I. The concept and justification of party autonomy

Party autonomy in the conflict of laws of contracts is understood to mean the right of the parties to choose the governing law of a contract⁷. That is, their power to determine the law that is the causa causans of the contract⁸; the law that provides the rules to determine the existence, substantive validity and effects of the contract and those ru0les which the parties cannot displace. Hence, when autonomy is exercised the conflict rule of the forum submits the contract to the chosen law and the parties are bound by this law⁹.

Party autonomy permits the parties to determine the extent and scope of application of State law to their contracts. It grants them an essential legislative prerogative. "It allows private parties to determine the distribution of private law authority themselves, thus essentially, privatising an important allocative function of global governance"¹⁰.

Party autonomy is justified on several grounds. A philosophical one is that autonomy is founded on the principle of the liberty of the individual, which is a human right applicable to both, his personal and economic sphere¹¹. In accordance, the parties should be free to enter into a contract and to stipulate the terms and conditions of that contract¹². They should be free also to choose the governing law of their contract as they might have valid reasons to do so. For instance, they might want to choose a law that is well developed and well suited to their contract, or one they know well, or one they consider "neutral", or one, they have used in an earlier transaction or in another contract related to the present one¹³. Autonomy recognizes and guarantees contractual freedom for the parties¹⁴. Thus, autonomy should be accepted subject to certain limits, set to guarantee fundamental values of the State and the protection of the weaker party to a contract.

Party autonomy is also justified because of its ability to determine a suitable governing law for international contracts. Hence, international contracts do not always accommodate well with a governing law determined by the conflict rules of the forum without having regard to the special characteristics of these contracts. When this is the case, autonomy can help the parties to exclude an inappropriate law that would otherwise govern their contract. Also it allows them to choose a more convenient law to govern the whole or a part of it¹⁵. Thus, the flexibility given by autonomy overcomes the rigidity of domestic conflict rules, which might submit a 0.particular contract to an inappropriate governing law¹⁶. This has a clear economic and legal advantage for the parties. In sum, autonomy presupposes that parties to a contract "are the best judges of their own self-interest"¹⁷ and that "they may be in the best position to determine which set of legal principles is most suitable for their transaction"¹⁸.

Besides, autonomy allows certainty and predictability in respect of the governing law of a contract¹⁹. A contract requires certainty, and certainty is ensured when the parties are able to predict the law that is to govern it with as much accuracy as possible²⁰. In fact, the law governing an international contract is difficult to predict. An international contract is connected to several jurisdictions and the determination of its governing law depends on the conflict rules of the forum called upon to solve the disputes arising from it. Thus, the parties have no certainty about this law before proceedings are brought. This uncertainty can be lessened if a choice of law is made and the jurisdictions connected to the contract accept it. Further, a choice of law permits submitting the contract to a law while negotiation is in course, granting the parties, in advance, significant certainty and predictability in respect of its governing law²¹. This legal certainty constitutes a human right in a world of multiple jurisdictions and open frontiers²².

Additionally, in international commerce "the parties are competitors not only with regard to the goods and services but also with regard to the legal system they may offer"²³. Thus, an adequate legal framework for international contracts fosters international commerce and economic integration between countries. Party autonomy contributes to providing this adequate legal framework and, hence, seems fundamental to develop a global market economy²⁴.

Further, party autonomy is consistent with the conception of an international community of justice, implicit nowadays in most national systems of conflict laws. For this "suppose not only the existence of separate national laws but also their integration in a common legal order serving the needs of international commerce"²⁵ and protecting equivalent standards of fairness and justice.

In sum, from a law and economics perspective, party autonomy "is efficient; enforcing a contractual choice of law can eliminate inconsistency, clarify the applicable law, promote jurisdictional competition in the 'law market', and ultimately lead to legal evolution"²⁶. From a theoretical approach, party autonomy is justified by a focus on individuals, as the main subjects of Private International Law²⁷. It is consistent with giving them a primary role in regulating their private interests and with restricting their own regulation only when needed to protect justice or a fundamental public interest. Hence, allowing autonomy means accepting that the parties are in the centre of the conflicts problem: "they are allowed to choose the applicable law because it is their dispute that is in question"²⁸. Because of this, it has been stated that "the parties' freedom to choose the applicable law should be one of the cornerstones of the system of conflict-of-law rules in matters of contractual obligations"²⁹.

The legitimacy of respecting party autonomy is not seriously questioned today. It is accepted almost ubiquitous with the exception of some Latin American and Middle East countries³⁰. The development of this principle, however, is recent; it took place mainly in the mid 19^th and 20^th centuries³¹. The acceptance of the principle was, initially, a matter of controversy in some countries³². It was argued that granting the parties the right to choose the governing law of a contract infringed national sovereignty or was equivalent to permitting the parties to legislate themselves outside the reach of the territorially applicable law³³. Nowadays, objections to autonomy have faded and the principle is currently embodied in the private international laws of most countries³⁴. Autonomy is so widely accepted that it is considered to belong to "the common core of the legal systems"³⁵ and to represent a rule of international customary law³⁶. "It has acquired the status of a self-evident proposition .. .virtually nobody is against it and most commentators enthusiastically endorse it"³⁷. Moreover, the acceptance of the principle is now extended beyond the field of contracts, to matters of succession, torts, marital property, property rights and some issues of family law³⁸. The Institut de Droit International in its Draft Resolution of 2019 on Human Rights and Private International Law has declared that party autonomy is a general principle of Conflict of Laws and that States should ensure that party autonomy is respected³⁹. A similar statement has been made by the Inter-American Juridical Committee (CJI) in its Guide on the Law Applicable to International Commercial Contracts in the Americas, 2019^[40].

