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A Comparative Study of Rome I and Thai Private International Law:
Focus on the Applicable Law Rules in Contract
Soemsit Sirijaroensuk*
1. Introduction a. Statement of the thesis
Due to the international business transactions which can be incurred by someone
or by a company whose nationality is the same or different, there will thereafter be the
fundamental question of which legal system should be used as the applicable law in order to
determine the rights and obligations between the parties. For example, A, a Thai company,
makes a contract with B, an English company, for the purpose that A will send Thai products
to B in England and B will give the monetary consideration for those products. This is an
international contract between the companies among different countries. Consequently, the
problem of which legal system, the Thai legal system or English legal system, should be
used in relation to this contract in governing the rights and obligations between the parties.
Moreover, if A and B are a Thai company and A want to sell its property situated in The US
to B by making the contract in The US., this is also an international contract; even though,
both parties come from the same country because the purpose of the contract is to buy and
sell the property situated abroad and the contract is made outside their country. As a result,
the aforementioned issue arises in the previous example occurs. However, the choice of law,
* Judge of the Central Bankruptcy Court, LL.B. Chulalongkorn University, Thai Barrister-at –Law, LL.M International Commercial Law, University of Aberdeen (Office of the Judiciary Scholarship 2009)
42 Vol.3No.3:2011
an important part of the private international law, can resolve these problems. The problem
can be addressed by determining which law system should be prevail. nonetheless, there
is a choice of law rules among the countries, of which some seem to be accepted by most
countries because they are adapted from the old law with corrections to the drawbacks of
the past while the others have been used for a long time without amendment. Rome I1, for
example, which was developed from the Rome Convention2and is recently used by the
member states of EU, is one of the popular choices of law rules used only for contractual
obligations and gives the freedom of choice for the parties to determine the applicable
law3. It also gives a variety of rules in order to determine the applicable law in contracts
in the absence of choice.4 on the other hand, Thai Private International Law5 has different
rules than those in Rome I which have been in use for more than 70 years. For example, in
contracts in the absence of choice this law still determines the applicable law by using the
nationality of the party and the place where the contract is made, in case the parties have the
different nationalities6. However, these methods seem to be out of date. Thus, the scope of
this dissertation is to compare the rule of both laws by focusing on a few provisions such as
Article 3 and Article 4 in the Rome I and Article 13 in Thai Private International Law which
relate to the applicable law rules in contract, party autonomy in contracts and contracts in
the absence of choice, without discussing the existence and validity of a contract and finally,
evaluate the rule of both laws and considering, whether the Thai Private International Law
should be amended in order to keep pace with Rome I.
1 REGULATION (EC) No 593/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 JUNE 2008 ON THE LAw APPLICABLE TO CONTRACTUAL OBLIGATIONS (Rome I).
2 EC CONVENTION ON THE LAw APPLICABLE TO CONTRACTUAL OBLIGATIONS (Rome 1980)
3 Article 3 of Rome I4 Article4 of Rome I5 Act On Conflict of Law B.E.2481 6 Article13 of Act On Conflict of Law B.E.2481
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b. Indication of its important and relevance
Private international law, especially in relation to the choice of law, is very
important due to the growth of international business transactions which are increasing
every year. If the countries of the parties have the same choice of law rules, or the rules
which are most widely accepted, it will be easier for the parties to conclude the contract. It
will make it more certain and predictable for the party to know exactly which applicable
law governs their transactions. In addition, this rule will make the party feel that they will
get the justice, because they know this rule well and are assured that no forum- shopping
has occurred. As a result, the country whose choice of law rule is accepted and also can
correspond to choice of law rule of another country has more opportunity to get increasing
international trade. although in the article 13 of the act on Conflict of Law B.E.2481 it
shows that its choice of law rule supports the freedom of choice among the parties like
those in Rome I7, this provision is not clear in many aspects. Moreover, its rule in contract
in the absence of choice is very different from those in another country. Thus, it is time for
Thailand to amend its private international law if it wants to increase its international trade
and provide reliability for the foreign parties.
c. Outline of the dissertation
this dissertation is divided into six chapters. the first is an introduction which
is divided into three sections, a, b and c. In section a there will be the statement of the
thesis which will show the scope, and the object and purpose of this dissertation. The
former is to compare and evaluate the rules of both laws by focusing especially on
Thai private International Law while the latter is to speculate on whether Thai Private
International Law should be amended in order to keep pace with Rome I. In section b
there will be the indication of its importance and relevance and the last section, c, is an
7 Article3 of Rome I
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outline of the dissertation. The second and third chapters are Rome I and Thai Private
International Law respectively. Each will have the same structures; which are the history
and the determination of applicable law, party autonomy in contracts and contracts in
the absence of choice without stating the existence and validity of a contract, in order to
extract the similarities and the differences between both laws. The fourth chapter will
have a comparison between both laws by illustrating their similarities and differences
and the fifth chapter will have the evaluation and suggestions. the sixth chapter will be
the conclusion of this dissertation.
2. Rome I Regulation
2.1 History
Rome I Regulation came into force on July 24, 2008 and applied from 17 December
2009 according to article 29 of the Rome I Regulation.8 Every EU member states joined
this regulation except Denmark.9 the United kingdom at first did not take part in
the adoption of this Regulation according to Recital 4510, with the ground that there
were primary anxieties about the Commission’s proposal and the method in which it
had been arranged.11 however, finally it accepted this Regulation on July 24, 2008 and
later got the permission of the European Commission.12 This Regulation converted the
8 Rome I 9 Recital (46) of Rome I 10 Rome I 11 Ministry of Justice, Rome I- should the UK opt in? (consultation Paper CP05/08, Published
on 2 April 2008) < http://www.justice.gov.uk/docs/cp0508.pdf> accessed 10 June 2010.12 Commission Decision of 22 December 2008 on the request from the United Kingdom to
accept Regulation (EC) No 593/2008 of the European Parliament and the Council on the law applicable to contractual obligations (Rome I) (notified under document number C(2008) 8554) (2009/26/EC)< http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:010:0022:0022:EN:PDF>accessed 10 June 2010.
