Doctor of Philosophy of Comparative Private International Law of the University of Western Australia [School of Law/ Compartive Private International Law] 2020

Evaluation of the Transplantability of the Doctrine of Proper Law of the Contract from Australian Law into the Jordanian Legal System

Mohammad Rasmi Yousef Al-umari L.L.B. / L.L.M

This thesis is presented for the degree of Doctor of Philosophy of Comparative Private International Law of the University of Western Australia [School of Law/ Compartive Private International Law] 2020

Thesis Declaration

I, [Mohammad Rasmi Yousef Al-umari], certify that: This thesis has been substantially accomplished during enrolment in this degree. This thesis does not contain material which has been submitted for the award of any other degree or diploma in my name, in any university or other tertiary institution. In the future, no part of this thesis will be used in a submission in my name, for any other degree or diploma in any university or other tertiary institution without the prior approval of The University of Western Australia and where applicable, any partner institution responsible for the joint-award of this degree. This thesis does not contain any material previously published or written by another person, except where due reference has been made in the text. This thesis does not violate or infringe any copyright, trademark, patent, or other rights whatsoever of any person. Third party editorial assistance was provided in preparation of this thesis by Scribo Proofreading & Editing. This thesis does not contain work that I have published, nor work under review for publication.

Signature: Date: 31/07/2020

i

This thesis has been accomplished under the supervision of

Camilla Andersen Bruno Zeller

Professor, Cand. Jur. (Denmark), PhD Dr, BCom BEd PhD Melb., MIL Deakin (Denmark) Professor, Faculty of Arts, Business, Law Professor, Faculty of Arts, Business, Law and Education, UWA Law School and Education, UWA Law School

ii Abstract

This thesis employs comparative methodology to examine the transplantability of the doctrine of proper law of contract from Australia into the Jordanian legal system, comparing the functional scope of the targeted rules in both countries. To this end, it first develops its own methodology for evaluating the legal transplant, before analysing the ability of Jordan to accommodate the proper law doctrine within its national legal system. This analysis includes a functional effectiveness of the doctrine from a Jordanian perspective; including its alignment with political and cultural values. The thesis concludes that the transplantablity of the proposed solution is not only possible, but necessary.

iii Table of Contents

Evaluation of the Transplantability of the Doctrine of Proper Law of the Contract from Australian Law into the Jordanian Legal System ...... 1 Thesis Declaration ...... i Abstract ...... ii Table of Contents ...... iv List of Figures ...... vii Chapter 1: Introduction ...... 1 Overview ...... 1 1.1. Introduction ...... 1 1.2. Point of Departure ...... 2 1.3. Reason for the Selection of the Topic ...... 6 1.4. Why the Proper Law? ...... 7 1.5. Why Australia? ...... 7 1.6. Research Problem ...... 8 1.7. Research Questions ...... 9 1.8. Research Aims ...... 9 1.9. Issues Examined ...... 10 1.10. Research Purpose ...... 10 1.11. Significance ...... 10 1.12. Originality ...... 11 1.13. Contribution ...... 11 1.14. Scope of the Study ...... 11 Chapter 2: Methodology ...... 13 Overview ...... 13 2.1. The Theory of Legal Transplant ...... 14 2.1.1. Who is Correct: Watson, Legrand or Kahn- Freund? ...... 18 2.1.2. Watson’s Understanding of ‘Legal Transplant’ ...... 23 2.1.3. Issues with Watson’s Understanding of Legal Transplant as a Method of Comparative Law ...... 24 2.1.4. Factors That Must Be Taken into Account When Transplanting a Legal Rule ...... 28 2.2. Comparative Methodology ...... 30 2.2.1. Undertaking a Comparative Study ...... 30 2.2.2. Comparative Methods ...... 32 2.2.3. The Relationships between the Claimed Methods of Comparative Legal Research ...... 35 2.3. The Researcher’s Understanding of Comparative Methodology ...... 38 2.3.1. Why the Comparative Methodology is Too Complex to Apply ...... 39 2.3.2. The Protocol of Transplanting a Legal Rule from One Country to Another ...... 43 2.3.3. Research Structure ...... 46 Chapter 3: Ability of the Jordanian Law to Abandon the Current Conflict of Laws Rules ...... 54 Overview ...... 54 3.1. Cultural and Historical Backgrounds of Articles 20 and 21 of the JCC ...... 54 3.1.1. Historical Backgrounds of Articles 20 and 21 of the JCC ...... 55 3.1.2. Justifications for Adopting the Jordanian Conflict Rules in Question ...... 56 3.2. The Relationship Between Law and Religion in Jordan ...... 58 iv 3.3. Consistency of the Targeted Jordanian Conflict Rules with Justifications for Adoption ...... 63 3.3.1. Historical Background of the Law of the Place Where the Contract Is Made ...... 63 3.3.2. The Close Relationship Between the Selected Connecting Factors and the Contract ...... 70 3.3.3. Internationality of the Law of the Place Where the Contract Is Made ...... 72 3.3.4. Flexibility of the Formula Currently Adopted by Jordan...... 73 3.4. Conclusion ...... 73 Chapter 4: Comparability of the Australian and the Jordanian Conflict Rules Concerning Contracts ...... 75 Overview ...... 75 4.1. Comparative Analysis of the Scope of the General Conflict Rules Regarding Contracts in Australia and Jordan ...... 75 4.1.1. Contract: Meaning in Australia and Jordan ...... 76 4.1.2. Unilateral Obligations Enforceable by Law in Australia and Jordan ...... 85 4.1.3. What Makes a Contract International? ...... 88 4.2. National Mandatory Laws Affecting the Scope of the Conflict Rules Regarding International Contracts in Australia and Jordan ...... 92 4.2.1. International Maritime Carriage of Goods Contracts...... 93 4.2.2. International Sale of Goods Contracts ...... 95 4.2.3. Consumer Credit Contracts ...... 96 4.2.4. Consumer Contracts ...... 96 4.2.5. Insurance Contracts ...... 98 4.2.6. Contracts Including an Arbitration Clause ...... 99 4.2.7. Individual Employment Contracts ...... 99 4.3. Contractual Obligations Excluded from the Scope of the Targeted Conflict Rules in Australia and Jordan ...... 101 4.3.1. Law Applicable to Contracts over Immovable Property in Australia and Jordan ...... 102 4.3.2. Law Applicable to Contracts over Movable Properties ...... 103 4.3.3. Debts ...... 103 4.3.4. Intellectual Property ...... 105 4.4. Conclusion ...... 105 Chapter 5: Effectiveness of the Proper Law Doctrine from the Jordanian Perspective ...... 107 Overview ...... 107 5.1. The Problem of the Conflict Rules Concerning Contracts in Jordan ...... 107 5.1.1. Challenges Raised by the Wording of Articles 20 and 21 of the JCC .... 107 5.1.2. Challenges Related to Adoption of the Law of the Place Where the Contract Is Made ...... 109 5.1.3. Challenges Posed by the Connecting Factors of Articles 20 and 21 of the JCC ...... 112 5.1.4. Challenges Posed by the Legislative Ideology of the Jordanian Conflict of Laws Rules Regarding International Contracts ...... 112 5.1.5. Other Challenges ...... 114 5.2. The Ability of the Proper Law Doctrine to Overcome the Challenges of the Current Jordanian Approach ...... 116 5.2.1. The Ability of the Proper Law to Minimise the Impact of National Laws on International Contracts ...... 116 5.2.2. The Ability of the Proper Law Doctrine to Meet the Justified Expectations of Contracting Parties ...... 122

v 5.2.3. The Ability of the Proper Law Doctrine to Deal with the Variety of Contractual Issues ...... 129 5.2.4. The Ability of the Proper Law Approach to Support Efforts to Harmonise the Conflict of Laws Rules at the International Level ...... 132 5.3. Conclusion ...... 135 Chapter 6: The Alignment of the Proper Law Approach with the Political Values of the Jordanian Legal System ...... 136 Overview ...... 136 6.1. Criticisms Directed against the Proper Law Doctrine ...... 136 6.1.1. Uncertainty ...... 137 6.1.2. Judicial Resources ...... 139 6.1.3. Judicial Subjectivism ...... 140 6.1.4. When the ‘Closest Connection’ Points Towards Different Legal Systems ...... 140 6.1.5. Which Law Should Govern a Contract in Case there is No Dispute? .... 141 6.2. Excluding the Proper Law Approach by Jordanian Lawmakers ...... 142 6.2.1. Historical Background of the Single Law Theory ...... 142 .6.2.2 The Impossibility of Unifying the Applicable Law under the Current Approach ...... 144 .6.3 Cultural Acceptability of the Jordanian Legal System to the Proper Law Doctrine ...... 146 6.3.1. Consistency of the Proper Law Doctrine with Islamic Cultural Background of the Jordanian Society ...... 148 6.3.2. Attitude of Islam Towards the Idea of Legal Transplant ...... 157 6.4. Conclusion ...... 158 Chapter 7: Conclusion ...... 159 Bibliography ...... 162 Conventions ...... 162 Legislations ...... 162 Case Law ...... 163 Court Decisions ...... 163 Books and Articles ...... 164

vi List of Figures

Figure 1. Watson’s Understanding of Legal Transplant as a Method ...... 24 Figure 2. This Researcher’s Understanding of the Comparative Methodology ...... 42 Figure 3. Factors relevant to understanding a legal rule ...... 43 Figure 4. The purposes of analysing legal rules in a legal transplant study ...... 45

vii First, I would like to express my sincere gratitude to my supervisors, Professor Camilla Andersen and Professor Bruno Zeller for their continuous support of my PhD study and related research. I am grateful for their patience, motivation and immense knowledge. Their guidance helped me at all stages of the research and the writing of this thesis. I could not have had better supervisors and mentors for my PhD study.

Moreover, I would like to thank the members of the Law School at the University of Western Australia for their insightful comments and encouragement, and for asking difficult questions, which enabled me to widen my research by including various perspectives.

I am grateful to Mutah University for granting me a scholarship enabling me to undertake this study. Without their invaluable support, it would not have been possible for me to undertake this PhD.

I thank my classmates for the stimulating discussions, being with me on many sleepless nights when we worked together to meet deadlines, and for all the fun and stress (much of it) that we shared over the past four years.

Many thanks also go to Mrs. Jennifer Jordan and Mr. Ray Jordan, the best couple I have ever met. I cannot imagine my life in Australia without them.

Last but not least, I would like to thank my family in Jordan for their support and encouragement. Special thanks go to my beloved wife and children, Baker, Rima and Daniel for everything.

viii

This work is dedicated to:

The souls of my grandmother (Mrs. Nameh Flah Alrashed), my father (Mr. Rasmi Yousef) and to my best cousin ever (Mrs.Basmah Alomari); My mother (Najah Saleh Alomari); My beloved wife (Kholoud); My children (Baker, Rima and Daniel).

ix Chapter 1: Introduction

Overview

This chapter contains a summary of the central issues addressed in this thesis and: 1- formulates the research question; 2- defines the main issues examined; 3- states the importance and original contribution of the study to the literature on comparative private international law (PIL); and 4- determines the scope of the thesis.

1.1. Introduction

The provisions of the Jordanian conflict of laws rules (conflict rules)1 regarding contracts fall short of the modern standards of PIL.2 There are many challenges arising from the national conflict rules, which makes them inadequate and unfair. Previous studies have reported that an effective conflict rule in the area of contracts is one that respects the intentions of contracting parties, enjoys the flexibility necessary when dealing with the diversity of contractual obligations, ensures justice by meeting the expectations of the contracting parties,3 and minimises the impact of the national law on the international transaction.4 Unfortunately, the Jordanian conflict rules concerning contracts (see Chapter 5) do not achieve these ends. Although this researcher believes that the law would be more effective if it were nationally established because then it would be more capable of reflecting the values of its society, he believes that in some areas where the legal issue is global in nature such as in PIL, imported law might be appropriate. Therefore, to enable Jordan to modernise the provisions of its conflict rules concerning contracts, in this thesis, we examine the feasibility of transplanting the doctrine of the proper law of the contract (the proper law) from Australia into the Jordanian legal system by means of comparative methodology. Mousourakis summarised the importance of this methodology in the field of legislation as follows: Comparative law is particularly important in the field of legislation, especially when a new law or a modification of an existing one is proposed. In today’s complex society the lawmaker is often faced with difficult problems. Instead of guessing possible solution and risking less

1 Also referred to as “choice of laws rules”. Giesela Rühl, ‘Methods and Approaches in Choice of Law: An Economic Perspective’ (Pt bjil) (2006) 24(3) 802. 2 Also referred to as “international private law”. Alex Mills, ‘The Private History of International Law’ (Pt Cambridge University Press) (2006) 55(1) International and Comparative Law Quarterly 1–50, 4. 3 Eugene F Scoles et al., Conflict of Laws (West Group, 4th ed, 2004) 18; Michael Bogdan, Private International Law as Component of the Law of the Forum General Course (Hague Academy of International Law, 2012) 88. 4 Michael Joachim Bonell, ‘The Law Governing International Commercial Contracts and the Actual Role of the Unidroit Principles’ (2018) 23(1) Uniform Law Review 15–41, 16. “[T]he ideal conflict rule is even today considered to be bilateral, unbiased in favour of lex fori and neutral in the sense that it designates the applicable law on the basis of a connecting factor rather than having regard to its substantive contents”. Michael Bogdan, Private International Law as Component of the Law of the Forum General Course (Hague Academy of International Law, 2012) 82.

1 appropriate result, he or she can draw on the enormous wealth of legal experience that the comparative study of laws provides … It is thus unsurprising that legislators, when considering different possible approaches to resolving a particular problem, often take into account how the same or similar problem has been dealt with in other jurisdictions.5 As explained in more details in Chapter 2, to ensure the effective application of the comparative methodology, this thesis adopts some objective criteria that aim to achieve two main purposes. On the one hand, to examine the ability of the proper law doctrine to enable Jordan to overcome the challenges of the current approach, it adopts four main norms. That are the ability of the proper law to deal effectively with the great diversity of contractual obligations, to minimise the impact of the national law on international contracts, to meet the justified expectations of the contracting parties and to support the efforts of the international community to harmonise the conflict rules in this area. These norms have been selected based on a careful analysis of the challenges arising from the current Jordanian approach.6 On the other hand, it examines the alignment between the proper law doctrine and the cultural and political values of Jordan. To this end, this thesis considers the comparability of the scope of application of the proper law doctrine and the Jordanian conflict rules in question, the alignment between the proper law doctrine and the Islamic cultural background of Jordan, and the consistency of the proper law doctrine and the legal ideology of Jordan. These norms have been determined by an analysis of the cultural concerns that may challenge the transplantability of the proper law doctrine into Jordan, and an analysis of the theory of legal transplant.7 This introductory chapter provides an overview of the complexity of the problem pertaining to the conflict of laws, presents the research questions, and summarises the main issues examined in the thesis. The methodology and research structure are discussed in Chapter 2. The focus of this thesis is the Jordanian legal system because it is the receiving country. Hence, this thesis is not a symmetric comparative study. A symmetric comparative analysis is undertaken only when relevant. To put it differently, the Australian proper law approach is used in this thesis to demonstrate how the provisions of the Jordanian conflict rules in question can be improved. The reader should bear in mind that the thesis does not aim to harmonise the provisions of the Australian and the Jordanian legal systems regarding the matter of the law applicable to contractual obligations. Therefore, in this thesis, no suggestions or recommendations are offered in regard to Australian law.

1.2. Point of Departure

Generally, when a dispute arises in relation to a legal transaction that has relationships with more than one jurisdiction,8 following a decision that it is competent to hear the

5 George Mousourakis, Comparative Law and Legal Traditions: Historical and Contemporary Perspectives (Springer International Publishing, 2019) 23–4. 6 See Section 5.1. 7 See Chapter 2. 8 “[The conflict rules] differ from all other branches of private law in concept and content: while the raison d'être of all other branches of private law is in natural human activities and motives and those branches of law are concerned with the regulation of social functions resulting directly from human relations, the conflict of laws has its origin in the diversity of the laws existing in various territorial legal units and is the artificial product of the law itself”. Clive M Schmitthoff, ‘Conflict Avoidance in Practice and Theory’ (Pt Duke University School of Law) (1956) 21(3) Law and Contemporary Problems 429–62, 429.

2 dispute,9 a court in any legal system may proceed to determine the applicable law.10 To this end, the court applies the conflict rules of the country in which it sits. The mechanism by which these rules resolve legal issues falls within the scope of their applications, which depends mainly on categorising legal relationships into groups known as ‘connecting categories’.11 These connecting categories link each category to a legal system by ‘connecting factors’.12 For example, Article 3 of the Hague Convention on the Law Applicable to Traffic Accidents provides that “[t]he applicable law is the internal law of the State where the accident occurred”.13 In this example, ‘traffic accident’ is the connecting category and ‘the place where the accident occurred’ is the connecting factor. In this sense, conflict rules do not resolve disputes, but direct the court to where to search for the solution.14 That is, conflict rules are intended to link a disputed legal transaction to a legal system.15 In the PIL field, there is no issue more perplexing than the matter of the choice-of-law question in contracts.16 There are at least three reasons for this complexity. First, there is the diversity of connecting factors that may be deemed important, such as the domicile of the parties, their nationality, the place where the contract is made, the place where the contract is to be performed, and the principal place of business.17 Second, there are many different types of contracts such as sale-of-goods contracts, contracts for the carriage of goods by sea, insurance contracts, and real estate contracts.18 Finally, there is a wide range of contractual issues19 such as the form and validity of a contract, the subject matter of a contract, interpretation of the terms and the conditions of a contract, and termination of a

9 Afroza Bilkis, ‘Determining Proper Law and Jurisdiction in International Commercial Disputes: Efficacy of Conflict of Laws Principles’ [11] (2016) 21(2) IOSR Journal Of Humanities And Social Science 11–21, 11. 10 Prem Kumar Agarwal, ‘The Theory Of Characterization: A Critical Legal Study Perspective’ (2015) 4(3) Voice of Research 45, 45. 11 Edward S Stimson, ‘Which Law Should Govern?’ (Pt Virginia Law Review Association) (1938) 24 (7) Virginia Law Review 748–69, 750. 12 Connecting factor refers to the indicator that courts use to determine the applicable law such as domicile, nationality and place of contracting. Bilkis (n 9) 15. 13 Convention of 4 May 1971 on the Law Applicable to Traffic Accidents (entered into force 4 May 1971) (‘Convention the Law Applicable to Traffic Accidents’) art 3. 14 “The choice-of-law rule is an odd creature among laws. It never tells what the result will be, but only where to look to find the result”. Brainerd Currie, Selected Essays in the Conflict of Laws (Duke University Press, 1963) 170. 15 Doug Jones, ‘Choosing the Law or Rules of Law to Govern the Substantive Rights of the Parties’ [911] (2014) 26(Special Ed) Singapore Academy of Law Journal, 912. 16 J J Fawcett, Cheshire, North & Fawcett Private International Law (Oxford University Press, 14th ed, 2008) 665; Ernest G Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws’ (1921) 30(7) The Yale Law Journal, 565; Russell J Weintraub, ‘Choice Of Law In Contract’ (1968) 54(3) Iowa Law Review, 399; Garth J Bouwers, 'Tacit Choice of Law in International Commercial Contracts– A Turkish Study' Scientific Cooperations 2nd International Conference On Social Sciences, 170. 17 Murat Metin Hakki, ‘The European Union’s Conflict of Law Rules: A Re-Evaluation’ (2003) 10(1) Elaw Journal: Murdoch University Electronic Journal of Law 1–11, 6. 18 Note, ‘Conflict of Laws and the Discharge of Contracts: An Approach’ (Pt Columbia University School of Law) (1957) 57(5) Columbia Law Review 700–16. 19 J J Fawcett, Cheshire, North & Fawcett Private International Law (Oxford University Press, 14th ed, 2008) 665.

3 contract. When Koetz described PIL as the “nuclear physics of jurisprudence”,20 perhaps he was thinking of the law applicable to contractual obligations. Conflict rules are not internationally standardised, but vary, sometimes considerably, between countries.21 A part of the reason for this is that under the principle of sovereignty, each country can choose a solution that appears fair from a national perspective.22 While one country may apply the law of the place at which the contract is made to deal with the conflict of laws problem in contracts, another may apply the law of place where the contract is to be performed.23 Accordingly, it is impossible to predict the governing law before the selection of the court hearing the dispute. This situation is referred to in jurisprudence as ‘uncertainty’ and ‘unpredictability’.24 Uncertainty has always been a major concern for parties to an international contract because their rights and responsibilities are determined by the applicable law.25 To avoid uncertainty, most contemporary legal systems and international conventions allow parties to select the laws that will govern their contracts,26 which is referred to as the principle of party autonomy.27 Determination of the law applicable to a contract without taking into account the expressed will of the parties to the contract can lead to unhelpful uncertainty because of differences between solutions from State to State. For this reason, among others, the concept of ‘party autonomy’ to determine the applicable law has developed and thrived.28 However, when the parties do not include a choice-of-law clause in their contract document29 or where the court rejects the application of the chosen law because it is

20 Quoted in Bruno Zeller, Damages Under the Convention on Contracts for the International Sale of Goods (Oxford University Press, 2009) 9. Citing H Koetz, Allgemeine Rechtsgrundsatze als Ersatzrecht, (1970) 34 Rabels Zeitschrift, 663. 21 Robert A Pascal, ‘Characterization as an Approach to the Conflict of Laws’ (1990) 2(4) Louisiana Law Review, 717. 22 Gulum Bayraktaroglu, ‘Harmonization of Private International Law at Different Levels: Communitarization v International Harmonization’ [127] (2003)(1) European Journal of Law Reform, 130. 23 Louis B. Sohn, 'New Bases for Solution of Conflict of Laws Problems' (Pt Harvard Law Review Association) (1942) 55(6) Harvard Law Review 978-1004, 978. 24 Brooke Adele Marshall, ‘Reconsidering the Proper Law of the Contract’ (2012) 13(1) Melbourne Journal of International Law 505–39. 25 Lord Diplock once said, “My Lords, contracts are incapable of existing in a legal vacuum. They are mere pieces of paper devoid of all legal effect unless they were made by reference to some system of private law which defines the obligations assumed by the parties to the contract by their use of particular forms of words and prescribes the remedies enforceable in a court of justice for failure to perform any of those obligations”. Amin Rasheed Shipping Corporation v Kuwait Insurance Co 1984 AC 50 at 65. 26 Convention on the Law Applicable to Contractual Obligations, Member States of the European Union opened for signature 19 June 1980 (entered into force 1 April 1991) (‘Rome Convention 1980’) art 3 (1); Principles on Choice of Law in International Commercial Contracts, (entered into force 19 March 2015) (‘Hague Principles 2015’) art 1.4. 27 Symeon Symeonides, ‘The Scope and Limits of Party Autonomy in International Contracts: A Comparative Analysis’ in Franco Ferrari and Diego P Fernández Arroyo (eds), Private International Law: Contemporary Challenges and Continuing Relevance (Edward Elgar Publishing Limited, 2019) 102. 28 Principles on Choice of Law in International Commercial Contracts, (entered into force 19 March 2015) (‘Hague Principles 2015’) art 1.2. 29 Doug Jones, ‘Choosing the Law or Rules of Law to Govern the Substantive Rights of the Parties: A Discussion of Voie Directe and Voie Indirecte’ (2014) 26 Singapore Academy of Law Journal, 911.

4 incompatible with the public policy of the forum,30 it is open to the court to select the applicable law according to the provisions of the national conflict rules.31 To this end, legal systems adopt one of two approaches: the rigid approach—the preselected connecting factors approach32—or the proper law of the contract doctrine—the proper law. The latter is defined as the system of law with which the contract has its closest and most real connection.33 Neither approach is perfect, and each will give rise to dilemmas and theoretical concerns. Further, they are not equal in terms of achieving their goals.34 With international contracts, there are two main aspects that law reformers must consider when regulating a choice-of-law question: certainty and flexibility. Although the preselected connecting factor approach emphasises certainty,35 the proper law doctrine sacrifices certainty in favour of flexibility.36 In the absence of the chosen law, Jordanian law adopts the rigid approach, for which Articles 20 and 21 of the Jordanian Civil Code (JCC) are particularly important.37 Since Jordanian law is written in Arabic and there is no official English translation, this thesis contends that the following are the closest possible translations of these Articles:  Article 20 provides that “the law applicable to contractual obligations shall be the law of the state in which the domicile of the contracting parties is, if they share the same domicile, if not, the law of the place where the contract is made shall apply unless the contracting parties agreed otherwise”.38  Article 21 provides that “the form of contract is governed by the law of the place where the contract is made; it can also be subjugated to the law that govern the contract, the law of the common domicile or the common national law of the contracting parties (the law of the nationality)”.39 The above Articles give rise to several questions: 1. In light of the nature of conflict rules as connecting categories, what is the impact of dividing contractual issues into two connecting categories on the determination of the applicable law to a disputed contract? 2. Why have Articles 20 and 21 adopted these connecting factors? 3. To what extent does the Jordanian law give effect to the parties’ intentions in the absence of the chosen law?

30 Michael Douglas and Nicholas Loadsman, ‘The Impact of The Hague Principles on Choice of Law in International Commercial Contracts’ (Pt Copyright Agency Limited (Distributor)) (2018) 19(1) Melbourne Journal of International Law 1–23, 5. 31 Andrew Beal, ‘Choice of Law’ [615] (1992) Ampla Yearbook, 617. 32 Maria Hook, The Choice of Law Contract (Oxford and Portland, Oregon, 2016) 9. 33 Anthony JE Jaffey, ‘The English Proper Law Doctrine and the EEC Convention’ (Pt Cambridge University Press) (1984) 33(3) International and Comparative Law Quarterly 531–57, 531. Citing Lord Simonds in Bonython v Commonwealth [1951] AC 201, 2019. 34 Vladimir Čolović, ‘Application of the Theory of Proper Law to Contractual Relations with the Foreign Element’ (2015)(4) Strani pravni život 51, 51. 35 The preselected connecting factor approach “implies a lack of judicial discretion. The system provides a single answer from which the judge cannot deviate”. Kermit Roosevelt III, ‘Certainty versus Flexibility in the Conflict of Laws’ (2019) Faculty Scholarship at Penn Law, 2. 36 Symeon C Symeonides, ‘Oregon’s Choice-of-Law Codification for Contract Conflicts: An Exegesis’ (2007) 44(2) Willamette Law Review 205, 207. 37 The Jordanian Civil Code No 43 1976 (Jordan) (‘The Jordanian Civil Code No 43’). 38 Ibid, art 20 (1). 39 Ibid, art 21. 5 4. To what extent are the adopted connecting factors in Articles 20 and 21 adequate for dealing effectively with the complex matter of the law applicable to contractual obligations? 5. What norms should the court adopt in selecting one of the connecting factors mentioned in Article 21? 6. To what extent can the formula adopted in these Articles minimise the effects of the national law on international contracts? 7. To what extent can the provisions of Jordanian law in this area achieve justice? 8. Above all, what makes these articles (connecting factors) preferable from a Jordanian perspective? The importance of answering the questions above stems from their ability to explain the roots of the problem of the Jordanian conflict rules in question, which is essential to determine how the effectiveness of the proposed solution should be examined. On the other hand, such an understanding can help to clarify the cultural as well as the political role, if any, of the targeted Jordanian conflict rules, enabling an evaluation of Jordan’s readiness to abandon the current rules, which is essential to accept the proposed solution. Identifying the problem of a legal system is perhaps the easiest task in a comparative study. However, understanding why there is such a problem—which is essential prior to suggesting a solution—requires a sound knowledge of the targeted rules and the cultural background of the legal system to which they belong. Legal rules do not exist in a vacuum; they are part of a socio-political order that has its own values, standards and principles. Prior to suggesting a legal rule for a legal system, one must understand the underlying principles of that legal system to ensure that the proposed solution is consistent with the fundamental values of the targeted legal system.

1.3. Reason for the Selection of the Topic

Contracts are the major means, if not the only, by which most commercial agreements and monetary exchanges are conducted, especially at the international level. Since the purpose of the conflict rules is to determine the applicable law, which in turn determines the rights and duties of parties to a contract, the provisions of such rules unquestionably have an economic impact.40 As put by Allsop and Ward, “[r]ules of service in contract proceedings are obviously of great commercial significance”.41 Hence, the fairness of the national conflict rules in the area of contracts is not simply a matter of justice, but also of national interest, including economic needs.42 Consequently, if the national law of a country appears to be unfair from the perspective of international parties, they may decide to not deal with that country, which can negatively affect the economic growth of the state. Therefore, Jordan must pay careful attention to the impact of its national law in this area. Allsop and Ward explained that PIL “is a gatekeeper to the rest of the law … It is especially important that the gatekeeper act in a manner conducive to the interests of parties and of the nation as a whole”.43 Arguably, modernising the provision of the Jordanian conflict rules concerning contracts will enable the country to benefit from the movement of international trade and improve its economic growth.

40 Toshiyuki Kono, Efficiency in Private International Law (Brill, 2014) 63–4. 41 James Allsop and Daniel Ward, ‘Incoherence in Australian Private International Laws’ in Andrew Dickinson, Mary Keyes and Thomas John (eds) Australian Private International Law for the 21st Century: Facing Outwards (Hart Publishing, 2014) 49–66, 49. 42 James Allsop and Daniel Ward, ‘Incoherence in Australian Private International Laws’ (Pt Federal Judicial Scholarship) (2013) 3. 43 Ibid, 51.

6 1.4. Why the Proper Law?

The proper law was selected partly because it has been the most accepted solution worldwide. Since it was adopted in 1980 by The Convention on the Law Applicable to Contractual Obligations (Rome Convention),44 the proper law has become the predominant solution, primarily because the rigid approach has been rejected. Despite its efficacy in some cases, the rigid approach suffers from several major drawbacks, three of which are the most important. First, the rigid approach does not always meet the expectations of the contracting parties, which makes it an impractical and undesirable solution. Second, the rigid approach limits the court’s power, so the court will not be effectively involved in the process of determining the applicable law.45 Finally, this approach presents the challenge of interpreting the connecting factors upon which the determination of the applicable law depends.46 In some cases, this leads to a doubling of the impact of national law on international contracts, which contradicts the objective of the conflict rules approach: to free international relationships from the grip of the national law.47

1.5. Why Australia?

Australia was chosen as a comparison in this thesis for three main reasons. First, Australia has adopted the proper law approach, which is the solution that this thesis contends is appropriate to enable Jordan to overcome the shortcomings of its current approach. Second, the scope of the application of the Australian proper law (see Chapter 4) matches the scope of the Jordanian conflict rules in question. Finally, Australia is an English- speaking country. The importance of this, as explained by Rodolfo Sacco, is that “the comparatist must learn not to translate”.48 When dealing with two legal systems, researchers must understand each of the legal systems being compared in their original language49 to avoid reliance on translated materials, which often do not deliver the entire meaning.50 Arabic-speaking countries have been excluded because they have adopted the rigid approach,51 which is rejected in this thesis. European countries that use languages other than English were excluded because the researcher is fluent in only Arabic and English. Other English-speaking countries such as the US, UK and Canada are larger than Jordan in terms of population and judicial decisions, which are critical to understanding the law in its context. Accordingly, Australia was the most suitable choice.

44 Convention on the Law Applicable to Contractual Obligations, Member States of the European Union opened for signature 19 June 1980 (entered into force 1 April 1991) (‘Rome Convention 1980’) art 4 (1). 45 Jones (n 15) 913. 46 Caslav Pejovic, ‘Civil Law and Common Law: Two Different Paths Leading to the Same Goal’ (Pt Wm W Gaunt and Sons Inc) (2001) 32(3) Victoria University of Wellington Law Review 817–51, 817. 47 Laura E Little, Conflict of Laws: Cases, Materials and Problems (Wolters Kluwer, 2nd ed, 2018) 385. 48 Quoted in Pierre Legrand, ‘How to Compare Now’ [232] (1996) 16(2) Legal Studies, 234. 49 John C Reitz, ‘How to Do Comparative Law (Symposium: New Directions in Comparative Law)’ (Pt American Journal of Comparative Law) (1998) 46(4) American Journal of Comparative Law 617, 630. 50 Ibid. 51 Hasan Al-Hedawi, A Comparative Study of the Jordanian Private International Law (Dar Al- Thaqafah Publisher, 1997) 154.

7 1.6. Research Problem

The research problem consists of two main parts. First, although the problem addressed by this study is the inadequacy of the Jordanian conflict rules concerning international contracts, the main obstacle is how to solve the problem using comparative methodology. Any study that aims to develop a legal system by using foreign models is categorised in comparative law as being a study of legal transplant.52 However, a major problem with this kind of study is that there is little agreement on the aspects that should be considered.53 Opponents of the theory of legal transplants have argued that culture gives the law its meaning. Therefore, moving a legal rule out of its cultural context renders it meaningless.54 However, proponents have argued that legal transplants can occur between legal systems that have almost nothing in common.55 Accordingly, before proceeding to examine the transplantability of the proper law doctrine into the Jordanian legal system, this thesis must determine the extent to which a legal rule can be successfully transplanted, including the relevant factors that must be taken into account. This is done in Chapter 2. Second, the proposed solution (see Chapter 6) is not without issues. One of the main criticisms directed against this approach is its uncertainty, since the applicable law remains undetermined under the proper law approach until the court decides it. Moreover, there are no guidelines regarding how the applicable law should be determined. Such an approach could be too flexible to the extent that it might be rejected by the Jordanian judicial system. For example, although the US has a common law system, its conflict rules, since the first Restatement of the Law of Conflict of Laws was published in 1934,56 were codified before the conflict rules revolution accelerated the trend towards the adoption of the proper law doctrine.57 Symeonides explained: The revolution did not aspire to and did not produce a new rule system to replace the old one. Instead, the revolution offered conflicting and open-ended ‘approaches’, all of which required and individualized handling of each case. The result was that, in a relatively short time, American conflicts law began looking like ‘a tale of thousand-and-one- cases’ in which ‘each case [was] decided as if it were unique and of first impression’. Just like the Restatement had gone too far toward certainty to the exclusion of flexibility, the revolution went too far in its infatuation with flexibility. This move had its own price tag … Gradually, the initial euphoria surrounding the revolution subsided and gave way to disillusionment … at least, one judge has described modern American conflict of laws as ‘a veritable jungle, [in] which, if the law

52 Alan Watson, ‘Legal Transplants: An Approach to Comparative Law’ (1975) 27(4) Stanford Law Review 1208. 53 Shaunnagh Dorsett, ‘How Do Things Get Started? Legal Transplants and Domestication: An Example from Colonial New Zealand.(Special Issue: Constitutional Traditions)’ (Pt New Zealand Centre for Public Law) (2014) 12(1) The New Zealand Journal of Public and International Law 103–22, 106. 54 Pierre Legrand, ‘Corporatists at Law and the Contrarian Challenge Inaugural Lecture’ in Gunther Teubner (ed), Legal Irritants: Good Faith in British Law or How Unifying Law Ends up in New Divergences (The Modern Law Review Limited, 1998) 1–22. 55 Alan Watson, Legal Transplants and European Private Law (METRO, Institute for Transnational Legal Research, 2000) 10. 56 Bernard Hanotiau, ‘The American Conflicts Revolution and European Tort Choice-of-Law Thinking’ (1982) 30(1) The American Journal of Comparative Law 73–98, 73. 57 Ibid, 95.

8 can be found out, leads not to a rule of action but a reign of chaos dominated in each case by the judge ‘informed guess’.58 Each new step will have advantages and disadvantages. Ignoring the disadvantages in a legal transplantation study is akin to burying one’s head in the sand. One of the main concerns that is taken seriously in this thesis is the impact, on the Jordanian judicial system, of replacing the current rules. The Jordanian conflict rules in question have been in place since 1976; hence, they have become part of the ideology of the legal system. Most Jordanian judges, especially those of the Court of Cassation—the highest court in the country—have relied on these Articles over the course of their careers. For them, the provisions of these rules have been embedded in their thinking, and reliance on these rules for nearly four decades has transformed their rulings into firm principles. The adoption of the proper law doctrine within a legal system that has taken the rigid approach for a long time should not be understood as being the replacement of one legal rule with another. Rather, it should be seen as a fundamental change in the legal logic of the receiving country, which is not an easy task. To convince the Jordanian law to accept this veritable jungle or the informed guess method, it is necessary to articulate the cultural and political gains that Jordan will obtain from the change. The development of a legal system that incorporates foreign models of legal rules is a complicated matter that must be taken seriously. A further complication is that the solution proposed in this study has already been rejected by the Jordanian legal system.59 The possibility that the proposed solution will be rejected is not a hypothetical concern, but a fact that this study strives to overcome.

1.7. Research Questions

This thesis is concerned with discovering the cultural and political factors that facilitate or impair the process of transplanting the proper law of the contract approach into the Jordanian legal system, thereby determining whether the proper law approach can enable Jordan to overcome the challenges posed its current approach. To this end, two research questions are addressed: 1- To what extent does the proper law of the contract approach enable Jordan to overcome the challenges of its current approach? 2- To what extent does the proper law approach align with the fundamental values of the Jordanian legal system?

1.8. Research Aims

This thesis seeks to determine whether the proper law doctrine can enable Jordan to overcome the challenges created by the rigid approach that it takes at present. Moreover, this thesis provides suggestions and recommendations that could help to make the Jordanian conflict rules concerning contracts more: 1- flexible to deal with the diversity of contractual issues; 2- aligned with the principle of freedom of contract;60

58 Symeon C Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (Oxford University Press, 1st ed, 2014) 211–12. Citing In re Paris Air Crash of 3 March 1974, 399 F Supp 732, 739 (CD Cal 1975). 59 See Section 6.2. 60 Ludwig Erhard once said, “independent and free will be one of humanity’s most basic motives, we need to protect it and strengthen it day after day”. Quoted in MENG Zhaohua, 'Study on

9 3- able to meet the expectations of the parties to the international contract;61 4- aligned with the cultural and political values of Jordan; and 5- expressive of national legislative philosophy.

1.9. Issues Examined

To achieve the research aims of this thesis, five main issues are examined: 1- the ability of Jordan, culturally and politically, to abandon the current rules; 2- the comparability of the Australian proper law rule and the Jordanian conflict of laws rules in question, in terms of the scope of application; 3- the ability of the proper law doctrine to overcome the challenges arising from the current Jordanian approach; 4- the alignment of the proper law doctrine with the legislative philosophy of Jordan; and 5- the alignment of the proper law doctrine with the cultural values of Jordanian society.

1.10. Research Purpose

The purpose of this thesis is to provide an appropriate theoretical framework for the transplantation of the proper law doctrine into the Jordanian legal system that can be relied upon by lawmakers, if the doctrine were adopted to deal with the choice-of-law question in contracts. However, the success of transplanting a legal rule from one legal system to another is one matter in theory, but its success in practice is another. This thesis examines the theoretical success of transplanting the proper law doctrine into the Jordanian legal system because the evaluation of its success in practice will not be possible prior to its formal adoption and application. Legal history is full of examples where legal rules were culturally and politically accepted by a legal system, although in practice the goals could not be achieved. The United Nations Convention on Contracts for the International Sale of Goods (CISG) is one example. Zeller noted that although the CISG was accepted by many countries, it has not been properly applied. In theory, the convention is still in force, although in practice its provisions do not apply, which can be described as an unsuccessful adoption.62

1.11. Significance

The significance of this thesis stems from the importance of the legal issues that it considers. International contracts are the main economic tools at the international level. Therefore, modernising the provisions of the Jordanian law will make it more hospitable to the rights of parties to international contracts, to the benefit of Jordan and its economic growth. Additionally, this thesis enables the gap between the Jordanian conflict rules regarding contracts and the cultural values of Jordan to be bridged. Further, this thesis indicates how Jordan can translate its legislative philosophy regarding the matter of the

the Meaning of Lex Voluntatis in the Choice of Law in International Private Law' (2014) 7(1) Higher Education of Social Science, 42. 61 “Protecting the reasonable expectations of the parties is widely regarded as a principal objective of choice of law, particularly for tort and contract”. Mary Keyes, 'Statutes, Choice of Law, and the Role of Forum Choice' (Pt Routledge) (2008) 4(1) Journal of Private International Law 1- 33, 14. 62 Bruno Zeller, ‘Uniformity of Laws: A Reality Or Just a Myth?’ [231] (2008) 1(3) Int J Private Law, 233.

10 law applicable to contractual obligations into an effective conflict rule. This thesis highlights additional issues that may be useful for future studies in Jordan, including an examination of the benefits that the country may gain from joining the CISG, and the need to review the position of the national law regarding consumer protection.63

1.12. Originality

The originality of this thesis stems from the fact that it is the first study to use comparative methodology to assess the Jordanian conflict rules regarding international contracts, and to examine the Jordanian legislative philosophy regarding international contracts. The problems of Jordanian conflict rules have not been previously identified for three reasons. First, PIL is a relatively new branch of law in Jordan; conflict of laws rules did not exist prior to 1976. Second, there are a limited number of Jordanian scholars with expertise in this area. Third, the Jordanian conflict rules are similar to the Egyptian rules, so Jordanian scholars have relied on Egyptian textbooks to explain the Jordanian rules without paying enough attention to the differences between these two legal systems. Although the Jordanian PIL has been in force since 1976, it remained untouched until the late-1990s. The first Jordanian PIL textbook was written by an Iraqi scholar, Al-Hedawi, who was employed by a Jordanian university to teach PIL during the 1990s. In the introduction to his book—published in 1997—Al-Hedawi stated that “when I was given the honour to teach PIL in Jordan, I could not find a Jordanian textbook that explains the Jordanian PIL. So, I decided to write one”. Al-Hedawi continued: “I do not claim that my book is unique, but I claim that that I am the first one to write in this area”.64 Al-Hedawi’s work, along with later books published in this area, described the conflict rules without analysis or criticism of their provisions. No previous study has investigated the Jordanian conflict rules regarding contracts or analysed the legal logic upon which they are structured. Hence, most of the issues addressed by this thesis have not been addressed previously from a Jordanian perspective.

1.13. Contribution

This thesis makes the following contributions to the field of PIL: 1- It explains how the adoption of the proper law doctrine can help in harmonising the conflict rules regarding contractual obligations, which previously appeared to be an impossible task. 2- It explains how legal systems can avoid characterisation problems in international contracts and, thus, reduce the impact of the national laws on international transaction through the adoption of a balanced legislative philosophy. 3- It paves the way for other Arabic countries, who take a similar approach and share similar cultural backgrounds, to review their conflict rules on the basis of the findings of this study.

1.14. Scope of the Study

Although this study concentrates on the provisions of the Australian and Jordanian conflict rules regarding international contracts, it examines other relevant jurisdictions

63 “[T]he engaged researcher is always able to perceive opportunities for additional perspectives”. Dawn Watkins and Mandy Burton, Research Methods in Law (Routledge, 2013) 18. 64 Al-Hedawi (n 51) 2.

11 including English law,65 Egyptian law, and Islamic jurisprudence as historical resources of the targeted legal systems.66 The French law is occasionally considered as a historical source of the Egyptian law. It also may refer, particularly in chapter 3, to the law of Continental Europe as well as the Anglo-American law. The importance of the last two systems of law arises partly from the fact that the proper law doctrine is not originally an Australian rule, but a universal one. Thus, to understand its historical development, which is necessary to understanding its modern application, an analysis is required of the contributions made by various legal systems to the current approach. This is mainly due to the fact that, in 1992, the Australian Law Reform Commission (ALRC), considered that the proper law of the contract as developed by the common law is ill-defined, uncertain in scope, and inadequate to deal with modern developments in international contracts. Hence, it made several recommendations based on the provisions of the Rome Convention.67 The convention that was drafted through consultations between European Union countries.

65 “In other areas, however, and in particular the law applicable to contractual obligations, the English common law continues to exert a strong influence on Australian law and practice”. Andrew Dickinson, ‘The Future of Private International Law in Australia’ (2012) 19(19) Australian International Law Journal 1–10, 5. 66 Abdelnaser Zeyad Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (2012) 6(2) British Journal of Humanities and Social Sciences, 46. 67 Law Reform Commission, Choice of Law, Report No 58 (1992) 81 [82]. 12 Chapter 2: Methodology

Overview

This chapter maps the methodology utilised to transplant the proper law doctrine from the Australian legal system into the Jordanian legal system. To this end, it considers three main questions: 1- Are legal transplants possible? 2- Is legal transplant a method in its own right as Watson suggested? 3- Which aspects (contexts) should be considered in this thesis to make possible the transplantability of the proper law doctrine into the Jordanian legal system? The term ‘legal transplant’ is associated with legal historian, Alan Watson,68 who believed that legal transplant is the main method of comparative legal studies. However, many scholars have disagreed with Watson’s understanding of legal transplant as a phenomenon, his understanding of the comparative methodology, and his accuracy in using technical terms including the term legal transplant itself. Five main arguments form the basis of this chapter. First, legal transplant is not a method; it is a term that describes the methodological steps followed by a legal system to adopt the provisions of a legal rule that was developed in a foreign jurisdiction in order to resolve a legal issue or to fix a legislative defect in the national law. Second, legal transplant is possible only if undertaken on solid comparative ground.69 Third, the classical method of comparative law, which focuses on describing the similarities and differences between compared items, is inadequate because it “turns a blind eye to everything but surfaces”.70 This position is based on the belief that law is a product of social needs that are largely determined by societal circumstances, including culture, history, religion and political values,71 without ignoring foreign influences and cross- border exchanges, which usually occur to fill gaps in the national law.72 Fourth, deep analysis is necessary to address broad and complicated research questions73 because no single context can explain the reality of a legal rule in all its dimensions.74 Finally, the selection of the appropriate contexts differs from one study to another depending on the purposes and characteristics of the relevant legal systems;75 however, this does not mean that the comparative methodology differs from one study to another. This chapter consists of three main sections. Section 2.1 evaluates Watson’s theory of legal transplant. Section 2.2 explores jurists’ understandings of the comparative

68 Konstantinos Lalenis Martin De Jong and Virginie Mamadouh, The Theory and Practice of Institutional Transplantation—Experiences with the Transfer of Policy Institutions (Kluwer Academic Publishers, 2002) 4. 69 Alan Watson, ‘Legal Transplants and Law Reform’ (1976 ) 92 Law Quarterly Review 79, 79. 70 Lawrence Friedman, ‘Some Thoughts on Comparative Legal Culture’ in David S Clark (ed), Comparative and Private International Law Essays in Honour of John Henry Merryman on his 70th Birthday (1990) 52. 71 Maja Savevska, The End of the Eurocrats’ Dream: Adjusting to European Diversity (Oxford University Press, 2016) 15, 258. 72 Ibid. 73 Robert K Yin, Case Study Research: Design and Methods (Sage, 1994) 28. 74 Geoffrey Samuel, ‘Taking Methods Seriously Part 1’ (2007) 2 Journal of Comparative Law 94, 109. 75 Geoffrey Samuel, ‘Compartive Law and its Methodology’ in Dawn Watkins and Mandy Burton (eds), Reserch Method in Law (Routledge, 2nd ed, 2018) 144.

13 methodology. Finally, Section 2.3 introduces the comparative methodology adopted in this thesis and describes the thesis structure.

2.1. The Theory of Legal Transplant

As early as 1927, Walton challenged the historical school of jurisprudence represented by Hugo and Savigny,76 who believed that “law acquires its validity not by way of an act of a legislature, but rather as an end product of a historical process”.77 They argued that law develops gradually and unconsciously like language and customs, so it should be regarded as a reflection of its society.78 To put it differently, law is the mirror of some set of forces external to it such as culture, politics, history and religion.79 However, Walton rejected these claims because he believed that many of the developments in legal systems could be explained by what he called “transplantations of law”.80 Hence, the concept of ‘legal transplant’ emerged to describe the phenomenon of moving a legal rule from one country to another.81 To support his argument, Walton claimed that “a very large and important part of the German law [as an example] did not grow out of the consciousness of the German people … but … grew out of the consciousness of the Roman people and bears the stamp of the Roman mind”.82 Similarly, Gleeson argued: The Australian Constitution was not the product of a legal and political culture, or of historical circumstances, that created expectations of extensive limitations upon legislative power for the purpose of protecting the rights of individuals. It was not the outcome of a revolution, or a struggle against oppression. It was designed to give effect to an agreement for a federal union, under the Crown, of the peoples of formerly self-governing British colonies. Although it was drafted mainly in Australia and in large measure (with a notable exception concerning the Judicature—s 74) approved by a referendum process in the Australian colonies and by the colonial parliaments, it took legal effect as an Act of the Imperial Parliament. Most of the

76 FP Walton, ‘The Historical School of Jurisprudence and Transplantations of Law’ (Pt Society of Comparative Legislation) (1927) 9(4) Journal of Comparative Legislation and International Law 183–92, 31. 77 Beata Kviatek, ‘Explaining Legal Transplants’ (PhD Thesis, University of Groningen, 2015) 51. 78 Walton (n 76) 184. 79 William Ewald, ‘Comparative Jurisprudence (II): The Logic of Legal Transplants’ (Pt American Association for the Comparative Study of Law) (1995) 43(4) The American Journal of Comparative Law 489, 491. 80 Walton (n 76) 181. 81 Watson, ‘Legal Transplants: An Approach to Comparative Law’ (n 52) 1208. However, there are several different notions that are used in the same meaning such as “transplantation, transposition, spread, transfer, import/export, reception, circulation, mixing and transfrontier mobility”. William Twining, ‘Diffusion and Globalization Discourse’ (Pt Harvard Law School) (2006) 47(2) Harvard International Law Journal 507–15, 510. 82 'Legal transplant' as a concept that describes the phenomenon of moving legal rules from one legal system to another was used for the first time by Walton in 1927 in his article ‘The Historical School of Jurisprudence and Transplantations of Law’. Walton (n 76) 187.

14 framers regarded themselves as British. They admired and respected British institutions, including parliamentary sovereignty.83 Further, Walton claimed that “[c]odifiers are arrant thieves and every new civil code ought to contain some articles which the legislators of other countries will make up their minds to steal so soon as a favourable opportunity occurs”.84 Fifty years after Walton, Watson used the same idea to argue that “law does not reflect totally the society in which it operates. Instead, much of it is borrowed from other systems”.85 After having examined the similarities between legal systems that had almost nothing in common—Europe, Egypt, Turkey and Japan—Watson concluded that legal history does not support the social theory of “the mirror thesis”86 because most developments in legal systems can be explained by legal transplant. Watson then boldly proclaimed that “[l]aw is out of context much of the time, perhaps even most of the time”,87 which caused controversy among legal scholars, particularly Kahn-Freund and Legrand.88 Although Watson was not the first to introduce the concept of legal transplant into academia,89 it has become associated with his name90 because he brought it to the centre of scholarly attention during the famous debate between him and Kahn-Freund in the 1970s.91 Since then, many other writers have become involved in this debate through a considerable number of articles that have discussed various aspects of legal transplants,92 including the accuracy of the concept, its nature and its feasibility.93 For example, Shah correctly argued that the concept of ‘legal transplant’ is inadequate because it does not incorporate the cultural values of the phenomenon.94 Teubner believed that the concept “legal irritant” is more effective than the term ‘legal transplant’ because

83 Quoted in JC Gibson, ‘Impact Of Legal Culture And Legal Transplants On The Evolution Of The Australian Legal System’ [1] (2011) 1(1) International Academy of Comparative Law, 38. 84 FP Walton, ‘Civil Codes and Their Revision: Some Suggestions for Revision of the Title “Of Ownership”’, (1916) 1 Southern Law Quarterly. Cited in John W Cairns, ‘Watson, Walton and the History of “Legal Transplants”’ (Pt Georgia Journal of International and Comparative Law Inc) (2013) 41(3) Georgia Journal of International and Comparative Law 637–96, 693. 85 Alan Watson, ‘The Birth of “Legal Transplants”’ (2013) 41(3) Pt Georgia Journal of International and Comparative Law Inc 605–8, 607. 86 Brian Tamanaha, A General Jurisprudence of Law and Society (Oxford Socio-Legal Studies, 2001). 87 Alan Watson, Law Out of Context (University of Georgia Press, 2000) 107. 88 Dorsett (n 53) 106. 89 'Legal transplant' as a concept that describes the phenomenon of moving legal rules from one legal system to another was used for the first time by Walton in 1927 in his article '‘The Historical School of Jurisprudence and Transplantations of Law'. Walton (n 76) 219. 90 Martin De Jong (n 68) 4. 91 Antonina Bakardjieva Engelbrekt, ‘Legal and Economic Discourses on Legal Transplants: Lost in Translation?’ in Antonina Bakardjieva Engelbrekt and Peter Wahlgren (eds), Law and Development (Scandinavian Studies in Law, 2015) vol 60, 111–42, 112. 92 William Twining, ‘Social Science and Diffusion of Law’ (Pt Blackwell Publishing Ltd) (2005) 32(2) Journal of Law and Society 203–40, 204. 93 Pierre Legrand, ‘The Impossibility of “Legal Transplants”’ (Pt SAGE Publications) (1997) 4(2) Maastricht Journal of European and Comparative Law 111–24. 94 Prakash Shah, ‘Globalisation and the Challenge of Asian Legal Transplants in Europe’ (Pt Singapore Journal of Legal Studies) (2005) Singapore Journal of Legal Studies 348–61, 348.

15 the latter cannot adequately describe the nature of this phenomenon.95 However, it looks like that the concept ‘legal irritant’ has not been accepted in academia; perhaps because it also does not reflect the nature of the phenomenon. Friedman contended that the term legal transplant is “murky”,96 however, he did not suggest another term. Twining understandably argued that “the diffusion of law” is more accurate.97 Twining explained that “[s]ince 1959 the study of diffusion of law has proceeded under many labels including reception, transplants, spread, expansion, transfer, exports and imports, imposition, circulation, transmigration, transposition and transfrontier mobility of law”.98 Twining further argued: These terms are not all synonyms. In particular, some focus on the original source (export, transfer, spread, transmigration, diffusion, diaspora), while others direct attention to the recipient (reception, import, transposition). In ordinary usage ‘diffusion’ may imply the former, but I shall use it as a generic term to cover both perspectives, as it does in standard social science discourse: ‘Diffusion is the most general and abstract term we have for this sort of process, embracing contagion, mimicry, social learning, organized dissemination and other family members’.99 Regardless of the state of disagreement on the accuracy of the concept (legal transplant), there is agreement that it refers “to the movement of legal norms or specific laws from one state to another during the process of law-making or legal reform”.100 Kanda and Milhaupt summarised the position of jurisprudence in terms of the legal transplant phenomenon: Despite the importance of transplants to legal development around the world, scholarly understanding of this ubiquitous form of legal development is still fairly rudimentary … For example, there is little agreement among scholars on transplant feasibility and the conditions for successful transplants, or even how to define ‘success’. Moreover, there is little analysis of how the success or failure of legal transplants relates to the achievement of larger goals, such as economic development.101 This section answers two questions. Are legal transplants possible? If so, how can legal transplants be achieved? First, it is necessary to identify the theoretical basis for the disagreement among scholars in this area, which explains the importance of answering the aforementioned questions. Kahn-Freund, inspired by Montesquieu’s work, argued

95 Gunther Teubner, ‘Legal Irritants: Good Faith in British Law or How Unifying Law Ends Up in New Divergencies’ (Pt Blackwell Publishers Ltd) (1998) 61(1) Modern Law Review 11–32, 12. 96 Lawrence M Friedman, ‘Some Comments on Cotterrell and Legal Transplants, in Adapting Legal Cultures’ (2001) David Nelken & Johannes Feest, 94. 97 William Twining, ‘Diffusion of Law: A Global Perspective’ (2004) 36(49) The Journal of Legal Pluralism and Unofficial Law 1, 5. 98 Ibid. 99 Ibid. 100 A Mistelis Loukas, ‘Regulatory Aspects: Globalization, Harmonization, Legal Transplants and Law Reform—Some Fundamental Observations’ (Pt Section of International Law and Practice of the American Bar Association) (2000) 34(3) The International Lawyer 1055–69, 1067. 101 Hideki Kanda and Curtis JC Milhaupt, ‘Re-Examining Legal Transplants: The Director’s Fiduciary Duty in Japanese Corporate Law’ (Pt American Society of Comparative Law) (2003) 51(4) The American Journal of Comparative Law 887–901, 887.

16 that “it was only in the most exceptional cases that the institutions of one country could serve those of another at all”.102 Kahn-Freund wanted to confirm that law is usually designed for a particular purpose within particular circumstances to fit a particular political context.103 Therefore, if lawmakers want to use a foreign legal rule for the purpose of law reform, they must ask “[h]ow far would it be accepted and how far rejected by the organised groups which, in the political sense, are part of our constitution?”104 Kahn-Freund argued that organised groups should be understood, not only as “groups representing economic interests: big business, agriculture, trade unions, consumer organisations, but equally of organised cultural interests, religious, charitable, etc.”.105 Accordingly, the success of legal transplants requires knowledge “not only of the foreign law, but also of its social and, above all, its political context”.106 Watson underestimated the importance of the political context of the foreign rule and argued that what matters is the fit between the imported rule and the political system of the recipient legal system.107 In Watson's own words: [S]uccessful borrowing could be made from a very different legal system, even from one at a much higher level of development and of a different political complexion. What, in my opinion, the law reformer should be after in looking at foreign systems was an idea which could be transformed into part of the law of his country. For this a systematic knowledge of the law or political structure of the donor system was not necessary, though a law reformer with such knowledge would be more efficient. Successful borrowing could be achieved even when nothing was known of the political, social or economic context of the foreign law.108 However, if the imported rule is “inimical” to the values or political context of the recipient state, its chance of being successful in that state is “diminished”.109 Further, Watson argued that legal transplants are common and “socially easy” because “[b]orrowing is much easier than thinking. It saves time and effort”.110 Watson’s logic has been used by some scholars to justify the same idea. For example, Milhaupt and Pistor claimed that “[w]e begin by asking why this is [legal transplants] such a common form of legal change … First and most obvious, a legal transplant is a cheap, quick and potentially fruitful source of new law”.111 Further, Jhering believed that “only a fool would refuse a good medicine [a legal rule] just because it did not grow in his own back garden [nationally made]”.112

102 O Kahn-Freund, ‘On Uses and Misuses of Comparative Law’ (1974) 37(1) The Modern Law Review 1–27, 6. 103 Ibid, 8. 104 Ibid, 12. 105 Ibid. 106 Ibid, 27. 107 Watson, ‘Legal Transplants and Law Reform’ (n 69) 81. 108 Ibid, 79. 109 Ibid, 81. 110 Watson, ‘The Birth of “Legal Transplants”’ (n 85) 607. 111 CJ Milhaupt and K Pistor, Law & Capitalism: What Corporate Crises Reveal about Legal Systems and Economic Development around the World (University of Chicago Press, 2008) 209. 112 Quoted in Mousourakis (n 5) 24.