Several international instruments have adopted autonomy and thus, have contributed to the universal acceptance of this principle. Amongst these, the Convention on the Law Applicable to Contractual Obligations, Rome 1980 ("Rome Convention")⁴¹ is the most relevant. This Convention consolidated autonomy within the EU countries and has now been transformed into the Regulation (EC) N° 593/2008 of the European Parliament and of the Council of 17 June 2008 on the Law Applicable to Contractual Obligations, Rome I ("Rome i Regulation")⁴². Besides, this Convention served as a model for the Inter American Convention on the Law Applicable to International Contracts (CIDIP V) Mexico, 10-III-1994 ("Mexico Convention") which intended to consolidate autonomy in Latin America⁴³. More recently, an important instrument of soft law, the Hague Principles on Choice of Law in International Commercial of 2015, has confirmed the importance and wide acceptance of the principle.

It seems, however, that Latin American lawmakers -especially those of Brazil and Uruguay and of those countries following the model of the Chilean Civil Code- are hesitant to sanction autonomy and amend their old conflict rules. These lawmakers seem to consider autonomy as a principle alien to their legal systems and against their legal tradition. It is appropriate then, to analyse their conflict rules and the strength of this reasoning.

II. The early Latin American domestic conflict rules on contracts and party autonomy

The Latin American domestic conflict rules have been traditionally included in the national Civil Codes and have changed little throughout the years. These rules have been inspired in common principles, doctrines or works or, have adopted the same or similar text⁴⁴. Thus, to study the acceptance of autonomy in them, it is relevant to analyse the influence that the doctrine of some authors and legal sources have had on them. Namely, that of Andrés Bello, Joseph Story, Carl Friedrich von Savigny and the French Civil Code.

A. Andrés Bello and the Latin American conflict rules on contracts

Andrés Bello is one of the most influential Latin American legal writers on international law⁴⁵. His work "Principios de Derecho de Gentes", firstly published in Santiago of Chile in 1832, was re-published in several Latin American countries⁴⁶. Besides, his Code, the Chilean Civil Code of 1855, is the model of several Civil Codes in Latin America and its influence in the region has been considered like that of the French Code Civil in Europe⁴⁷.

The Chilean Civil Code was adopted by El Salvador in 1859, Ecuador in 1860 and by Colombia in 1873 with almost no amendment. It is still in force in these countries. This Code also influenced the conflict provisions of the Civil Codes of Honduras (1880,1906), Nicaragua (1867), Panamá (1860, 1916), Uruguay (1868) and Venezuela (1862, 1942) and to a lesser extent those of the Civil Codes of Argentina (1869), Costa Rica (1887), Guatemala (1877) and Mexico (1870, 1928)⁴⁸.

This Code was the first original civil code in Latin America⁴⁹. According to Bello its conflict provisions received the influence of the French Code Civil, the Louisiana Code Civil (1825), the Austrian Allgemeines bügerlisches Gesetzbuch (1811) and the Cours de Code Civil (1829) of Delvincourt⁵⁰. These provisions, however, provide original solutions, which are a creation of Bello⁵¹.

The main principle that inspires the conflict provisions of the Code is that of territoriality of laws, under which Chilean law governs every person, asset, act or contract located, made or performed in the country, but not those outside the country. Therefore, Chilean law has priority over foreign law in all those issues connected to Chile. Further, foreign law is only applicable in Chile to those issues not connected to the country or to those that, exceptionally, Chilean law submits to it⁵².

The principle of territoriality of laws was not new in the legal systems of the region. It inspired the Spanish law that was in force in Latin American countries during colonial times and, after their independence, it was preserved in their national laws as a way of building up and protecting national sovereignty⁵³. The Chilean Civil Code has been a vehicle for perpetuating this principle in the conflict laws of these countries.

In respect of the law governing contracts, Bello considers that every contract is governed by the law of the country where it is made unless it is to be performed in a different country, in which case, the law of the country of performance applies⁵⁴. This view is expressed in art. 16 of the Chilean Civil Code that states that contracts validly made abroad are binding for the parties, though when they are to be performed in Chile, their effects are governed by Chilean law.

Bello recognizes the binding value of contractual clauses and a great freedom to the parties in determining the content of a contract. In "Principio de Derecho de Gentes" he states that courts should determine the contractual obligations of the parties in accordance with the clauses of the contract and the laws incorporated into it⁵⁵. In his Civil Code, he adds that every contract legally made is binding on the contracting parties and cannot be declared null unless by their mutual agreement or by a legal cause; besides, he states that the intention of the parties is paramount in construing the clauses of a contract⁵⁶. Thus, it seems that Bello recognizes that the parties are free to stipulate within the limits allowed by the governing law of the contract, but not that they are allowed to choose which is to be this law⁵⁷. This conclusion is backed-up by the provisions of his Code that require the mandatory application of Chilean law to any contract being performed or made in Chile⁵⁸.

