Chapter V

Application of Foreign Law

and the Various Choice-of-Law
Theories

Why Apply Foreign Law?

According to Prof. Lorenzen, it is for
the administration of justice
demands that a state shall take
consideration the rules of other
states

Theory of Comity
Comity courtesy of one state to
another
The application of foreign legal
systems in cases involving foreign
element is proper because their nonapplication would constitute a
disregard of foreign sovereignties

Problems with the Theory of Comity

1. It is based on the erroneous idea that a
State has a great interest in the
application of its laws by other States
2. The application of foreign law does not
spring from the desire of the sovereign of
one State to show courtesy to the other
state whose law is being applied
3. If foreign law were to be applied as a
matter of option, it would be impossible to
build up a definite body of rules

2. Protection of Vested Rights

Theory
This theory of vested rights is based
on the concept of territoriality, the
court can apply only its own
territorial law
The court cannot recognize foreign
laws or enforce foreign judgments

Problems with the Vested Right

Theory
1. Recognition of the foreign created right
perforce carries with it application of
the foreign legal system in which the
foreign right originates. The obligation
to recognize the right implies the
obligation to apply foreign law.
2. Not all rights acquired under foreign law
are protected elsewhere, nor is their
protection always desirable.

3. The protetion of rights and other

interests is not the only consideration
to be taken into account
4. The law not only protects vested rights
constituted abroad, but often also
foreign legal relationships, capacities
or powers out of which rights, or the
extinction of duties and charges or the
invalidity of acts mat arise.

5. It is difficult and impracticable to

apply the theory where material
aspects of a transaction or event
touch two or more states equally or
almost equally

3. Local Law Theory

Accdg toProf. Cook, The court of the
forum recognizes and enforces a
local right ie. One created by its own
law
The court applies its own rules to the
exclusion of all foreign rules.

Revolution in the U.S. conflicts

Law

1. The second restatement and the law of the most

significant relationship theory
.Professor Elliot Cheatham and Willis Reese
published an article to guide courts in deciding
choice-of-law questions and in formulating
rules for the choice of law in cases where there
is no law applicable.

a) Choice of law rule should be designed to make the

international and interstate system work well
b) The court should apply its own local law unless there is good
reason for not doing so.
c) The court should consider the purpose of its relevant local
law rule in determining whether to apply its own law or the
law of another state.
d) Choice of law rules should seek to achieve certainty,
predictability and uniformity of result. They should be
simple and easy to apply.
e) The court should seek to protect the justified expectations of
the parties.
f) The court should seek to apply the laws of the state of the
dominant interest.

g) The court should seek to further the fundamental policy

underlying the particular field of law
h) The court should seek to attain justice in the individual case

2.

State-interest theory
Prof. Brainerd Currie suggested the following rules to be
followed instead of following the rules on choice of law:
a) When is asked to apply the law of a foreign state,
different form the law of the forum, it should inquire
into the policies expressed in the respective laws, and
into the circumstances in which it is reasonable for the
respective states to assert an interest in the application
of those policies.

b) If the court finds that one state has an interest in the

application of its policy in the circumstances of the
case and the other has none, it should apply the law of
the only interested state.
c) If a court finds an apparent conflict between the
interests of states, it should reconsider.
d) If, upon reconsideration, the court finds that a conflict
between the legitimate interest of the two state is
unavoidable, it should apply the law of the forum.
e) If, forum is disinterested, but an avoidable conflict
exist between the interest of two other states, and the
court cannot with justice decline to adjudicate the case,
it should apply the law of the forum, at least if that law
corresponds with the law of one of the other state.

Disadvantage of the theory:

a) It was developed in the context of conflicts problems
within the United States
b) It assumes a willingness and ability on the part of judges
to identify and to evaluate the policies and interest
expressed in the substantive laws under review.

3.

Cavers principles of preference

Prof. David Cavers set forth certain principles of preference

for the solution of conflicts problems
He maintains that the choice of law should not be the result of
the automatic operation of a rule or principle of selection but a
search for a just decision.
The selection of governing law ought to be a process of choice
between rules of law rather than a choice of jurisdiction
A court choosing between the laws of two states must look at
the content of the laws with reference to the facts in the
particular case and with reference to the social policies
inherent in them as they relate to the facts.

4. The functional approach

Developed by Prof. Arthur Von Mehren and Donald Trautman in
their book the law of multistate problems.
The approach aims at solutions that are the rational elaboration
and application of the policies and purposes underlying specific
legal rules and the legal systems as a whole.
Steps:
Locate the concerned jurisdiction in a conflict case
Construct for each concerned jurisdiction a regulating rule
that takes account both of relevant policies expressed through
the jurisdictions domestic rules and of policies peculiar to
multistate transactions as distinguished from wholly domestic
transactions.

5. Choice-influencing considerations
Introduced by Prof. Robert Leflar
5 basic considerations:
Predictability of results
Maintenance of interstate and international order
Simplification of judicial task
Advancement of the forums governmental interest
Application of the better rule law

Better rule law concept

Whether one of the competing legal

rules, compared with the other
domestic rule, serves the modern
requirement of the international
order, or whether it is anachronistic
in that it is behind the times.

6. Comparative approach
Introduced by Dr. Ernest Rabel
Comparison of the various legal systems with reference to
specific problems in each field.
Brought out the similarities and dissimilarities
Examined their purposes and effects
Showed to what extent unification or reconciliation is
feasible, and proposed specific solutions in the context of
the needs and requirements of a growing international
community.

7. The convenient forum theory

Application of a foreign law in such a convenient forum,
which implies substantial connection with a given conflict
problem, must be analytically understood as an exception
from the basic rule calling for the application of the lex
fori.
But though the convenient forum should apply its own
law as a basic method, it should not hesitate to apply a
foreign law where legislative or settled judicial rules of
choice of law or the policy of the forums domestic rule
require a different answer.

8. The harmony of treatment and uniformity of

result theory
Equal justice under the law requires that the decision be
the same wherever the claim is brought.
A conflict problem should receive the same treatment and
disposition wherever the forum may happen to be.

The application of foreign law in the Philippines; a

proposed approach
Philippine courts have a natural inclination to apply Philippine
internal law to conflict problems.
A policy-oriented approach, responsive to the demands of the
international system and aware of the policy considerations
that should influence, certain choice of law, may well be
adopted for conflicts problems in the Philippines, where there
is no applicable codal or statutory provision.