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Harmonizing International Commercial Contracts: The Role of UNIDROIT Principles in Arbitration

Harmonizing International Commercial Contracts: The Role of UNIDROIT Principles in Arbitration


The UNIDROIT principles in international commercial contracts have seen a very prominent success in the area of international trade and commerce. In this regard, international arbitrators play a very important role in attaining the unification of international contract law. The principles promulgated are the results of the shift in the paradigm of international trade law, as the unification of the laws was done by the restatement of rules and principles issued by a group of academics and practitioners privately, other than by the convention at a conference such as Huge Conference and so on.[1] International commercial arbitration gives a real-life test to the workability of the UNIDROIT principles in practice. The arbitrators use a natural and comparative approach to decision-making in the legal diversity field; therefore, it makes the award more understandable for the arbitrators, who usually come from cultural and legal backgrounds. The principles aim to establish neutral and balanced rules for the world, regardless of the legal traditions and the economic and political conditions. The principles in international commercial arbitration are mostly dependent on the reconciliation of the arbitrators on the various options for use in the generally accepted laws on conflict.

Arbitrators' Varied Use of Principles in International Arbitration

The arbitrators have used the Principles of Arbitration in three different ways. The first way is to interpret international uniform law instruments such as the UN Convention on the Contract for the Sale of Goods. Another approach was to fill in the gaps in the domestic laws with an internationally useful interpretation of the domestic laws. The last approach was to begin to use the principle as per the proper law of the contract, either based on the choice in the contract or the absence of a choice of law based on the applicable conflict of laws rules in the arbitration laws and rules as such.[2] To interpret the domestic laws in the contract as it often does not meet the specific needs in international trade and commerce and mostly in the field of copyright laws. The principles provide the legal instruments to guide the effort, and the arbitrator referred to the principles as having concrete and workable content. Nevertheless, the assumptions about the negative choice of the laws have been met with skepticism.[3]


The UNIDROIT Principles of International Commercial Contracts have become a particle tool for international arbitrators, along with their increasing acceptance among international contracts, lawyers, and academics. Thus,  this successful demonstration of the practicality of comparative law, which has evolved from the academic subject of applied comparative law as such,. [4] The growing preference for the principles also promoted the development of genuine transactional cases in the international arbitral tribunal, with the awards taking precedential value. This is the global movement towards the growing set of principles in the contract negotiations with the International Arbitral Tribunal, and it will also provide a new impetus to the laws of merchants.


[1] Lando, Ole. "Assessing the Role of the UNIDROIT Principles in the Harmonization of Arbitration Law." Tul. J. Int'l & Comp. L. 3 (1995): 129.

[2] Vogenauer, Stefan, and Jan Kleinheisterkamp, eds. Commentary on the UNIDROIT principles of international commercial contracts (PICC). Oxford: Oxford University Press, 2015.

[3] Rosett, Arthur. "UNIDROIT Principles and Harmonization of International Commercial Law: Focus on Chapter Seven." Unif. L. Rev. ns. 2 (1997): 441.

[4] Berger, Klaus Peter. “International Arbitral Practice and the UNIDROIT Principles of International Commercial Contracts.” The American Journal of Comparative Law, vol. 46, no. 1, 1998, pp. 129–50. JSTOR, Accessed January 30, 2024.

  • Arbitrators utilize UNIDROIT Principles in three key ways: interpreting international law instruments, filling gaps in domestic laws, and determining the proper law of the contract.
  • Arbitrators employ a natural and comparative approach, enhancing the understandability of awards for individuals from diverse cultural and legal backgrounds.
  • UNIDROIT Principles serve as a crucial tool for international arbitrators.

BY : Vaishnavi Rastogi

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