Later doctrine and case law have been at variance in respect of the acceptance of autonomy by this Civil Code. While authors in Chile, Colombia and Ecuador tend to affirm that the Code accepts choices of law by the parties, courts tend to apply the principle of territoriality of laws by accepting choices of national law and rejecting choices of foreign law, when contracts are to be performed or have been made in the country⁵⁹.

In sum, Andrés Bello did not develop a doctrine on party autonomy in his works. His Code allows different constructions regarding its acceptance that depend mainly on the strength given to the territoriality principle inspiring it.

B. Joseph Story and the Latin American conflict rules on contracts

The American scholar, Joseph Story, had a substantial influence on the conflict laws of Argentina (1869), Paraguay (1889^[60]) and the provisions of the Treaty on International Civil Law of Montevideo, 1889^[61].

The drafter of the first Argentinian Civil Code (1869), Dalmacio Vélez Sarsfield, took inspiration from Story's book, "Commentaries on the Conflict of Laws"⁶², for drafting the conflict provisions of his Code. Many of its provisions are translations of the principles included by Story in his book, particularly those on contracts⁶³. Following Story's doctrine, the Code submitted international contracts either to the law of their place of making, or that of their place of performance⁶⁴.

Story's views on the law governing contracts bear some similarity to those of Bello. He affirms that a contract shall be governed by the law of its place of making, if it is made and performed in the same place⁶⁵. If the contract is made in one place to be performed in another, it shall be governed by the law of its place of performance⁶⁶. Story mentions that the ground for the application of these laws is commonly considered to be the silent or presumed consent of the parties⁶⁷. However, he then clarifies that the law of the place of making is not applicable because of their choice, but in virtue of the general sovereignty possessed by every nation⁶⁸. It seems that the same applies to the law of the place of performance⁶⁹. In sum, his solution appears to be based on the principle of territoriality of laws rather than on the autonomy of the parties.

In practice, the possibility of the parties to determine the applicable law of a contract under Story's doctrine is indirect; it only lies in the possibility of choosing the place of performance of the contract, but not its applicable law⁷⁰. Thus, it does not accept the principle of party autonomy, which was unknown to Story⁷¹.

Applying Story's principles, the conflict provisions on contracts of the Argentinian Civil Code (1869), in force until 2015, gave no role to the parties in determining the governing law of a contract. Some Argentinian doctrine, however, construed these provisions as accepting autonomy with arguments that failed to be conclusive due to the lack of provisions of the Code on this issue⁷².

C. Carl Friedrich von Savigny and the Latin American conflict rules on contracts

The doctrine on contracts of Carl Friedrich von Savigny weighed much amongst Latin American jurists. It influenced the Argentinian (1869)⁷³ and Chilean⁷⁴ civil codes, the Treaty on International Civil Law of Montevideo, 1889 and the work of the Brazilian A. Teixeira de Freitas⁷⁵. Savigny sees the place of performance of the contract as the true seat of the obligation and as the special forum to solve the disputes arising from it. This place of performance is to supply the territorial law governing the obligation⁷⁶. Thus, a contract is to be governed by this law. However, this place of performance is always determined by the express or tacit intention of the parties and so, the parties have a role in determining the governing law of a contract⁷⁷.

There is no doctrinal consensus as to the acceptance of party autonomy by Savigny⁷⁸. For some, the role he assigns the parties in determining the governing law of a contract is indirect and restricted to their possibility of choosing the place of performance of the contract⁷⁹. For others, this role is major and allows the parties to choose a governing law different to that of the place of performance of the contract. Hence, they understand that he accepts party autonomy⁸⁰. This latter opinion, however, was not received in the Argentinian and the Chilean Civil Codes; nor in the Treaty on International Civil Law of Montevideo, 1889.

Savigny's views were adopted by the Brazilian scholar Augusto Teixeira de Freitas⁸¹ in his Draft for a Civil Code or Esboço⁸². Teixeira developed Savigny's doctrine further by acknowledging the value of choices of law by the parties⁸³. The chosen law, according to Teixeira, could displace the law of the place of performance of the contract. Thus, Teixeira was the first Latin American author who accepted party autonomy. Regrettably, his Esboço was never enacted as law and his doctrine found no practical support in Latin America⁸⁴.

D. The French "Code Civil" and the Latin American conflict rules on contracts

The French Code Civil (1804) inspired several Civil Codes in Latin America, amongst which are the Chilean (1855), Peruvian (1852⁸⁵) and Mexican (1870⁸⁶) Civil Codes⁸⁷. These codes adopted some of the conflict rules of the Code Civil but adapted them to their national context with originality. Regarding contracts, Latin American Codes adopted from the Code Civil the principle of contractual freedom, which has provided the doctrinal foundation for the acceptance of party autonomy in these jurisdictions⁸⁸. Thus, the Code adopts the view that "a contract is primarily an agreement based on the intention of the parties and that is their will which creates the legal obligation" by stating that: "Les conventions légalement formées tiennent lieu de loi à ceux qui les on faites""⁸⁹. Hence, the Code ascertains the binding effect of the parties' agreement and stresses that their subjective intention is paramount in determining the extent and content of their legal obligation and the construction of its terms⁹⁰. By so doing, the Code permits to infer that it is mostly concerned with what rules the parties intend to govern their contract and that these rules should be principally determined by them, with very limited exceptions. Thus, the Code conceives the contract as a private horizontal legal relationship between the parties, that creates binding rights and duties for them. Therefore, most of its provisions on contracts are supplemental rules, to be applied in the absence of the parties' agreement on an issue.

