The new articles 1171 and 1170 of the French civil code entitle the judge and the arbitrator to « cut » the contract containing abusive clauses or circumventing essential obligations, the sanction being in both cases the one of « non-existing clauses ».
Swiss law does not know as such the expression or the concept of « non-existing clause » limiting itself in that regard to the determining of the nullity, partial or total (the latter never being presumed) of the contract for defects related to its subject matter or affecting the consent.
On the comparative law level, the penalty clause and the liquidated damage clause constitute characteristic and largerly spread out illustrations of the judge or the arbitrator’s power to « amputate the contract », precisely to modify its contents or to revisit its application, the rule being however for the international arbitrator to refer to the national law or to the general principles applicable to the contract.
Revue de l’arbitrage