1          Introduction

Since the early 1990s, Laos has hosted foreign direct investment, and responsible government agencies have signed and entered into several internationalised contracts. International parties, including but not limited to financiers, securities takers, suppliers, buyers, and contractors domiciled in different jurisdictions, have been actively involved in the investment sphere.[1] The national legislation governing foreign direct investment in various fields demonstrated the genesis of law applicable to undertakings between state entities and investors from different jurisdictions.[2] Indeed, investment in hydroelectric power generation projects and electricity trading with foreign off-takers have attracted international participants. In drafting concession agreements for hydroelectric power concessions and transactions, [international] legal advisers acting for Lao government agencies merely cut the applicable law clause from the earlier contracts and pasted it into the latter without adequately understanding its implications. The author found the passage below in a model-like contract, which has been used in many concession agreements for electric power generation projects in Laos.

This Agreement shall be governed by and construed and interpreted in accordance with Lao law. If Lao law is found to be wholly silent on any issue in question or so inadequate as to preclude the making of any reasonable finding on any issue in question, then solely to the extent of such silence or inadequacy, as the case may be, for the purposes of the interpretation of such issue, English law shall apply.

This article aims to analyse gaps and analogies between Lao law and English law when each is performed as the applicable law in internationalised contracts. The author focuses on long-term state-investor concession agreements incorporated with the above applicable law clause to understand the implications.

2          Understanding of applicable law

2.1       Contract Internationalisation

Investment and trade connect people domiciled in one jurisdiction to the other. With respect to state-investor undertakings, the host state prefers domestic legislation to govern a contract it signs with foreign counterparts, who also want to apply the laws of their home country.[3] In a long-term host-state investor concession agreement, domestic law interprets, for instance, ownership, intellectual property rights, taxes, obligations, duties, and legal capacity. In contrast, foreign law deals with matters that may arise outside the host jurisdiction.[4] As such, a combination of domestic law and foreign legislation inevitably applies to a contract. In several circumstances, national law functions in parallel with international law in investment dispute resolution clauses. Merging national law with international law has occurred in many contracts applied in many parts of the world regardless of whether the parties have agreed on proper law in an internalised contract.    

2.2       Choice of Law

In signing and entering into an internationalised contract, the parties determine which laws apply to their contract and anticipate legislation allowing arbitral bodies to settle the differences that may arise during its term.[5] Under several circumstances, parties to a long-term investment contract necessitate anticipating international arbitration proceedings that may take place outside the host jurisdiction.[6] Private investors feel their assets may be exposed to various risks due to the host states’ law, which can unilaterally change agreements. As such, many host states recognise the crucial role of foreign direct investment and ease the prevalence of domestic law on state-investor contracts. Historically, lex mercatoria served as the merchant rules to govern sale contracts, to which the non-state parties were not domiciled in the same jurisdictions.[7] Later, the world developed international conventions, which apply to the signatories thereto. For long-term internationalised concession contracts, host states believe that the state-investor contracts with respect to investment in natural resource extraction necessitate host state law in governing private obligations to deal with environmental mitigation measures and taxes. For the reasons mentioned, international investors want to ensure a party autonomy status, meaning that the parties to a contract can apply neutral law other than the host state law. Rome I Regulation recognises parties’ rights to a contract and allows them to make their choice with respect to the applicable law thereof.[8]  Lim suggests that in the absence of agreement between contracting parties, the arbitral tribunal shall support the host contracting party’s national law’s applicability in combination with international law.[9] International law gives rise to the choices that contract parties have the freedom to make. 

English law is ascertainable rules that apply to case proceedings taking place in England even though neither party is domiciled in the UK at the time.[10] Where a contract is silent on its applicable law, the state’s legal system where the parties sign the contract is the governing law.[11] However, in the digital era, a contract may be signed online, in an airport lounge, or even while one party is seated on a plane which is airborne in international airspace. Under such circumstances, parties to internationalised contracts may not rely upon the afore-mentioned presumption with respect to the applicable law clause, which is related to the place of signing the contract. The parties must expressly agree on specific laws applying to their contract without inferring that the execution place determines applicable law.   

