. MORRIS, THE CONFLICT OF LAWS 2 12-214 (1980); R.H. GRAVESON, THE CONFLICT OF LAWS 419-434 (1969).

(13) See A.E. ANTON, PRIVATE INTERNATIONAL LAW 263 (1990).

(14) See article 27 of the Introductory Code to the Civil Code 1986 (Einfuehrungsgesetz zum Buergerlichen Gesetzbuche: EGBGB). This text can be found in Rainer Gildeggen & Jochen Langkeit, The New Conflict of Laws Code Provisions of the Federal Republic of German: Inteoductory Comment and Translation, 17:229 Georgia Journal International & Comparative Law (1986). See also Brice Dickson, The Reform of Private International Law in the Federal Republic of Germany, 34 International and Comparative Law Quarterly 231, 261 (1985). It should also be added that Professor Drobnig, one of the prominent German jurists in this field, opined that most rules concerning choice of law in contract rely heavily on court's ecision along with academic works. See ULRICH DROBNIG, BILATERAL STUDIES IN PRIVATE INTERNATIONAL LAW 225 (1972).

(15) See article 116(1) in Switzerland's Private International Law 1987 (Introduced Translated and Annotated by PIERRE A. KARRER and KARL W. ARNOLD) 112 (1989).

(16) According to article 57 of the Italian System of Private International Law 1995, The contractual obligations are based on, in all cases, by the Rome Convention of 19 June 1980, widely known to lawyers as the Rome Convention. The Rome Convention recognizes the principle of party autonomy in article 3(1) 4 (1). The following articles are useful for a better understanding of the basic concept and structure of the Italian private international law: Bonomi, The Italian Statute on Private International Law, 27 International Journal of legal International 247 (1999); Andrea Russo and Robert E. Rains, The Reform of the Italian System of Private International Law with Particular Regarding to Domestic Relations Issues, 25 North Carolina Journal of International Law & Commercial Regulation 271, (2000)

(17) See PRIVATE INTERNATIONAL LAW AT THE END OF THE 20TH Century: PROGRES OR REGRESS?, (SYMEON C. SYMEONIDES (ed)), supra note 15, at 311-312.

(18) See Ole Landa, Scandinavia Conflict of Law Rules Respecting Contracts, VI The American Journal of Comparative Law 1, 3(1957).

(19) The Party autonomy can be found in two sources. The first is the Second Restatement of Conflict of Laws. The second is the Uniform Commercial Code, abbreviated as U.C.C. By the term of section 187 of the Second Restatement, it provides that "The law of the state chosen by the parties to govern their contractual rights and duties will be applied". See RUSSELL J. WEINTRAUB, supra note 24, at 370. See Uniform Commercial Code Section 1-105. See also Francis A. Gabor, Stepchild of the New Mercatoria: Private International Law from the United States Perspective, 8 Northwestern Journal of International Law and Business 538 ff (1988).

Originally Published in the Law Journal of Thailand Bar Society On December, 2002