The Code sees contracting parties as exercising a law-making authority and a certain sovereignty. "The French expression for party autonomy, autonomie de la volonté, pointedly suggests such a foundational role for the will of the parties"⁹¹. Following this view, French courts ruled that the chosen law was not necessarily subject to subsequent changes in that law⁹², understanding that the parties somehow froze or incorporated it into the contract by their choice.

To sum up: the early Latin American Civil Codes were highly influenced by the principles of territoriality of laws and contractual freedom. Territoriality was reflected in the priority given in these Codes to the application of the conflict rules and the law of the forum to international contracts, and in the minimum role given to the parties in determining their governing law. Besides, these Codes either made no reference to party autonomy or, exceptionally allowed it to a very limited extent, when the choice of law was that of the forum⁹³. At the same time, these Codes were influenced by the principle of contractual freedom, which gave an important role to the parties in determining the content and obligations arising from their contracts, but within the legal framework determined by the conflict rules of the forum. This situation persists today. The territoriality principle still inspires several Codes in force and still has a negative effect on the acceptance of autonomy in Latin America⁹⁴ but, at the same time, the parties' contractual freedom is still a fundamental underlying principle of these Codes.

III. The Latin American treaties on contracts and party autonomy

The early drafting of several Latin American Treaties on contracts opened the debate in respect of autonomy but did not result in its universal acceptance within Latin American jurisdictions.

These jurisdictions showed early interest at unification of conflict rules and made several attempts to do so. The first attempt was made in the Congress of Lima of 1877-1878, where a Treaty was agreed between Argentina, Bolivia, Chile, Costa Rica, Ecuador, Peru and Venezuela⁹⁵. This Treaty submitted contracts to the law of the place of making or to that of the place of performance, following the doctrines of Bello and Story⁹⁶. Its success though, was hindered by the 1879 Pacific War, and it had almost no application⁹⁷.

Other unification attempts were made through the Montevideo Treaties of 188889 and 1939-40, the Bustamante Code (1928), and the Mexico Convention (1994), which are worthy of further analysis.

A. The Montevideo Treaties of 1888-89 and 1939-40

The "Montevideo Treaties" were drafted within two South American Congresses that took place in Montevideo in 1888-89 and 1939-40. The First South American Congress on Private International Law, Montevideo (1888-89^[98]) was attended by delegates from Argentina, Bolivia, Brazil, Chile, Paraguay, Peru and Uruguay; who drafted eight treaties and an additional protocol⁹⁹. These treaties were ratified by Argentina Bolivia, Paraguay, Peru and Uruguay. They entered into force in 1892 and are still widely applied. Other South American and European States acceded to them afterwards¹⁰⁰. Brazil and Chile signed some treaties but never ratified them¹⁰¹.

The Second South American Congress on Private International Law, Montevideo 1939-40 took place on the 50^th anniversary of the First Congress to update the treaties of 1889. It was divided into two phases: 1939 and 1940. Delegates from Argentina, Bolivia, Chile, Paraguay, Peru and Uruguay worked in both phases; delegates from Brazil and Colombia joined in the second phase¹⁰². They drafted eight treaties and an additional protocol¹⁰³ that received less signatures and ratifications than those of 1889¹⁰⁴. They never came into force between the parties to the Bustamante Code; amongst them, Brazil and Chile, expressed in the Conference their preference for the principle of territoriality of laws to determine the applicable law in conflict cases¹⁰⁵.

The Montevideo Treaties address the problem of the law governing international contracts in the Treaties on International Civil Law of 1889 and 1940^[106]. Both treaties provide that the law of the place of performance is to govern an international contract and all matters related to it¹⁰⁷. The determination of this law, however, is to be done by specific provisions of the Treaties that presume the place where different types of contracts are normally performed¹⁰⁸. This "system of presumptions" cannot be disregarded in any case¹⁰⁹.

The acceptance of autonomy was widely discussed in 1889 and 1940; and in both cases rejected. In the Congress of 1889, the Uruguayan professor Ramírez proposed that contracts should be governed by the law chosen by the parties¹¹⁰. His proposal was rejected on the ground that party autonomy should always be limited by public policy. The delegates argued that public policy should be necessarily de termined by a certain law and decided, quoting the authority of Savigny, that this law should be that of the place of performance of the contract¹¹¹. They then agreed that contracts should always be governed by this law and not by that chosen by the parties. Notwithstanding this agreement, the Treaty on International Civil Law of 1889 contains no express prohibition of choices of law by the parties.

This absence of prohibition has been construed in different ways in Argentina, Peru and Uruguay¹¹². In Argentina, it has been construed as an acceptance of party autonomy and courts have disregarded the provisions of the Treaty when a choice of law has been made. In Peru and Uruguay, the Treaty has been construed as rejecting autonomy. Uruguayan doctrine has been adamant to declare that its provisions are mandatory and should be construed according to the principles that inspired the First Congress of Montevideo, amongst which was the rejection of party autonomy¹¹³.