2.3       Choice of Forum  

When drafting an internationalised contract, lawyers usually predict where the parties will resolve disputes which may arise during the contract term. Similarly, the parties’ legal procedure to resolve their differences is contingent upon a dispute resolution venue, on which the parties need to agree in advance at the contract formulation stage expressly.[12] The venue’s selection to resolve differences depends upon whether the contract is state-investor or both parties are businesses. The former may be subject to the state party’s immunity and exemption, which restrains the chosen forum.[13] Foreign investors importing investment into developing economies usually lack confidence in the efficiency of the host governments’ courts in solving differences between the latter. Likewise, the host governments are reluctant to go to courts in the investors’ jurisdiction.[14] As such, arbitration in the third country is preferable for the parties to resolve differences which may arise during the contract term. There are a number of arbitral institutions, including but limited to ICC in Paris, ICSID in Washington DC, LCIA in London, SIAC in Singapore, and non-institutional arrangements that offer to resolve differences between parties.[15] In formulating a contract, parties agree on a jurisdictional venue where the courts can hear their cases. For a venue where parties solve their disputes, the applicable legislation is based on procedural laws. However, one shall bear in mind that a dispute between parties to the contract may be resolved either by arbitration or the court’s decision.[16] The parties need to expressly agree to the law applying to either arbitration or court proceedings earlier during the 1970s-1980s; when a party submitted the motion, the selected competent court might have reviewed another forum precluded by the parties to the contracts to examine whether the ouster clause was valid.[17] Where the parties to a contract make their choice of arbitration, an arbitration award is subject to courts of different jurisdictions to recognise and enforce the awards. Nonetheless, the arbitration award shall be set aside by the competent courts and under the country’s jurisdiction where such the award was made.[18] Under the preceding circumstance, the parties are to take the laws of the arbitration seat into account. One shall understand that the seat of arbitration differs from the court jurisdictions. The former depends on the contracting party’s choice; nonetheless, the latter is contingent upon locations where the claimants find the respondent’s assets.   

3.         Comparison Setting for Lao law and English law

3.1       Lao Laws to Govern Contracts Executed in Laos

Following the policy change, in 1988, the Lao government adopted the first law on foreign investment, recognising electricity generation projects as commercial undertakings.[19] Although the first Lao law on investment promulgated in 1988, as amended from time to time, recognised private investment, the current law built upon its preceding versions authorised the Lao government to realise its openness in investment policy since the early 1990s.[20] As required by law, any investment contracts to create obligations of the parties regarding matters, including but not limited to domestic incorporation and management and obligations to finance, construct project facilities, and mitigate adverse environmental impacts, shall be governed by Lao laws of the relevant fields.[21] However, the Lao investment law governing the country’s natural resource development, such as hydroelectric power generation, has remained fledgling legislation and has been deferred to international law in anticipation of addressing dispute settlement.[22] An international law firm advising the private investors introduced a draft long-term contract applied to the concession agreements at the very outset. The Lao government made use of the draft as the template for concession agreements and subsequently applied it to electricity generation concessions. The notion of laws applied to an internationalised contract had been known to the Lao government officials involved in contract formulation and negotiation since the first private concession partook in the Lao electricity sector. Legal specialists advised the Lao government to apply domestic law in combination with the principles of common law, as believed to be international legislation, to the long-term concession agreements in Laos’ electricity generation.[23] The law on foreign investment promotion and management alone did not create confidence for foreign investors and associates to bring capital and technology into Laos. Statutes of the other fields, including but not limited to the law on contract, the law on enterprises, the law on land, and the law on intellectual property, were enacted as investment-friendly legislation.[24] The aforementioned laws were amended several times before becoming the present version.   

3.2       Differences between Two Sets of Law 

3.2.1     Different Sources of Law

Lao laws were rooted in a civil law system inherited from colonial rule during the last centuries. The state’s legal system was then embodied after Laos gained independence from France in 1953.[25] Despite a regime change in the Lao polity, coupled with the evolution of public administration since independence, the law-making legislative power has remained functioning in parallel with the executive and judiciary power. The unitary governance system has framed, to a great extent, the Lao legislation, which has been tailored to the surrounding legal environment from time to time. In general, the laws were structured within the codified law system, which comprised rules in accordance with the hierarchy, including the constitution, statutes, and secondary legislation.[26] However, private law promoting private investment in the country was not enacted until the early 1990s. Also, the Lao state has only made accession to international commercial treaties and conventions since then. The state has encouraged and promoted foreign investment in various sectors of the national economy, aimed at importing capital and technology into production, marketing, and management.[27] According to the present Law on Laws (Law on Making Legislation), lower legislation shall be consistent with those in the higher hierarchy; if any contradiction is found, the higher shall precede the lower. Likewise, provisions of the international treaties and conventions, to which Laos is the signatory, shall prevail over the provisions of national law.[28] As such, international law accorded by the Lao state also forms part of the Lao legislation and should be part of the applicable law.   

