BIASED INTERPRETATION OF INTERNATIONAL COMMERCIAL CONTRACTS: LEGAL CHALLENGES AND THE IMPACT ON CONTRACT ENFORCEMENT

Abstract

The interpretation and enforcement of international commercial contracts are frequently complicated by differences between legal traditions, particularly common law and civil law systems. These divergences can lead to inconsistent outcomes, legal uncertainty, and perceptions of unfairness in cross-border commercial disputes. This dissertation examines how international legal frameworks, specifically the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts (UPICC), contribute to harmonising contract interpretation and promoting fairness in international trade. The study adopts a doctrinal and comparative approach, analysing judicial decisions and arbitral awards from both common law and civil law jurisdictions, as well as international arbitration practice. It explores key interpretative principles such as good faith, party autonomy, usages and practices, and implied obligations, and assesses how these principles are applied across different legal traditions. Particular attention is given to the role of arbitration as a dispute resolution mechanism, including challenges relating to arbitral bias, proportionality of awards, and inconsistencies arising from the application of multiple legal frameworks. The findings demonstrate that while common law and civil law systems differ significantly in their approaches to contract interpretation, international instruments such as the CISG and UPICC play a crucial role in bridging these differences by providing neutral and flexible interpretative standards. The dissertation concludes that the UPICC, as a soft law instrument, is especially effective in supplementing existing domestic and international laws by addressing gaps left by the CISG and promoting coherent and fair outcomes. However, limitations remain due to the non-binding nature of these instruments and concerns surrounding arbitral practice. The study recommends greater judicial and arbitral engagement with international principles, enhanced training for arbitrators, and improved alignment of legal frameworks to strengthen consistency, predictability, and fairness in the resolution of international commercial disputes.