Public Policy and Public Interest in International Law and EU Law

Abstract

Whereas civil law understands the [principles] of order public to be the pillars of legal and social order, forming a long-term constant, public policy in the common-law understanding is a markedly broader category. In this respect, public interest and public policy, as categories, are much closer to one another than is the case in civil-law systems. Even so, they remain separate categories. The increasing trend of making one’s case by taking recourse to public interest and the conflation of the latter with public policy (order public) (often owed to terminological inaccuracies) is alarming, as it leads to a broadening of the public policy defense, and increased application of the public policy objection, which is at odds with the interests of the international community. Public interest is not an indeterminate legal term. It is an abstract category that can only be identified against the backdrop of specific legal rules (laws, standards). Its subject are persons who form a loosely defined, but essentially identifiable circle, and it is usually expressed in [absolute] mandatory rules (which in private international law customarily take the character of what is known as overriding mandatory rules). In contrast to the negative operation of public policy, mandatory rules operate as positive rules. However, it is only in exceptional case that public interest becomes pervasive to such a degree that it may be protected as public policy. In contrast to the [absolute] overriding mandatory rules, public policy does not require the identification of the public interest and its specific subject, or vehicle.

Keywords: public policy, order public, public interest, civil law, common law, mandatory rules, overriding mandatory rules, arbitration, expropriation, private interest, fundamental value, consumer, fundamental right, international law, EU law, fundamental freedom

JEL Classification: H41, G18, A12, D18, F29, G38, H56, J68, K10, K14, K30, K33, K40, K41, K42