Foreword
Summary
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A1
Acknowledgements
Figures and tables
Economic value of English law | Oxera

A1.2.2: Overview of governing laws

Published: October 5th 2021
Download the Report Executive Summary Funders
2.1: Introduction 2.2: Economic value is created by ‘gains from trade’—realised through transactions 2.3: The law underpins growth in the volume of transactions (and therefore the generation of economic value) 2.4: Considering the law as infrastructure on which transactions take place
3.1: Introduction 3.2: The economic value created through the UK legal services ecosystem 3.3: The economic value created for the UK as a whole -3.3.1: English law as a global market standard -3.3.2: Agglomeration effects -3.3.3: Reduced transaction costs for UK businesses trading internationally 3.4: The choice of law and legal services for internationally mobile transactions
4.1: Introduction 4.2: English law provides significant value to the UK economy -4.2.1: Maritime sector -4.2.2: Commodity trading -4.2.3: ISDA swaps and derivatives -4.2.4: International insurance contracts -4.2.5: The value of English law to the UK economy is significant 4.3: Risks and opportunities 4.4: Future opportunities for the use of English law represent significant potential value to the UK
5.1: Introduction 5.2: English law suffers from a type of ‘market failure’ 5.3: Solutions to the free-rider problem: coordination across private and public parties 5.4: How to manage the ‘provision’ of English law
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Chapter A1

A1.2.2: Overview of governing laws

The standard form contracts offered by GAFTA, FOSFA, RSA, and the LME are governed by and decided in accordance with English law.[1]GAFTA (N.D.), ‘All Contracts’; LME (2021), ‘London Metal Exchange Rules and Regulations’, 18 March; RSA (2021), ‘Rules and Regulations’, 2 March; FOSFA (N.D.), ‘Contracts’. Therefore, English law is likely to have governed at least $11.6tn of global metals transactions,[2]London Metal Exchange (2020), ‘Guide to the London Metal Exchange’. approximately $92.4bn of global oils and fats transactions,[3]85% of the global trade in oils and fats is traded under FOSFA contracts. Total global trade in oils and fats was $108.7bn in 2020. See FOSFA International (N.D.), ‘FOSFA International: About … Continue reading and $98.2bn of global grains transactions in 2020.[4]80% of the global trade in grain is traded under GAFTA contracts. Total trade in cereals was $122.8bn in 2020. See GAFTA (N.D.), ‘Membership’; United Nations (N.D.), ‘UN Comtrade Database’.

Similarly, the rules and procedures for the arbitration services offered by GAFTA, FOSFA, RSA, and the LME are drawn up under the framework of English law.[5]GAFTA (N.D.), ‘Arbitration’; RSA (2021), ‘Rules and Regulations’, 2 March; LME (N.D.), ‘Arbitration’; FOSFA (N.D.), ‘Arbitration’.

Where commodities are traded on exchanges elsewhere in the world, it may be the case that these transactions are governed by law other than English law. For example, contracts and arbitration services offered by the Shanghai Futures Exchange in China are written in accordance with the law, regulations and judicial interpretations of the People’s Republic of China.[6]Shanghai Futures Exchange (N.D.), ‘General Exchange Rules of the Shanghai Futures Exchange’.

References

References
↑1GAFTA (N.D.), ‘All Contracts’; LME (2021), ‘London Metal Exchange Rules and Regulations’, 18 March; RSA (2021), ‘Rules and Regulations’, 2 March; FOSFA (N.D.), ‘Contracts’.
↑2London Metal Exchange (2020), ‘Guide to the London Metal Exchange’.
↑385% of the global trade in oils and fats is traded under FOSFA contracts. Total global trade in oils and fats was $108.7bn in 2020. See FOSFA International (N.D.), ‘FOSFA International: About us’. See United Nations (N.D.), ‘UN Comtrade Database’.
↑480% of the global trade in grain is traded under GAFTA contracts. Total trade in cereals was $122.8bn in 2020. See GAFTA (N.D.), ‘Membership’; United Nations (N.D.), ‘UN Comtrade Database’.
↑5GAFTA (N.D.), ‘Arbitration’; RSA (2021), ‘Rules and Regulations’, 2 March; LME (N.D.), ‘Arbitration’; FOSFA (N.D.), ‘Arbitration’.
↑6Shanghai Futures Exchange (N.D.), ‘General Exchange Rules of the Shanghai Futures Exchange’.