(b) Dispense with …excluding its conflicts of law provisions

Choice-of-law clauses regularly contain the phrase excluding its conflicts of law provisions. It is used so often and yet is so useless that a clarification is desirable.

Obviously, the phrase excluding its conflicts of law provisions attempts to exclude the private international law provisions of the law chosen under that same choice-of-law clause. (Conflict of laws is an area of private international law, which deals with determining the applicable law, as may be appointed by a choice-of-law clause.) The phrase excluding its conflicts of law provisions is meaningful only if the private international law rules of the chosen law would ‘refer’ the same matter to another law. This is only possible under the (private international law) concept of ‘renvoi‘.

Many systems of private international law reject renvoi, which is understandable because renvoi is a source of legal uncertainty, potentially leading to circular or endless referrals. Moreover, renvoi would not necessarily provide a solution, which is by definition unequivocally acceptable. Finally, many legal systems reject renvoi because it may introduce inefficiencies in the case at hand. Countries that do accept renvoi normally reduce its scope to a minimum. Areas typically excluded from the working sphere of renvoi are contractual obligations and areas that permit broad party autonomy (ius dispositivum). In essence, the applicability of renvoi in the case of a choice-of-law clause, and hence the phrase excluding its conflicts of law provisions, seems rather exceptional.

In order for the words excluding its conflicts of law provisions to be meaningful, the following criteria should be met cumulatively:

(a) neither the private international law rules of the chosen law nor those of the lex fori (i.e. the law of the country where the court is located) may reject renvoi. If the private international law rules of the lex fori do, the court will, after applying its own private international law rules, refuse a renvoi (if any) by the private international law rules of the chosen law;
(b) the applied private international law rules should not permit contracting parties to choose the applicable contract law themselves because if they do, such a choice-of-law clause would already be conclusive; and
(c) if the previous two criteria are met, the court must not determine that the parties actually intended to apply the chosen law (e.g. because they wrote this down) or that they had a legally valid other justification for the chosen law.

Do you see how highly exceptional if not completely hypothetical the facts of a particular contract must be in order for the words excluding its conflicts of law provisions to make any sense?