On the other hand, English law passed into the rules for its land and conquered territories a thousand years ago. English law is commonly understood as the rules of common law derived from judicial decisions. In many circumstances inside and outside the United Kingdom, English law is dubbed a judge-made law. The Black’s Law Dictionary defines “Common Law”  as “(1) The body of law derived from judicial decisions, rather than from statutes or constitutions…; (2) The body of law based on the English legal system, as distinct from a civil-law system…”,[29] the Oxford’s Law Dictionary gives the meaning to “Common Law)” as (1) rules of law developed by the courts as opposed to those created by statute; (2) a general system of law deriving exclusively from court decisions.[30] Hence, English law applies to the person’s action in the United Kingdom of Great Britain and commonwealth jurisdictions.

A common-law system comprises a combination of circumstances where rules of law derived from legal principles and judicial precedents are applied together.[31] To maintain uniformity, consistency, and certainty, one must apply the regulations where such rules are reasonable and convenient and have no freedom to deny and abandon all analogies to the rules.[32] The laws of judicial precedents apply to new cases that no courts have adjudicated. Wild and Weinstein state that previous courts’ decisions must be followed to develop the legal system.[33] Thus, English law applying to commercial contracts was rooted in the UK judicial background and utilised in the common law orbit. Comparing the sources of Lao law to English should have helped explain each of the two legislations’ aspects.   

3.2.2     Different Functions

Parties to the concession agreements were statutorily required to comply with domestic laws governing substantive obligations and duties. For instance, the Law on Investment Promotion and Law on Enterprises required that any investors willing to undertake a concession on the electricity business would establish a Lao project company for each electricity-generating project before signing a concession agreement and associated contracts with the designated government agency.[34] After signing the concession agreement, the project company, in its capacity as the concessionaire, shall have complied with a range of substantive domestic laws in the relevant fields to ensure rights and duties in respect of the invested project are maintained for the entire concession period.[35] The Law on Investment Promotion currently being in force was built on inherent principles as set out in its preceding versions that the parties to the concession agreement shall articulate the rights and duties as so agreed in the concession agreement and refer to provisions of the Lao laws being in force before and on the date of the agreement.[36] Any amendment, alteration, and modification the parties may have agreed to from time to time shall be made in writing and signed by both parties thereto. At law, no investors are entitled to recourse to conditions and rights previously granted by the government to other concessionaires, regardless of whether such conditions and rights are of the same nature and under the same relevant law fields.[37] According to the rules of Lao law, any investors willing to sign a concession agreement to invest in an electricity generation project are not entitled to enjoy precedents, irrespective of the concession right or court decisions the Lao government or the Lao courts ever granted in the past. For instance, the concessionaire of the MIHPP project in 2015 is not automatically entitled to have the same legal treatment given to the concessionaire of the R&W Project in 2000.

English law appears to apply to matters outside Lao jurisdiction, which governs many internationalised concession agreements for electricity generation in Laos. Regardless of whether the law to govern a contract is referred to as English law or common law, each of the executed concession agreements is customarily governed by two-component applicable law by far. For the case of investors and the Lao government in South River Co Ltd and Hansa Water Co Ltd v Laos,[38] the International Arbitral Tribunal engaged in 2010 under the arbitration clause of the R&W Concession Agreement relied on the law of the arbitration seat in Kuala Lumpur, Malaysia; however, the law of New York State of the United States of America was asserted in the applicable law clause thereof. Selecting the law for the arbitration was based upon UNCITRAL Arbitration Rules, Article 33 (1), by referring to the conflict of laws rules.[39] Ultimately, the arbitration award was issued in 2012. Before the arbitration seat’s courts in Malaysia set aside the arbitration award, the Claimant submitted the award for enforcement to the High Court in London, in the territory of which the Claimant believed that the Lao government had assets. In London, the Defendant’s attorney team pleaded with the High Court of Justice to stay proceedings on English procedural law grounds, pending the Malaysian Court setting aside the Arbitration Award. The stay was granted, and the London High Court then annulled proceedings after the Arbitration Award had been vacated in Malaysia.