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Rome Convention into a community instrument13: and as a result, for the interpretation
of the Regulation most case law and explanatory reports which used to be interpreted
the Rome Convention can still involve with this Regulation14, and any reference to that
Convention shall be understood like a reference to this Regulation in accordance with
the article 24 (2) of this Regulation. Moreover, pursuant to Recital (7) of its provision,
it states that the provision and substantive scope of this Regulation should be correspond
with Brussels I15and Rome II.16
only contractual obligation is addressed by Rome I, so in situations which
involve both contractual obligations and non-contractual obligations the rules in Rome
II will be needed to apply so as to deal with the latter problems.17
The principle of party autonomy is still a general rule like those in Rome
Convention; even though, there are some changes in words of this Regulation. Also,
the parties can continually have the freedom of choice to select the applicable law
to only part of the contract.18 however, two helpful clarifications are included in this
Regulation.19 First, without clearing in Rome Convention, this Regulation clarified that
only in express term need not be made by party autonomy but it is now considered
enough for the choice to be undoubtedly expressed by the parties by reference to the
13 Nils willem Vernooij, THE COLUMBIA JOURNAL OF EUROPEAN LAw ONLINE, Rome I : an update on the law applicable to contractual obligations in europe, p.71<http://www.cjel.net/online/15_2-vernooij/>accessed 12 June 2010
14 Zheng Tang, The interrelationship of European Jurisdiction and choice of law in contract, Journal of Private International Law, Volume4 Number1 April2008 , p. 36
15 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I)
16 REGULATION (EC) No 864/2547OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 July 2007 on the law applicable to non- contractual obligations (Rome II)
17 R.Plender & M. wilderspin, Private International Law of Obligation, 3rd ed., Sweet & Maxwell, London, 2009, p. 94.
18 Vernooij, (n13) p.7219 Ministry of Justice, (n11) p. 3
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terms of the contract or the circumstances of the case.20 Secondly, according to Recital 1221,
the situation under the contract that the parties agree to confer one or more courts or
tribunals of the Member State exclusive jurisdiction to address disputes should be
taken in to account as one of the factors in determining whether a choice of law was
demonstrated.22
Additionally, there are some major changes in the principle of choice of law
rule in the absence of express or implied choice of law in contracts in this Regulation23.
Due to the fact that the structure of the old rule was not clear, especially the relationship
among three main rule elements which are the general principle, the presumptions and
escape clause 24(Article 4(1), 4(2) and 4(5) respectively25), this led to uncertain results
if the same case is litigated in different countries among the Member State depending
on which approach they use. The outcome of the same case litigated in the Dutch court
using the strong presumption26 will differ from that in the early English court using the
weaker presumption. For example, in Societe Nouvelle des Papeteries de l’ Aa SA v
BV Machinefabrike BOA27 and Definitely Maybe (Touring) Ltd v Marek lieberberg
Konzertegentur GmbH 28 respectively, while litigating in Scottish court or recent English
court using approach between strong and weak presumption29 may get another result,
20 Ibid21 Rome I 22 Ministry of Justice (n13) p. 323 Vernooij, (n13), p7424 Garcimartin Alferez, Francisco J., PRIVATE INTERNATIONAL LAw AND INTER-
NATIONAL CIVIL PROCEDURE, The Rome I Regulation: Much ado about nothing? p I-67<http://www.simons-law.com/library/pdf/e/884.pdf>accessed 12 June 2010
25 Rome Convention26 Ole Lando and Peter Arnt Nielsen, THE ROME ONE PROPERSAL, Journal of Private
International Law, Vol.3 No.1. p36 ; Simon Atrill, Choice of law in contract : The missing pieces of the article 4 jigsaw?. pp 550-551
27 [1996] LMCLQ 1828 [2001] 1 wLR 174529 Atrill, (n26) p. 575
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namely in the Caledonia Subsea Ltd. V Microperi SRL30 and Intercontainer Interfrigo
SC (ICF) v Balkenende Oosthuizen BV, MIC Operations BV 31 respectively. Moreover,
there is also the problem about the classification of the characteristic performance of the
contract in intricate relationships which was not simple and really gave rise to dissimilar
understandings between the courts of the Member States.32
As a result, the aim of the provisions of the Rome I Regulation is to address
these problems in order to increase certainty and predictability for the parties.33 First,
it provides hard-and-fast rules, which have eight types of the contracts, to replace the
characteristic performance rule in the Rome Convention according to Article 4(1).34
Secondly, it, however, does not totally discard the characteristic performance rule but
according to article 4(2) this rule can occur in two conditions: first, when the contract
is not covered by one of eight types of Article 4(1) or second, when the contract is
covered by more than one of those types.35 Lastly, it still provides the principle of
closest connection, the basic principle in Article 4 of Rome convention, in Article 4(3)
and 4(4).36 The formal is an escape clause and seems to be similar with those in Rome
Convention37 except the wording “manifestly” while the latter will apply when the
applicable law in paragraph 1 or 2 in the same article cannot be defined.
30 [2003] SC 7031 Case C-133/0832 Alferez, J. , (n24) p I-6733 COMMISSION OF THE EUROPEAN COMMUNITIES PROPOSAL FOR A REGULATION
OF THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE LAw APPLICABLE TO THE CONTRACTUAL OBLIGATIONS (Dec. 15, 2005) p.5<http://eur-lex.europa.eu/LexUriServ/site/en/com/2005/com2005_0650en01.pdf>accessed 12 June 2010
34 Zheng Tang, Law Applicable in the Absence of Choice-The New Article 4 of the Rome I Regulation, (2008) 71 Modern Law Review, p.787
35 Ibid, p. 79336 Ibid, p.79737 Article 4(5) of Rome Convention
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2.2 Determination of Applicable Law
2.2.1 Party Autonomy in contract
Article 3(1) of Rome I Regulation, can be divided into three parts, to allow a
better understanding.
First, “A contract shall be governed by the law chosen by the parties”. In this
part, the law chosen by the parties must be the state law which is no need to have the
relationship with the contract.38 Thus, the parties cannot select non-State laws such as
UnIDRoIT or lex mercatoria as an applicable law to address their contracts.39 Shamil
Bank of Bahrain EC v Beximco Pharmaceuticals Ltd40is an example of this. nonetheless,
pursuant to Recital 13 of this Regulation the parties can incorporate a non-State body of
law or an international convention into their contract by reference.41
Secondly, “The choice shall be made expressly or clearly demonstrated by the
terms of the contract or the circumstances of the case”, in the case of express choice, it can
be made in both direct way and indirect way42. The former, for instance, can occur when
the contract is included by a clause which exactly determines the state law, such as English
law or Thai law to govern the contract and such law shall be applied when disputes happen
in relation to the contract.43 However, this Article will not satisfy if a choice of law in a
printed contract is deleted by one of the parties before signing, and this contract is signed by
38 Alferez, J. , (n24) p I-6639 Vernooij, (n13,) p7240 [2004] 1 wLR 178441 Vernooij, (n13), p.7342 Clarkson & Hill, The Conflict of Law, (3rd ed. OUP 2006) p. 17643 Ibid.
