Conflict of laws and of jurisdiction

In international cases, which have links to several countries or legal systems, it is needed to determine the applicable law and the competent courts. Indeed, the laws of several States as well as international rules may be applicable and the courts of several States may have jurisdiction over a dispute. On the contrary, it may be that no court will assume jurisdiction. Remember that there is no international code applicable to every international case, nor is there an international court competent to hear any international dispute between private persons.

A conflict of laws is when the applicable law is not known a priori.

A conflict of jurisdiction is when the competent courts are not known a priori.

Conflict of laws and of jurisdiction is the central subject of private international law. The rules concerning the conflict of laws and of jurisdiction aim to determine the applicable law and the competent courts.

Conflict of laws

A legal relationship of an international nature may be governed by several State laws or by international rules. Since these substantive rules are not uniform, it is important to determine the applicable law. Generally, each legal system has its own conflict rules (also known as conflict-of-laws rules ), which are intended to determine which substantive law will be applied to a given case. The conflict rules of different legal systems can sometimes be inconsistent or contradictory.

For example, an international contract for the provision of services between a French company and an Australian company could be governed by French law, or by Australian law or by an international convention. In the absence of an applicable international convention, the conflict-of-laws rules under French law could lead to the application of French law, while the conflict-of-laws rules under Australian law would lead to the application of Australian law.

Conflict of jurisdiction

Two opposing situations pose a problem.

Positive conflict of jurisdiction: the courts of several States recognise themselves as competent to adjudicate a same dispute. This is problematic because the courts may issue different or even contradictory decisions.

Negative conflict of jurisdiction: no court considers itself competent to judge a dispute. This is problematic because a judicial solution to the conflict must be found.

For example, let’s imagine a dispute between a French company and a Chinese company. The French company sued the Chinese company in a French court. At the same time, the Chinese company sued the French company before a Chinese court for the same dispute. If no judge recognises himself as competent, there is a negative conflict. If the French and Chinese judges both recognise themselves as competent, there is a positive conflict. This is known as lis pendens : the same dispute is pending before two different courts. This is not a desirable situation for the proper administration of justice. Judges could make contradictory decisions: for example, the French judge could rule in favour of the French company, while the Chinese judge would rule in favour of the Chinese company. The judges could simply make different decisions: imagine that the two judges award damages to the French company, but of a different amount; the winning party could potentially accumulate the amounts awarded in France and China.

Solutions to prevent and resolve conflicts

Several solutions make it possible to prevent conflict of laws and of jurisdiction or to resolve them when they arise.

Choice of law clauses. Parties can include choice of law clauses in contracts, specifying which laws will govern their agreement, thereby reducing uncertainty and potential conflicts.

Uniform rules provided by international treaties. Certain treaties stipulate uniform conflict rules and others stipulate uniform substantive rules, which resolve problems related to discrepancies between the conflict rules of different States.

Conflict-of-laws rules of each State. Ultimately, each State has rules concerning the conflict of laws and of jurisdiction. These rules will at least make it possible to find a solution at the level of each State. However, they will not guarantee a good administration of justice from an overall point of view.