In South River Co Ltd and Hansa Water Co Ltd v The Government of Lao People’s Democratic Republic,[40]  labelled differently in Malaysia but was the case of the same parties submitted to the London High Court, the Malaysian Federal Court rejected an argument against the conflict of laws rules as filed by the Claimant’s legal team arguing for New York law. Nonetheless, the Court in Malaysia upheld the Defendant’s legal team’s argument against jurisdiction exceeding the Arbitral Tribunal. The Defendant’s legal team claimed that the Arbitral Tribunal exceeded its jurisdiction because the R&W Concession Agreement was also brought into the arbitration, although it was non-party to the arbitration agreement in question.[41] The Malaysian Federal Court brought proceedings of the case between the Claimant and Defendant under Malaysian law within the common law orbit; the law of New York State appeared in the R&WCA’s applicable law clause and was not intended for arbitration in Malaysia. In the Court decision, the Tribunal referred to precedents, the inherent common law principle, to underpin the conflict of laws rules.[42] Judge Tan Hakim mentioned the conflict of law rules in deciding in favour of the arbitration seat law in Malaysia instead of the New York State’s law.  In Government of India v Cairn Energy India Pty & Another,[43] Richard Malanjum CJ determined that the arbitration seat’s law was the law of arbitration. In Government of India v Petrocon India Ltd,[44] Arifin Zakaria CJ delivered the court’s judgment, choosing the law of the arbitration seat to govern arbitration proceedings. In South River Co Ltd and Hansa Water Co Ltd v The Government of Lao People’s Democratic Republic,[45] although the Malaysian Federal Court decided to set aside the arbitration award on the grounds of exceeding jurisdiction by the Arbitral Tribunal of 2013, the procedural law was underpinned and reiterated by the judges in several sections of the Court Judgment.           

Unlike domestic substantive law, common law serves as procedural rules for many arbitration and court proceedings. However, the applicable law clause in the well-ongoing MIHCA contains provisions for interpreting and governing the parties’ substantive rights and duties. The relevant clause seemingly allows English law to interpret matters not covered by Lao laws.[46] Again, legal specialists recommended the government incorporate applicable law provisions to state that the MIHCA shall be governed by, construed, and interpreted in accordance with Lao law. English law shall have been referred to where there was a gap in connection to the interpretation in an English law jurisdiction.[47] The applicable law clause of the MIHCA also followed the CA template.

If English law were to generalise to a procedural function as analysed in the preceding sections of this study, arbitrators in Laos might not recognise it as procedural legislation simply because the English laws were unknown to domestic attorneys. Likewise, international arbitrators might not acknowledge English law as procedural legislation without it being expressly agreed upon in the arbitration agreement by parties to the disputes. An arbitral tribunal could refer to clause 20.3(a), positing that any dispute arising from the MIHCA,[48] shall have been referred to and resolved by Singapore International Arbitration Centre Rules. If arbitration proceedings had occurred in Singapore, arbitrators would have utilised Singaporean law as the arbitration law.[49] In Ashville Investments v Elmer Contractor,[50] Bingham J decided that any mandates of the arbitral tribunal had to be framed by words in the arbitration agreement. Based on the precedents as afore-presented, procedural law shall have been expressly mentioned in the arbitration clause, failing which arbitrators would determine the laws of the country where arbitration proceedings took place to be the arbitration law. 

3.2.3     Different Jurisdiction    

Unlike Lao civil law, common law accepts precedents as a source of law.  In several arbitration awards and court judgments, where common law as procedural legislation applies to the arbitration agreement, precedents of other cases containing similar facts occurring previously elsewhere are cited to support the proceedings. Arbitral proceedings under international conventions, including but limited to New York Convention 1958,[51] UNCITRAL Arbitration Rules,[52] SIAC Rules,[53] the United Nations Convention on International Settlement Agreements Resulting from Mediation,[54] enjoyed by the Lao state agencies are all in the orbit of common law, and that shall apply to host state-investor contracts.      

Presently, case laws constituting common law are ubiquitously available, and lawyers find them more accessible, whereas the Lao statute-based civil laws are unknown to many foreign lawyers. The choice of jurisdiction exercised by the parties to a contract is subject to the substance of the law. Where parties to a contract expressly agreed on a choice of law of another country, performance under the contract in question was connected to only one country of the parties’ domicile; laws of the domicile apply to the contract. In Banco Santander Totta SA v Companhia de Carris de Ferro de Lisboa SA,[55] the parties to the contract agreed to apply English law to the contract even though the parties thereto were Portuguese persons. On an appeal made by the defendant, Longmore LJ dismissed English law and upheld Portuguese law applying to the contract substance.[56] However, in Kabib-ji Sal (Lebanon) v Kout Food Group (Kuwait),[57] the parties to the contract were domiciled in different jurisdictions but subsequently agreed to English law as the arbitration agreement law. The Arbitrators concluded that French law applied to the arbitration as earlier agreed and further suggested English law to govern the parties’ substantive rights and obligations. The Respondent issued proceedings in the UK under the Arbitration Act.[58] McCombe LJ allowed the Respondent’s notice and gave an order to set aside the Arbitration Award.   