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the other party without observing.44An example of this event occurred in Samcrete Egypt
Engineers and Contractors SAE v Land Rover Exports Ltd.45
The latter can happen when the parties do not state the name of state law which
shall be used as an applicable law but try to select the applicable indirectly.46For example,
in Companie Tunisienne de Navigation SA v Compagnie d’ Armement Maritime SA47
one of the clauses of the charterparty form provided the law of the flag of the vessel
which carries the goods will apply this contract.48
In the case that the choice of law is “clearly demonstrated by the terms of the
contract or the circumstances of the case”, even though the wording in this Article is
somewhat different from that of Rome Convention, which are “clearly demonstrated”
and “demonstrated with reasonable certainty”49, it is thought that the intention of the
legislature did not want in order to satisfy this Article’s stronger proof of the intention
of the parties than those in Rome Convention.50 The main reason to change the wording
is just to clarify the doubt which happened in the different language versions, French
and English texts, in the old text.51 Thus, the essential meaning remains the same.52
According to the Giuliano-Lagarde Report53, there are many possible facts,
44 Ibid45 [2002] CLC 372.46 Clarkson & Hill, (n44), p. 17647 [1971] AC 572.48 Clarkson & Hill, (n44), p. 17749 Article 3(1) of Rome Convention50 Plender, (n17) p. 14451 Ibid.52 Ibid.53 Giuliano-Lagarde Report, OJ 1980 C282/17.
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clearly demonstrated by the terms of the contract or the circumstances of the case,
that make the courts consider the parties make a real choice of law without making it
expressly in the contract.
A. Dispute-resolution clause.54
at common law, in practice, if the parties agree to arbitration or litigation in a specific
country, the court can make a decision that the applicable law governing the contract is the
law of that country.55 Komminos S56 is an example. In this case, P’ cargo was shipped on
a vessel belonging to D under the bill of lading that was written in English and determined
the British courts to govern the dispute between the parties.57The Court of Appeal decided
that the applicable law governing the contract was English law.58 However, pursuant to
Recital 12 of this Regulation, it stated one or more courts or tribunals of the Member State
that is determined by the agreement between the parties to address the dispute under the
contract should be one of the factors that a judge may allow for contemplating whether a
choice of law is clearly demonstrated. And according to the Giuliano-Lagarde Report, it
stated the choice of a specific forum in some cases may illustrate in certain manner that
the parties aim to use the law of that forum to govern the contract, but this must always be
expose to the other terms of the contract and all the circumstances of the case.59 Therefore,
the choice of the particular forum shall be one of the factors that the courts consider with
the other terms of the contract and the circumstances of the case in order to determine the
applicable law. On the contrary, when the parties agree to arbitration in a specific country,
this will make the courts, after the Rome Convention came into force, consider that the
54 Clarkson & Hill, (n44), p. 17855 Ibid.56 [1991] 1 Lloyd’s Rep 370.57 Clarkson & Hill, (n44), p. 17858 Clarkson & Hill, (n44), p. 17959 OJ 1980 C282/17
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contract between the parties was addressed by the applicable law of that country. Egon
Oldendorff v Libera Corpn60is an example.
B. Standard forms.61
According to the Giuliano-Lagarde Report,62 the parties can make a real choice
of law without expressly stating in the contract under a standard form of the contract
that is known to be applied by a specific law system. For example, in Amin Rasheed
Shipping Corpn v Kuwait Insurance Co63 , at common law, a marine insurance policy
which its policy was based on a Lloyd’s form described in a list to the English marine
insurance law was used as a standard form of contract between the parties.64The House
of Lords held that by using the English form of policy, which only the English law could
be interpreted, the intention of the parties must have English law to apply the contract.65
C. Previous course of dealing.66
The Giuliano-Lagarde Report recommended that in other cases a previous course
of dealing under contracts which have an express choice of law may give no doubt to the
court that this contract is to be applied by the previous law chosen, in which the choice
of law clause has been excluded in events which do not express a planned change of
policy by the parties.67This means even though the parties, for example, do not conclude
an express choice of law in contract in question, the court may make a decision that the
applicable to be governed this contract is the same law as that of in previous clause of 60 [1995] 2 Lloyd’s Rep 64.61 Clarkson & Hill, (n44), p. 18062 OJ 1980 C282/17.63 [1984] AC 50.64 Clarkson & Hill, (n44), p. 18065 Ibid.66 Ibid.67 OJ 1980 C282/17.
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dealing. However, each case will depend on its own piece of evidence, so it would be
incorrect if the court decides that the parties had impliedly selected the law of a specific
country easily due to the fact that they had done so in a previous dealing.68
D. Express choice of law in related transactions.69
This is one kind of other matters, according to the Giuliano-Lagarde Report,70
that can make the court conclude that an express choice of law in related transactions
between the same parties might have effect on the real choice of law that has been made
in later contract. nevertheless, like the case of previous course of dealing, whether the
implication can be determined will rely deeply on the facts of the case.71
Reference to particular rules.72
The Giuliano-Lagarde Report advised that even though there is no expressly
mentioned choice of law, similar references in a contract to particular Articles of the
French Civil Code may make no doubt to the court that the parties have intentionally
selected French law.73 Thus, if the parties conclude the contract with no express choice
of law but reference to the law of a specific country, it may make the court decide that
this is an implied choice to apply the law of that country according to the real purpose
of the parties.
E. other considerations.74
Apart from the Giuliano-Lagarde Report, American Motorists Insurance
68 Clarkson & Hill, (n44), p. 18069 Ibid.70 OJ 1980 C282/17.71 James Fawcett and Janeen M. Carruthers, Cheshire, North and Fawcett Private International
Law, (14th ed, OUP 2008) p.70472 Clarkson & Hill, (n44), p. 18173 OJ 1980 C282/17.74 Clarkson & Hill, (n44), p. 182
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Co v Cellstar Corporation 75 gave another situation that the court may decide the parties
make an implied choice. In this case the question arose whether English or Texan law
governed the contract of insurance between C, a company in Illinois which performed
insurance business in Texas, and D, a company in Delaware whose principle place of
business was in Texas.76The court held that Texas law was chosen by the parties by
the reason that the place in which the policy was issued was Texas and the terms of
the contract which its clause offering 12 months as a time limit was agree to the law of
Texas.77
In addition, under common law, for example, in Re Missouri Steamship Co78
the court may indicate a choice of validating law as a law to govern the contract if the
contract or its specific provision is invalid under the law of one country to which the
contract is involved but valid under another because the intention of the parties must
have the contract to be valid.79
Lastly, “By their choice the parties can select the law applicable to the whole or
to part only of the contract” in this part which is called dépeçage the parties can select
different law for different parts of the same contract. The parties can express the choice
or it can be deduced by the court.80 nonetheless, according to the Giuliano-Lagarde
Report,81 the choice must be reasonably consistent when the contract is severable. It
must connect with elements in the contract which can be applied by different laws
without causing contradictions.82on the contrary, it is not likely that repudiation of the
contract foe non-performance would be exposed to two distinct laws, one for the seller
75 [2003] ILPr 37076 Clarkson & Hill, (n44), p. 18277 Ibid.78 (1889) 42 CH D 32179 Ibid.80 Fawcett and Carruthers, N71), p. 69181 OJ 1980 C282/1782 Ibid.
