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This commentary focuses on Article 3.3.1 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning contracts that infringe mandatory rules. Art 3.3.1 governs a specific aspect of the mandatory rules regime, namely the effect that their infringement produces on a contract. The relevant mandatory rules, however, are not set forth in the PICC; rather, the PICC defer to the binding norms from which such rules originate. Thus, the definition of what constitutes illegal conduct is to be found in those binding norms. Similarly, Art 3.3.1 defers to Art 1.4 PICC with respect to the applicability of any mandatory rule, which, in turn, defers to the relevant rules of private international law. This commentary discusses the scope of application of Art 3.3.1, with particular emphasis on the effects of mandatory rules whether or not expressly prescribed, effects upon the contract and remedies under the contract, and the importance of mandatory rules.

This commentary focuses on Article 3.3.2 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning the criteria for granting restitution as well as the rules governing restitution. According to Art 3.3.2, where there has been performance under a contract infringing a mandatory rule under Article 3.3.1, restitution may be granted where this would be reasonable in the circumstances. In determining what is reasonable, regard is to be had, with the appropriate adaptations, to the criteria referred to in Article 3.3.1(3). If restitution is granted, the rules set out in Article 3.2.15 apply with appropriate adaptations. The distinction introduced by Art 3.3.1 between mandatory rules that expressly prescribe their effects and those that do not is also relevant for Art 3.3.2.

This commentary focuses on Article 1.4, which clarifies the relationship between the UNIDROIT Principles of International Commercial Contracts (PICC) and mandatory rules originating from sources external to the PICC. Mandatory rules are rules which cannot be derogated from by the parties, and are therefore mandatory for them. The typical rationale for making certain rules mandatory is to protect weaker parties or the public interest. Mandatory rules can be of two kinds: domestic mandatory rules and international mandatory rules. Art 1.4 covers relevant rules of private international law, choice of law rules applicable in court proceedings, arbitral tribunals, and origin of mandatory rules. It also discusses the applicability of the PICC to international contracts that include an arbitration clause, along with the application of mandatory rules by arbitral tribunals in relation to the doctrine of transnational public policy.

This commentary focuses on Article 1.5, which recognizes that the UNIDROIT Principles of International Commercial Contracts (PICC) are, with some exceptions, default rules that may be modified and, indeed, excluded, by the parties. In other words, the parties may exclude the application of the PICC or derogate from or vary the effect of any of their provisions, except as otherwise provided in the Principles. Art 1.5 does not mention any formal requirements for excluding or modifying the PICC. Thus, in accordance with Art 1.2 PICC, it must be concluded that exclusion or modification of the PICC may be either express or implied. Art 1.5 covers complete exclusion of the application of the PICC, derogation from or variation of particular provisions of the PICC, providing for the application of several legal regimes, and mandatory provisions of the PICC.

Section 3.3 of the UNIDROIT Principles of International Commercial Contracts (PICC) deals with illegality. This is an innovation of the third edition of the PICC. Previous editions expressly excluded immorality and illegality. The rationale for the exclusion was the complexity of questions of public policy and the diversity of national laws. When UNIDROIT inquired among its experts which topics should be included in a new edition, illegality emerged as one of the most widely supported topics. The conceptual possibility of a private instrument governing the application of mandatory rules was apparently not considered. Yet, the issue might reveal an essential limit to the relevance of the provisions of Section 3.3.

This chapter discusses the law on creditor claims in France. French insolvency law has traditionally been unfriendly to creditors benefitting from contractual security interests. Unlike most other legal systems, insolvency claims secured by contractual security interests over certain assets of the debtor do not enjoy the right to be satisfied from the secured assets in priority to all other claims. The treatment of creditor claims is also similar among various insolvency proceedings. In reorganization proceedings (sauvegarde or redressement judiciaire), post-commencement claims are more common and substantial, whereas in liquidation proceedings (liquidation judiciaire), such claims are often non-existent. The remainder of the chapter deals with insolvency claims, administration claims, and non-enforceable claims in turn. Each section covers: the definition and scope of the claim; rules for submission, verification, and satisfaction or admission of claims; ranking of claims; and voting and other participation rights in insolvency proceedings.