The Uruguayan rejection of autonomy was strongly expressed in the Second Congress of 1939-40, though in different terms. The delegate of Uruguay, Vargas Guillemete, argued that the legislative and jurisdictional competence of a sovereign State could not be subordinated to the will of the parties. According to him, a conflict rule was allocative of legislative and jurisdictional competence and was, therefore, beyond the scope of party autonomy. He remarked that: 'It has been a mistake of international doctrine not to realize that the notion of party autonomy is completely parasitic to Private International Law and inapplicable to solve conflicts of laws, which are conflicts of sovereignty". Accordingly, he proposed to include in the Additional Protocol to the Treaty of International Civil Law of 1940 a provision forbidding choices of law and forum by the parties¹¹⁴.

The Uruguayan proposal was contested by the Argentinian delegates who, unsuccessfully, proposed that party autonomy should be accepted¹¹⁵. Finally, the proposal of Vargas Guillemete was accepted, but with a final phrase added by the Argentinians that intended to moderate its effects: "The jurisdiction and applicable law determined in accordance with the pertinent Treaties cannot be modified by the will of the parties, except to the extent authorized by such law" ¹¹⁶.

Vargas Guillemete, the reporter of the commission which drafted the Treaty on International Civil Law, 1940, wrote: "it could be affirmed that amongst the commissioners, the principle that denies party autonomy any legitimate power to rule on a conflict of laws issue, triumphed"¹¹⁷. Bustamante i Rivero, the Peruvian delegate, added: "The idea was accepted that, in the international order, the protective and organizational power of the States should prevail over the conventions subscribed to by private parties. There was also a consensus on the convenience of the Treaties fixing unequivocally the competent law and jurisdiction in order to avoid the uncertainty and change of the parties' intentions... and to prevent the most powerful party from imposing unfair conditions to the weaker party through the choice of a more favourable law or forum"¹¹⁸.

This decision had a significant and longstanding effect in Uruguayan conflict rules. After the Montevideo Treaties of 1940 were enacted, Uruguayan doctrine unanimously rejected party autonomy¹¹⁹. By the same time, Vargas Guillemete drafted the bill of Law 10.084, which amended the Uruguayan Civil Code adding an Appendix of conflict rules, modelled on the Treaties¹²⁰. Thus, Law 10.084 included an express rejection of party autonomy, which is still in force in Uruguay¹²¹.

B. The Bustamante Code

The "Bustamante Code" is an annex to the Convention on Private International Law agreed on 20th February 1928 at the Sixth Pan-American Conference in Havana¹²². This Conference was convoked by the Pan-American Union¹²³ to vote on a draft of a code on Private International Law to be enforced in all the countries of America. The draft was prepared mainly by the Cuban Professor Antonio Sánchez de Bustamante y Sirvén and was approved, with little amendments, by the delegates to the Conference¹²⁴. It was then ratified by Bolivia, Brazil, Chile, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Nicaragua, Panama, Peru and Venezuela, and is in force in all these countries¹²⁵.

The Bustamante Code, however, has not unified significantly the conflict laws of these countries¹²⁶. Thus, Bolivia, Costa Rica, Chile, Ecuador and El Salvador ratified it with a general reservation giving priority to their domestic provisions over those of the Code, and other countries ratified it with special reservations on certain provisions¹²⁷. As a result, the Code has been less applied than expected, though its doctrinal importance has still been significant¹²⁸.

The Code contains some general provisions on contracts and other specific to certain types of contracts¹²⁹. These provisions are somehow difficult to understand and apply¹³⁰. Thus, they either exempt certain matters from the governing law of the contract or, point to a certain governing law for specific contracts by way of supplementation of the will of the parties¹³¹.

The acceptance of autonomy in this Code is a matter of debate since it has no provisions clearly authorizing or prohibiting it¹³². Some doctrine construes arts 166, 185 and 186 of the Code¹³³ as authorizing autonomy but other doctrine rejects this construction¹³⁴. However, the proper construction of these provisions needs to consider the opinion of Bustamante.

Bustamante prefers the term "personal autarchy" to that of party autonomy¹³⁵. He affirms that the Code accepts personal autarchy and submits contracts to the law expressly or tacitly chosen by the parties. In the absence of choice, the Code presumes other laws as accepted by them¹³⁶. This statement permits the conclusion that the Code recognizes party autonomy in wide terms. This, however, is not accurate since in Bustamante's view the scope of the law chosen by the parties is greatly limited by the "territorial law"¹³⁷. He considers that the parties can freely stipulate in their contracts whatever is permitted within the limits of the territorial law, but are unable to exempt themselves from the fulfilment of its mandatory rules; amongst which are the mandatory rules of the forum, those governing the object and essential requisites of a contract, and the validity of consent¹³⁸. Hence, in truth, Bustamante only accepts a restricted party autonomy, equivalent to contractual freedom in the domestic sphere¹³⁹. It seems that he did not intend to grant the parties the right to choose the governing law of a contract, though the wording of his Code is not clear on this issue¹⁴⁰.

Finally, the Code has not played a substantial role in respect of autonomy in its enacting countries and has had no major influence in their domestic conflict provisions on contracts.