17 Conversely, Legrand criticised the possibility of legal transplants. For Legrand, “legal transplants are impossible”113 because culture is what gives law its meaning. As such, “at best, what can be displaced from one jurisdiction to another is, literally, a meaningless form of words”.114 Legrand claimed that law is not simply statutes; law is culture and the application of law demonstrates a certain way of interpreting rules.115 Even when legal rules appear to be similar across jurisdictions, their interpretation is affected by the cultural context and will often be different in practice.116 Further, Legrand argued that “anyone who believes in the reality of ‘legal transplants’ must broadly agree with Watson’s position and must accept, in particular, a ‘law-as-rules’ and a ‘rules-as-bare- propositional-statements’ model”.117 In his reply to Legrand, Watson used several historical examples to prove the feasibility of legal transplant. Further, Watson argued that “[w]hat can be and is, borrowed is not just statutory rules”.118 Hence, a foreign legal rule should be taken as an “idea” of how a particular issue has been resolved in another legal system.119 In summary, Watson— inspired by Walton—believed that legal transplants are possible and easy to undertake; Legrand believed that legal transplants are impossible; and Kahn-Freund believed that legal transplants are possible but rare. Twining claimed that “Watson’s critics focused on some of his more extreme statements and accused him of claiming that legal change takes place largely independently of social conditions. Others, notably Pierre Legrand, have gone to the other extreme, arguing that ‘transplants are impossible’”.120 Therefore, the question is: which of these opinions is correct? The next section provides a response.

2.1.1. Who is Correct: Watson, Legrand or Kahn- Freund?

To determine whose position on legal transplant is correct, a fourth opinion is required. This opinion must not be the opinion of a single scholar, but rather the prevalent opinion in jurisprudence. The point of disagreement between Watson, Legrand and Kahn-Freund is the feasibility of legal transplants. Therefore, the fourth opinion must address this point.  The logic upon which Watson based his opinion Watson is a legal historian, who noted in his work that there are many similarities between legal systems. To him, this meant that legal systems must have copied from each other.121 Twining disagreed and argued that the logic upon which Watson based his argument does not reflect the reality of what Twining called the “diffusion of law” because it was founded on an erroneous assumption: that “the typical process of reception involves a direct one-way transfer from country A to country B”.122 To put it differently, the similarities between legal systems do not always mean that one legal system must have copied from the other legal system. In some cases, these similarities may be the final product of a continuous mutual development process. It might happen that country A

113 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93) 114. 114 Ibid, 120. 115 Ibid, 114. 116 Pierre Legrand, Comparative Legal Studies: Traditions and Transitions (Cambridge University Press, 1st ed, 2003) 277. 117 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93) 114. 118 Watson, ‘Legal Transplants and European Private Law’ (n 55) 7. 119 Watson, ‘Legal Transplants and Law Reform’ (n 69) 79. 120 Twining, ‘Social Science and Diffusion of Law’ (n 92) 212. 121 Watson, ‘Legal Transplants and European Private Law’ (n 55) 7. 122 Twining, ‘Diffusion of Law: A Global Perspective’ (n 97) 3.

18 imports a legal rule from country B, then amends it to fit a particular context. Later, country B decides to adopt the amendments made by country A and add to them, and so on. Hence, it is almost impossible to decide who copied from who.  The logic upon which Kahn-Freund based his opinion Kahn-Freund believed that law was strongly attached to its political context. Each legal rule is designed to achieve a particular function in a particular political context. Therefore, if one wants to import a legal rule from a foreign legal system, one must understand the political context of the imported legal rule in its original legal system.123 Hence, one needs to compare the foreign political context with the political context into which the legal rule is intended to be transplanted. If the contexts are similar, one can transplant a legal rule. A serious weakness of this argument, however, is that it assumes that the reception of the foreign law always “involves formal enactment or adoption at a particular moment of time”,124 which is not always true.  The logic upon which Legrand based his opinion Legrand believed that culture is what gives law its meaning. Therefore, when a legal rule is moved out of its cultural context, it no longer has relevance or it becomes a different legal rule.125 Mousourakis believed: [I]n most cases it may prove impossible to adopt a foreign rule without significant modifications because of differences pertaining, for example, to the court structure, legal process and legal reasoning, as well as more general socio-cultural, political and economic differences between the countries.126 Twining understandably argued that the problem of this logic is that “it assumes that the object of reception retains its identity without significant change after the date of reception”.127  The most accepted opinion in jurisprudence The majority of jurists and writers have considered legal transplant to be as old as law itself.128 “A well-known example of such use is when Romans visited several foreign (especially Greek) city-states which they felt could provide them with models of laws

123 Kahn-Freund (n 102) 27. 124 Twining, ‘Diffusion of Law: A Global Perspective’ (n 97) 3. 125 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93) 120. 126 Mousourakis (n 5) 24. 127 Twining, ‘Diffusion of Law: A Global Perspective’ (n 97) 3. 128 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93); Kahn-Freund (n 102); Tay-Cheng Ma, ‘Legal Transplant, Legal Origin and Antitrust Effectiveness’ (Pt Oxford University Press) (2013) 9(1) Journal of Competition Law and Economics 65–88; AlanWatson, Legal Transplants: An Approach To Comparative Law (University of Georgia Press, 1993); Martin De Jong (n 68); Ewald (n 75); Kanda and Milhaupt (n 111) 887; Thi Mai Hanh Do, ‘Evaluation of the Applicability of Common Law Approaches to Precedent in Vietnam’ University of Wollongong, 2011) 72; Salvatore Mancuso, ‘Legal Transplants and Economic Development: Civil Law v Common Law?’ in Jorge Costa Oliveira and Paulo Cardinal (eds), One Country, Two Systems, Three Legal Orders—Perspectives of Evolution (Springer Berlin Heidelberg, 2009) 75–89; Watson, ‘Legal Transplants and European Private Law’ (n 55) 4; Daniel Berkowitz, Katharina Pistor and Jean-Francois Richard, ‘Economic Development, Legality and the Transplant Effect’ (Pt Elsevier BV) (2003) 47(1) European Economic Review 165– 95, 168.

19 worth embodying into their own code of laws (this compilation, known as the law of the Twelve Tables, was published in c. 450 BC)”.129 Glenn believed that there are no pure legal systems,130 and Zeller argued that domestic laws have changed dramatically over the past thirty years “as a result of globalisation through transplantations and the introduction of uniform international laws”.131 All legal systems must have borrowed something from other legal systems at some point in time.132 Mousourakis contended: [S]everal ideas in the German Civil Code were derived from the Swiss Law of Obligations of 1881 and German civil procedure borrowed much from Austrian law. The wholesale adoption of civil law codes across Europe and other parts of the world during the nineteenth and twentieth centuries is also a well-known phenomenon. In particular, the French Civil Code of 1804 (Code civil des francais) served as a model for the civil codes of many countries, including Italy, Spain, Portugal, Poland, Romania, Bolivia, Mexico, Quebec and Louisiana. The Swiss Civil Code of 1907 was adopted in Turkey (1926). And the drafts of the German Civil Code of 1900 (Buregerliches Gesetzbuch or BGB) influenced the civil codes of Japan, Korea, Brazil, Switzerland, Austria, Hungary and Greece. The civil codes of the Netherlands (1992) and Quebec (1994) and the German law of obligations of 2002, as well as the new codes in the areas of civil, commercial and criminal law enacted in former communist of Central and Europe were also based on extensive comparative law research.133 In another article, Mousourakis argued that “the view held by some scholars that legal transplants are impossible betrays an exaggeration of cultural diversity as it contradicts the teachings of history and is at odds with recent trends towards legal integration in certain world regions”.134 In light of this, it is difficult to accept Legrand’s argument that legal transplants are impossible because this argument, as described by Twining is “extreme”.135 Here, it is worth mentioning that in some of his later writings, Legrand accepted that in some cases legal transplants might be possible if the receiving country has developed “a predisposition to the act of borrowing and preparedness to borrow from a given jurisdiction”.136 In Legrand’s words: [T]he decision to alter a local institutional framework at the level of formal rules and to do so through borrowing, is first and foremost a function of cultural engagement with alterity which will make the host

129 Mousourakis (n 5) 24–5. 130 H Patrick Glenn, ‘Persuasive authority’ (Pt McGill Law Journal (Canada)) (1987) 32(2) McGill Law Journal 261, 264–5. 131 Zeller (n 62) 232. 132 Esin Örücü, ‘What is a Mixed Legal System: Exclusion or Expansion?’ (2008) 12(1) Electronic Journal of Comparative, 170; Spataru-Negura Laura-Cristiana, ‘Exporting Law or The Use of Legal Transplants’ (Pt Nicolae Titulescu University Publishing House) (2012) 2 Challenges of the Knowledge Society 812–19, 812; Ibid, 812. 133 Mousourakis (n 5) 24–5. 134 George Mousourakis, ‘Legal Transplants and Legal Development: A Jurisprudential and Comparative Law Approach’ (2013) 54(3) Acta Juridica Hungarica 219–36, 219. 135 Twining, ‘Social Science and Diffusion of Law’ (n 92) 212. 136 Pierre Legrand, ‘Note’ (Pt [Cambridge University Press, Editorial Committee of the Cambridge Law Journal]) (1997) 56(3) The Cambridge Law Journal 638–40, 639.

20 legal culture receptive to the new rule in a way that will avoid internal tension.137 In this case, the act of borrowing becomes, according to the same author, “an avatar of culturally derived norms of behaviour embedded in a particular legal community”.138 The best summary of Legrand’s position was put by Kviatek: Differently from Watson, Legrand, who is also one of strongest critics of the legal transplants approach, is sceptical about the success of legal transplantations. Moreover, legal transplantations are hardly possible. Nevertheless, he pointed to two key preconditions that should be met in this [sic] rare cases of legal transplantation: there should be a predisposition to the act of borrowing and a preparedness to borrow from a given jurisdiction on the part of borrower. Both conditions, however, refer only to the probability of the act of borrowing.139 It is evident that Legrand moved from the category ‘impossible’ to ‘possible but rare’, the category of Kahn-Freund’s argument. However, while one scholar might describe legal transplants as common because 200 examples were found where legal systems appeared similar, another might see this as a rarity in light of the significant differences between legal systems. Watson believed that comparatists should focus on the similarities between legal systems,140 indicating that Watson did not pay sufficient attention to the differences. This could mean that Watson collected several examples, which to him were enough to convince himself that legal transplants are common. Conversely, Legrand argued that comparatists should focus on differences,141 which are unquestionably greater in number than the similarities. In light of the fact that each of them viewed the topic from a narrow perspective and did not consider the phenomenon in light of both similarities and differences, it is difficult to consider either of them as accurate. Twining’s claim that the scholarly debate about legal transplants is “the worst kind of academic debate” is convincing,142 in part because the debate between Kahn-Freund and Watson never had a common starting point. Although they responded to each other, Watson, Legrand and Kahn-Freund discussed different ideas. Watson considered this issue in two different articles. For example, Watson claimed: In 1974 … appeared the important and fascinating article of Otto Kahn- Freund, ‘On Uses and Misuses of Comparative Law’. Our aims and approaches were very different. Professor Kahn-Freund was concerned with comparative law as a tool of law reform; I was attempting to set out guidelines for comparative law as an academic discipline in its own right.143 It is evident that Watson considered comparative law to be a branch of science and not a methodology, which influenced his understanding of legal transplants. However, for Kahn-Freund, comparative law was a methodology.144 This understanding of comparative

137 Ibid. 138 Ibid. 139 Kviatek (n 77) 108. 140 Alan Watson, Legal Transplants: An Approach to Comparative Law (University of Georgia Press, 1993) 96. 141 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93) 112. 142 Twining, ‘Social Science and Diffusion of Law’ (n 92) 10. 143 Watson, ‘Legal Transplants and Law Reform’ (n 69) 79. 144 Kahn-Freund (n 102) 27. 21 law as methodology has been a source of disagreement among scholars regarding the definition of legal transplants. Accordingly, the discussion between these two scholars was supposed to be not about the possibility of legal transplants, but about the nature of the comparative law. In another article, Watson contended that Legrand did not ignore the fact that legal rules can be transplanted from one country to another, but did not call this ‘legal transplant’: I suspect that Pierre Legrand’s exaggerated emphasis on my interest in rules is because rules very obviously can be and are, copied from those of another society. But this copying would not for him (I think) be a transplant because the cultural ethos of the two societies are different. If I am correct then to a large extent he and I are talking at cross-purposes, using the word ‘transplant’ in different senses.145 Following an analysis of the debate between Legrand and Watson, Kviatek correctly concluded: [I]t seems that both parties [Watson and Legrand] play a straw-man by misrepresenting an opponent’s argument. The dispute is full of various logical fallacies, such as cherry picking [Fallacy of incomplete evidence] with a biased selection of cases from the legal history. Other logical fallacies that are found are red herring [Fallacy of distraction], argument from ignorance [Assuming that a claim is true (or false) because it has not been proven false (true) or cannot be proven false (true)], defining fallacy [Involves the confusion between two notions by defining one in terms of the other], or begging the question [A sort of circular argument in which a proposition is made that uses its own premise as proof of the proposition].—like in following example ‘law is out of context, therefore it is autonomous’. Also, quite frequent and obvious are examples of false dilemma or so-called black-and-white thinking, especially with regard to the role of social context in the development of law.146. Most likely, Legrand used the term ‘legal transplant’ in the sense that, in its new legal system, the imported rule must be identical to its original legal system. Any change during the transplantation process means that it is no longer transplantation, which contradicts the common understanding of legal transplant.147 One of the few points on which the researcher agrees with Watson is that foreign solutions can be used to understand how problems could be solved. However, Watson and Walton before him did not consider the role of legal transplant as a tool of law reform; instead, they used it to explain existing similarities between legal systems. Evidently, for those scholars, legal transplants did not mean the same thing. They discussed ideas that had nothing in common, although each called his idea ‘legal transplant’. Watson contended that legal history is replete with examples that support the hypothesis that legal rules have been always transplantable, although legal transplantation was unsuccessful on several occasions.148 At times, the same examples could be used to support arguments for the possibility and impossibility of legal transplant. A clear example of this is the CISG. Although the harmonisation of law through international conventions is not, strictly speaking, a legal transplant, it can be used to demonstrate the concept. The CISG has been adopted by 94 different systems. The proponents of legal

145 Watson, ‘Legal Transplants and European Private Law’ (n 55)10. 146 Kviatek (n 73) 58. 147 Twining, ‘Diffusion of Law: A Global Perspective’ (n 97) 8. 148 See Kahn-Freund (n 102) 13.

22 transplant may use it as an example of the widespread transplantation of rules. At the same time, some scholars such as Zeller have argued that the application of the CISG differs from one country to another,149 which exemplifies the failure to adopt a foreign system of law. Instead of asking whether legal transplants are possible, one must ask whether a particular legal rule is transplantable into a particular legal system. The former question, which has been the main focus of scholarly debate is the wrong question to ask because the answer will always be ‘yes’ and ‘no’ at the same time. Legal history is full of examples that support both answers. Therefore, the possibility of transplanting a legal rule from one country to another must be individually evaluated.150 From an analytical perspective, the differences between legal systems may be indicative of cultural differences. National understandings of justice and rights play a significant role in this regard. What might be culturally accepted in one society might not be accepted in another. Therefore, not every legal rule is transplantable. Having answered the first question regarding the possibility of legal transplants, the following section seeks to understand the nature of legal transplant and determine whether it is a method of comparative legal research as suggested by Watson.

2.1.2. Watson’s Understanding of ‘Legal Transplant’

Watson argued that legal transplant is the main method of comparative law.151 The use of legal transplants in a comparative study is inescapable because it is the most appropriate way by which the relationships between legal systems can be traced.152 According to Watson, every comparative study must commence with an exploration of similarities between the legal systems being dealt with in order to establish relationships between them.153 Then, the comparative study should employ the legal transplant method to explain those relationships.154 Watson argued that “where there is no relationship [between the compared legal systems] there can be no comparative law”.155 The purpose is to classify legal systems into donors and receivers.156 Figure 1 presents Watson’s understanding of legal transplant as a method:

•Researchers must determine the similarities between the legal 1 systems being compared.

•Researchers must use the similarities determined in Stage 1 to 2 establish relationships between the compared legal systems.

•Researchers must use the legal transplant to explain the 3 relationships established in Stage 2.

•Researchers must classify legal systems into donors and 4 receivers.

149 Zeller (n 62). 150 Kanda and Milhaupt (n 111) 901. 151 Watson, Legal Transplants: An Approach to Comparative Law (n 140). 152 Kviatek (n 77) 52. 153 Cairns (n 84) 640. 154 Kviatek (n 77) 52. 155 Watson, Legal Transplants: An Approach to Comparative Law (n 140) 7. 156 Kviatek (n 77) 52. 23 Figure 1. Watson’s Understanding of Legal Transplant as a Method According to Watson, a comparative study consists of four stages. Stage 1 focuses on the identification of similarities between the legal systems being compared. Those similarities are used in Stage 2 to establish relationships between the legal systems being dealt with. Stage 3 employs the legal transplant to explain these relationships. Finally, Stage 4 involves the classification of legal systems into donors and receivers.

2.1.3. Issues with Watson’s Understanding of Legal Transplant as a Method of Comparative Law

This section does not consider Watson’s work in detail because, as Twining correctly noted, Watson “has written so much on the theme, advancing here, retreating there, that he is difficult to pin down”.157 Watson was not the first to propose the theory of legal transplants. However, he was the first to claim that legal transplant is a method. According to Walton, who can be called the father of the theory of legal transplant, legal transplant involves historical observations or facts. Watson took Walton’s observations and developed a theory that he could not explain or justify.158 Twining understandably argued that Watson’s generalisations “are not backed by empirical evidence”.159 It is difficult to find scholars who have accepted Watson’s theory. For example, Abel claimed that “[p]erhaps the most serious problem with Watson’s theory is that it is not a theory at all”.160 Ewald noted that Watson “has presented his theory in a somewhat loose and intuitive fashion; he has, over time and in different contexts, changed his formulations, sometimes claiming one thing and sometimes another, with the consequence that his theory has frequently been misunderstood”.161 The most important of the criticisms directed against this theory is, according to Ewald, that Watson failed “to pay adequate attention to the logical structure of his argument and to the logical structure of the views he is concerned to oppose”.162 This is the reason that Watson’s work is difficult to understand. Another problem with Watson’s theory is that it fails to take into account the meaning of the technical terms Watson used to express his ideas. For example, although Watson introduced legal transplants as a method of comparative law, he described it as a “factor” in another article. Watson claimed that “since the later Roman empire … [legal transplants] have been a major, if not always the main, factor in legal change”.163 Evidently, method and factor do not mean the same thing. Further, Watson sometimes claimed one thing and then the opposite. For example, Watson agreed with Legrand’s argument that “a rule once transplanted is different in its new home”.164 However, a few pages later, he posed a question: “Is the tomato plant [under the buyer’s care] the same plant as it was under my care?”.165 Watson answered this question: “If I understand Pierre Legrand correctly his answer is No!”,166 which

157 Twining, ‘Social Science and Diffusion of Law’ (n 92) 211. 158 Ibid. 159 Ibid, 212. 160 L Abel Richard, ‘Law as Lag: Inertia as a Social Theory of Law’ (1982) 80(4) Michigan Law Review 785–809, 793. 161 Ewald (n 75) 491. 162 Ibid. 163 Watson, ‘Legal Transplants and European Private Law’ (n 55) 10. 164 Ibid, 2. 165 Ibid, 10. 166 Ibid.

24 implies that Watson’s answer was ‘yes’. The problem with Watson’s answer is that it contradicts his earlier claim that “a rule once transplanted is different in its new home”. Monateri commented on Watson’s example: However, Legrand’s criticism of this vision of transplant goes deeper than the merely empirical. A rule or individual law may be a plant, but laws in context make a garden. It follows that whether or not a transplant is meaningful and successful cannot judge by assessing the health of an individual plant in isolation. Cultures are only meaningful as cultures when appreciated as a whole. This is true of social cultures and it is true of actual gardens.167 Watson believed that comparatists must focus on the similarities between legal systems and the purpose of doing so is to classify legal systems into donors and receivers. Watson defined comparative law as “the study of the relationships of one legal system and its rules with another”.168 He further claimed that “where there is no relationship there can be no comparative law”.169 In this sense, Watson used the comparative law to explore the relationship between legal systems.170 However, Watson never explained how these similarities could be determined. If he relied on legal terms only, most likely Watson assumed that these terms have a universal meaning, which is not true.171 Additionally, Legrand argued that the similarities cannot explain law in practice.172 The classic understanding of comparative methodology comprises both the similarities and the differences between legal systems.173 Further, by claiming that the purpose of comparative law is to explain the similarities between legal systems, Watson ignored most of the purposes of comparative methodology, including the role of legal transplants as a tool of law reform.174 Twining believed that Watson’s assumption “that there was an identifiable exporter and importer” was questionable.175 Moreover, there is no practical benefit in classifying legal systems into donors and receivers. Shapiro argued: [I]t is fair to say that comparative law has been a somewhat disappointing field. For the most part, it has consisted of showing that a certain procedural or substantive law of one country is similar to or

167 Pier Giuseppe Monateri, Methods of Comparative Law (Edward Elgar Pub, 2012) 93. 168 Watson, Legal Transplants: An Approach to Comparative Law (n 140) 6. 169 Ibid, 7. 170 Cairns (n 84) 640. 171 Mark Van Hoecke, ‘Methodology of Comparative Legal Research’ (Pt Boom Juridische Uitgevers) (2015) Law and Method, 13. 172 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93) 112. 173 Jaap Hage, ‘Comparative Law as Method and the Method of Comparative Law’ (2014) Maastricht European Private Law Institute Working Paper No. 2014/11 39; Vernon Valentine Palmer, ‘From Lerotholi to Lando: Some Examples of Comparative Law Methodology’ (Pt American Society of Comparative Law, Inc) (2005) 53(1) The American Journal of Comparative Law 261–90, 283. 174 Comparative law can be used for different purposes such as to achieve comparability between two or more systems, build a particular system of law by formalising various systems of law, determine a better system of law by evaluating two or more systems, prepare legal unification by universalising a particular rule, provide tools for the critique of a law and understand a legal rule or institution. See Akinwumi Olawuyi Ogunranti, ‘The Scope of Party Autonomy in International Commercial Contracts: A New Dawn?’ (Master Thesis, Dalhousie University, 2017) 16. 175 Twining, ‘Diffusion of Law: A Global Perspective’ (n 93) 3.

25 different from that of another. Having made this showing, no one knows quite what to do next.176 As mentioned above, Watson argued that where there is no similarity between the legal systems being compared, there can be no comparative law.177 One major drawback of this argument is that Watson ignored the possibility of comparing legal systems that have nothing in common, which contradicts his own claim that history is full of examples where legal transplants have taken place between legal systems that have nothing in common. This contradiction, which unquestionably indicates a misunderstanding of the reality of legal transplant as a means of law reform, reveals the weakness of the foundation on which Watson’s theory was built. Many writers, such as Glenn, have challenged Watson’s claim on the grounds that even completely different legal systems are comparable if the internal criteria and the purposes of the study are precisely identified.178 To support his argument, Glenn distinguished between two types of logic: bivalence and multivalence. Bivalent logic states that there is no middle ground between contradictory things.179 According to this logic, there are always sharp boundaries between thoughts, ideas and legal systems. Glenn argued that this idea was wrong because it did not understand the complexity of the relationship between ideas where everything is a matter of degree,180 which forms the core of multivalent logic. In this respect, Glenn stressed that a middle ground between legal systems exists, and it is entirely feasible to compare legal rules regardless of the differences between the legal systems to which they belong. Watson’s understanding of comparative law in light of Glenn’s theory is based on bivalence logic, which does not reflect the reality of comparative studies. When Watson introduced his theory of legal transplants, he attempted to “set out guidelines for comparative law as an academic discipline in its own right”.181 However, the fundamental assumption of Watson’s theory—that comparative law is a discipline— was weak and has been rejected by most of the jurisprudence.182 Considering Watson’s academic background as a legal historian, it becomes evident that he used the idea of legal transplants in an attempt to explain the similarities between legal systems.183 To claim that the purpose of legal transplant was simply to explain the similarities between legal systems was to claim that comparative law and comparative legal history were the same.184 Cairns stated that Watson understood that “comparative law is the study of (mainly historical) relationships between legal systems”.185

176 Martin Shapiro, Courts: A Comparative and Political Analysis (University of Chicago Press, 2013) vii. 177 Watson, Legal Transplants: An Approach to Comparative Law (n 140) 7. 178 H Patrick Glenn, Legal Traditions of the World: Sustainable Diversity in Law (4th ed, 2010) 48. 179 Ibid, 368. 180 Ibid, 396. 181 Watson, ‘Legal Transplants and Law Reform’ (n 69) 79. 182 AG Chloros, ‘Principle, Reason and Policy in the Development of European Law’ (Pt Cambridge University Press) (1968) 17(4) International and Comparative Law Quarterly 849–77, 850. 183 Cairns (n 84) 642. 184 Ibid, 642. Citing: Book Note, 27 STAN L REV 1203, 1208 (1975) (reviewing LEGAL TRANSPLANTS (1st ed) supra note 1. 185 Ibid. “Alan Watson defends an apprehension of comparative law as ‘an academic discipline in its own right’, which addresses ‘a study of the relationship, above all, the historical relationship, between legal systems or between rules of more than one system’”. Simone Glanert, ‘Method?’ in P. G. Monateri (ed), Methods of comparative law (Edward Elgar, 2012)

26 Finally, Watson claimed that legal transplants are common because they are socially easy to implement,186 which is not true. Cowan argued that while legal transplants are possible, “it is not an easy process to carry out”.187 The comparatist, who seeks to transplant a legal rule, needs to be aware of the risk that the foreign rule might be rejected in the receiving country due to cultural considerations.188 Gibson argued: The process of transplantation is much more than a simple process of adaptation of good ideas from other countries. Resistance from local lawyers, reluctance by parliament to embark on law reform of a controversial nature, or simple failure to appreciate the value of reforms in other legal systems may all be factors.189 Legal transplant is a complicated and risky process. Whoever claims that borrowing is easy perhaps has the ‘copy–paste’ process in mind, which is incorrect. It is easy to assume that legal systems have copied from each other in order to explain the similarities between them because, by making this assumption, a researcher can avoid analysing the factors behind such similarities. Legal systems may reach similar solutions by adopting different approaches. To understand how this can happen, one needs to understand the mechanisms by which a society solves problems, the factors that have played a role in the development of these mechanisms, and the relationship between law and its contexts (culture, history and religion, etc.). For these reasons, Watson’s theory of legal transplants does not work. However, Twining argued that “Watson’s work fits the simple model of reception and he works squarely within ‘the Country and Western tradition’”.190 Watson’s understanding of comparative law played a significant role in this respect. In summary, jurists have understood legal transplant differently depending on their academic background and how they define what is ‘possible’. The same examples that are used to prove that legal transplants are common can also be used to prove the opposite.191 Dupré argued that “any major transformation of the imported law might be understood as a failure to import the law … By contrast … modification of the original law can be considered as a positive effort to adjust the law to the new environment in order to make it work”.192 Legal transplant is not a method as Watson suggested. Instead, legal transplant is a term describes the process by which a legal rule from one legal system is used to inspire legal drafting in another legal system. Conversely, the role of legal transplant in the context of law reform is more important than its utilization to classify legal systems according to donor and receivers. Watson’s understanding of legal transplant reduced the importance of legal transplantation. Gravidae claimed that “[l]egal transplants are surely of interest to those who are interested in the study of relations of power, such as those arising through

62-3. Citing Watson, Alan, Legal Transplants: An Approach to Comparative Law, 2nd ed. Athens: University of Georgia Press, 1993: 9. 186 Watson, ‘The Birth of “Legal Transplants”’ (n 85) 607. 187 Rosaline Baindu Cowan, ‘The Effect of Transplanting Legislation from One Jurisdiction to Another’ (Pt Routledge) (2013) 39(3) Commonwealth Law Bulletin 479–85, 485. 188 Ibid. 189 Gibson (n 83) 20. 190 Twining, ‘Social Science and Diffusion of Law’ (n 92). 191 See e.g., Ahmad A Alshorbagy, ‘On the Failure of a Legal Transplant: The Case of Egyptian Takeover Law’ (Pt Indiana University, School of Law) (2012) 22(2) Indiana International & Comparative Law Review 237–66; ‘The Irish Rejection of Divorce’ Kahn-Freund (n 102) 23; Zeller (n 62) 233; See also Zuzanna Pepłowska-Dąbrowska and Justyna Nawrot, Codification of Maritime Law: Challenges, Possibilities and Experience (Taylor & Francis, 2019) s 3. 192 Catherine Dupré, Importing the Law in Post-Communist Transitions: The Hungarian Constitutional Court and the Right to Human Dignity (Bloomsbury Publishing, 2003) 61.

27 colonization”.193 However, it is inaccurate to consider the laws that are imposed on a nation through colonisation as a legal transplant, although this is another argument, outside the scope of the present discussion. In summary, there are several problems with Watson’s approach, which means that his theory does not work. However, some of Watson’s claims are valid: legal transplants are common in legal history, the acceptability of the receiving legal system to adopt the foreign rule is more important than the similarities between legal systems, and the receiving country should consider the foreign legal rule as a mere idea.

2.1.4. Factors That Must Be Taken into Account When Transplanting a Legal Rule

Husa emphasised that legal transplants should be taken seriously,194 which raises four issues regarding what to transplant, why to transplant, from where to transplant and how to transplant. The importance of answering these questions is attached to the fact that “[g]overnments use comparative law for law reform purposes, generally to promote desirable social or legal changes which have been observed to arise from the implementation of such a law in other countries”.195 Therefore, it is essential that one selects from the foreign legal system the legal rule that directly relates to the problem faced by the law of the receiving country, which highlights the importance of the first issue regarding what to transplant. The second issue focuses on the effectiveness of the imported legal rule, which is important if it is meant to cater to a national legislative need, in that the imported rule must have been proven effective in its original legal system. Mousourakis claimed that “the adoption of foreign legal rule would normally presuppose that the rule has generally proved effective in its country of origin and that it is deemed capable of producing the desired results in the country contemplating its adoption”.196 Therefore, it is important that the effectiveness of the imported rule be examined within its own legal system. The third issue, from where to transplant, reflects the cultural concerns raised by opponents of the theory of legal transplants. There is often a relationship between a society and its law. Watson could not prove his claim that law is outside its social context most of the time.197 The widespread usage of legal transplants does not support this hypothesis because legal systems usually import those legal rules that suit their domestic culture, which is what can be understood from Watson’s claim that a foreign rule should be taken as mere “idea”.198 Naturally, this idea must fit the political and the cultural context into which it is transplanted. Hence, “[w]ithout hesitation one can accept the proposition that a foreign legal rule will not easily be borrowed successfully if it does not fit into the domestic political context”.199 Therefore, “the recipient system does not require any real knowledge of the social, economic, geographical and political context of

193 Michele Graziadei, ‘Legal Transplants and the Frontiers of Legal Knowledge’ (Pt De Gruyter) (2009) 10(2) Theoretical Inquiries in Law 723–43, 724. 194 Jaakko Husa, ‘Developing Legal System, Legal Transplants and Path Dependence: Reflections on the Rule of Law’ (2018) 6(2) The Chinese Journal of Comparative Law 129–50, 130. 195 Gibson (n 79) 2. 196 Mousourakis, Comparative Law and Legal Traditions: Historical and Contemporary Perspectives (n 5) 24. 197 Watson, Law Out of Context (n 87) xi. 198 Alan Watson, ‘Comparative Law and Legal Change’ (Pt Cambridge University Press) (1978) 37(2) The Cambridge Law Journal 313–36, 315. 199 Watson, ‘Legal Transplants and Law Reform’ (n 69) 81.

28 the origin and growth of the original rule”.200 What matters is the fit between the imported rule and the receiving legal system. Understanding the political context of the foreign rule is not important in a legal transplant study. However, what is important are the actions taken by the receiving country to create the perfect circumstances for receiving and applying a foreign legal rule,201 which is why this thesis is not a symmetric comparative study. Teubner argued that the possibility of legal transplant depends on the degree of connection between law and its social context: “Legal transplants may become ‘legal irritants’, depending on whether there is loose or tight coupling between law and other social discourses”.202 The nature of the imported legal rule(s) and the nature of the relevant legal systems play a crucial role in this regard. Even within the same country, legal rules can differ in nature.203 Some of them are attached to public policy, while others are not; some are religious rules, while others are human-made; and some are procedural rules, while others are substantive, and so on. As such, not all legal rules have the same value in society and in the consideration of comparatists.204 While some rules are like “potted plants”, which “carry their own foundation and sustenance with them and that, like a houseplant, can be placed anywhere the purchaser desires”,205 other rules may not be transplantable. Kahn-Freund contended that: All rules which organise constitutional, legislative, administrative or judicial institutions and procedures, are designed to allocate power, rule making, decision making, above all, policy making power. These are the rules which are closest to the ‘organic’ end of our continuum, they are the ones most resistant to transplantation.206 Likewise, when transplanting a legal rule, the nature of the targeted legal systems must be considered. Legal transplantation between legal systems that share the same culture and speak the same language is easier than transplantation between fundamentally different legal systems.207 Therefore, understanding the relationship between the culture and customs of a society and the provisions of a legal rule is fundamental to any legal transplantation study.208 Blind copying has implications in terms of its failure,209 so it is imperative for the comparatist to consider criteria that will make legal transplants

200 Ibid. 201 Teubner (n 95) 12. 202 The ‘Transplantability’ Debate in Comparative Law and Comparative Labour Law: Implications for Australian Borrowing from European Labour Law (Centre for Employment and Labour Relations Law, (‘The ‘Transplantability’ Debate in Comparative Law and Comparative Labour Law: Implications for Australian Borrowing from European Labour Law’) 8. 203 Kahn-Freund (n 102) 23. 204 Teubner (n 95) 12. 205 Inga Markovits, ‘Exporting law reform—but will it travel?’ (Pt Cornell University) (2004) 37(1) Cornell International Law Journal 95–114, 99. 206 Kahn-Freund (n 102) 23. 207 Holger Spamann, ‘Contemporary Legal Transplants—Legal Families and the Diffusion of (Corporate) Law’ (Pt Brigham Young University Law Review) (2010) 15–35. 208 Walton (n 76) 184. 209 Kanda and Milhaupt (n 111) 889.

29 desirable and possible.210 A final consideration is not only from where law will be borrowed, but also how it will be borrowed.211 Another factor that has not been given adequate attention by scholars of the comparative methodology is the context of the legal issue that requires a solution in the receiving country, including whether the recipient country already has rules in place. The importance of this factor stems from the fact that cultural resistance might not be directed against acceptance of the proposed solution, but rather against the abandonment of the existing rule if it is culturally rooted. The success of transplanting a legal rule into a legal system that already has rules in place relies on the alignment between the imported rule and the receiving legal system and the ability or readiness of the receiving country to abandon its current rules. These factors can be considered as guidelines for legal transplantation. The challenge is how to translate these factors into a methodology that can be applied in a manageable and controlled manner. The next section explains the importance of the comparative methodology.

2.2. Comparative Methodology

There is no ideal example of a comparative scholarship to emulate, nor clear guidelines that must be followed.212 Therefore, the main challenge that faces comparatists is how to apply the comparative methodology. According to Hoecke, this is because: [T]here is no agreement on the kind of methodology to be followed, nor even on the methodologies that could be followed. Moreover, almost everything that was more or less established in the area of comparative law over the last century has been increasingly criticized during the last few decades: the concept of ‘legal family’, the possibility of comparison itself, the object of comparison, etc.213 This section is not intended to explain the comparative methodology adopted in this thesis, but to argue that the comparative methodology as explained in jurisprudence cannot be applied because it does not address the main issue of how to conduct a comparative study. Unfortunately, the jurists who attempted to answer this question have complicated the use of the comparative methodology. This section summarises the jurists’ opinions on three main points: how to conduct a comparative study, relevant methods for comparing two legal systems, and how to apply the proposed methods.

2.2.1. Undertaking a Comparative Study

One of the key questions, if not the main one, that every comparatists seeks to find an answer to is: how to conduct a comparative study or how to use the comparative methodology? To date, there has been no straightforward answer to this question;214 and,

210 Cowan (n 187) 479. 211 Engelbrekt (n 91) 137. 212 Reitz (n 49) 617. 213 Van Hoecke (n 171) 1; in the same meaning see Reitz (n 47) 617; Jaakko Husa, 'Research Designs of Comparative Law Methodology or Heuristics?' in Maurice Adams and Dirk Heirbaut (eds), The Method and Culture of Comparative Law: Essays in Honour of Mark Van Hoecke (Bloomsbury Publishing Plc, 2015) 53. 214 Chloros (n 182) 852.; ‘Örücü has made an appropriate comment on the methodology of comparative law: ‘how this comparison is to be carried out has no standard answer’. Quoted in Jaakko Husa, 'Research Designs of Comparative Law Methodology or Heuristics?' in

30 according to Reitz, there is no promising avenue for an answer in the near future.215 However, in their attempts to answer this question, scholars have put forward several arguments that deserve attention. For example, Reitz claimed that “all comparative law scholarship has to start by introducing some aspect of … law in order to have something to compare”.216 Mousourakis argued that “[w]ithout the knowledge derived from historical-comparative studies it is impossible to investigate contemporary legal institutions”217 because “law acquires its validity not by way of an act of a legislature, but rather as an end product of a historical process”.218 Others have paid more attention to the cultural backgrounds of the compared legal systems.219 According to this view, comparatists give careful attention to the values, thoughts, attitudes and ideas of society with respect to its legal system.220 To this end, Hoecke and Warrington divided the world into Western, Asian, Islamic and African cultural families.221 The object of this division was to explain the main differences between these legal cultures regarding legal concepts, the role of the law in each legal culture and the ways in which societies believe disputes should be solved.222 Valcke and Grellette argued that comparatists must not limit themselves to legal terms because this can be like “comparing apples and oranges”223 due to differences in the meaning of legal terminology. The assumption that legal terms are comparable can threaten the entire comparative process and lead to misleading results.224 Similarly, Glanert argued that “[o]ne must never allow one’s vision to be clouded by the concepts of one’s own national system”.225 Although comparing family law in one country with contract law in another is obviously unreasonable, this could occur if the comparatist were unaware that legal terms do not mean the same thing everywhere.226 The seriousness of this is exacerbated when the legal systems being compared use different languages. In this situation, Reitz claimed: [T]he comparatist comes face to face with the enigma of translation. In one sense every term can be translated because there are things in each legal system that are roughly the functional equivalent of things in the other legal system. In another sense, nothing can be translated because

Maurice Adams and Dirk Heirbaut (eds), The Method and Culture of Comparative Law: Essays in Honour of Mark Van Hoecke (Bloomsbury Publishing Plc, 2015) 56. 215 Reitz (n 49) 618. 216 Ibid, 619. 217 Mousourakis, ‘Legal Transplants and Legal Development: A Jurisprudential and Comparative Law Approach’ (n 134) 219. 218 Kviatek (n 77) 51. 219 Edward J Eberle, ‘The method and role of comparative law’ (Pt Washington University, School of Law) (2009) 8(3) Washington University Global Studies Law Review 451, 459. 220 Ralf Michaels, ‘The Functional Method of Comparative Law’ in Mathias Reimann and Reinhard Zimmermann (eds), The Oxford Handbook of Comparative Law (Oxford University Press, 2006) 372. 221 Mark Van Hoecke and Mark Warrington, ‘Legal Cultures, Legal Paradigms and Legal Doctrine: Towards a New Model for Comparative Law’ (Pt Cambridge University Press) (1998) 47(3) International and Comparative Law Quarterly 495–536, 502. 222 Ibid, 508. 223 Catherine Valcke and Mathew Grellette, ‘Three Functions of Function in Comparative Legal Studies’ in Maurice Adams and Dirk Heirbaut (ed), The Method and Culture of Comparative Law—Essays in Honour of Mark Van Hoecke (Hart Publishing, 2015) 102. 224 Ibid, 102. 225 Glanert (n 185) 68. 226 Reitz (n 49) 617.

31 the equivalents are different in ways that matter at least for some purposes.227 Valcke and Grellette argued that the success of any comparative study depends largely on the selection of the comparable rules on each side, which means that “the particular rule or set of rules chosen on one side must be compared to the corresponding rule or set of rules on the other”.228 Moreover, comparative studies must consider law as it applies in real life.229 Further, one must be aware of the risk of stepping into a foreign legal system. Lawson claimed: Now, in a sense, a comparative lawyer is bound to be superficial; he would soon loose himself in the sands of scholarship. It is hard enough to comprehend even the master subjects of a single modern system of private law, such as property, contract and torts: they seem unfathomable and in constant flux. Anything like the same intimate sense of a second system must seem almost impossible to acquire; and if one extends one’s studies to other laws of different families, one is indeed in danger of knowing very little of a great many things.230 It would be difficult for a lawyer to understand a foreign law as much as the national lawyers do. Perhaps that is why Watson argued that in a legal transplant study, a foreign legal rule should be taken as a mere idea. This is not to say that having an understanding of a foreign rule in its own legal system is unimportant, but that a full understanding of a foreign rule may not be as easy as understanding one’s own law. To translate the above suggestions into a methodology, scholars have suggested various methods which are discussed in the following section.

2.2.2. Comparative Methods

Jurists have suggested several different methods, although a full analysis of the multitude of methods lies outside the scope of this study. Therefore, this section considers some of the main methods, although this researcher disagrees with calling some of them “method” (see Section 2.3). The methods examined in this section are doctrinal, analytical, functional, cultural and historical. The last two methods together are referred to as the ‘law in context’ method. These methods were selected because they represent the aspects of interest in this thesis (see Section 2.3). The doctrinal method is one of the most common methods applied in legal studies and can be defined as “a detailed and highly technical commentary upon and systematic exposition of, the context of legal doctrine”.231 The doctrinal method entails “analysing legal rules and decisions, clarifying ambiguities within rules, structuring them in a logical and coherent manner and describing their interrelationships”.232 To this end, it focuses on

227 Ibid, 620. 228 Valcke and Grellette (n 223) 102. 229 David Nelken, ‘Comparative Law and Comparative Legal Studies’ in Esin Örücü and David Nelken (eds), Comparative Law—A Handbook (Hart Publishing, 2007) 21. 230 Hiram E. Chodosh, Global Justice Reform: A Comparative Methodology (NYU Press, 2005) supra note 86. Citing FH Lawson, Selected Essays (New York: North Holland Publishing Co, 1977) 2. 231 Michael Salter and Julie Mason, Writing Law Dissertations: An Introduction and Guide to the Conduct of Legal Research (Pearson, 2007) 49. 232 Reza Banakar, ‘Having One’s Cake and Eating It: The Paradox of Contextualisation in Socio- Legal Research’ (Pt Cambridge University Press) (2011) 7(4) International Journal of Law in Context 487–503, 487; Glanert (n 225) 68.

32 the collection and organisation of data from primary sources, including law in books, case law and statutes, in order to identify the underlying system, and aims to obtain a general understanding of a legal system in terms of the rules that should be applied to cases.233 The use of the doctrinal method—the black letter law method—is indispensable to the comparative study approach.234 Westerman argued that the doctrinal method is “the main supplier of concepts, categories and criteria”.235 The primary sources of data for this method include legislation, court decisions and jurisprudential interpretations. The doctrinal/black letter law method is also referred to as the descriptive method because it mainly describes law obtained from books. The analytical method focuses on legal and non-legal terms used in legal contexts by comparing the meaning of those concepts in different jurisdictions.236 The analytical method is used to clarify the meaning of legal terms “as used in several different contexts”237 and can be used to identify relevant cases and clarify ambiguous terms and legal facts. The advantage of the analytical method stems from the fact that “[t]he marriage of the comparative and analytical processes is what ensures continuity of the comparative legal scholarship; it is what allows later researchers to build on previous models and findings”.238 The application of this method relies on both primary and secondary sources. There is no consensus regarding the definition of the functional method.239 In fact, there are several functional methods,240 which can be defined as “the investigation of legal means and methods for the resolution of similar or identical social and legal problems by different legal systems”.241 Hence, the functional method views society as a living organism that gradually evolves, and therefore focuses mainly on analysing the mutual relationships between phenomena in order to identify the latent functions of legal rules.242 Instead of focusing on the formulation of law (e.g., black letter law), the functional method highlights the role of law as a component of a complex system243 and compares legal rules according to their effects. Therefore, the functional method focuses on judicial

233 Banakar (n 232) 487. 234 Reitz (n 49) 619. 235 P Westerman, ‘Open or Autonomous? The Debate on Legal Methodology as a Reflection of the Debate on Law’ in M Van Hoecke (ed), Methodologies of Legal Research: Which Kind of Method for What Kind of Discipline? (Hart Publishing, 2011) 94. 236 Pejovic (n 46) 817. 237 Nelken (n 229) 28. 238 Hamid Harasani, ‘Islamic Law as a Comparable Model in Comparative Legal Research’ (Pt Brill | Nijhoff) (2014) 3(2) Global Journal of Comparative Law 186–202, 189. 239 John J Macionis and Linda M Gerber, Sociology, Seventh Canadian Edition with MySocLab (Pearson Education Canada, 7th ed, 2010) 14; Michaels, The Functional Method of Comparative Law (n 220) 344–5. 240 According to Ralf Michaels, ‘one can distinguish at least seven different concepts of functionalism across disciplines: (1) finalism … (2) adaptionism … (3) classical (Durkheimian) functionalism … (4) instrumentalism … (5) refined functionalism … (6) epistemological functionalism … and (7) equivalence functionalism … Largely oblivious of incompatibilities, functionalist comparative law (8) uses all of these’. Michaels, The Functional Method of Comparative Law (n 220) 342. 241 William Elliott Butler and A Kh Saidov, Comparative Law (Wildy, Simmonds & Hill, 2003) 33. 242 Roscoe Pound, ‘Law in the Books and Law in Action’ (1910) 44 American Law Review, 12. 243 Jaakko Husa, ‘Functional Method in Comparative Law—Much Ado About Nothing?’ (Pt De Gruyter) (2013) 2(1) European Property Law Journal 4–21, 12.

33 decisions as the practical outcomes of law.244 The common function enables a comparison of different legal rules. Michaels argued that “legal and non-legal, even doctrinally different ones, are comparable if they are functionally equivalent, if they fulfil similar functions in different legal systems”.245 The functional method can be used for two purposes: to understand the legal rules being compared in the light of their functional relation to society,246 which is referred to as the ‘epistemological function’,247 or to determine the ‘better’ law,248 which is referred to as ‘the evaluative function’.249 The functional method can be also used to decide comparable rules or what has to be compared with what.250 The historical method focuses on understanding the historical development of the legal rules being compared.251 The historical context helps to explain contemporary law.252 To understand law, one has to understand its historical origin.253 Jaakko Husa claimed that the use of the historical method is inescapable: Nevertheless, as soon as the comparatist exceeds the narrow limits of black-letter law, historical context(s) become highly relevant. There are two places where legal history actually comes to play. First, understanding the sources is easier if there is knowledge of the legal historical context of those sources. Second, legal historical knowledge is of quintessential significance since it is virtually impossible to explain observations without knowledge of legal history. We need to look at the research process of comparative law in order to get a clearer picture concerning where to place legal historical knowledge in comparative law.254 The historical method seeks to understand and explain the factors that have contributed to the formation of the targeted legal rules.255 It focuses on the roots of the law instead of comparing laws that comprise an existing body of rules. The outcome of this method can be used to explain the differences between legal systems. The cultural method is one of the most important and controversial. There is not one cultural method but many, of which three are the most popular. The first deals with culture as a possible explanation for the variations in law; the second uses law to explain culture;

244 Michaels, The Functional Method of Comparative Law (n 220) 342. Husa, ‘Functional Method in Comparative Law—Much Ado About Nothing?’ (n 243) 12. 245 Michaels, The Functional Method of Comparative Law (n 220) 342. 246 Ibid. 247 Ibid. 248 Nelken (n 229) 27. 249 Michaels, The Functional Method of Comparative Law (n 220) 363. 250 Konrad Zweigert, ‘Methodological Problems in Comparative Law’ (Pt Israel Law Review Association) (1972) 7(4) Israel Law Review 465, 467. 251 Van Hoecke (n 171) 18. 252 Nelken (n 229) 21; Rodolfo Sacco, ‘Legal Formants: A Dynamic Approach to Comparative Law (Part 2)’ (Pt American Journal of Comparative Law) (1991) 39(2) American Journal of Comparative Law 343–401, 384. 253 Mousourakis, ‘Legal Transplants and Legal Development: A Jurisprudential and Comparative Law Approach’ (n 130) 219. 254 Husa, ‘Developing Legal System, Legal Transplants and Path Dependence: Reflections on the Rule of Law’ (n 194) 132. 255 Van Hoecke (n 171) 17.

34 and the third considers law as a culture.256 Most of the differences between these approaches stem from the goals they seek to achieve. For example, if a study aims to identify the cultural changes that occurred in a particular society within a specified period, it makes sense to deal with the law as an influencing factor. However, if the purpose of a study is to examine the factual differences between two legal systems regarding the same matter, it would be more appropriate to adopt the point of view that law is culture. Moreover, comparative legal culture does not have a specific method to be followed, and it is difficult to separate it from the historical and analytical methods.

2.2.3. The Relationships between the Claimed Methods of Comparative Legal Research

Scholars interested in explaining the comparative methodology disagree not only on how to use the comparative methods described above, but also on the roles of these methods in a comparative study. For instance, the descriptive method (the doctrinal method) has been criticised by several scholars. Salter and Mason believed that comparative studies that rely solely on the descriptive method are inadequate, and that the results of such comparisons are misleading.257 One reason for this is that the descriptive method is too formalistic in its approach258 and ignores the context of legal rules.259 The descriptive method does not consider social, political and moral factors important for legal analysis. Instead, the descriptive method considers these factors to be of marginal relevance at best.260 Therefore, the descriptive method perceives law simply as a body of rules.261 Vick claimed: In its purest form, ‘black-letter’ research aims to understand the law from no more than a thorough examination of a finite and relatively fixed universe of authoritative texts consisting of cases, statutes and other primary sources, the relative importance of which depends on the legal tradition and system within which the legal researcher operates.262 Wightman understandably argued that it is useful to a certain extent.263 To put it differently, the descriptive method would be more useful if it considered law in terms of its cultural, historical and political contexts.264 The importance of these contexts in a comparative study is attached to their ability to explain the law as a final product comprising several ingredients. The use of the cultural method side by side with the doctrinal method will offer a better understanding of the legal systems being compared, which is also true for the historical method. Although the use of the historical method is necessary to address the shortcomings of the doctrinal method, Fedtke argued that the use

256 Abigail C Saguy and Forrest Stuart, ‘Culture and Law: Beyond a Paradigm of Cause and Effect’ (Pt SAGE Publications) (2008) 619(1) The Annals of the American Academy of Political and Social Science 149–64, 149. 257 Salter and Julie Mason (n 231) 99–108. 258 Ibid, 99. 259 Roger Cotterrell, Law’s Community: Legal Theory in Sociological Perspective (Clarendon Press, 1995) 50–3. 260 Terry Hutchinson, ‘Doctrinal research, Researching the Jury’ in Dawn Watkins and and Mandy Burton (eds), Research Methods in Law (Routledge, 2nd ed, 2018) 21. 261 Cotterrell (n 255) 50–3. 262 Douglas W Vick, ‘Interdisciplinarity and the Discipline of Law’ (Pt Blackwell Publishing Ltd) (2004) 31(2) Journal of Law and Society 163–93, 178. 263 John Wightman, Contract: A Critical Commentary (Pluto Press 1996) 11. 264 Örücü, ‘Developing Comparative Law’ (n 128) 57.

35 of the former depends largely on the data gathered by the latter.265 Löhnig believed that the historical method is more effective when it is combined with the functional method because the latter can help to explain differences that are not rooted in doctrinal thinking.266 The functional method has been criticised because it does not pay much attention to the historical, cultural and political factors surrounding the law and that could affect its formation. As argued by Husa, a consideration of these factors is essential for effective comparison.267 Since a valuable comparative study must seek to understand law as it acts in real life, which can be achieved by analysing the relevant values of its society, both the analytical method and the cultural method are required to supplement the functional method.268 Moreover, there is a strong relationship between the epistemological function and the other comparative methods because it is important to identify relevant sources and data.269 Context is essential for the vast majority of comparative legal methods, particularly the analytical method, which must consider cultural context in order to understand the meaning of legal terms.270 This is especially important where the legal systems being compared use different languages. Eberle claimed that legal translation: [I]s not easy. We need to be extremely careful here. We cannot assume that an idea or word will translate perfectly from one culture to another. We must recognize the meaning of the idea or word in its own culture, explain its underlying cultural context and then translate that meaning as best we can to another legal culture, whether our own or a different, foreign culture. Translation calls upon us to explain the underlying context of the culture in which the idea or word is found. It requires understanding the multiple semiotic systems and linguistic contexts that situate ideas and then determining how to adjust and transfer over that particular worldview into that of another. If we do this well, translation can be a bridge to connect cultures.271 To understand semiotic systems and linguistic contexts, the use of the analytical method to search for functional equivalence of terms becomes crucial. The term of ‘functional equivalence’ can be defined as “a term in the target legal system designating a concept or institution, the function of which is the same as that in the source legal system”.272 Shiflett argued: Legal translators face numerous factors that influence their ability to translate certain terms. Besides the obvious linguistic side of legal translation, legal translators are faced with challenges, such as cultural

265 Jörg Fedtke, ‘The Method and Culture of Comparative Law: Essays in Honour of Marc Van Hoecke’ (2016) 4, 255–9. 266 Martin Löhnig, ‘Comparative Law and Legal History: A Few Words about Comparative Legal History’ in Maurice Adams and Dirk Heirbaut (eds), The Method and Culture of Comparative Law: Essays in Honour of Mark Van Hoecke (Hart Publishing, 1st ed, 2014) 113–20, 114. 267 Husa, ‘Developing Legal System, Legal Transplants and Path Dependence: Reflections on the Rule of Law’ (n 254) 132. 268 Van Hoecke (n 171) 16. 269 Michaels, The Functional Method of Comparative Law (n 220) 364. 270 Rene David, Major Legal Systems in the World Today: An Introduction to the Comparative Study of Law (Stevens, 3rd ed, 1985) 361. 271 Eberle (n 219) 459. 272 Marcela Müllerová Shiflett, ‘Functional Equivalence and its Role in Legal Translation’ English Matters III, 29.

36 and social norms and traditions within legal systems of the country where the text originated, as well as the country for which the translation is prepared.273 There is a fundamental relationship between the analytical and cultural methods. To determine the comparable rules, it is crucial to use the cultural method.274 In addition, conceptual analysis of law “lies at the heart of ‘black letter law’ and is the basis upon which legal scholarship is built”.275 Therefore, there is also a strong relationship between the doctrinal method and the analytical method. Two main conclusions can be reached from the above discussion. First, none of the methods described can solely answer all comparative law questions because each considers the problem from a different angle and serves a particular purpose. Conversely, it is almost impossible to separate these methods from each other. Some scholars have argued that any attempt to select one or more of these methods should be based on the aims and the research questions of the project.276 For example, Hage contended that “the comparative law data should be complemented by one or more standards [methods] at the hand of which the evaluation takes place”.277 Therefore, it is up to researchers to decide the methods that are most appropriate to their studies according to the research questions and their purposes.278 Although jurists have suggested the aforementioned methods and more,279 there are no clear guidelines regarding how to apply any of these methods. In light of such complexity, one might ask whether there even is a comparative methodology. Perhaps that is why Legrand once asked, “whoever said that the subject of comparative legal studies is easy?”280 Regardless of this debate, in this study, the researcher posits that there is a comparative methodology that offers significant benefits for legal theory, especially in the field of PIL where comparative methodology has played a remarkable role in its development.281 The vast majority of the universal principles and techniques of PIL such as renvoi, party autonomy, the ‘proper law’ and characterisation have proliferated by dint of comparative methodology.282 These principles were developed in one jurisdiction before they were adopted in other jurisdictions.283 Different legal systems have faced similar conflict of

273 Ibid, 29. 274 Reitz (n 49) 617. 275 Hutchinson (n 260) 16. 276 Imre Zajtay, ‘Aims and Methods of Comparative Law’ (Pt Institute of Foreign and Comparative Law, University of South Africa) (1974) 7(3) The Comparative and International Law Journal of Southern Africa 321–30, 322; Hage (n 173) 43. 277 Hage (n 173) 47. 278 Samuel, ‘Compartive Law and its Methodology’ (n 75) 144. 279 For example, Structuralism, which is defined as ‘a method of interpretation and analysis of aspects of human cognition, behaviour, culture and experience, which focuses on relationships of contrast between elements in a conceptual system’. Oxford Dictionary of English (Oxford University Press, 3rd ed, 2010) ‘structuralism’. 280 The question was posed by Professor Legrand in his inaugural lecture delivered at Tilburg University on 20 October 1995. Cited in Samuel, ‘Compartive Law and its Methodology’ (n 75) 143. 281 Emira Kazazi and Ervis Çela, ‘The Unification of Private International Law’ [23] (2015) 1(2) Academic Journal of Business, Administration, Law and Social Sciences, 25. 282 Ibid, 25. 283 Ralf Michaels, Comparative Law and Private International Law (Elgar Encyclopedia of Private International Law) 3.

37 laws issues, so it was reasonable that lawmakers who sought to regulate a conflict of laws issue would explore how other legal systems have solved problems and then copied appropriate solutions.284 When lawmakers consider how other legal systems dealt with legal issues, they often adopt the solution that fits the legal logic of their societies by employing a comparative methodology. Most defects of the imported solution appear during parliamentary discussions that are evaluating effectiveness of the proposed solution and its alignment with the values of the society. Therefore, a well-organised comparative methodology can offer a sound framework for transplanting a legal rule from one country to another. At the international level, the importance of the comparative methodology in PIL is attributed to a global desire to formulate general conflict rules capable of being applied by all legal systems as international standards.285 The purpose of international standards is to make international business easier by avoiding the risky consequences of the application of contradictory substantive laws.286 Zweigert and Kötz argued that “unified laws avoid the hazard of applying PIL and foreign substantive law”; Thus, unified law reduces the legal risks associated with international business, thereby giving assurance to the businessman who undertakes the venture and to the judge who has to resolve the disputes to which it gives rise.287 Since conflict rules are part of the domestic law of each country, such unification or harmonisation will never be possible without the use of the comparative methodology.288 This is a self-evident fact. The problem, therefore, is not whether there is a comparative methodology or whether it is important. Rather, what does the comparative methodology mean and how should it be used. The following deals with that.

2.3. The Researcher’s Understanding of Comparative Methodology

In this section, the notion of comparative methodology is redefined, and a protocol is proposed that can be used for law reform. The reasons for the complexity of comparative methodology are explained, and a new understanding is established that can simplify its application. One of the main reasons for the complexity of comparative methodology is that there is a degree of uncertainty concerning the terminology upon which its understanding depends. Five key terms are important in this regard: methodology, method, approach, factor and observation. In this study, these terms are defined as follows:  Method: a set of standards by means of which the relevance of arguments can be evaluated or “the way in which a particular investigation is carried out”.289  Methodology: “a group of chosen methods”.290  Approach: a way of dealing with something.  Factor: a circumstance, fact or influence that contributes to a result or outcome.  Observation: the action of carefully observing something to gain information.