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and the other for the buyer.83 The Article 4 must be used to solve the problem if the
selected law cannot be rationally reconciled.84
Pursuant to Article 3(2) of the Regulation which stipulates that “The parties
may at any time agree to subject the contract to a law other than that which previously
governed it, whether as a result of an earlier choice made under this Article or of other
provisions of this Regulation. Any change in the law to be applied that is made after
the conclusion of the contract shall not prejudice its formal validity under Article 11 or
adversely affect the rights of third parties.” This Article gives the parties the liberty to
change their choice at any time before or after the conclusion of the contract. However,
according to the Giuliano-Lagarde Report, it is rather usual that this variation should be
exposed to the similar rules as the early choice.85Moreover, if they change the applicable
law after concluding the contract, it shall not affect its formal validity under Article 11
or badly influence on the third parties’ rights.
according to article 3(3) which specifies that “where all other elements
relevant to the situation at the time of the choice are located in a country other than the
country whose law has been chosen, the choice of the parties shall not prejudice the
application of provisions of the law of that other country which cannot be derogated
from by agreement”, this rule, pursuant to Recital 15 of this Regulation, should use
whether or not the choice of law was came with a choice of court or tribunal. The aim of
this rule is to limit party autonomy by providing that the mandatory rules of the country
must be used although the parties select the law of another country due to the fact that all
the elements relevant to the situation are placed in that country at the time of the choice
other than the country that the parties select its law.86
83 Ibid.84 Ibid.85 OJ 1980 C282/1886 Clarkson & Hill, (n44), p. 196
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Pursuant to Article 3(4) which provides that “Where all other elements relevant
to the situation at the time of the choice are located in one or more Member States, the
parties ‘choice of applicable law other than that of a Member State shall not prejudice
the application of the provisions of Community law, where appropriate as implemented
in the Member State of the forum, which cannot be derogated from by agreement”, this
Article aims to shield a mandatory community law application against a choice of law
of a third country in the events that link with Member States only.87This rule thus also
limits the freedom of choice like that of in Article 3(3). nonetheless, many conditions,
unlike those in article 3(3), must be fulfilled in order to satisfy this article. First, all
the relevant elements other than the parties choice must be linked with one or more
Member States.88Secondly, the agreement cannot derogate the provision of Community
law in question on the condition that only if a regulation contains its rule.89 Besides, this
Article uses only in case the law which is chosen by the parties must be the law of the
third country not the law of the Member States.90
Limitations on freedom of choice.
Apart from Article 3(3) and 3(4), mentioned above, there are many limitations
on freedom of choice in this Regulation. First, by virtue of article 5, 6, 7 and 8 there
are many rules limiting party autonomy in a specific contract in an area of contracts
of carriage, consumer contracts, contracts of insurance and contracts of employment
respectively.91Secondly, the provision of article 9, Overriding mandatory provisions,
which aims to protect public interests of a country such as its political, social or economic
organisation, and Article21, Public policy of the forum, which aims to protect public
87 Hulmut Heiss, “Party Aunomy”, in Ferrari Franco & Stefan Leible (Eds.), Rome I Regula-tion: The Law Applicable to Contractual Obligations in European Law, 2009, p. 4
88 Plender, (n17), p. 16189 Ibid.90 Ibid, p. 16391 Ibid, p. 159
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policy (ordre public), also restrict the freedom of choice. Thirdly, the applicable law
chosen by the parties, according to Article 3(1) cannot be non-States law except national
law and also be logically consistent choice when complying with dépeçage.92Lastly, a
“floating” applicable law which gives the choice to a party to select an applicable law in
the future by choosing the law from a list cannot be selected by the parties.93
2.2.2 In the Absence of Choice
Article 4 of the Regulation provides three law rules, hard-and-fast rules in Article 4(1),94
characteristic performance rule in Article 4(2)95the closest connection principle in Article 4(3)
and (4),96 to determine the applicable law governing contracts in the default of choice.
Hard-and-fast rules
Sale of Goods 97
According to Article 4(1) (a), which provides that “a contract for the sale of goods
shall be governed by the law of the country where the seller has his habitual residence”, the
law to apply this contract shall be the law of the seller’s habitual residence.
The concept of “sale of goods” should be explained in the same way when
using Article 5 of Brussels I Regulation98and also in Article 1CISG99 and in Article 1(1)
1955 hague Convention100 while the meaning of habitual residence can be explained by
92 Fawcett and Carruthers, (n71), p. 69893 Ibid, p. 70094 Tang, (n34), p.787 95 Ibid, p. 79396 Ibid, p. 79797 Plender, (n17), p. 178 98 Recital17 of Rome I Regulation99 Convention of International Sale of Goods100 Heiss, (n87), p. 36
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article 19 of this Regulation.
Nonetheless, the meaning of “goods” is defined as only movables, which are
different from immovables and rights, so these two things will be governed by another
law.101 Moreover, this Article does not cover sale of goods by auction and consumer
contracts due to the fact that they are managed by Article 4(1) (G) and Article 5 of this
Regulation respectively.102
Provision of Services103
Like Article 4(1) (a), the term of provision of services in Article 4(1) (b) is
interpreted in the same way as using Article 5 of Brussels I Regulation but though
franchise and distribution contracts are provision of services, they are not covered by
this Article but are managed by particular rules.104This Article provides the law of the
country in which the service provider has his habitual residence addressing the service
contracts.105 The term “services” must be aware of a broad sense and covers many
categories of services such as contracts with medical doctors and lawyers.106However,
this Article does not cover contracts of carriage, consumer contracts, insurance contracts
and employment contracts pursuant to article 6, 7, 8 and 9 respectively.107
Agreements relating to Immovable Property108
The law of the country in which the property is located shall be the law to govern
101 Ibid, p. 37102 Ibid.103 Plender, (n17), p. 178 104 Recital17 of Rome I Regulation 105 Article 4(1) (b)106 Heiss, (n87), p. 38107 Ibid.108 Plender, (n17), p. 180
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this contract, which is related to a right in rem in immovable property or to a tenancy
of immovable property.109However, the law of the country in which the landlord has
habitual residence shall apply if this contract is concluded for impermanent personal use
for no more than a period of six successive months and the tenant is a natural person and
has his habitual residence in the same country.110Similarly to Articles 4(1) (a) and (b),
the term of rights in rem in immovable property in this article should be clarified as that
of in Article 22 (1) of Brussels I Regulation.111And this Article cannot be replaced by the
rule in consumer contracts112; although, contracts which involve immovable property or
particular tenancies are frequently a consumer contract.113
Franchise Agreements114
The law which governs this contract shall be the law of the country in which
the franchisee has habitual residence.115this Regulation does not give a definition of
the franchise contract but the international comprehension that it is a contract that the
franchisee has a duty to do a business idea that the franchisor has renovated.116
Distribution Contracts117
The law of the country in which the distributor has habitual residence shall
apply this contract.118The motivation of this Article, like that in franchise contracts, is
109 Article 4 (1) (c) of Rome I Regulation110 Article 4 (1) (d) of Rome I Regulation111 Heiss, (n87), p. 39112 Article 6 of Rome I Regulation113 Heiss, (n87), p. 39114 Plender, (n17), p. 182115 Article 4 (1) (e) of Rome I Regulation116 Heiss, (n87), p. 41117 Plender, (n17), p. 183118 Article 4 (1) (f) of Rome I Regulation
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to protect the weaker party as the distributor trades in his own name and his own risk in
economic.119
Auctions120
In this type of contract the law which applies to these sales shall be the law of
the place, if it can be defined, where these sales happen.121The purpose of this Article is
to defend an impartial situation at auction owing to the fact that the sales of this type are
commonly controlled by particular provisions on auctions.122However, this rule cannot
cope with the internet auctions which have to apply by another rule.123
Financial Instruments124
According to Article 4 (1) (h) which stipulates that “a contract concluded
within a multilateral system which brings together or facilitates the bringing together of
multiple third-party buying and selling interests in financial instruments, as defined by
article 4(1), point (17) of Directive 2004/39/EC, in accordance with non-discretionary
rules and governed by a single law, shall be governed by that law”, this contract shall be
managed by a single law that ever applied with it.
