The 1985 European Communities Directive on Product Liability1 aims to harmonise member State product liability rules and to improve the level of protection of victims by basing the liability of producers for physical injury and damage to personal goods on the proof that the victim's damage was caused by a defect in the product supplied. On 19 May 1998, ten years after the deadline for transposition, France finally enacted legislation incorporating the Directive into national law.2 The Directive was incorporated into English law by Part I of the Consumer Protection Act 1987.

Article 9 of the Treaty of Rome, as amended by the 1992 Treaty on European Union (the Maastricht Treaty), declares that the European Community “shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect”.1 The principle was thereby established of the free movement of goods within the European Community. The Treaty does not define “goods” for the purposes of the Articles (9 to 37) which make up the Title dealing with “Free Movement of Goods”, but the European Court of Justice has held that “goods” means “products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions”. From this it is clear that works of art are included in the “goods” that are intended to circulate freely within the Community.

The UNIDROIT Principles of International Commercial Contracts have appeared in a small but steady trickle of investment treaty arbitrations over the last decade. This article considers the use of the Principles by investment tribunals on questions of both domestic law and international law. It suggests that reference to the Principles can play an important legitimating role on questions of domestic law, but that this should not replace reference to the applicable law. On questions of international law, reference to the Principles may be justified by resort to the general principles of law. However, the article contends that there is only a limited role for the UNIDROIT Principles where the primary and secondary rules of investment protection are already found in treaties and custom. In addition, while general principles have historically been drawn from domestic private law, there is increasing recognition that general principles of public law are more relevant to investment arbitration. Given this, arbitrators resolving questions of international law must be cautious in references to the UNIDROIT Principles, a quintessentially private law instrument.

The Orthodox position on the legal effect of treaties in English law is easy to state. Treaties are entered into by the Executive acting under prerogative powers. The exercise of these powers is not, even in the post-GCHQ2 dispensation, a matter within the jurisdiction of the courts, so that the desirability of entering into a treaty cannot be challenged in the courts.3 However, since any prerogative power must be exercised campatibly with legislation, if there is an extant statutory restriction upon making a particular treaty or providing a particular procedure as a condition upon which the prerogative power may be exercised, then compliance with the statutory provisions is a matter for the courts.4