VI Choice-of-Law Rules in the Absence of Party Autonomy: The Most Significant Relationship Principle

Subject(s):

International financial law — International monetary law — Property — Choice of law

This chapter discusses the question of which law should apply to adjudicate the parties' rights and duties when the parties have not selected one. It favours the extension of the popular ‘most significant relationship’ (MSR) principle to negotiable instruments law. A careful evaluation of the nature of this principle, and the objections raised against it, points towards its incorporation into this area of law. We challenge the traditional orthodoxies, expose their flawed foundations, and subsequently suggest a fairly dramatic reconsideration of the choice-of-law rules derived from them. The chapter then reveals clear traces of the MSR principle within the traditional and contemporary case law of negotiable instruments. This suggests that this principle has always played a role in the choice-of-law mechanics of the field. The chapter also offers some suggestions as to the operational mechanics of the MSR principle. We contend that the principle should not operate alone but in combination with flexible presumptions, which provide points of departure for choice-of-law analysis.