284 Cowan (n 187) 483; Zajtay (n 276) 324; Palmer (n 173) 276. 285 Zeller (n 62) 233. 286 Mark Elliott et al., The Unity of Public Law: Doctrinal, Theoretical and Comparative Perspectives (Hart, 2018) 233. 287 Konrad Zweigert and Hein Kötz, An Introduction to Comparative Law (Oxford University Press, 3rd ed, 1998) 25. 288 Eberle (n 219). 289 Hage (n 173) 3. 290 Dawn Watkins and Mandy Burton, Research Methods in Law (Routledge, 2013) 2. 38 One’s comprehension of these terms plays a vital role in determining one’s understanding of comparative methodology. This is not to say that each writer has the right to redefine the above terms; however, without an accurate understanding of these terms, one cannot effectively engage in a debate about comparative methodology. Thus, these definitions will be applied to evaluate the accuracy of other writers.

2.3.1. Why the Comparative Methodology is Too Complex to Apply

Several factors have played a role in complicating the application of comparative methodology. First, much of the problem has been related to conceptual misuse. For instance, the term, ‘comparative law’, has played an important role in this regard as it has been given different meanings by two different schools of thought. The first school, which represents the vast majority of scholars, uses the term ‘comparative law’ in the sense of ‘comparative methodology’. For example, Kahn-Freund defined comparative law as “the common name for a variety of methods of looking at law”.291 Another writer defined it as “the act of comparing the law of one country to that of another”.292 Ralf Michaels defined it as “the comparison of various laws”.293 Samuel argued that comparative law is used “to put together (cum) several objects or several elements of one or more objects in order to examine the degrees of similarity (par)”.294 The problem with these definitions is that they define the comparative methodology rather than the comparative law, which is, according to the second school of thought adopted by Watson and Legrand, a discipline in its own right that studies the relationships between legal systems. To avoid the confusion caused by using the term ‘comparative law’, it would be more realistic to use the concept of ‘comparative methodology’. The minority, who still believe that comparative law is an independent discipline, first have to prove that it is a discipline.295 Second, the technical terms upon which the methodological discussions have been based were left undefined. Although lawyers are supposed to be accurate when it comes to language because they know that even a single word can change the whole meaning, they did not pay enough attention to language when discussing comparative methodology. For example, Watson described legal transplant as a ‘method’, while in the same article he used the term ‘approach’296 and in another article he described it as a ‘factor’.297 Evidently, these three terms do not mean the same thing. Therefore, it is unsurprising that one cannot understand Watson’s work. Method is defined as the ways by which a particular investigation is carried out, which means that a method should have clear procedures that everyone should follow. Although

291 O Kahn-Freund, ‘Comparative Law as an Academic Subject’ (1966) 82 Law Quarterly Review 40, 41. In the same meaning: Maurice Adams, ‘Doing What Doesn’t Come Naturally. On the Distinctiveness of Comparative Law’ in Mark Van Hoecke (ed), Methodologies of Legal Research: Which Kind of Method for What Kind of Discipline? (Bloomsbury Publishing Plc, 2011) 229, 236. 292 Eberle (n 219) 452. 293 Ralf Michaels, ‘Comparative Law’ in Hopt Basedow, Zimmermann (ed), Oxford Handbook of European Private Law (Oxford University Press, 2011) 1. 294 Samuel, ‘Compartive Law and its Methodology’ (n 75) 124. 295 “Comparative Law … is not a distinct body of law”. Michaels, ‘Comparative Law’ (n293) 1; “In the 1950s, 1960s and 1970s of the 20th century the overwhelming majority of comparatists were inclined to doubt the existence of the science of comparative law, claiming that … comparative law only consisted of a variety of methods of investigation of jurisprudence”. Djalil I. Kiekbaev, ‘Comparative Law: Method, Science or Educational Discipline?’ (Pt Electronic Journal of Comparative Law) 7(2) 1. 296 Watson, Legal Transplants: An Approach to Comparative Law (n 140). 297 Watson, ‘Legal Transplants and European Private Law’ (n 55) 10. 39 extensive research has been carried out on comparative methodology, no single study to date has adequately defined the term ‘method’ and applied this definition to assess the proposed methods. The term ‘method’ has a specific meaning, and must be applied accordingly. When one refers to the ‘cultural method’, one must provide a particular set of procedures that can be followed by anyone intending to apply the cultural method. However, it is not only that there are no such procedures but also that there is no agreement on the definition of the cultural method. There are no procedures attached to any of these methods (see Section 2.2.2). The main reason for this is that these supposed methods cannot be considered as such. So, what are they? Culture and history are two factors that comparatists should consider if they are to understand and compare legal rules. Culture is used to understand the relationship between law and the society in which it functions or to understand why law is as it is. Accordingly, it is not a method but a factor, which the comparatists must not ignore. The same can be said about the history or any other factors such as politics, religion and the economy. For example, Löhnig argued: [L]egal history itself has no genuine comparative method. Instead, a legal historian may either use the toolkit of comparative law and practice ‘historical comparison of laws’ or help himself to the instruments of comparative law and practice ‘comparative legal history’... Historical comparison of laws is a doctrinally centred method that focuses on the intellectual history of legal concepts, which first describes several legal systems and then compares with each other. The objects of comparison are, therefore, different doctrinal concepts and developments from different period and jurisdictions. The findings can be used to evaluate and if necessary, amend one’s own doctrinal ‘equipment’.298 Functionalism is neither a method nor a factor,299 but an observation.300 To illustrate, one of the things that comparatists observed from dealing with different legal systems is that it might happen that different legal systems reach the same result through the adoption of different approaches. Reitz claimed that “[t]he comparative method consists in focusing careful attention on the similarities and differences among the legal systems being compared, but in assessing the significance of differences the comparatist needs to take account of the possibility of functional equivalence”.301 Another observation that comparatists should consider is that legal terms do not always have the same meaning. This does not mean that each observation requires the adoption of a new methodology, but that comparatists should consider these observations prior to reaching any conclusion. Further, many of the published articles in this area are not adequate in terms of quality. In 2007, Samuel argued that there has been “an intellectual gap” in comparative law.302 Additionally, law students generally do not study the methodological aspects of their

298 Löhnig (n 266) 113. 299 ‘One reason for the methodological mishmash in comparative law is that the founders of the functional method were more pragmatically than methodologically interested’. Michaels, The Functional Method of Comparative Law (n 220). 300 “[D]espite much discussion by others, ‘as a theory [the functional method] hardly exists’”. James Gordley, 'The functional method' in Pier Giuseppe Monateri (ed), Methods of Comparative Law (Edward Elgar Publishing Limited, 2012), 107. Citing Michaels, Ralf, ‘The Functional Method of Comparative Law’. Eds. Konrad Zimmermann and Mathias Reimann, The Oxford Handbook of Comparative Law. Oxford: Oxford University Press, 2006: 339. 301 Reitz (n 49) 620. 302 Samuel, ‘Taking methods seriously Part 1’ (n 74) 94.

40 discipline.303 Consequently, the scholars who have attempted to explain the notion of comparative methodology, have not received good training pertaining to the topic. Reitz claimed: Most of us who teach and write in the field of comparative law, however, were not taught formally how to do comparative law. Rather, we have for the most part worked out our own methods based on an amalgam of the scholarship we thought effective for our particular purposes at the time. Moreover, we keep adjusting our approach for every new task. Some would see this self-taught experimental approach as a strength of the field.304 Reitz also argued: What do we teachers and scholars of comparative law tell our students when they ask for guidance on how to write a comparative law seminar paper, note, or comment? How do we respond to colleagues who say they are interested in using the ‘comparative law method’ but want to know what it is? When we are asked to evaluate comparative law scholarship, what standards do we apply? Like most fields of legal scholarship, we do not have an official canon of great works for writing in the field to emulate.305 Further, Reitz asked: “Is there even really a ‘comparative law method?’ If there is, does it need an overhaul in light of the persistent criticism that comparative law as a field of intellectual endeavour has failed to live up to its promise?”306 The interesting thing to note from Reitz’s comments is that it is an acknowledgement from a comparative law scholar that he has been confused about the application of comparative methodology. What Reitz described as a ‘self-taught experimental approach’, Samuel described as “amateurism”.307 There is also disagreement regarding where a comparative study should start. Inspired by Zweigert and Kötz,308 Samuel argued that “[a]n interdisciplinary approach to methodology is essential if amateurism is to be avoided”.309 Samuel’s opinion encapsulates three main points: law schools do not take methodology seriously; the vast majority of comparatists are not professionals;310 and, the solution to the problem of the comparative methodology lies in an interdisciplinary approach. Although Samuel understood much of the problem, he could not solve it. Samuel’s ‘solution’, in fact, produced another problem. Galligan claimed that comparatists who

303 Ibid, 95. 304 Reitz (n 49) 617–8. 305 Ibid, 617. 306 Ibid. 307 Samuel, ‘Taking Methods Seriously Part 1’ (n 74) 94. 308 “Law is ‘social engineering’ and legal science is a social science. Comparative lawyers recognize this: it is, indeed, the intellectual and methodological starting point of their discipline”. Quoted in Michaels, The Functional Method of Comparative Law (n 220) 351. 309 Samuel, ‘Taking Methods Seriously Part 1’ (n 74) 94. 310 Ralf Michaels said a similar thing while he was discussing the functional method: “researchers frequently place naïve faith in both the mono-functionality and effectiveness of legal institutions. Second, they are often insufficiently aware of the non-legal elements of success or failure of societies, including cultural differences”. Michaels, The Functional Method of Comparative Law (n 220) 351.

41 study law from a social scientific perspective can easily lose sight of law as law.311 Moreover, it can be risky for lawyers to step into the social science arena in order to understand law because it is a discipline with which lawyers are unfamiliar. Therefore, advising comparatists to use social science to understand something that they find difficult to understand within their own discipline, as suggested by Samuel,312 is similar to advising a student who is attempting to learn English to study French. Finally, there has been disagreement on whether there is one comparative method or several. Reitz believed that “the comparative method consists in focusing careful attention on the similarities and differences among the legal systems being compared”.313 Palmer argued: As an abstract matter, comparative law has but one method—to compare and contrast norms, institutions, cultures, attitudes, methodologies and even entire legal systems. But in practice the word is applied more concretely. Method is now identified by the ‘techniques’ by which comparisons are carried out. These techniques have thereby acquired the status of separate methods: thus we have historical comparisons, functional comparisons, evolutionary comparisons, structural comparisons, thematic comparisons, empirical and statistical comparisons and all of these can be carried out from a micro or macro point of view.314 Hage claimed that “[c]omparative law is a discipline within legal research that has gained considerable popularity during the last decades”.315 The key part of this sentence is ‘within legal research’, which indicates that comparative methodology should be studied as a part of legal research methods. The question is what other method this discipline (legal research methods) contains. There are two important methods: the descriptive method (the doctrinal) and the analytical method. The comparative method should be used side by side with these other two methods because every comparative study requires a description of the legal rules being compared and an in-depth analysis of their content (see Figure 2).

Describing the legal Analysing the legal rules Comparing the targeted rules being compared being compared rules

Figure 2. This Researcher’s Understanding of the Comparative Methodology A comparative study leads to the acquisition of knowledge from putting together two analytical studies of two different legal systems for a certain purpose. Part of the reason for this, as explained by Chloros, is that “each legal system and each part of each system is but a facet of law as a whole”.316 Figure 3 shows the factors that may be relevant to understanding a legal rule:

311 Banakar (n 227) 488. 312 Samuel, ‘Taking Methods Seriously Part 1’ (n 74) 94. 313 Reitz (n 49) 620. 314 Palmer (n 173) 2. 315 Hage (n 173) 1. 316 Chloros (n 182) 851. Citing FH Lawson, Selected Essays (New York: North Holland Publishing Co, 1977) 16. 42 Culture Constituti- onal Religion Issues

Legal Rule National History Interest

Social Political Values Context

Figure 3. Factors relevant to understanding a legal rule317 In light of the above, this researcher contends that the comparative method is one part of the legal research method, which also requires the application of the doctrinal (descriptive) method and the analytical method. The latter focuses on analysing the relationship between law and society, where different factors may be relevant such as culture, religion and history. The factors required to understand one legal system may differ from those required to understand another legal system. Most of the differences between comparative studies are related to the factors selected by researchers. However, the act of comparison is usually simple and similar across comparative studies, as a means of determining the similarities and differences between the compared legal systems. However, explaining these similarities or differences is part of the analytical, not the comparative, process. However, what distinguishes one comparative study from another are the factors relevant to understanding the legal rules being compared. The determination of these factors depends on the purpose of the study and the nature of the legal systems being compared. What Palmer called “techniques”, this researcher refers to as ‘protocols’. Comparative studies do not differ in terms of the methods they apply, but in the protocols they follow. The following section explains the protocol followed for this thesis.

2.3.2. The Protocol of Transplanting a Legal Rule from One Country to Another

There are three main stages in the successful transplantation of a legal rule from one country to another: pre-transplant, transplant and post-transplant. During the pre- transplant stage, several procedures must be followed.318 First, one must accurately determine the problem of the receiving country. Second, one needs to exclude the nationally-made solution or justify the use of a foreign solution. Part of the reason for this is that the national solution is usually preferable. Hence, one might argue that the nature of the problem with which the targeted rule deals requires an internationally-accepted

317 “Various political, social, economic, legal, and historical circumstances have led to the crystallization of different rules on conflict of laws – on spatial delimitation of laws – in each country of the world”. Sohn (n 23) 979-80. 318 “Comparison contains several phases, so the study of comparative law has to be conceived of as a research process. Comparative study is a creative chain of research processes where progressive understanding of the research objects is typical”. Jaakko Husa, 'Research Designs of Comparative Law Methodology or Heuristics?' in Maurice Adams and Dirk Heirbaut (eds), The Method and Culture of Comparative Law: Essays in Honour of Mark Van Hoecke (Bloomsbury Publishing Plc, 2015) 54.

43 solution.319 Finally, one needs to select a donor legal system. Several factors play a role in this selection, including the spoken language, size of the country, cultural background, historical background and the number of relevant international treaties to which the country is a party. The donor legal system might be selected because other countries have been excluded for any number of reasons. Additionally, one must consider whether the receiving country already has rules in place. It is particularly important to determine whether the national rules are dysfunctional, as this is key to convincing the receiving legal system to replace them. Each legal rule has a purpose and a function. Therefore, there must be a good reason for a legal system to abandon or amend its national rules. The issue is how to determine that the national rules are dysfunctional. One method is to consider the goal(s) that a particular rule is supposed to achieve320 and to evaluate the rule in light of its goal(s).321 Conversely, it is necessary to determine whether the receiving legal system is able to abandon the national rules. This can be achieved by analysing the relationships between specific rules and the legal system. To this end, factors such as culture, religion, political values and history should be considered.322 The transplant stage also involves several procedures. First, one needs to ensure that the foreign rule is designed to deal with the precise problem faced by the receiving country. One must determine the comparable rules. Factors that should be considered when determining the comparable rules are the language of the compared legal systems and the scope of the application of the targeted rules. When the legal systems being compared use different languages, the comparatist faces the challenge of translation. To compare the scope of the targeted rules, one must consider the national interpretation of the key terms upon which this scope depends, the surrounding national legal rules that may affect the scope of the targeted rules, and the relevant international conventions to which the countries are a party. During this stage, one thing is particularly unreliable: the conclusions reached by other writers if such conclusions affect the outcomes of one’s research. Second, one needs to examine the effectiveness of the foreign rule within its own legal system. In other terms, the imported rule must be able to address the shortcomings of the national rule. To examine this, two steps are particularly important. First, one must start by analysing the current national solution applied by the receiving country in order to identify its shortcomings. This is followed by examining the ability of the imported rule to help the receiving country overcoming these shortcomings. As put by Gordley, “If one knows the purposes or functions of a rule, one can consider how well the rule serves those purposes … By identifying the purposes of a rule, however, it does provide a standard by which the merits of rules can be evaluated”.323

319 “[T]hroughout the 20th century and often advocated principle for formulating private international law rules is that private international law rules should be drafted in a way which is internationally acceptable”. Katharina Boele-Woelki, Carla Joustra and Gert Steenhoff, 'Dutch private international law at the end of the 20th century: pluralism of methods' (1998) 205. 320 For example, the rule must be able to deal with the great diversity of contractual obligations, eliminate the impact of the national law on international contracts and respect the intention of the contracting parties. 321 For example, the rule doubles the impact of the national law on international contract or does not pay enough attention to the intention of the contracting parties. 322 Husa, 'Research Designs of Comparative Law Methodology or Heuristics?’ (n 318) 56. 323 Gordley (n 300) 107. 44 Third, one needs to examine the alignment between the imported rule and the fundamental values of the receiving country. To this end, one must commence by analysing the legal logic upon which law in the receiving country is based and the foreign rule to understand its applications and its shortcomings, including any criticisms directed against it. In this way, one can ascertain whether a foreign rule can be integrated with the law in the receiving country, and whether the receiving country can handle any criticisms directed against the foreign rule. One of the main things that should be considered when transplanting a legal rule from one jurisdiction to another is that the purpose of analysing the law in both jurisdictions is not the same. Figure 4 summarises the main goals of analysing legal systems and demonstrates that in a legal transplant study, the purposes of analysing the targeted legal systems differ. The relevant context and the space given to each analysis are not the same. Therefore, the relevant contexts for each law differ. A legal transplant study is not a symmetric comparative study. Analysing the law of the receiving country Analysing the foreign law • To determine the exact problem with • To ensure that the foreign rule is which the rules in question deal; designed to deal with the exact • To determine the shortcomings of the problem with which the rules in the national solution; receiving country deal; • To determine cultural and political • To understand the imported rules acceptability of the receiving legal thoroughly, its historical development, system to abandon the current rules; strengths and weakness, criticisms • To determine political objectives of directed against and the legal logic the rules intended to be replaced; upon which it is based; • To determine the relationship between • To examine the ability of the imported law and the society; rule in its own legal system to • To determine the cultural concerns overcome the challenges faced by the that may challenge the reception of the rules of the receiving country. proposed solution; • To determine the objective norms by which the effectiveness of the proposed solution must be evaluated. Figure 4. The purposes of analysing legal rules in a legal transplant study The final stage in the transplantation of a legal rule from one country to another is the post-transplant stage, which focuses mainly on determining the goals that the national law of the receiving country achieved indirectly by adopting the current rules.324 Determining these goals can help to determine the procedures that the receiving country may need to put in place in order to effectively adopt the suggested rule, and reduces the cultural and political resistance of the receiving country to the adoption of the foreign solution. Hence, the advantage of applying comparative methodology in a legal transplant study is that, in one way or another, it provides knowledge about ‘law as rules’, ‘law in context’ and ‘law as culture’, which enable comparatists to have comprehensive and in-depth knowledge of the legal rules being dealt with, and their interactions in society.325 Moreover, the comparative methodology can provide a general understanding of the factors that may affect the success of a legal transplant operation, which is essential when seeking ways to address them.326 Such knowledge is essential if necessary adjustments

324 Gordley (n 300) 107. 325 Örücü, ‘Developing Comparative Law’ (n 264) 45. 326 Mousourakis, ‘Legal Transplants and Legal Development: A Jurisprudential and Comparative Law Approach’ (n 130) 219.

45 are to be made in order to allow foreign patterns of law or legal solutions to work in a national setting.327

2.3.3. Research Structure

Two factors play a vital role in determining the structure of a comparative study: the nature of the targeted rules and the nature of the donor and receiver legal systems. In this study, the chosen legal systems have almost nothing in common. Australia is a common law country with a secular Western cultural background, whereas Jordan is an Arabic country with an Islamic cultural background. The overall structure of the study takes the form of seven chapters, including the introductory chapter, the methodology chapter and the conclusion. The process of transplanting the proper law doctrine consists of four themed stages, each of which is addressed in a separate chapter. Stage 1 (see Chapter 3) determines the ability of the Jordanian legal system to abandon its current conflict rules. This stage is the most important because, if Jordan is not ready to abandon the current conflict rules, there is little point in suggesting other solutions. The cultural resistance of the Jordanian legal system might not be directed against acceptance of the proper law doctrine, but rather against abandonment of the existing rules. Although the ‘mirror law’328 theory has been heavily criticised,329 the potential relationship between the targeted rules in Jordan and the culture cannot be ignored because, if law is a culture,330 “culture is not simply a set of customs we can choose to put on or take off like clothing; it is woven into the fabric of our being”.331 There is a theoretical reason for taking this as a real concern in this thesis. It is evident that in the Jordanian legal system, there is a fundamental relationship between the law and the Islamic religion. Three facts support this observation. First, at the abstract level, the Jordanian legal system uses cultural terms that suggest that Jordanian law is an expression of Islam or is simply an Islamic law. For example, Article 2 of the Jordanian Constitution expressly identifies Islam as the religion of country: “Islam is the religion of the State and Arabic is its official language”.332 Second, the JCC—the law to which the conflict rules in question belong—has been described as an Islamic law.333 This is partly because its historical source was the Majalla,334 which was the first successful attempt to codify part of the Islamic

327 Nelken (n 229) 33. 328 Law reflects the cultural assumptions of society in which it functions. For more about this theory see e.g., Tamanaha (n 86) 52. 329 Alan Watson, ‘Law Out of Context’ (2000) 4(2) Edinburgh Law Review 147–67, 147; Mark A Edwards, ‘The Alignment of Law and Norms: Of Mirrors, Bulwarks and Pressure Valves.(Symposium: Layers of Law and Social Order)’ (Pt Florida International University) (2014) 10(1) FIU Law Review 19–51, 19. 330 Naomi Mezey, ‘Law as culture’ (Pt Yale University, School of Law) (2001) 13(1) Yale Journal of Law & the Humanities 35–67, 36. 331 Paul Schiff Berma, ‘The Enduring Connections Between Law and Culture: Reviewing Lawrence Rosen, Law as Culture and Oscar Chase, Law, Culture and Ritual ‘ (2009) 57 GW Law Faculty Publication & Other Works, 102. 332 The Constitution of the Hashemite Kingdom of Jordan 1952 (Jordan) (‘The Jordanian Constitution’) art 2. 333 Hayajneh (n 66) 46. 334 Abdelnaser Zeyad Hayajneh, ‘Theoretical Framework for Judicial Discretion within Qatari and Jordanian Civil Laws: Indications and Implications’ (2015) 15(2) British Journal of Humanities and Social Sciences, 71.

46 jurisprudence during the Ottoman Empire.335 Mainly, however, it is because Article 2 of the JCC explicitly provides that the sources of legislation are Islamic jurisprudence and the principles of shariah.336 Therefore, whenever a court faces an issue that is not regulated by legislation, it is obligated to explore these two sources to resolve the dispute.337 Third, Article 3 of the JCC provides that the principles of Islamic jurisprudence shall be relied upon to understand and interpret the rules of the legislation.338 By directing the court to rely on the principles of Islamic jurisprudence to interpret its rules, Article 3 makes it clear that the JCC is Islamic, not only in its source but also in its application. Hence, it is reasonable to ask whether there is any relationship between the Jordanian conflict rules in question and the Islamic religion. To understand the importance of answering this question, one first needs to understand the position of religion in a Muslim society. The term ‘Islam’ is derived from the Arabic root ‘Salema’, which means peace, submission and obedience.339 In a religious sense, Islam means submission to the will of God by following His commands.340 Islam is based on “eschatological connotations”,341 which divide one’s life into two parts: the first life and the hereafter.342 The first life—from birth to death—is a test that cannot be successfully passed without following God’s rules and the religion.343 In general, Islam “is seen as the expression of God’s command for Muslims”344 or simply as God-given law.345 Islam determines its position in society and protects its position in a way that makes competition impossible. If Islam is considered to be a ‘country’ and ‘being a Muslim’ as a nationality, it is not the person who decides that they are Muslim; rather, it is Islam who decides who is Muslim. No one can claim that they are Australian if the Australian law does not consider them as such; similarly, no one can claim to be a Muslim if Islam does not consider them as such. The norm here is simple: everyone who believes in Allah and the Prophet Mohammad is a Muslim. At the same time, if a Muslim rejects the provisions of Islam regarding an issue, they are no longer Muslim.346 Wherever the culture—which might differ from one Muslim society to another347—contradicts the teachings of Islam,

335 Anis Al-Qasem, ‘The Injurious Acts Under the Jordanian Civil Code’ (Pt BRILL) (1989) 4(3) Arab Law Quarterly 183–98, 183. 336 The Jordanian Civil Code No 43 (n 37) art 2. 337 Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (n 66) 46. 338 The Jordanian Civil Code No 43 (n 37) art 3. 339 L Gardet, ‘Islām i. Definition and Theories of Meaning’ in E van Donzel, B Lewis and Ch Pellat (eds), Encyclopedia of Islam (Brill Academic Pub, 1978) vol IV, 171. 340 Javed Jamil, Islam Means Peace (Mission Publications, 1st ed, 2005) 12. 341 Hideyuki Shimizu, Philosophy Of The Islamic Law Of Contract: A Comparative Study Of Contractual Justice (The Institute Of Middle Eastern Studies: International University Of Japan, 1989) 20. 342 Harasani (n 345) 186. 343 The Quran, tr Abdullah Yusuf Ali (Wordsworth Editions Limited, 2000) Ch. 67:2. 344 Ahmed El Shamsy and Noel James Coulson, ‘Sharīʿah’ . 345 Onder Bakircioglu, ‘The Principal Sources of Islamic Law’ in Tallyn Gray (ed), Islam and International Criminal Law and Justice (Torkel Opsahl Academic EPublisher, 2018) 15. 346 “But no, by the Lord, they can have no (real) Faith, until they make thee judge in all disputes between them and find in their souls no resistance against Thy decisions, but accept them with the fullest conviction”. The Quran (n 343) Ch. 4:65. 347 Kemal Ataman, ‘Religion, Culture and the Shaping of Religious Attitudes: The Case of Islam’ (Pt Routledge) (2007) 18(4) Islam and Christian–Muslim Relations 495–508, 498.

47 the culture is supposed to give way to religion.348 From an Islamic point of view, religion cannot be wrong.349 Therefore, whatever is accepted by Islam must be culturally acceptable in Muslim societies, including Jordan.350 Given that Islam regulates every aspect of one’s life, it is the norm by which a Muslim distinguishes between right and wrong, what is accepted and what is not.351 Islam is above culture, and Muslim people must dedicate their lives entirely to religion by means of thought and deed. 352 In this sense, Islam is not a religion that simply regulates the spiritual relationship between individuals and God. It is also a social and legal system, which covers every aspect of one’s life, including personal relationships, society and the State.353 Zweigert and Kötz understood from this that the law in Islam “was given to man once and for all” and that “society must adapt itself to the law rather than generate laws of its own as a response to the constantly changing stimulus of the problems of life”.354 According to this understanding, there is no room in Islam for human-made law.355 However, this is not entirely true (see Chapter 6). Without needing to explain all the tenets of Islam, it is enough to state that in some areas, society does not have room to change the law, while in other areas, the law is changeable. It depends on the legal issue in question. In light of the above, Stage 1 (see Chapter 3) focuses mainly on analysing the relationship between the targeted conflict rules in Jordan and Islam, and examining the religiosity of the Jordanian legal system in general. The latter is necessary to determine the factors that make a solution preferable from a national perspective. Since conflict rules have always been transplantable from one legal system to another— as put by Kazazi and Çela, “[PIL] is the theatre of a great immigration of ideas”356—Stage 1 (see Chapter 3) commences by tracing the historical development of the targeted rules. It then employs the explanatory memorandum of the JCC (the explanatory memorandum) to understand the relationship between the targeted rules and the cultural and political values of Jordanian society. Stage 1 seeks to answer two questions: what is the

348 “And when it is said to them, ‘Follow what God has revealed’, they say, ‘We will follow what we found our ancestors following’. Even if their ancestors understood nothing and were not guided?”. The Quran (n 343) Ch. 2:170. 349 “Today I have perfected your religion for you and have completed My favor upon you and have approved Islam as a religion for you. But whoever is compelled by hunger, with no intent of wrongdoing—God is Forgiving and Merciful”. Ibid, Ch. 5:3. “The notion of Islamic public policy is based on ‘respect to the spirit of sharia and its sources’”. Mutasim Ahmad Alqudah, 'The Impact of Sharia on the Acceptance of International Commercial Arbitration in The Countries of the Gulf Cooperation Council' (2017) 20 Journal of Legal, Ethical and Regulatory Issues 1, 11. 350 “But no, by your Lord, they will not believe until they call you to arbitrate in their disputes and then find within themselves no resentment regarding your decisions and submit themselves completely”. Ibid, Ch. 4:65. 351 Bakircioglu (n 345) 14. 352 Ibid, 15. 353 Yilmaz Selman, ‘Cultural Muslims: Background Forces and Factors Influencing Everyday Religiosity of Muslim People’ (Pt Karabuk University) (2014) 3(3) Tarih Kültür ve Sanat Araştırmaları Dergisi 1–19, 2. 354 Zweigert and Kötz (n 287) 373–4. 355 “In Common Law, judges do not simply apply the available rules … but also create new rules on the basis of the existing rules to ensure a resolution of the case before them”. Frederick Schauer, ‘Is the Common Law Law?’ (Pt California Law Review, Inc) (1989) 77(2) California Law Review 455–71, 455. 356 Kazazi and Çela (n 281) 25.

48 relationship between the religion and the conflict rules regarding contracts in Jordan? What is the relationship between Islam and the legal ideology of the Jordanian legal system in general? The aim of Stage 1 is to determine whether the Jordanian legal system is culturally ready to abandon its current rules. In Stage 2 (see Chapter 4) the focus is on determining the comparability of the Australian and the Jordanian conflict rules regarding contracts. This is to ascertain whether the conflict of laws problem with which the Australian rule deals is similar to the conflict of laws problem which the targeted Jordanian conflict rules address. Legal transplant is usually applied to enable the receiving country to address a national legislative need or to fix a defect in the existing legislation. Therefore, it is elementary that the imported legal rule must be designed to deal with the exact problem that requires a solution in the receiving country. One of the main observations that jurists have highlighted after comparing different legal systems is that these sometimes differ in their solution to a given problem and in their understanding of the problem. A typical example of this is a ‘donation’, which in some legal systems is classified as a ‘contract’, while in other legal systems it is not.357 The solution adopted by a legal system may reflect a different understanding of the problem. Therefore, when developing a legal system by using a foreign model, one must ensure that the imported rule speaks directly to the problem that requires a solution in the receiving country. In light of the fact that legal terms are particularly unreliable when comparing the rules of two legal systems, determining the comparability of the targeted rules in Australia and Jordan is a challenge. Jhering, while defending the use of legal transplants for the purpose of law reform, claimed that “only a fool would refuse a good medicine just because it did not grow in his own back garden”.358 Although the researcher agrees with Jhering, he wants to determine whether this ‘good medicine’ is suitable for the patient. When treating a patient, the doctor must first diagnose the disease and then prescribe a suitable medicine. For example, to treat diabetes, a doctor chooses the drug that is designed to treat blood sugar. Medicines designed to treat other conditions such as hypertension will not only be ineffectual for the treatment of diabetes, but may also be harmful. To achieve the desired treatment outcomes, the doctor must ensure that the remedy is appropriate for the disease. Determining a suitable medicine for diabetes may not be as complicated as solving legal issues by using legal transplant because ‘diabetes’ has the same meaning worldwide. Therefore, when choosing an effective treatment for this disease, the doctor needs only to compare the published statistics regarding the chosen drug, regardless of its country of origin. When it comes to legal theory, the matter is not as simple because legal terminology might not mean the same thing everywhere. Again, using the example above, if each country gave diseases whatever labels they wanted such as calling diabetes ‘high blood pressure’, the choice of foreign ‘good medicine’ in this case based on terminology would be an improper decision. Hence, in order to overcome this obstacle, doctors would have to give up part of their knowledge of the meanings of medical terms and to compare the symptoms of the disease for which the foreign treatment is designed with the symptoms of the disease being treated. This would be a complex and delicate process because the

357Veronique Allarousse, ‘A Comparative Approach to the Conflict of Characterization in Private International Law’ (Pt Case Western Reserve University School of Law) (1991) 23(3) Case Western Reserve Journal of International Law 479–516, 479. 358 Quoted in Zweigert and Kötz (n 287) 16.

49 doctor cannot rely on the terminology, which is challenging for the brain because it needs to operate smoothly using several reference points. In a legal transplantation study, reliance on legal terms could have undesirable outcomes. To avoid this methodological problem, scholars have agreed that comparatists must look beyond legal terms to the facts attached to them.359 For example, Zweigert argued: To find the rules of a foreign legal order which are functionally equivalent to rules of one’s own law … I wish to stress one point … the functional counterpart in a foreign legal system of a rule of one’s own law will not be found in the legal rules of that system, but rather in certain meta- or extra-legal phenomena which we will only get to know by research into the facts of law, as we may aptly call them.360 Comparative lawyers should ask, “by what means a legal system protects a party from entering into a transaction without due deliberation or from being bound by a contract which was not really seriously intended to be a contract?”361 Comparative lawyers should not ask “what forms does foreign law prescribe for a valid sales contract?”362 Rabel explained that the main reason for this is that the functions of legal rules, in contrast to the legal terms, are international and valid for comparison.363 Valcke and Grellette claimed: [I]t seems reasonable to think that a core of same social problem—individuals killing one another, not doing what they promised to do, trespassing on one another’s, etc.—are attend to in most, if not all, jurisdictions. If so, such problems might well provide the jurisdiction-neutral point of entry we are looking for.364 For the purposes of this thesis, it is very important to determine this jurisdiction-neutral point. Part of the reason for this is the assumption that key legal terms relevant to this thesis may mean different things in Australia and Jordan, and that it is widely accepted that they fundamentally differ. To illustrate, the targeted conflict rules in both of these countries are relevant when the subject matter of the dispute is a contract that involves a foreign element. Two terms are particularly important when determining the comparability of the Australian and Jordanian conflict rules: ‘contract’ and ‘foreign element’. The latter may also be referred to as ‘the norm by which a legal system determines that a contract is international’. The national interpretation of these terms plays an important role in determining the legal issues with which the targeted legal rules in both countries deal, or the scope of their application. 365 ‘Contract’ is usually translated into the Arabic term aqd (plural uqod). Some Western scholars have argued that ‘contract’ and aqd are fundamentally different. For example, Coulson argued that “[aqd] is in no sense the precise equivalent of the technical term

359 Reitz (n 49) 617; Pejovic (n 46) 817; Valcke and Grellette (n 223) 102; Zweigert (n 250) 467; Ernst Rabel, The Conflict of Laws: A Comparative Study (The Universtiy of Michigan Press, 1945); M Schmitthoff, ‘The Science of Comparative Law’ (Pt Cambridge University Press) (1939) 7(1) The Cambridge Law Journal 94–110, 96. 360 Zweigert (n 250) 467. 361 Ibid. 362 Ibid. 363 Rabel, The Conflict of Laws: A Comparative Study (n 359); in the same meaning: Schmitthoff (n 359) 96; Valcke and Grellette (n 223) 103. 364 Valcke and Grellette (n 223) 103. 365 Hutchinson (n 260) 16.

50 ‘contract”’.366 If true, this can mean two things. First, the Australian rule is designed to deal with a conflict of laws problem other than the one with which the Jordanian conflict rules deal. Implicitly, the Australian rule is not ‘good medicine’ in this case. It can also mean that both legal systems have adopted different solutions because they regulated different problems. Therefore, there is no point in comparing the provisions of two legal systems regarding different legal issues. An effective comparative study is one that examines how two different legal systems deal with the same problem. Worthy of note is the fact that in order to compare ‘contract’ and aqd, one must resort to translation. Therefore, Coulson’s statement cannot be taken as a fact without first examining its accuracy. Legal translation is challenging. Poorly-translated materials usually lead to misleading results.367 Since Coulson’s statement is important in this thesis because it can change the outcomes of this work, it was not taken as fact. Instead, the researcher conducted his own comparison of Western and Islamic contract theories to determine whether they are functionally equivalent. Another important issue that has to be dealt with is the common belief that donation— usually translated into the Arabic term hibah—is enforceable as a contract in countries with an Islamic cultural background, which is not the case in common law systems.368 This merits consideration because it is used to support the argument that contract and aqd are fundamentally different, and to determine whether the Australian proper law doctrine can be applied to the conflict of laws problem in contracts as understood in Jordan. That is, to determine whether the Jordanian conflict rules in question deal with the matter of the conflict of law in regard to donations. Hence, the functional approach is useful when determining the accuracy of translating hibah into ‘donation’. In addition, the doctrinal method is used to determine how Jordan deals with the matter of the law applicable to hibah. Although the aforementioned translation issue is important, it is not enough to determine the comparability of the Australian and Jordanian conflict rules in question because the conflict of laws approach is not the only mechanism applied by legal systems to handle a conflict of laws problem. There are at least two other mechanisms: international treaties to which the country is a party, and national mandatory rules.369 The principle here is that no conflict rule is applicable if its provisions are contrary to the provisions of a national mandatory rule or an international convention in force in the country.370 These two mechanisms help to determine the comparability of the targeted rules, which can help in understanding the legal logic of the two legal systems. It is also useful to identify the areas that the Jordanian legal system may need to consider if the proposed solution were adopted. The latter is particularly important for the purposes of the post-transplant stage. In Stage 2 (see Chapter 4), the functional scope of the proper law doctrine and the functional scope of the Jordanian conflict rules in question, are compared. The functional scope refers to the factual situations to which a conflict rule would apply without ignoring the provisions of other national laws that may affect its application, including the relevant international conventions to which the country is a party.

366 Noel J Coulson, Commercial Law in the Gulf States: The Islamic Legal Tradition (Graham & Trotman, 1984) 18. 367 Reitz (n 49). 368 J Gordley, The Enforceability of Promises in European Contract Law (Cambridge University Press, 2001) 338. 369 Reid Mortensen, Private International Law in Australia (LexisNexis Butterworths, 2006) 409; Mary Keyes, ‘Statutes, Choice of Law and the Role of Forum Choice’ (Pt Routledge) (2008) 4(1) Journal of Private International Law 1–33, 5. 370 Mortensen (n 369) 409. 51 The focus of Stage 3 (see Chapter 5) is on examining the effectiveness of the proper law doctrine within the Australian legal system. To transplant a legal rule from one jurisdiction to another, the foreign rule must have been proven effective within its own legal system. It is also necessary to understand the foreign solution as a law. Therefore, in Stage 3 (see Chapter 5) the aim is to explain the proper law doctrine, including its definition, how it is determined, the theoretical framework upon which it is based and the criticisms directed against it. Understanding the proposed solution helps to determine the challenges that may face its reception by the Jordanian legal system. To this end, the descriptive method and the analytical method are used to analyse the proper law doctrine. The historical context plays a vital role here because it largely explains why the courts in common law countries in general, and Australia in particular, have decided to adopt this solution to the exclusion of others. This understanding can help to determine the validity of the reasons used by the Jordanian lawmaker to justify the adoption of the current rules. The historical context is considered as it provides a better understanding of the relationship between the proper law doctrine and the principle of party autonomy, and helps to identify the relationship between the latter principle and the principle of freedom of contract. Without this understanding, it would be almost impossible to determine the factual motivations for adopting such an approach, which is vital to understanding its applications in the modern legal systems. To encourage Jordan to adopt this doctrine, the focus of Stage 3 (see Chapter 5) is on determining the effectiveness of the proper law doctrine from a Jordanian perspective. In this stage, an evaluation is conducted to ascertain the ability of the proper law doctrine to overcome the challenges of the current Jordanian rules. Hence, there is a need to thoroughly analyse the problem of the Jordanian conflict rules in question and to develop objective criteria which can be applied to assess the proper law doctrine. This is an essential process because, usually, legal transplant is intended to meet a legislative need in the receiving country. Thus, it is important to establish that the proposed solution will be more effective than the national solution.371 To this end, the Jordanian conflict rules in question are analysed are analysed in light of the objectives of PIL and its theories, particularly the theory of characterisation. The focus of Stage 4 (see Chapter 6) is mainly on examining the alignment between the proper law doctrine and the Jordanian legal system. Because one of the main findings of Stage 5 is that the proper law doctrine is not an issue-free system, it is essential to determine whether the Jordanian legal system can cope with the criticisms levelled at this doctrine. Moreover, in Stage 4, consideration is given to the alignment of the proper law doctrine with the legal logic of the Jordanian legal system, evaluating the cultural and political acceptability of the Jordanian legal system to adopt the proper law doctrine. One of the most important findings of Stage 1 (see Chapter 3) is that the current Jordanian rules are not nationally made, but are transplanted rules. The current rules might not work because they are culture-free, so the solution that may work better is the religious solution. The logic upon which this argument is based is that Islam is the dominant religion in Jordan. Muslims make up approximately 93 per cent of the population of the country,372 which means that the Jordanian culture is Islamic.373 In response to this argument, two main issues are examined in this section: the attitude of Islam towards human-made law,

371 Mousourakis, Comparative Law and Legal Traditions: Historical and Contemporary Perspectives (n 5) 24. 372 The World’s Muslims: Unity and Diversity Washington, (‘The World’s Muslims: Unity and Diversity’). 373 Islamic culture is the culture that goes along with the teachings of Islam.

52 and the attitude of Islam towards the idea of legal transplant. Stage 4 (see Chapter 6) examines the fit between the proper law doctrine and the provisions of Islam. Only by doing so can one determine the extent to which Islam allows its followers to create a law and evaluate the seriousness of this concern. The aim is to discuss the potential role of religion to accept or refuse the proper law doctrine by Jordanian society. Stage 4 argues that Islamic law “is not, as is frequently assumed, a religious law in the generally accepted sense of this adjective”.374 However, religion is not the only concern addressed in Stage 4 (see Chapter 6), where political concerns are also examined. Legal history demonstrates that if the foreign rule does not fit the values of the recipient country, it is likely to be rejected.375 Therefore, it is necessary to determine the values that the current rules seek to protect. To this end, the explanatory memorandum of JCC is useful because it explains why a given rule has been adopted or why it is preferable. Although this stage is one of the most important in any legal transplant study, it has particular relevance in this thesis because the proposed solution has been already rejected once by Jordanian lawmakers. Therefore, in Stage 4 (see Chapter 6) the legal logic behind the rejection of the proper law doctrine is examined in order to determine its validity.

374 Gamal Moursi Badr, ‘Islamic Law: Its Relation to Other Legal Systems’ (Pt American Association for the Comparative Study of Law) (1978) 26(2) The American Journal of Comparative Law 187, 188. 375 Watson, ‘Legal Transplants and Law Reform’ (n 69) 81. 53 Chapter 3: Ability of the Jordanian Law to Abandon the Current Conflict of Laws Rules

Overview

This chapter includes an examination of the ability of the Jordanian legal system to abandon the current conflict rules, which is one of the most important procedures in the process of transplanting the proper law doctrine into Jordan, outlined in chapter 2. To this end, the following are examined: 1- The relationship between the Jordanian conflict rules concerning contracts and the fundamental values of the Jordanian legal system, including religion; 2- The relationship between Jordanian law at an abstract level and a religious level; and 3- The ability of Articles 20 and 21 of the JCC to reflect the ideology of the Jordanian legal system. Articles 20 and 21 of the JCC and Islam are examined to determine whether they have a direct or indirect relationship. A direct relationship refers to a situation in which a legal rule is derived directly from religion, whereas an indirect relationship refers to the role that religion plays in the formulation of the legal logic of the society, which influences the formulation of the law. This chapter is divided into three main sections, followed by a conclusion. In Section 3.1, the cultural background of the targeted Jordanian conflict rules is examined. In some cases, the differences between legal systems are an expression of cultural differences. Therefore, understanding the relationship between law and culture is essential to any legal transplanting study. In light of that, comparative methodology is applied to explain the differences between legal systems by analysing the “invisible powers”, such as culture, that form law.376 The religiosity of the Jordanian legal system is examined in Section 3.2, which is important in determining the ability of the Jordanian legal system to abandon its current rules and to accept a legal rule from a secular legal system such as that of Australia. The consistency of the current Jordanian conflict rules is examined Section 3.3, together with the practical justifications for their adoption given in the explanatory note of the JCC.

3.1. Cultural and Historical Backgrounds of Articles 20 and 21 of the JCC

This section examines the relationship between the targeted Jordanian conflict rules and the society. Hence, it looks at the cultural background of the conflict rules in question and reviews their historical source as well as the reasons given in the explanatory memorandum to justify their adoption. Generally, legal systems find it difficult to abandon legal rules that play a role in the religious, cultural or political aspects of a society. Religious rules are the most challenging rules to abandon in a Muslim country.377 There is a fundamental relationship between law and religion in Jordan (see Chapter 2), particularly the JCC, which is the code to which the issue of the conflict of laws belongs.378 If the Jordanian legal system is to receive the proper law doctrine, it must be

376 Eberle (n 219) 453; David Nelken, ‘Using the Concept of Legal Culture’ (2004)(29) Australian Journal of Legal Philosophy 1–26, 1. 377 See Section 2.4.1. 378 See Section 2.4.1. 54 willing to abandon its current rules, which is impossible if these rules are embedded in religion or culture. In Jordan, the rules of PIL are contained in the national civil code. This means that these rules are not autonomous; they are part of a code based on a socio-political order, which may affect their formulation, aims and application. Articles 2 and 3 of the JCC provide that Islamic jurisprudence and the principles of shariah are the sources of legislation, and that the principles of Islamic jurisprudence shall be relied upon to understand and interpret the rules of the JCC.379 Moreover, the historical source of the JCC is the Majalla, which is no more and no less than the principles of Islamic jurisprudence that are expressed as law.380 In this sense, JCC is an Islamic law not only in terms of its sources, but also in its application. Therefore, it is reasonable to assume that there is a direct relationship between the Islamic jurisprudence and the targeted conflict rules. Before examining this issue, it is useful to distinguish between the Islamic jurisprudence and the principles of shariah. An exploration of the differences requires a thesis in its own right. However, there is a simple way to differentiate between them: Islamic jurisprudence (known as fiqah) applies the principles of shariah to determine how a legal issue should be resolved from a religious point of view.381 It might happen that different jurisprudential schools reach different conclusions regarding the same issue,382 and within the same school, opinion might differ from one place to another and from time to time. For example, Article 1448 of the JCC provides that the rules of Majalla shall be repealed to the extent that it contradicts the rules of this code. This Article makes it evident that although the JCC and the Majalla are based on Islamic jurisprudence,383 their provisions may be contradictory. To recognise how two contradictory legal rules can be considered Islamic, one needs to understand the legislative philosophy of Islam, which is discussed under the theory of Ijtihad (see Chapter 6). Conversely, the principles of the Sharia are static and immutable.384 This section includes an examination of the background of the conflict rules in question, a review of the historical source of the targeted rules, and the justification for their adoption as set out in the explanatory memorandum.

3.1.1. Historical Backgrounds of Articles 20 and 21 of the JCC

The current Jordanian conflict rules are the first rules in the country’s history to be devoted to resolving the conflict of laws issues. Although the Jordanian conflict rules in general are part of the national civil code,385 the Majalla is not their historical source because the Majalla does not explicitly deal with the conflict of laws problems. This raises the question: where did Jordan get these rules?

379 The Jordanian Civil Code No 43 (n 37) arts 2 and 3. 380 Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (n 66) 46. 381 Christopher Melchert, ‘Traditionist-Jurisprudents And The Framing Of Islamic Law’ (Pt BRILL) (2001) 8(3) Islamic Law and Society 383–406, 384–8; Calder et al, ‘Law’) . 382 Diana Zacharias, ‘Fundamentals of the Sunnī Schools of Law’ (2006) 66 ZaöRV 491–507, 491–2. 383 Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (n 66) 46. 384 John Hursh, ‘The Role of Culture in the Creation of Islamic Law’ (Pt Indiana University, School of Law) (2009) 84(4) Indiana Law Journal 1401–23, 1401. Citing NJ Coulson, A History of Islamic Law 9–11 (1964). 385 The Jordanian Civil Code No 43 (n 37) arts 11–29.

55 The Jordanian conflict rules in general were imported from the Egyptian Civil Code of 1948 in 1976.386 This is clearly stated in the explanatory memorandum. However, it did not, according to Alshorbagy, “incorporate the Majalla in its law. Rather, Egypt relied on the French Napoleonic code in forming its laws”.387 Michael claimed that “[t]he connecting factors are sometimes assumed to indirectly encode state interests in regulating appropriately connected persons and activities”.388 Therefore, the following questions arise: do these Articles seek to protect any national cultural values? Is there any relationship between these Articles and the national political values? Why have these rules been adopted in Jordan? The following section is devoted to answering these questions.

3.1.2. Justifications for Adopting the Jordanian Conflict Rules in Question

According to the explanatory memorandum, Article 20 was chosen because it gives effect to the parties’ intentions.389 In light of the presumed values of an effective conflict rule, this could be considered to be one of the most important principles upon which Article 20 is based. In the absence of a chosen law, the law of the place where the contract is made was chosen to answer the choice-of-law question in contracts according to the explanatory memorandum. There are four reasons for this. First, when the JCC was enacted in 1976,390 there was no agreement among PIL scholars nationally or internationally regarding the appropriate solution to the conflict of laws problem in contracts.391 Second, at the international level, the law of place where the contract was made seemed to be the most accepted opinion at the time of enacting the JCC.392 This assumption was supported by the fact that most Arabic countries adopted the law of the place where the contract was made to solve the problem of conflict of laws in international contracts.393 This suggests that Jordan attempted to adopt a solution that would be universally accepted. Third, the law of the place where the contract is made was adopted because of its close relationship with the contract,394 which was justified on the basis of tacit choice.395 The fourth reason for adopting the law of the place where the contract is made was to unify the applicable law or to subjugate the whole contract to a single law.396 Most likely, Jordanian lawmakers believed that adopting the law of the place where the contract is made as the only connecting factor in Article 20 and the main connecting factor in Article 21 would help to unify the applicable law. According to the explanatory memorandum, Article 21 was adopted for three reasons. First, the law of the place of the contract was the traditional rule applied by the vast majority of legal systems, including those of Western countries,397 which implies that it was adopted because it was prevalent at the time of the creation of the JCC. Second,

386 Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (n 66) 46. 387 Alshorbagy (n 191) 241. 388 Michael J Whincop and Mary Keyes, ‘Putting the “Private” back into Private International Law: Default Rules and the Proper Law of the Contract’ (Pt Melbourne University Law Review) (1997) 21(2) Melbourne University Law Review 515–43, 518. 389 Explanatory Memorandum, the Civil Code No 43 of 1976 (Jordan) art 20. 390 The Jordanian Civil Code No 43 (n 37) art 1. 391 Explanatory Memorandum (n 389) art 20. 392 Ibid. 393 Ibid. 394 Ibid. 395 Ibid. 396 Ibid. 397 Ibid, art 21.

56 lawmakers believed that the connecting factors adopted in Article 21 offered a wide variety of choices from which the court may select one, so it has the flexibility necessary for dealing with the diversity of contractual issues.398 At the same time, according to the explanatory memorandum, this formula would leave room to benefit from future developments that may occur in this area. Third, the explanatory memorandum claims that the adoption of the law of the place of contracting was chosen for practical reasons,399 such as the fact that in some types of contracts the parties may not enjoy the freedom to avoid the legal requirements of the contracting country. Therefore, the application to their contract of any law other than the law of the place might create a possibly insurmountable legal obstacle. In this regard, the explanatory memorandum states that if the contracting parties can meet the formalities required by the law of their nationality or the law of the common domicile, they should not be banned from doing so. Hence, one of the main goals of Article 21 is to make contractual undertakings easier for contracting parties.400 Although the explanatory memorandum justifies the adoption of the law of the place based on practical needs, it states that there should be no controversy regarding the nature of the jurisdiction of the law of the place, whether it is decided by the provisions of national law or for pragmatic reasons. An analysis of the explanatory memorandum shows that one of the aims of adopting Article 21 was to end the controversy, which appeared prevalent, regarding the rationale for adopting the law of the place by explicitly codifying it. It appears as if the legislator said, ‘We (the legislator) chose the law of the place of contract based on practical needs, but the court must apply it because it is stipulated by the law’. One of the most important considerations is not mentioned in the explanatory memorandum, namely the national values that Articles 20 and 21 seek to protect. The Articles are not linked to any national cultural or political values. Although the JCC is an Islamic law and the court is obliged to apply the principles of Islamic jurisprudence to interpret its rules, this rule does not apply to the targeted conflict rules, which indicates a gap between Articles 20 and 21 and the cultural background of the code to which they belong. In the words of Von “[i]f the application of a choice-of-law rule does not advance the forum's values-or, for that matter, the values of any concerned community-that is unfortunate”.401 It can be argued that just because the values that these rules seek to protect are not mentioned in the explanatory memorandum, this does not mean that these values do not exist. When importing a legal rule, lawmakers might unconsciously pick the solution that matches the fundamental values of national law.402 What supports this argument is that legislators do not always mention the values that each legal rule should protect as these values are part of the legal reasoning that is implicitly agreed upon by society. This argument, in light of Article 2 of the Jordanian constitution which stipulates explicitly that Islam is the religion of the State, might mean that these rules—Articles 20 and 21 of the JCC—were chosen because their provisions are aligned with the teachings of Islam. To determine whether this is the case, the following section examines the relationship between law and religion in Jordan at the constitutional level to decide whether Jordanian

398 Ibid. 399 Ibid. 400 Ibid. 401 Mehren Arthur Taylor Von, 'Choice of Law and the Problem of Justice' (Pt Duke University School of Law) (1977) 41(2) Law and Contemporary Problems 27-43, 30. 402 “Law would make no sense without values”. Martin Škop, 'Law and Literature – a Meaningful Connection' (2015) IV Filozofia Publiczna i Edukacja Demokratyczna, 7. 57 law is an expression of Islam or a religious legal system. This analysis is important because it determines the direction of the research and helps to illustrate the issues that are addressed in this thesis when evaluating the feasibility of transplanting the proposed solution into the Jordanian legal system. The above justifications can be considered as the general guidelines of the Jordanian legislative philosophy in this area, and as the political values of the Jordanian conflict rules regarding international contracts. Cerar argued that “law and politics as social phenomena are two emanations of the same entity”.403 Further, Cerar claimed that “the binding value-normative system established and carried out by the state in national law … which are intended for the establishment and maintenance of a balance between justice and order and solving and preventing pressing societal … conflicts”.404 Therefore, determining these values and explaining why the law is as it is can help to determine whether the proper law doctrine fits the legal ideology of the Jordanian legal system.

3.2. The Relationship Between Law and Religion in Jordan

In this section, the following question is answered: in light of Article 2 of the Jordanian Constitution, to what extent can the Jordanian legal system be considered a religious (Islamic) law? The superiority of Islam is not a constitutional principle in Jordan. No Jordanian law, including the Constitution, stipulates that religion should be given priority when the law contradicts its teachings. Second, Article 2 does not provide that Islam is the main source of legislation in the country. However, this does not change the fact that the assumption that Jordanian law is an Islamic legal system deserves attention. This section proposes and tests the following hypothesis: according to Article 2 of the Constitution, the Jordanian legal system is an Islamic law. There are two ways to prove or disprove the hypothesis. The first is to explore the opinions of constitutional law scholars in Jordan regarding Article 2 of the Constitution, which is more suitable for studies specialising in constitutional law. However, since in this section the aim is not to understand this Article or analyse its contents, but to decide the religiosity of the Jordanian legal system, it is enough to demonstrate that the Jordanian law as whole is not a religious law, which is the second way. To this end, this section compares the provisions of the Jordanian legal system with the stated provisions of Islam by using examples from different laws, including criminal law. The latter has been chosen because the provisions of Islam are clearly explicated and valid for comparison.405 Other issues require additional explanation of the philosophy of the religion, which is beyond the scope of the current discussion. Before proceeding, two questions must be answered: what does Islamic law mean? What are the criteria that should be applied when examining the religiosity of the Jordanian legal system? Regarding the first question, Islamic law can be defined as a legal system that takes Islam as its main source of legislation406 or a legal system that does not contradict the teachings of Islam. The criteria applied to examine the religiosity of a legal system differ from one study to another and from one topic to another. For the current discussion, several simple and direct criteria were selected that focused on defining the Islamic law and then

403 Miro Cerar, ‘The Relationship Between Law and Politics’ [19] (2009) 15(1) Annual Survey of International & Comparative Law, 20. 404 Ibid. 405 Shahrul Ismail, The Dilemma of Hudud and International Human Rights: Proposing a Benevolent Mechanism (2007) 1. 406 Irshad Abd-Haqq, in Hisham M. Ramadan (ed), Understanding Islamic Law From Classical to Contemporary (2006) 3. 58 highlighted the contradictions between law and religion in Jordan in order to refute the hypothesis. The importance of this analysis is two-fold. First, it facilitates the understanding of the legal logic upon which Jordanian law is based, which is crucial when evaluating the readiness of the country to abandon the conflict rules in question. Second, it helps to identify the issues that should be considered when suggesting a legal rule for Jordan that has been developed in a non-Muslim jurisdiction. There are two main sources of legislation in Islam: the Quran and the Sunnah.407 The Quran is the central religious text of Islam, which Muslims believe to be a revelation from God; it is not only the book of God but the exact words of God,408 which is why Muslims believe that the Quran is superior.409 No one is allowed to criticise its provisions or ignore them. In this sense, the Quran is the measurement by which Muslims distinguish between right and wrong.410 Accordingly, the Quran as a source of legislation in Islamic jurisprudence enjoys a position comparable to the position of the constitution in modern legal systems.411 Where the Quran expressly decides a matter, its decision is binding, final and indisputable. An example of this is the prohibition of pork. The Quran states: O ye who believe! Eat of the good things that We have provided for you and be grateful to God if it is Him ye worship. He hath only forbidden you dead meat and blood and the flesh of swine [pig] and that on which any other name hath been invoked besides that of God but if one is forced by necessity without wilful disobedience nor transgressing due limits then is he guiltless. For God is Oft-Forgiving Most Merciful.412 For more than 14 centuries, no Muslim scholar has sanctioned the consumption of pork or criticised its prohibition. In general, the Quran offers general guidelines without providing details, with some exceptions.413 Badr claimed that the “Quran is far from being a legal code. In fact, it contains very few legal provisions. Out of a total of 6237 verses only 190 verses or 3 per cent of the total can be said to contain legal provisions. Most of these deal with family law and inheritance”.414 Therefore, Muslims need the Sunnah, which provides a practical interpretation of the Quran, and is the second primary source of legislation in Islam.415 Sunnah is an Arabic term which means “way of living”.416 In a religious sense, Sunnah refers to the way that Prophet Mohammad lived his life, and includes his sayings, actions,

407 Mutasim Ahmad Alqudah, 'The Impact of Sharia on the Acceptance of International Commercial Arbitration in The Countries of the Gulf Cooperation Council' (2017) 20 Journal of Legal, Ethical and Regulatory Issues 1, 11. 408 Ijtihad: Reinterpreting Islamic Principles for the Twenty-First Century Washington, DC, (‘Ijtihad: Reinterpreting Islamic Principles for the Twenty-first Century’) 1. 409 IA Ibrahim, A Brief Illustrated Guide To Understanding Islam (Darussalam, 2nd ed). 410 Bakircioglu (n 345) 15–16. 411 Wael B. Hallaq, ‘Was the Gate of Ijtihad Closed?’ (Pt Cambridge University Press) (1984) 16(1) International Journal of Middle East Studies 3–41. 412 The Quran (n 343) Ch. 2:172–3. 413 Kamali Mohammad Hashim, ‘Methodological Issues in Islamic Jurisprudence’ (Pt BRILL) (1996) 11(1) Arab Law Quarterly 3–33, 3. 414 Gamal Moursi Badr, ‘Islamic Law: Its Relation to Other Legal Systems’ [178] (1978) 26(2) The American Journal of Comparative Law, 188. 415 Bakircioglu (n 345) 16. 416 Asifa Quraishi-Landes, ‘The Sharia Problem with Sharia Legislation’ 41 Ohio Northern University Law Review, 545–6.

