CIVIL

What is “Proper law”

Apex Court in National Thermal Power Corporation Vs. The Singer Company and others,[(1992) 3 SCC 551 ]. In that case the parties had expressly agreed that the law that would govern their contract, was the law in force in India and the Courts of Delhi to have exclusive jurisdiction in all matters arising under the contract. The Apex Court, while considering the matter in that perspective, in para 13 has adverted, inter alia, to Dicey and Morris in the conflict of laws, 11th Edition, Vol. II( Dicey ,which refers to Rule 180. The Apex Court has reproduced the said Rule as well as the relevant portion of the opinion of Lord Herchell, L.C. in Hamlyn and Co. v. Tallsker Distillery (1891-4) All ER R 849. The Apex Court in para 14 has observed that the expressed Intention of the parties is generally decisive in determining the “proper law of the contract”. The only limitation on this rule is that the intention of the parties must be expressed bona fide and it should not be opposed to public policy. The apex Court in para 19 has observed that (at p. 1007 of AIR) :

“proper law is thus the law which the parties have expressly or impliedly chosen, or which is imputed to them by reason of its closest and most intimate connection with the contract. It must, however, be clarified that the expression “proper law” refers to the substantive principles of the domestic law of the chosen system and not to its conflict of laws rules. The law of contract is not affected by the doctrine of renovi. See Dicey Vol. II”.

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