Unidroit Principles of International Commercial Contracts (PICC): Applicability and application

The PICC are an impressive product, a ratio scripta, with various potential applications. The most aspirational one is to serve as applicable law in lieu of a state law, i.e., as lex causae. This chapter explores all of the purposes of the PICC as listed in the Preamble but focuses on the use of the PICC as lex causae. Most arbitration laws allow the parties to choose a non-national legal standard (NNLS) such as the PICC as lex causae, while the same is not the case in almost any state court. If the parties want the PICC as applicable law, they need to combine it with an arbitration agreement. In some jurisdictions (but usually not in UNCITRAL Model Law jurisdictions), arbitrators may also choose the PICC as applicable law in the absence of a choice of law by the parties. Conversely, independent of the jurisdiction, if the parties had chosen another NNLS, such as general principles of law or the lex mercatoria, arbitrators should not apply the PICCs even though this is proposed in the Preamble. While the PICC merit widespread use, empirical research tells a sobering story. Parties only very rarely choose the PICC as applicable law and very few arbitral awards have become known that are based on the PICC and do not just contain the odd reference to a provision of the PICC for illustrative purposes. The chapter discusses why this might be so and what the future might hold in store for the PICC.