59 behaviours, ethics and his tacit approval.417 This last refers to what people did in front of the Prophet, which he did not deny or comment on that so that his companions understood that he accepted it.418 The prophetic Sunnah as a source of legislation enjoys a status in Islam comparable to the Quran.419 This is explicitly stated in the Quran: “Whatever the Messenger gives you, accept it; and whatever he forbids you, abstain from it”.420 Muslims believe that the Quran and the Sunnah are revelations.421 The difference between them is that “while the [Quran] embodies the binding law in God’s own words, Sunnah is taken to be the reflection of God’s wisdom with which the Prophet had been inspired”.422 The importance of the Sunnah arises from the ways in which the Quran is organised; as aforementioned, it does not go much into detail, but provides general guidelines for those who want to follow its teachings.423 The Sunnah explains how those teachings have to be practiced.424 For example, daily prayers in Islam are mentioned in the Quran without explanation regarding how or when to pray. The Quran states: “And be steadfast in prayer”.425 However, the details of how and when to pray are explained in the Sunnah, which demonstrates why the Quran and the Sunnah should not be treated as two completely separate sources.426 Wherever the primary sources have clearly decided a matter, no one is supposed to have an opinion.427 If the provisions of a legal system contradict the primary sources of Islam, it cannot considered as an Islamic legal system. One of the areas in which the teachings of Islam are clearly stated is that of criminal law. Penalties in Islam are divided into two types: hudud and tazir.428 Hudud is an Arabic term, which means ‘borders’ or ‘boundaries’.429 In the religious sense, it refers to those crimes for which the punishment is mandated and fixed by religion. Ismail explained: Hudud penalties were formulated to secure the rights of God hence it is often argued that no one but God, himself may ‘forgive the crime or change the law’. The fact that it involves the right of God signifies that it is meant to be mandatory punishment, a demand from God that requires fulfilment and no one, including the victim, judge or the head of state has authority to alter or modify, what more to pardon or suspend it.430

417 Thorsten Koch, ‘Islamic Law: Ordained Sharī’ah Principles v Man-Made Code (UWTSD, 2017)’ (2017); Alqudah, (n 407) 11. 418 Abdullah Wahib Allami, ‘Principlizing Islamic Zakat as a System of Taxation’ Brunel University, 2015) 58. 419 Mashood Baderin, ‘Understanding Islamic Law in Theory and Practice’ (Pt Cambridge University Press) (2009) 9(3) Legal Information Management 186–90, 187. 420 The Quran (n 343) Ch. 59:7. 421 Allami (n 418) 58. 422 Bakircioglu (n 345) 25. 423 Moursi Badr, ‘Islamic Law: Its Relation to Other Legal Systems’ (n 414) 187. 424 Bakircioglu (n 345) 26. 425 The Quran (n 343) Ch. 2:43. 426 SA Jackson, Islam and the Blackamerican: Looking toward the Third Resurrection (Oxford University Press, 2011) 4. 427 Allami (n 418) 64. 428 Maizer Chankseliani, ‘Punishment And Other Penal Measures’ (Pt European Scientific Journal) (2012) 8(2) European Scientific Journal, 102. 429 Ismail (n 405) 1. 430 Ibid, 2.

60 Tazir denotes offences for which Islam does not prescribe a penalty.431 The determination of tazir penalties are left to the leader of the Muslim society, who can be a person or institution, such as modern parliaments.432 Accordingly, the easiest way to determine the religiosity of the Jordanian legal system is by comparing its provisions regarding hudud penalties because they are fixed and valid for comparison. In practice, there are many examples where Jordanian laws explicitly contradict the clearly-stated provisions of Islam. Below are three examples with the explanation of the contradictions. A clear example of hudud penalties is the punishment for Zina (adultery or illegal sex).433 In Islam, any sexual intercourse outside of marriage is a sin for which there is a fixed punishment.434 Additionally, Islam sets out specific criteria for proving the crime of adultery.435 For example, there must be at least four witnesses, who are randomly gathered in a place where they can see people having sex and ensure that it is sexual intercourse.436 Nothing other than that, even though it is a sin, amounts to Zina in the religious sense.437 If the Jordanian legal system is Islamic, it must adopt the provisions of Islam regarding Zina. However, this is not the case in Jordan.438 Jordan does not apply any of the provisions of Islam regarding any prohibited sexual relationship, such as homosexuality, which is also a sin from a religious perspective.439 The second example that highlights the contradictions between religion and law in Jordan is Riba (interests or usury).440 Riba is an Arabic term that refers to the lending of a certain amount of money with the condition that the loan be returned with interest.441 Riba is explicitly prohibited in Islam.442 The Quran states: “Those who devour usury will not stand except as stands one whom the Evil One by his touch hath driven to madness. That

431 Allan Christelow, Matthew Lippman, Sean McConville and Mordechai Yerushalmi, Islamic Criminal Law and Procedure: An Introduction (Praeger, 1988) 50. 432 Chankseliani (n 428) 103. 433 Mark Cammack, ‘Islamic Law and Crime in Contemporary Courts’ (Pt eScholarship) (2011) 4(1) Berkeley J Of Middle Eastern & Islamic Law, 3. 434 Quran says in this regard: “The woman and the man Guilty of adultery or fornication,— Flog each of them With a hundred stripes: Let not compassion move you In their case, in a matter Prescribed by God, if ye believe In God and the Last Day : And let a party Of the Believers Witness their punishment”. The Quran (n 343) Ch. 24:2. 435 Marcia C Inhorn, ‘Islam, Sex and Sin: IVF Ethnography as Muslim Men’s Confessional’ (2018) 91(1) Anthropological Quarterly 25–51, 35. 436 Quran says in this regard: ‘And those who launch A charge against chaste women and produce not four witnesses (To support their allegation),—Flog them with eighty stripes; And reject their evidence Ever after: for such men Are wicked transgressors; Unless they repent thereafter And mend (their conduct); For God is Oft-Forgiving Most Merciful’. The Quran (n 343) Ch. 24:4–5. 437 Karamah: Muslim Women Lawyers For Human Rights, ‘Zina, Rape and Islamic Law: An Islamic Legal Analysis Of The Rape Laws In Pakistan’ (2011) 3. 438The Jordanian Criminal Code No 16 1960 (Jordan) (‘The Jordanian Criminal Code No 16’) arts 282–4. 439 Muhsin Hendricks, ‘Islamic Texts: A Source for Acceptance of Queer Individuals into Mainstream Muslim Society’ (2010) 5 The Equal Rights Review, 31. 440 M Chapra, ‘The Prohibition of Riba in Islam: An Evaluation of Some Objections’ (Pt Association of Muslim Social Scientists) (1984) 1(2) American Journal of Islamic Social Sciences 23, 23. 441 Zubair Muhammad and Khattak Sadia, ‘Concept Of Riba (Interest) In Islamic Law: Its Impact On Society.(Report)’ (Pt Asianet-Pakistan) (2015) 27(4) 3601. 442 Neelam Daryanani, ‘A Deeper Understanding on the Prohibition of Riba’ (Nottingham University, 2008) 12; Mohammed, ‘Principles of Islamic Contract Law’ (Pt Hamline University School of Law) (1988) 6 (1) Journal of Law and Religion 115–30, 118.

61 is because they say: Trade is like usury but God hath permitted trade and forbidden usury”.443 Accordingly, an Islamic legal system must prohibit riba. However, this is not the case in Jordan. The Jordanian legal system has legalised bank interest, which is riba from an Islamic point of view. Contrary to the teachings of Islam, Article 43 of the Central Bank of Jordan Law provides that: [T]he Central Bank may issue to the Licensed Banks and the Specialized Credit Institutions orders published … prescribing the following: (a) The minimum and maximum interest rates which the Licensed Banks and the Specialized Credit Institutions charge on credit facilities which they extend to their clients … (b) The maximum and minimum commissions which the Licensed Banks charge on credit facilities and the administration of accounts and other services offered to their clients; (c) The minimum and maximum interest rates which the Licensed Banks and the Specialized Credit Institutions pay on deposits with them … (e) In case the Central Bank does not fix the interest rates … the Licensed Banks and Financial Companies may charge their clients’ interests and commissions and pay them interests in accordance with instructions issued by the Central Bank and without being bound by the margins stipulated in any Law or regulation dealing with profit sharing or interest.444 Another example involves the trade and consumption of alcohol. Islam explicitly prohibits the consumption of alcohol.445 The Quran states: “O ye who believe! intoxicants and gambling (dedication of) stones and (divination by) arrows are an abomination of Satan’s handiwork: eschew such (abomination) that ye may prosper”.446 From a religious point of view, Muslim societies have no choice but to prohibit the consumption and trade of alcohol.447 However, the Jordanian legal system prohibits neither.448 The examples above demonstrate that the Jordanian legal system cannot be described as a strictly Islamic legal system, which means that Article 2 of the Jordanian Constitution is meaningless or at least not effectively implemented. Considering that the cultural background of the Jordanian society is Islamic, it can be argued that the Jordanian law at an abstract level does not always reflect the values of its society. However, this is not to say that Jordan is an entirely secular country because some of its national laws are based on the teachings of Islam, such as family law.449 Since it is evident that the Jordanian legal system in general is not based on religious law, and the conflict rules in particular are outside its context, there should be no cultural resistance to abandoning the current

443 The Quran (n 343) Ch. 2:275. 444 The Central Bank of Jordan Code No 23 1971 (Jordan) (‘The Central Bank of Jordan Code No 23’). 445 Laurence Michalak, ‘Alcohol and Islam: An Overview’ (2006) 33(4) Contemporary Drug Problems 523–62, 528. 446 The Quran (n 343) Ch. 5:90. 447 Khashan Ammar, ‘The Quran’s Prohibition of Khamr (Intoxicants): A Historical and Legal Analysis for the Sake of Contemporary Islamic Economics’ [97] (2016) 9 Kyoto Bulletin of Islamic Area Studies, 97–8. 448 This is based on the principle that there can be neither offence nor penalty except as specified by the law. 449 The law that regulates family relationships such as marriage, divorce, custody of children and inheritance; Mohamed Olwan, ‘The Three Most Important Features of Jordan’s Legal System’ International Association of Law Schools, .

62 rule in this regard. The following section evaluates the validity of the justifications used by Jordanian lawmakers to adopt the targeted conflict rules.

3.3. Consistency of the Targeted Jordanian Conflict Rules with Justifications for Adoption

Regardless of the fact that the current Jordanian conflict rules are not national-made, justifications used by Jordanian lawmakers must not be ignored because the current rules are part of a legal system, and their goals are clearly stated in the explanatory memorandum. This section evaluates the ability of the current rules to reflect the logic of these justifications, particularly the consistency between the law of the place where the contract is made, and the parties’ intentions. The criterion of the law of the place where the contract was made is not Jordanian in origin. Rather, it is an imported criterion from the Egyptian legal system,450 which imported it from France.451 France, being part of the EU, has switched to the proper law doctrine, the approach advocated by the Rome Convention to deal with the conflict of laws problem in international contracts.452 To understand the logic upon which the Jordanian conflict rules in question are based, there is a need to study the Jordanian solution from an international perspective. Hence, in this section, an attempt is made to understand the relationship between the law of the place where the contract is made and the parties’ intentions. This is achieved by reviewing the historical development of the principle of party autonomy, which came to replace the law of the place where the contract is made. Moreover, the section contains an evaluation of other reasons used by Jordanian lawmakers to justify the adoption of the current rules.

3.3.1. Historical Background of the Law of the Place Where the Contract Is Made

Historically, the place where the contract is made was adopted to resolve the conflict of laws problem in contracts by most legal systems. Bartolus (1314–1357) argued that “the law of the place of contracting governs all questions concerning the form and substance of the contract”.453 Bartolus viewed a contract as a person that was attached to the place of origin,454 and the origin of a contract was the place where it was concluded.455 In the sixteenth century, Dumoulin justified the application of this law on the tacit choice.456 As put by Adkins, “[t]he rationale of this rule is that parties are presumed to have contracted with reference to or in contemplation of the place where they entered the contract”.457

450 Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (n 66) 46. 451 Alshorbagy (n 191) 241. 452 “A contract shall be governed by the law chosen by the parties. The choice must be express or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or a part only of the contract”. Rome Convention 1980 (n 44) art 3 (1). 453 Mo Zhang, ‘Party Autonomy and Beyond: An International Perspective of Contractual Choice of Law’ (Pt Emory University School of Law) (2006) 20(2) Emory International Law Review 511–61, 517. 454 Ogunranti (n 174) 27. Citing Armand Lainé, Introduction Au Droit International Privé: Contenant Une Etude Historique Et Critique De La Théorie Des Statuts Et des rapports de cette théorie avec le Code civil, vol 2 (Librairie Cotillon, F Pinchon, successeur, 1892) 189. 455 Zhang (n 453) 517. 456 Peter Hay, Patrick J Borchers and Symeon C Symeonedes, Conflict of Laws (Minnesota: West Publishing Co, 5th ed, 2010) 16. 457 F Michael Adkins, ‘Conflict of Laws: Contracts and Other Obligations’ (1974) 35 Louisiana Law Review, 113.

63 The importance of this justification, although it did not view the parties’ wills as the leading factor, stems from the fact that it opened the door to consider the parties’ intentions,458 which Huber, in 1689, argued that it must be taken as the leading factor in the determination of the applicable law. However, Hurber rejected the law of the place as an indication of this will.459 In 1849, German scholar Savigny suggested that the law of the place where the contract was made, the law of the place where the contract is to be performed or the law of the nationality of the parties was the law to govern contracts unless there was a contrary intention.460 By this, Savigny accepted that, although he believed that every legal relation has a seat at the place where the legal relation is based, the parties to an international contract may replace the law of the seat through the voluntary submission to another law.461 Savigny’s approach focused on territorial connections between a given relationship and the applicable law without special weight being given to the forum’s interests.462 Lorenzen claimed that the place where a contract is made, should not to be considered absolutely; particularly, where it is evident that the parties had in mind a law other than the law of the place at the time of contracting.463 The historical evidence presented thus far supports the idea that the principle of party autonomy or the intention theory came to replace the rigid connecting factors in general,464 and the place where the contract is made, in particular. While many scholars have attributed the principle of party autonomy to French jurist Dumoulin,465 legal history demonstrates that this idea is almost as old as the problem of

458 Jieying Liang, Party Autonomy in Contractual Choice of Law in China (Cambridge University Press, 2018) 26. 459 Lord Mansfield, citing Huber, is reported to have said: “[t]he parties had a view to the laws of England. The law of the place can never be the rule, where the transaction is entered into with an express view to the law of another country, as the rule by which it is to be governed”. Robinson v Bland (1760) 2 Burr. 1077 at [1078]. 460 Ernest G Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws’ (1921) 30(7) The Yale Law Journal, 575. 461 Yntema (n 465) 342. 462 Charles R Calleros, ‘Toward Harmonization and Certainty in Choice-of-Law Rules for International Contracts: Should the US Adopt the Equivalent of Rome I?’ (2016) 28 SSRN Electronic Journal, 664. 463 Ernest G Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws III’ [565] (1921) 30(6) The Yale Law Journal, 574. 464 Andrew Bell and Paul Le Gay Brereton, Nygh’s Conflict of Laws in Australia (9th ed, 2014) 13–14; Maria Hook, The Choice of Law Contract (Oxford: Hart Publishing, 1st ed, 2016) 21. 465 Ole Lando, ‘Contracts’ in Kurt Lipstein (ed), International Encyclopedia of Comparative Law (Brill—Nijhoff 1971) vol 3; Hessel E. Yntema, ‘“Autonomy” in Choice of Law’ [341] (1952) 1(4) The American Journal of Comparative Law 341–58, 342; Yuko Nishitani, ‘Party Autonomy in Contemporary Private International Law—The Hague Principles on Choice of Law and East Asia’ (2016) 59 Japanese Yearbook of International Law 300–44, 305. Citing Yoshio Tameike, Kokusaishihô Kôgi (3rd ed, Tokyo 2005) 351.

64 conflict of laws466 and can be traced back to the time of the Roman Empire467 or earlier.468 According to Beale, party autonomy “is quite foreign to common-law notions”.469 Beale maintained: The continental idea of the applicability of law, derived from the political system of the Roman empire, regarded a system of law as the peculiar property of the person entitled to it, which he had at any time a right to claim; but he might at any time in place of it accept another system. A Roman citizen anywhere in the world had a right to claim the protection of the Roman law, though he might if he chose waive that protection and act in obedience to a provincial or barbarian law and this liberty of choice persisted to modern times.470 According to Rühl, the Italian jurist, Mancini, laid the foundations for the modern principle of party autonomy in 1851.471 Although Mancini rejected the notion of territoriality on which PIL theories had been based, he maintained that the application of this principle should not contradict matters concerning sovereignty, public policy and real estate rights.472 This is the idea that, according to Lorenzen, was adopted by the Belgian scholar, Laurent: It is certain that the contracting parties cannot determine their status and capacity; these matters belong to public order and as such fall within the exclusive province of the legislator. Still less can they regulate what belongs to the sovereign power. To express myself in the language ordinarily used, everything belonging to status and to the real statute is beyond the autonomy of the individuals.473 In 1865, the English court in two cases—P&O Steam Navigation v Shand474 and Lloyd v Guibert475—decided that the law applicable to a contract was the law by which the parties

466 Symeon C Symeonides, Wendy Collins Perdue and Arthur Taylor Von Mehren, Cases and Materials on Conflict of Laws: American, Comparative and International (American Casebook) (West Academic, 2nd ed, 2003) 338. “Dumoulin founded the theory on the autonomy of will, in private international law”. Bogdan Cristian Trandafirescu, 'The Emergence and Evolution of the Lex voluntatis Principle In Private International Law' (2017) 9(2) Contemporary Readings in Law and Social Justice, 504. 467 Joseph Beale, ‘What Law Governs the Validity of a Contract’ (1909) XXIII (1) Harvard Law Review, 7; Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 12. 468 “An edict promulgated in Hellenistic Egypt from 120 to 118 BC provided that contracts written in the Egyptian language were subject to the jurisdiction of Egyptian courts, which applied Egyptian law, whereas contracts written in Greek were subject to the jurisdiction of Greek courts, which applied Greek law. In specifying language as the pertinent connecting factor for jurisdictional purposes, it implicitly recognized the principle of party autonomy: by choosing the language, the parties could directly choose the forum and indirectly, the applicable law”. Liang (n 458) 26. 469 Beale (n 467) 7. 470 Ibid. 471 Giesela Rühl, ‘ Party Autonomy In The Private International Law Of Contracts: Transatlantic Convergence And Economic Efficiency’ (2007) 3(1) CLPE Research Paper 4/2007, 5. 472 Liang (n 458) 27. 473 Quoted in Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws III’ (n 463) 576. 474 P&O Steam Navigation v Shand (1865) Moore PC (NS) 272. 475 Lloyd v Guibert (1865) L.R. I Q.B. 79.

65 intended the contract to be governed. A few years later, the same rules were applied in Germany and France.476 In 1875, Jessel proclaimed: [I]f there is one thing which more than another public policy requires it is that men of full age and competent understanding shall have the utmost liberty of contracting and that their contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice. Therefore you have this paramount public policy to consider-that you are not lightly to interfere with this freedom of contract.477 Ten years later, Bowen in Jacobs v Credit Lyonnais took party autonomy and made it the main rule: The first matter we have to determine is, whether this contract is to be construed according to English law or according to French. To decide this point we must turn to the contract itself, for it is open in all cases for parties to make such agreement as they please as to incorporating the provisions of any foreign law with their contracts. What is to be the law by which a contract, or any part of it, is to be governed or applied, must be always a matter of construction of the contract itself as read by the light of the subject matter and of the surrounding circumstances. Certain presumptions or rules in this respect have been laid down by juridical writers of different countries and accepted by the Courts, based upon common sense, upon business convenience and upon the comity of nations; but these are only presumptions or prima facie rules that are capable of being displaced, wherever the clear intention of the parties can be gathered from the document itself and from the nature of the transaction.478 By the end of the nineteenth century, for economic and commercial reasons, the place of contracting gradually lost its paramount significance and party autonomy became the leading principle internationally.479 However, as with other revolutionary ideas, the principle was not easy to accept480 because the principle of party autonomy challenged the classical principle of sovereignty.481 Until the middle of the nineteenth century,482 several different theories were proposed to restrict its application on the ground that it gave individuals the power to legislate.483 According to Lorenzen, Beale was the most vigorous opponent of the principle, who argued: [I]n point of theory, is that it involves permission to the parties to do a legislative act. It practically makes a legislative body of any two persons

476 Ole Lando, ‘Some Issues Relating To The Law Applicable To Contractual Obligations’ The King’s College Law Journal, 56. 477 Quoted in WM Wiecek, The Lost World of Classical Legal Thought: Law and Ideology in America, 1886–1937 (Oxford University Press, 1998) 135. 478 Jacob v Credit Lyonnais, 12 QBD 589 (1884). 479 Patrick Borchers, ‘Choice of Law in the American Courts in 1992: Observations and Reflections’ (Pt American Association for the Comparative Study of Law) (1994) 42(1) The American Journal of Comparative Law 125, 135. 480 Nishitani (n 465) 305. 481 Lando, ‘Some Issues Relating To The Law Applicable To Contractual Obligations’ (n 476). 482 Patrick S Atiyah, ‘The Classical Law of Contract’ in Richard Devlin (ed), An Introduction to the Law of Contract (Halifax, 1988) 33. 483 Joseph Story, Commentary on the Conflicts of Laws, Foreign and Domestic: In Regard to Contracts, Rights and Remedies and Especially in Regard to Marriages, Divorces, Wills, Succession and Judgment (Hilliard, Gray, 1834) 280.

66 who choose to get together and contract. The adoption of a rule to determine which of several systems of law shall govern a given transaction is in itself an act of the law.484 However, Beale was not the only scholar to criticise the principle of party autonomy; several theories were proposed in this respect. One of those restrictions was established by the imperative rules of a predestined law theory. According to this theory, every contract is created under a certain law that contains ‘imperative rules’, which the parties cannot modify or avoid applying by an agreement that another law should govern.485 Imperative rules are defined as any rules that “parties cannot modify by contracting in a purely domestic sphere, they do not avoid by an agreement that another law should govern”.486 However, the followers of this theory could not agree on how to classify a legal rule as imperative. Some writers attempted to reduce those rules to the limit of what is called order public or public policy.487 According to Rabel, Nolde strongly disagreed with the idea and claimed that imperative rules included: A ‘vast and normal domain’, including formation and validity of contracts, the principle of freedom of contracting, the clausula rebus sic stantibus, rescission on the ground of nonperformance, the effect of contracts on third persons, assignment, plurality of subjects of obligations, ‘many’ of the rules concerning discharge of obligations and a ‘very great number’ of rules dispersed in the codes including those on collective bargaining.488 According to Rabel, “not much remains for agreements of parties, nor is it easy to see exactly what their sphere may be. This entire theory … has been … refuted by English, French and German writers. It has no real background in any of the significant court practices”.489 The second theory was one that suggested the necessity of the law of the place where the contract is made to govern the validity of a contract. From the title, it is evident that this theory emphasised the relationship between a contract and the place where it was made. Although this idea was rejected by most scholars and legal systems, it is believed that it was revived by the doctrine of ‘vested rights’.490 According to this theory, it is impossible to avoid the application of place. Nussbaum argued: [T]here is no reason for rejecting the place-of-contracting theory … the courts are considered powerless to depart, through their Conflict rules, from the control of the lex loci contractus [the law of the place where the contract is made]; and in no case may the contrary intent of the parties be taken into account.491 The principle of party autonomy collides, in Nussbaum’s point of view, with the necessity of the law of the place where the contract is made. This theory found a place for a while in some legal systems such as that of Switzerland, which was the “only important

484 Ernest G Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws (Part 2)’ [665] (1921) XXX(7) Yale Law Journal, 656. Citing (I910) 23 Harvard Law Review, 260. 485 Rabel, The Conflict of Laws : A Comparative Study (n 359) 394. 486 Ibid. 487 Ibid. 488 Ibid, 394–5. 489 Ibid, 395. 490 Ibid, 396. 491 Arthur Nussbaum, ‘Conflict Theories of Contracts: Cases versus Restatement’ (Pt Yale Law Journal Co) (1942) 51(6) Yale Law Journal 893, 894.

67 jurisdiction following this idea in its proper meaning, that is, making the lex loci contractus exclusively applicable without any possibility for the parties to change the rule”.492 The third theory suggested that illegal contract under the law of the place where the contract is made is void everywhere. This theory must not be confused with the mother rule—the necessity of the law of the place where the contract is made. In re Missouri Steamship Co,493 Lord Halsbury summarised the key idea of this theory as follows: “[w]here a contract is void on the ground of immorality or is contrary to such positive law as would prohibit the making of a contract at all, then the contract would be void all over the world and no civilized country would be called on to enforce it”.494 Later, in Vita Food Products, Inc v Unus Shipping Co, Lord Wright commented on Lord Halsbury’s decision: Lord Halsbury, having stated that the contrary view would mean that no country would enforce a contract made in another country unless their laws were the same, said: ‘that there may be stipulations which one country may enforce and which another country may not enforce and that to determine whether they are enforceable or not you must have regard to the law of the contract, by which I mean the law which the contract itself imports to be the law governing the contract’.495 However, this theory was adopted in a different form by the English court. For example, in R v International Trustee for the Protection of Bondholders Akt, Lord Wright proclaimed that “[a]n English court will not enforce a contract where performance of the contract is forbidden by the law of the place where it must be performed”.496 The final theory is the law of the forum.497 According to this theory, party autonomy does not place the contracting parties in a lawless environment, but rather operates as a connecting factor, which is effective only when the law of the forum gives it effect.498 According to Vischer, the law of the forum “ultimately controls the choice of law, has to determine the conditions, the limits and the scope of the parties’ autonomy in international contracts”.499 This theory is another facet of the notion of territorial sovereignty. However, it is difficult to apply this theory because national law cannot be applied until the suit is filed and the court has jurisdiction.500

492 Rabel, The Conflict of Laws: A Comparative Study (n 359) 397. 493 Re Missouri Steamship Co (1889) 42 Ch D 321. 494 Quoted in JD Lawson, The Principles of the American Law of Contracts at Law and in Equity (Рипол Классик, 1905) 341. 495 Vita Food Products Inc v Unus Shipping Co Ltd [1939] UKPC 7:296. 496 R v International Trustee for the Protection of Bondholders Akt AG [1937] AC 500, 519. 497 “The origins of the lex fori approach can be traced back as far as to the 4th century BC. At that time the Greek city-states began to engage in trade with one another, which inevitably led to disputes involving members of different city-states. In order to deal with these disputes the Greeks developed several strategies, among them the conclusion of treaties between the city- states and the creation of special courts for commercial and maritime matters. However, due to the basic unity of Greek law, the dominant strategy was a lex fori approach that provided for application of each city-state’s law in its own courts”. Rühl (n 1) 804. 498 Albert Armin Ehrenzweig, Private International Law: A Comparative Treatise on American International Conflicts Law, Including the Law of Admiralty (Leiden: Sijthoff, 1972) vol 1, 44. 499 Liang (n 458) 31. Citing Frank Vischer, ‘General Course on Private International Law’ (1992) 232 Recueil des Cours 9, 197. 500 Ibid.

68 It is evident that there has always been a conflict between the rigid approach and the intention theory. Fortunately, the theories mentioned above could not stand in the face of the intention theory (party autonomy), which succeeded in finding its way to almost all legal systems, including Jordanian law. In other terms, the stone that the builders refused has become the head stone of the corner.501 In light of the theories presented above, the question “to what extent are the parties to a contract free in their choice?” has become central to PIL. The importance of this question does not stem from the answer that it seeks to find, but from the development in the legal logic it presents. To illustrate, initially the question was whether the parties should be given the right to select the law governing their contract. However, the other question—to what extent are the parties free to select the governing law?—implies that the first question no longer needs to be discussed. The legal logic was convinced that party autonomy is the best solution. For example, in Jacobs v Credit Lyonnais, Bowen LJ claimed that the principle of party autonomy was adopted because it offered “sound ideas of business, convenience and sense to the language of the contract itself, with a view to discovering from it the true intention of the parties”.502 Nowadays, party autonomy is accepted in all modern legal systems.503 In 1992, the Preamble to the resolution adopted by the Institute of International Law at Basel declared, inter alia: “Considering that the autonomy of the parties is one of the fundamental principles of private international law; recognizing that the autonomy of the parties has also been enshrined as a freedom of the individual in several conventions and various United Nations resolutions”.504 According to the ALRC, the fundamental reason for adopting this principle was that “it accords with the principle of freedom of contract”.505 According to the Hague Principles, “[p]arty autonomy … enhances certainty and predictability within the parties’ primary contractual arrangement and recognises that parties to a contract may be in the best position to determine which set of legal principles is most suitable for their transaction”.506 Perhaps one of the most noteworthy opinions that indicates the development of the legal logic in this area is one that views party autonomy as a human right. Jayme argued that “[c]hoosing the applicable law is a mode of exercising and utilising freedom and an integral part of human rights and enable the parties to design their economic activities and fine-tune their interests more effectively than any legislator could do”.507 Two main considerations support the wide acceptance of the party autonomy principle: the principle fits the philosophy upon which the classical contract theory is based (freedom of

501 Anyanwu A Emmanuel, ‘Determining the Proper Law of Contract under Private International Law’ (Ahmadu Bello University, 2005) 32. 502 Quoted in Pistis Marco, ‘The Rome Convention: Different Approaches’ (Pt Mondaq Ltd) (2006) Mondaq Business Briefing, 2. 503 Some legal systems do not allow the parties to select the law applicable to their contract. Brazil is an example. D Stringer, ‘Choice of Law and Choice of Forum in Brazilian International Commercial Contracts: Party Autonomy, International Jurisdiction and the Emerging Third Way’ (2006) 44 Columbia Journal of Transnational Law 959–91, 968–77. 504 Quoted in Peter Nygh, Autonomy in International Contracts (Clarendon Press, 1999) 36. Citing Annuaire de l’institut de droit international, session de Bale (1992) vol, 46-II, 208. 505 Law Reform Commission (n 67) 82. 506 Hague Principles 2015 (n 28) art I.3. 507 Erik Jayme, ‘Party Autonomy in International Family and Succession Law New Tendencies’, Yearbook of Private International Law (Sellier—European Law Publishers & the Swiss Institute of Comparative Law, 2009) vol 11, 1–10, 1.

69 contract)508 and the certainty in transnational contracts, which is essential to the market economy.509 Symeonides claimed that “all but two of the 84 choice of law codifications enacted during the last 50 years have sanctioned this principle for contract conflicts”.510 The application of this principle varies from country to country. Cordero-Moss argued: Party autonomy is a conflict rule that is, undeniably, generally recognised; however, the conditions for the exercise of party autonomy may vary according the rules contained in the private international law of each different state … for example, some systems permit a choice of law even if the contract is not international, but domestic (for example, English law, assuming that the choice was made in good faith) and others, if there is a foreign element in the transaction (for example … Hague Convention 1955). Moreover, some systems require that the choice of law be made expressly or appear clearly from the provisions of the contract (for example, the Norwegian Act on the Law Applicable International Sale Of Goods, Section 3), while others consider it sufficient that the choice of law is clearly demonstrated by the circumstances of the case (for example, the Rome I Regulation, article 3.1).511 In Jordan, the principle is applicable when the parties have explicitly chosen a law. In some other legal systems, this principle does not play a role when parties agree on the governing law only or in the absence of the chosen law throughout the proper law approach.512 Three main conclusions can be drawn from this section. First, the principle of party autonomy came to replace the rigid connecting factors, which supports the hypothesis that adopting the intention theory side by side with the rigid criteria is something that is difficult to justify. Second, the presumed relationship between the law of the place where the contract is made and the parties’ intention is not a fact. Rather, it is a presumption with which the vast majority of scholars disagree. Thirdly, adopting the law of the place where the contract is made based on the tacit choice appears to contradict the intention theory.

3.3.2. The Close Relationship Between the Selected Connecting Factors and the Contract

Jordanian lawmakers claimed that the other connecting factors adopted in Article 21 of the JCC were chosen because of their close relationship with the contract, which is hard to prove. Every theory and connecting factor suggested in this regard, including the proper law doctrine, claimed that the solution it offers is the most reasonable choice because it has the closest relationship with the disputed transaction. For example, the proper law doctrine provides that the applicable law is “the system of law by reference to which the

508 F Kessler, G Gilmore and A Kronman, ‘Contract as a Principle of Order’ in Richard Devlin (ed), An Introduction to the Law of Contract (Halifax: Dalhousie University, 1988) 38. 509 Keisuke Takeshita, ‘Critical Analysis of Party Autonomy: From a Theoretical Perspective’ [196] (2015) 58 Japanese Yearbook of International Law, 198–9. 510 Symeonides, ‘The Scope and Limits of Party Autonomy in International Contracts: A Comparative Analysis’ (n 27) 101. 511 Giuditta Cordero-Moss, International Commercial Contracts: Applicable Sources and Enforceability (Cambridge University Press, 2014) 136. 512 Nussbaum (n 491) 911.

70 transaction has its closest and most real connection”,513 whether it be the law of the nationality or any other law. However, the claim regarding the closest connection needs to be objectively proven before it is accepted. Although Article 21 of the JCC allows the court to subject matters of formality to the law that governs the substantive validity of the disputed contract—the law of the common domicile or the law of the common nationality—it ignores the parties’ intentions. As put by Zhaohua, “the traditional conflict norms’ rigid connecting points, dealing with the problems of legal application often directly embodies the lawmakers which means it always prefers the way of legislation and makes choice of law rules for individuals from the perspective of the nation”.514 This kind of conflict rules usually reflects only the sovereign and ignores the interests of the parties.515 Article 21 does not mention the law of the place of performance, which deserves attention because it is more important to a contract than the law of the nationality or the law of the place where the contract is made.516 The place of performance can also be justified on practical grounds more so than the law of the place where the contract is made.517 According to Ehrenzweig, Savigny argued that “[a]s long as the parties’ intention continued to be the ultimate guide to the applicable law, the place of performance, when different from that of contracting … [is] one of the aids in determining this intention”.518 Place is defined as “the place where the party to the contract that is to effect the performance that is characteristic of the contract habitually resides unless the contract has its most real and substantial connection with another place”.519 Therefore, ignoring the place of performance by the Jordanian law can be considered as an indication that, under Jordanian law, the parties’ intentions are ignored. Nussbaum did argue that there is no absolute relationship between the law of the place where the contract is made and the parties’ intentions.520 Simply put, the assumption that the place where the contract is made reflects the presumed intention of the contracting parties is greatly outdated and goes back to the sixteenth century. In different terms, the principle of party autonomy was originally adopted to eliminate such an assumption.521 Hence, the inclusion of the principle of party autonomy in Article 20 of the JCC contradicts the application of the law of the place where the contract is made.

513 David Bradshaw, ‘The Imputed Proper Law of the Contract: Conflicts in the Common Law?’ (Pt Wm W Gaunt and Sons Inc) (1982) 12(2) Kingston Law Review 111–39, 123. 514 Zhaohua (n 60) 43. 515 Ibid. 516 Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws III’ (n 463) 575. 517 “[T]he seat of a contractual obligation is, in principle, the place of performance and that law accordingly regulates questions respecting the obligation's substantial validity”. Von, 'Choice of Law and the Problem of Justice' (n 401) 32. 518 Albert A Ehrenzweig, ‘Contracts in the Conflict of Laws. Part Two: Performance. IV. The Rule of the Lex Fori’ (Pt Columbia Law Review Association, Inc) (1959) 59(8) Columbia Law Review 1171–90, 1171. 519 Law Reform Commission (n 67)98. 520 Nussbaum (n 491) 899. 521 K. M. Hayne Q.C., 'Problems with Long Term Contracts: Conflict Of Laws' (1986) AMPLA Yearbook, 464. Citing Dicey & Morris The Conflict of Laws (London 1980) 748-9; Yntema (n 465) 115.

71 3.3.3. Internationality of the Law of the Place Where the Contract Is Made

According to the explanatory memorandum, the law of the place was chosen because it was the most accepted solution worldwide in 1976,522 although this was not the case at the beginning of the twentieth century. For example, Lorenzen argued in 1921that “[i]n this country [USA] opinion has been divided between the law of the place of performance and that of the place where the contract was executed, the majority of the courts supporting the former rule”.523 Further, since 1769, the English court has declined to be obliged by any inflexibility in the method of choice of law in relation to the place where the contract was made.524 Lord Denning in Boissevain v Weil claimed that “the question whether the contract … is valid … depends on the proper law of the contract and that depends not so much on the place where it was made”.525 Although other earlier examples can be cited, Robinson v Bland was one of the leading cases in which the English court accepted the principle of party autonomy. In his decision, Lord Mansfield made it clear that the law of the place where the contract is made should not be taken as rule. Lord Mansfield argued that “[t]he law of the place can never be the rule where the transaction is entered into with an express view of the law of another country, as the rule by which it is to be governed”.526 There was no real reason for discussing the matter of the law applicable in this case because both conflict laws— English law and French law—were identical,527 although the Judges expressed their opinions regarding the question of what law should govern if those laws were different. Wilmot J argued that any claim contrary to the ordre public was void in England. For Dennison J, English law would prevail because the plaintiff had chosen the English court, so the English law was applicable. Lord Mansfield stated: The general rule, established ex comitate et jure gentium, is that the place where the contract is made and not where the action is brought, is to be considered in expounding and enforcing the contract. But this rule admits of an exception, when the parties [at the time of making the contract] had a view to a different kingdom.528 The judges in this case expressed at least four different opinions regarding the law that should govern the disputed contract: the law chosen by the contracting parties, the law of the country where the court sits, the law of the place of performance and the law of the place of performance as the implied chosen law.529 In 1909, Beale commented on Lord Mansfield’s opinion: But Lord Mansfield’s first reason for preferring the law of England— that it was the law intended by the parties—has never been repudiated

522 The Jordanian Civil Code No 43 (n 37) art 1. 523 Ernest G Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws’ (Pt The Yale Law Journal Company) (1921) 31(1) The Yale Law Journal 53–72, 60. 524 Bilkis (n 9) 15. Citing Compton v Bearcroft, 1769 2 Hagg Con 444n. 525 Boissevain v Weil [1949] 1 All ER 146. 526 Robinson v Bland [1760] 1 Wm BL 234 at 258–9. 527 ‘Lord Mansfield: “The facts stated scarce leave room for any question; the law of France and of England is the same”’. Quoted in Beale (n 467) 5. 528 [1870] LR 6 QB1 529 SM Sichardson, ‘International Contracts and the Choice of Law’ (University of Canterbury, 1988) 29.

72 by an English court and has finally been accepted as the rule by which the validity of all contracts.530 Today, no solution can compete with the proper law doctrine. Since it was adopted by the Rome Convention in 1980, the proper law doctrine has become the most accepted solution worldwide.531 All common law countries and EU member states have adopted it. Čolović argued that “[n]owadays, a great majority of countries apply the principle of the closest association of a contract with a particular law [the proper law doctrine], in case the parties do not decide on the applicable law”.532 Therefore, if Jordan is seeking the best solution to the problem of the conflict of laws in international contracts, the proper law doctrine is the obvious choice.

3.3.4. Flexibility of the Formula Currently Adopted by Jordan

According to the explanatory memorandum, the lawmakers did their best to adopt a flexible solution to ensure that Jordan would benefit from future developments in this area.533 However, the current rules are not flexible. The philosophy of the preselected connecting factors approach is inflexible. Many scholars have described this approach as ‘the rigid approach’534 because it significantly limits the courts’ power to determine the applicable law. Indeed, such a claim is inaccurate and if it were not there, it would be much easier to excuse the lawmakers because Article 21 of the JCC deals with the formalities of a contract. Moreover, in a civil law country, the possibility of benefiting from future development is impossible because the court’s task is limited “to apply[ing] and interpret[ing] the law contained in a code, or a statute to case facts”.535 Pejovic claimed that “[o]ne of the basic characteristics of the civil law is that the courts main task is to apply and interpret the law contained in a code, or a statute to case facts”.536 However, this justification suggests that Jordanian lawmakers attempted to adopt a flexible approach. As explained in detail in Chapter 5, no other approach can compete with the proper law doctrine in this regard.

3.4. Conclusion

Three main points can be drawn from this chapter. First, although the JCC is an Islamic law, neither the Jordanian legal system nor the Jordanian PIL is Islamic. Second, the targeted conflict rules are not nationally made, but are culture-free imported Articles. On this basis, since there is no fundamental relationship between national culture and conflict rules on international contracts in Jordan, the abandonment of these rules should not present a challenge. Further, there should not be cultural resistance to the abandonment of Articles 20 and 21 of the JCC. Third, when Jordan adopted these Articles, the lawmakers did not attempt to protect national interest or cultural values. Instead, they believed that the existing rules respected the intention of the parties, that the solution they provided was the most universally accepted solution, and the law chosen according to the current approach was genuinely related to the disputed contract, which would allow the court to deal flexibly with the diversity of contractual disputes and benefit from developments.

530 Beale (n 467) 6. 531 Rome Convention 1980 (n 44) art 3(1). 532 Čolović (n 34) 53. 533 Explanatory Memorandum (n 389) art 21. 534 Kono (n 40) 64. 535 Pejovic (n 46) 819. 536 Ibid. 73 However, in this chapter, it has been argued that the current Jordanian conflict rules concerning contracts are not aligned with these values. The proper law doctrine is the conflict rule that Jordan should adopt if it wants to translate these values into a conflict rule because it is the most acceptable solution, is flexible, and offers a sound foundation for the selection of the law that has the closest relationship with the disputed contract. In this chapter, the questions posed for the first stage of a legal transplant study (see Chapter 2) have been answered: is Jordan ready to abandon its current approach? Why must Jordan abandon the current approach? In the following chapter, the comparability of the proper law doctrine and the Jordanian conflict rules in question, is examined.

74 Chapter 4: Comparability of the Australian and the Jordanian Conflict Rules Concerning Contracts

Overview

In this chapter, the researcher seeks to confirm that the Australian proper law doctrine and the Jordanian conflict rules in question are functionally equivalent. To this end, the functional scopes of the targeted rule in both jurisdictions are compared by means of an analysis of two main issues: 1- National interpretations of the key terms upon which the determination of the scope of the targeted rules depends. 2- The impact of the national laws in both jurisdictions and the international conventions to which each country under comparison is a party on the scope of the targeted conflict rules. Further, the issues that Jordan may need to consider prior to adopting the proper law doctrine are highlighted in this chapter. As mentioned in Chapter 2, the provisions of a conflict rule are not the only aspect that a court takes into consideration when dealing with a case involving a choice-of-law question. There are at least two additional factors: the national mandatory rules and the relevant international treaties to which a country is a party. The principle is that no conflict rule shall apply when there is a contrary provision in a special law or in an international convention in force in the country.537 The provisions of these laws play an important role in determining the scope of the targeted rules, which can explain the differences between national laws of different countries. This chapter is divided into three main sections. Section 4.1 determines the scope of the general conflict rules regarding international contracts in both countries by focusing on the definition of international contract as a key term. A comparison is made of the national definition of (the term) contract in both legal systems and the criteria by which they determine its internationality. Section 4.2 examines the international conventions and the national mandatory rules in both countries under comparison, which may affect the scope of the conflict rules in question. Section 4.3 considers the national laws in both countries that may influence the scope of the targeted rules.

4.1. Comparative Analysis of the Scope of the General Conflict Rules Regarding Contracts in Australia and Jordan

To ascertain the ambiguity of a legal rule or to determine whether a legal rule is applicable to a given dispute,538 courts begin by interpreting key terms.539 This interpretation is the other facet of characterisation.540 MacCormick and Summers claimed that “[t]he reverse

537 See e.g., Vázquez Carlos Manuel, ‘Treaties as Law of the Land: The Supremacy Clause and the Judicial Enforcement of Treaties’ (Pt Harvard Law Review Association) (2008) 122(2) Harvard Law Review 599–695, 694. 538 DN MacCormick and RS Summers, Interpreting Statutes: A Comparative Study (Taylor & Francis, 2016) 268. 539 John Middleton, ‘Statutory interpretation : mostly common sense?’ (Pt Melbourne University Law Review) (2017) 40(2) Melbourne University Law Review 626–56, 627–30. 540 Hannah L Buxbaum, ‘Determining the Territorial Scope of State Law in Interstate and International Conflicts: Comments on the Draft Restatement (Third) and on the Role of Party Autonomy’ (2017) 27 Duke Journal Of Comparative and International Law 381, 382.

75 image of interpretation is … the legal characterization of facts. A factual state of affairs is ‘placed’ under the scope of a text”.541 Since the targeted rules in Australia and Jordan are relevant only when the subject matter of a dispute is a contract that involves a foreign element, it is evident that the national understanding of the terms ‘contract’ and ‘foreign element’ plays a vital role in determining the scope of application of the targeted conflict rules. In the context of PIL, ‘foreign contract’ means literally a contract with an international (transnational) dimension according to the national understanding of the term. In this section, the scope of the general conflict rules regarding contracts in Australia is compared with that of Jordan by examining how these legal systems define contract, unilateral obligations and the criteria by which they characterise a contract as being international. For the purpose of this thesis, a distinction is made between contract theory and contract law, and between doctrinal interpretations and the application of law (judicial interpretation). Contract laws differ across jurisdictions, which is why the conflict rules approach is required. However, this does not mean that contract theory also differs from one country to another. It might happen that two legal systems adopt almost the same contract theory, although their contract laws differ. Contract theory is not the only theory upon which contract law is based.542 For example, contract law also uses the theory of legal capacity and the theory of determining the place of contracting by post. It is difficult to compare the entire contract laws of two legal systems.543 At best, one can compare their provisions regarding a specific point. Hence, the purpose of the current discussion is not to compare contract laws in Australia and Jordan; so, any generalisations must be understood at the theoretical level. In this section, the researcher’s purpose is to determine whether there is any fundamental difference between the contract theories in these two legal systems, which may affect the application of their national conflict rules. What matters is the way that these two legal systems characterise a legal transaction as a contract, which depends mainly on how they interpret the term contract. It seems that if these two legal systems differ in their definition of contract, the scope of their conflict rules will differ accordingly, which is why it is important to determine whether this is the case. For the purpose of this thesis, it does not matter how the legal systems under comparison regulate the sale of goods contract, as long as such a transaction is considered to be a contract in both jurisdictions. What matters is whether one of these legal systems does not accept such a transaction as a contract, because this will directly influence the scope of the targeted rules.

4.1.1. Contract: Meaning in Australia and Jordan

The term contract is usually translated into the Arabic term aqd (plural uqud), a noun derived from the root aqda, which literally means ‘bond’ or ‘tie’.544 Some Western

541 MacCormick and Summers (n 538) 268. 542 Alan Schwartz and E Scott Robert, ‘Contract Theory and the Limits of Contract Law’ (Pt The Yale Law Journal Company) (2003) 113(3) The Yale Law Journal 541–619, 543. 543 Chodosh (n 225) supra note 86. Citing FH Lawson, Selected Essays (New York: North Holland Publishing Co, 1977) 2. But see John A. Makdisi, 'The Islamic origins of the common law' (Pt North Carolina Law Review Association) (1999) 77(5) North Carolina Law Review 1635, 1652. 544 Ibn Manzur, Lisan al-Arab (Dar Ihya al-Turath al-Arabi, 1999) vol 3, 297.

76 scholars, such as Coulson, have argued that aqd and contract are not functionally equivalent.545 To support this claim, Coulson presented three main arguments. First, Coulson argued that a legally binding contract, particularly in common law countries, requires an agreement, although this element is not necessary for creating a valid aqd in Islamic jurisprudence. Coulson claimed that “aqd does not necessarily involve agreement because the term is used to describe a unilateral juridical act which is binding and effective without the consent of any other party”.546 To support his argument, Coulson used the example of repudiation of a marriage by a husband (talaq means to divorce).547 Second, following discussion of consideration as an essential element of a valid contract, Coulson concluded that Western and Islamic contract theories are fundamentally different because consideration is not required in order to create a legally binding aqd.548 This assumption is based on the belief that while hiabh (usually translated into donation or gift)549 and ariyya (usually translated into gratuitous loan) are treated as contracts in Islamic jurisprudence, they are not considered as such in common law countries because of the lack of consideration.550 According to Coulson, aqd does not necessarily involve consideration.551

545 Catharine MacMillan and Richard Stone, Elements of the Law of Contract (University of London, 2012) 13–42. 546 Coulson (n 366) 18. Some Muslim writers have claimed the same thing and used the same example: “[A]qd is not an accurate translation of the conventional ‘contract’ because the former does not necessarily involve agreement (which is a necessary element in a conventional contract) because the term is also used to describe a unilateral juridical act which is binding and effective without the consent of the other party. For example, divorce or talaq, which essentially ends the marriage contract”. Ismail (n 405) 222. Some Muslim writers have also confused regarding whether contract and aqd are functionally equivalent. For example, Abdurrahman Yahiya Beamer published a book in English to discuss aqd, in which he used the sane ideas and the same examples used by Coulson and reached the same conclusion: “[T]he Arabic term aqd is translated into English as ‘contract’; however, it carries a deeper meaning than a normal contractual relationship. The literal meaning of word aqd is ‘tie’ or ‘bond’. There is no precise equivalent of the technical term ‘contract’ in Western jurisprudence, as a contract under common law involves, in addition to the intention to create a legal relation, the basic requirements of offer, acceptance and consideration. Under Sharī’ah contract law, however, a contract does not necessarily require the agreement of all the parties, because the term aqd may describe a unilateral action, which is binding and effective even without the consent with the other parties in some events. For example, a gift contract and the dissolution of marriage by the husband are valid actions with no need for the other parties’ acceptance”. AY Baamir, Shari’a Law in Commercial and Banking Arbitration: Law and Practice in Saudi Arabia (Taylor & Francis, 2016) 67. 547 Coulson (n 366) 18. 548 Ibid. In the same meaning Carol Lee Childress, ‘Saudi-Arabian Contract Law: A Comparative Perspective’ (Pt St. Thomas Law Review) (1990) 2 St. Thomas Law Forum 69, 81. ‘Islamic law, unlike American law, does not require consideration’. 549 Some writers have used another example to support the same claim. For example, Wisham, Muneeza and Hassan use ‘wasiah (wills)’. However, wills are not contracts. 550 Coulson (n 366) 18. 551 Some Muslim writers have agreed with Coulson: “[I]n Islamic law an aqd does not necessarily involve consideration”. Ismail Wisham, Aishath Muneeza and Rusni Hassan, ‘Special legal features of the Islamic Wa’d or Pledge’ (Pt Emerald Group Publishing Limited) (2011) 53(3) International Journal of Law and Management 221–34, 223.

77 Third, Coulson argued that the essential elements needed to create a valid aqd vary from those required to create a legally binding contract in Western countries. He claimed: [W]hile uqud may be translated as ‘contracts’, because the term normally refers to legal transactions which are concluded by an offer from one party and acceptance from the other, it must be emphasised that an aqd or ‘contract’ in Islamic jurisprudence means no more and no less than a legal undertaking, the essential of which are very different from ‘the binding promise’ which constitutes a contract in Western law.552 Coulson’s claim that aqd does not require agreement indicates his misunderstanding of the Islamic aqd theory and of the meaning of aqd as a legal term.553 On the contrary, agreement is not only essential to create a valid aqd, but the aqd is also defined as an agreement. In Islamic jurisprudence—the historical source of contract law in Arabic countries, including Jordan554—it has been claimed that aqd is a metaphor for the parties who choose to voluntarily tie themselves to an agreement.555 Muslim scholars have argued that every aqd is an agreement, whereas the opposite is not necessarily true.556 For example, international conventions are agreements between countries, but they are not contracts.557 Hence, it is inaccurate to claim that an aqd does not involve agreement. Here one might ask: what about the example used by Coulson to support his argument? The answer to this question can explain the methodological problem that led to a false assumption. A combination of several factors has led to this wrong conclusion. However, as they cannot all be explained in a short chapter, this discussion is focused on two of the most important methodological mistakes that led to Coulson’s misconception. First, Coulson focused on Islamic jurisprudence and not on contract law in Islamic countries, although he discussed contract law in the United Arab Emirates. What supports this observation is that Coulson mentioned classical jurisprudence schools, such as ‘al- Mughni of Ibn Qudama’558 and the ‘Maliki fiqh’.559 Al-Mughni of Ibn Qudama is a book— Al-Mughni is the name of the book (it means ‘the adequate’) and Ibn Qudama is the author, who died in 1323; Maliki fiqh is a series of books, fiqh means jurisprudence and Maliki is an adjective, which is derived from the name of a well-known scholar in Islamic history called Malik Ibn Anas, who died in 795.560 These books that deal with aqd theory existed long before the appearance of the current civil codes, which were enacted in the

552 Coulson (n 366) 18. 553 “In Islam, every part of the total system is justified as a link in the chain of interrelations, as explained in the preceding chapter. If it is taken isolated or torn out of its setting, it is very difficult to understand the real meaning and function, of each part. A contract in Islamic law is just a part built into the whole Islamic network system. Accordingly, it is important to examine the entire Islamic network system in order to understand the real meaning of a contract in Islamic law”. Shimizu (n 341) 20. 554 Hayajneh, ‘Theoretical Framework for Judicial Discretion Within Qatari and Jordanian Civil Laws: Indications and Implications’ (n 334) 71. 555 Hanan Bint Muhammad Husain, ‘Contracts Types in Islamic Jurispudance’ (Master Thesis, Umm Al-qura University, 1998) 66. 556 Beatrix Vohrah, The Commercial Law of Malaysia (Longman/Pearson Education Malaysia, 2nd ed, 2000) 6–7. 557 Khadduri Majid, ‘Islam and the Modern Law of Nations’ (Pt American Society of International Law) (1956) 50(2) The American Journal of International Law 358–72, 359. 558 Coulson (n 366) 18. 559 Ibid, 23. 560 H Pearson et al., The Encyclopaedia of Islam (Brill, 1960).

78 twentieth century in most Arabic countries.561 The problem of relying on these books by a non-specialist in Islamic jurisprudence stems from the fact that the logic upon which these books were based does not match the logic of modern aqd theory. However, there is a fundamental relationship between both theories. Perhaps that is why these books are referred to in the Islamic jurisprudence as reference sources of jurisprudence. Modern aqd theory is based on the classical one, although the structure of the modern theory is different. Logic in this context refers to the structure of the theory, including the interpretation of its key terms. It is almost impossible to understand modern aqd theory accurately by analysing classical aqd theory. The classical theory can be used to justify the modern theory and link it back to religion. It appears that Coulson ignored issue, although some Muslim writers have made the same mistake.562 There is a relationship between the classical theory, where aqd is used metaphorically and the rules of the modern civil codes, where aqd is used as a technical term. For example, Article 3 of the JCC provides that the rules and principles of Islamic jurisprudence shall be relied upon to understand and interpret the Articles of the code.563 Therefore, scholars of private law could not ignore the classical interpretations and legal requirements for the creation of a valid aqd under the classical theory, which directly influences the ways in which the term aqd is explained. To illustrate, the term aqd is used in different areas of legal theory for different purposes, so it means different things in different legislations. Previously, the law was not divided as it is currently, which meant that the classical jurisprudence school did not distinguish between the commercial code and the civil code. This remains the case in Saudi Arabia.564 Moreover, classical theory considers family law side-by-side with those legal relationships (uqud) subjected to civil code in the modern legal systems.

561 For example, the JCC was enacted in 1976, the UAE Civil Code was enacted in 1985 and the Egyptian Civil code was enacted in 1948. 562 For example, Noor Mohammed published an article in which she claimed that “The [A]rabic word ‘uqud’ covers the entire field of obligations [which is not true. contract theory and the theory of obligations are two different theories], including those that are spiritual, social, political and commercial. In the spiritual realm “uqud” deals with the individual’s obligation to Allah [the Arabic word for this is ahed not aqd]; in social relations the term refers to relations including the contract of marriage [this is metaphorically]; in the political area it encompasses treaty obligations [that is agreement] and similarly, in the field of commerce, it covers the whole spectrum of obligations of parties in regard to their respective undertakings [this is the only area covered by aqd as a technical term]. Hence the generic word ‘uqud’ forms the foundation of contract and attendant liabilities”. Noor (n 442) 116. Noor’s argument suffered from the same methodological problems discussed in the present section. Noor confused four Arabic terms: promise (ahed) contract (aqd), obligation (iltizam) and agreement (itifaq), which is why she reached a misleading conclusion. 563 The Islamic interpretation theory has been selected to stress the relationship between the law and Islamic jurisprudence, especially since the fundamentals of Islamic jurisprudence is a set of interpretation principles and rules that scholars agreed on. Prior to 1939, a separate law existed for the purpose of interpreting laws in Jordan, the Law of Interpretation of Laws enacted under the British Mandate for Jordan. It was amended several times before it lost its meaning. Therefore, judges started to interpret laws according to their own understanding of the language, which caused disparate outcomes. The lawmaker sought to solve this problem with Article 3 by prescribing a single source or method of interpretation. Explanatory Memorandum (n 389) art 3. 564 Baamir (n 546) 67.