article 4(1), point (17) of Directive 2004/39/EC concerns only the concept
“financial instrument” and interprets it by a listing of various singer transactions125 while
the meaning of multilateral system is explained by the Recital 18 of this Regulation.126
119 Heiss, (n87), p. 42120 Plender, (n17), p. 184121 Article 4 (1) (g) of Rome I Regulation122 Heiss, (n87), p. 43123 Ibid.124 Plender, (n17), p. 185125 Heiss, (n87), p. 44126 Plender, (n17), p. 186
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Characteristic performance rule
The wording of “characteristic performance” came from the Swiss literature
and grew in the practice of the Swiss Federal Tribunal. 127By virtue of Article 4 (2) of
the Regulation characteristic performance rule shall be used in two conditions which are
where the contract does not fall within the list of paragraph 1 of this Article and where
the factors of the contract covered more than one types of that paragraph. In these cases,
the law to govern the contract shall be “the law of the country where the party required
to effect the characteristic performance of the contract has his habitual residence”.128
In case of the latter condition the characteristic performance of the contract shall be
“determined having regard to its centre of gravity”.129as a result, due to the Recital 19
and article 4 (2), it is recommended the characteristic performer can be defined by two
stages: first to discover the characteristic performance owing to the contract’s centre
gravity, and second to detect the party affecting the performance.130
The concept of characteristic performance of this Regulation is the same as that
in Article 4(2) of Rome Convention.131 In unilateral contracts the fact will be concluded in
the line that a legal responsibility that it is the performance of that responsibility which is
characteristic of the contract will be with only one party.132 Ark Therapeutics plc v True
North Capital Ltd 133 is an example. While in bilateral contracts, according to the Giuliano-
Lagarde Report, such as insurance contracts, banking contracts or contracts of services the
characteristic performance is the provision of these contracts, which commonly establishes 127 K Lipstein, “Characteristic Performance- A new concept in the Conflict of Laws in Matters of
Contract for the EEC”, [1981] 3 Northwestern Journal of International Law and Business 402, p. 405 128 Article 4 (2) of Rome I Regulation129 Recital 19 of Rome I Regulation130 Tang, (n26), p.795131 Ibid, Plender,(n17), p. 188, Fawcett and Carruthers, (n71),p. 724132 Clarkson &Hill, (n44), p. 186133 [2006] 1 ALL ER (Comm) 138
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the centre of gravity and the socio-economic task of the contractual transaction.134Therefore,
in a banking contract, for example, the law to govern this contract shall be the law of the
country of the banking establishment where the transaction is made.135
The closet connection principle
Pursuant to Article 4 (3) and (4) of this Regulation, they stipulate a remaining
function for the connecting factor of this rule in two different groups of the situations.136The
former which provides for an escape clause137 determines the law of the country with
which the contract is manifestly more closely connected to govern the contract although
that can be indicated in paragraph 1 or 2. The important point of this Article concerns
the query what composes of the manifestly closer connection.138Moreover, in order
to determine that country, according to Recital 20, it states that “account should be
taken, inter alia, of whether the contract in question has a very close relationship with
another contract or contracts”.139 Definitely Maybe (Touring) Ltd v Marek lieberberg
Konzertegentur GmbH140 and Samcrete Egypt Engineers and Contractors SAE v Land
Rover Exports Ltd141are good examples.
While the latter that provides for a default rule142defines the law to govern the
contract is the law of the country with which the contract is most closely connected in
case paragraph 1 or 2 cannot determine the applicable. In order to determine that country,
134 OJ 1980 C282/20135 OJ 1980 C282/21136 Plender, (n17), p. 194137 Ibid.138 Heiss, (n87), p. 49139 Recital 20 of Rome I 140 (n28)141 (n45)142 Plender, (n17), p. 194
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pursuant to Recital 21, it provides the same method like that in Recital 20. The case examples
that characteristic performance cannot be defined are exchanged contracts, joint ventures,
complex contracts, or any contract relating to several parties performing interconnected
obligations.143 Apple Corps Ltd v Apple Computer Inc144 is an example. Apart from the
determining of the country in Recital 21, the setting and weighing of all pertinent contracts
of the case must be defined by this law, especially the place of negotiation, conclusion and
performance of the contract, the language of the contract, the place of business or habitual
residence of the parties or the currency (if any).145
3. Thai Private International Law
3.1 History
thai Private International Law or act on Conflict of Laws B.E. 2481 was enacted
on March 10, B.E. 2481 and came into force on March 20, B.E. 2481 according to Article 2
of this act. at first, thailand did not have its own conflict of law rules. the principle of these
rules used in Thai courts came from that in England.146 However, after making a new treaty
with some countries, this forced Thailand to enact these rules as written law in the form of the
above Act.147This Act can be divided into six titles which are general provisions, status and
capacity of persons, obligations (including contract and tort), things, family and succession.148It
can be interpreted by the judgments of Thai Supreme Court in case of having legal problems.
