How does the court determine what law will apply to the claims?
Litigation & Dispute Resolution
Issues regarding applicable law are questions pertaining to substantive law and consequently the court will not ex officio inquire what law is applicable in a commercial dispute. Normally, the court will render an intermediate award regarding what law is applicable if the issue is at dispute. The court will rule on the choice of law based on the international legislation or treaties applicable or, in the absence thereof, national sources of law.
The applicable law is determined in the first instance through an analysis of the will of the parties. However, it must always be taken into consideration that the will must meet all the relevant criteria prescribed by the Portuguese Civil Code.
The Court determines the applicable law based on the subject matter of the dispute. For example, in employment matters the UAE Labour Law will be applied. However, in some cases more than one law may be applicable to one dispute, or if specific law does not cover a certain aspect of the dispute, the Court may then revert to the Civil Transactions Law which is the most general law that tackles most if not all principles of law.
The concept of private international law, or conflict of laws, has only limited application before Saudi Arabian courts. Whenever a Saudi Arabian court or judicial tribunal is properly seized of a dispute, the case will be decided only in accordance with Saudi Arabian law, even if a contract is expressed to be governed by the laws of a country other than the Kingdom of Saudi Arabia. On the other hand, the Saudi Arabian courts give effect to agreements to submit disputes to the courts of, or arbitration in, another jurisdiction.
This is decided based on non-statutory law. However, Norwegian courts will take into account the two Rome regulations regarding the law applicable to contractual and non-contractual obligations.
In commercial litigation, in cases not involving a federal question, a court will determine which state’s substantive law(s) will apply to the claims alleged in the complaint. To the extent the case concerns a federal question, federal substantive law applies.
In certain instances, the parties may have negotiated in advance the state’s law that will apply to any contractual dispute by including a choice-of-law provision in the governing contract. Some state courts may be reluctant to apply choice-of-law provisions to extra-contractual rights at issue in a commercial dispute.
In general, Austrian and European conflict of law rules acknowledge choice of law agreements. Austrian law applies without question if both parties are domiciled in Austria and no choice of law exists.
In case of commercial disputes with a cross-border element, the applicable law in question is either governed by Austrian rules on conflict of laws or European regulations; provided that Austrian jurisdiction is given and no choice of law exists.
If at least one of the contracting parties is domiciled in an EU member state, the Rome I and II Regulations determine the applicable law with respect to contractual and non-contractual obligations (such as claims for damages or unjustified enrichment) in civil and commercial matters. Outside the scope of EU law, the Austrian Act on International Private Law (“Internationales Privatrechtsgesetz”) provides an answer to the issue of applicable law.