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CHOICE OF LAW IN INTEGRATED AND INTERCONNECTED MARKETS: A MATTER OF POLITICAL ECONOMY

9 Colum. J. Eur. L. 383 (2003)

Horatia Muir Watt. Professor at the University of Paris I (Pantheon-Sorbonne). The author would like to express sincere thanks to Roy Mersky and Jonathan Pratter for the generous welcome extended by the Tarlton Hall Law Library at the University of Texas at Austin during the preparation of this paper, and to Christian Joerges for his inspiring comments on a previous draft.

A CASE OF LOST INNOCENCE: SHIFTS IN THE PUBLIC/PRIVATE DIVIDE

Describing the conflict of laws as an issue of political economy can be seen as a response to the tectonic shifts currently wrought by globalization with respect to the public/private law divide that shapes traditional thinking in this field. A new generation of “collisions of economic regulation” linked to unprecedented trans-nationalmobility of firms, goods, services and capital, challenges mainstream Continental European conceptions of choice of law as a tool geared to the resolution of purely private disputes. Unchallenged throughout the major part of the twentieth century, the private interest paradigm which constitutes the foundation of the conflict of laws can no longer cope with the increasing interference of state policies in the field of transnational litigation. Of course, European legal theory has been more loath than American scholarship to embrace the idea that private law can also serve as a regulatory tool, which explains the poor reception that governmental interests analysis has received on this side of the Atlantic. But, as it has been pointed out, fields such as antitrust, securities, banking law, export controls, products liability or environmental regulation, which can all affect private transactions, directly or indirectly, involve interests of an undeniably different order from those premised by traditional conflicts methodology,” and introduce concerns previously identified as belonging to the field of public interests and as such beyond the pale of choice of law. In its strictest expression, the latter has been shielded from political concerns by the “public law taboo,” which led courts to decline to adjudicate other states’ interests, at least when they give rise to the direct enforcement of foreign public rights. The emergence of a progressive intermediate category of semi- public, internationally mandatory provisions, or “lois de police,” has contributed somewhat to bridge the methodological gap; while remaining subject to specific unilateral methodology, foreign economic regulation has become amenable to application in domestic courts in private law litigation. Aside from this exception, however, the conflict of laws deals exclusively with “private law relationships;”governments, it is thought, do not care directly about outcomes. However, after losing its “neutrality” in the 1970s by allowing in result-selective considerations in private law,16 choice of law also seems destined to lose the “innocence” which once served to keep it distinct from international politics.