Foreword
Summary
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5
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A1
Acknowledgements
Figures and tables
Economic value of English law | Oxera

A1.3.2: Overview of governing laws

Published: October 5th 2021
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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

A1.3.2: Overview of governing laws

The ISDA Master Agreement contains the parties’ choice for the governing law of the contract and transactions under its terms and includes a provision specifying the jurisdiction that can adjudicate upon disputes between parties.[1]ISDA (2018), ‘2018 ISDA Arbitration Guide and Choice of Court Jurisdiction Guide’, 17 December.

Prior to 2018, ISDA offered English, New York and Japanese law-governed Master Agreements.[2]ISDA (2018), ‘Brexit and the ISDA Master Agreement’, 8 January. According to ISDA,[3]ISDA (2018), ‘ISDA Publishes French and Irish Law Master Agreements’, 3 July. ‘virtually all’ ISDA Master Agreements entered into between counterparties based within the EU or the EEA were governed by English law in 2018. Therefore, English law likely governed at least €661.5tn of global derivatives transactions in 2018.[4]According to ISDA,[4] ‘virtually all’ ISDA Master Agreements entered into between counterparties based within the EU or the EEA were governed by English law in 2018. Data for 2018 EU OTC … Continue reading

However, in July 2018, ISDA published Irish and French law-governed Master Agreements, in order to provide parties with the option to continue trading under a EU member-state law with EU jurisdiction clauses once the UK left the EU.[5]ISDA (2018), ‘ISDA Publishes French and Irish Law Master Agreements’, 3 July.  This allows for the retention of specific benefits of EU legislation, for example, insolvency law,[6]Some EU national insolvency laws require contracts to be subject to EU/EEA law in order to qualify for safe harbour protections following a bankruptcy: ISDA (2018), ‘ISDA Publishes French and Irish … Continue reading and allows EU/EEA counterparties to retain automatic recognition and enforcement of judgements when trading with each other.[7]Ibid.

References

References
↑1ISDA (2018), ‘2018 ISDA Arbitration Guide and Choice of Court Jurisdiction Guide’, 17 December.
↑2ISDA (2018), ‘Brexit and the ISDA Master Agreement’, 8 January.
↑3ISDA (2018), ‘ISDA Publishes French and Irish Law Master Agreements’, 3 July.
↑4According to ISDA,[4] ‘virtually all’ ISDA Master Agreements entered into between counterparties based within the EU or the EEA were governed by English law in 2018. Data for 2018 EU OTC derivatives transactions from European Securities and Markets Authority (2019), ‘EU Derivatives Markets ESMA Annual Statistics Report 2019’, 9 December.
↑5ISDA (2018), ‘ISDA Publishes French and Irish Law Master Agreements’, 3 July. 
↑6Some EU national insolvency laws require contracts to be subject to EU/EEA law in order to qualify for safe harbour protections following a bankruptcy: ISDA (2018), ‘ISDA Publishes French and Irish Law Master Agreements’, 3 July.
↑7Ibid.