Governing Clause: International Contracts and English Law

This report, written from the perspective of a Sales Director at Pharmaceutical (UK), addresses the critical aspect of governing clauses in international contracts. It begins by presenting a specific governing clause, emphasizing the application of English law, arbitration, and the legal place of arbitration in Ghana. The report then provides five key reasons for choosing English law, highlighting its historical importance and influence, the strength of the HM Courts and Tribunal Service, judicial independence, the transparent and predictable nature of English Law, and its dominance in various sectors like international commercial contracts. The author also touches upon the confidentiality afforded in English Law. The report references several academic sources to support its arguments, offering a comprehensive analysis of the subject matter. This resource is available on Desklib, a platform providing AI-powered study tools for students.

GOVERNING CLAUSE

A commercial contract is successfully persuaded by complying with all applicable legal
provisions. It is an important issue which is to be reviewed in case of international context,
where a contract is connected or dealt in many countries (Moses, 2017). Being a Sales Director
of “Pharmaceutical (UK)” Governing clause for the international contract has been drafted
below. Further five reasons for choosing the same has also been provided.
GOVERNING CLAUSE FOR INTERNATIONAL CONTRACTS
“ This agreement and any other argument or disagreement or claim which has been
arising out of or in connection with its subject matter (comprising non-contractual disputes or
claims) shall be governed by and construed in accordance with provision available in English
law. Further, any dispute in the case arises out of or in connection with this contract, comprises
validity or termination would be ultimately resolved by arbitration rules which are deemed to be
included in this clause. The no. of arbitrator (one / three) (specify along with the provisions
relating to the manner in which arbitrators will be chosen). The legal place of arbitration shall
be Ghana. The language to be used in the proceeding relating to arbitrate shall be English. The
governing law for the international contracts of the company shall be substantive English
Law.”
REASON FOR THE CHOICE OF LAW
Historical Importance and Influence
English law is preferred governing law for international contracts and for business
transactions on a worldwide level. In the case where international aspects are involved in the
transaction, it is necessary to set out in a contract both the governing law as well as the
jurisdiction. Jurisdiction can be specified as the name of the country’s law which will govern the
contract and in which country disputes arising relating to the contract will be finally decided
(Cuniberti, 2013). Many countries retain the system of common law as for development and
interpretation of rules English law is taken for guidance and unusual issues. Thus, as the law is
well-known, reputable jurisprudence and well- developed; the same has been chosen.
HM Courts and Tribunal Service

English Law is strengthened by its sovereignty of judiciary, the knowledge, experience
and reputation of judges and enhanced quality of UK law firms and lawyers. The court resolves
and deals with issues which comprise commercial disputes and individuals asserting their
employment rights to family law and issues relating to administrative law (Clermont, 2014). The
relative speed and effectiveness with which commercial disputes are resolved through English
Court or any other alternative mechanism also contribute to the trust relating to English Law.
Judicial Independence
The manner of selection, experience and impartiality of English Law judges are highly
qualified and coupled with a skill which is necessary for dealing with complex cases. Judicial
Independence is one of the key principles of UK constitution (Woodward Jr, 2014). Judges are
authorized to resolve the case or take required action in accordance with their own judgement
relating to the case. Further, no outside influence and government control are enforced on the
independent decision of judges.
Content of English Law
English Law is considered as transparent and predictable which provides freedom of
contract or agreement and pro-business approach. In accordance with the provisions available in
English Law, no implied overarching responsibility relating to the duty of good faith exists
which is available in other jurisdictions. The principle of good faith requires that neither party
should be able to take advantage of another party (Levy, 2017). The similar concept of Good
Faith in relation with other countries provide obligation for the parties to communicate each
other in case the other party is not able to discover important points on its own. Even it creates
appropriate obligations for application of reasonable diligence while executing contractual
obligation and analysing moral and ethical behaviour standard.
Sector Dominance
A variety of sectors is dominated by English Law. The same comprises international
commercial contracts, maritime and shipping, merger and acquisition, international arbitration,
etc. For the purpose of dealing with other countries, it is necessary for the company to select
appropriate governing law for the purpose of cross-border transactions. Usually, English Law is

chosen as it is amenable to allowing and enforcing a limitation of liability clauses, liquidation of
anticipated damages and other favourable provision relating to international contracts (Clermont,
2014). The discussion with a lawyer is required to be kept confidential in accordance with
provisions of English Law and is covered by legal privilege. It is necessary for English Lawyers
to keep the information provided by client confidential as it is considered as basic human right
and also provide comfort to the parties while discussing the case with their lawyer.

REFERENCES
Clermont, K.M., 2014. Governing Law on Forum-Selection Agreements. Hastings LJ, 66, p.643.
Cuniberti, G., 2013. The international market for contracts: the most attractive contract
laws. Nw. J. Int'l L. & Bus., 34, p.455.
Levy, L.W., 2017. The establishment clause: Religion and the First Amendment. UNC Press
Books.
Moses, M.L., 2017. The principles and practice of international commercial arbitration.
Cambridge University Press.
Woodward Jr, W.J., 2014. Legal Uncertainty and Abberant Contracts: The Choice of Law
Clause. Chi.-Kent L. Rev., 89, p.197.