Admission of Extrinsic Evidence for Contract Interpretation: The International Arbitration Culture in Light of the Traditional Divisions

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Abstract

Mergers and acquisition (M&A) operations generally follow wide due-dil­igence and investigation works. This suggests that a lot of elements outside of the final contract could help the judge or arbitrator interpret the intent of the parties. Yet, the common law tradition usually includes a so-called ‘parol evidence rule’ (PER) that pro­hibits the use of such evidence to this end, among numerous exceptions. Other legal tradition such as the civil law don’t include such rule. As transnational M&A operations now generally use international commercial arbitration (ICA) as a way to solve potential disputes, parties can wonder if these extrinsic evidence can be used in an ICA context, given its multicultural legal habits. To answer this question, this article analyses the cultural roots that explain the existence or absence of the PER, and matches them with the specificities of ICA. There are two main explanations for the distinction between common law and civil law regarding the PER. One is substantial and regards the con­tractual interpretation approach. The second depends on the culture regarding evidence and the existence of exclusionary rules. These two explanations don’t survive in ICA. Moreover, the specificities of ICA tend to encourage the admission of extrinsic evidence in contractual interpretation.

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