Given the entire history and level of international acceptance, one shall submit that Lao law and English law are incomparable in many respects. However, this study focuses on the differences between the two legislations, explaining how each body of law works in the one-single contract. Despite different jurisdictional coverage, Lao law and common law function differently under various circumstances, which foster internationalised concession agreements for electricity generation in Laos to a great extent.

3.3       Similarities

3.3.1     Similar Sources

The Lao law is similar to English law in several aspects, ranging from the law-making process to some functions in internationalised contracts. The monarchy of Laos’ former Kingdom had long influenced the source of Lao laws until 1975,[59] similar to the customary law-making evolution in the United Kingdom a thousand years ago. With respect to statutes, the single law-making power makes laws in the United Kingdom of Great Britain,[60] and the Lao People’s Democratic Republic.[61] Despite different regimes, the law-making process in either jurisdiction is framed by the unitary government controlling the polity in each country. Laws apply to the respective entire jurisdiction without legal stratification into different layers.

3.3.2     Similarity in Application

For the comparison in this study, similarities between Lao law and English law focus on when each piece of legislation functions as the law applying to internationalised concession agreements in electricity generation. For instance, an electricity concessionaire is required by the Law on Enterprises to incorporate a limited liability company in Laos.[62] The legal capacity, composition and power of directors, and formalities of doing business of the limited liability company in Laos, [63] are similar to those of a company limited under the Company Act in the UK.[64] The laws of both Laos and the United Kingdom of Great Britain can function as substantive legislation in internationalised concession agreements signed in the Lao context. Lao law accepts that foreign law applies to international arbitration challenged by investors against a state agency under the state-investor contract.[65] The Lao law internationalisation provides a similarity of Article 9 of the Law on Making Legislation[66] to section 4(5) of the Arbitration Act 1996, where both legislations recognise the parties’ right to choose a law applying a contract.[67] Rome I Regulation, recognised by English law, also gives freedom to choose applicable law in a contract.[68] In contrast, Lao law authorises parties to the concession agreements to choose the foreign applicable law. Despite being fledgling legislation, Lao law is internationalised to a great extent.   

The near-standardised passage regarding the governing law asserted in the concession agreements refers to provisions where an agreement is governed, interpreted by, and construed in accordance with Lao law; however, if the Lao law is silent on any issues, to the extent of interpretation, the matter in question shall be referred to English law.[69] Considering the provisions of the concession agreement template, one may hold that both Lao law and English law can equally interpret issues in a contract, always providing that there is a gap for dividing the rules into substantive law and procedural legislation. An arbitration clause similar to that of MIHCA is in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb,[70] where a Russian insurer and Turkish contractor resolved a dispute. In the preceding case, neither the Claimant nor the Defendant were registered under English law. The Appellant insured the owner of an electric power plant against an event of fire and then appealed against an anti-suit injunction. The Appellant argued that arbitration proceedings should have been made under Russian law.[71] The insurance agreement was silent on governing law for the dispute settlement but determined that English arbitration was the forum law. In the decision on the anti-suit injunction, the appeal was dismissed, and Lord Kerr upheld the arbitration clause, asserting English law as the arbitration seat’s law.[72] The law applying to the arbitration clause is not the same law governing substantive obligations in the contract’s main text as found in Sulemeria Cia Nacional de Seguros SA v Enersa Engenharia,[73] where the law of arbitration is applied to arbitration proceedings. Unless parties to a dispute specifically express the procedural law in a recurring arbitration clause of the contract, the arbitral panel will determine the law applying to the arbitration proceedings thereafter.                  

3.3.3     Substantive Law Versus Procedural Law

When differentiating substantive law from procedural legislation, one can notice different functions of both Lao law and English law. While many arbitral tribunals and courts apply common law, rules of the laws rooted in the United Kingdom of Great Britain are seen in arbitral proceedings and court decisions on the selected cases, as introduced in this study’s analysis. However, it is difficult to distinguish between substantive and procedural law. In Bolton v Travelers Insurance Co.,[74] substantive law was interchanged with the procedural legislation; the court held that the statute of limitations that barred the claims after the period thereof and recognised timing rules for the parties to make answers and appearances was procedural.