Nonetheless, this act has been in use foe the past 70 years without amendment.143 Ibid , p. 201144 [2004] EwHC 768 (Ch)145 Heiss, (n87), p. 49146 Saengauthai Youd, Conflict of law in Nationality with the explanation of Nationality Act
B.E.2495 and Act on Conflict of B.E. Law 2481, 7th ed, ratchadarompublishing, Bangkok, 1963, p. 13
147 Ibid.148 Act on Conflict of Law B.E. 2481
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3.2 Determination of Applicable Law
3.2.1 Party Autonomy in Contract
According to Section 13 of this Act, it stipulates that “The question as to what law
is applicable in regard to the essential elements or effects of a contract is determined by the
intention of the parties thereto...”,149the principle of this Section supports the party autonomy
in contract. In addition, both of them can be covered by express or implied choice as part
of this Section.150 For example, the former is the case151 between P, an English man, who
made a contract of employment as an employee with D, an American company employer,
who registered and had a head office at New Jersey in the United States. however, in the
clause of this contract in Article 21 it provided that the law to govern this contract is the law
of the United States. As a result, after the dispute happened and the case was brought before
the court in Thailand, the court held that the law to govern the contract was the law of the
United States as the choice of the parties. While the latter is in the case152between P and D
who made a charterparty which the clause of this contract in Article 38 provided Arbitrators
in the UK to govern the dispute between the parties, so the court held that the parties made
an implied choice pointing to the law of the UK to govern this contract. In addition, in the
case153about a marinetime insurance contract both P and D made this contract in English
language. This resulted to the judgment of the court that the parties agreed to apply English
law as an implied choice.
149 Translated in Professor Saengauthai , (n146), p. 14150 Ninnart Sunchai, Private International Law on the Matter of Person, winyuchon, Bangkok,
2009, p. 117: r Piwavattanapanich Pasit, Private International Law, Tammasart, Bang-kok,2008, p. 243; Sontikasatalin Kamon, Private International Law, 7th ed, Chulalongkorn, Bangkok, 1996, pp.266-267
151 The judgment of Thai Supreme Court No. 1958/2548 (B.E.)152 The judgment of Thai Supreme Court No. 1645/2538 (B.E.)153 The judgment of Thai Supreme Court No. 996/2496 (B.E.)
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nevertheless, there are some situations that some Thai scholars think may make
the court consider the parties make an implied choice such as the place to govern the
contract, the content of the contract, the currency used in the contract, the traditional
trade and the nationality of the parties.154
Moreover, it is not clear about the law chosen by the parties which can be only
State law or can be both State law and non State law. It is because even though this
Act does not prohibit using non State law, it does not indicate that non State law can
be used as well as no explanation from judgment of the Thai Supreme Court. Besides,
owing to the same reason whether the applicable law should have a relationship with the
contracts or not is also ambiguous.
In addition, in the case of dépeçage, without the interpretation of the Thai Supreme
Court, there are some different opinions from the Thai scholars. Assistant Professor
Chonhaaurai155 stated that the contract may have several important parts which that each part
may be governed by the law of different countries according to the intention of the parties. This
seems that the rule under Section13 could cover the concept of dépeçage. While according
to Associate Professor Piwayattanaparich,156he stated that both act on Conflict of Laws B.E.
2481 and the judgment of the court as well as the writing of the lawyer did not mention about
the separation of the contract due to the fact that this may be pretty new for intelligentsia in
Thailand and especially the overview in Thailand the lawyers and the courts did not pay a
serious attention to conflict of law. this seems that dépeçage might not be covered under
Section 13. As a result, whether Section 13 covers dépeçage or not is still unclear.
154 Chonhaaurai Patsakorn, Private International Law, Nitibannakarn, Bangkok, 1968, p. 76: Sontikasatalin Kamon, (n150), p. 267
155 Chonhaaurai, (n154), p. 76156 Piwavattanapanich, (n150), p. 250
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Limitations on freedom of choice.
There are only two limitations on freedom of choice in this Act. First, pursuant
to Section 5, it provides that “Whenever the law of a foreign country is to govern, it
shall apply in so far as it is not contrary to the public order or good morals of Siam
(Thailand)”,157the foreign law cannot be applied if it affects the public order or good
morals of Thailand. The meaning of “public order or good morals” can be occurred in
two situations according to Sumavong158. Firstly, the meaning of “public order” is the
matter involved in the benefit of the country or the majority of the population which
affect on the national security, economy and family institution. Secondly, the meaning
of “good morals” is the great tradition of society which can be changed in generation that
one society assumes that it is good morals while another might not. Thus, the meaning
of these words can be separated into two parts. The former is public order which can
be happened in all ages whereas the latter can be occurred and changed in generation
depending on each society.
In addition, according to Article 4159, it stipulates that the applicable law to
govern the contract of the carriage of goods by sea shall be the law stated in the bill of
lading; however, although such an event happens if the nationality of one of the parties
is Thai or a company registering in Thailand, Thai law160 shall govern this contract.
3.2.2 In the Absence of Choice
157 Translated in Saengauthai, (n146), p. 11158 The former president of the Supreme Administrative Court who gave the lecture at the Insti-
tute of Legal Education of The Thai Bar; sited by Kumanachai Supot, Private International Law, 4th ed., Nitithum, Bangkok, 2006, p. 23
159 The Act on The Carriage of Goods by Sea B.E.2534 160 Ibid.
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Section 13 of this Act provides two law rules which are lex patriae161 and lex
loci contractus,162 to determine the applicable law to govern the contract in the absence
of choice.
Lex Patriae
Pursuant to Section 13 which specifies that “... If such intention, express or
implied, cannot be ascertained, the law applicable is the law common to the parties when
they are of the same nationality,..”,163 in case both parties have the same nationality the
law to govern the contract in the default of choice shall be the law of the country of their
nationality. For example, P and D have the same nationality which is English. P buys
the land in Thailand from D and also the contract is made in Thailand without express
or implied choice. Therefore, the law to govern this contract shall be the law of England
which is the law of the parties’ nationality.
Lex loci contractus
By virtue of Section 13 which provides that “..., or, if they are not of the same
nationality, the law of the place where the contract has been made.”164, the law to
govern the contract in case of the parties having different nationalities shall be the law
of the country where the contract is made. For instance, P and D who have different
nationalities make a contract of sale in the United States without express or implied
choice. Thus, the law of the United States shall address this contract.