79 Evidently, the problem with Coulson’s reference to the classical aqd theory is that he compared Islamic contract theory, which had been applied between the eighth and fourteenth centuries, with the contract theory of the twentieth century in common law systems. Therefore, in principle, Coulson’s comparison cannot be accepted. This does not mean that what he said about the Islamic aqd theory of the fourteenth century is correct. However, Coulson made an inappropriate choice of systems for the purposes of comparison, which renders unacceptable any comparative study.565 Second, aqd is used in Islamic jurisprudence to describe every agreement to create, amend, cancel or end an obligation.566 In this sense, aqd was used in its etymological meaning of ‘tying up’, rather than as a technical term.567 Marriage is an aqd.568 However, since marriage is subjugated to family law, it is an aqd that differs from the aqd regulated by the provisions of the civil code. Likewise, divorce is an aqd because it ends the marriage aqd. Divorce, as marriage, is also governed by the provisions of family law. Therefore, aqd must be studied, analysed and understood in the context of the legislation to which it belongs. Accordingly, the divorce example given by Coulson to demonstrate that aqd does not necessarily involve agreement in support of his claim that aqd and contract are different was misleading because contractual and family relationships belong to different legislations. The assumption that contract and aqd are fundamentally different because divorce does not require agreement is inaccurate and does not stand on a sound academic foundation. By using the divorce example to compare aqd and contract, Coulson compared the provisions of family law in the legal history of one jurisdiction with contract law in another. Although agreement is important when creating aqd, Muslim scholars have not listed it under the essentials of a valid aqd. Therefore, if one wants to translate the essentials of creating a valid aqd under the Islamic contract theory, one cannot find ‘agreement’ (‘itfiaq’ in Arabic) among them. The latter means no more and no less than the coming together of an offer made by one of the contracting parties with the acceptance of the other.569 According to Muslim scholars, agreement is not a separate requirement to create a valid aqd, but a title that describes the meeting of two intentions.570 The essential elements are the offer and the acceptance. The agreement (itfiaq) is only a term that summarises what has occurred between the parties, and there is no need to mention agreement if one mentions an offer and an acceptance. Conversely, a group of common law scholars have argued that agreement is not essential for the creation of a valid contract, a matter which Coulson took for granted. Some textbooks have defined contract as “an enforceable agreement”.571 Cheshire, Fifoot and Furmston claimed that this definition is inaccurate because ‘deeds’ do not depend on

565 Reitz (n 49) 420–2. 566 Bashar A Malkawi, ‘The Contract in the Jordanian Civil Law Between the Internal and the External Will ‘ (2006) 33(2) Journal of Syariah and Law, 286. 567 Hussein Hassan, ‘Contracts in Islamic Law: The Principles of Commutative Justice and Liberality’ (Pt Oxford University Press) (2002) 13(3) Journal of Islamic Studies 257–97, 257. 568 Shimizu (n 341) 89. 569 Md Abdul Jalil and Muhammad Khalilur Rahman, ‘Islamic Law of Contract is Getting Momentum’ [175] (2010) 1(2) International Journal of Business and Social Science, 180. 570 Ibid. 571 Clive Turner and John Trone, Australian Commercial Law (Thomson Reuters Professional Australia Limited, 32nd ed, 2019) 48; Jeffrey Jenkins, The American Courts: A Procedural Approach (Jones & Bartlett Learning, 2011) 198.

80 agreement, yet they constitute contracts.572 However, this argument is faulty because no legal system will enforce any transaction with deeds as a contract without the acceptance of the other party. Murray contended that “[g]ivers are free to give or not; recipients are free to accept or not”.573 Perhaps what those scholars had in mind when making their point is the case in which the grantor makes a deed without discussing it with the grantee. However, the acceptance of the grantee must occur at some point before the deed is enforceable. If the grantee refuses the deed, no legal system will force an acceptance of it. Although the acceptance might not occur immediately, it must happen at some point.574 However, if ‘agreement’ here is used in the sense of negotiation (bargain), that is a misuse of legal terms, since ‘negotiation’ and ‘agreement’ are not synonymous. Many contracts are made on the basis of ‘take it or leave it’ (contract of adhesion).575 Islamic and Western contract theories agree that agreement is essential when creating a valid (legally binding) contract, although they discuss the concept in different contexts. For example, Jalil and Rahman argued that “to make a contract in the Islamic law, there must be an agreement between two parties”.576 Accordingly, the difference between the two theories regarding agreement is not, as Coulson claimed, that an agreement is not necessary to create an aqd, but in the way jurisprudence explains it in both jurisdictions. The claim that consideration is not necessary for the creation of a valid aqd, while it is essential for a legally binding contract, is not based on a solid comparative foundation. As such, it is not in a better position than the previous allegation. Although this might be surprising to many, consideration is equally important in both common law systems and Islamic contract theory. If ‘essentials’ refers to the elements whose non-availability results in nullification of the contract, consideration is not essential even in common law systems. Deeds do not require consideration, yet they are considered to be contracts. The general principle in common law countries is that no contract is enforceable in the absence of consideration unless it is a deed,577 which means that consideration is relevant only when a contract is bilateral, which can be defined as: A contract in which each party promises a performance, so that each party an obligor on that party’s own promise and oblige on the other’s promise; a contract in which the parties obligate themselves reciprocally, so that the obligation of one party is correlative to the obligation of other.578 In Jordan—as an example of countries that apply the Islamic contract theory—this type of contract is known as uqud almwawada, which can be translated as ‘synallagmatic contract’.579 A typical example of these contracts is a contract of sale, in which one party promises to pay the price of something and the other party promises to deliver the goods.

572 CHS Fifoot, MP Furmston and GC Cheshire, Cheshire and Fifoot’s Law of Contract (Butterworths, 11th ed, 1986) 27. 573 Thomas H Murray, ‘Gifts of the Body and the Needs of Strangers’ in Ruth F. Chadwick and Doris Schroeder (eds), Applied Ethics: Critical Concepts in Philosophy (Taylor & Francis, 2002) 171. 574 M Jennings, Real Estate Law (Cengage Learning, 2007) 350. 575 Andrew Tutt, ‘On the invalidation of terms in contracts of adhesion’ (Pt Yale University, School of Law) (2013) 30(2) Yale Journal on Regulation 439, 440–1. 576 Jalil and Rahman (n 569) 180. 577 Moschi v Lep Air Services Ltd [1973] AC 331 at 346. 578 Black’s Law Dictionary (2nd ed, 1995). 579 JW Carter, Greg J Tolhurst and Elisabeth Peden, ‘Developing the Intermediate Term Concept’ (Pt LexisNexis Butterworths) (2006) 22(3) Journal of Contract Law 268, 275.

81 According to Article 87 of the JCC, consideration is expressly provided for in Jordanian law. This Article defines aqd as: The coming together of an offer made by one of the contracting parties (ijab) with the acceptance of the other (qbool), together with the agreement of both of them in such a manner as to determine the effect thereof on the subject matter of the contract and from which results obligations upon each of them with regard to that which each is bound to do for the other.580 The key phrase to focus on in this article is ‘from which results obligations upon each of them with regard to that which each is bound to do for the other’. This is referred to in Islamic jurisprudence as ‘mutual obligation’, which is referred to in common law system as ‘consideration’. According to Turner and Trone, consideration “means that a promise can only be legally enforced by promise … if the promise can show that they have given or promised to give something in return for the promise”.581 Jenkins defined consideration as “something of value that is exchanged by the parties to a contract in order to secure their respective promises. It is the thing that someone does in exchange for the promise of another party”.582 As a rule, “[u]nder the Islamic law of contract there must be a consideration in a contract. If there is no consideration, the agreement will not be valid as it is not enforceable by law”.583 In light of the above, it is difficult to understand the logic upon which the assumption that aqd does not necessarily require consideration is based. It raises the question of where this assumption originated. One possible answer may be that material was poorly translated. To illustrate, if one translates the legal requirements to create a valid aqd under the Islamic contract theory into English, one cannot find consideration among them because consideration is not essential to every aqd. Muslim scholars have discussed consideration only in the context of the contracts to which it was relevant.584 Further, consideration in the sense of ‘a payment or reward’ is regarded by Muslim scholars as an obligation, not as being essential to creating a legally binding bilateral contract.585 The reason why a party is obligated to do something is because they made an agreement with the other party, who is obligated to do something in return. Smith claimed that “[t]he rule’s ultimate purpose, in the realist view, is to function as a residual category; it allows judges to rely on reasons that have not been and in some cases, arguably cannot be, incorporated explicitly into the law”.586 Therefore, the obligation of one party is the right of the other party.587 Since each party has the right to waive their right and exempt the other party from their obligation, the consideration is not regarded as essential to the

580 The Jordanian Civil Code No 43 (n 37) art 87. 581 Turner and Trone (n 571) 57. 582 Jenkins (n 571) 198. 583 Jalil and Rahman (n 569) 182; Shimizu (n 341) 10. 584 ‘[In bilateral contracts] consideration constitutes their principal ingredient’. Hayatullah Laluddin et al., ‘The Contract of Hibah (gift) From an Islamic Perspective’ [1080] (2012) 6(7) Advances in Natural and Applied Sciences, 1081. 585 The same logic upon which the doctrine of consideration is based: See, PS Atiyah, ‘Consideration: A Restatement’ in PS Atiyah, Essays on Contract (Oxford University Press, 1990) 181. 586 Stephen A Smith, Contract Theory (Oxford University Press, 2004) 231. 587 “None of the parties has the right to unilaterally dissolve the contract as none of them can unilaterally form it, because the contract is a shared right”. Muhammad Wohidul Islam, ‘Dissolution of Contract in Islamic Law’ (Pt Brill) (1998) 13(4) Arab Law Quarterly 336–68, 342.

82 creation of a valid aqd. If it is classified as being essential to a contract, this would mean that the law restricts the parties’ freedom. To put it differently, classifying consideration as an essential element of a legally binding contract could mean, according to Muslim scholars’ understanding of obligation theory, that if one of the contracting parties have voluntary chosen to absolve the other party from his/her obligation, will make the transaction void and null. This is simply because, if one of the essentials is missing, the transaction is void and must not have any legal effect.588 Evidently, no legal system considers such a transaction to be void.589 Another possible reason for not mentioning consideration as an essential element of a legally binding aqd is that aqd has two forms in Islamic jurisprudence: unilateral contracts and bilateral contracts. Muslim scholars have classified contracts in various ways depending on the nature of the classification.590 For example, contracts can be classified based on whether they are explicitly mentioned in the law into nominate and innominate contracts. Examples of nominate contracts in Jordan include the sale contract,591 hire contract,592 contract of agency (wakala),593 hibah594 and ariyya.595 Another way to classify contracts is by reference to whether they contain executory promises by one or both parties; if only one party is obligated in a contract, it is unilateral; otherwise it is bilateral.596 However, classifying contracts is not part of the Islamic contract theory, but rather an academic approach used to explain contracts according to their classification. According to Carter, the distinction between unilateral and bilateral contracts was abandoned in Australia “because of doubts as to its utility”,597 given that unilateral obligations do not have consideration and cannot constitute a contract. However, this contradicts the fact that a deed is enforceable as a contract, although it does not involve consideration.598 Even the common law system gives effect to some types of obligations in which only one party is obligated to do something without receiving anything in return. One of the most important points used to compare the common law system and the civil law system regarding the matter of consideration is that in common law system, it is not necessary for consideration to be monetarily fair, which is also true under the Islamic contract theory. Jalil and Rahman claimed: A consideration needs not be adequate as an inadequate consideration is enough to validate a contract as long as the parties give consent freely to the agreement upon which they are satisfied. If a contract is not caused by a misrepresentation, fraud, coercion, undue influence and other attendant legal ambiguities then the contract is valid even though its consideration is not adequate. For example, A sells his car to B for RM5,000 while the market value of the car is RM10,000. If A sells the car with a free consent and he is not forced by someone to sell the car or he is not unduly influenced to sell the car and if he is satisfied with

588 RLR Miller and FB Cross, The Legal Environment Today: Business in Its Ethical, Regulatory, E-Commerce and Global Setting (Cengage Learning, 2012) 242. 589 Mathias Siems, Comparative Law (Cambridge University Press, 2018) 69. 590 Coulson (n 366) 18. 591 The Jordanian Civil Code No 43 (n 37) art 465. 592 Ibid, art 658. 593 Ibid, art 833. 594 Ibid, art 567. 595 Ibid, art 763. 596 Ibid, arts 557, 760. 597 Carter (n 475) 13. 598 Turner and Trone (n 571) 59.

83 the price, we can say that the contract will not be invalid due to a merely inadequate consideration.599 According to the JCC, a contract may not be cancelled on the basis of a gross cheat (unfair consideration) in the absence of misrepresentation, save in respect of property of a person under restriction, waqf property (an endowment made by a Muslim to a religious, educational or charitable cause) and property of the State.600 Accordingly, in regard to consideration, there is no real difference between the Western and the Islamic contract theories. It is a matter of how and where it is explained. When explaining how to conduct comparative law, Reitz stated: A comparative study of the consideration doctrine in British, French and German law that simply reported that neither French nor German law recognizes the doctrine without considering whether French and German law achieve some of the same purposes with other rules would simply be a very weak effort.601 Further, Coulson claimed, inaccurately, that the essentials of aqd are very different from those required to create a valid contract under Western laws.602 In Australia, there are six essentials required to create a valid and legally binding contract namely offer and acceptance, intention, consideration, legal capacity, genuine consent and legality of object.603 Surprisingly, these essentials are identical to those required by the JCC, which is based on Islamic jurisprudence, to create a legally binding aqd.604 Article 87 of the JCC defines aqd as: [T]he coming together of an offer made by one of the contracting parties with the acceptance of the other in such a manner as to determine the effect thereof on the subject matter of the contract and from which results obligations upon each of them with regard to that which each is bound to do for the other. This definition makes it obvious that every aqd must involve an offer and an acceptance, which must be expressed by the free will of persons who enjoy legal capacity,605 otherwise the aqd is void.606 The intention to create a legal relationship is understood and studied in Islamic jurisprudence under consent.607 Moreover, the subject matter of a contract must be legal.608 The requirements for creating a valid aqd under Jordanian law—as an example of the countries that have applied the Islamic contract theory—have profound similarities that could pass as being identical to those required by Australian law—as an example of legal systems that have adopted the Western contract theory.609

599 Jalil and Rahman (n 569) 182. 600 The Jordanian Civil Code No 43 (n 37) art 189. 601 Reitz (n 49) 621. 602 Coulson (n 366) 18. 603 Turner and Trone (n 571) 48–9. 604 SS Razali, Islamics Law of Contract (Cengage Learning, 2010) 1–27. 605 The Jordanian Civil Code No 43 (n 37) art 90: ‘A contract shall be made by virtue solely of the confluence of offer and acceptance, subject to the specific provisions laid down for the making of the contract by law’. 606 The Jordanian Civil Code No 43 (n 37) art 168. 607 Hisham Ali Sadiq, The Law Applicable to International Commercial Contracts (Monchaat Al Maaref, 1995). 608 The Jordanian Civil Code No 43 (n 35) art 88/4. 609 “A contract is an agreement which is enforceable by law and only legal agreements are contracts whereas illegal agreements are not contracts. To draft a valid contract there must be

84 So far, observations that support similarities between both theories appear to be greater than those support the opposite. After the foundations upon which Coulson based his argument have been examined, it can be concluded that the prevailing belief that there are considerable differences between the contract theories of Western legal systems and Islamic jurisprudence is questionable and requires reassessment. Jalil and Rahman contended that “Islamic contract law is not totally different from the English contract law”.610 For the purpose of applying the Jordanian conflict rules in question, contract can be defined as a monetary agreement to do something that occurs between individuals or companies.611 Therefore, family relationships, legal actions that take effect after death, such as wills and succession, and legal actions that occur between the persons of the public law are not contracts.612 This definition is similar to the Australian definition of a contract, which involves “a promise or set of promises for which the law gives a remedy, or the performance of which the law in some way recognizes as a duty”.613 While there are more similarities between the contract theories in the legal systems being compared, there is one final concern: the assumption that donation is treated under the Islamic contract theory as a contract, whereas it is not considered as such in Western legal systems. As a rule, the Australian and Jordanian legal systems agree that some types of unilateral obligations can be enforced as contracts. In Jordan, these obligations are referred to as hibah, and as ‘deeds’ in common law systems. In Australia, no contract is enforceable in the lack of consideration unless it is a deed, and in Jordan, no contract is enforceable in the lack of mutual obligations unless it is a hibah. Could hibah and deed be functionally equivalent, and is the assumption that hibah (donation) is not enforceable in common law systems founded on a misunderstanding of hibah’s legal requirements? This question is addressed in the following section.

4.1.2. Unilateral Obligations Enforceable by Law in Australia and Jordan

In Islamic jurisprudence, two types of unilateral obligations are enforceable by law in the lack of consideration: hibah and ariyya. Hibah is the passing of property or a right in property to another person during the period of the lifetime of the owner, without consideration.614 Ariyya is the conferment of ownership upon another of the use of an item of property without consideration for a specified period or purpose.615 There is a common assumption that such transactions are not enforceable as contracts in common

some basic legally enforceable elements which are basically similar and applicable either in the Islamic law of contract or the English law. As mentioned above, these elements are: i) an offer (Ijab); ii) an acceptance (qabul); iii) a free consent; iv) a consideration; v) an intention to create a legally binding relationship; vi) the objective and consideration of the contract should be legal; vii) a certainty of legitimate performance, viii) a capacity (Aliyah); and ix) a formality”. Jalil and Rahman (n 569) 180. 610 Ibid. 611 Ahmed Shawky Abdulrahman, The General Theory of Obligation—The Voluntary and Non- Voluntary Sources (Almanzora University, 2008) 10. 612 Anwar Sultan, Sources of Obligations in Jordanian Civil Law, a Comparative Study to Islamic Jurisprudence (Dar AlThaqafa, 2005) 93. 613 JW Carter, Cases and Materials on Contract Law in Australia (LexisNexis Butterworths, 2012) 6. 614 The Jordanian Civil Code No. 43 (n 37) art 557. 615 Ibid, art 760.

85 law countries,616 which has played an important role in shaping the claim that contract and aqd are different. In this section, the accuracy of this assumption is examined by comparing the functionality of hiba and deeds. Ariyya is a non-binding contract, so either party can terminate it at any time regardless of the time agreed upon.617 The only binding unilateral contract is hibah, which is why ariyya is not discussed in this chapter. One of the noteworthy things regarding hibah is that it is usually translated as ‘donation’ or ‘gift’,618 a transaction generally not enforceable by law in common law countries.619 Therefore, it is necessary to determine whether ‘donation’ is an accurate translation of hibah. This is important because translation is one of the most influential factors determining the success or otherwise of studies that compare legal systems that do not use the same language.620 The translation of legal terminology is not an easy task owing to cultural reasons.621 Sacco argued that comparative lawyers should learn “not to translate”.622 At least, they must not take translation for the purpose of comparing two legal systems as a side concern. However, it is not enough for comparatists to understand legal terms in the original language; Shiflett argued that they must also be familiar with the function of the legal terms within the legal systems being compared.623 The Arabic term hibah means to give something to someone without expecting or receiving anything in return.624 This is similar to the meaning of two English terms: gift and donation. The former is “[t]he transference of property in a thing by one person to another, voluntarily and without any valuable consideration”,625 whereas the latter refers to “[t]he action or contract by which a person transfers the ownership of a thing from himself to another, as a free gift”.626 Hibah is frequently translated as gift or donation. However, when applied in practice, hibah does not mean donation or gift. Therefore, what is the English equivalent term for the Arabic term hibah? To answer this question, it is important to determine the accurate meaning of hibah as a legal term. Muslim scholars have extracted four requirements for hibah as a legally enforceable transaction: offer and acceptance, the object must be property, hibah must occur during the lifetime of the donor and there must be no consideration.627 This is known as unconditional hiba. However, hibah can also be conditional. Article 557 of the JCC provides that it shall be permissible for the donor, when still intending to make a donation,

616 Coulson (n 366) 18–9. 617The Jordanian Civil Code No. 43 (n 37) art 763. 618 Laluddin et al (n 584) 1080. ; H. Kureshi and M. Hayat, Contracts and Deals in Islamic Finance: A User’s Guide to Cash Flows, Balance Sheets and Capital Structures (Wiley, 2014) 112. ; Coulson (n 366) 20. 619 Siems (n 589) 69–70. 620 Reitz (n 49) 621. 621 Bernard Rudden, ‘An English Reader’s Guide to the French Legal System. By Martin Weston. [Book Review]’ (Pt Cambridge University Press) (1991) 40(3) (2008/01/17) International and Comparative Law Quarterly 755–6, 756. 622 Rodolfo Sacco Introduzione at diritto comparato 5th ed (Turin, 1992) pp 40–1. Cited in Legrand, ‘How to compare now’ (n 48) 234. 623 Shiflett (n 272) 29. 624 Ministry of Awqaf and Islamic Affairs (That Al Salasil 2nd ed, 1983) 144. 625 Oxford Dictionary of English (n 279) ‘gift’. 626 Ibid, ‘donation’. 627 Yusnita Mohd Yusof and Asmida Ahmad, ‘Hibah as An Alternative Mechanism In Muslims Assests Management: A Study In Melaka Tengah’ (Kuala Lumpur International Business, Economics and Law Conference, 2–3 December 2013) 3.

86 to make it a condition that the donee should perform a specified obligation and that such obligation shall be regarded as consideration.628 However, to determine the applicable law, there is no real difference between these two types. Further, the effectiveness of a hibah must be dependent on any procedure required by law for the transfer of ownership of property.629 If the subject matter of a hibah is movable property, there is no need to register it as long as the given property is delivered.630 However, neither a promise to make a hibah nor a hibah of future property is valid.631 If the subject matter of a hibah contract is immovable property, it must be in writing, signed and registered.632 Briefly, a hibah contract is a contract whereby the donor passes the ownership of property to another person without consideration and its subject matter must be immovable property, in writing, signed and registered. This is the image of the legally binding hibah contract. To put it differently, not all donation acts are legally binding. According to Zweigert’s approach to the formulation of comparative law questions,633 the question becomes: what is the English legal term that describes transferring immovable property from one person to another during the lifetime of the donor without consideration, when such an action is in writing, signed and registered? According to the Oxford English Dictionary, this action is referred to as a deed, which is defined as “[a]n instrument in writing … purporting to effect some legal disposition and sealed and delivered by the disposing party or parties”.634 A deed is a “written document that must make it clear on its face that it is intended to be a deed and validly executed as such”.635 As a rule, a deed must be written, signed, sealed and delivered.636 A deed of a gift is “a deed conveying property from one person, the donor, to another, the donee, where the donee gives no consideration in return”.637 This definition matches the definition of the unconditional hibah contract. One of the most common types of deeds is an escrow, which was explained by Lord Denning MR, in Kingston v Ambrian Investment Co Ltd: When a party executes a deed of transfer as an escrow, it means that he executes it subject to a condition, express or implied, which is thereafter to be fulfilled. As soon as the condition is fulfilled the transfer becomes complete. The deed operates to transfer the title to the transferee. If, however, the condition is not fulfilled, the deed is not effective to make the transfer.638 It is evident that an escrow is functionally similar to the conditional hibah under Jordanian law. For the purpose of comparison, hibah must be translated into deed and not into donation or gift. Siems argued: Gifts are, of course, recognised in common law countries, but to make a binding promise it has to be put in a deed. By contrast, civil law countries have no problem treating gifts as contracts but, then, the civil

628 The Jordanian Civil Code No 43 (n 37) art 557/2. 629 Ibid, art 566/1. 630 Ibid, art 566/2. 631 Ibid, art 563. 632 Ibid, art 566/1. 633 See Section 2.2. 634 Oxford Dictionary of English (n 279) ‘deed’. 635 John Goldsworth, Private Foundations: Law & Practice (Mulberry House Press, 2011) 126. 636 Turner and Trone (n 571) 60. 637 Oxford Dictionary of English (n 274) ‘deed’. 638 Kingston v Ambrian Investment Co Ltd [1975] 1 WLR 161 at 166.

87 codes often impose formalities, such as a notarial deed, to make such a contract binding. Thus, we can say that the results are functionally similar.639 Arguably, the only difference between the Australian and the Jordanian legal systems in terms of unilateral obligations can be found in what is called an ‘offer calling for an act’. A typical example of such an offer is when a person promises that they will pay another to do a certain thing such as swimming with a shark.640 Common law countries consider such a promise, whether made to a particular person or to the public at large, to be a unilateral contract.641 However, in Jordan, such a contract is known as a reward (jualah in Arabic).642 Article 909 of the JCC defines jualah as a contract whereby a person obligates himself to pay a sum of money or gives some other thing by way of agreed recompense to a person who succeeds in achieving the object specified in the contract. According to this Article, juala is a bilateral contract643 because the announcement made by the first party is seen as an offer and achieving the required job by the other party is seen as an acceptance. The mutual obligations of both parties are the consideration. However, as long as both legal systems agree on characterising an offer calling for an act as a contract, the title attached to it is not important as long as it does not affect the scope of the rules targeted in this thesis. The claim that aqd and ‘contract’ are fundamentally different because hibah is enforceable under the Islamic contract theory, while ‘donation’ is unenforceable under the common law system, has not been based on sound comparative grounds and is therefore unreliable. ‘Deed’ and hibah are functionally equivalent because they both serve the same purpose. Therefore, theoretically, it can be claimed that common law contract theory and Islamic contract theory as applied in Jordan agree that no contract is enforceable in the lack of consideration unless it is a gift that meets certain legal requirements. The legal document necessary to implement this gift is known in the common law system as ‘deed’ and under the Islamic contract theory as a hibah contract. Therefore, there would not be any conflict of characterisation between these two legal systems in the area of contract. As long as the scope of the targeted rules in these two legal systems depends to a large extent on the national understanding of the term contract, given the similarity of these two theories, there must be no difference between the scope of the application of the targeted rules. However, to ensure the compatibility of the Australian and the Jordanian conflict rules, a further question is necessary: What is the norm that the court in these two legal systems apply to decide that a given contract is international? This is the central topic of the following section.

4.1.3. What Makes a Contract International?

The importance of determining whether a contract is international is attributed to the effective application of the conflict rules in question, particularly the principle of party autonomy. In this context, there is a need to distinguish between two terms: ‘foreign contract’ and ‘international contract’. An international contract can be defined as a

639 Siems (n 589) 69. 640 Parviz Owsia, Formation of Contract: A Comparative Study Under English, French, Islamic and Iranian Law (Graham & Trotman, 1994) 422. 641 United States Federal Labor Relations Authority. Office of Operations and Technical Assistance, Decisions of the Federal Labor Relations Authority (Federal Labor Relations Authority, Office of Operations and Technical Assistance, 1985) 346. 642 Owsia (n 640) 424. 643 For more about this contract see e.g., Ibid, 424; Coulson (n 366) 24.

88 contract that is undertaken between private parties who are residents in different countries.644 A foreign contract is a contract that includes a foreign element,645 although it is not international. This distinction is important because the internationality feature of a contract is what enables its parties to select the law applicable to their transaction.646 If a contract took place in a country between two residents and then a dispute arose concerning this contract, which was brought before a court in the same country, the applicable law would be that of the national law of the country where the contract was made.647 However, if the dispute were brought before a court in another country, it would be dealt with as a foreign contract but not as an international contract. While the court would not apply the law of the country where it sits, it also would not deal with it as a real conflict of laws problem. Therefore, the applicable law would be the law of the country where both parties resided. At least, this is the position of the Jordanian legal system. In one of its decisions, the Jordanian Court of Cassation claimed that the law governing contractual obligations according to Articles 20 and 21 of the JCC was the law of the common domicile of the contracting parties if the parties resided in the same country: “This is a legal principle that parties cannot by their will agree to exclude it”.648 This is also the case under the Australian legal system.649 There is no difference between the two legal systems on this point. Historically, legal systems have adopted at least three norms to determine the internationality of contracts. The first is the legal norm. It has been argued that it is the duty of the law of each country to determine whether a contract is national or international. According to this view, a contract is international if at least one of its elements is foreign such as the nationalities of the parties, their domicile, the place where the contract is made or the place where the contract is to be executed.650 One of the criticisms of this norm was that it did not pay attention to the role of the foreign factor. Therefore, if any of the contract’s elements were foreign, the contract would be considered international. According to this argument, all contracts established between

644 Frank Emmert, ‘Part One The General Framework for International Business Transactions Section 1: Definition of IBT and Scope of the Book’, (2019) 2. 645 Mutasim Ahmad Alqudah, 'Alleviating Jurisdictional Uncertainty: An Arbitration Clause or a Jurisdiction Clause?' (Pt Kluwer Law International) (2016) Business Law Review 124-128, 124. 646 GR Delaume, ‘What is an International Contract? an American and a Gallic Dilemma’ (Pt Cambridge University Press) (1979) 28(2) International and Comparative Law Quarterly 258–79, 258. 647 See A De Droit International De LA Haye, Recueil Des Cours (Collected Courses), 1997 (Nijhoff, 1998) 367–8. 648 The Jordanian Court of Cassation, Decision No 67/1988. 649 Several international conventions have adopted the domicile of the parties. ‘This Convention applies to contracts of sale of goods between parties whose places of business are in different States’. United Nations Convention on Contracts for the International Sale of Goods, signed 11 April 1980 (signed and entered into force 1 January 1988) (‘CISG’) art 1 (1); European Convention on International Commercial Arbitration, signed 21 April 1961 (signed and entered into force 7 January 1964) (‘European Convention on International Commercial Arbitration’) art 1 (a). ‘This Convention shall apply] to arbitration agreements concluded for the purpose of settling disputes … between physical or legal persons having … their habitual place of residence or their seat in different Contracting States’. 650 Hisham Ali Sadiq, A Comparative Study of the General Principles and the Legislative Solutions in the Egyptian Law (Monchaat Al Maaref, 3rd ed, 1974) 645; Sadiq, The Law Applicable to International Commercial Contracts (n 607) 20.

89 parties of different nationalities are international, regardless of the actual role of nationality in that contract.651 In these situations, all legal transactions that one conducts while travelling overseas such as housing, hiring a car or even purchasing a tooth brush appear to be international contracts, although this not the case because nationality is not an effective factor in such transactions.652 For that reason, proponents called for a distinction between what can be called effective and ineffective elements.653 They posited that a contract is international if the foreign element is effective and plays an important role in that contract.654 This led to the appearance of ‘the narrow legal norm’ or ‘the flexible legal norm’, which requires the legal relationship to be analysed to determine the actual role that the foreign factor plays. Concisely, the internationality of a contract is a relative issue, which depends on how a factor influences the legal relationship in question. It might be that a transaction involves more than one foreign element, but it remains national because these factors are ineffective, while it might be considered international for containing one foreign element, if that element is effective. The proponents of this norm argued that a distinction should be made between the ‘objective internationality’ and the ‘subjective internationality’.655 The idea of objective internationality refers to the case in which the elements of a transaction are linked to more than one legal system. In this case, the transaction is ‘international’ regardless of which court hears the dispute.656 Conversely, the ‘subjective internationality’ or the ‘relative internationality’ occurs when the transaction’s elements are related to a legal system other than the law of the court.657 This matches the definition of the foreign contract, which has been adopted in Jordan. Although the legal norm was the first norm in this respect, it was incapable of keeping up with the requirements of rapid growth of international trade. For example, according the legal norm, if both parties are from the same country, there is no international contract even when this contract is linked to international trade. The legal norm, as a sole norm, is insufficient to determine the internationality of a contract.658 Many contracts, such as consumer contracts, may be considered ‘international’ according to this norm when in

651 Sadiq, The Law Applicable to International Commercial Contracts (n 607) 60. 652 Delaume (n 646) 264; Sadiq, The Law Applicable to International Commercial Contracts (n 607) 61. 653 Sadiq, The Law Applicable to International Commercial Contracts (n 607) 64–6. 654 Al-Saeed Abdul Monem Hafiz, International Financial Leasing Contract (Al Mansoura University, 2006) 38. 655 According to Mahmoud Mohamed Yaqoot, one of the most famous Egyptian private international law scholars, this distinction was adopted by the French Scholars such as Pierre Mayer; Mahmoud Mohamed Yaqoot, Party Autonomy in International Contracts in Theory and Practice—A Comparative Analytical in Light of the Modern Attitudes (Monchaat Al Maaref, 2004) 38–9. 656 Ibid. 657 Mansour Abd Al-Salam Al-Saraira Mohannad Azmi Abu Moghli, ‘Law Applicable To Consumer E-Contracts of International Nature’ (2014) 41(2) Journal of Sharia and Law Sciences (The University of Jordan) 1346–7. 658 Mohammad Salmeen Mohammad Alarian, ‘The Impact of Changing Circumstances on Executing the International Contracts’ (Ain Shams University, 2006) 26.

90 fact they are not.659 This norm was explicitly excluded by several international conventions including the CISG.660 The second norm is the economic norm. Because the legal norm was not enough to determine the internationality of a contract, and due to the unprecedented growth in international trade, courts required a more flexible approach to determine the internationality of a contract. In this regard, the French Court of Cassation has applied several principles. For example, in 1977, in Pelissier du Besset v Societe Algiers Warehouse, the Court characterised a contract as being ‘international’ because it had relationships with the economic system of more than one country.661 Later, the Court adopted this norm to give effect to the arbitration clause in the contract that was made between the State and a foreign party, when such a clause was not lawful in the national contracts.662 This indicates that the Court considered a contract to be ‘international’ if it affected the interest of the international trade.663 The roots of this norm can be found in a theoretical assumption that has been based on an analysis of the subject matter of the contractual bond and its effects on the movement of money across borders and the economies of different countries.664 According to this norm, a loan contract between two persons—stipulating whether the money will be handled and invested overseas—is international if it involves movement of the capital, regardless of the nationality of the parties or the other contract’s elements.665 However, the commercial feature is more a guide than a norm because it does not contradict the legal norm, which is mainly based on more than one legal system. The third norm is the mixed norm. In 1972, the French Court of Cassation in Hecht v Societe Buismans, upheld a decision of the Court of Appeals of Paris, in which the Court adopted a norm that combined the above two norms to classify a contract as being international.666 Subsequently, this norm became known as the mixed approach.667 In this case, the Court did not justify its opinion based on one norm, but mentioned both norms at the same time. It claimed that the disputed contract was international because it was concluded between parties of different nationalities in a foreign country.668 Further, the Court mentioned the economic factor of that contract because it gave the Dutch company the opportunity to sell its products in France through the French agent, which meant that it had a relationship with the economic system of more than one country. The mixed approach is similar to the flexible legal norm that adopted the economic factor as a guideline to weigh the foreign element. A contract can be international if any of its

659 Mohammad Ibrahim Mosa, The Impact of the Globalisation on the International Commercial Contracts (Dar El Gamaa El Gadida, 2007) 53. 660 ‘Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention’. CISG (n 649) art 1 (3). 661 Delaume (n 628) 269. 662 Ibid. 663 Ibid. 664 ‘The initial case held that a contract would be concidered as “international” in character if it implied a matual transfer (flux et reflux) of economic values whether whether in the form of transfer of money or of goods, across national borders, one of which was France’. Ibid. 665 Fouad Mohamed Al-Adani, The Determination of the Legal Rules Applicable to the International Commercial Contracts by Brokers (Dar Al Nahda Al Arabeya, 2012) 23. 666 Delaume (n 628) 269. 667 Ibid. 668 Ibid, 269.

91 elements is foreign669 or if it transfers a movable property from one country to another, such as investment transactions. Due to the fact that none of the norms could offer a sufficient norm by which a court would determine the internationality of a contract in all cases, the domicile of the parties has been adopted by different legal systems. The logic of adopting the domicile of the contracting parties stems from the fact that this norm can avoid traditional issues attached to nationality, such as statelessness. Further, nationality is not necessarily a significant factor in international contracts. Criticisms of this norm include that it ignores the contract and does not distinguish between the contract and its parties. However, this norm may be useful for sale-of-goods contracts, although not for every contract. However, the domicile norm appears to be no more and no less than the mixed approach. It is the legal norm that takes the domicile as a guideline. When it was first suggested, the idea of the common domicile was not intended to make a distinction between the foreign contracts and international contracts, but to determine the applicable law based on the presumed intention. Lorenzen claimed: Some writers contend that the application of the lex patriae does not rest upon a reasonable basis. They urge that contracts have nothing to do with national characteristics or traditions, but belong exclusively to the economic life of an individual, which centers about his domicil. Where the parties have not expressed their intention, it is reasonable to assume, therefore, according to these writers, that they would have chosen the law of their common domicil as the law governing their legal relations.670 The researcher believes that the question of whether a contract is international should be determined by the court hearing the dispute partly due to challenges related to the domicile, but also due to the relationship between the internationality feature and the effective application of party autonomy. However, for the purpose of this chapter, an international contract can be defined as a monetary agreement between two or more parties, based in different countries, enforceable by law. This definition is applicable to the Australian and Jordanian legal systems. However, is every international contract subject to the provisions of the legal rules being compared? This question is addressed in the following section.

4.2. National Mandatory Laws Affecting the Scope of the Conflict Rules Regarding International Contracts in Australia and Jordan

Almost all legal systems subjugate some types of contracts to overriding rules (mandatory laws).671 The concept refers to a rigid mechanism that enables the national court to apply the law of the forum despite choice-of-law principles.672 Mandatory laws have also been referred to as “rules which cannot be derogated from by contract”.673 Mandatory laws affect the scope of the targeted conflict rules because they determine their own scope of

669 Ibid, 262. 670 Lorenzen ‘Validity and Effects of Contracts in the Conflict of Laws’ (n 523) 56. 671 Gonzalo Parra Aranguren and Daniel Vignes, General Course of Private International Law: Selected Problems (Dordrecht : Martinus Nijhoff, 1989) 121. 672 Law Reform Commission (n 67) 90. 673 Rome Convention 1980 (n 44) art 3 (3).

92 application.674 Hence, it is not possible to accurately determine the comparability of the Australian and the Jordanian conflict rules without considering the relevant mandatory rules in these two legal systems, including the relevant international conventions to which each country is a party. In Jordan, Article 24 of the JCC provides that no conflict rule shall apply in cases where there is a contrary provision in a mandatory law or in an international convention in force in the country.675 The explanatory memorandum states that this Article is a repetition of the general principle of interpretation, whereby special laws override general laws.676 However, this is also true for the Australian legal system.677 Whincop and Keyes claimed: Mandatory substantive law rules purport to exist over and above the domain of PIL. A court may not apply a contractual choice of law if the substantive law chosen by the parties is inconsistent with a mandatory rule, just as it would ignore any other inconsistent contractual provision.678 In Golden Acres Ltd v Queensland Estates Pty Ltd,679 the Court refused to apply Hong Kong law as the law chosen by the parties because the law of Queensland, which regulated the commission payable to real estate agents, was mandatory so the choice-of- law challenged the national legislative policy.680 In this section, the researcher’s aim is to determine the legal relationships that are excluded from the scope of the general conflict rules regarding international contracts in Australian and Jordan to acquire a better understanding of how these two legal systems apply the conflict rules in question. This includes the maritime carriage of goods contracts, international sales of goods contracts, consumer credit contracts, consumer contracts, insurance contracts and international labour contracts. This is not to say that both legal systems exclude the same legal transactions from the scope of the targeted rules, but that one of them at least excludes one or more of these contracts.

4.2.1. International Maritime Carriage of Goods Contracts

Since 1904, Australia has protected shippers by prohibiting parties to contracts for the maritime carriage of goods from contracting outside of Australian law. In 1991, this protection was legalised under s11 of the Carriage of Goods by Sea Act 1991 (Cth).681 According to this law, any contract for the carriage of goods by sea from an Australian port to a place outside the country is presumed to be governed by Australian law.682 The contracting parties are not allowed to select law other than Australian law to govern their

674 JJ Fawcett, ‘Evasion of Law and Mandatory Rules in Private International Law’ (Pt Cambridge University Press) (1990) 49(1) (2009/01/16) The Cambridge Law Journal 44–62, 57. 675 The Jordanian Civil Code No 43 (n 37) art 24. 676 Explanatory Memorandum (n 389) art 24. 677 Mortensen (n 369) 409–10; Martin Davies, Andrew Bell and Paul Le Gay Brereton, Nygh’s Conflict of Laws in Australia (Chatswood, NSW: LexisNexis Butterworths, 8th ed, 2010) 402; Edward I Sykes, Australian Private International Law (Law Book Co, 1979) 349–58. 678 Whincop and Keyes (n 388) 521. 679 Queensland Estates [1969] Qd R 378, 383–4. 680 Whincop and Keyes (n 388) 521. 681 The Carriage of Goods by Sea Act 1991 (Cth) (‘Carriage of Goods by Sea Act 1991’). 682 Allison Simon, ‘Choice of Law and Forum Clauses in Shipping Documents—Revising Section 11 of the Carriage of Goods by Sea Act 1991 (cth)’ (2014) 40(3) Monash University Law Review 639–72, 639.

93 contract, and any agreement that excludes the application of Australian law is void.683 Implicitly, the proper law approach does not play a role in this respect. However, the legislation does not indicate how a bill of lading relating to a shipment from a foreign port to a place inside Australia should be dealt with.684 In such a case, the law of the cause (lex causa) is probably the proper law of the contract. If the proper law is the law of a place that has adopted the Huge Visby and Hamburg Rules, evidently they must continue to govern the contract.685 However, if the proper law in such a contract is the law of a place that has not adopted The Hague Visby or Hamburg rules, it would appear that it is inapplicable.686 According to Article 215 of the Jordanian Maritime Commercial Law,687 any condition contained in a bill of lading or any document for carriage of goods by sea that directly or indirectly releases the carrier from the responsibility and liability imposed on him by the JCC or by the Maritime Commercial Law, or shifts the burden of proof from any party on whom such burden of proof lies under the laws in force or under this law, or violates the rules of legal jurisdiction shall be null, void and have no effect.688 Although this article does not explicitly provide that the Jordanian law is the law applicable to all bills of lading,689 it provides that the shipper’s rights stipulated in the Jordanian law are mandatory without prohibiting any application of any other law if it gives more rights or better rights to the shipper, who is the weaker party in this contract.690 The parties may select laws other than Jordanian law if that law does not release the carrier from its responsibilities according to Jordanian law. In summary, as a rule, contracts for the carriage of goods by sea are governed in Australia and Jordan by the national law, without excluding the possibility of applying another law in some cases. Broadly speaking, the difference between the two legal systems in this area lies in the ways in which the national laws are expressed. Evidently, Australian law assumes that the national law provides the best possible protection. Conversely, Jordanian law is based on the assumption that the protection provided by Jordanian law is the bottom line. In principle, both legal systems seek to offer the best necessary protection for shippers in a carriage of goods by sea contract. Accordingly, both legal systems agree that the international maritime carriage-of-goods contract is not subjugated to the provisions of the general conflict rule if the contract was made in the country.

683 Mortensen (n 369) 411. 684 Richard Garnett, Mary Keyes and Reid Mortensen, Private International Law in Australia (LexisNexis Butterworths, 2015) 438. 685 Ibid. 686 Mortensen (n 369). 687 Jordan acceded to the Hamurg Rules on 10 May 2001. Lafi Mohammad Daradkeh, ‘The Temporal Scope of the Responsibility of the Maritime Carrier—A Comparison of the Jordanian Maritime Trade Act and the Hamburg Rules’ (2007) 13(9) Al-Manarah, 111. 688 The Jordanian Maritime Commercial Law No 12 1972 (Jordan) (‘The Jordanian Maritime Commercial Law No 12’). 689 Mamdouh Mohammed Hamed Al Shahwan, ‘The Role of Arbitration in Resolving Maritime Cargo’ (Master Thesis, Middle East University, 2018) 20. 690 Ibid, 20.

94 4.2.2. International Sale of Goods Contracts

In 1989,691 Australia acceded to the CISG,692 which provides uniform international substantive rules that enable contracting parties to avoid choice-of-law issues because it offers widely-accepted rules on which exporters, judges and arbitrators may rely.693 It is presumed that contracts for the international sale of goods are governed in Australia by the provisions of the CISG.694 The application of this convention is not mandatory because Article 6 authorises parties to exclude its provisions.695 In this case, parties have the right to choose a law to govern their contract or they may only exclude its provisions entirely without selecting a particular law to be applied to their contract. Accordingly, the CISG does not entirely eliminate the role of the proper law. At best, the CISG can be described as the law that may apply in the absence of the chosen law in cases where the parties did not explicitly exclude its application. Conversely, Jordan is not a party to the CISG, so international contracts for the sale of goods are governed by the provisions of the general conflict rules. Such contracts are dealt with in Jordan like any other contract governed by the provisions of the general conflict rules.696 However, this does not change the fact that if the country where the contract was made is a party to the CISG, it is the law applicable to the contract.697 Australia and Jordan agree that contracts for the international sales of goods are governed as a rule by the law chosen by the contracting parties, and in the absence of such a choice, by the provisions of CISG in Australia unless the parties exclude its application, and the provisions of the general conflict rules in Jordan without excluding the possibility of applying the CISG.698 Although both legal systems differ on the matter of the law governing international sales of goods contracts in the absence of the chosen law, this difference in light of the diversity of contract types is minor, and does not make the comparability of the conflict rules in these two legal systems impossible. However, because this study supports international efforts directed to harmonising the conflict rules regarding cross-border contracts, and due to the fact that the CISG is an internationally accepted convention,699 it is argued that Jordan should consider the adoption of this convention. Similarly, Al-Masadeh recommended that Jordan adopt the convention:

691 Davies, Bell and Brereton (n 677) 420. 692 Sale of Goods (Vienna Convention) Act 1987 (ACT); Sale of Goods (Vienna Convention) Act 1986 (NSW); Sale of Goods (Vienna Convention) Act 1987 (NT); Sale of Goods (Vienna Convention) Act 1986 (Qld); Sale of Goods (Vienna Convention) Act 1987 (SA); Sale of Goods (Vienna Convention) Act 1987 (Tas); Sale of Goods (Vienna Convention) Act 1987 (Vic); Sale of Goods (Vienna Convention) Act 1986 (WA). 693 This Convention applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State. CISG (n 649) art (1). 694 The Trade Practices Act 1974 (Cth), art 66A. 695 CISG (n 649) art 6. 696 Nael Al-Masadeh, ‘The Possibility of Applying the United Nations Convention on Contracts for the International Sale of Goods by a Jordanian Judge’ (Pt Brill) (2012) 26(3) Arab Law Quarterly 381–6, 383. 697 Ibid, 386. 698 Ibid, 385. 699 ‘CISG … has now been ratified by 70 nations [now it is 94 nations]. The number of states is arguably significant enough to suggest that the CISG is a successful convention’. Zeller (n 62) 233.

95 The sale of goods plays a major role in the growth of international trade, it remains important that the Convention [CISG] be signed by Jordan, which is seeking to further develop its trade relations and must therefore maintain an expedient environment for international trade and foreign investments.700

4.2.3. Consumer Credit Contracts

In Australia, the law protects those who have obtained credit in relation to consumer goods through the National Consumer Credit Protection Act 2009 (Cth).701 This legislation provides: [A] range of protection to consumers of credit within Australia. The legislation is stated to apply in the geographical territory of all Australian states, pursuant to their referral of powers to the commonwealth and the territories. It also applies to acts and omissions outside the jurisdiction and to foreign individuals who are taken to be carrying on a relevant business within Australia.702 However, this law is not applicable to an international consumer credit contract, which does not have a relationship with the Australian legal system. The latter is governed by the proper law, whereas Jordan does not have similar legislation, which means that consumer credit contracts are generally subjugated to the provisions of the general conflict rules. In Jordan, there is no difference between the consumer credit contract and other international contracts for the purposes of determining the applicable law. However, the provisions of Jordanian law are functionally similar to those of Australian law. To illustrate, Jordanian law adopts the law of the place where the contract is made to determine the law applicable to an international contract, which means that consumer credit contracts that take place in Jordan are subjugated to the national law of Jordan. In practice, both legal systems subjugate consumer credit contracts to the national law. There is a difference between the legal systems being compared in this area. Such a difference, although not important for the purpose of this study, warrants further attention by Jordan. Here, it is contended that Jordan may need to review the protection that it offers to such contracts if it decides to adopt the proper law doctrine.

4.2.4. Consumer Contracts

Consumer contracts are a common example of the contractual obligations that legal systems subjugate to mandatory laws, the application of which cannot be avoided by the parties to a contract.703 Several international conventions expressly exclude consumer contracts from the scope of their application. For example, the 2015 Hague Contracts

700 Al-Masadeh (n 696) 386. 701 Credit Act 1985 (ACT); Credit Act 1984 (NSW); Credit Act 1987 (Qld); Credit Act 1984 (Vic); Credit Act 1984 (WA). 702 Garnett, Keyes and Mortensen (n 369) 440. 703 See CGJ Morse, ‘Consumer Contracts, Employment Contracts and the Rome Convention’ (Pt Cambridge University Press) (1992) 41(1) International and Comparative Law Quarterly 1– 2; Symeonides, ‘The Scope and Limits of Party Autonomy in International Contracts: A Comparative Analysis’ (n 27) 104.

96 Principles confine their scope to ‘commercial’ contracts only.704 The Hague Choice of Court Convention also contains similar provisions.705 In Australia, there is federal, state and territory legislation that provides some protection for consumers in contracts for the supply of goods and services,706 by the mandatory implication of terms that make certain guarantees about the quality of the goods and services being supplied. For example, the Trade Practices Act 1974 (Cth) is the applicable legislation when the goods or services are supplied by a trading or financial corporation and specifies that it applies to contracts for which the proper law would be the law of any part of Australia.707 Therefore, the effect of an express choice of proper law shall be ignored, unless it is the law of an Australian state or territory.708 Hence, the Trade Practices Act operates as a mandatory law and applies its consumer protection provisions to all consumer contracts, which by reference to objective criteria are governed by the law of an Australian state or territory to be the proper law. Since Australia has a federal legal system, State legislatures have their own territorial operations. For example, in South Australia, the legislation applies in respect of any consumer contract and consumer credit contract in two alternative cases.709 The first is when the law of South Australia is the proper law of the contract. The second depends on the nature of the contract.710 For a consumer contract, the legislation applies when the goods or services are to be delivered in South Australia. In the Australian Capital Territory and the other states, the legislation applies to contracts signed in the state or territory or, if the contract is not in writing, when goods or services are to be delivered to that state or territory. However, in international consumer contracts, the law applicable is the proper law of the contract approach. In contrast, Jordanian law does not offer this protection, which means that consumer contracts are governed by the provisions of the general conflict rules.711 However, from a practical perspective, the law applicable to any consumer contract that take place in the country is the Jordanian law because it is the law of the place where the contract is made. This protection is one of the reasons that Jordan adopts the law of the place where the contract is made. Therefore, if Jordan decided to replace the current approach with the proper law doctrine, the country may need to review its national policy regarding the protection of consumers. The Australian and Jordanian legal systems subjugate consumer contracts to national law. Australia achieves this via explicit regulation, whereas Jordan achieves the same outcome by adopting the connecting factor of the place where the contract is made. Both legal systems achieve the same goal in terms of consumer contracts. However, this would not be the case if Jordan decided to adopt the proper law approach. In addition to the adoption

704 Hague Principles 2015 (n 28) art 1. 705 The Convention of 30 June 2005 on Choice of Court Agreements, 30 June 2005 (entered into force 1 October 2015) (‘The Hague choice of court convention’) art 2 (1). 706 In 2010, the Commonwealth Parliament passed legislation implementing a national consumer law, the Competition and Consumer Law Act 2010 (Cth) sch 2 (‘Australian Consumer Law’). 707 The Trade Practices Act 1974 (Cth), arts 67-68. 708 Garnett, Keyes and Mortensen (n 369) 440. 709 Garnett, Keyes and Mortensen (n 369) 439. 710 Ibid, 440. 711 Mohand Azmi Abu Maghli and Mansour Abid Alsalam Alsaryrah, ‘The Law Applicable to International Consumer Cotracts’ (2014) 41(2) The Journal of Sharia and Law 1339, 1351.

97 of the proposed solution, Jordan would need to review its national law regulating consumer contracts.

4.2.5. Insurance Contracts

In Australia, insurance contacts—although not reinsurance712—are governed by the Australian law according to the provisions of s8 of The Insurance Contract Act 1984 (Cth), which provides that: 1. … the application of this Act extends to contracts of insurance … the proper law of which is or would be the law of a State or the law of a Territory in which this Act applies … 2. for the purposes of subsection (1), where the proper law of a contract …would, but for an express provision to the contrary included … in the contract … be the law of a State or of a Territory in which this Act applies … then, notwithstanding that provision, the proper law of the contract is the law of that State or Territory.713 In Akia Pty Ltd v The People’s Insurance Co Ltd,714 the Australian High Court held by majority that irrespective of the parties’ intentions to subjugate their contract to the English law, the application of the law of New South Wales was unavoidable. The reason for this, according to the Court, was that the disputed contract came under the provisions of s52 of the Insurance Act which states that “[w]here a provision of a contract of insurance … purports to exclude, restrict or modify, or would, but for this subsection, have the effect of excluding, restricting or modifying, to the prejudice of a person other than the insurer, the operation of this Act, the provision is void”.715 In this sense, the law applicable to all insurance contracts is the law of a state or territory of Australia, without exception. It is a mandatory law because the Act has prevented any attempt to avoid its application. In simple terms, if an insurance contract has a substantial connection with a state in Australia, the proper law approach is not applicable. Mortensen claimed: [T]he operation of the Act is not negated by provisions that might indicate that the parties intended the law of some other place to apply. These include an express choice of proper law clause. They also include clauses which suggest that the parties implicitly chose the law of some place outside Australia.716 Similar to the previous two contract types—consumer credit contracts and consumer contracts—the proper law is relevant when the contract has no relationship with Australia. Conversely, Jordan does by no means exclude insurance contracts from the scope of the general conflict rules. However, the adoption of the place where the contract is made could achieve the same purpose as that of the Australian law. Insurance contracts that are made in Jordan are supposed to be governed by the Jordanian law because it is the law of the place where the contract is made. Accordingly, what is said regarding the previous two contracts can be said regarding the insurance contract: if Jordan decided to adopt the

712 Garnett, Keyes and Mortensen (n 369) 439. 713 Insurance Contracts Act 1984 (Cth) (‘Insurance Contracts Act’). 714 Akai Pty Ltd v The Peoples Insurance Co Ltd (1995) ANZ Ins Cases 61–254. 715 Insurance Contracts Act (n 713). 716 Mortensen (n 369) 411. 98 proper law doctrine, the country may need to review the provisions of the national law regarding the matter of the law applicable to insurance contracts.

4.2.6. Contracts Including an Arbitration Clause

In Jordan, the law applicable to a disputed contract that includes an arbitration clause shall, in the absence of a choice-of-law clause, be governed by the law with which the contract has its closest and most real connection, or the proper law of the contract. Article 36 of The Jordanian Arbitration Code, states that “[f]ailing an agreement by the parties on the legal rules applicable to the subject matter of the dispute, the arbitral tribunal shall apply the substantive rules in the law it deems most closely connected to the dispute”.717 It is evident that Jordanian law does not apply general conflict rules to matters governed by the arbitration law. However, there is no difference in Australia between the conflict rule governing an international contract whether it is brought before an arbitrator or a court. In either case, the applicable law is determined according to the proper law doctrine. While such a difference might appear significant, it can be ignored for the purposes of this study simply because adopting the proper law doctrine by The Jordanian Arbitration Code means that the both legal systems agree on subjugating contracts that include an arbitration clause to the proper law doctrine, which is the doctrine that this thesis keen to encourage the Jordanian law to adopt.

4.2.7. Individual Employment Contracts

Employment contracts are another example of contracts that are given special consideration. Smith and Cromack argued: The recognised imbalance between the bargaining power of the individual worker and the employer has caused national states to make special provisions for employment contracts and to establish sets of minimum standards of protection for employees. It would make nonsense of these protection provisions if the employer could circumvent them in every case by adding terms in the contract by which the employee gave up the protections afforded to him by the legislation.718 In a manner similar to the one by which Jordanian law regulates contracts for the carriage of goods by sea, Jordanian law regulates employment contracts. Jordanian law does not regulate employment contracts by applying mandatory laws; instead, it sets minimum standards for the protection of workers.719 Article 4 of the Jordanian Employment Act stipulates that the provisions of this Act must not affect workers’ rights under any other law, contract or decision, if any grant workers’ rights that are better than the ones granted by the present Act.720 Any condition or agreement, whether it took place before or after this Act became active, according to which workers waive any of their rights, is void.721 Implicitly, Jordan does not exclude the application of the chosen law if its provisions are

717 The Arbitration Act No 31 2001 (Jordan) (‘The Arbitration Act No.31’) art 36 (b). 718 Raymond Smith and Valerie Cromack, ‘International Employment Contracts—The Applicable Law’ (Pt Oxford University Press) (1993) 22(1) Industrial Law Journal 1–13, 2–3. 719 Deaa Mohammad Salameh, The Work of Foreigners in Jordan (Dār al-Maʼmūn lil-Nashr wa- al-Tawzīʻ, 2012) 71. 720 The Labour Act No. 8 1996 (Jordan) (‘The Labour Act No. 8’) art 4 (a). 721 Ibid, art 4 (b).

