Maxim Kulkov took part in the UNIDROIT Principles of Contracts – Neutral Law for Global Trade RAA webinar

On 8 April, a RAA webinar was held which focused on the practical aspects of using the UNIDROIT Principles of International Commercial Contracts and Lex Mercatoria in circumstances where the application of national laws carries serious risks for parties to international contracts, particularly due to the current geopolitical reality and sanctions.

KK&P Trial Lawyers Managing Partner Maxim Kulkov opened the discussion with an overview of the concept and history of Lex Mercatoria, as well as the objectives of the UNIDROIT Principles as a codification of Lex Mercatoria.

Drawing on his 30 years of experience in international commercial arbitration (at the ICAC at the RF CCI, SCC, LCIA, and other centres), Maxim shared specific examples of governing law clauses encountered in his practice.

In particular, he cited a recent case involving a dispute over a supply agreement for cattle vaccines between a Russian and an Asian party, where the clause directly referred to “general principles of law, including the UNIDROIT Principles of International Commercial Contracts.”

Maxim noted that he had encountered Lex Mercatoria three times throughout his career but that, over the last four years, the number of such clauses has grown since parties are increasingly finding themselves in a deadlock where they cannot agree on which national law to apply, and neutral principles of commercial dealings become the only available compromise.

Maxim paid special attention to the question of when arbitrators apply Lex Mercatoria in dispute resolution: “Where a direct clause exists, arbitrators are obliged to apply Lex Mercatoria, and the application of national law in such cases is only possible subsidiarily, i.e., to the extent that transnational norms do not regulate the matter.”

At the same time, he emphasised that his view is not undisputed, but it is precisely this approach that he consistently advocates in practice.

Alongside Maxim, the webinar featured Roman Zykov (RAA), Alexey Dudko (Level Legal), and Stepan Sultanov (KIAP).

The webinar recording is available here (in Russian): https://rutube.ru/video/4371ed6e2e2c762c16ed1d9c4d379f19/