C. The Mexico Convention, 1994

The efforts to unify conflict provisions in Latin America continued. As an attempt to reconcile in a comprehensive legal instrument the Montevideo Treaties, the Bustamante Code and the First United States Restatement of Conflict of Laws failed, a new approach for a gradual unification of conflict laws was adopted¹⁴¹. The OAS, through its CJI, focused on drafting Inter American conventions dealing with conflict issues, to be approved in specialized Private International Law conferences, known¹⁴² as CIDIP .

As to party autonomy, the Mexico Convention, 1994 (CIDIP v) is mostly relevant. The signature of this Convention was preceded by extensive preparatory works, which began in 1987¹⁴³. In 1988, a working group set up by OAS, decided that the Convention should focus on party autonomy in contracts for the international sale of goods¹⁴⁴. Then, OAS requested a study on the issue, which concluded that there was an increasing trend to accept autonomy in Latin America, even in those legal systems which had no provisions on it, or rejected it in their conflict rules. This trend was evidenced by new draft bills, legal practice and the fact that many Latin American countries had participated in the negotiation of the Hague Convention on the Law Applicable to Contracts for the International Sale of Goods, 1986, ("Hague Convention"), where autonomy had been unanimously accepted. The study recommended OAS countries to sanction autonomy to harmonize laws on contracts, foster international trade and grant legal predictability to the parties. It also suggested CIDIP iv to use the Rome Convention, the United Nations Convention on Contracts for the International Sales of Goods,1980 ("Vienna Convention") and the Hague Convention as models to harmonize rules on contracts within the region¹⁴⁵.

CIDIP IV (Montevideo, 9-15 July 1989), approved certain "Bases" or basic guidelines for the drafting of an Inter-American convention on the law applicable to contracts. These "Bases" determined that the starting point of the future convention should be the acceptance of autonomy. All the delegates -including those of Brazil and Uruguay- agreed that an Inter-American convention would be the appropriate instrument to consolidate the principle within the region¹⁴⁶.

Subsequently, a questionnaire was sent to OAS countries to inquire about their conflict rules on contracts. The answers reflected that they were divided between those that accepted autonomy -Argentina, Canada, Chile (restrictedly), Honduras, Mexico, United States of America and Venezuela- and those denying it -Brazil, Colombia, Costa Rica and Uruguay¹⁴⁷.

OAS then asked the CJI to prepare a preliminary draft of a convention. This Draft considered the "Bases" approved in CIDIP IV and the contents of the Rome Convention, the Hague Convention and the Vienna Convention¹⁴⁸. In presenting the Draft, the CJI insisted on the need for updating the Latin American conflict rules to foster international trade and commercial integration¹⁴⁹.

This Draft was corrected by a group of experts in Tucson, Arizona, in November 1993^[150]. The Tucson Draft was presented to CIDIP V and revised by a special committee¹⁵¹. The Convention was then approved, with slight corrections, by the delegates in Plenary Session of 17-m-1994 and became the first Inter American Convention where party autonomy is expressly accepted.

Hence, the Convention states that "the contract shall be governed by the law chosen by the parties"¹⁵². This law is only limited by the public policy and the mandatory rules of the forum and, discretionally, by the mandatory rules of another State connected to the contract¹⁵³. Besides, the Convention seems to accept choices of the lex mercatoria by the parties, and thus, grants them greater freedom than its models¹⁵⁴.

It appears from the drafting process of the Convention that consolidation of autonomy within Latin America seemed paramount to OAS' member States to develop regional integration and foster international trade. It was evident from the "Bases" approved in CIDIP IV that the Convention was to be drafted to achieve this purpose¹⁵⁵. The importance of the adoption of autonomy in Latin America was confirmed in all the stages of the drafting of the Mexico Convention. Further, this conviction was shared even by those countries that do not accept autonomy in their domestic conflict provisions, such as Brazil and Uruguay, which participated actively in the debate and were amongst the few signatories of the Convention¹⁵⁶. It was never contested either that an international convention was the appropriate tool to achieve this consolidation. Paradoxically, this consensus has led to only two ratifications of the Convention and it is doubtful that more countries are to ratify it in the future¹⁵⁷. A cji's survey on the reasons for this lack of ratifications, cited, amongst others: a) that its acceptance of party autonomy meant, in 1994, a radical shift from the traditional conflict laws of some Latin American countries; b) that its reference to the lex mercatoria was too broad and unclear; and c) that there was no political will to enact it, due to the lack of awareness of its potential benefits¹⁵⁸. Other authors point to deficiencies in its text and its need to be supplemented with adequate domestic conflict rules, currently inexistent in some Latin American jurisdictions¹⁵⁹.

This Convention, however, has been important. It has revived the discussion on the acceptance of autonomy in Latin America, which had receded since 1940^[160]. Besides, it has had a positive influence on the acceptance of autonomy in some countries. It has inspired the Venezuelan Private International Law Act (1998)¹⁶¹, the Dominican Republic Private International Law Act (2014), the Paraguayan Law 5393 on the Law Applicable to International Contracts (2015), the OHADAC Draft-Model Law on Private International Law (2014)¹⁶² and some draft bills in Brazil¹⁶³ and Uruguay¹⁶⁴. It has also reflected an OAS official policy towards promoting the consolidation of autonomy within its member States¹⁶⁵. Thus, the importance of the Convention consists in having been used as a model for drafting domestic conflict rules on contracts, rather than in its actual implementation within Latin America. Considering this, the CJI Guide on the Law Applicable to International Commercial Contracts in the Americas, 2019; recommends all OAS' countries to incorporate the Convention's rules in their domestic conflict rules, but considering the subsequent developments contained in the Hague Principles on Choice of Law, 2015 and other international instruments¹⁶⁶.

