Arbitration - Investing into North African Solar Power - page 97

The choice of the applicable law is a highly sensitive issue for both contracting
parties. 361 There are several laws important for international arbitration. There are
the law of the seat of arbitration ( lex arbitri ), procedural rules, the law governing
the arbitration agreement, the performance of the agreement, the law governing the
contract, the law governing the recognition and enforcement of the award, and other
applicable rules or guidelines. 362 In the following section, the focus will be on the
law governing the contract. This section mainly deals with the categorization of
contracts between Morocco and an investor. In addition, an analysis of the rela-
tionship between international and national law as applicable law will be carried
out. Finally, stabilization clauses will be discussed.
First of all, there is a difference between lex arbitri (the law of the seat of
arbitration) and the law governing the contract. 363 In most cases, the parties chose a
“neutral” place of arbitration, without intending to apply lex arbitri to their con-
tracts. 364 Besides the choice of national law, there are also other possible legal
frameworks. The parties can also choose the lex mercatoria as the applicable law. 365
It is rare that the lex mercatoria is chosen as the only applicable law, as it is rather
useful as assistance of contract negotiation or to supplement the law of the contract. 366
In practice, the choice of a third state law as the proper law did not pay off. 367 Lastly,
the choice of international law as the applicable law remains. A choice of international
law might be irrelevant if the contract between the investor and the state is subject to
international law. Thus, both parties must be subject to international law. Tradition-
ally, only states and international organizations are subject to international law. 368
However, international law does not have a numerus clausus of legal subjects. 369
Legal personality depends whether there is a possibility to assign the “party” their own
legal position (rights and obligations). 370 Asmentioned above, a possible investor, like
Dii was, has the potential of being a TNC. After World War II, TNCs became
increasingly important, which has to do with their growing economic power. 371
Hence, the question arises whether TNCs are subjects to international law. 372

361 Dolzer and Schreuer ( 2008 ), 73-74; Important choice, in: Wood ( 2007 ), 575 (588).
362 Moses ( 2008 ), 63-75; Partasides and Fullelove ( 2010 ), 1 (4-5).
363 Redfern et al. ( 2004 ), 78 para 2-05.
364 Redfern et al. ( 2004 ), 78-79 para 2-05.
365 Moss ( 2009 ), 782 (785); Ouerfelli ( 2008 ), 241 (242); Moses ( 2008 ), 70; Buchanan ( 1988 ),
511 (529).
366

Moses ( 2008 ), 70.

367

Herdegen ( 2003 ), 13 (32); Especially in the case of the law of a third state, an application of
labor law, tax law or administrative law would be difficult and impractical, in: Schreuer ( 2009 ),
559 para 27.
368

Schobener et al. ( 2010 ), 59, Kap. 1 §5 para 194.
369 Dahm et al. ( 2002 ), 195 et seq.; Tietje ( 2005 ), 47 (61); Tietje ( 2003 ), 5 (16).
370 Sch

obener et al. ( 2010 ), 60, Kap. 1 §5 para 197; Shaw ( 2008 ), 195; Verdross and Simma
( 2010 ), 221-222 para 375; Weh ( 2008 ), 143; Tietje ( 2005 ), 47 (61); Tietje ( 2003 ), 5 (16).
371 Dahm et al. ( 2002 ), 246; Schweisfurth ( 2006 ), 48-49 para 165.
372 Tietje ( 2005 ), 47 (61); Tietje ( 2003 ), 5 (16); Dahm et al. ( 2002 ), 245.

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