CHAPTER 2

CHOICE OF LAW RULES

UCN2612 CONFLICT OF LAWS
TRIMESTER 2, 2020/2021

LEE JIA CHERN

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 Outline of Chapter

1. Connecting Factors
2. Characterisation
• The lex fori theory
• The lex causae
• Application by the courts
3. Renvoi
4. Incidental Question
5. Time Element

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 Introduction
• 1st Question: whether a local court has power to hear the case.
• 2nd Question: what system of law should be applied to the dispute.
• The rules which direct the local court to identify the applicable law are called choice of law rules.
Formal validity of a marriage – lex loci celebrationis;
Capacity to marry – lex domicilii;
Succession to movable property – law of the last domicile of the deceased;
Succession to immovable property – lex situs;
Procedural aspects – lex fori;
Contracts – law intended by the parties.

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• In real life, the situation is not always straightforward.
• Some issues are governed by more than one system of law:
Cumulatively – alleged torts committed abroad governed by both the lex fori and lex loci
delicti;
Alternatively – formal validity of contracts – either the law of the place of contracting or by
the applicable law.
Issue Operative facts Connecting The applicable
(legal categories) factors law
A son in Japan is claiming for a Succession to immovable Lex situs ?
bungalow of his deceased father property.
located in Malaysia.
Marriage between Adam, an Formal validity of a Lex loci ?
Australian and Julie, a Singaporean marriage. celebrationis
was disputed as some procedural
requirements were not fulfilled when
they registered their marriage in
Malaysia. 4
1. From the table, it might seem straightforward and can be easily ascertained. However, there are
difficulties due to the conflicts between different legal systems:
a) Legal category (operative facts)
• A case may fall into one legal category in the view of the lex fori but into another category by the foreign law
which is alleged to be the lex causae (applicable law).
• For example, English law may regard an issue as being concerned with formalities of marriage but French law
may regard it as raising the question of capacity to marry.
• This difficulty will then involve the question of ‘characterization’.
b) Connecting factors
• Different connecting factors to be employed causes conflict between choice of law rules.
• For example, English law regards succession to movable properties as governed by the law of domicile but
foreign law governs it by the law of the nationality.
• This involve the question of interpretation of the ‘connecting factor’ and the doctrine of ‘renvoi’.

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c) The consequential conflicts
• English law and foreign (French law) may agree on the legal category as well as the
connecting factor.
• However, this conceals a latent conflict as the two laws mean different things by the
connecting factor.
• For example, under both laws, succession to movable property is governed by the law of
the last domicile of the deceased.
• However, by the English law of domicile, the deceased died domiciled in France while
under the French law, he died domiciled in England.
• This involves the doctrine of renvoi.

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 Connecting Factors
1. Connecting factor(s) is the factor that links an event, a transaction or a person to a country.
• The personal law
• The place where the transaction takes place
• The place of performance
• The intention of parties
• The place where a property is situated
• The place where the court is sitting
2. Since the conflict of laws form part of English law (by extension the Malaysian law), English law
alone can determine when a foreign law is to be applied.
• English law to select the connecting factor, and say what it means.
• Re Annesley [1926] Ch 692 7

• XAG v A Bank [1983] 2 All ER 464

3. However, there are two exceptions to this general rule.
a) Nationality
• Can only be determined by the law of the state to which a national claims to belong;
• Cannot be determined by the lex fori.
b) For jurisdictional purposes
• Some statutes would provide that for certain cases, domicile shall be as determined by
the foreign law in question.

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 Characterisation

1. The process of characterisation is sometimes necessary because the law of one country may
regard a case as falling into one legal category but the relevant foreign law believes it to
belong in a different one.
• Raiffeisen Zentral Osterreich AG v Five Star General Trading LLC [2001] QB 825
2. The problem of characterization is one of the most difficult in the conflict of laws. There are
various methods put forward to solve the problem of characterisation:
a) The lex fori theory
b) The lex causae
c) The better view

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 The Lex Fori Theory
1. Proposed by the German and French writers – F. Kahn and F. Bartin.
2. The court to characterize the issue in accordance with the categories of its domestic law, and
foreign rules of law in accordance with their nearest analogy in the same law.
• Simonin v Mallac (1860) 2 Sw & Tr 67
• Ogden v Ogden [1908] P 46
3. Criticisms
• May result in a distortion of the foreign rule and render it inapplicable in cases in which the
foreign law would apply it, and vice versa.
• Not applicable if there is no close analogy in the domestic law.

