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IX Conclusion

From: International Negotiable Instruments

Benjamin Geva, Sagi Peari

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

International financial law — International monetary law — Choice of law

(p. 251) IX  Conclusion

9.01  Last year, 2019, marked the one-hundredth anniversary of the last comprehensive treatment of the question of the applicable law to negotiable instruments.1 Much has changed since then. Through a systematic inquiry into principles of law, statutes, and international conventions, and their analysis in light of the underlying rationales of both choice-of-law and negotiable instruments laws, this book has aimed to shed light on the existing uncertainties in the case law and literature of international negotiable instruments law. Our aim was to describe the various rules of the systems as they are, to carefully compare them, and then analyse them against our general thesis with a view of resolving ambiguities, controversies, and contradictions within the existing law.

9.02  Albeit closely tied by a common thread of organizing ideas, recurring themes, and a related evolutionary development, substantively the common law and civil law systems diverge. Furthermore, even within the same systems, some significant divergences and departures can be noticed. The systematic inquiry into the key aspects of negotiable instruments law within the systems and understanding the key points of convergence and divergence between the systems has allowed us to make observations on the possible desirable interpretation of existing choice-of-law rules.

9.03  The frequency of private international law litigation in the area of negotiable instruments, the deep divergence between the systems, and the principal objection of ‘forum shopping’ leads us to think that the harmonization of the choice-of-law rules of negotiable instruments is highly desirable. Such harmonization would lead to more justice and fairness between the litigating parties, enhance the value of predictability, and promote international commerce and business. From this perspective, it seems to be of paramount significance to find a common ground as to the identity of the choice-of-law rules among the systems.

9.04  This is precisely where our suggestion about the much-needed harmonization of choice-of-law enters the picture. The choice-of-law question tackles the identity of the law to be applied by the court or other adjudication tribunal to adjudicate a given dispute. The fact that our comparative findings have revealed a significant difference between the substantive laws of various systems underlies the contemporary significance of the choice-of-law question for negotiable instruments law. In other words, the divergence in the substantive law of various systems underpins the significance of the identity of the substantive law to be applied by the judge to adjudicate the dispute. Furthermore, in the contemporary world of frequent mobility of goods, international commerce, cross-border dealings, and the Internet, cases involving ‘international negotiable instruments’ law will only grow.

(p. 252) 9.05  Accordingly, our book has incorporated a comprehensive proposal for reform. We have made some fairly detailed observations and suggestions on how the international framework of global choice-of-law rules in international negotiable instruments may look, a framework that would be both: (1) internally coherent in order to meet the underlying rationales of the choice-of-law and negotiable instrument worlds; and (2) accommodating enough to meet the contemporary challenges of Internet communication and the digital age.

9.06  Our comparative perspective has demonstrated that throughout the systems, many doctrines of negotiable instruments can be analysed, not in isolation but in a systematic manner, which puts them within the unifying framework of organizing ideas and underlying rationales of negotiable instruments and choice-of-law. In this way, this book bridges the various doctrines, concepts, and principles within various systems, tackles their conceptual and doctrinal internal coherency, and as such, provides a solid foundation for understanding and implementing them.

9.07  By tracking the historical origins of negotiable instruments law, comparing the various provisions of choice-of-law rules, and developing a unifying framework for understanding the present law and its future development, our perspectives are historical, comparative, doctrinal, and conceptual in nature. We sought to establish which law governs international negotiable instruments today; how it should be understood, interpreted and applied; and how the existing law can be improved in the future through international reform that is consistent with the global trend of harmonization of choice-of-law rules, and advances in the digital age.

9.08  We are cognizant of the declining importance of negotiable instruments both as a source of liquidity and as paper-based instruments in the digital age. However negotiable instruments are still heavily used in international trade, for example, in conjunction with documentary sales and letters of credits. They undergo digitization in both form and delivery, an aspect that was specifically addressed in our book. Moreover, enhancing understanding of the law applicable to negotiable instruments will provide insights and facilitate a smooth transition into the law of their electronic successors. To that end, we believe that our book was not only overdue from a historical perspective, it is also timely from the perspective of focusing on the needs of commerce.

9.09  The controversies around the existing choice-of-law rules applicable to negotiable instruments are troubling. The call made in the literature about the need for a ‘radical overhaul’ of the existing rules is valid. The need for harmonization of the rules is real. The era of digitalization is imminent. Our partnership indeed has aimed to respond to these challenges.


1  E Lorenzen, The Conflict of Laws Relating to Bills and Notes (Yale University Press 1919).