Books Developments in PIL Scholarship

Penasthika on Unravelling Choice of Law in International Commercial Contracts

Priskila Pratita Penasthika (Assistant Professor in Private International Law at the Faculty of Law, Universitas Indonesia) has just published her PhD dissertation with Eleven under the title Unravelling Choice of Law in International Commercial Contracts. Indonesia as an Illustrative Case Study.

The abstract reads as follows:

Despite the paramount role of choice of law in international contractual relationships, its implementation in various countries remains disparate. Many countries have acknowledged and given effect to choice of law, but some other countries persist in opposing it. The lingering reluctance in enforcing choice of law remains a challenging impediment to cross-border commercial relationships.

Strict adherence to the territoriality principle, absence of special provisions or clear guidelines of choice of law, and difficulties in confirming the content of the chosen foreign law are among the reasons for the reluctance to give effect to choice of law. These circumstances are encountered by some countries, including Indonesia.

This book not only unravels the reasons for Indonesia’s reluctance and its subsequent lack of advancement on choice of law, but also examines possible solutions to the problem. Building on in-depth doctrinal research, supported by qualitative interviews, this research will serve as an essential point of reference for academics, practitioners, and policymakers interested in private international law and cross-border commercial litigation.

The book offers a thorough analysis into why and to what extent Indonesia deviates from applying choice of law in international commercial contracts and identifies related factors to this situation. The study makes use of various research methods to analyse in-depth the situation of choice of law in international commercial contracts. The doctrinal method allows the scholar to explore and describe the theoretical and regulatory frameworks of choice of law that are available at the global, regional, and national levels. This is complemented by an empirical part based on qualitative interviews carried out with practitioners and experts in Indonesia, and a detailed analysis of national case law after 2002 concerning contracts where parties made use of a choice of law clause. The interviews allowed the researcher to gain a better understanding of the problems and difficulties facing the Indonesian judicial practice with regard to choice of law.

This publication could not have been more timely given that it has taken Indonesia around 55 years since its independence to finally have a statutory provision that acknowledges the freedom of the parties to choose the law applicable to a contract.

Nevertheless, the prevailing provisions appear insufficient to deal with the complexity of international commercial transactions. The academic discussion on the topic has been rather sluggish for a long period in Indonesia.

With the ongoing reforms and the national policy vision (Visi Indonesia 2045) aiming to encourage international trade, this book has the potential to bring back into the arena advanced discussions on the topic. It is certainly a valuable study for international readers interested in choice of law who would otherwise not be able to easily access decisions of Indonesian courts in this area of private international law as well as gaining a detailed understanding of the complexity of the national system.

Additionally, it is a useful tool for Indonesian policymakers, practitioners, and scholars as it highlights a number of improvements that could be embarked upon in the future. This will also assist courts to secure parties’ access to justice, and promote certainty and predictability in the settling of international commercial contract disputes.

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