IV. The statutory acceptance of party autonomy in the Latin American domestic conflict rules on contracts

The statutory acceptance of autonomy in the Latin American domestic conflict rules on contracts has been gradual, recent and limited to certain countries. It is interesting to highlight, however, that this progressive acceptance has not been an isolated process in these countries. It has been fostered by a shift of paradigm in Latin American conflict laws. This new paradigm considers that the parties are the principal actors in conflict of laws on contracts; and that their will and needs are to be taken into consideration because they are, somehow, more important than the jurisdiction or policies of the State¹⁶⁷. Thus, it comprises a reduction of the role of the State in determining the governing law of international contracts and a recognition of a major role of the parties in this issue. It is a shift from a State-sovereigntist perspective to a party-centred perspective in the conflict laws on contracts¹⁶⁸. This shift has been expressed by the enactment of new domestic conflict laws in some Latin American countries, the drafting of the Mexico Convention, the lobby of OAS and that of national legal practitioners and scholars.

The idea, so strongly expressed in the discussions of the Montevideo Treaties, that party autonomy is alien to private international law, has been superseded by the conception that autonomy is central to the foundations of this law. It has remained clear, however, that the State is still free to limit autonomy through mandatory provisions or the protection of public policy. Thus, that ultimately, the extent of autonomy is in the State's hands. Authorizing autonomy does not reduce the sovereignty of the State, because it is the State who allows the parties to choose the applicable law and sets the conditions for their choice¹⁶⁹. Under this doctrine, some Latin American jurisdictions have managed to reconcile territorialism and contractual freedom in their conflict rules.

In fact, territorialism and contractual freedom might collide with each other when applied to conflicts law. Territorialism might restrict contractual freedom in international contracts if too strictly sanctioned. This happens when a legal system forbids autonomy and mandatorily submits the contract to the State's conflict or substantive rules. Territorialism, however, might be less strictly sanctioned in order to permit a broader contractual freedom. This happens when a legal system adopts party autonomy as a domestic conflict rule that authorizes the parties to choose the governing law of an international contract. Both options are possible, but only the second reconciles territorialism and contractual freedom to a reasonable extent. This second option has been adopted by the Latin American jurisdictions that have ac cepted autonomy in their laws. They have preserved the prerogative of the State as lawmaker but, at the same time, have broaden the contractual freedom of the parties.

The statutory acceptance of autonomy in Latin America began during the decade of the 80's, when the priority of of the principle of territoriality of laws started to fade and to be progressively replaced by the priority of the principle of contractual freedom in some jurisdictions. This phenomenon occurred in parallel with the consolidation of autonomy in Europe through the signing and enactment of the Rome Convention and the discussions of the Hague Convention.

Peru was the first Latin American country to accept autonomy in wide terms in its new Civil Code of 1984¹⁷⁰. The enactment of this Code changed the Peruvian legal tradition on autonomy. In fact, the first Peruvian Civil Code of 1852 allowed a restricted party autonomy permitting the parties to choose Peruvian law in contracts made abroad but prohibited other choices of law¹⁷¹. The second Civil Code of 1936 made no reference to party autonomy and authors mostly concluded that it prohibited autonomy, even when the chosen law was that of Peru¹⁷². This prohibition ended with the Code of 1984¹⁷³, which draw inspiration from European sources and the Venezuelan Draft-bill of Private International Rules of 1965^[174].

The second country to statutorily accept autonomy in international contracts was Cuba in its first Civil Code of 1987, under the influence of some European Civil Codes and the preliminary draft of the Peruvian Civil Code of 1984^[175].

Mexico accepted autonomy next by amending the Civil Code for the Federal District in January 1988^[176]. The previous texts of this Code, of 1870 and 1884, provided that contracts made abroad were governed by Mexican law, if performed in Mexico. Exceptionally, they granted some autonomy to foreign parties to choose the law to govern the validity of a contract made abroad concerning movables¹⁷⁷. An attempt to introduce wider autonomy was made in a Bill of 1928, but the Code enacted that year opted for a stronger territorialism by submitting the effects of all contracts to be performed in Mexico to Mexican law¹⁷⁸. Legal practice, however, begun to include choice of law clauses in international commercial contracts arguing that these clauses were valid under the provisions of the Commercial Code¹⁷⁹. Authors and legal practitioners fostered a new amendment to this Code in 1988¹⁸⁰. This amended Code abandoned territorialism and allowed party autonomy¹⁸¹. It also permitted the ratification of the Mexico Convention in 1996. In the year 2000, this Code became the Federal Civil Code and a partially amended Civil Code for the Federal District came into force. Both Codes contain similar provisions authorizing autonomy¹⁸².

Guatemala accepted autonomy the following year in the Judicial Body Act, Decree n° 2-1989^[183].

Subsequently, Venezuela ratified the Mexico Convention in 1995^[184] and enacted the 1998 Private International Law Act to update the Venezuelan conflict provisions¹⁸⁵.The Act accepted autonomy in similar terms to those of the Convention¹⁸⁶. However, autonomy was accepted in Venezuela prior to these enactments in case law, legal practice and doctrine but without a sole and clear legal basis¹⁸⁷.