161 Piwavattanapanich, (n150), p. 252162 Ibid, p.253163 Translated in Saengauthai,(n146), p. 14164 Ibid
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4. The Comparison
4.1 Determination of Applicable Law
4.1.1 Party Autonomy in Contract
Similarities
Both law rules are the same concept that supports the freedom of choice which
can be both explicit and implied choice. Furthermore, although the events that make the
Thai court consider being an implied choice are not much but it appears that one notion
of these things are quite similar. For example, in In Egon Oldendorff v Libera Corpn 165
and in the judgment of Thai Supreme Court no. 1645/2538 (B.E.) this shows that the
dispute resolution clause especially with the agreement to arbitration in a particular
country will make the court in both law rules consider that the applicable law of that
country shall apply the contract. Moreover, to restrict the freedom of choice the aim of
“overriding mandatory provisions” that are to protect public interests of a country such
as its political, social or economic organisation and “public policy” ,which is to protect
public policy (ordre public), in Rome I are similar to the aim of “public order” ,which is
to protect the benefit of the country or the majority of the population that affect on the
national security, economy and family institution, or “good morals” ,which is to protect
the great tradition of society, in act on Conflict of Law B.E. 2481.
Differences
Unlike Rome I, there are some aspects that act on Conflict of law B.E. 2481
does not state clearly such as the choice of non State law, the using of dépeçage in
the contract and the relationship between the law and the contract. Additionally, even
though there is one concept of the situations that make the court in both law rules
consider the parties make an implied choice, the other notion between these two rules
165 (n60)
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seem to be different. For instance, the rule in Rome I concerns about standard form,
previous course of dealing, express choice of law in related transactions, reference to
particular rules and other considerations such as a choice of a validating law as a law to
govern the contract whereas the rule in act on Conflict of Law B.E. 2481, according to
the opinion of Thai scholars, focuses on the place to govern the contract, the content of
the contract, the currency using in the contract, the traditional trade and the nationality
of the parties. Moreover, the rule in act on Conflict of Law B.E. 2481 does not state
about the change of choice like that in Article 3 (2) of Rome I; as a result, the parties
cannot change the choice after the conclusion of the contract with the reason that this
law does not give the power to do so. In the limitations on freedom of choice
Rome I has more limit rules than those in act on Conflict of Law B.E. 2481. apart
from Article 3 (3), a domestic mandatory rule, and (4), community mandatory rules, the
limitations on the choice of Rome I also occur in article 5,6,7,8,9 and 21 which are contracts
of carriage, consumer contracts, insurance contracts, individual employment contracts,
overriding mandatory provisions and public policy of the forum respectively. In addition,
a “floating” applicable law and non State law cannot be a choice of the parties and the
applicable law must also logically consistent choice when applying with dépeçage. While
the choice of law rule in act on Conflict of Law B.E. 2481 is only restricted by the Section
5, public order or good morals of Thailand, and according to the Article 4, contract of the
carriage of goods by sea, of the Act on The Carriage of Goods by Sea B.E. 2534.
4.1.2 In the Absence of Choice
Similarities
There is no similar law rule in contracts in the default of choice between Rome
I and act on Conflict of Law B.E. 2481.
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Differences
Both law rules in Rome I and in act on Conflict of Law B.E. 2481 are totally
different. This is because in the absence of choice Rome I provides three law rules
which are Hard-and-fast rules, Characteristic performance rule and the closet connection
principle. The Hard-and fast rules is a rule giving a rigid connection that applies with
eight types of contracts, a contract for the sale of goods, a contract for the provision of
services, a contract relating to immovable property, a franchise contract, a distribution
contract, a contract for the sale of goods by auction and a contract concluded within
a multilateral system. For example, a sale of goods contract shall be addressed by the
law of habitual residence of the seller (characteristic performance)166 while the other
such as a contract relating to immovable property shall be applied by the law where the
property is located but if in case of a impermanent private use and the maximum of the
period not less than six successive months including that the renter is a normal person
and the habitual residence of both parties are the same the law of the habitual residence
of the property-owner shall operate. Apart from these contracts or more than one aspect
of these contracts cover the parts of the contract, the characteristic performance rule, as
explained above, however, shall be used as the factor that the party is needed to effect
and the law of the habitual residence of that party shall apply. nonetheless, the closet
connection principle, as explained above, shall be utilized in case that no matter that
previous conditions causing to use both the Hard-and fast rules and the characteristic
performance happen or not if it is satisfied that the country where using its law is
manifestly connected with the contract than that country in case of the former or most
closely connected than that country in case of the latter.
while act on Conflict of Law B.E. 2481 provides only two law rules which
are lex patriae and lex loci contractus. The former shall apply the law of the country
166 Giuliano-Lagarde Report, OJ 1980 C282/20
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where both parties have the same nationality whereas the latter shall apply the law of the
country where the contract is made in case that both parties have the different nationality.
these two rules shall apply with every contract if the situation fulfils its restrictions.
this means all the contracts defined in the hard-and fast rules, in the characteristic
performance rule and in the closet connection principle According to Article 4 (1) to (4)
shall be apply with these rule when the case is brought before the court in Thailand.
For example, P, who has Thai nationality but his habitual residence is in the
United States, sells the goods in the United States to D, who has English nationality, and
the contract is made in England. In this case if Rome I is applied, the Hard-and fast rules
pursuant to Article 4 (1) (a) shall determine the law of the United States to govern the
contract as the law of the seller’s habitual residence whereas if act on Conflict of Law
B.E. 2481 is applied, lex loci contractus according to Section 13 shall define the law of
England to govern the contract due to the fact that English law is the law of the country
where the contract is made.
Another example is that P, a company registered in England but has a branch in
Thailand, hires D, a company registered in England but also has a branch in Thailand, to build a
new office building in thailand. the parties realise that the branch of D in thailand will builds
that building. In this case if Rome I is applied, the characteristic performance rule according
to Article 4 (2) shall stipulate Thai law to govern this contract owing to the fact that the branch
of D in thailand where is treated as the place of habitual residence according to article 19
(2)167 of Rome I performs the characteristic performance by constructing that office whereas if
act on Conflict of Law B.E. 2481 is applied, lex patriae will define English law to address the
contract because the nationality of both parties are the same.
167 Article 19 states that “..., performance is the responsibility of such a branch..., the place where the branch...is located shall be treated as the place of habitual residence.”
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The last example is that P, a company registered in Thailand, makes a contract
with D, a company registered in England, in order to hire D to build the apartment in
England. The contract is negotiated in England but is made in Thailand. However, the
payment will be done in England in the national currency of pounds sterling. If Rome I
is applied, the closet connection principle shall determine the law of England to govern
the contract because one of the parties is English and the negotiation and performance
happened in England as well as the currency is the English currency. Thus, this contract
is most closely connected with England. But if use of act on Conflict of Law B.E. 2481,
then lex loci contractus shall define the law of thailand to address the contract because
Thailand is the place where the contract is made as a consequence of the different
nationalities of the parties.