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 The Lex Causae Theory
1. Classification be effected by adopting the categories of the governing law.
2. The English court should classify a French rule as it is classified in French law, not in the way the
equivalent English rule is classified by English law.
3. Re Maldonado’s Estate [1954] P 223
• Deceased was domiciled in Spain, died intestate, left movable property in England.
• Should be dealt with by rule of succession or law of property?
4. Re Cohn [1945] Ch 5
5. Criticisms:
• It is akin to arguing in a circle.
• Which law to be adopted when there are two possible foreign laws to govern the matter? 11
 Application by the Courts
1. The English courts have not consciously adopted any one particular doctrine or theory.
2. However, lex fori theory, modified in some cases so as to approximate to Falconbridge’s view,
seems to represent the actual method employed by the court.
3. In practice, the courts formulate the issue and define the ambit of the legal category for
themselves, and then they determine whether a question posed by a foreign rules comes into
that category.
• Re Cohn [1945] Ch 5
4. ‘Importation’ of concepts unknown to domestic law
• National Bank of Greece and Athens SA v Metliss [1958] AC 509
• Macmillan Inc. v Bishopsgate Investment Trust plc (No.3) [1996] 1 WLR 387
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 Renvoi
Illustration:
Benjamin, a Malaysian citizen domiciled in Italy. He dies intestate, leaving movable
property in Malaysia. According to section 4 of the Malaysian Distribution act 1958, the
distribution of Benjamin’s movable property shall be regulated by the law of the country in
which he was domiciled at the time of his death. In this case, it is Italy.
However, Italian law refers the matter back to Benjamin’s lex patriae (law of citizenship), i.e.
the Malaysian law.
At this point of time there is an interminable battle of ping-pong where there is a reference
to another country which sends it back to the first.
Under such circumstances, the Malaysian court would have to decide whether to apply the Italian law
of distribution of movable property or to apply the whole Italian law including its rules as to the
conflict of laws? 13
Under such circumstances, the Malaysian court would have to decide whether to apply the Italian law
of distribution of movable property or to apply the whole Italian law including its rules as to the
conflict of laws?
• If Malaysian court apply the whole Italian law, this means that the foreign country’s rules as to
conflict of laws make a reference back, or renvoi, to the law of Malaysia.
• Under such circumstance, the Malaysian court must decide whether to accept the renvoi and apply
its own internal law or how otherwise to deal with the case.
• Hence the issue of renvoi arises when a rule of conflict refers to the whole of the law of a foreign
country, but the conflict rule of the foreign country would have referred the question to the law of
the first country, (i.e. remission), or the law of some other countries (i.e. transmission)
• Re Ross [1930] 1 Ch 377
• Jacobs v Motor Insurers Bureau [2011] 1 WLR 2609 14
1. Rejection of renvoi
2. Single or partial renvoi
• The application/acceptance of foreign law including its conflict rules but minus its conflict rules applying
renvoi.
• For instance, if the court of country X is referred by its own choice of law rules to the law of country Y,
but the choice of law rules of Y refers such case back to the law or X or even Z, then the court of X must
apply its own domestic law or that of Z to the case before it.

3. Double or total renvoi

• The application/acceptance of foreign law including its conflict rules and renvoi.
• The court of country X, which is referred by its conflict rules to the foreign country Y, must apply the law
which a court of Y would apply if it were hearing the case.
• This means that the X court not only applies Y’s choice of law rule, but also its doctrine of renvoi.
• Re Annesley [1926] Ch 692
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Example
A UK citizen died domiciled in Mexico - how to deal with his estate
English law – law of domicile
Mexican law – law of nationality
English choice Mexican choice Mexican rule of Applicable law
of law rule of law rule renvoi
No renvoi Distribute
according to X X ?
law of domicile
Partial renvoi Distribute Distribute
according to according to X ?
law of domicile law of
nationality
Total renvoi Distribute Distribute If Mexican
according to according to court accepts
law of domicile law of the renvoi, ?
nationality English choice
of law rule will 16
be applied
3. Arguments for renvoi:
• Tend towards the uniformity of decision.
• To protect the reasonable expectation of the parties
• As a deterrent to forum shopping
4. Arguments against renvoi:
• Difficult to ascertain whether the foreign legal system does or does not apply renvoi;
• Difficult and costly to prove the rules of a foreign law;
• Akin to surrendering the jurisdiction of a domestic court to a foreign court.

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Incidental Question
• Arises when, in the course of deciding a case, an issue which is subsidiary to the actual issue to be
decided arises.
• Schwebel v Ungar [1963] 42 DLR (20) 622

Time Element
• Several questions to be asked:
i. Has the Malaysian court jurisdiction to deal with the issue at the date of the institution of the
proceedings?
ii. By what system of law generally, and as of what date, shall the specific issue be decided?
iii. In relation to the judgment of a foreign country, by what criteria, including time factor,
should this be reocgnised in Malaysia?
• Phillips v Eyre (1860) LR 6
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