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27 Va. J. Int'l L. 39 (1986-1987)
Choosing the Substantive Law to Apply in International Commercial Arbitration

handle is hein.journals/vajint27 and id is 49 raw text is: Choosing the Substantive Law to Apply in International Commercial Arbitration DAVID J. BRANSON* RICHARD E. WALLACE, JR.* A contract in international commerce should contain a choice of law clause in order to secure a neutral and predictable standard for resolving disputes arising out of that contract. It is not only advis- able to include such a clause, but it is also permissible to seek ad- vantage in choosing the substantive law. Thus, the adroit lawyer can often obtain considerable advantage for his client in the draft- ing process. For example, if the subcontract for a construction project speci- fies that New York law will govern disputes, the subcontractor may secure final payment from the general contractor before the gen- eral contractor has been paid by the project owner. This remains true even if the subcontract expressly states that final payment from the general contractor is conditional on payment from the owner. In contrast, the laws of a majority of U.S. states would en- * Member of the firm of Kaye, Scholer, Fierman, Hays & Handler, resident at the firm's Washington, D.C. office. A.B. 1966, Catholic University of America; J.D. 1973, Georgetown University;, L.L.B. 1975, St. John's College, Cambridge University. Mr. Branson regularly represents parties to international arbitrations and teaches the subject at the International Law Institute, Washington, D.C. ** Associate with the firm of Kaye, Scholer, Fierman, Hays & Handler in the firm's Washington, D.C. office. B.A. 1977, University of Massachusetts; J.D. 1982, Harvard Law School 1. Schuler-Haas Elec. Corp. v. Aetna Cas. & Sur. Co., 40 N.Y.2d 883, 885. 357 N.E.2d 1003, 1003, 389 N.Y.S.2d 348, 348-49 (1976); Sturdy Concrete Corp. v. Nab Constr. Corp., 65 A.D.2d 262, 411 N.Y.S.2d 637 (N.Y. App. Div. 1978) (per curiam); see Dyer Co. v. Bishop Int'l Eng'g Co., 303 F.2d 655 (6th Cir. 1962). The New York Lien Law imposes a trust on all funds paid or to be paid by an owner of a construction project to a contractor, and makes subcontractors beneficiaries of the trust. The law grants a subcontractor the right to recover even monies not yet paid from owner to contractor, because these monies are considered

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