5. Evaluation and Suggestion
although both law rules sustain the party autonomy in contract, act on Conflict
of Law B.E. 2481 seems to be much more defective. It is because there is not clear in
many aspects in this law. First, this law rule does not clearly state about the choice of
non State law whether the parties can choose this law as their choice or not. This brings
about an uncertainty of their choice. As a result, if the parties choose non State law to
apply their contract, this choice may be allow or reject by the court. Secondly, this law
also does not address about the term and condition that can consider being an implied
choice. Therefore, only two condition which are a dispute resolution clause particularly
with the agreement to arbitration in a specific country and the language of a particular
country using in the contract can exactly be determined that these are parties’ implied
choice according to the judgment of Thai Supreme Court no. 1645/2538 B.E. and
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No.996/2549 B.E. respectively while all the rest concepts such as the place to govern
the contract that come from Thai scholars are uncertain. In addition, due to the same
grounds, whether the contract should have the relationship and with the choice or not is
ambiguous. Furthermore, the use of dépeçage is still controversial because of its unclear
provision. Fifthly, unlike Rome I, this law rule does not permit the parties to change
their choice. Finally, this law determines only two limitations on freedom of choice
which are the Section 5, public order or good morals of Thailand, and according to the
Article 4, contract of the carriage of goods by sea, of goods by the Act on the Carriage
of Goods by Sea B.E. 2534.
While the law rules in Rome I have the provisions which can address all of these
drawbacks. In case of limitations on freedom of choice, apart from a mandatory rule
and public policy, it also provides the rule in order to protect the weaker party pursuant
to Article 5 to 8,contracts of carriage, consumer contracts, contracts of insurance and
contracts of employment respectively,168 of this Regulation. The reason that Act on
Conflict of Law B.E. 2481 is more inferior than Rome I is that the former has been in
use for about seventy years without amendment and only the judgment of Thai Supreme
Court which have not much can obviously interpret this Act while the Thai scholars’
opinions do not tie the consideration of the Thai judges. Whereas the rules in Rome I
have been developed for a long time. Moreover, most case in Rome Convention and
explanation report of the Giuliano-Lagarde can also interpret this rule.
In order to keep up with Rome I and to make the conflict of law rules in this
Act more highly foreseeable like that of the general objective in Rome I169 as well as
168 Dicey Albert Venn, Morris & Collins, The Conflict of Law, 14th ed. ,Sweet & Maxwell, London, 2008
169 Recital 16 of Rome I Regulation
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also make its rule more certain and flexible this act, therefore, should be amended in
the area of party autonomy in contracts in many features. First, this Act should have
the provision to determine exactly whether non State law can be chosen as the parties’
choice or not or this law can only be incorporating by reference in the contract like
that in Rome I. Secondly, the term and condition to consider an implied choice should
be determined clearly. Thirdly, like Rome I, whether the contract should have the
relationship with the choice or not should be clarified. Fourthly, the using of dépeçage
should be provided by this Act owing to the fact that dépeçage give more choices for
the parties but the choice must be logically consistent when the contract is severable like
the rule using in Rome I.170Fifthly, this Act should stipulate about the changing of the
choice by allowing the parties to change their choice after concluding the contract in the
condition that it will not cause a bad consequence to the right of the third parties and its
formal validity of the contract like that in Rome I. Lastly, this Act does not seem to be
concerned about the weaker parties such as the consumer in the consumer contracts or
the employee in the contracts of employment because there is no provision in this Act
to protect these parties, so it should take more concern about these parties as they may
get unfair contract, according to a small power to negotiate, by defining these contracts
as a specific provision in order to limit the freedom of choice.
In case of the contracts in the default of choice although Article 4 of Rome I
that uses the rules, Hard-and-fast rules, Characteristic performance rule and the closet
connection principle, to determine an applicable law has some problems171, it is fashionable
and is accepted by other countries. While the rules, lex patriae and lex loci contractus
, in Section 13 of act on Conflict of Law B.E. 2481 seems to be out of date owing to
the fact that these rules are the same as those in the Italian Private International Law in
170 Giuliano-Lagarde Report, OJ 1980 C282/17171 Tang, (n34), p. 785-800
74 Vol.3No.3:2011
1942 lex patriae and lex loci contractus 172 that they already cancelled.173As a result, so
as to be accepted by other countries these rules should be cancelled and this Act should
apply the rules like those in Rome I. nonetheless, according to some problems occurring
in using Article 4 of Rome I, before applying the Hard-and-fast rules, which are rigid, this
rule should be changed in many aspects. First, it should clarify the meaning of technical
terms in this rule such as “habitual residence” of both a legal person and a natural person,
including the exact meaning of a specific contract. In addition, this rule should not cover
some contracts that can easily identified by the characteristic performance rule such as the
contracts of sales or the contracts of services. Thirdly, each type of the contracts should be
classified exclusively.174In case of the characteristic performance rule this rule should also
be used when the classification of any specific contract is impossible by considering the
main obligation, the major purpose and the centre of gravity of the contract.175Moreover,
this rule should state which contracts it cannot manage such as the contract of exchange or
the contract of a joint venture176in order to clarify the restriction of its rule. In case of the
closet connection principle, the escape clause should be clearly stated that when this clause
shall be used. Furthermore, this principle should give the clear conditions which apply to
consider the “manifestly closer connection”
6. Conclusion
The applicable law rules in contracts between Rome I and Thai private
172 Piwavattanapanich, (n150), p. 253 173 Piwavattanapanich, (n150), p. 252, citing Andrea Bonomi, The Italian Statute on Private
International Law, 27 International Journal of Legal Information 347, 262 (1999)174 Ibid, p. 800175 Ibid.176 Ibid, p. 792
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International Law, act on Conflict of Law B.E. 2481, are quite different. It is because
although both of them support the party autonomy in contracts, the rules in contracts in
the default of choice are totally different. In case of the rules in contracts in the default
of choice, Rome I provides three law rules which are Hard-and-fast rules, Characteristic
performance rule and the closet connection principle, to determine an applicable law
while act on Conflict of Law B.E. 2481 provides two law rules which are lex patriae
and lex loci contractus. In addition, the rules of party autonomy in contracts in Act on
Conflict of Law B.E. 2481 seems to be more inferior than those law rules in Rome I
due to the fact that there is not clear in many aspects in this law. The reason why Act
on Conflict of Law B.E. 2481 has a lot of drawbacks is that this law is too old owing
to the fact that it has been in use for about seventy years whereas Rome I has just
been developed from Rome Convention. So, the law rules in Rome I are much more
modern than those law rules in act on Conflict of Law B.E. 2481. therefore, In order
to modernise its law rules act on Conflict of Law B.E. 2481 should be amended in the
aspects of both the law rules applying to party autonomy and the law rules applying to
contracts in the absence of choice. Many aspects of the former should be clarified, as
mentioned above, while the latter should be cancelled and the rules like those in Rome
I that have already developed some features, as mentioned above, should be applied
instead in order to seal the loopholes occurring in Rome I.