Sixteen years later, in 2014, Panama, Dominican Republic and Argentina authorized autonomy in their laws, under the influence of the Mexico Convention and the Rome I Regulation. The Panamanian Code of Private International Law¹⁸⁸ authorized autonomy demanding a connection of the chosen law with the contract and prohibiting autonomy in certain contracts¹⁸⁹. The Dominican Republic Private International Law Act¹⁹⁰ authorized the choice of any law to govern the contract and regulated autonomy with more detailed rules than the previous Latin American laws¹⁹¹.

The Argentinian Civil and Commercial Code of 2014¹⁹² confirmed the authorization of autonomy in Argentina¹⁹³. Before, rather than by statutory provisions, autonomy was validated there by a customary practice, which was accepted by case law¹⁹⁴.

Paraguayan law embraced autonomy in 2015 by the enactment of Law N° 5393 on the Law Applicable to International Contracts¹⁹⁵, modelled on the Hague Principles on Choice of Law in International Commercial Contracts, 2015. Thus, it became the first country in the world to enact these Principles as statutory law and to extend their scope of application to civil international contracts¹⁹⁶.

In 2014, the Organization for Business Law in the Caribbean, OHADAC, prepared a Draft-Model Law on Private International Law that accepts autonomy and might be adopted by some Caribbean country¹⁹⁷. Recently, the cji's Guide on the Law Applicable to International Commercial Contracts in the Americas, 2019, has strongly encouraged the remaining Latin American legislators to adopt autonomy in their domestic conflict rules on contracts to harmonize laws within the region¹⁹⁸.

As seen, the enactment of statutes authorizing autonomy in Latin America began thirty years ago but it is still an ongoing process. The debate on adopting autonomy in Latin American jurisdictions, which began in Montevideo 130 years ago, has not been completely settled and the reasons that prevented its adoption in 1889 and 1940 still weigh much in some jurisdictions.

Some of these jurisdictions have prepared draft bills authorizing autonomy but they have faced an active or passive resistance to their enactment by Parliament, who has delayed substantially their discussion or shelved them; this is the case in Brazil and Uruguay¹⁹⁹. Brazilian Parliament seems reluctant to depart from the provisions of the Brazilian Introductory Law of the Civil Code, 1942 and Uruguayan Parliament from those of the Appendix of the Civil Code inspired on the Montevideo Treaties of 1940 that reject autonomy²⁰⁰. Other jurisdictions, as Chile, Colombia and Ecuador, remain faithful to the provisions of their old Civil Codes, which render priority to the application of their territorial law to international contracts made or performed in the country²⁰¹. In all these jurisdictions national legislators seem not fully convinced on the convenience of embracing autonomy.

However, the general acceptance of autonomy worldwide and the spread customary practice of including choice of law clauses in international contracts, is pressing national legislators to amend their conflict provisions to validate these clauses. The lobby of legal practitioners and national authors and some incipient case law, in conjunction with the authorization of autonomy in national arbitration laws and international instruments of hard and soft law; might convince lawmakers of abandoning legal territorialism in favour of the principle of contractual freedom guaranteed by autonomy²⁰². This has happened in the Latin American jurisdictions that have statutorily authorized autonomy. These jurisdictions have understood that party autonomy is not alien to their legal systems since the parties' contractual freedom has always been protected by their rules on contracts. Authorizing autonomy has not been a drastic change in their legal tradition but has been a further development of the power given to the contracting parties by their national laws.

Besides, and most important, these jurisdictions have understood that arguing that party autonomy might prevent the enforcement of their national laws is an anachronism nowadays. Latin American countries are no longer in need of building up and protecting national sovereignty by securing the application of their territorial law; as they were in the early days after their independence, when their first Civil Codes were enacted. Territorialism was considered useful then to preserve the existence of Latin American countries as independent States but seems archaic in today's global world where economic and commercial integration are paramount²⁰³ Hence, preserving territorialism should no longer prevent Latin American countries from amending their conflict laws on contracts to accept autonomy.

The adoption of autonomy should not be a difficult challenge for Latin American courts. The judiciary in some countries, as Brazil and Uruguay, have a longstanding experience in applying foreign law to contracts. In others, less used to apply this law, as Colombia, Chile or Ecuador, the good quality of the legal profession and the internationalization of law firms will make it perfectly feasible.

Moreover, to circumvent the mistrust on autonomy based on its potential ability to attempt against national fundamental values; it should be remarked that the exercise of autonomy will never preclude the protection of these values. Any chosen law attempting against them can always, and in any forum, be departed from by reason of public policy.

The rationale that allowing autonomy endangers the jurisdiction of national courts, should be also disregarded. Nowadays, choices of law and choices of forum, though somehow related, are independent issues governed by different conflict rules²⁰⁴. Hence, allowing autonomy does not mean, by itself, allowing the parties to evade the jurisdiction of national courts, especially, in those cases where they have exclusive jurisdiction.

In sum, the amendments of national laws to authorize autonomy in the remaining Latin America jurisdictions should be presented as a necessary proposal for sound law reform that will solve the problems and deficiencies of the old laws in force²⁰⁵. But, at the same time, will preserve and enhance the principle of contractual freedom that has historically inspired them, while leaving untouched national jurisdiction.