99 more favourable to employees.722 Many other countries have adopted the same philosophy to deal with such a contract. The English law is an example.723 However, the Jordanian position is vague. This is partly because the Jordanian law does not explicitly regulate the matter of the law applicable to employment contracts when there is a relationship with more than one country.724 Article 4 was designed to regulate national employment contracts and its purpose is to regulate the national employment contracts that took place under the previous Act. However, it might be understood from the wording of this Article that it is applicable to all employment contracts. Most likely, international employment contracts in Jordan are governed by the provisions of Article 20 of the JCC. Accordingly, any employment contract signed in Jordan is governed by Jordanian law, being the law of the place where the contract is made. In such a contract, the place where the contract was made is not useful because it is not difficult to manipulate the place of the contract.725 However, since the aim of this discussion is not to evaluate the legal protections offered to workers by Jordanian law, but rather to determine whether the employment contract is governed by the targeted rules, it is not excluded from the scope of the conflict rules in question. In Australia, the ALRC believes that the individual employment contract shall be regulated in a manner that enables the parties to select the applicable law. The ALRC explained the position of the Rome Convention which permitted parties to choose the law applicable to their contract, and the Giuliano Lagarde Report which stressed that if the “mandatory rules offer a better protection to employees, or better safety and hygiene provisions than are available under the law chosen by the parties these shall prevail and the provisions of the chosen law shall be aside”.726 The ALRC recommended that these provisions be adopted.727 The ALRC report further recommended “the adoption of the law of the place of habitual employment as the principal means of establishing the proper law of an employment contract in the absence of choice”.728 In principle, there is no real difference between the position of the Australian and the Jordanian legal systems regarding the law applicable to individual employment contracts. Both countries agree that the parties shall be given the right to select the governing law as long as the chosen law does not affect the rights of the weaker party, which is always the worker. However, in the absence of the chosen law, the Jordanian law most likely applies the law of the place where the contract is made, whereas Australia considers the place of habitual employment.729

722 This matches the provisions of art 6 (2) of Rome Convention 1980 (n 44). 723 Employment Protection (Consolidation) Act 1978 1978 (United Kingdom) c 44 (‘Employment Protection (Consolidation) Act 1978’) Section 142 (1). 724 “In the context of an employment contract such connections as the country where the contract is made, or is to be carried out, or from which employer or employee comes, or the location of the place of business”. Smith and Cromack (n 718) 2. 725 Law Reform Commission (n 67) 77–8. 726 Ibid, 99. 727 Law Reform Commission (n 67) 100. 728 Ibid. 729 This matches the position of ‘Regulation (EC) No. 593/2008 of the European Parliament and of the Council on the Law Applicable to Contractual Obligations (Rome I)/Réglement (CE) no 593/2008 du Parlement européen et du Conseil sur la loi applicable aux obligations contractuelles (Rome I)’, (2008) 13(3) Uniform Law Review 830–71, art 8. 100 4.3. Contractual Obligations Excluded from the Scope of the Targeted Conflict Rules in Australia and Jordan

Some contractual obligations are not governed by mandatory laws or international conventions, and yet they are outside the scope of the general conflict rules regarding international contracts. Article 20 of the JCC provides that ‘the law applicable to contractual obligations (translated into altezmat taqudayah) shall be governed by …’. The question arises: what contractual obligations fit within the scope of this Article? To what extent are those obligations similar or different to those within the scope of the Australian proper law doctrine? To answer these questions, it is necessary to understand the term ‘altezmat taqudayah’, which is a key term that determines the scope of this Article. The concept of altezmat taqudayah, which is usually translated into ‘contractual obligations’, consists of two parts: altezmat and taqudayah. The first part, altezmat (singular: altezam) can be defined as a pledge made by a competent person to do something, or a legal duty that cannot be avoided.730 This matches the definition of the English term ‘obligation’, which according to the Macquarie Dictionary, means “the act of binding oneself by a promise, contract, etc.”.731 The second part, taqudayah, is an adjective derived from the root aqda, which limits the scope of the first concept to the obligations that arise from contractual relationships. Hence, altezmat taqudayah refers to the monetary duties of each party to an aqd. According to Al-Hedawi, all monetary legal transactions that occur between living individuals, regardless of the source, whether it is a bilateral contract or a hibah, are subjugated to the provisions of Article 20 of the JCC.732 This opinion is based on a general assumption that legal terms shall be given the ordinary meaning unless the law provides otherwise.733 If the intended meaning of altezmat taqudayah refers to the obligations raised by bilateral contracts, this should be explicitly expressed by law. Although this view may seem logical, it is not precisely accurate because legal rules “must be read, not as if it were entirely divorced from its context, but as part of the whole instrument”.734 As stated above, the subject matter of a hibah contract—whether it be conditional or unconditional—must be property, which is also true for a deed.735 Both hibah and deed can be classified as contracts for property, so the question becomes: what law should govern property contracts in Australia and Jordan? To determine the law applicable to contracts regarding property,736 most legal systems such as those of Australia and Jordan distinguish between movable and immovable properties.737 Mortensen, Keyes and Garnett argued that “[t]he fundamental distinction that must be drawn in all issues involving property in a multi-state case is the distinction

730 Ahmad Mahmod Alkholi, The Theory of Rights in Islamic Jurisprudence and Law (Dar Alsalam, 2003) vol 1, 14. 731 The Macquarie Encyclopedic Dictionary: The National Dictionary (Macquarie Library, 1990) obligation. 732 Al-Hedawi (n 51) 149. 733 Elmer A Driedger, The Construction of Statutes, Canadian Legal Manual Series (Butterworths, 1974) 1. 734 Bell, ‘Proper Law—Ignoring the Contract? A Note on “Akai Pty Ltd v The People’s Insurance Co Ltd”’ (Pt University of Sydney, Faculty of Law) (1997) 19(3) The Sydney Law Review 400, 403. 735 See Section 4.1.2. 736 Explanatory Memorandum (n 389) art 19. 737 The Jordanian Civil Code No 43 (n 37) art 19.

101 between immovable and movable”.738 The importance of this distinction stems from the fact that the conflict rules applicable to these cases differ. Jordanian law does not answer the question of how the distinction between movable and immovable properties should be made or what is meant by ‘immovable property’. According to the explanatory note, the main reason for leaving these terms undetermined is that there was no agreement among PIL scholars regarding how this distinction was to be made. For that reason, the Jordanian legislature decided to leave the door open to the court to make this distinction, according to what was necessary.739

4.3.1. Law Applicable to Contracts over Immovable Property in Australia and Jordan

In Jordan, possession and ownership of property shall be governed by the law of the place where the property is situated in the case of real estate.740 Contracts related to immovable property in general are excluded from the scope of the general conflict rule concerning contracts741 and because the subject matter of a hibah contract must be property, it must be excluded from the scope of Article 20 when the subject matter of such a contract is immovable property.742 The place where the property is situated is applicable, as a rule, to the formal and essential validity of a hibah contract. In Australia, as a rule, “the proper law of the contract is not necessarily the law of the cause for question concerning the transfer of the property, even in some cases where the contract creates the obligation by which the transfers of property must be effected”.743 The ALRC explained that “the Commission recommends that in contracts concerning immovable property, the place of closest connection should be presumed to be the place where the property is”.744 This law is applicable to formal validity and essential validity.745 In Earl Nelson v Lord Bridport, the Court emphasised that “[t]he incidents to real estate, the right of alienating or limiting it and the course of succession to it, depend entirely on the law of the country where the estate is situated”.746 This principle was adopted in Attorney-General v Bouwens to govern leasehold interests.747 One of the differences between Australian and Jordanian law in the context of the choice- of-law question in transferring a property is that Australian law subjugates the capacity of the person to transfer or receive an immovable property to the law of the place where the property is situated,748 which is reasonable. While, Jordanian law subjugates it to the law of nationality of the person. However, such a difference can be ignored in this chapter because it does not affect the scope of the conflict rules being compared.

738 Garnett, Keyes and Mortensen (n 369) 467. 739 Ibid. 740 The Jordanian Civil Code No 43 (n 37) art 19. 741 This is also the position of Rome Convention 1980 (n 44) art 4.3. 742 This is identical to the provisons of Article 20/2 of the Jordanin Civil Code, which provides that ‘the law of the place where an immovable property is situate is the applicable law to all contracts related to this property’. 743 Garnett, Keyes and Mortensen (n 369) 479. 744 Law Reform Commission (n 67) 98. 745 Garnett, Keyes and Mortensen (n 369) 479. 746 Earl Nelson v Lord Bridport (1845–1846) 8 Beav 547; 50 ER 215. 747 Attorney-General v Bouwens (1838) 4 M & W at 191. 748 Garnett, Keyes and Mortensen (n 369) 479.

102 4.3.2. Law Applicable to Contracts over Movable Properties

When dealing with the validity of the transfer of movable property, one must distinguish between three types of properties: tangible property (chattels), debts and intangible property. In Jordan, chattels shall be subject to the law of the place in which such property is at the time when the cause resulting in the acquisition or loss of possession, ownership or any other right over the property arose.749 Evidently, this includes the hibah contract when the subject matter of such a contract is a movable property, which is also true for the Australian legal system.750 Mortensen, Keyes and Garnett argued that “[t]he validity of a transfer of a chattel is generally to be determined in accordance with the law of the place where the chattel is situated at the time of the transfer”,751 which suggests that contracts for movable chattels are excluded from the scope of the targeted conflict rules in both countries. It is evident that although hibah and deed are considered to be contracts in Australia and Jordan, they are not governed by the provisions of the general conflict rules regarding international contracts in those countries. Article 20 of the JCC and the Australian common rule of the proper law are relevant when the subject matter of a dispute is a bilateral contract.

4.3.3. Debts

Debt is another example of the contractual obligations that need to be considered to determine the compatibility of the Australian and Jordanian conflict rules regarding contracts. A comparison of the provisions of the Australian and Jordanian legal systems regarding the matter of the law applicable to debts is one of the most confusing topics in this thesis. The equivalent Arabic term for debt—daen—does not precisely mean debt. Daen is used in the Islamic contract theory as a synonym of obligation. To illustrate, daen takes two—the creditor and the debtor—and both terms are used as synonyms for obligee and obligor. In this sense, each party to a bilateral contract is simultaneously a creditor (obligee) and a debtor (obligor). A debt in common law countries refers to an agreement in which one agrees to repay funds to a lender.752 Although the latter is also known under Islamic contract theory, the discussion of the matter of the law applicable to debt (daen) in jurisprudence is not limited to this type. Therefore, since this thesis is devoted to modernising the Jordanian legal system, the philosophy of the targeted legal system will be adopted in this section; that is, the philosophy of the Jordanian law. Generally, debts in the context of PIL in Jordan are treated according to the source of the obligation, whether it is a contract, hibah or tort. If the debt arises from a contractual relationship, it is deemed to be governed by the law governing the contract.753 This is applicable to the creation and ending of the debt but not to the transfer of the rights in the debt. To determine the law applicable to this transfer, Jordanian law distinguishes between two types of rights: personal rights and documented rights.754 The former can be defined as those rights that the creditor obtains after the contract is legally created in light

749The Jordanian Civil Code No 43 (n 37) art 19/1. 750 Cammell v Swell (1860) 5 H & N 728. 751 Garnett, Keyes and Mortensen (n 369) 482. 752 Al-Hedawi (n 51) 141. 753 Ibid, 141. 754 Ibid, 142.

103 of its applicable law and they have the right to use them in the way that they want, including transferring them to a third party. Documented rights include bearer share, shares, partnership interests and nominative shares. The matter of the law applicable to documented rights is one of the most complicated issues in the field of PIL. Different international efforts have been made to regulate documented rights,755 although these efforts did not fully succeed. Although the documented rights are outside of the scope of this thesis, bearer shares are subjected to the law of the country in which they are created and nominative shares are governed by the law of the country in which the company is registered. In Jordan, shares in corporations are supposed to be governed by the law of domicile of the company, which is the law of the country in which the main branch is registered.756 Implicitly, such obligations are excluded from the scope of the general conflict rules in question, which is also true for Australian law.757 Both countries under comparison agree on subjugating an interest in partnership to the law of the country where the partnership conducts business.758 In Australia, with regard to the simple contract debts, the general principle is that they are supposed to be governed by the law of the place where the debtor is resident.759 However, this does not entirely exclude the possibility of selecting the place of debt if the debtor is resident in more than one place and the selected place is one of them.760 The provisions of the Jordanian legal system regarding simple contract debts are unclear. If the court deals with it as an ordinary bilateral contract, the court will subjugate it to Article 20 of the JCC. If such a contract is characterised as a contract over a movable property, the applicable law according to Article 19 of the JCC is the law of the place where the movable property was at the time of creating the contract. If the court considers the simple contract debts as a special contract, it may decide to select the applicable law based on the provisions of Article 25 of the JCC, which provides that the principles of PIL shall be relied upon to determine the law applicable to the cases not explicitly regulated in this code. The principles of PIL are those on which most legal systems agree, including any theory that appears to be accepted worldwide.761 In the absence of related court decisions, it is difficult to determine the position of Jordanian law on this matter. However, subjecting the simple debt contract to the law of the domicile of the debtor can be considered a guideline for how such a contract should be dealt with under the proper law approach. The Australian legal system distinguishes between simple debt and judgment debts, which is defined as a sum of money that a court of law has ordered a company or person to pay. In Attorney-General v Bouwens,762 the Court held that the place of judgment debt is the place where the judgment was made. Mortensen argued that “there seems no reason why a judgment debt cannot be treated as a simple contract debt and so be deemed to be

755 Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes (signed and entered into force 1 January 1934) (‘Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes’). 756 Al-Hedawi (n 51) 142. 757 Garnett, Keyes and Mortensen (n 369) 472. 758 Al-Hedawi (n 51); Garnett, Keyes and Mortensen (n 369). 759 Raiffeisen Zentralbank Osterreich AG v Five Star General Trading LLC [2000] 1 at 270. 760 Garnett, Keyes and Mortensen (n 369) 470. 761 Explanatory Memorandum (n 389) art 25. 762 Attorney-General v Bouwens (1838) 4 M & W at 191.

104 situate where the judgment debtor is resident”.763 However, this distinction does not exist in the Jordanian law, so only the simple debt contract above applies. The final type of debt obligation is mortgage debt. What makes a mortgage debt special is that it can be understood as a debt contract or as an interest in land. In Walsh v The Queen,764 Lord Watson rejected the argument that a mortgage debt should be treated as a personal obligation to repay and, therefore, should be governed by the law of the place where the debtor resides because the mortgage is an interest of land. Again, Jordanian law does not include a specific rule to regulate this matter, which suggests that a mortgage debt is treated as any other contract involving immovable property. This observation is supported by the fact that it is legally impossible to mortgage land in another jurisdiction without meeting the legal requirements of the law of the country where the property is located; otherwise, the mortgage will be void. The provisions of Jordanian law regarding mortgage debt are in line with Lord Watson’s opinion. Hence, both legal systems agree that mortgages are outside of the scope of the targeted conflict rules.

4.3.4. Intellectual Property

In Australia, as a rule, the law governing intellectual property rights is the law of the country in which those rights were registered. However, there is no such rule in the Jordanian legal system. According to Article 53 of The Jordanian Copyright Code,765 the copyrights of Jordanian residents, regardless of whether they have been published in the country or overseas, are governed by Jordanian law. As for the rights of non-Jordanian authors, the legislation distinguishes between two cases. When these rights are registered in Jordan, they will be treated in a manner similar to the one applicable to the rights of Jordanian citizens. However, when these rights are registered overseas, they will be treated according to the principle of reciprocity and international conventions.766 In summary, intellectual property is outside of the scope of the conflict of laws rule regarding international contracts in Australia and Jordan.

4.4. Conclusion

The scope of the targeted rules in Jordan is similar to the scope of one Australian conflict rule: the proper law. Four observations support this conclusion. First, the Jordanian conflict rules concerning contracts and the Australian proper law doctrine are relevant when the subject matter is a bilateral contract that involves a foreign element only. Contract is defined as a monetary agreement that takes place between private persons with consideration. The common belief that gift is a contract in Islamic contexts has been proven to be inaccurate. Most likely, this assumption is based on poorly-translated materials since Hibah and ‘deed’ are functionally equivalent terms. In Australia, at the federal level, the mandatory rules that may affect the scope of the national conflict rule concerning international contracts are limited.767 Regarding international conventions, both countries are parties to a few conventions that may have a direct impact on the scope of the targeted rules. While Australia and Jordan have ratified

763 Mortensen (n 369) 451. 764 [1894] AC 144. 765 The Jordanian Copyright Code No 22 of 1992 (Jordan) (‘The Jordanian Copyright Code No 22’). 766 Al-Hedawi (n 51) 140. 767 Mortensen (n 369) 411–2.

105 the Hamburg Rules for Carriage of Goods by Sea,768 only Australia is a party to the CISG.769 However, this may not necessarily affect the scope of the conflict rules in question because the CISG allows parties to opt out of its provisions.770 For the purposes of this thesis, it suffices to note that despite the differences in scope between Australia and Jordan, they are similar enough to justify the selection of Australia for comparison.771 Second, the legal systems of Jordan and Australia have more similarities than differences in terms of their national mandatory rules and the international conventions to which each country is a party that may determine the scope of the targeted conflict rules. Both legal systems, in different ways, subjugate to national law the international carriage of goods by sea contracts, consumer contracts, insurance contracts and employment contracts. In Australia, this goal is achieved through mandatory rules, whereas in Jordan it is achieved by adopting the place where the contract is made as a connecting factor. Finally, both legal systems agree on the exclusion of some contractual relationships from the scope of the targeted rules, such as contracts over movable and immovable property and contracts that are related to intellectual property. There are few differences between both legal systems regarding the matter in hand. However, although such differences in light of the similarities explained above are minor and ineffective, they still deserve attention. Therefore, the first step of transplanting the proper law approach into the Jordanian legal system has been successfully accomplished, which was to examine the comparability of the Australian proper law and the Jordanian conflict rules in question.

768 Ibid, 409. 769 Ibid, 410. 770 CISG (n 649) arts 6, 12. 771 Rabel, The Conflict of Laws: A Comparative Study (n 359) 361. 106 Chapter 5: Effectiveness of the Proper Law Doctrine from the Jordanian Perspective

Overview

In this chapter, the researcher examines the effectiveness of the proper law doctrine and its ability to enable Jordan to overcome the challenges arising from the current Jordanian conflict rules. To this end: 1- a thorough analysis is conducted of the problem facing Jordanian law in order to develop to identify relevant objective criteria that will be used to evaluate the proposed solution; and 2- an assessment is made of the effectiveness of the proper law doctrine and its application to Jordan. Legal transplant is usually applied to meet a legislative need in the receiving country. Therefore, it is important that the foreign rule be more effective than the national one.772 However, an effective solution in one case, may be inadequate for another; hence the need to apply several objective criteria.773 This chapter consists of two main sections. In Section 5.1, an analysis is conducted of the Jordanian conflict rules concerning international contracts in order to develop essential criteria, which will be applied in Section 5.2 to evaluate the effectiveness of the proper law doctrine when dealing with the problem of the conflict of laws in international contracts.

5.1. The Problem of the Conflict Rules Concerning Contracts in Jordan

The targeted conflict rules must have a function that can be determined by analysing the relationships between these rules and the theories of PIL. In this section, the researcher examines Articles 20 and 21 of the JCC as part of an integrated system, the theories and rules of which must work in harmony to achieve the overall goals of PIL.774 A significant part of the problem of the conflict rules in question is the adoption of a single connecting factor to deal with contractual obligations, which is the law of the place where the contract is made. However, the adoption of the rigid approach to deal with the choice-of-law question in international contracts in Jordan has generated several challenges, which have reduced the effectiveness of the national solution. There are three categories of challenges: those raised by the wording of the conflict rules in question, those raised by the connecting factors adopted therein, and those raised by the legislative ideology. Legislative ideology in this context refers to the ways in which contractual issues have been categorised in Jordan.

5.1.1. Challenges Raised by the Wording of Articles 20 and 21 of the JCC

To begin with, the wording of Articles 20 and 21 of the JCC is vague. With respect to Article 20, there is a large gap between the interpretation adopted by scholars

772 Mousourakis, Comparative Law and Legal Traditions: Historical and Contemporary Perspectives (n 5) 24. 773 Gene R Shreve and Hannah Buxbaum, A Conflict of Laws Anthology (LexisNexis, 2nd ed, 2012) 252. 774 Bonell (n 4) 16. 107 (jurisprudential interpretation) and court interpretation. Article 20, according to how the Jordanian courts applies it, reads as follows: [T]he applicable law to contractual obligations is the law of the common domicile, if the parties are residents in the same state. Whereas the law governing obligations in relation to a contract that take place between parties resident in different countries is the law chosen by the parties themselves and in the absences of the choice of law clause, the law of the place where the contract is made shall apply.775 According to this interpretation, the common domicile is not a connecting factor, but a norm to distinguish between two different types of contracts: the foreign contract and the international contract. The former is a contract that takes place between parties domiciled in the same country,776 whereas the latter is a contract to which its parties are domiciled in different countries. Every international contract is a foreign contract, although the opposite is not true.777 The importance of such a distinction is related to the application of the principle of party autonomy because only parties to an international contract enjoy the freedom to select the law applicable. However, according to the jurisprudential interpretation, Article 20 reads as follows: [T]he applicable law to contractual obligations is the law chosen by the contracting parties. In the absence of the chosen law, the law of the common domicile shall apply, if the parties are residents in the same state. Otherwise, the law of the place where the contract was made is the governing law.778 According to Al-Hedawi, although the common domicile is mentioned first, followed by the law of the place where the contract is made, and then the law chosen by the contracting parties, this does not mean the determination of the law applicable shall follow this order. The order that must be understood from the meaning of the Article makes the law chosen by the contracting parties the first priority. However, if the parties did not agree on a law applicable to their contract, the court shall apply the law of the common domicile. The first connecting factor is the parties’ intentions (the chosen law) and if they did not agree that the court will apply the law of the common domicile then the law of the place where the contract is made.779 According to this interpretation, the common domicile is a connecting factor. The question here is not ‘which of these interpretations is more accurate?’ because the court interpretation is the formal one. Perhaps the question that should be asked is ‘why is there such a gap between these interpretations?’ Most likely, this gap occurred because of the wording of the Article. The use of ‘unless’ at the end of the Article suggests that ‘the common domicile’ is only a connecting factor. The Article, according to how the court interprets it, should be as follows: ‘The law applicable to contractual obligations is the law of the place where the contract is made unless the contracting parties agreed otherwise. While the law applicable to a contract

775 The Jordanian Court of Cassation, decisions: No. 67/1988, 28/2/1988, publications of Adaleh Centre for legal information. 776 The domicile is defined according to the JCC as ‘1) A domicile is the place in which a person normally resides. 2) A person may have more than one domicile at the same time’. The Jordanian Civil Code No 43 (n 37) art 39. In this sense, it appears that the Jordanian law does not distinguishes between the domicile and the habitual residence. 777 The Jordanian Court of Cassation, decision No. 489/2010, 7/6/2010, publications of Adaleh Centre for legal information. 778 See Al-Hedawi (n 51) 151. 779 Ibid.

108 that take place between parties who are residents in the same country shall be the law of their domicile’. Three things can be concluded from the above discussion. First, the judicial interpretation of Article 20 confirms that, in the absence of the chosen law, the law of the place where the contract is made governs the substantive matters of an international contract, without exception.780 Second, the wording of Article 20 is vague and requires rewording. Finally, Article 20 was designed to deal with two different types of contracts: international contracts and foreign contracts. Article 21 of the JCC causes further confusion because it does not specify how a court shall choose one of the connecting factors mentioned therein. These connecting factors pull the applicable law in different directions, which raises the question of whether an appropriate formula has been used in this Article. Although the Article stipulates several connecting factors from which the judge must select one, it does not indicate the priority of their application. For example, Article 20 clearly states that the law applicable to contractual obligations is the law of the common domicile if the parties are both residents of the same country. If both the parties are not residents, the law of the place where the contract is made is applicable unless the contracting parties agreed otherwise. Therefore, it should not be difficult to select the applicable connecting factor under Article 20, which is not the case under Article 21. This formula makes it difficult for lawyers to counsel clients in regard to the law applicable to the formal validity of their contract. The main reason for adopting the rigid approach has always been to improve certainty.781 Therefore, a case involving uncertainty under a system that was originally adopted to improve certainty makes Article 21 a poor example of the conflict rules that adopt this approach, which is why the Article must be reformulated.

5.1.2. Challenges Related to Adoption of the Law of the Place Where the Contract Is Made

According to the judicial interpretation above, it is evident that the Jordanian law proceeds on the assumption that, in the absence of the chosen law, there is generally one correct answer to the choice-of-law question in contracts: the law of the place where the contract is made, which deserves attention. To illustrate, achieving justice should be the purpose of any legal rule,782 of which conflict rules are no exception.783 In other terms, “[r]ules and institutions perceived as unjust are unstable and ultimately unacceptable’.784

780 The Jordanian Court of Cassation, decision No. 3876/2006, 8/3/2007, publications of Adaleh Centre for legal information. 781 Neuhaus Paul Heinrich, ‘Legal Certainty versus Equity in the Conflict of Laws’ (Pt Duke University School of Law) (1963) 28(4) Law and Contemporary Problems 795–807, 798. 782 Anthony D’Amato, ‘On the Connection Between Law and Justice (Symposium in Memory of Professor Edward Bodenheimer: The Reemergence of Natural Law Jurisprudence in Decisional Law)’ (Pt UC Davis School of Law) (1993) 26(3) UC Davis Law Review 527–82, 581. 783 Moss Giuditta Cordero, ‘International Contracts between Common Law and Civil Law: Is Non-State Law to Be Preferred? The Difficulty of Interpreting Legal Standards Such as Good Faith’ (Pt Walter de Gruyter GmbH) (2007) 7(1) Global Jurist 1, 1; Nishitani (n 465) 300. 784 Von, 'Choice of Law and the Problem of Justice' (n 401) 27.

109 Justice in the context of PIL does not mean subjecting the disputed transaction to the law that offers a better solution,785 but to the law that is supposed to govern it.786 Historically, conflict rules have been adopted because it is unfair to apply to a disputed transaction a law that has no real relationship with it.787 Little claimed that ‘[it] would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state’.788 Therefore, the aim of a conflict rule must be ‘to fulfil foreign rights, not to destroy them’.789 Carswell emphasised that “[t]he application of rules of foreign law is a cosmopolitan technique, born of a certain tolerance of foreign conceptions of justice … The difficulty is to find a theoretical basis for this well-recognised practice”.790 In international contracts, this theoretical basis has been identified as meeting the expectations of the contracting parties.791 Castel argued that “[p]rotecting the justified expectations of the parties is an objective that is particularly important in PIL cases involving international business transactions”.792 Further, “the applicable legal system should not come as a surprise to the parties, the applicable legal system should be the law with which the parties can be presumed to be particularly familiar”.793 The law of the place where the contract is made does not always meet the expectations of the contracting parties, particularly when the contracting place has no relationship with the contract or with its parties. Zeller provided the following example: “German buyer and American seller sign a contract at Zurich airport. The sale involves delivery of goods to Brazil on CIF [cost, insurance and freight] terms”.794 In Jordan, the court is obligated, according to the provisions of the national conflict rules, to apply Swiss law to any dispute in relation to this contract, in the absence of the choice of law, because it is the law of the place where the contract was made: [W]hile both the German and American court would apply the CISG in the first place and issues not governed by that Convention would be subject to German law as the law of the seller in a German court and, arguably, to Brazilian law as the law of the place of performance by an American Court.795

785 “The “better law” approach [is] later criticised as merely a cover for applying lex fori. Judges could generally be expected to think that their own law [is] preferable to foreign law in terms of fairness”. Maebh Harding, Conflict of Laws (Routledge, 5th ed, 2013) 13. 786 Mills (n 2) 10. 787 Harry A Haines, ‘Recognition of Legislative Interests in Conflicts Cases Arising under the Full Faith and Credit Clause’ [1] (1964) 26(1) Montana Law Review, 1. 788 Little (n 47) 385. 789 Bilkis (n 9) 17. 790 RD Carswell, ‘The Doctrine of Vested Rights in Private International Law’ (Pt Cambridge University Press) (1959) 8(2) International and Comparative Law Quarterly 268–88, 268–9. 791 Eugene F Scoles et al., Conflict of Laws (West Group, 4th ed, 2004) 18; Jean-Gabriel Castel, ‘The Uncertainty Factor in Canadian Private International Law’ (Pt McGill Law Journal (Canada)) (2007) 52(3) McGill Law Journal 555, 558–9. 792 Castel (n 791) 558–9. ‘[I]n contracts,... there is but one basic policy, namely protection of the expectations of the parties’. Eugene F Scoles et al., Conflict of Laws (West Group, 4th ed, 2004) 18. 793 Bogdan (n ) 91. 794 Zeller (n 62) 234. 795 Ibid. Citing Basedow J (2007–4) ‘Lex Mercatoria and the Private International Law of Contracts in Economic Perspective’, Unif L Rev/Revdr Unif 697, 710.

110 Swiss law is irrelevant in this case, so its application would be surprising for the contracting parties, particularly if they are unfamiliar with its provisions. The significance of the above concerns is that although the court may realise that the law determined by the national conflict rule is not valid to govern the dispute, it has no choice but to apply it. The main reason for this is that in Jordan, as with most civil law countries, the “judge lacks the power to control the decisions”,796 which means that a court has no choice but to apply the law that national conflict rules indicate regardless of its relationship with the disputed transaction.797 The court would explain that it is bound to decide the dispute in a particular way because it falls within the scope of the relevant connecting category. Hence, the court, when issuing its decision, may not be confident that the result is just because the judge could not effectively engage in the process of determining the applicable law, which could render the judgment unjustified and weak. Further, the decision might be unenforceable and eventually need to be enforced in another jurisdiction. It could be argued that what is said about the unfairness of the Jordanian conflict rules in question has been established on the assumption that justice means meeting the justified expectations of the contracting parties, when justice is a relative term, which could be understood differently by different legal systems.798 Two factors play an important role in this regard: legal culture and legal ideology, which represent the values upon which a legal system is based, including the ways in which a society believes that a particular issue has to be dealt with.799 Moreover, in any legal system, the law has several cultural and political objectives to achieve. These objectives differ between societies, which may explain why law differs across jurisdictions. Accordingly, the appropriate solution (legal rule) is the one that can achieve its objectives according to national values. What might be considered as a perfect solution in one country may be seen as unfair in another. However, the explanatory memorandum justifies the adoption of the place where the contract is made as a tacit choice,800 which means that the Jordanian law attempted to adopt this criterion to meet the expectations of the contracting parties. This suggests that Jordanian lawmakers believe that fulfilling parties’ intentions is the norm by which the fairness of the targeted rules should be assessed.801 This is supported by the fact that the Jordanian law gives parties the freedom to select whatever law they want to govern their contracts. In summary, the call for the application of the law of the place where the contract is made to all contractual issues, including formation and substitutive validity—although this place might be irrelevant to the contract in some cases—is no longer justified because it causes many difficulties and challenges which prevent legal systems from meeting the expectations of contracting parties. Critics of this rule stress the difficulties inherent in determining the place of making the contract, and point out that this place might be not related to the contract. Therefore, it is recommended that this connecting factor not be adopted, particularly in a civil law country.

796 Seon Bong Yu, ‘The Role of the Judge in the Common Law and Civil Law Systems: The Cases of the United States and European Countries’ (1999) 2(2) International Area Review, 37. 797 Ibid. 798 Sandra Taylor, Anthea Vreugdenhil and Mara Schneiders, ‘Social Justice as Concept and Practice in Australian Social Work: An Analysis of Norma Parker Addresses, 1969–2008’ (Pt Routledge) (2017) 70 (sup 1) Australian Social Work 46–68, 46–9. 799 Van Hoecke and Warrington (n 221) 508. 800 See Section 3.1.2. 801 Ibid.

111 5.1.3. Challenges Posed by the Connecting Factors of Articles 20 and 21 of the JCC

The connecting factors adopted in Articles 20 and 21 focus on the contracting parties and ignore the contract. As a result, Jordan has adopted the subjective theory, which is inadequate because most modern legal systems apply a combined approach that comprises the subjective and the objective connecting factors by analysing a given contract to determine the appropriate connecting factors on a case-by-case basis.802 Another concern is the problem of the conflict of domiciles. The common domicile plays a vital role in determining the law applicable to a foreign contract in Jordan and whether a contract is international, using the principle of party autonomy. According to the way the Jordanian court interprets Article 20, it is evident that the parties to a contract can agree on the law applicable when they are domiciled in different countries. However, the Articles in question do not explain how to identify the relevant domicile when both parties share more than one domicile. Additionally, subjective connecting factors such as ‘domicile’ and ‘nationality’ have been leading for decades to a phenomenon that may be called ‘nationalitylessness’ and ‘domicilelessness’.803

5.1.4. Challenges Posed by the Legislative Ideology of the Jordanian Conflict of Laws Rules Regarding International Contracts

The philosophy of the conflict rules approach depends on the categorisation of legal actions into groups, which are then linked to a legal system.804 Although this philosophy is international, legal systems frequently differ in the way they categorise legal actions.805 In Jordan, contractual issues are divided into two different connecting categories because each of the conflict rules in question is a connecting category in its own right. The targeted rules distinguish between the matter of the law applicable to the form of contract and the matter of the law applicable to the contract. While the former is governed by the provisions of Article 21, the latter is governed by the provisions of Article 20. The effects of this on the determination of the applicable law appears during the ‘characterisation’806 process, which in the context of PIL, is a delicate and sensitive matter that requires close attention. Characterisation in PIL controls the outcome of a dispute.807 If the characterisations differ, the applicable law may also differ. To illustrate, ‘characterisation’ in PIL is defined as the allocation of a given dispute to one of the national connecting categories808 and is the first step in determining the applicable law. Cheshire and North argued that “until a judge, faced with a case involving a foreign element, has determined the particular category into which the question before him falls, he can make no progress, for he will not know what choice of law rule to apply”.809 Therefore, when a Jordanian court faces a contractual dispute involving a

802 Garnett, Keyes and Mortensen (n 369) 419–25; Yntema (n 465) 448. 803 Seyyed Ibrahim Hosseini, Ako Arya and Mehran Ahmadi, ‘Nationality in Private International Law’ (2015) 8(12) Indian Journal of Science and Technology, 3. 804 See Section 1.1. 805 Edward S Stimson, ‘Which Law Should Govern?’ (1938) 24(7) Virginia Law Review 748, 750. 806 Also known as ‘qualification’ or ‘classification’: Ernest Lorenzen, ‘The Qualification, Classification, Or Characterization Problem In The Conflict Of Laws’ (Pt Yale Law Journal Co) (1941) 50(5) Yale Law Journal 743, 743. 807 Allarousse (n 357) 479. 808 Fawcett, Cheshire, North & Fawcett Private International Law (n 19) 36. 809 Ibid, 36.

112 foreign element, it is obligated to decide whether it deals with it as a matter of form or a matter of substance. This distinction of characterisation, in line with Article 11 of the JCC,810 must be done in accordance with the provisions of national law. Since legal systems disagree on how to distinguish between form and substance of a contract, this can be understood as an effect of national law on international contracts. What might be dealt with as a matter of substance in Jordan may be dealt with as a matter of form in another jurisdiction. In a case involving a conflict of laws, this detail can become serious and lead to changing the applicable law. In some cases, the result of this can turn a void legal transaction under one legal system to a valid one under another. For example, although the French and Dutch legal systems have agreed on subjecting the question of capacity to the law of the nationality of the person and the form of a will to the law of the place where it is made,811 they disagreed on the application of these rules in a case known as the Dutch Holograph Will.812 In this case, a Netherlander wrote his will in a ‘holographic manner’813 in France, where he was domiciled. Following his death, his inheritors challenged the validity of this will based on Article 992 of the Dutch Civil Code (1829), which prohibits citizens from writing wills in any form other than the authentic form prescribed by the law.814 The purpose of the Dutch rule was to ensure that when a one makes a will, one enjoys the legal capacity necessary to do so, and to ensure that one understands the seriousness of the obligation they are about to undertake.815 Thus, the formalities of a will should be dealt with as a question of capacity and should be governed by the law of the nationality—in this case, the Dutch law. However, the French court dealt with it as a question of formality and subsequently applied the law of the place where it was made, which was the French law.816 In this example, the characterisation turned a void will into a valid one. Therefore, the effects of the national law during the characterisation process must be taken seriously. Another issue is that, under the current approach, the determination of the place where the contract is made by post (contracts by correspondence)817 is an area where the Jordanian law influences international contracts. Where the parties meet in person to sign a contract, there should be no difficulty in determining the contracting place. However, in contract by post, the determination of this place has always caused trouble. While one

810 ‘The Jordanian law shall be the authoritative source in characterising disputed relationships in cases involving a conflict of laws issue’ The Jordanian Civil Code No 43 (n 37) art 11. 811 John Falconbridge, ‘Conflict Rule and Characterization of Question’ (Pt Carswell and Canada Law Book, for the Canadian Bar Association) (1952) 30 Canadian Bar Review 264, 299. 812 Ernest G Lorenzen, ‘Qualification, Classification, or Characterization Problem in the Conflict of Laws’ (1941) 50(5) The Yale Law Journal, 755. 813 ‘A holographic will is the simplest form in which a written will may be expressed. As its name indicates … the will must be written in its entirety by the testator. Beyond this requirement nothing is essential for the validity of this will’. LEG, ‘Holographic Wills and Their Dating’ (Pt The Yale Law Journal Company) (1918) 28(1) The Yale Law Journal 72–82, 72. 814 Lorenzen ‘Qualification, Classification, or Characterization Problem in the Conflict of Laws’ (n 812) 755. 815 Falconbridge (n 811) 292. 816 Allarousse (n 357) 490. 817 “Regarding contracts over internet, that the place where an offer is issued in an electronic transaction is supposed to be the place where the offeror usually conducts their business, which is also true for the receiver. For a party that does not have such a place, its usual place of residence is supposed to be the place in which that party conducts business”. The Jordanian Electronic Transaction Act No 85 2001 (Jordan) (‘The Jordanian Electronic Transaction Act No 85’) art 18.

113 country may adopt the place of issuing the acceptance,818 another country may adopt the place where the acceptance was received.819 Accordingly, the theory adopted in this regard plays a vital role in determining the applicable law and the rights and duties of contracting parties.820 Take for example, the case of an English person signed (by post) a contract with a party in India. The offer was issued in India and the acceptance was issued in England. The theory that the court adopts when determining the place of this contract plays a crucial role in determining the applicable law. Jordanian law determines the place of a contract by post according to the provisions of the national law,821 which is a serious legislative defect that Jordan needs to address. The problem of characterisation in international contracts in Jordan has nothing to do with the characterisation theory adopted by Jordan; rather, it is a product of legislative ideology. To address this issue, Jordan must review its national legislative philosophy regarding international contracts. In summary, the legal logic adopted in Articles 20 and 21 of the JCC increases the impact of national law on international contracts, which contradicts the fundamental purpose of PIL which is to minimise the impact of the law of the forum on transnational legal relationships.822 The legislative philosophy of the Jordanian law regarding the matter of the law applicable to contractual obligations, instead of simplifying the problem to effectively solve it, complicates it further although it is already the most confusing issue in PIL.

5.1.5. Other Challenges

In addition to the challenges described, three other issues deserve attention. First is the lack of clarity regarding the theoretical foundations upon which the targeted Jordanian conflict rules is based. To illustrate, adopting the law of the place where the contract was made by Jordan to solve contractual issues could mean that Jordan adopts the ‘vested rights’ theory823 and the underlying principle of ‘territoriality of laws’.824 However, adoption of the principle of party autonomy—explicitly in Article 20 and implicitly in Article 21—suggests that Jordan has adopted the intention theory. The effective application of this theory requires that the court hearing the dispute give effect to the parties’ intentions, whether they are explicit or implicit. However, the Jordanian court has never employed the implicit intention for the purposes of determining the applicable law to a contract. This can be observed when Jordanian law gives effect to the parties’ intentions when those initiations are expressly stipulated in the contract document. Jordanian law ignores the implicit intentions of the contracting parties and does not give any effect to the place where the contract must be performed. The traditional method of applying conflict rules in civil law countries originated in Savigny’s theory of conflict of laws.825 According to Lorenzen, the theory contends that where there is no proof of an intention, the parties must be deemed to have contracted with reference to the law of the place of performance.826 This conclusion is based upon

818 The Syrian Civil Code No 84 1949 (Syria) (‘The Syrian Civil Code No 84’) art 98; The Jordanian Civil Code No 43 (n 37) art 101. 819 The Iraqi Civil Code No 40 1951 (Iraq) (‘The Iraqi Civil Code No 40’) art 87. 820 Lorenzen ‘Validity and Effects of Contracts in the Conflict of Laws’ (n 523) 58. 821 The Jordanian Civil Code No 43 (n 37) art 11. 822 For more about this theory, see Little (n 47) 385. 823 Carswell (n 790) 268. 824 For more about this theory, see Carswell (n 767) 269. 825 Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws III’ (n 463) 575. 826 Ibid.

114 the assumption that if the parties had thought of the choice-of-law question, they would naturally have chosen the law of the place of performance because of its connection with the contract as their expectations are regarded as being directed to the performance of their agreement.827 Accordingly, ignoring the place of the performance by Jordanian law can be as indication that the country did not adopt Savigny’s theory. In summary, it is difficult to identify the theory that underpins the current Jordanian approach. This is not to say that Jordan must adopt a single theory. However, in order to evaluate the position of a legal system regarding an issue, it is necessary to determine the theoretical framework upon which it is based. Second, the rigid approach generally prevents the standardisation of conflict rules regarding international contracts at the international level. All countries are interested in supporting international efforts to harmonise conflict rules internationally.828 However, the philosophy of the preselected connecting factors approach, which reflects “the positivist theory of sovereignty”,829 makes it impossible to achieve this task.830 If each legal system adopts a connecting factor other than the one adopted in other legal systems, the harmonisation of national conflict rules will be impossible. Finally, the adoption of such an approach to deal with the problem of the conflict of laws in Jordan has rendered incoherent the Jordanian conflict rules regarding international contracts. While the court is obligated to apply the general conflict rules, the Jordanian arbitration law expressly provides that arbitrators should select the applicable law on a case-by-case basis: “Failing an agreement by the parties on the legal rules applicable to the subject matter of the dispute, the arbitral tribunal shall apply the substantive rules in the law it deems most closely connected to the dispute”.831 Accordingly, the law applicable to the same issue might differ depending on the institution hearing the dispute, such as a court or an arbitration tribunal. The gap between systems acquires importance in the event that the arbitration clause is null and void because it changes the litigation system and the mechanisms whereby the applicable law is determined. In summary, the Jordanian conflict rules in question lack the necessary flexibility required to deal with the diversity of contractual issues; do not meet the justified expectations of parties to international contracts; increase the impact of the national law on international contracts; ignore the implicit intentions of contracting parties; and do not support international efforts to harmonise the conflict rules at the international level. Therefore, the proposed solution offered by the proper law doctrine must be able to overcome these challenges.

827 Lorenzen ‘Validity and Effects of Contracts in the Conflict of Laws’ (n 523) 57. “[I]n Adelaide Electric Supply Company v. Prudential Assurance Company, Lord Wright said: ‘It is established that prima facie, whatever is the proper law of a contract regarded as a whole, the law of the place of performance should be applied in respect of any particular obligation which is performable in a particular country other than the country of the proper law of the contract’. M Schmitthoff, ‘The Doctrine of the Proper Law of the Contract in the English Conflict of Laws” (Pt Georgetown Law Journal Association) (1939) 28 Georgetown Law Journal 447, 456. 828 LR Kiestra, The Impact of the European Convention on Human Rights on Private International Law (TMC Asser Press, 2014) 16; Bilkis (n 9) 11. 829 Liang (n 458) 32. 830 The Jordanian Court of Cassation, decisions: No. 289/1998, 16/5/1999, publications of Adaleh Centre for legal information. 831 The Arbitration Act No 31 (n 717) art 36.

115 5.2. The Ability of the Proper Law Doctrine to Overcome the Challenges of the Current Jordanian Approach

The proper law is defined as a system of law that the parties choose as the law governing their contract,832 and in the absence of such choice, the system of law with which the contract has its closest and most real connection.833 To encourage Jordan to adopt this doctrine, it is important that this approach be able to solve the problems arising from the current approach.834 To this end, this section examines the ability of the proper law doctrine to deal with the diversity of contractual issues, meet the justified expectations of the contracting parties, minimise the impact of national law on international contracts and support international efforts towards harmonising the conflict rules regarding international contracts. With respect to the other challenges raised above, including the vagueness of the Jordanian conflict rules in question and the incoherence of the Jordanian PIL, they will automatically be overcome if the proper law doctrine is adopted because the formula of Articles 20 and 21 of the JCC will no longer be relevant since the new rule comes with its own formula. Moreover, the adoption of the proper law doctrine will remedy the incoherence because its adoption will unify the solution of the conflict of laws problem under the arbitration law and the JCC.

5.2.1. The Ability of the Proper Law to Minimise the Impact of National Laws on International Contracts

One of the key problems of the Jordanian conflict rules in question is that they strengthen the impact of national law on international contracts, much of which occurs during the characterisation process. Therefore, this section examines the ability of the proper law doctrine to eliminate the need for arbitrary characterisation. Characterisation is not unique to PIL, but what makes it significant in the context of PIL is the ‘conflict of characterisation’, 835 which refers to the situation in which two legal systems characterise the same issue differently.836 In 1891, Kahn became aware of the problem of conflict of characterisations when he noticed that the determination of the applicable law could be affected by national characterisation.837 Kahn posed the question: what law should govern the characterisation? This question has since become one of the most controversial issues in PIL. Historically, PIL scholars have suggested different theories to deal with the characterisation question. The most famous four are: characterisation according to the law of the forum where the court sits; characterisation according to the law applicable to

832 M Schmitthoff, ‘The Doctrine of the Proper Law of the Contract in the English Conflict of Laws’ (n 827) 448; Marshall (n 24) 506; Garnett, Keyes and Mortensen (n 369) 419. 833 Amin Rasheed Shipping Co v Kuwait Insurance Co [1984] AC 50, 69; Bonython v Commonwealth [1951] AC 201, 219. 834 Zweigert and Kötz (n 287) 16. 835 Lorenzen, ‘Qualification, Classification, or Characterization Problem in the Conflict of Laws’ (n 812) 744. 836 Allarousse (n 357) 479. 837 Lorenzen ‘Qualification, Classification, or Characterization Problem in the Conflict of Laws’ (n 812) 743. Citing Kahn, Gesetzeskollisiouen: Ein Beitrag zur Lehre des inlernalionalen Privatrecht (1891) 30 Jhering’s Jahrbücher Für Die Dogmatik Des Heutigen Romsche Privatrechts 1, reprinted in Lenel & Lewald, Abrandlungen Zum Internationalex Privatrecht (1928) 1.

116 the case; characterisation by reference to universal concepts; and the theory of primary and secondary characterisation.838 According to characterisation by the law of the forum theory—or Bartin’s theory839— whenever the implementation of a legal system relies on the nature of a disputed relationship, this nature must be decided in accordance with the provisions of national law.840 When a court deals with the question of characterisation, it has to decide the matter based on the terminology of national law.841 Bartin would apply the law of the forum even when it had no real connection with the disputed relationship without giving any effect to the law with which a given dispute was connected.842 As early as 1891, six years before Bartin’s article, Kahn concluded that the law of the forum was appropriate to define the particular relationship where there was a conflict of characterisations.843 Four main arguments were advanced in favour of this theory. First, the characterisation process is nothing more than an interpretation of the national law, which can be achieved only according to the national understanding of the legal terms upon which it depends.844 Otherwise, the national law loses control over its own rules. Second, when the national law permits a court to apply a foreign law, it waives sovereignty in favour of another legal system.845 For this reason, the application of foreign law should be limited to the role to which it has been appointed, with no exceptions. Third, since characterisation is a preliminary step to determining the applicable law, it is almost impossible to refer to any other law.846 Finally, PIL is part of the domestic law of each country; so, to protect the ‘unity’ of a legal system, it must not be assumed that PIL has a terminology distinct from the legal system to which it belongs.847 When the national law uses a certain term in a conflict rule such as ‘capacity’, it grants the foreign law the jurisdiction to govern the legal issues that from the national perspective are classified as such.848 In his theory, Bartin stressed that once a court has ascertained the applicable law according to national conflict rules, this law has to be applied as it is applied in its original country.849 Despite the relevance of this theory, it has received several criticisms. First, the characterisation process is not the same for all domestic laws within one legal system.850 Therefore, to assume that the conflict rules should be interpreted in a manner similar to that adopted to interpret other national rules, complicates the problem of conflicts of characterisation. Further, the unification of the conflict rules becomes more difficult.851 Second, characterisation by the law of the forum collapses when it characterises a dispute

838 Allarousse (n 357) 481. 839 Prem Kumar Agarwal, ‘The Theory of Characterisation: A Critical Legal Study Perspctive’ (2015) 4(3) Voice of Research, 45. 840 Ibid, 46. 841 Lorenzen ‘Qualification, Classification, or Characterization Problem in the Conflict of Laws’ (n 812) 744. 842 Prem Kumar Agarwal (n 839) 46. 843 Pascal (n 21) 717. 844 Allarousse (n 357) 482. 845 Ibid, 484. 846 Ibid. 847 Ibid. 848 Ernest G. Lorenzen, ‘The Theory of Qualifications and the Conflict of Laws’ (Pt Columbia Law Review) (1920) 20(3) Columbia Law Review 247–82, 250. 849 Pascal (n 21) 719. 850 Allarousse (n 357) 484. 851 Ibid.

117 in a way that is not known to the applicable law.852 Forsyth explained that “the foreign rules will often deal with legal institutions and concepts entirely unknown to the lex fori [the law of forum]—in which case it is simply impossible to characterise in this way”.853 Third, opponents of this theory have argued that it is based on a false assumption: the conflict of sovereignties.854 From their perspective, the role of conflict rules is not to protect the sovereignty of a state, but to enhance the value of justice by granting a foreign law jurisdiction to regulate some legal issues containing an international element because it is the appropriate law.855 The second theory suggested in this regard has been the characterisation according to the applicable law. According to this theory, all characterisation matters should be undertaken in accordance with the connecting categories of the governing law.856 To characterise a legal action, a court needs to consider the meaning of the key terms of the applicable law. The supporters of this approach have argued that when national law authorises a foreign legal system to regulate a certain issue, this legal system should be applied to all its matters, including the matter of characterisation. However, to claim that the applicable law should govern the characterisation process produces a circular argument, since this law will not be known until the characterisation process has been completed: “If the law which is finally to regulate the matter depends upon [characterisation], how can a [characterisation] be made according to that law?”857 Therefore, characterisation by the applicable law is, logically, impossible. The third theory to be discussed is characterisation according to comparative law, known as ‘Rabel’s Theory’.858 This theory suggests that all characterisation matters have to be dealt with by going beyond the national interpretation of legal terms. According to this theory, if national law provides that the capacity of a person governed by the law of one’s nationality, the interpretation of the term ‘capacity’ has to be undertaken in accordance with concepts that have a universal character on the basis of comparative studies.859 The advantage of this approach is that it promotes the harmonisation of PIL rules. Additionally, it helps a court to overcome the challenges it may face when dealing with legal relationships that are not known within its own legal system. However, supporters of this theory do not deny that they wanted to establish a perfect system, although this was never realized for two reasons. First, the idea of a supranational interpretation of legal terms is unrealistic because comparatists have not yet achieved it860 and second, legal systems have not found difficulties with characterising unknown legal issues, such as the characterisation of polygamy as a type of marriage.861 The final theory is the theory of primary and secondary characterisation. In Robertson’s opinion, distinguishing between two primary and secondary characterisations can solve

852 Ibid. 853 Christopher Forsyth, ‘Characterisation Revisited: An Essay in the Theory and Practice of the English Conflict of Laws’. (Pt Sweet & Maxwell Ltd) (1998) 114 Law Quarterly Review 141– 61, 147. 854 Allarousse (n 357) 483. 855 Ibid. 856 Ibid, 480. 857 Quoted in Agarwal (n 839) 46. Citing Paras Diwan & Peeyushi Diwan, Conflict of Law (Deep & Deep Publication, 4th ed, 2008) 79. 858 Franco Ferrari and Stefan Leible, Rome I Regulation: The Law Applicable to Contractual Obligations in Europe (Sellier European Law Publishers, 2009) 20. 859 Ibid. 860 Allarousse (n 357) 504. 861 Ibid, 504.

118 the conflict-of-characterisation problem.862 Primary characterisation refers to “the allocation of the issue to its correct legal category”.863 However, this definition is inaccurate because the primary characterisation aims to determine the applicable law, which means that it should be defined as follows: primary characterisation is every characterisation question necessary to determine the governing law. This definition is important within those legal systems that adopt the preselected connecting factors approach because the interpretation of the connecting factor is a matter of primary characterisation. Bilkis claimed: The indicator that is used by courts as a mechanism to determine the applicable law in conflict cases is known as “connecting factors” … these factors will be interpreted exclusively by domestic law for until the choice of law machinery has identified a foreign law to apply to a dispute, there is no rational basis for using any law other than domestic law for definitional purpose.864 In contrast, every characterisation question that may arise after the applicable law has been chosen, is concerned with secondary characterisation.865 As a rule, primary characterisation has to be undertaken in accordance with the provisions of the law of the forum, whereas the applicable law often governs secondary characterisation matters.866 Allarousse argued that this approach is close to Bartin’s approach, which includes a secondary principle that restricts the application of the law of the forum.867 This theory has gained increased acceptance during the past two decades, especially at the international level, due to the national nature of conflict rules and the international nature of their application.868 Generally, arguments in favour of this theory have matched justifications for adopting the law of the forum theory. However, the theory has faced several challenges. Dicey, for example, has rejected it for several reasons. The distinction between primary and secondary characterisation is unrealistic and confusing, while the process of characterisation should be as simple as possible. Further, the writers who support this theory do not have a clear view of where the line between these two types of characterisation should be drawn.869 Perhaps what Dicey had in mind was the role of the national legislative philosophy, which may turn a matter of secondary characterisation into a primary one. Article 11 of the JCC deals with the law governing characterisation in Jordan, which provides that the Jordanian law shall be the authoritative source when determining the nature of disputed relationships in cases involving a conflict of laws.870 The explanatory memorandum emphasises that the scope of this article is limited to primary characterisation matters. As such, all characterisation matters that arise after the applicable law has been determined must be undertaken according to the applicable law.871 In light of the above, it is evident that Jordanian law adopts the theory of primary

862 AH Robertson, Characterization in the Conflict of Laws (Harvard University Press, 1940) 62. 863 Ibid. 864 Bilkis (n 9) 15. 865 Kiestra (n 828) 13. 866 Allarousse (n 357) 499. 867 Ibid. 868 Ibid, 501. 869 Ibid, 501. 870The Jordanian Civil Code No 43 (n 37) art 11. 871 Explanatory Memorandum (n 389) art 11.

119 and secondary characterisations, which is the most internationally accepted theory. Therefore, the question arises: why does Jordan face challenges in this area that other legal systems do not? The answer lies in the legislative philosophy of this country. It appears that the characterisation theory is not the most important factor in this respect, so the question of what law should govern characterisation is irrelevant. What is more important is how to distinguish between the two types of characterisation. The problem of the conflict of characterisation has long been considered to be ‘insolvable’.872 When this issue was discussed for the first time in 1891, the law governing the characterisation law was the law of the forum and, after all these years, it remains much the same. Almost no change has occurred as the result of studies conducted in this area. This should motivate researchers to investigate whether the right questions were asked. Most of the studies conducted in this area attempted to answer one question: what law should govern the characterisation? The only problem with this question is that it indicates a misunderstanding of the issue of characterisation. The formula of this question reflects the logic upon which PIL is based: the idea of having more than one legal system competing with others to regulate a legal relationship.873 Therefore, the purpose of PIL is to select one of these laws to govern the dispute.874 For example, if there is a dispute between an Australian mother and a French father before an English court regarding the custody of their child, who holds American citizenship and is domiciled in England, the question of ‘what law should govern this dispute?’ is reasonable and indicates a comprehensive understanding of the reality of the problem because there are at least four legal systems that could claim the right to govern it: American law as the law of the nationality of the child, English law as the law of the domicile of the child, Australian law as the personal law of the mother, and French law as the personal law of the father. Now, during the characterisation process, is there such a conflict of laws? Is there any law other than the law of the forum that could claim jurisdiction over the characterisation? The answer is ‘no’ because, arguably, there is no law other than the law of the forum that can claim the right to govern the characterisation, which confirms that the question regarding the law that should govern the characterisation has always been irrelevant. Characterisation as a procedure is relevant in the context of conflict of laws when a court has to allocate a given dispute to one of the national connecting categories to link it to a legal system.875 It is a question of interpreting national law. Therefore, it must be done in accordance with the national understanding of the legal terms upon which it depends.876 Kahn was the first to ask what law should govern the characterisation, proclaiming that “each forum would have to deal with [the legal terms] on the basis of its own internal law”.877 To claim the opposite is to claim that the scope of national law is undetermined and unexplainable. In 1932, Neuner published an article in which he argued that the problem of characterisation has no right to exist:

872 Allarousse (n 357) 484. 873 GC Cheshire, Private International Law (Butterworth & Co, 7th ed, 1965) 5. 874 JHC Morris, The Conflict of Laws (Stevens & Sons Ltd, 3rd ed, 1971) 7. 875 Agarwal (n 839) 45. 876 Lorenzen ‘Qualification, Classification, or Characterization Problem in the Conflict of Laws’ (n 812) 745. 877 Ibid.

120 [T]he fundamental error consists in the assumption that there exists in each country a body of choice-of-law rules which are applicable to all situations that may be presented to a court, whereas there are actually only about twenty or thirty such rules, which are entirely inadequate for that purpose.878 Neuner concluded that the solution to this problem was to have more detailed conflict rules. The critical insight to be gained from Neuner’s opinion is that characterisation is not an international problem, but a national problem faced by all legal systems. There is a difference between both understandings in terms of the solution. The former requires an international solution, whereas the latter can be solved domestically with the assistance of comparative methodology. There is an unambiguous relationship between the national legislative philosophy and the characterisation process, which is one of the most significant facts that can be understood from Neuner’s argument. Hence, the question that must be answered is not what law should govern the characterisation because the answer would be always the law of the forum so long as the characterisation is required to determine the applicable law. However, what makes the characterisation in PIL a problem? How should legal systems deal with this problem? The problem of characterisation in PIL exists only in the minds of the scholars who see it as such. The conflict of characterisation is nothing but a mere result of what can be called ‘different interpretations’ or a ‘conflict of cultures’. Legal culture plays a vital role in giving meaning to legal terms. For example, the term ‘contract’ means different things in different countries. This is not to say that different interpretations are the problem because one of the most important findings of comparative studies is that legal terms do not always have the same meaning everywhere.879 Since characterisation is a matter of interpretation, there will always be a conflict of characterisation. Therefore, instead of seeing it as a problem that requires a solution, legal systems should deal with characterisation as a natural phenomenon that reflects the different legal cultures across jurisdictions and a challenge, which comparative law scholars do,880 and law reformers should learn how to cope with it. Contrary to Neuner’s claim that the reason for the conflict of characterisation is the limited number of conflict rules, in this thesis, it is argued that the detailed conflict rules are the source of the problem. Neuner’s opinion reflects a misunderstanding of the problem because his solution is confusing and unclear and instead of a tendency towards solving the characterisation problem, it goes against the solution and further complicates the issue. The main reason for this is that the more conflict of laws rules a country has, the more interpretation is required and the more the issue of conflict of characterisations will appear. In the case of Jordan, it is evident that the main reason for this problem is that Jordan adopts detailed conflict rules. This legislative philosophy has made the distinction between the formalist and the substantive matters of a contract and the determination of place of a contract by post issues of primary characterisation, when it was better to leave them to be decided by the law governing the dispute. Ignoring the role of this philosophy in Jordan has complicated the conflict of laws problem in international contracts and made Jordanian law unable to fulfil its obligation to free international contracts from the grip

878 Agarwal (n 839) 47. Citing Der Sinn Der Internationale Privatrechtlichen Norm, Eine Kur Der Qualifikationstheorie (1932). 879 M Van Hoecke, ‘Deep Level Comparative Law’ in M Van Hoecke (ed), Epistemology and Methodology of Comparative Law (Hart publishing, 2004) 170. 880 Valcke and Grellette (n 223) 102; Zweigert (n 250) 467.

121 of national law. In analysing the Jordanian conflict of laws rules regarding international contracts, it is evident that the greatest source of difficulty appears to be the national legislative philosophy, which requires the court to determine from the outset whether a given dispute shall be classified as a question of form or as substance.881 Most likely, the solution is the opposite of what Neuner suggested: to have fewer conflict rules and connecting categories. While this suggestion will not eliminate the conflict of characterisation problem, it will reduce, to a large extent, the impact of the national culture on international relationships, which is one of the main aspects of an ideal conflict rule. Countries that have adopted the proper law doctrine do not face the challenges faced by Jordanian law. The proper law approach governs most aspects of the contract. According to Mortensen, in Australia, “[t]he trend over the 20th century was that the concept proper law progressively extended its role and replaced other connecting factors for identifying the law of the cause in specific issues related to a multi-state contract”, including its formation and performance.882 A court needs only to determine that a given dispute is contractual and then leave the rest of the characterisation questions to the applicable law. The proper law approach would eliminate the need for detailed characterisation, which reduces the impact of national laws on cross-border contracts. The explanatory memorandum provides that although other legal systems subjugate the form of a contract to the law of the place where it is made, they do not codify it.883 Other legal systems have, instead, applied it as a judicial custom or principle. Arguably, the mistake Jordanian lawmakers made here was to codify what should have been left for the court to determine. Accordingly, instead of solving the conflict of laws problem falling within the scope of its application, Article 21 of JCC created several problems in the course of answering the choice-of-law question in contracts. In summary, the broader the scope of a conflict rule, the less interpretation will be required because many conflict rules are formulated according to ‘legal categories’ borrowed from domestic law, which reflects the national understanding of the legal terms upon which it depends. National laws should provide one choice of law for each category. Narrow rules such as the ones applied in Jordan do nothing to minimise the impact of national law on international contracts. Adopting the proper law doctrine can help Jordan to reduce the impact of the national law on international contractual disputes.

