Application of Overriding Mandatory Rules of Third Countries to Contractual Obligation

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Golshani Esmat; Hosseini Modarres Seyed Mahdi

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Journal Paper

Paper Information

Journal: Legal Research Year:2024 | Volume:27 | Issue:107 Page(s): 179-200

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Information Journal Paper

Title

Application of Overriding Mandatory Rules of Third Countries to Contractual Obligation

Author(s)

Golshani Esmat | Hosseini Modarres Seyed Mahdi | Issue Writer Certificate

Keywords

Overriding Mandatory rules

Conflict of Laws

arbitrability

Enforcement of awards

third country

Abstract

Overriding Mandatory rules (OMR), which claim to be applied regardless of the application of Conflict of Laws rules, are a widely used yet relatively new concept in the legal literature that has not been thoroughly examined from the perspective of private international law. Given the transformation of international commercial arbitration into the primary forum for resolving contractual disputes, it is necessary to clarify the approach of arbitration bodies to the issue of OMR. Therefore, from a theoretical perspective, it is necessary to complete the research literature in this field. From a practical perspective, due to Iran's exposure to multiple examples of OMR in international commercial disputes (such as rules on sanctions, consumer protection, competition law, and currency control), understanding the limits of the applicability of third-country OMR can help to protect national interests of Iran in these disputes.In this study, using a descriptive-analytical research method, library and internet sources related to the subject were reviewed with an emphasis on arbitral awards.The findings of the study indicate that third-country OMR are generally applied with stricter standards than those of the governing law, based on Conflict of Laws analyses and arbitrator's duty to render a binding award. However, the non-application of third-country OMR in arbitration precedent has occured due to several reasons: the lack of adherence by arbitrators to Conflict of Laws rules, the lack of a close connection between the OMR and the dispute, the non-superiority of the goals provided by the OMR over those of the law of.

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