As part of the laws of the United Kingdom of Great Britain, common law has functions that differ from the Lao laws, particularly in redressing disputes outside the Lao jurisdiction. When Laos signed BITs and accessed international conventions, such international law formed part of the Lao legal system with respect to the internalisation of its laws in the investment field.[75] Similarly, English law joined the Rome I Regulation after the UK government signed the Regulation on the law applicable to a contractual obligation.[76] The country members acknowledged the choice of law mechanism in the Rome I Regulation as if it were under English law.  However, as a non-member of the Rome Convention, Laos needs to ensure that parties to the Lao state-investor concession agreements make their choice of procedural law and a forum to deal with differences that may arise from the contract operation. The near-standardised appliable law clause, as applied by the Lao government in many state-investor contracts, did not provide explicit agreement on the laws applying to settle disputes by the parties thereto.  

Having identified the differences in the function of Lao law and English law when each legislation applies to the internationalised concession agreements in the electricity generation in Laos, the author could explain that domestic law was proper legislation to govern obligations and duties performed within the host-state jurisdiction by the parties to contract and that international law was asserted by international arbitrators or judges, as the case might be, to settle disputes arising out of the contract in question. The Lao law could function as substantive and procedural law only when a party pleaded arbitration requested to the domestic arbitral body.[77] However, international investors have long regarded the domestic arbitral body as lacking jurisdiction to reconcile the disputes arising from state-investor contracts because of the legal setting.[78] Foreign parties have also considered the Lao laws to be fledgling pieces of legislation that are absent from incomprehension and non-inclusiveness in many aspects. As such, investors anticipated having all state-investor disputes resolved by an international settlement body in accordance with the rules that constituted either contract-based or convention-based applicable law accorded by the government of Laos. 

4.         One may argue that substantive Lao law and English law never concurrently operated in any instance of the cross-border project finance concession agreements in the Lao context except in the international commercial arbitration process. In the event that any claim of any issue in the concession agreements is silent under substantive Lao law, the interpretation of such silence shall be made in accordance with the requirements of Lao laws.[79] Under the foregoing circumstances, Lao lawyers practising internationalised contracts should have revisited the nearly boilerplate of the “governing law” to make the latter operative. Otherwise, legislators should have reviewed national legislation to encourage the speedy interpretation and/or internalisation of integrative norms and weed out restraints.[80] Furthermore, overreliance on unfounded precedents shall be avoided.     

5.         Conclusion

5.1.      Laws applying to internationalised investment contracts in electricity generation have been left unattended for years. Unsettled performance in connection with laws applying to the internationalised contracts was noticeable. A comparative analysis of Lao law and English law was central to this study.

5.2.      When differentiating substantive law from procedural legislation, one could notice that each law functioned differently. While many arbitral tribunals and courts applied common law, precedents constituted the basis for arbitral proceedings and court decisions.[81] Differentiated functions of Lao law from those of common law helped pinpoint that the domestic law was proper legislation to govern obligations and duties performed within the host-state jurisdiction and that foreign law was asserted by international arbitrators or judges, as the case may be, to settle disputes arising out of the contract in question. The Lao law could function as substantive and procedural law only when a party pleads with arbitration requests to the domestic arbitral body.[82] Lastly, English law did not always equate with international law in the context of this study.

5.3.      While English law applying to electricity generation agreements may not always be treated as international law applying to the arbitration agreement, the author recommended contract drafters tweak the applicable law clause, as previously templated, to reflect the laws intended for the contract substance and procedure separately. The applicable law clause contained Lao law, and English law, as templated, might not be understood that the former applied to substance and the latter to the procedure automatically. Incorporating English law or any other foreign laws in the dispute settlement clause should have been expressly written and depended upon agreement on the arbitration forum. Likewise, if selected by parties to the contracts, contract drafters should have incorporated reference to either the BIT or validated convention in a clause other than the applicable law. In formulating an internationalised contract, lawyers should have separated the applicable law clause from the arbitration agreement clause. 

5.4.      The comparative analysis between two bodies of law in a single contract, whereby Lao law applied the substance and English law or foreign law regulated the contract’s procedure, as the case may be. Having had the clauses of fair governing rules and reliable dispute settlement in place, the Lao host government would leverage investment and investors’ confidence to a great extent. As such, a comparison between contract-based and convention-based governing law to advise an encouraging legal stance for the Lao government in hosting foreign direct investment may be worth further studying in international commercial and business law.