5.2.2. The Ability of the Proper Law Doctrine to Meet the Justified Expectations of Contracting Parties

Ideal conflict rules in contract law enhance the value of justice,884 which can be achieved only by subjugating the contract to the law that meets the expectations of the contracting parties.885 This in turn increases trust in national law. Jordan’s current conflict rules do not meet the justified expectations of the contracting parties,886 particularly in the absence

881 The characterisation is the allocation of the question raised by the factual situation before the court to its correct legal category. Fawcett, Cheshire, North & Fawcett Private International Law (n 19) 36. 882 Mortensen (n 369) 402; Garnett, Keyes and Mortensen (n 369) 431. 883 The Egyptian Civil Code No 131 1948 (Egypt) (‘The Egyptian Civil Code No 131’) art 20. 884 Giuditta Cordero Moss, ‘International Contracts between Common Law and Civil Law: Is Non-State Law to Be Preferred? The Difficulty of Interpreting Legal Standards Such as Good Faith’ (2007) 7(1) Global Jurist, 1. 885 Eugene F Scoles et al., Conflict of Laws (West Group, 4th ed, 2004) 18–9. 886 See Section 3.3.1.

122 of the chosen law, although meeting these expectations is one of the main values that the targeted rules seek to protect. It is necessary that this problem be solved by adopting the proper law doctrine. The proper law doctrine is defined as the law chosen by the contracting parties and, in the absence of this law, the law with which the contract has its closest and most real connection.887 This definition indicates the relationship between this approach and the principle of party autonomy, which refers to “the entitlement of parties to select the law under which their contractual terms will be interpreted [governed] … in the event of a dispute, be enforced”.888 Discussing the express selection of the proper law is similar to discussing the principle of party autonomy, albeit with some minor differences. The proper law doctrine attributes a particularly exalted position to the intentions of the contracting parties. If the parties have expressly agreed on the law governing their contract, this law—subject to some exceptions—should apply to their transaction889, and is referred to as ‘the subjective proper law’.890 According to Mann, the subjective proper law is “the product of an age which proclaimed and adhered to the liberal maxim of the freedom of contract”.891 Most modern legal systems give effect to the law chosen by the contracting parties.892 Normally, this choice is expressed by a choice-of-law clause. For example, in Akai Pty Ltd v The People’s Insurance Co Ltd, the disputed contract explicitly stipulated that “[t]his policy shall be governed by the law of England”.893 Having said that the chosen law is the law that governs a disputed contract, the question that needs to be answered concerns the extent to which, under the proper law approach, the parties to an international contract are free to select whichever law they want to govern their contract. This freedom has to be reasonable because no country would accept the complete loss of control on a sensitive legal issue such as contracts. Mills argued that the chosen law should not be applied without regard for the interests of the State, which would be the State of the applicable law with respect to the particular issue involved in the absence of an effective choice by the parties.894 Legal history shows that at least four theories have been suggested in this regard: bad faith, unconnected law, overriding legislation, and public policy.

887 Bradshaw (n 513) 123. 888 Fleur Johns, ‘Performing Party Autonomy’ (Pt Duke University School of Law) (2008) 71(3) Law and Contemporary Problems 243–71, 249. 889 “The nearly universal acceptance of the principle of party autonomy does not mean that all systems that espouse this principle assign to it the same scope … many systems narrow the scope of party autonomy by * excluding from it certain contracts, in whole or in part, such as contracts convening real rights in immovable property, consumer contracts, employment contracts, insurance contracts … * excluding certain contractual issues, such as capacity, consent and form”. F Ferrari and DPF Arroyo, Private International Law: Contemporary Challenges and Continuing Relevance (Edward Elgar Publishing Limited, 2019) 102–3. 890 JHC Morris, ‘The Proper Law of a Contract: A Reply’ (Pt Stevens & Sons Limited) (1950) 3(2) The International Law Quarterly 197–207, 197. 891 FA Mann, ‘The Proper Law of the Contract: A Rejoinder’ (Pt Cambridge University Press) (1950) 3(4) The International Law Quarterly 597–604. 892 Lando, ‘Some Issues Relating to the Law Applicable to Contractual Obligations’ (n 476) 56. 893 Akai Pty Ltd v The People’s Insurance Co Ltd (n 714) 254. 894 Alex Mills, ‘Limits on Party Autonomy in Choice of Law’, in Alex Mills (ed), Party Autonomy in Private International Law (Cambridge University Press, 2018) 455–90, 455.

123 In Vita Food Products Inc v Unus Shipping Co Ltd, Lord Wright argued that the law chosen by the parties would be the governing law “provided the intention is bona fide and legal”.895 The case, which provided a leading decision in this area, suggested that an express choice-of-law clause in a contract be honoured as long as the contract was bona fide and not against public policy.896 Lord Wright argued: [W]here there is an express statement by the parties of their intention to select the law of the contract, it is difficult to see what qualifications are possible, provided the intention expressed is bona fide and legal and provided there is no reason for avoiding the choice on the ground of public policy.897 According to Cheshire and North, bona fide implies that “the parties cannot pretend to contract under one rule in order to validate an agreement that clearly has its closest connection with another law”.898 Although Lord Wright’s opinion remains the authoritative statement on the limits upon the parties’ freedom to select the law governing their contract, it “has not met with universal approval”.899 Bilkis asked in this respect: how it can be determined that the parties have made an effective and lawful choice? 900 PIL scholars have agreed that this limitation has rarely been applied, at least in Australia.901 The Golden Acres Ltd V Queensland Estates Pty Ltd was the first and last decision in which the Court used Lord Wright’s opinion to defeat an express choice-of- law clause:902 “I am satisfied that the attempted selection of this [Hong Kong] law was for no other purpose than to avoid the operation of the Queensland law. Under all the circumstances, I conclude that the purported selection of the Hong Kong law was not a bona fide selection”.903 According to Garnett, Keyes and Mortensen, this limitation “has not been directly applied in any other case and is best avoided”.904 The ALRC argued: Rejecting the parties chosen law on the grounds of lack of bona fides only makes sense when there are good reasons to prefer the law which would apply in the absence of choice, namely the law with which the contract has its most real and substantial connection. Even then, it is fraught with evidentiary problems and conceptual difficulties.905 The ALRC report added that the bona fide rule should be replaced with rules to determine when parties cannot choose to evade the operation of a mandatory law of the place of closest connection.906 Although some writers have mentioned bad faith as a limit on the chosen law, in practice such a limit is not applied.

895 Vita Food Products Inc v Unus Shipping Co Ltd (1939) AC277. 896 Bilkis (n 9) 18. 897 Per Lord Wright in Vita Food Products Inc v Unus Shipping Co Ltd (1939) AC277. 898 GC Cheshire, Private International Law/Cheshire and North (Butterworths, 1987) 454. 899 St L Kelly, ‘International Contracts and Party Autonomy (Based on Golden Acres Ltd v Queensland Estate Pty Ltd)’ (1970) 19(4) The International and Comparative Law Quarterly 701–5, 701. 900 Bilkis (n 9) 18. 901 Kelly (n 873) 701; Mortensen (n 369); Garnett, Keyes and Mortensen (n 369) 421. 902 [1969] Qd R 378 (QSC) 385. 903 Ibid. 904 Garnett, Keyes and Mortensen (n 369) 421. 905 Law Reform Commission (n 67) 85. 906 Ibid.

124 The second theory that attempted to limit the contracting parties’ freedom was the unconnected law. This limitation has been attributed to the assumption that granting parties the absolute power to select the law governing their contract enables them to “rule out the laws of all the countries that their contract is connected with”.907 This concern stems from the traditional criticism directed against the party autonomy principle. According to Buckley, “[t]he real function of this barrier to contract may be to raise the cost of exit by limiting contracting parties’ range of choices to where they are bound by riddance or other factors”.908 In two cases in Queensland, Australia, the chosen law was disregarded because it had no connection with the contract.909 Garnett, Keyes and Mortensen commented on those two decisions: [I]t could be concluded that the choice was made to evade a statute in force in Queensland … it is therefore unlikely that the courts will invoke this as a limitation on party autonomy, even though some commentators believe that the court do have ‘a residual power’ not to apply the choice of an unconnected law. Once more the courts are only likely to be looking for a reason not to apply an unconnected law when the effect of enforcing the choice would be a result offensive to the legal or moral standards of the forum. In such a case, public policy provides a more acceptable reason for refusing the chosen law and will do so without complicating the principle of party autonomy as an additional qualification of unconnected laws would.910 Lorenzen argued that the call for excluding the application of the chosen law because it is unconnected law means that the parties are not free to select the law governing their contract.911 The traditional requirements of an objective connection between the contract and the chosen law have since been abandoned. Parties may choose a law that is completely unconnected with the transaction.912 Lando claimed that parties: [M]ay want to use a certain formula which is internationally known. They may want to submit the contract to the law of the country that dominates the market. They may want to select a ‘neutral’ law in which each of them has more confidence than in that of the domicile of the other party. A certain legal system may be well developed and well suited to the contract in question. The parties may wish to refer to a law which they have used in earlier transactions with each other. The contract may have a close relationship to some other contract which is governed by a certain law.913 The third theory that has been proposed to restrict the application of the chosen law is the theory of the overriding legislation—or mandatory rules—which has been defined as the rules that “cannot be derogated from by agreement”.914 The law chosen by the contracting parties will not be effective when the legislation of the forum overrides the express

907 Čolović (n 34) 56. 908 FH Buckley, The Fall and Rise of Freedom of Contract (Duke University Press, 1999) 328. 909 Golden Acres Ltd v Queensland Estates Ltd [1969] StR Qd 378; Freehold Land Investments Ltd v Queensland Estates Pty Ltd [1970] HCA 31. 910 Garnett, Keyes and Mortensen (n 369) 421–2. 911 Lorenzen, ‘Validity and Effects of Contracts in the Conflict of Laws’ (n 523) 54. 912 JJ Kuipers, EU Law and Private International Law: The Interrelationship in Contractual Obligations (Martinus Nijhoff Publishers, 2011) 167. 913 Ole Lando, ‘Contracts’ in Kurt Lipstein (ed), International Encyclopedia of Comparative Law (Tübingen: JCB Mohr (Paul Siebeck) 1976) vol III, para 62. 914 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the Law Applicable to Contractual Obligations (Rome I), arts 3(3), 3(4), 6(2), 8(1).

125 choice-of-law clause or its effect:915 “If the situation enters into the scope of applicability of an overriding statute will push, on that point, the proper law aside”.916 Here, mandatory rules can be seen as ‘unilateral conflict rules’.917 Usually, the purpose of these laws is to shift the balance away: [F]rom maximum party autonomy to provide special legal protections for vulnerable parties—such as consumers, employees and purchasers of insurance—who typically do not bargain on equal footing with their counterparts in the contract and are often presented with non-negotiable adhesion contracts.918 Moreover, such laws reflect the national interest.919 Mandatory rules are also applied: [W]henever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired facilities, financial need or other circumstances affect his ability to conserve his own interests and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.920 In such contracts, the ALRC argued that the court must be given the power to exclude the chosen law and decide the objective proper law.921 In Mynott v Barnard (1939), Latham CJ claimed that “[p]arties cannot by agreeing that their contract should be governed by the law of a foreign country exclude the operation of a ‘peremptory’ rule otherwise applicable to their transaction”.922 A clear example (see Chapter 4) is the Australian Carriage of Goods by Sea Act 1991 (Cth), which explicitly bans parties from agreeing on a law other than Australian law to govern a bill of lading relating to a carriage of goods by sea from a place in Australia to a place outside Australia. Any choice-of-law clause in this area is void and unenforceable.923 The same is true for contracts that come under the Contracts Review Act 1980 (NSW) and the Trade Practices Act 1974 (Cth).924 Occasionally, the legislation does not directly exclude the parties’ intentions. Instead, priority may be given to the effect of the legislation over the effect of the chosen law. For example, in Golden Acres Ltd V Queensland Estates Pty Ltd, the court proclaimed that the Queensland Auctioneers and Agents Act could have been applied to prevent the recovery of agents’ fees by its own force and effect. The law of Hong Kong, which was the chosen law, “could still have been applied as the proper law, expect where (as in the

915 Symeonides, ‘The Scope and Limits of Party Autonomy in International Contracts: A Comparative Analysis’ (n 27) 130. 916 Kuipers (n 912) 165. 917 ‘In contrast to bilateral conflict rules, unilateral conflict rules designate normally merely the scope of application of lex fori. Some unilateral conflict rules are in the sense that they leave no space at all for foreign law’. Michael Bogdan, Private International Law as Component of the Law of the Forum General Course (Hague Academy of International Law, 2012) 83. 918 Calleros (n 462) 642. 919 Law Reform Commission (n 67) 90. 920 Blomley v Ryan (1956) 99 CLR 362, 415. 921 Law Reform Commission (n 67) 89. 922 62 CLR. 62, 80. 923 Garnett, Keyes and Mortensen (n 369) 422. 924 Contracts Review Act 1980 (NSW) (‘Contracts Review Act 1980’) s 7; Trade Practices Act 1974 (cth) (‘Trade Practices Act 1974’) s 67.

126 question of the recovery of agents’ fees) it dictated a result different to that of the forum legislation”.925 The final limitation suggested in this regard concerns public policy. The court refuses to apply the law chosen by the parties when the effect of applying such a law would produce results contrary to the public policy of the forum.926 This is stipulated explicitly in the JCC: “It shall not be permissible to apply the provisions of a law specified by the preceding Articles if such provisions are contrary to public order or morals in the Hashemite Kingdom of Jordan”.927 In Australia, this limitation is applicable only to international cases but not to multi-state cases, in which “[f]ull faith and credit shall be given, throughout the Commonwealth, to the laws, the public Acts and records and the judicial proceedings of any State”.928 Hence, no court can invoke public policy as a reason for excluding the application of the law chosen by the parties if that is the law of an Australian State.929 In summary, the law chosen by the contracting parties is the law governing their contract unless it harms the public policy of the forum or contradicts the provisions of a national mandatory rule. The ability of the proper law doctrine to protect the parties’ choice does not depend on the formula of the doctrine, but on the ways in which a legal system applies it. Many of the theories that restrict parties’ freedom have been rejected in Australia. This demonstrates that the legal logic of a given legal system is more important than the formula of the legal rule, particularly in this area. When the parties expressly select a legal system to govern their contract, their intentions should not be difficult to identify.930 However, the complexity begins when there is no choice-of-law clause. In such a situation, the court is obligated to search for any implicit intention. For example, in Vita Food Products Incorporated v Unus Shipping Co, Lord Wright stated that if the intention was not expressed, it would be presumed from the terms of the contract and the relevant surrounding circumstances.931 This is known as the ‘objective proper law’.932 The issue is how to determine the presumed intention. The presumed intention was defined by Lord Wright, in Mount Albert Borough Council V. Australasian Temperance and General Mutual Life Assurance Society, as the “law which as just and reasonable persons they ought to or would have intended if they had thought about the question when they made the contract”.933 Although this intention might be easy to determine in some cases, particularly when the disputed contract is not the first transaction between the same parties, it remains an assumption that can be erroneous. Additionally, factors such as the presence of a jurisdiction clause or an arbitration clause and/or the use of legal terms that point particularly to one legal system, all indicate an implied choice according to the ALRC.934 Further, the contract may be in

925 Garnett, Keyes and Mortensen (n 369) 422. 926 Law Reform Commission (n 67) 85. 927 The Jordanian Civil Code No 43 (n 37) art 29. 928 The Commonwealth of Australia Constitution Act 1900 (CTH) (‘The Commonwealth of Australia Constitution Act’) s 118. 929 Garnett, Keyes and Mortensen (n 369) 423. 930 Davies, Bell and Brereton (n 677) 272–3; Fawcett, Cheshire, North & Fawcett Private International Law (n 19) 451. 931 Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277, 290 932 Law Reform Commission (n 67) 81–2. 933 Mt Albert BC v Aust T & G Assce Society [1938] AC 224. 934 Law Reform Commission (n 67) 83.

127 a standard form, which is usually governed by a particular system such as Lloyd’s Marine Policy. If the applicable law, when the parties are silent, cannot be determined based on the presumed intention, the proper law sought to apply the law with which the contract has its closest connection. In Lloyd v Guibert, the English court claimed that the proper law was “where their intention is neither expressed nor to be inferred from the circumstances, the system of law with which the transaction has its closest and most real connection”.935 It is difficult to draw the line between the implied selection and the law with which the contract has its closest connection. Perhaps that is why Lord Denning decided to exclude the implicit intention from his definition of proper law. In 1949, Lord Denning argued that “the question whether the contract … is valid … depends on the proper law of the contract and that depends not so much on the place where it was made or on the intention of the parties as on the place with which it has the most substantial connection”.936 In this respect, Morris argued that “the difference between the two theories [the presumed intention and the most real connection] appears, in such cases, to be merely a difference of approach or formulation and not to be fundamental”.937 Falconbridge believed that the implied selection was “merely a judicial mode of expressing the rule that the proper law is that of the country with which the transaction has the most real connection”.938 To decide this law, courts consider several factors, including the place of contracting, the place of performance,939 the place of residence or business of the parties, and the subject matter of the contract.940 Other factors that may be considered include the currency in which payments are to be made,941 the location of the land in contracts related to land,942 the place where the relationship between the parties is centred,943 the language in which the contract was written944 and the country under whose flag the ship sails in which goods are contracted to be carried.945 Although there was a debate regarding whether subjective or objective tests should be used to determine the proper law, the objective approach appears to have prevailed.946 The court completes a contract that its parties have left incomplete in a manner similar to the one that the parties might have chosen.947 The ALRC recommended that “[i]f the

935 Lloyd v Guibert (1865) LR 1 QB 115. 936 Boissevain v Weil [1949]1 All ER 146. 937 Morris, ‘The Proper Law of a Contract: A Reply’ (n 890) 910. In the same meaning: Currie (n 14) 351. 938 Currie (n 14) 351. 939 The ‘Assunzione’ [1954] 2 WLR 234, All ER 278; Chatenay v Brazilian Submarine Telegraph [1891] J 1 QB 79, 82, 83. 940 Re United Railways of the Havana and Regla Warehouses Ltd [1959] 2 WLR 251. 941 Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981]. 942 Merwin Pastoral Company Pty Ltd v Moolpa Pastoral Company Pty Ltd (1933) 48 CLR 565. 943 X, Y and Z v the Bank [1983] 2 Lloyd’s Rep 535 at 543. 944 The language factor can be traced to a decree issued in Hellenistic Egypt (120–118 BC), which provided that contract written in the Egyptian language were subject to Egyptian courts and law, while contracts written in Greek were subject to the Greek Courts and law. Friedrich K Juenger, Choice of Law and Multistate Justice (Martinus Nijhoff, 1992) 7–8. But see Sixto Sánchez Lorenzo, 'Choice Of Law And Overriding Mandatory Rules In International Contracts After Rome I' (2010) 12 Yearbook of Private International Law, 67-91, 79. 945 R v International Trustee [I937] AC 500 at 529. 946 Garnett, Keyes and Mortensen (n 369) 430. 947 Whincop and Keyes (n 388) 526.

128 indications are not clear, the court should not be free to infer the choice but should apply an objective test of the proper law”.948 In summary, the approach using preselected connecting factors does not achieve justice in terms of meeting the expectations of the contracting parties. Therefore, it does nothing to enhance trust in the national law. In contrast, the proper law doctrine appears to be more effective than the current Jordanian approach for two reasons. First, it does not exclude any of the laws to which Jordan currently gives effect, while allowing other laws to be applied when relevant, such as the place of performance.949 If there is a need or a relationship between the contract and the place where it is made, the court under the proper law approach can apply this law not as the law of the place, but as the law that has the closest and most real connection with the disputed contract. Čolović argued that “[t]his theory [the proper law doctrine] is grounded not only in the close connection between contracts and a particular country, but also in the intention of the parties which must be included in the elements of the contractual relations”.950 Second, under the proper law approach, the court enjoys the freedom to determine what law to apply on a case-by- case basis.951 In most cases, the court searches for the law that the parties would most likely have chosen, if they had thought of it when creating their contract. Therefore, the court can take the expectations of the contracting parties into account when determining the applicable law.

5.2.3. The Ability of the Proper Law Doctrine to Deal with the Variety of Contractual Issues

International contracts are not simple transactions. There might be a conflict related to the form of the contract, the capacity of its parties, or its substantive validity. As a rule, contracts do not need to comply with formalities because modern contracts are constructed on consent. However, in almost all legal systems, there are some exceptions to this rule because some types of contracts may not be considered valid unless they comply with a specific form or a procedure such as being in writing or registered. In this sense, ‘form’ can be defined as “the external manifestation required by law on a person expressing a will to be legally bound and in the absence of which such expression of will would not be regarded as fully effective”.952 For example, Article 1148 of the JCC provides that ownership of immovable property and of other rights cannot be transferred, either between parties or as regards third parties, except by registration in accordance with the provisions of the law.953 Likewise, in Australia, some types of contracts are unenforceable if they are not in writing; these include bills of exchanges,954 assignments of life insurance policies955 and contracts of marine insurance.956 Often, these requirements are attached to public policy, which means

948 Law Reform Commission (n 67) 84. 949 Davies, Bell and Brereton (n 677) 369–7. 950 Čolović (n 34) 51. 951 Bradshaw (n 513) 113. 952 Geert van Calster, European Private International Law (Hart Publishing, 2013) 224. 953 The Jordanian Civil Code No 43 (n 37) art 1148; ‘[A] partnership contract must be in writing’; Ibid, art 584/1; ‘[T]he formation of the insurance contract on the life of a third party is conditioned by the written approval of such third party, prior to the conclusion of the contract or, in case he lacks capacity, the contract shall only be concluded if approved by his lawful representative’; Ibid, art 942. 954 Bills of Exchange Act 1909 (Cth) (‘Bills of Exchange Act 1909’) ss 8(1), 89(1). 955 Life Insurance Act 1995 (Cth) (‘Life Insurance Act’) s 200(2)(a). 956 Marine Insurance Act 1909 (Cth) (‘Marine Insurance Act 1909’) s 28.

129 that parties are not allowed to stipulate otherwise. The main challenge is that legal systems differ in the special requirements that have to be met. Hence, the matter of the law governing the formalities of a contract is one of the most important issues in this area, exemplified by the Dutch Holograph Will described above.957 Offer and acceptance is another important area of concern. According to Article 90 of the JCC, offer and acceptance include any expression of intent used to create a contract; the first to be uttered is the offer and the second is the acceptance.958 Although these definitions may match the definitions of those terms in other jurisdictions such as the Australian legal system, 959 there is no one particular formula agreed upon by all legal systems to express the parties’ intentions. Hence, in international contracts, there might be conflict over whether one of the parties has actually accepted the other party’s terms, which explains the importance of the law governing this issue. Consent, which signifies the coming together of two wills in a manner that is legally recognisable,960 enjoys a dominant position in contracts and has been described as “the master concept that defines the law of contracts”.961 It might happen that one of the contracting parties claims that their consent is not legally binding because of what is known in the Jordanian legal system as ‘defects of consent’, including fraud, duress and misinterpretation.962 Legal systems frequently differ in regard to the definition of the ‘defects of consent’. The subject matter of a contract, according to the Jordanian definition, is the benefit that parties want to achieve from conducting their contract.963 For example, if one enters into a contract with another to buy a car, the car is the subject matter of this contract. The question of whether something is valid to be a subject matter of a contract is one of the issues over which legal systems may differ.964 The same could be claimed about the reason of a contract, which is defined according to Article 165 of the JCC, as the direct purpose aimed at by the contract—it must be extant, valid and permitted, and not contrary to public order or morals.965 According to Jordanian law, the subject matter and the reason for the contract are essential to creating a legally binding contract, which is not the case in all legal systems such as the Australian law. With respect to consideration, legal systems may disagree on what constitutes consideration. While one legal system may require that the deal between two parties be monetarily fair, in another legal system, such as in common law countries, it would be

957 See Section 5.1.4. 958 The Jordanian Civil Code No 43 (n 37) art 90. 959 The offer as ‘a proposal by one party to enter into a legally binding contract with another’ and the acceptance as the status of the other party who agrees to the proposal of the offer. Turner and Trone (n 571) 41–4. 960 Sultan (n 595) 11. 961 Chunlin Leonhard, ‘The Unbearable Lightness of Consent in Contract Law’ (Pt Case Western Reserve University School of Law) (2012) 63(1) Case Western Reserve Law Review 57, 57. 962The Jordanian Civil Code No 43 (n 37) arts 136–56. 963 Ibid, art 185. ‘(1) In transactions involving property, the subject matter of the contract must be property which may lawfully be dealt in “Mutaqawwim”; (2) The subject matter may be specific property or a benefit or any other right in property and likewise the subject matter may be an act or refraining from an act’. 964 Al-Hedawi (n 51) 156. 965The Jordanian Civil Code No 43 (n 37) art 165.

130 enough that each party passed something to the other party.966 The law applicable in this case is very important. The current Jordanian approach adopts a single connecting factor to deal with these contractual issues—the place where the contract was made—which has been proven to be frustrating for contracting parties and ineffective in terms of achieving justice.967 The problem of the single connecting factor approach is attributed to the question that lawmakers had in mind when they formulated the law, regarding the law that should govern a contract. Morris argued that this question is particularly unreliable; in international contractual disputes, the question must be: which law governs the particular question raised in the instant proceeding?968 This question reflects the logic upon which the proper law approach is based, which requires a case-by-case analysis. In Compania Naviera Micro SA v Shipley International Inc,969 the English Court of Appeal held that the law of the cause for issues relating to the formation of a contract should be the putative proper law,970 which, according to North and Fawcett, has to be ascertained objectively.971 The same approach was adopted in White Cliffs Opal Mines Ltd V Miller to determine whether a valid agreement had been concluded, although the question of whether terms have been incorporated into a contract is governed by the law of the forum.972 Generally, in the Anglo-Australian approach, the content of the obligations undertaken by parties to a contract is determined in accordance with the proper law. This is also true for offer and acceptance and consideration.973 Regarding consideration, it has been argued that it: [M]ust be given, as in the ‘center of gravity theory’ of choice of law [the proper law], to a broad array of factors vitally concerned with the agreement so that the proper law can be articulately selected to govern most of the questions arising under the contract on a basis which will give effect to the expectations of the parties and to the interests of the jurisdictions concerned.974 Regarding the statute of frauds for contracts, although they were traditionally regarded as procedural and governed by the law of the forum, Garnett, Keyes and Mortensen argued that they “should no longer be regarded as procedural after the fundamental definition of procedure was redrawn by treated as formally valid if it complies with formalities prescribed by its proper law”.975 In 1992, the ALRC stated: At common law the question of which law should govern the issues of whether a contract has come into existence is unsettled. There are dicta in the High Court to the effect that the law of the forum governs this

966 Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20, (1954) 92 CLR 424. 967 See Section 5.1.2. 968 Morris, ‘The Proper Law of a Contract: A Reply’ (n 864) 206. 969 Compania Naviera Micro SA v Shipley International Inc (The Parouth) [1982] 2 Lloyd’s Rep 351, 353. 970 Article 10 of the Rome I Regulation provides that the issue of formation is to be determined by the law that would govern the contract in the event that it was valid. 971 Peter North and James Fawcett, Cheshire and North’s Private International Law (Butterworths, 11th ed, 1987) 471–2. 972 White Cliffs Opal Mines, Ltd v Miller (1904) 4 SR (NSW) 150. 973 Mortensen (n 369) 404; Garnett, Keyes and Mortensen (n 369) 432. 974 Note (n 18) 700–16. 975 Garnett, Keyes and Mortensen (n 369) 432.

131 question? Despite this the weight of opinion favours the proper law. The formation of contract—offer and acceptance, consideration, the reality of consent—are as much part of the substance of the law of contract as are questions of material validity and it is illogical to submit them to a different law, especially the law of forum, merely because they are dealt with before issues of material validity arise. The Commission recommends that they be governed by the proper law of the contract.976 The position of the ALRC matched Cheshire’s opinion, who treated the proper law doctrine in a traditional way by attributing great importance to the proper law when dealing with the formal validity of the contract and the capacity of contracting parties.977 In regard to the form of the contract, Cheshire made the following observations: “Judicial statements of a past age cannot now be taken at their face value, for all that they amount to, when rightly considered, is the early nineteenth-century method of stating the modem principle of the ‘proper law’”.978 The Jordanian legal system separates the matter of the contracting parties’ legal capacities, although it is crucial to the validity of a contract. Article 12 of the JCC provides that the law of the State of which a person has the nationality shall apply to the civil status and competence of that person.979 This logic appears to be ignored by many legal systems. Historically in Australia, there were two rules to identify the law governing the capacity of a person to create legally binding contracts.980 The first rule subjugates the capacity to the law of the place where the contract was made, whereas the other rule suggests that the legal capacity has to be governed by the law of the domicile of the person.981 However, these rules have been recently replaced by the objective proper law of the contract.982 The law of nationality is not a valid choice, and treating the legal capacity without taking into account the contract, is something that Jordan needs to rethink due to the serious implications for the rights and responsibilities of contracting parties. The conflict over parties’ capacities to a contract should be dealt with as a contractual dispute so, from a practical perspective, it is better to be governed by the same law governing the contract. A contracting party may enjoy the legal capacity under the law of their nationality but not under the law governing the contract.

5.2.4. The Ability of the Proper Law Approach to Support Efforts to Harmonise the Conflict of Laws Rules at the International Level

In this section, it is argued that the first step in the journey toward unifying the conflict rules at the international level is to replace the rigid approach with the comparative approach. The majority of the universal principles and techniques of PIL have proliferated by dint of the principles of comparative law.983 Kazazi and Çela argued that PIL “is the start of what is called ‘the theatre of a great immigration of ideas’”.984 The rigid approach prevents legal systems from learning from each other. The harmonisation of conflict rules

976 Law Reform Commission (n 67) 101. 977 Quoted in Schmitthoff, ‘The Doctrine of the Proper Law of the Contract in the English Conflict of Laws’ (n 832) 454. 978 Quoted in Ibid, 454. 979 The Jordanian Civil Code No 43 (n 37) art 12. 980 Garnett, Keyes and Mortensen (n 369) 432; Mortensen (n 369) 403. 981 Garnett, Keyes and Mortensen (n 369) 432. 982 Charron v Montreal Trust Co, 15 DLR(2d) 240; White Cliffs Opal Mines Ltd v Miller (1904) 4 SR (NSW) 150; Union Transport Plc v Continental Lines SA [1992] 1 160. 983 Michaels, Comparative Law and Private International Law (n 283) 3. 984 Kazazi and Çela (n 281) 25.

132 internationally stems from the desire to eliminate uncertainty in international contracts so as to “stabilise and strengthen national economies and … create a healthy competition environment”.985 Ogunranti argued: Owing to its all-pervading nature, one of the aims of conflict of laws is to achieve uniform judicial decisions in legal disputes, regardless of the jurisdiction where litigation takes place. This is to promote transnational trade between persons from different jurisdictions or legal systems. Thus, if disputes are resolved by common criteria in different legal systems of the world, parties are certain of the consequences of their legal relations in international trade and by these they are encouraged to make international contracts.986 The harmonisation of such rules has always faced challenges because of the national nature of conflict rules and the complex nature of the conflict of laws problem.987 At the international level, the undesirable issue of uncertainty is directly attributed to different theories adopted in different legal systems. If one country adopts the law of the place where the contract was made, while another adopts the domicile or the place of performance, it becomes impossible to predict which law may govern a disputed contract if the court hearing the dispute has not been selected. In most areas of conflict of laws, certainty has been achieved through the harmonisation of PIL principles with the help of comparative methodology.988 Therefore, achieving harmonisation and certainty in the area of contract is a laudable and feasible goal. Countries can achieve greater certainty through the universal adoption of conflict rules, preferably not through international conventions but through exchange and voluntary transplantation of legal rules because this takes national preferences into account. Zeller claimed that some international conventions have not succeeded because: [D]omestic law has been ‘enriched’ by a body of law which was not designed and drafted by their own municipal parliaments but by academics and practitioners which in a sense reduces the political compromise situation which inevitably leads to a result which is not the best outcome.989 Countries should consider adopting a more flexible approach that allows courts worldwide to benefit from each other’s experiences, which will help to produce internationally acceptable solutions. To this end, no approach is better than the proper law doctrine because it revives the role of comparative law in PIL. In several Australian cases, the court cited decisions from English courts.990 Such acts of citation help to unify these rules. If the Australian court rejected the application of a particular formula that had been previously applied in another jurisdiction, the court may have expressed its concerns in this regard, which will enable the foreign court to better understand the matter from an international perspective. This is also true if the court accepted the foreign rule, as this will encourage more countries to consider adopting the foreign rule.

985 Loukas Mistelis, ‘Is Harmonisation a Necessary Evil? The Future of Harmonisation and New Sources of International Trade Law’ in Ian Fletcher, Loukas Mistelis and Marise Cremona (eds), Foundations and Perspectives of International Trade Law (Sweet & Maxwell, 2001) 8. 986 Ogunranti (n 174) 1. 987 See Section 1.2. 988 Kazazi and Çela (n 281) 25. 989 Zeller (n 62) 232. 990 In Mynott v Barnard (1939) 62 CLR 62, 80, Latham CJ, cited the Vita Food Products Inc v Unus Shipping Co Ltd (1939) AC277.

133 Considering the diversity of contractual obligations, it is not necessary to have a single rule that is applicable to all contractual obligations. However, this does not contradict the suggestion to reduce the number of conflict rules as much as possible, given that the rules regulating contractual obligations should not be codified. In this respect, Symeonides argued that “countries that choose to not codify their choice of law allow a greater degree of judicial discretion and thus greater flexibility than is available in countries with codified choice of law … [b]y their nature judge-made rules are much more flexible than rules enshrined in legislation”.991 It would be enough to develop rules as judicial principles. For example, courts may implicitly agree that the law governing the form of a sale-of-goods contract is the law of the domicile of the purchaser; whereas, the law governing the form of another contract is the law of the place where the contract is made, which depends on the nature of the contractual relationship in question. It is not necessary that the same connecting factor be applied to determine the formal validity of all types of contracts. Legal systems will eventually agree on relevant principles for each contractual dispute. This has happened in the past, an example of which is the law applicable to contracts over immovable property.992 However, flexibility and relinking PIL to the comparative approach are required. Accordingly, unifying conflict rules regarding international contracts without taking the proper law approach as the first step would be impossible. The harmonisation of the principle of PIL in the area of contract will increase over time with the accumulation of published judicial decisions and the work of commentators. Rigid ideas have no place in a modern dynamic world. For example, in the US, this harmonisation has been reached in the area of tort conflicts. Symeonides explained: [W]hile legislatures and restarters alike continue to maintain their negative stance toward choice-of-law rules, American courts have been converging to results that are perfectly capable and ready to produce such rules … [they] have reached surprisingly uniform results in resolving most tort conflicts, despite using different approaches or rationales.993 The same result can be achieved internationally over time in the area of contracts. The proper law doctrine has been in practice for a long time and there are many experiences relating to it. Countries that have decided to adopt the proper law doctrine would not need to start from scratch. Rather, they have the opportunity to benefit from the efforts of judges who are experts in dealing with international contracts from all over the world. In summary, the proper law approach provides a framework for harmonising conflict rules internationally because it enables courts from different jurisdictions to explore rulings and learn from each other.

991 Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 208. 992 In Amin Rasheed Shipping Corporation v Kurwait Insurance Co, Lord Diplock said that “the substantive law of the country which the parties have chosen as that by which their mutual legally enforceable rights are to be ascertained but excluding any renvoi, whether of remission or transmission that the Courts of that country might themselves apply if the matter were litigated before them”. Amin Rasheed Shipping Corporation v Kurwait Insurance Co [1984] AC 50, 60. The same principle is almost adopted by all legal systems. In Jordan, “if it is established that a foreign law is to be applied, only the domestic provisions thereof shall be applied, to the exclusion of those provisions relating to private international law”. The Jordanian Civil Code No 43 (n 37) art 29. 993 Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 213. 134 5.3. Conclusion

In this chapter, it has been argued that the proper law doctrine is the system of law that Jordan should adopt if it wants to overcome the challenges arising from its current rigid approach. The proper law doctrine can help Jordan to eliminate the impact of the national law on international contracts by reducing the need for arbitrary characterisation. Further, the proper law doctrine can meet the justified expectations of contracting parties, deal with the variety of contractual issues, and support international efforts to harmonise the conflict of laws rules in the area of contracts. Although this conclusion should encourage Jordan to switch to the proper law doctrine, there is a final issue that must be considered prior to the recommendation of the proper law doctrine—Jordan’s cultural acceptance of the adoption of the proper law doctrine—which is examined in the next chapter.

135 Chapter 6: The Alignment of the Proper Law Approach with the Political Values of the Jordanian Legal System

Overview

This chapter argues that the proper law doctrine is the conflict rule that Jordan should adopt to translate its national legal ideology into a conflict rule. To this end, the chapter examines: 1- the ability of the Jordanian legal system to cope with criticisms directed against the proper law doctrine; 2- the alignment of the proper law doctrine with the general guidelines of the Jordanian legislative philosophy; and 3- the alignment of the proper law doctrine with the Islamic cultural background of Jordanian society. This chapter is divided into three main sections. In Section 6.1, the criticisms directed against the proper law doctrine are examined. Section 6.2 presents the justifications that Jordanian lawmakers used to eschew the adoption of the proper law doctrine in 1976. Finally, in Section 6.3, Jordanian society’s likelihood of accepting and adopting the proper law doctrine is discussed, specifically from the cultural perspective.

6.1. Criticisms Directed against the Proper Law Doctrine

The proper law doctrine is not without issues. For instance, it has been harshly criticised due to the lack of guidelines regarding the way that it should be determined. Moreover, the explanatory memorandum of the JCC explicitly excludes the proper law of the contract doctrine. Hence, the solution proposed in this thesis, intended to enable the Jordanian legal system to address the shortcomings of its current approach, has already been rejected. It is necessary to examine the reasons for the rejection and to determine why the country needs to review its position, and whether it can do so. Moreover, the proper law of the contract doctrine is an approach developed by non-Muslim scholars and judges, so it is necessary to ensure that the logic upon which it is based is consistent with the Islamic ideology on which the Jordanian legal system is founded. Regardless of the widespread utilisation of the proper law doctrine,994 as noted above, it is not free from objection.995 The proper law doctrine has been criticised especially with respect to the ‘closest and most real connection’ test. First, it has been argued that this test “is uncertain, vague and unpredictable”.996 Opponents have maintained that “[t]here is often a sense of unreality in the process of trying to find an intention which may never have existed in respect of the law governing ... when the contract was made”.997 In Sayers v International Drilling Co, Salmon LJ claimed:

994 Mortensen argued that ‘[t]he trend over the 20th century was that the concept proper law progressively extended its role and replaced other connecting factors for identifying the law of the cause in specific issues related to a multi-state contract’, including its formation and performance. Mortensen (n 369) 402; Garnett, Keyes and Mortensen (n 369) 431. 995 Čolović (n 34) 52. 996 Law Reform Commission (n 67) 94. 997 Lando, ‘Some Issues Relating To The Law Applicable To Contractual Obligations’ (n 476) 58. Citing Graveson, Conflict of Laws (3rd ed, 1955) 195. ‘In 1950, Carter stated that there is an 'absurd artificiality involved in attempting to apply a rule of law based on presumed

136 Sometimes it is said that the test—and it is a very useful test—is: what system of law has the closest and most real connection with the contract? My difficulty is that I can find very little clue in the contract as to what the parties intended and very little indication that the contract has a very real or close connection with any particular system of law.998 Some writers have criticised the proper law doctrine to the extent that they have called for a switch to the preselected connecting factor approach. For example, Castel claimed: “[a]fter reviewing some relevant objectives of PIL and the application of the real and substantial connection test in Canada, the author pleads in favour of a return to clear and predictable rules of private international law that leave little room for interpretation by the courts”.999 It has been argued that the adoption of this approach wastes judicial resources and increases litigation costs. Further, it raises the possibility of judicial subjectivism where the same issues are handled differently.1000 Another concern related to the application of the proper law doctrine emerges when the contract has to be performed in more than one territory or when the ‘closest connection’ points to different legal systems (“evenly balanced factors”).1001 Finally, since contracts are legal documents enforceable by a legal system,1002 which law should govern an international contract when there is no dispute? The above-mentioned criticisms have been directed at the proper law doctrine. Evidently, these criticisms are based on one foundational concern: that the proper law doctrine is too flexible.1003 In this study, there is no claim that the proper law doctrine is an ideal solution The researcher’s aim here is to examine the ability of the Jordanian legal system to cope with the adoption of this approach.

6.1.1. Uncertainty

The proper law doctrine has been criticised because it is too flexible, making it difficult to know the law applicable to a given dispute prior to the court deciding it, which can be problematic.1004 This criticism does not stem from the way the applicable law is determined according to this doctrine; the issue here is the interpretation of the doctrine. Čolović explained:

common intention, to fact situations in which either such common intention is non-existent or its determination is a matter of the merest conjecture’. Marshall (n 24) 512. Citing P B Carter, 'The Proper Law of the Contract' (1950) 3 International Law Quarterly 255. “MSR [most significant relationship] principle actually presents 'no rule' and thus equips judges to decide cases however they wish”. Sagi Peari, 'Savigny's Theory Of Choice-Of-Law As A Principle Of 'Voluntary Submission' (2014) 64 University Of Toronto Law Journal, 180. 998 [1971] All ER 163 at 168. 999 Castel (n 768) 555. 1000 ‘[A] phenomenon aptly described as “judicial particularistic intuitionism” or “impressionnisme juridique”’, Symeonides, ‘Oregon’s Choice-of-Law Codification for Contract Conflicts: An Exegesis’ (n 36) 207. 1001 Law Reform Commission (n 67) 94. Citing Miller D Whitworth St Estates (Manchester) Ltd [1969] 1 WLR 377 reversed [1970] 2 WLR 728 56. 1002 Amin Rasheed Shipping Corporation v Kurwait Insurance Co [1984] AC 50, 60. 1003 Law Reform Commission (n 67) 94; ‘In light of the potential number of connecting factors, the proper law approach amounts to a nonrule, leaving the courts with too much discretion in the ascertainment of the applicable law’. Castel (n 768) 559. 1004 Castel (n 768) 555.

137 [T]he application of the theory of proper law to contractual relations with the foreign element gives rise to many doubts, not only with regard to defining the theory, but also in terms of its relation to the party autonomy and to other theories defining the rules which apply to cases when the parties have not made their choice of the applicable law … the question is asked if the theory of proper law only accounts for the closer connection of a particular contract with a particular legal system, or if it also provides a basis for defining the tacit will of the parties and if it also enables the decision on the law to be made by a court, with regard to hypothetical party autonomy.1005 Drawing on an example where the applicable law determined by the English court was not one of the laws that the parties believed to be relevant to their transaction, Bilkis argued that the applicable law under the proper law doctrine is difficult to predict: In the Assunzione, the court applied the most real and substantial connection test to determine what should be the proper law applicable to the contract. England was the forum, but the parties contended that either French or Spanish law should be applied to their dispute over a shipping arrangement where plaintiff wanted to recover part of a salvage award paid. The court decided Italian law to apply. Thus the rules of finding the proper choice of law are hard to predict.1006 In a similar context, Shreve and Buxbaum argued that “any system calling for open-ended and endless soul-searching on a case-by-case basis carries a high burden of persuasion”.1007 Rosenberg went further in criticising the approach, labelling it a “vain and dangerous illusion”.1008 Parties need to know which law governs their contract, which is why most modern legal systems allow parties to choose the law they believe is most relevant to their contractual agreement. When parties decide to go to the court, they do so because they are unsure which law should govern their contract. It is the duty of the law to resolve problems pertaining to the conflict of laws, although the answer is not always simple and direct. Fawcett, Cheshire and North argued: The problem of ascertaining the applicable law is more perplexing in the case of contracts than in almost any other area … there is the diversity of connecting factors that can be raised by the fact of the case … In most areas of private international law the decisive connecting factor on which ascertainment of the applicable law depends is reasonably clear. There is general agreement, for instance, that it is the place of celebration which indicates the law to govern the formal validity of marriage. But with contracts the sheer multiplicity of connecting factors makes it hard to identify one single connecting factor as the determinant of the applicable law.1009 The case of uncertainty is not related to the proper law doctrine but rather to the complex nature of contractual relationships. A rigid approach such as the one adopted in Jordan is unsuitable for dealing with the diversity of contractual obligations. At the same time, it is

1005 Čolović (n 34) 52. 1006 Bilkis (n 9) 16. 1007 Shreve and Buxbaum (n 773) [99/100] 1008 Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 211. Citing Maurice Rosenberg, Comments on Reich v Purcell, 15(1968) UCLA Law Review 641, 644. 1009 Fawcett, Cheshire, North & Fawcett Private International Law (n 971) 665–6. 138 almost impossible to find a flexible formula that suits this complexity better than the proper law doctrine: In order to reconcile necessary judicial flexibility with the desirable policies of the conflict of laws, an approach must be developed which avoids … mechanical choice of law rules either of the Restatement or other imperative types. Instead, consideration must be given, as in the ‘center of gravity’ [the proper law] theory of choice of law, to a broad array of factors vitally concerned with the agreement so that the proper law can be articulately selected to govern most of the questions arising under the contract on a basis which will give effect to the expectations of the parties and to the interests of the jurisdictions concerned. While this approach sacrifices some of the predictability which is desirable in commercial transactions, it is believed that this drawback should not be decisive in view of the fact that the goals of certainty and predictability have not been realized under the present mechanical approach.1010 Symeonides argued that “[w]hile flexibility is preferable to uncritical rigidity, too much flexibility can be as problematic as no flexibility at all”.1011 Similarly, Kono claimed that the “rigid rules do not always provide for optimal solutions and should be accompanied, if not replaced, by more open provisions which would at least enable choice depending on given factual circumstances”.1012 Rather than completely dispense with this approach, it should be developed because it is the best available solution. This does not need to occur ‘here and now’, but could evolve gradually.1013 Moreover, there may be a considerable number of court decisions that can work as guidelines for lawyers when advising their clients, and for judges when facing contractual disputes. In this regard, Peari argued that “[c]ontrary to the realists' claim that the MSR [most significant relationship] principle embodies unlimited judicial discretion, the principle does lead to predictable results”.1014

6.1.2. Judicial Resources

In regard to the second criticism above, Rosenberg believed that too much flexibility can waste judicial resources and increase litigation costs.1015 Borchers argued: [T]he extreme flexibility of the modem approaches [the proper law] probably brings increased litigation costs, in particular through the need to prosecute appeals. Because cases settle (at least for economically rational litigants) when the parties’ assessments of the value of the case

1010 Note (n 18) 715. 1011 Symeonides, ‘Oregon’s Choice-of-Law Codification for Contract Conflicts: An Exegesis’ (n 36) 207. 1012 Kono (n 40) 61. 1013 Marshall (n 24) 506. 1014 Peari (n 997) 109. 1015 Symeonides, ‘Oregon’s Choice-of-Law Codification for Contract Conflicts: An Exegesis’ (n 36) 207–9; in the same meaning: “Conflicts theorists, especially the “modern” ones, have been notoriously indifferent to the issue of efficiency, treating every case as a unique specimen calling for custom-made handling on the tacit assumption that litigational resources are infinite”. P John Kozyris, ‘The Conflicts Provisions of the ALI’s Complex Litigation Project: A Glass Half Full?’ [953] (1994) 54 Louisiana Law Review, 956; Erin A O’Hara and Larry E Ribstein, ‘From Politics to Efficiency in Choice of Law’ (Pt University of Chicago Law Review) (2000) 67(4) The University of Chicago Law Review 1151–1232, 1152–3; Shirley A Wiegand, ‘Fifty Conflict of Laws “Restatements”: Merging Judicial Discretion and Legislative Endorsement’ [1] (2004) 65 Louisiana Law Review.

139 converge to within the expected cost of pursuing the case to judgment, the ever-present wild card of choice of law may discourage settlement.1016 However, while the pursuit of saving judicial resources is commendable, this should not be at the expense of justice. The use of judicial resources to criticise the proper law approach is unacceptable. The purpose of a conflict rule must not be to save judicial resources, but to establish justice and to protect foreign rights. As shown in the case of Jordan,1017 adopting an approach that gives the priority to ‘predictability’ is unjustifiable and threatens justice, which can negatively affect economic growth. Marshall argued that “[i]t is a ‘perennial struggle’ for the law reformer to balance the need for certain and predictable solutions against the desire for ‘flexible and individualised’ ones”.1018 To date, no rule has been able to achieve this in a better manner than the proper law doctrine. Čolović claimed that “the theory of proper law provides the most leeway for choosing the applicable law compared to the other theories”.1019

6.1.3. Judicial Subjectivism

Regarding the criticism of judicial subjectivism, the same issue may attract the application of one law, while another may be decided under another law if justice so requires.1020 This is not a real criticism, but part of the proper law approach which sees each case as unique. The philosophy upon which the proper law is based enables the court to determine the law applicable to each case based on its circumstances. To describe the variety of solutions reached by courts in different cases as ‘judicial subjectivism’ indicates distrust in the court. Courts are given judicial power because they are considered to be trustworthy. Lando claimed: When deciding a case, the judge feels his responsibility for the living individuals before him whom his judgment will affect economically and often also mentally. The problems of the case force themselves upon him with the power of direct and immediate experience. The response which his sense of justice will give to this challenge will often lead the judge to the right result even though he does not arrive at a cognition of the pertinent arguments.1021

6.1.4. When the ‘Closest Connection’ Points Towards Different Legal Systems

In response to the fourth criticism—the case where the ‘closest connection’ points towards different legal systems—the application of the theory of characteristic obligation (characteristic performance) can help in this regard.1022 Characteristic obligation, as the point of connection, can determine whose obligation in a contract is more important, and serves as a basis to determine the applicable law.1023 This is the position of the Rome

1016 Patrick J Borchers, ‘Empiricism and Theory in Conflicts Law’ (2000) 75(2) Indiana Law Journal 509–10, 509. 1017 See Section 1.3. 1018 Marshall (n 24) 4. 1019 Čolović (n 34) 51. 1020 Bilkis (n 9) 15-18. 1021 Lando, ‘Some Issues Relating to the Law Applicable to Contractual Obligations’ (n 476) 58. 1022 This is also the position of Rome Convention (n 44) art 4(2). 1023 Čolović (n 34) 57.

140 Convention,1024 which has also been noted by the ALRC.1025 The characteristic performance is not a connecting factor, but is: [A] set of operative facts introducing a series of conflict rules fashioned on the basis of a number of types of contract. The characteristic performance flowing from the characteristic obligation serves to establish a typology of contracts and the residence, central administration or place of business of the party owing the obligation which is characteristic of the contract serves as a connecting factor.1026 For example, in Libyan Arab Foreign Bank v Bankers Trust Co,1027 the English court held that, based on the characteristic performance theory, a contract between a bank and its customer was governed by English law to the extent that it was related to a bank account in London, and by New York law to the extent that it was related to a bank account in New York.1028 According to the ALRC, the logic that supports the wide acceptance of the characteristic performance theory is that it improves the certainty and predictability of a range of transnational contracts, which would be otherwise be subject to the main, real and substantial connection test.1029

6.1.5. Which Law Should Govern a Contract in Case there is No Dispute?

The final criticism was related to which law should govern an international contract in the case where there is no dispute. According to the ‘contract without law theory’,1030 the contract is the law of its parties. The determination of the proper law is particularly relevant when there is a dispute. Therefore, to ask about the proper law when there is no dispute is meaningless because there is no practical benefit in determining it. The parties might not even ask such a question. To illustrate, a contract is an agreement between its parties, which is enforceable by law. This does not mean that the parties cannot implement their agreement unless the governing law is determined, although it means that if this implementation occurs through the court, it is important to determine the applicable law. The purpose of law is not to control every transaction, but to resolve disputes when they occur. Determining the applicable law when there is no need for it is unnecessary. Conversely, if a law is undetermined, this does not necessarily mean that this law does not exist, but that this law has not yet been determined: [W]hen individuals entered into a contract, voluntarily and in their own interests, they made a piece of private law, binding on each other and beneficial to both themselves and the community at large, because the good of all was served in the pursuit by each person of his or her own economic gain. The role of the courts in this picture was seen to be in the enforcement of, rather than interference with, contracts.1031

1024 Rome Convention (n 44) art 4(2). 1025 Law Reform Commission (n 67) 96. 1026 Kurt Lipstein, ‘Characteristic Performance—A New Concept in the Conflict of Laws in Matters of Contract for the EEC’ (Pt Northwestern University, School of Law) (1981) 3(2) Northwestern Journal of International Law & Business 402, 404. 1027 Libyan Arab Foreign Bank v Bankers Trust Co [1988] 1 Lloyd’s Rep. 259. 1028 Garnett, Keyes and Mortensen (n 369) 429. 1029 Law Reform Commission (n 67) 97. 1030 Čolović (n 34) 56. 1031 Bell (n 734) 402. Citing Cohen, MR, ‘The Basis of Contract’ (1933) 46 Harv LR 533 at 558 and Printing and Numerical Registering Co v Sampson (1875) LR Equ462 per Sir George Jessel MR.

141 Opponents of the proper law doctrine have overstated the seriousness of such shortcomings. Considering the complexity of the conflict of laws problem in international contracts and the variety of contractual relationships, the solution could not be simple, inexpensive and direct.1032 There are no guidelines indicating how the proper law can be identified. Lord Atkin in R v International Trustee argued that “all these rules [connecting factors] but serve to give prima facie indications of intention: they are all capable to being overcome by counter indications, however difficult it may be in some cases to find such”.1033 Similarly, the ALRC proclaimed that “the proper law of the contract as developed by the common law is ill-defined and uncertain in scope and inadequate to deal with modern developments in international contracts”.1034 In its report, the ALRC listed several reasons for this claim, including uncertainty about the extent of implied choice, unclear limits to party autonomy, and the concept of the objective proper law being too vague for modern commercial usage.1035

6.2. Excluding the Proper Law Approach by Jordanian Lawmakers

The explanatory memorandum maintains that one of the main purposes of the current conflict rules is to unify the law applicable to international contract; that is, to subjugate the entire contract to a single law. This memorandum adds that this purpose is not served by analysing the contract’s elements and linking them to the law that suits each.1036 Implicitly, it refers to the proper law doctrine, which deserves attention because Jordanian lawmakers previously rejected the solution that is proposed in this thesis. It is necessary to evaluate the reasons for this refusal and their suitability. To this end, this section examines the historical background and legal logic upon which the single-law theory is based and the ability of the current Jordanian conflict rules to unify the applicable law.

6.2.1. Historical Background of the Single Law Theory

The explanatory memorandum mentions several times that the purpose of adopting the current approach is to unify the applicable law.1037 However, the single-law theory is not Jordanian; rather, it is international in the sense that it was developed by non-Jordanian writers. In 1957, an American author argued that “[i]f choice of law rules are to be consciously applied, there remains the critical problem of what these rules should be”.1038 Moreover, “[t]he prevalent approach of characterization followed by application of different bodies of law to the various elements of the agreement is open to objection on the ground that it requires a mechanical and possibly artificial division of the obligation”.1039

1032 “Achieving justice in the individual case cannot always be reconciled with decisional uniformity, certainty and predictability”. Mary Keyes, 'Statutes, Choice of Law, and the Role of Forum Choice' (Pt Routledge) (2008) 4(1) Journal of Private International Law 1-33, 15. 1033 Čolović (n 34) 56. 1034 Law Reform Commission (n 67) 81; “Edelman J recognised in the recent Australian Competition and Consumer Commission v Valve Corp [No 3] (‘Valve’) litigation, different factors may point in different directions. His Honour made a welcomed critique when he observed that, ‘[w]hilst the language of “closest and most real connection” trips off the tongue, the underlying concept is far from clear’”. Douglas and Nicholas (n 30) 4. 1035 Ibid. 1036 Explanatory Memorandum (n 389) art 20. 1037 Ibid, arts 20–1. 1038 Note (n 18) 715. 1039 Ibid, 715.

142 In Wanganui-rangitikei Electric Power Board v Australian Mutual Provident Society, Evatt J argued that “[t]he whole theory which lies at the root of private international law … is that the law of one country and one country alone, can be the proper or governing law of the contract”.1040 Another author claimed that “[i]f a single imperative rule such as … [the law of the place where the contract is made] is selected to govern all incidents, a considerable degree of uniformity and predictability may result”.1041 Needless to say, this is precisely the logic upon which the Jordanian lawmakers based their argument. There is no direct relationship between justice and the single-law theory. In 1959, Ehrenzweig argued that a theory “that would refer questions concerning both the validity and the incidents of a contract to the same law, cannot give proper regard to the varying policies that should determine the laws governing the several incidents”.1042 Additionally, the single-law theory—especially where imperative rules are used—has limitations, such as “[v]ariations of opinion as to which specific body of law is to be applied may remain to impede uniformity”.1043 Moreover, the idea of subjugating a contract to a single legal system contradicts the foundation upon which the principle of party autonomy—adopted in Article 20 of the JCC—was originally based, which enables parties to select different laws to govern different parts of their contracts.1044 This is referred to as ‘voluntary dépeçage’,1045 which is defined by Marshall as “a legal tool which enables parties to choose several laws to govern discrete parts of their contract or phases of their contractual relationship”.1046 Perhaps that is why the Rome Convention was one of the first codifications of its time to authorise voluntary dépeçage and judicial dépeçage.1047 While the explanatory memorandum states that the selection of those connecting factors is intended to unify the applicable law,1048 this idea does not align with the general philosophy of the Jordanian law and the effective application of the principle of party autonomy.1049 Morris argued: [Q]uestions such as, Have the parties reached agreement? Have they full capacity? Have the necessary formalities been observed? Is the contract illegal? Are quite different from questions relating to the substance of the obligation and therefore not necessarily governed by the same law.1050 What is noteworthy here is that the current JCC is the first civil code in Jordan’s history,1051 which suggests that the lawmakers lacked the practical experience necessary

1040 Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581, 604. 1041 Note (n 18) 715. 1042 Ehrenzweig (n 518) 1172. 1043 Note (n 18) 715. 1044 Douglas and Loadsman (n 30) 8. 1045 Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 226. 1046 Brooke Marshall, ‘The Hague Choice of Law Principles, CISG and PICC: A Hard Look at a Choice of Soft Law’ (Pt Oxford University Press) (2018) 66(1) The American Journal of Comparative Law 175–217, 196. 1047 Rome Convention (n 44) arts 3–4. 1048 Explanatory Memorandum (n 389) art 20. 1049 Hague Principles 2015 (n 28) art 2 (2) (a). 1050 Morris, ‘The Proper Law of a Contract: A Reply’ (n 864) 206. 1051 Hayajneh, ‘Legal Surgery: The Need to Review Jordanian Civil Law’ (n 66) 45.

