Paraguay Promulgates the Law based on the Draft Hague Principles on Choice of Law in International Commercial Contracts
On 15 January 2015, Paraguay promulgated Law No 5393 on the Law Applicable to International Contracts (Law), which implements the Draft Hague Principles on Choice of Law in International Commercial Contracts (Draft Principles) (a newsflash published on the official Paraguay Government website is available here in Spanish).
In line with the Draft Principles, this Law accepts party autonomy for choice of law in international contracts, which enhances legal certainty and predictability in the contractual dealings concluded between Paraguayan companies and companies from around the world. It therefore will contribute to the facilitation of foreign investment and trade in Paraguay.
In addition to confirming the pioneering role played by Paraguay in bringing the Draft Principles into operation, the enactment of the Law affirms the objective of the Draft Principles as a guide to "best practices" with regard to the choice of law in international commercial contracts.
The Draft Principles are set to be officially approved by the Members of the Hague Conference in the near future.