143 to predict the effects of legislative philosophy on future practice. Although this may not be a sufficient excuse, it appears to be the main reason why Jordanian law is as it is. When the lawmakers adopted the current rules in 1976, they attempted to adopt the most internationally-accepted solution. However, there was no agreement at that time regarding many important aspects, which were relevant to determining the law governing international contracts, such as the extent to which the contracting parties are free to select the law governing their transaction, the law governing the form of a contract, and the law governing the contract in the absence of the chosen law.1052 This directly influenced Jordanian law. Additionally, it appears that these rules have been left unrevised for four decades, which means that Jordan has missed many opportunities to benefit from developments in the legal logic in this area. The idea of subjugating the entire contract to a single law does not fit the effective application of the principle of party autonomy or the complex nature of the contractual relationships. However, does the current formulation of the Jordanian conflict rules achieve the unity of the applicable law? An answer to this question is sought in the following section.

6.2.2. The Impossibility of Unifying the Applicable Law under the Current Approach

The idea of subjugating the entire contract to a single law seems peculiar because it contradicts the idea of contract fragmentation, which is one of main features of the general philosophy of Jordanian law in this area, although the explanatory memorandum explicitly denies it. Although the explanatory memorandum stresses that the main goal of adopting the conflict rules in question was to unify the applicable law, the general legislative philosophy demonstrates the opposite. The ways in which the conflict rules in question are structured gives the impression that Jordanian law applies the dépeçage theory.1053 This assumption is built partly on the use of the term contractual obligations in Article 20 of the JCC,1054 which suggests that Jordanian law distinguishes between the contract and its effects. Further evidence comes from Article 21 of the JCC, which regulates the matter of the law applicable to the form of contracts. This Article shows that Jordanian law splits contractual obligations into two connecting categories. Symeonides noted that “[t]he more the legal categories used in the conflict of laws rules are fragmented, the more likely it is that courts will have to apply several laws in the same cause (dépeçage)”.1055 Further, Symeonides claimed: The prevailing opinion is that most choice-of-law codifications are hostile to issue-by-issue analysis and therefore to dépeçage. As to Belgian authors observe, ‘[i]t does not rhyme with the traditional European approach to allow an ad hoc splitting up of issues’. However, the keywords in the quoted phrase are the words ‘ad hoc’. What the Europeans seem to object to is the ‘ad hoc’ judicial splitting of the issues, not the legislative splitting. In other words, this hostility is limited to the legislatively unauthorized issue-by-issue analysis, apparently because of concerns that it may lead to an undisciplined or inappropriate judicial dépeçage. Contrary to the definition of …

1052 Explanatory Memorandum (n 389) arts 20–1. 1053 ‘dépeçage: where a court applies more than one system of law to the same dispute in a case with a foreign element’. Douglas and Nicholas (n 30) 8. 1054 See Section 4.3. 1055 Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 225.

144 [dépeçage], they do not consider legislative issue-splitting to be dépeçage. Instead, they call it ‘fragmentation’ ‘differentiation’ or ‘branching out into detail’.1056 This quotation elucidates the position of the Jordanian law. However, it is not a coincidence that Symeonides’s description suits Jordanian law given that Jordanian conflict rules were imported from Europe.1057 This explains the similarities between the legal logic upon which the Jordanian law is based and the European logic. Jordan imported not only the conflict rules in question, but also their justification and the legal logic upon which they are based. Moreover, Article 21 adopts several connecting factors, including the nationality of the contracting parties from which the court may select one (see Chapter 1).1058 However, the explanatory memorandum does not indicate how the adoption of the law of the nationality would help to unify the applicable law when it is not mentioned in Article 20. Adopting such a connecting factor will lead to undesirable fragmentation. If the court wants to avoid this result, it should not apply this connecting factor, which means that the existence of this connecting factor contradicts the intention of the lawmakers. This situation is undoubtedly confusing not only for the contracting parties and their lawyers, but also for the court. The single-law theory is intended to avoid an inappropriate dépeçage. Currie, who was one of the chief proponents of issue-by-issue analysis, acknowledged the fact that in some cases, dépeçage may be problematic. According to Symeonides, Currie stated that “issue- by-issue analysis ‘should not result in the cumulation of negative policies to produce a result not contemplated by the law of either state’. This would be like a ‘synthetic hybrid’ of ‘half a donkey and half a camel’”.1059 However, the potentially inappropriate dépeçage is not a sound excuse for rejecting the entire theory. Symeonides argued: In any event, the fact that in some cases issue-by-issue analysis may lead to dépeçage and that in some of those cases the dépeçage may be inappropriate is not a good reason for rejecting issue-by-issue analysis in general and returning to the wholesale choices of the traditional system. Rather than precluding issue-by-issue analysis, the better solution is to guard against the possibility of an inappropriate dépeçage and to provide tools for avoiding it in the few situations where it may occur.1060 Moreover, in some cases, the application of dépeçage might be necessary to achieve justice. As put by Schumitthoff: “No court will split the contract without a good reason”.1061 The approach currently adopted in Jordan—particularly in Article 21 of the JCC—is subjective and focuses on the contracting parties. The circumstances of individual contracts are not considered prior to determining the applicable law. With this approach, the court does not have the authority to select the most appropriate law when considering the circumstances of each case. In order to meet the expectations of contracting parties, the contract needs to be analysed to determine which law is the one most closely related to it.

1056 Ibid, 224–5. 1057 See Section 3.1.1. 1058 See Section 1.1. 1059 Symeonides, Codifying Choice of Law Around the World: An International Comparative Analysis (n 58) 221. 1060 Ibid, 222. 1061 Quoted in J Chitty and HG Beale, Chitty on Contracts (Sweet & Maxwell, 2012) 2179. 145 The discussion above can be summarised under four main points. First, Jordanian law adopts two contradictory theories, although it does not recognise this. Second, it is difficult to ensure that the application of a single law leads to justice in all cases. Third, in some cases, the subjugation of different parts of a contract to different legal systems will be inevitable. Finally, the current Jordanian approach, contrary to its purpose of unifying the applicable law, instead makes it difficult to achieve such unity. A unification of the applicable law can be achieved by adopting the proper law doctrine, based on the intention theory, which permits the application of a single dominant law to the principal incidents of the contract if justice requires it.1062 That is, “[c]hoice of law approaches based on the ‘center of gravity’ or intention theories or on an acceptance of party stipulations of governing law … permit application of a single dominant law to the principal incidents of the contract”.1063 At the same time, under this doctrine, the court has the necessary power to determine whether there is a need to apply more than a legal system.1064 In some cases, subjugating the entire contract to a single law might be reasonable, whereas in other cases, this may not be appropriate. The adoption of opposing theories by a legal system is not a legislative flaw due to the need to deal with a wide variety of contractual issues. What might work well in one case might not be relevant in another. Therefore, different theories are required. The only approach capable of absorbing conflicting theories is the proper law approach because it is flexible enough to cope.

6.3. Cultural Acceptability of the Jordanian Legal System to the Proper Law Doctrine

The cultural acceptance by the receiving country can affect the success of legal transplant. Legrand argued: [T]he decision to alter a local institutional framework at the level of formal rules and to do so through borrowing, is first and foremost a function of cultural engagement with alterity which will make the host legal culture receptive to the new rule in a way that will avoid internal tension.1065 It appears that “[f]or the law to be effective, it must be meaningful in the context in which it is applied so citizens have an incentive to use the law and to demand institutions that work to enforce and develop the law”.1066 Legal culture derives its normative power: [F]rom the relationship between political, social and legal traditions and law, legal institutions, practice and the informal experience of legal culture—inside and outside of the legal community: deeply felt, ingrained attitudes about what law is and should be and how it should translate into institutions, institutional roles and procedures and rules.1067

1062 Note (n 18) 710–1. 1063 Ibid, 710–1. 1064 Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581, 604; Libyan Arab Foreign Bank v Bankers Trust Co [1988] 1 Lloyd’s Rep, 259. 1065 Ibid. 1066 Daniel Berkowitz, Katharina Pistor and Jean-Francois Richard, ‘The Transplant Effect’ (Pt American Journal of Comparative Law) (2003) 51(1) American Journal of Comparative Law 163, 167. 1067 C Brants, ‘Legal Culture and Legal Transplants’ (2010) 14(3) Electronic Journal Of Comparative Law, 2. 146 The importance of realising the above stems from the fact that legal transplant is more than a simple copy–paste action. Transplanting a legal rule into a legal system is the beginning, not the end, of the exercise. As mentioned in Chapter 2, there is a significant difference between transplanting a legal rule into a legal system, and its eventual success. The targeted Jordanian conflict rules are transplanted rules, although they were most likely imported without first ascertaining that they were aligned with the national culture. This observation is supported by the limited number of judicial decisions related to the conflict rules in question. Although the relevant Articles have been in force since 1976, only 18 decisions could be found. In nine of them, the court concluded that the applicable law was the Jordanian law as the law of the place where the contract was made. As a rule, any contract made in Jordan is subjugated to the Jordanian law,1068 which “is a stable principle … that if a contract is signed in Jordan, the applicable law must be the Jordanian law”.1069 In some cases, the Jordanian law was applied because it was the law of the common domicile.1070 However, in nine decisions, the court accepted the application of a law other than the national law of Jordan. This small number, given the fact that Jordan depends on imports and exports to fulfil the country’s energy, food and clothing needs, could mean that parties to international contracts do not trust Jordanian law in this area: an issue that merits further attention. The transplantation of rules does not succeed if the place where the contract is made does not always meet the expectations of the contracting parties. The contracting parties most likely eschewed the application of the Jordanian conflict rules. One might argue here that contracting parties, in principle, do not enjoy the freedom to select or exclude the conflict rules.1071 Although parties enjoy the freedom to select the law governing their contract, they do not have the power to select the applicable conflict rules. However, there are several ways to do so. One is by selecting the court to hear the dispute,1072 which is a standardised principle of PIL.1073 It has been argued that “Jordanian courts are competent to rule on the case even if it is not within its jurisdiction if the opponent accepts its mandate explicitly or implicitly”.1074 Accordingly, by selecting a court, parties select the conflict rules of the country where the court sits because each court is obligated to apply its own conflict rules.1075 The missing link between the current Jordanian conflict rules and the cultural background of Jordanian society may have played a significant role in reducing the effectiveness of the targeted conflict rules. Islam is the dominant religion in Jordan, which means that the Jordanian culture is Islamic (see Chapter 2). The national culture is omnipresent and often affects the formulation of law and its application. Since the overwhelming majority of the

1068 The Jordanian Court of Cassation, decisions: No. 697/1995, 21/5/1995; The Jordanian Court of Cassation, decisions: No. 697/1995, 21/5/1995. 1069 The Jordanian Court of Cassation, decisions: No. 289/1998, 16/5/1999, publications of Adaleh Centre for legal information. 1070 The Jordanian Court of Cassation, decisions: No. 2149/2006, 21/8/2007, publications of Adaleh Centre for legal information. 1071 ‘If it is established that a foreign law is to be applied, only the domestic provisions thereof shall be applied, to the exclusion of those provisions relating to private international law’. The Jordanian Civil Code No 43 (n 37) art 28. 1072 Keyes, 'Statutes, Choice of Law, and the Role of Forum Choice' (n 1032) 1. 1073 The Hague Choice of Court Convention (n 705) art 2. 1074 Civil Procedure Act No 24 1988 (Jordan) (‘Civil Procedure Act No 24’) art 27(2). 1075 Jeremy Kirk, ‘Conflicts and Choice of Law within the Australian Constitutional Context’ (Pt Wm W Gaunt and Sons Inc) (2003) 31(2) Federal Law Review 247–98, 251.

147 Jordanian population is Muslim, it is appropriate to consider religion as an influential cultural factor in Jordan. In this respect, Morden argued that “religious belief and practice are valuable in illuminating the platitudes of our existing morality upon which law is based”.1076 Similarly, Cotterrell argued that “law is a continuum of regulation that reaches deep into culture”.1077 What makes Islam a significant factor in this thesis is the philosophy upon which it is based, and the close relationship between religion, law and legal culture in Muslim societies. Therefore, it is essential that the proper law doctrine fits and does not contradict the cultural values of Jordanian society. Ensuring that the proper law doctrine is aligned with the cultural values of Jordanian society is also important because the donor country in this study—Australia—has a secular legal system. Such dogmatic differences can threaten the entire transplantation process if they are ignored. Therefore, two issues must be examined. First is the ability of the Jordanian legal system to adopt a legal rule that has been developed in a non-Muslim jurisdiction—the cultural acceptability of the idea of legal transplant. Second, in light of Zweigert and Kötz’s claim that law in Islam “was given to man once and for all” and that “society must adapt itself to the law rather than generate laws of its own as a response to the constantly changing stimulus of the problems of life”,1078 it is important to examine the alignment of the proper law doctrine with the cultural values of Jordanian society.

6.3.1. Consistency of the Proper Law Doctrine with Islamic Cultural Background of the Jordanian Society

In this section, the researcher justifies the adoption of the proper law approach in Jordan from the cultural perspective, and considers the legislative philosophy of Islam, as this is the predominant cultural characteristic of Jordan. In this section, it is argued that the logic upon which the proper law doctrine rests, is aligned with the cultural background of Jordanian society. Therefore, the adoption of the proper law doctrine can align the Jordanian conflict rules regarding international contracts with the cultural values of Jordanian society. Most criticisms directed against the theory of legal transplants are related to the cultural features of the recipient country.1079 Legrand argued that a legal rule does not have “any empirical existence that can be significantly detached from the world of meanings that defines a legal culture”.1080 Moreover, what may culturally fit one society may not fit another.1081 For this reason, the potential influences of the culture in future developments cannot be ignored.1082 Hence, two important factors must be considered: the Islamic theory of interpretation and the mechanisms by which an Islamic law deals with novel issues.

1076 John W Morden, ‘An Essay on the Connections Between Law and Religion (lecture given at Knox College, University of Toronto in February 1983)’ (Pt Hamline University School of Law) (1984) 2(1) The Journal of Law and Religion 7–39, 11. 1077 Roger Cotterrell, Living Law: Studies in Legal and Social Theory (Routledge, 2017) 154. 1078 See Section 2.4.1. 1079 Legrand, ‘The Impossibility of “Legal Transplants”’ (n 93) 116. 1080 Pierre Legrand, ‘What “Legal Transplants’” in D Nelken and J Fest (eds), Adapting Legal Cultures (Hart, 2001) 55, 59. 1081 Legrand, ‘The Impossibility of ‘Legal Transplants’’ (n 93) 114. 1082 Daniel Berkowitz, Katharina Pistor and Jean-Francois Richard, ‘The Transplant Effect’ (2003) 51(1) American Journal of Comparative Law 163, 167.

148 According to the explanatory memorandum,1083 Jordan does not adopt a specific interpretation of Islam.1084 Rather, Jordan permits any accepted scholarly interpretation. Lawyers, judges and scholars are free to base their interpretations on any jurist’s opinion, whatever their affiliation. They may even follow rules of interpretation adopted by a particular school in one context and those adopted by a different school for another rule.1085 This section refers to Islam without any customisation. This is not to say that Islam differs from one society to another, but rather that different schools of thought present different understandings of the text:1086 Islamic jurists could not always interpret the language of the Qurʾān and that of the Sunna in the same way arriving at the same legal result, rather they frequently differ in their interpretations of certain Qurʾānic verses and particular Prophetic traditions, reaching different legal rulings.1087 The Islamic principles of interpretation (tafsir)1088 were originally proposed to extract or derive the provisions (Ahkam) of the sacred text of the Quran and the Sunnah.1089 Islamic theorists and scholars have adopted a view similar to the Western theory of interpretation, which has to be practiced not through a free reasoning process, but “as a result of an inductive exegesis”.1090 Interpretation theory in Islam pays careful attention to the language and the general context of a rule. This appears to be similar to the ‘literal rule’ method or the plain meaning rule in Western jurisprudence.1091 According to the literal rule, texts shall be interpreted in accordance with the ordinary meaning of the words,1092 unless they are defined in the legislation otherwise.1093 According to Turner and Trone, this is based “on the assumption that Parliament’s intention is expressed in the actual word used”.1094 Literal rule differs from Islamic theory because the latter offers a detailed guide to uncovering the factual meaning of texts. This guide consists of many rules that help the interpreter to understand a text and to justify one’s understanding. These rules can be employed as criteria to evaluate the accuracy of scholars’ interpretations. Islamic

1083 Explanatory Memorandum (n 389) art 2. 1084 There are four main schools of thought in Sunni Islamic jurisprudence: the Hanafi School, the Maliki School, the Shafi’I School and the Hanbali School. For more about the differences between these schools of thought see e.g., Melchert (n 381) 384–93. 1085 Raed El-Saadouni, ‘The Liability of Groups of Companies in Islamic Law (A Comparative Study with Common Law)’ (PhD Thesis, Univercity of Stirling, 2013) 116. 1086 Harasani (n 345) 194. 1087 Rafat Y Alwazna, ‘Islamic Law: Its Sources, Interpretation and the Translation of It into Laws Written in English’ (2016) 29(2) International Journal for the Semiotics of Law—Revue Internationale de Sémiotique Juridique 251–260, 252. 1088 The Arabic term tafsir, which can be considered equivalent to the English term interpretation, has a more specialised meaning in the classical Arabic than the legal interpretation. Bernard Weiss, ‘Interpretation in Islamic Law: The Theory of “Ijtihad”’ (Pt American Association for the Comparative Study of Law) (1978) 26(2) The American Journal of Comparative Law, 199. 1089 ‘Sunna: is the inspired sayings and deeds of the Prophet as recorded in a genre of literature known as hadith’. Ibid, 200. 1090 Ibid, 202. 1091 Ekta Gurjar, ‘Literal Rule: A Tool for Statutory Interpretation’ (2012) SSRN Electronic Journal, 3. 1092 Michael Kirby, ‘Towards a Grand Theory of Interpretation: The Case of Statutes and Contracts’ (2003) 24(2) Statute Law Review 95, 99. 1093 Driedger (n 733) 1. 1094 Clive Turner and John Trone, Australian Commercial Law (Thomson Reuters Australia Limited, 32nd ed, 2019) 13.

149 interpretation theory, which has been developed over 1,400 years, is extensive but focuses mainly on two questions: ‘Why?’ and ‘How?’ The ‘Why?’ focuses on the relationship between the text and the reasons for its existence. Although understanding the real meaning plays a significant role in the interpretation process, it is not the only factor. Often, it is used to select one of several possible meanings. This approach is known to Western scholars as the ‘mischief rule’.1095 The mischief rule interprets a legal rule in light of the mischief and defects with which it deals.1096 Lord Coke argued: For … true interpretation of all statutes in general … four things are to be discerned and considered: (1st). What was the common law before the making of the Act? (2nd). What was the mischief and defect for which the common law did not provide? (3rd). What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth. And, (4th). The true reason of the remedy.1097 The answers to these questions are to be found in secondary sources, such as explanatory memorandums, parliamentary discussions, committee reports, corresponding rules, and law review articles. ‘How?’ refers to the language, which includes grammar, the ordinary meaning of terms and the textual signals. In this regard, Islamic theory offers five main rules that every interpreter must thoroughly understand and follow. The first rule prescribes how the terms should be interpreted. The reason for this rule is that the same thing can be said in various ways and when the legislator chooses a specific word, there must be a reason, which is the duty of the interpreter to uncover.1098 The second rule specifies that each term must be understood in its legislative context. For this purpose, Islamic theory offers several principles that enable context to be used in the process of interpretation. For example, it categorises vocabularies into four groups according to their role: specific, general, interpretable and homographic.1099 However, vocabularies can also be classified according to their meaning: factual, metaphorical, explicit, or implicit. Finally, words can be categorised according to their position in the text in terms of being visible, hidden, clear or interpretable.1100 The third rule states that one must understand the relationship between a text and its surrounding texts. In this regard, Islamic theory offers some principles to be followed by interpreters when examining this relationship, which are based on a logical reasoning process. Each interpreter has to be familiar with the laws of logic such as “the call for doing something is an order not to do the opposite”. Additionally, one has to be aware that different texts may affect each other. For example, a more recent text may omit an older version or amend it explicitly or implicitly. Therefore, the historical context of a legal rule plays an important role in determining its factual meaning, which is also true for the Western interpretation theory.1101 Although there are many similarities between the Islamic theory of interpretation and the Western theory, both disagree on its nature.

1095 Samuel L Bray, ‘The Mischief Rule’ (2019) Georgetown Law Journal 1. 1096 Driedger (n 733) 1. 1097 Heydon’s Case [1584] EWHC Exch J36 (1 January 1584) . 1098 W.B. Hallaq, An Introduction to Islamic Law (Cambridge University Press, 2009). 1099 Alwazna (n 1087) 5. 1100 Ibid, 5–6. 1101 ‘A lawyer must … act in a strategic manner, determine what stands ‘behind a given text’ and be able to use this knowledge’. Škop (n 402) 11.

150 For Muslim scholars, interpretation is a science, not an art; whereas the Western philosophy of interpretation considers it as an art, not a science. Kirby argued: The basic principles governing statutory interpretation are repeatedly stated, without apparent disagreement, in decisions of the High Court of Australia … they involve deriving meaning from close consideration of the text, context and purpose … But the process is an art and not a science.1102 However, given the similarities between the two systems, this difference is relatively minor, particularly if ‘art’ means the ability of the interpreter to apply the laws of logic and the sense of language to determine the meaning of a given text. Interpretation theory is important because it is used by the court to interpret the contract’s terms. When the court is about to determine the applicable law, it needs to interpret the disputed contract, which has to be done according to the theory of interpretation. Hence, the first theory that will be relevant to determine the applicable law to an international contract under the proper law doctrine appears to be functionally similar in both legal systems: Islamic law and Western legal theory. The historical source of the JCC—the Majalla—does not regulate the problems associated with the conflict of laws. The Islamic legal system is a system of law based on the provisions of Islam.1103 However, these provisions are not immutable in all cases. In society, legal issues develop and it is evident that some legal issues facing modern societies differ from those issues that existed 14 centuries ago when Islam emerged.1104 Some of the modern issues faced by societies were not known in the past, such as the transplantation of living organs, artificial insemination, and the conflict of laws. Given that Muslims must attach their lives completely to their religion, the question is: how can such issues be addressed and resolved? In Islam, arbitrary opinions are not accepted, which means that every opinion must be justified by reference to the primary sources: the Quran and Sunnah,1105 which is referred to as Ijtihad (effort)1106—the process of logical reasoning by which jurists derive and rationalise opinions from the sacred texts, Quran and Sunnah.1107 It is believed that Ijtihad began and received approval during the time of the Prophet Mohammad.1108 There is a narration that summarises a short conversation between the Prophet and one of his companions, Mouad ibn Jabal. In this narration, the Prophet asked Mouad, before he sent him to the people of Yemen: ‘According to what shalt thou judge?’ He replied, ‘According to the Book of God’. ‘And if thou findest nought therein?’ ‘According to the Sunnah of the Prophet of God’. ‘And if thou findest nought therein?’ ‘Then I will exert myself to form my own judgement’. And thereupon

1102 Michael Kirby, ‘Statutory Interpretation: The Meaning of Meaning. (Australia)’ (2011) 35(1) Melbourne University Law Review 113, 113. 1103 El-Saadouni (n 1085) 114. 1104 Ibid. 1105 Aznan Hasan, ‘An Introduction to Collective Ijtihad (Ijtihad Jama’i): Concept and Applications’ [26] (2003) 20(2) American Journal of Islamic Social Sciences, 35. 1106 Matilda Arvidsson, ‘Ijtihad Reformation of Islamic law in the 21st century. The case of the Sudan’ (University of Lund, 2002) 23. 1107 Nancy N Roberts and Saʻīd Shabbār, Ijtihad and Renewal (The International Institute of Islamic Thought, 2017) 10–11. 1108 Hasan (n 1105) 29.

151 the Prophet said: ‘Praise be to God Who has guided the Messenger of His Prophet to that which pleases His Prophet’.1109 Not all narrations (Sunnah) enjoy the same level of credibility.1110 Some narrations are better in terms of their authenticity than others1111 because of the citation system,1112 which is a discipline that focuses on the credibility of narrators.1113 While the explanation of the Islamic citation system is outside the scope of this thesis, it is noteworthy because the narration above is not considered to have a high level of authenticity. However, Muslim scholars accept it because its meaning aligns with a teaching of the Quran:1114 “but had they referred it to the Messenger and to those in authority among them, those who can draw conclusions from it would have comprehended it”.1115 In another narration, Prophet Mohammad encouraged his companies and their followers to make Ijtihad: 1116 “When a judge utilizes his skill of judgment [makes Ijtihad] and comes to a right decision, he will have a double reward, but when he uses his judgment and commits a mistake, he will have a single reward”.1117 The purpose of this narration was to encourage judges and jurists to seek the truth without being afraid of being wrong. Those mistakes are rewarded because they are part of their efforts and indicate that human beings cannot always be correct.1118 Since Ijtihad is permissible, the question is: what issues are covered by Ijtihad? Islam as a religion governs two areas: acts of worship (Ibadat) and transactions (Muamalat).1119 The latter “deals with all those subjects which comprise the only content of other legal systems”.1120 These two areas are not separate and distinct. When one fulfils transactions with fair and good intentions, one is rewarded for that by God because those behaviours are acts of worship in Islam. The Quran says “O you who have believed, be persistently standing firm for Allah, witnesses in justice and do not let the hatred of a people prevent you from being just. Be just; that is nearer to righteousness”.1121 Ibadat regulates the relationship between God and the individual, and its provisions cannot be amended: the Arabic term for this is Ibadat Twqefiah, which means ‘immutable’.1122 God shall not be worshipped except by his commandments. For example, Muslim people must pray five times a day and no one is allowed to amend when

1109 Said Ramadan, Islamic Law. Its Scope and Equity (Macmillan Press, 1961) 64. 1110 Wael Hallaq, ‘The Authenticity of Prophetic Hadith: A Pseudo-Problem’ (1999) Studia Islamica 75, 77–80. 1111 Ibid. 1112 ‘While Muslims believe generally that the Sunnah also enjoys divine inspiration, they appreciate that not every reported Tradition is authentic. Political dissension and other social factors that emerged after the Prophet’s death, led to divisions amongst the Muslims and to the emergence of fabricated Traditions attributed to the Prophet’. Baderin (n 419) 188; In the same meaning: Alqudah, (n 407) 11. 1113 Ibid, 188–9. 1114 Saim Kayadibi, ‘Ijtihad by Ra’y: The Main Source of Inspiration behind Istihsan’ (2007) 24(1) The American Journal of Islamic Social Sciences, 82. 1115 The Quran (n 343) Ch. 4:83. 1116 Hasan (n 1105) 29. 1117 Riyad-us-Saliheen, (IslamKotob) naration No 1856. 1118 Lily Zakiyah Munir, ‘General Introduction To Islamic Law’, 1. 1119 David Drennan, ‘An Introduction to Islam’ The La Trobe Journal, 18. 1120 Moursi Badr, ‘Islamic Law: Its Relation to Other Legal Systems’ (n 414) 188. 1121 The Quran (n 343) Ch. 5:8. 1122 Baderin (n 419) 187.

152 or how those prayers are said: “There is no ijtihad within an explicit rule in the texts”.1123 Everyone, including scholars and jurists, are only imitators.1124 Conversely, muamalat regulates relationships between individuals, such as family relationships, social relationships and other legal transactions.1125 The Quran does not separately regulate every relationship; rather, it provides broad, general directives and principles applicable to a variety of relationships, 1126 such as good faith,1127 which is essential in any transaction.1128 In muamalat, the provisions of Islam come in two forms: definitive and speculative.1129 The definitive rules of Islam are those rules explicitly set out in the primary sources. Conversely, the Quran has left other matters to be decided by society, stating: “those who hearken to their Lord and establish regular prayer; who (conduct) their affairs by mutual Consultation; who spend out of what We bestow on them for Sustenance”.1130 This verse explicitly provides that Muslims enjoy the freedom to select through mutual consultation (the Arabic term is Shura) when the provisions are speculative, what suits them so long as the matter in question is not an issue explicitly regulated in the primary sources.1131 In another verse, the Quran directs the Prophet Mohammad to consult the people regarding an issue: It is part of the Mercy of Allah that thou dost deal gently with them Wert thou severe or harsh-hearted, they would have broken away from about thee: so pass over (Their faults) and ask for ((Allah)’s) forgiveness for them; and consult them in affairs … Then, when thou hast Taken a decision put thy trust in Allah. For Allah loves those who put their trust (in Him).1132 In summary, where there is a decisive text, there is no room for Ijtihad, 1133 which is a jurisprudential rule.1134 However, when the primary sources were silent regarding an issue, medieval Muslim jurists developed various secondary sources and principles, including consensus (ijma),1135 analogical reason (Qyias),1136 juristic preference (Istehsan), public interest (Almasaleh Almorsala), inference, reason and local custom. These principles are referred to as ‘the secondary sources of legislation’. The application of the secondary sources explains Ijtihad and the attitude of Islam towards human-made law. The branch of science that covers this area is known as the Principles of Islamic Jurisprudence (Usul al-fiqh), which are the methodological principles used by Muslim

1123 El-Saadouni (n 1085) 115. 1124 Baderin (n 419) 187–9. 1125 Ibid. 1126 Mohammad Hashim (n 413) 3. 1127 “The notion of Islamic public policy is based on ‘respect to the spirit of sharia and its sources’ and on the famous sharia principle that ‘Individuals must respect their clauses, unless they forbid what is authorized or authorize what is forbidden’". Alqudah, (n 407) 11. 1128 Seok Beom Choi et al., ‘Towards A Better Understanding of Good Faith Concept in Islamic Contract Law’ (2018) 7 International Journal of Engineering & Technology 287, 287. 1129 Baderin (n 419) 187. 1130 The Quran (n 343) Ch. 42:38. 1131 Mufti Fahad Qureshi, ‘Shura (Consultation) in the Islamic Way of Life’ (2016) 1. 1132 The Quran (n 343) Ch. 3:159. 1133 Abdul Baki As-Safi, Islamic Jurisprudential Maxims: 114 Maxims Expounded and Rendered Into English (Amwāj lil-Ṭibā’ah wa-al-Nashr wa-al-Tawzī’, 2012) Maxim 92. 1134 The Jordanian Civil Code No 43 (n 37) art 215. 1135 Alqudah, (n 407) 11. 1136 Ibid.

153 scholars to derive the rulings of Islam (ahkam) from primary sources when required.1137 To this end, Usul al-fiqh focuses on elaborating how the scriptures should be linguistically and rhetorically interpreted. Scholars of Usul al-fiqh define ahkam as the opinion of the religion regarding human actions, including transactions.1138 Consensus is the third source of legislation in Islam after the Quran and Sunnah,1139 which occurs when qualified Muslim jurists agree regarding a legal issue that is not specifically covered in the primary sources.1140 Although consensus is binding, it can be changed or modified.1141 To justify the validity of consensus as a source of legislation, Muslim scholars refer to a statement by Prophet Mohammad: “[M]y nation does not gather (make consensus) on an error”.1142 Consensus is also a means of identifying other sources and formulating a general legislative philosophy. Qiyas is the fourth source of legislation in Islam.1143 It is “the process of deductive analogy in which the teachings of the Hadith are compared and contrasted with those of the Al-Qur’an. To apply a known injunction … to a new circumstance and create a new injunction”.1144 For example, narcotic drugs such as heroin were not known in the time of Prophet Mohammad, so no direct prohibition of such drugs is found in the Quran or Sunnah.1145 To regulate this issue, scholars of Islamic jurisprudence used analogical reason by applying alcohol prohibition—because alcohol and heroin are intoxicating substances1146—to the prohibition of drugs. Analogical reasoning is the process used by Muslim scholars to regulate an unprecedented case by analysing and comparing it to known cases.1147 The process of analogical reasoning primarily relies on the assumption that injunctions guarantee a beneficial objective, which can be referred to as the ‘cause’. If this cause can be deduced, the same injunction can be applied to cases with similar causes.1148 However, in some instances there might not be similar cases or relevant injunctions. To deal with such issues, jurists adopt what is known as ‘juristic preference’. To adopt tolerance and moderation, jurists apply juristic preference, which is a means by which jurists decide matters in the absence of evidence, based on the general understanding of the philosophy of Islam, referred to as Maqsed (‘purposes’).1149 This source is used when none of the above sources is applicable to a novel issue. Generally, it aims to make life easier by selecting rulings that mitigate hardship. This doctrine was derived from Quran and Sunnah. In this regard, Quran says “Allah desires you ease and good, not hardship”.1150 In Sunnah, Aeshah, the Prophet’s wife, said “whenever the Prophet … was given an

1137 Mohammad Hashim (n 413) 3–4. 1138 Remali Yusoff and Nor’ Azurah Md Kamdari, Understanding Usul al-fiqh and Its Application Analysis for Sukuk (2017) 148. 1139 Ibid, 150. 1140 Allami (n 403) 61. 1141 Baderin (n 419) 188. 1142 Quoted in Yusoff and Md Kamdari (n 1138) 151. 1143 Hasan (n 1105) 35. 1144 Mastura Ab Wahab, ‘The Impact of Islamic Work Values on Employees’ Job Performance in Malaysia’ (University of Canberra, 2012) 74. 1145 Baderin (n 419) 188. 1146 Ibid. 1147 Yusoff and Md Kamdari (n 1138) 151. 1148 Baderin (n 419) 188–9. 1149 Yusoff and Md Kamdari (n 1138) 152. 1150 The Quran (n 343) Ch. 2:186.

154 option between two things, he used to select the easier of the two as long as it was not sinful”.1151 Public interest was suggested for the first time by Malik bin Anas, head of the Maliki School.1152 This doctrine gives effect in dealing with novel issues regarding the interests of society.1153 Although public interest is controversial, it remains valid as a source of legislation in most Islamic countries because none of those countries is attributed to a single school. In Islam, people are free to select the opinion that works best for them so long as this opinion is related to a matter in which Ijtihad is permissible. Public interest plays a significant role in Islam and the other legal systems. For example, the Western Australia Inc Royal Commission report emphasised that one of the two fundamental principles and assumptions upon which representative and responsible government is based is that “the institutions of government and the officials and agencies of government exist for the public, to serve the interests of the public”.1154 Urf refers to the local customs and common practices of a given society.1155 In Islamic jurisprudence, Urf refers to the unwritten rules that a given society has implicitly agreed upon, and which do not contradict the provisions of Islam.1156 Although custom was not explicitly mentioned as a source of legislation in the primary sources, it appears that Islam did not exclude it. When the Prophet Mohammad was sent, there were some prevailing customs at that time, which Islam did not abolish. This implied a tacit approval.1157 Some scholars believe that Urf as a source of legislation has as much authority as consensus.1158 For them, Urf is preferable to analogical deduction because customs are considered to be the common law rules of Islam.1159 Custom was adopted as a source of legislation by Muslim scholars for the first time during the eighth century, 1160 although it is applicable only when there is no written text.1161 Custom is also a source of law in other legal systems.1162 According to Duxbury, in the English legal context: The history confirms, nevertheless, that a feature of the rule of recognition within a municipal legal system may be that its courts identify some community customs as legally binding by relying on criteria of validity which (notwithstanding possible legal disagreements over their specifics) themselves exist as custom in foro.1163

1151 Muhammad Muhsin Khan, Sahih Bukhari (Peace Vision, 1984).vol 8, book 81, no 777. 1152 Mohammad Hashim Kamali, Principles of Islamic Jurisprudence (The Islamic Texts Society, 4th ed, 2013) 15. 1153 Yusoff and Md Kamdari (n 1138) 151. 1154 Chris Wheeler, ‘The Public Interest: We Know It’s Important, But Do We Know What It Means’ (2006) (48) AIAL Forum 12–25, 13. Citing In vol 1, s 1.2.5. 1155 Shimizu (n 341) 36. 1156 Baderin (n 419) 189. 1157 Hursh (n 384) 1405. 1158 Hafiz Abdul Ghani, ‘Urf-o-Ādah (Custom and Usage) as a Source of Islamic law’ (2011) 1(2) American International Journal of Contemporary Research, 183. 1159 Hasan (n 1105) 169–71. 1160 Vincent J Cornell, Voices of Islam (Greenwood Publishing Group, 2006) 66. 1161 The Jordanian Civil Code No 43 (n 37) art 2. 1162 ‘English Lawyers have tended to understand and explain custom as a source of law in its own right’. Neil Duxbury, ‘Custom as Law in English Law’ (Pt Cambridge University Press) (2017) 76(2) The Cambridge Law Journal 337–59, 5–6 1163 Ibid.

155 It is evident that Zweigert and Kötz’s claim that society must adapt to the law rather than generate laws of its own does not stand on a sound foundation.1164 The legislative philosophy of Islam does not ban the idea of human-made law; rather, it encourages society to regulate transactions and determine solutions by practising Ijtihad when the primary sources are silent on an issue or when a new issue emerges. In this regard, Badr argued: In its Mu’amalit [transactions] branch, which is all that other legal systems deal with, Islamic law is indeed a man-made law and has no preteens to being a religious law except that it may be said to lay more emphasis on moral considerations than is usually the case with other legal systems.1165 It is evident that the human-made nature of the proper law doctrine does not contradict the legislative philosophy of Islam and Jordanian culture because the matter of the law applicable to contractual obligations is not explicitly regulated in the primary sources;1166 hence, Ijtihad is permissible. Although Turkey is a Muslim country, it adopts the proper law doctrine when dealing with the law applicable to contractual obligations.1167 Another important point is that the ijtihad theory is similar to case-by-case analysis. Originally, Islam was not a civil law system, but was closer to the common law: “The fundamental difference between the English legal system and the Islamic legal system in framing the law is that in Muslim countries the Parliament can make laws for the benefit of the society but it must not be contradictory or inconsistent with the Islamic law principles”.1168 Indeed, John Makdisi argues that “the common law as an integrated whole was a product of Islam”.1169 However, in both theories, the personality of the judge is one factor that has an impact on the legal system. Mann argued: The principle of the personality of the judge is … one of the characteristic features of the English legal system … a judge’s character, intelligence, originality and authority—indeed his whole personality— speak through his judgments. Although nowhere described or defined, these are matters which one learns to assess and to distinguish, which make up the vividness and the strength of the English legal system.1170 The practice of Ijtihad by Muslim scholars is what courts do when they apply the proper law doctrine, with minor differences, which does not challenge the main idea of the proper law doctrine. A summary of the problem of Jordanian law can be found in an article written by Currie in 1959:

1164 Quoted in J Rehman, Islamic State Practices, International Law and the Threat from Terrorism: A Critique of the ‘Clash of Civilizations’ in the New World Order (Bloomsbury Publishing, 2005) 941. 1165 Moursi Badr, ‘Islamic Law: Its Relation to Other Legal Systems’ (n 414) 188. 1166 Alqudah, (n 407) 11. 1167 Article 24(1) of the Turkish Code provides: “Choice of law may be understood with reasonable certainty from the provisions of the contract or the relevant circumstances shall also be valid”. Quoted in Garth J Bouwers, 'Tacit Choice of Law in International Commercial Contracts– A Turkish Study' Scientific Cooperations 2nd International Conference On Social Sciences, 174. 1168 Jalil and Rahman (n 569) 180. 1169 John A. Makdisi, 'The Islamic origins of the common law' (Pt North Carolina Law Review Association) (1999) 77(5) North Carolina Law Review 1635, 1638. 1170 FA Mann, ‘The Proper Law in the Conflict of Laws’ (1987) 36(3) International and Comparative Law Quarterly 437, 437.

156 [T]he rules so evolved have not worked and cannot be made to work … the root of the trouble goes deeper. In attempting to use the rules we encounter difficulties which do not stem from the fact that the particular rules are bad, nor from the fact that a particular theoretical explanation is unsound, but rather from the fact that we have such rules at all.1171 If Jordan does not have these rules, the country would apply them according to the provisions of Article 2 of the JCC the Ijtihad theory, which is functionally similar to the proper law doctrine. Although in the area of transactions, Islam is generally a human- made law, it is based on the general guidelines of Islam. This raises the question of why Jordan would import a legal rule from a secular legal system when the country can develop its own rule. The following section addresses this concern by analysing the attitude of Islam towards the idea of legal transplant.

6.3.2. Attitude of Islam Towards the Idea of Legal Transplant

One of the concerns that may be raised regarding the borrowing of the proper law doctrine from the Australian legal system is attributed to the action of borrowing. From a cultural perspective, this concern is attributed to the legislative philosophy of Islam because every legal rule must be created in light of the general guidelines of Islam. Therefore, importing a legal rule from a non-Muslim legal system may present challenges. Some writers have described it as “the crimes of the legal transplant”.1172 For example, Harasan argued that “cultural and religious pride, and intellectual impartiality, decrees that a legal solution should not be preferable just because it comes from the First World”.1173 To evaluate the attitude of Islam as a legal theory and give a cultural perspective of the idea of legal transplant, two considerations are important. First is the nature of the legal issue that the rule intended to be borrowed addresses. Is it one of the issues in which Ijtihad is permissible? Second, does the provision of the imported rule contradict the teachings of Islam? Although Islam is open and flexible in its adaption to societal developments, this does not mean that every legal rule regulating non-prescribed matters can be borrowed.1174 The principle is that the imported rule must not contradict the fundamental values of Islam.1175 Further, the imported rule must not permit a prohibited action in Islam or prohibit a permitted action. The conflict rules in Jordan do not breach cultural rules.1176 Although they are part of the national law, they are designed to protect rights that are created under foreign laws. Their transplantation may be easier than other rules, such as those regulating marriage. Although the proper law doctrine has been developed by secular legal systems, it is not in conflict with the cultural values of Jordanian society. As Watson suggested, the imported rule should be seen as being a mere ‘idea’.1177 The legal history of Jordan contains examples of legal transplant, such as Jordanian arbitration law, which was mainly derived from the Egyptian Arbitration Act No. 27 of 1994, based on the

1171 Currie Brainerd, ‘Notes on Methods and Objectives in the Conflict of Laws’ (Pt Duke University School of Law) (1959) (2) Duke Law Journal 171–81, 172. 1172 Lama Abu-Odeh, ‘Who Cares About Islamic Law?’ (2017) Georgetown University Law Center, 2. 1173 Harasani (n 345) 186. 1174 Alshorbagy (n 191) 241–2. 1175 Watson, ‘Legal Transplants and Law Reform’ (n 69) 81. 1176 See Section 5.3.2. 1177 Watson, ‘Comparative Law and Legal Change’ (n 198) 315.

157 UNCITRAL Model Law of 1985 on International Commercial Arbitration.1178 Moreover, the targeted conflict rules have also been imported.

6.4. Conclusion

The Islamic cultural background of Jordanian society and related concerns, such as the secularity of the proper law doctrine and the idea of human-made law, should not challenge the reception of the proper law doctrine in Jordan because the doctrine deals with a matter that the primary sources of legislation in Islam do not explicitly regulate. The proper law doctrine is more in line with the teachings of Islam than is the current approach adopted in Jordan. Therefore, adopting the proper law doctrine can help Jordan to bridge the gap between the conflict rules regarding international contracts and national culture. The proper law doctrine aligns with the Jordanian legislative philosophy, facilitates its translation into a legal rule, and is more consistent with the presumed values of an ideal conflict rule. Hence, the proper law doctrine is more aligned with Jordanian political values than is the current approach because it is the most frequently-accepted solution worldwide and it will enable Jordan to combine the two conflicting theories of dépeçage and the single law.

1178 Hamzeh Haddad, ‘(Jordan) Arbitration Law’ (Pt Law And Arbitration Centre ) 1. 158 Chapter 7: Conclusion

This chapter: 1- Summarises the main findings of this thesis. 2- Highlights the main aspects that Jordan may need to consider if the country decides to replace the current conflict rules with the proper law doctrine. This thesis has determined that the transplantability of the proper law doctrine into the Jordanian legal system is possible and is recommended. This conclusion was based on the fact that the scope of the proper law doctrine matches the scope of the targeted Jordanian conflict rules, and the problem with which the proper law doctrine deals is the same problem as that dealt with in Articles 20 and 21 of the JCC.1179 In addition, the proper law doctrine aligns with the cultural values of Jordanian society and reflects the political values of the Jordanian legal system.1180 Although the proper law doctrine is not an ideal solution,1181 it is preferable to the rigid approach currently adopted in Jordan. The alignment of the proper law doctrine with the political and cultural values of Jordan is based on several observations. First, the proper law approach gives more effect to the parties’ intentions,1182 which demonstrates that it is more capable of meeting the parties’ expectations than is the rigid approach. In addition to being necessary to achieve justice in international contracts, meeting the justified expectations of contracting parties is already implied in the rigid approach taken by Jordan. Article 20 of the JCC enables parties to select the law applicable to their contract, and the explanatory memorandum justifies the adoption of the place where the contract is made through tacit choice. The law applicable to contractual obligations is the law chosen by the contract parties and, in the absence of choice, by the law that has the closest relationship with the contract. However, the only difference between the Jordanian approach and the proper law doctrine is that Jordanian law assumes that the law of the place where the contract is made is the law with which the contract has its closest connection, rather than allowing the court to determine this matter.1183 Moreover, the proper law doctrine enables the court to effectively engage in the process of determining the law governing a contract. Accordingly, the proper law doctrine is the approach that Jordan should adopt to translate its legislative philosophy into a conflict rule. Second, the flexible formula of the proper law doctrine reduces the need for characterisation and the impact of national laws on international contracts.1184 This is particularly important because the current Jordanian approach doubles the impact of the national law on transnational contracts.1185 Third, the proper law approach is flexible enough to deal with a variety of contractual obligations.1186 For example, it grants the court the power to determine the applicable law, which provides a sound foundation for ensuring that the selected law has a real relationship with the contract in question. Fourth,

1179 See Chapter 4. 1180 See Section 6.3. 1181 See Section 6.1. 1182 See Section 5.2.2. 1183 See Section 3.1.2. 1184 See Section 5.2.1. 1185 See Section 5.1.4. 1186 See Section 5.2.3.

159 the proper law doctrine can support international efforts to harmonise the conflict rules regarding international contracts by reviving the role of comparative law in PIL.1187 Further, the current approach was adopted because it was believed to align with the predominant rules in the region in 1976.1188 However, no approach can compete with the contemporary proper law doctrine, which has become the most accepted solution worldwide since it was adopted by the Rome Convention in 1981.1189 Therefore, this thesis contends that the proper law doctrine aligns with the Jordanian legal system and should be adopted. Finally, adopting the proper law doctrine by the JCC will help to harmonise the provisions of the national conflict rules. There is a gap between the provisions of the Jordanian arbitration law and the provisions of the JCC.1190 This gap can become a serious issue in cases where the arbitration agreement is void, which can lead to changing the institution that hears the dispute and the mechanism by which the applicable law is determined. Therefore, adopting the proper law doctrine can eliminate this risk and make the provisions of national laws more coherent. This thesis has demonstrated that the arguments presented by Jordanian lawmakers to eschew the adoption of the proper law doctrine in 1976 were invalid. Chapter 6 described how Jordanian legislators argued that the current approach was selected because it helps to unify the applicable law, and that the proper law doctrine was excluded to avoid dépeçage.1191 However, this argument has been disproved through an analysis of the relationship between the single law theory and the achievement of justice. It has been found that there is no direct or indirect relationship. Conversely, it has been proven that the current Jordanian approach does not avoid dépeçage, although lawmakers do not call it dépeçage.1192 Although the aim of this thesis was to examine the ability of the proper law doctrine to enable the Jordanian legal system to overcome the challenges arising from the current conflict rules and the transplantability of the proper law doctrine into the Jordanian legal system, it generated some further insights. First, this thesis found that the debate over the possibility of legal transplant and the state of disagreement existing in jurisprudence was not real.1193 The issue is not whether legal transplants are possible, but how a legal rule can be transplanted from one jurisdiction to another. A comprehensive understanding of the comparative methodology is required to improve the chance of a successful legal transplant operation. Second, the foundations upon which the argument that the Islamic understanding of contract theory fundamentally differs from Western understandings are invalid. The analysis presented in Chapter 4 demonstrated that the theories have more similarities than differences. The two main arguments used to support the claim that they are different have been proven wrong. The claim that a contract under Islamic contract theory does not require consideration is untrue. Consideration is essential to create a legally binding contract according to both theories.1194 Further, the assumption that a gift is treated as a

1187 See Section 5.2.4. 1188 See Section 3.1.2. 1189 See Section 1.3. 1190 See Section 4.2.6. 1191 See Section 6.2. 1192 Ibid. 1193 See Section 2.1. 1194 See Section 4.1.1.

160 contract under Islamic contract theory has been proven inaccurate. Under the Islamic contract theory, a gift is enforceable by law only if it meets the legal requirements prescribed by law, which are similar to the legal requirements required under Western contract theory to enforce a deed.1195 No contract is enforceable under either theory unless it is a deed. Third, the problem of the conflict of characterisation—which has long been considered unsolvable—can be overcome by understanding its relationship with the national legislative philosophy. This thesis contends that the conflict of characterisation is a legal phenomenon that reflects different legal cultures and will always be there. However, the problem of characterisation in PIL is attached to its role in maximising the undesirable impact of the national law on international transactions.1196 The main goal of PIL should be to reduce the impact of national laws on foreign legal transactions. Therefore, adopting a formula that does not serve this purpose is what makes this phenomenon problematic. Much of the problem of characterisation, particularly in the area of contracts, can be avoided through the adoption of a more flexible approach, which reduces the need to interpret legal terms.1197 If Jordan decides to adopt the proper law doctrine, it could adopt a formula similar to the one adopted by the Rome Convention. The Australian legal system—as a common law country—does not have a fixed formula. The ALRC suggested some principles to Australia that were based on the provision of this convention.1198 However, since the Australian and the Rome Convention are in English, Jordanian lawmakers may adopt the same formula of Article 36 of the Jordanian Arbitration Code. Some areas that may require close attention by lawmakers before adopting the proper law approach (see Chapter 4) include the provisions of national law regarding contracts for the international sale of goods. One suggestion is to evaluate the gains that the country may achieve from joining the CISG.1199 Further, reviewing national laws regulating consumer contracts may require special consideration that most legal systems achieve through mandatory laws. However, Jordan does not need special laws because the current approach subjugates such contracts to the national law, which will not be the case if the country switches to the proper law doctrine.1200 Most legal systems do not want to lose control over international employment contracts because the worker is the weak party, who needs the protection of the law. The provisions of the Jordanian law are unclear in this area. However, the current approach offers some protection for such contracts by subjugating it to Jordanian law if they take place in Jordan. Before switching to the proper law doctrine, it is recommended that Jordan review the provisions of the national law regarding the matter of the law applicable to international employment contracts. If Jordanian lawmakers adopt the proper law doctrine, the national law will need to become more flexible to deal with the diversity of contractual issues, aligned with the principle of freedom of contract to meet the expectations of parties to international contracts, supported by the cultural and political values of Jordan and expressive of its national legislative philosophy.

1195 See Section 4.1.2. 1196 See Section 5.1.4. 1197 See Section 5.2.1. 1198 See Section 6.1.1. 1199 See Section 4.2.2. 1200 See Section 4.2.3. 161 Bibliography

Conventions

1. Convention of 4 May 1971 on the Law Applicable to Traffic Accidents (entered into force 4 May 1971) (‘Convention the Law Applicable to Traffic Accidents’). 2. Convention on the Law Applicable to Contractual Obligations, Member States of the European Union opened for signature 19 June 1980 (entered into force 1 April 1991) (‘Rome Convention 1980’). 3. Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes (signed and entered into force 1 January 1934) (‘Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes’). 4. European Convention on International Commercial Arbitration, signed 21 April 1961 (signed and entered into force 7 January 1964) (‘European Convention on International Commercial Arbitration’). 5. Principles on Choice of Law in International Commercial Contracts, (entered into force 19 March 2015) (‘Hague Principles 2015’). 6. Queensland Estates [1969] Qd R 378, 383–4. 7. Regulation (EC) No. 593/2008 of the European Parliament and of the Council on the Law Applicable to Contractual Obligations (Rome I)/Réglement (CE) no 593/2008 du Parlement européen et du Conseil sur la loi applicable aux obligations contractuelles (Rome I). 8. The Convention of 30 June 2005 on Choice of Court Agreements, 30 June 2005 (entered into force 1 October 2015) (‘The Hague choice of court convention’). 9. United Nations Convention on Contracts for the International Sale of Goods, signed 11 April 1980 (signed and entered into force 1 January 1988) (‘CISG’).

Legislations

1. Bills of Exchange Act 1909 (Cth) (‘Bills of Exchange Act 1909’). 2. Civil Procedure Act No 24 1988 (Jordan) (‘Civil Procedure Act No 24’). 3. Contracts Review Act 1980 (NSW) (‘Contracts Review Act 1980’). 4. Employment Protection (Consolidation) Act 1978 1978 (United Kingdom) c 44 (‘Employment Protection (Consolidation) Act 1978’). 5. Life Insurance Act 1995 (Cth) (‘Life Insurance Act’). 6. Marine Insurance Act 1909 (Cth) (‘Marine Insurance Act 1909’). 7. The Arbitration Act No 31 2001 (Jordan) (‘The Arbitration Act No.31’). 8. The Carriage of Goods by Sea Act 1991 (Cth) (‘Carriage of Goods by Sea Act 1991’). 9. The Central Bank of Jordan Code No 23 1971 (Jordan) (‘The Central Bank of Jordan Code No 23’). 10. The Commonwealth of Australia Constitution Act 1900 (CTH) (‘The Commonwealth of Australia Constitution Act’) s 118. 11. The Competition and Consumer Law Act 2010 (Cth) sch 2 (‘Australian Consumer Law’). 12. The Constitution of the Hashemite Kingdom of Jordan 1952 (Jordan) (‘The Jordanian Constitution’). 13. The Egyptian Civil Code No 131 1948 (Egypt) (‘The Egyptian Civil Code No 131’). 14. The Iraqi Civil Code No 40 1951 (Iraq) (‘The Iraqi Civil Code No 40’). 15. The Jordanian Civil Code No 43 1976 (Jordan) (‘The Jordanian Civil Code No 43’). 16. The Jordanian Copyright Code No 22 of 1992 (Jordan) (‘The Jordanian Copyright Code No 22’). 17. The Jordanian Criminal Code No 16 1960 (Jordan) (‘The Jordanian Criminal Code No 16’). 18. The Jordanian Electronic Transaction Act No 85 2001 (Jordan) (‘The Jordanian Electronic Transaction Act No 85’). 19. The Jordanian Maritime Commercial Law No 12 1972 (Jordan) (‘The Jordanian Maritime Commercial Law No 12’).

162 20. The Labour Act No. 8 1996 (Jordan) (‘The Labour Act No. 8’). 21. The Syrian Civil Code No 84 1949 (Syria) (‘The Syrian Civil Code No 84’). 22. Trade Practices Act 1974 (cth) (‘Trade Practices Act 1974’).

Case Law

1. Attorney-General v Bouwens (1838) 4 M & W at 191. 2. Australian Woollen Mills Pty Ltd v The Commonwealth [1954] HCA 20, (1954) 92 CLR 424. 3. Blomley v Ryan (1956) 99 CLR 362, 415. 4. Boissevain v Weil [1949] 1 All ER 146. 5. Bonython v Commonwealth [1951] AC 201. 6. Charron v Montreal Trust Co, 15 DLR (2d) 240. 7. Chatenay v Brazilian Submarine Telegraph [1891] J 1 QB 79, 82, 83. 8. Compania Naviera Micro SA v Shipley International Inc (The Parouth) [1982] 2 Lloyd’s Rep 351. 9. Earl Nelson v Lord Bridport (1845–1846) 8 Beav 547; 50 ER 215. 10. Freehold Land Investments Ltd v Queensland Estates Pty Ltd [1970] HCA 31. 11. Friedrich K Juenger, Choice of Law and Multistate Justice (Martinus Nijhoff, 1992). 12. Golden Acres Ltd V Queensland Estates Pty Ltd [1969] Qd R 378 (QSC) 385. 13. Heydon’s Case [1584] EWHC Exch J36 (1 January 1584) . 14. Jacob v Credit Lyonnais, 12 QBD 589 (1884). 15. Jorden v Money (1854) LR 5 HL 185. 16. Kingston v Ambrian Investment Co Ltd [1975] 1 WLR 161Amin Rasheed Shipping Corporation v Libyan Arab Foreign Bank v Bankers Trust Co [1988] 1 Lloyd’s Rep. 259. 17. Lloyd v Guibert (1865) L.R. I Q.B. 79. 18. Lloyd v Guibert (1865) LR 1 QB 115. 19. Mendelson-Zeller Co Inc v T & C Providores Pty Ltd [1981]. 20. Merwin Pastoral Company Pty Ltd v Moolpa Pastoral Company Pty Ltd (1933) 48 CLR 565. 21. Moschi v Lep Air Services Ltd [1973] AC 331. 22. Mt Albert BC v Aust T & G Assce Society [1938] AC 224. 23. Mynott v Barnard (1939) 62 CLR 62. 24. P&O Steam Navigation v Shand (1865) Moore PC (NS) 272. 25. R v International Trustee for the Protection of Bondholders Akt AG [1937] AC 500, 519. 26. Raiffeisen Zentralbank Osterreich AG v Five Star General Trading LLC [2000]. 27. Re Missouri Steamship Co (1889) 42 Ch D 321. 28. Re United Railways of the Havana and Regla Warehouses Ltd [1959] 2 WLR 251. 29. The ‘Assunzione’ [1954] 2 WLR 234, All ER 278. 30. Union Transport Plc v Continental Lines SA [1992] 1 160. 31. Vita Food Products Inc v Unus Shipping Co Ltd [1939] UKPC 7:296. 32. Walsh v The Queen [1894] AC 144. 33. Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581. 34. White Cliffs Opal Mines Ltd v Miller (1904) 4 SR (NSW) 150. 35. X, Y and Z v the Bank [1983] 2 Lloyd’s Rep 535.Kuwait Insurance Co 1984 AC 50.

Court Decisions

1. The Jordanian Court of Cassation, decision No. 3876/2006, 8/3/2007, publications of Abdallah Centre for legal information.

163 2. The Jordanian Court of Cassation, decisions: No. 289/1998, 16/5/1999, publications of Abdallah Centre for legal information. 3. The Jordanian Court of Cassation, decisions: No. 697/1995, 21/5/1995, publications of Abdallah Centre for legal information. 4. The Jordanian Court of Cassation, decision: No. 489/2010, 7/6/2010, publications of Abdallah Centre for legal information. 5. The Jordanian Court of Cassation, decisions: No. 67/1988, 28/2/1988, publications of Abdallah Centre for legal information. 6. The Jordanian Court of Cassation, decisions: No. 2149/2006, 21/8/2007, publications of Abdallah Centre for legal information.

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