Imagine this: you conclude an international contract, select Dutch law as the governing law – clear, predictable, familiar. Somewhere in the agreement, however, a clause also refers to U.S. regulations, a transport regime, or a foreign legal rule. To you, it feels like a practical detail: the relevant part of the deal follows the rules of the country it relates to. Simple.
But what if that single sentence means that an entirely different liability system applies than the one you thought you agreed to?
What if you can no longer rely on Dutch protective rules?
What if you unknowingly accept a position similar to the shipper in a multi-million liability case?
This scenario is not theoretical. On 7 November 2025, the Dutch Supreme Court held in Airgas/UAL that a partial choice of law – even one referring to only one specific foreign statute – is fully binding, and takes precedence over the otherwise chosen national law.
For companies active across borders, this is a decision you should not ignore.
The case in practical terms
A U.S. shipper transported hazardous goods from Houston to Angola. The bill of lading contained a familiar combination:
- Dutch law as the general governing law,
- but for shipments from/to U.S. ports, US COGSA, the American Carriage of Goods by Sea Act, would apply.
An explosion occurred during discharge operations. The central question soon became:
How far does a partial choice of law reach? Can a contract effectively “insert” a foreign law, even if it conflicts with the chosen national law?
The Court of Appeal said yes.
The Supreme Court confirmed it.
What does the ruling mean?
The Court clarified that:
- a partial choice of law is fully valid,
- even if it concerns only one foreign statute,
- and the foreign regime prevails over the remaining governing law.
As a result, what looked like a practical reference in the bill of lading activated a complete U.S. liability regime, leaving Dutch law with only supplementary effect. Dutch rules that might have led to a different outcome simply could not be invoked.
In plain terms:
one short clause determined the entire liability framework.
Why this matters to your business
If your company contracts internationally, chances are your agreements already contain partial choices of law — sometimes explicitly, sometimes hidden in boilerplate language. You will likely recognise these:
- “The CMR rules apply to transport obligations.”
- “Technical requirements follow FAA regulations.”
- “English law governs quality specifications.”
- “The applicable U.S. safety regulations are incorporated herein.”
These phrases often seem harmless. But the Supreme Court ruling shows how quickly such references can expand into a mandatory application of a foreign liability system. With no warning. And often without full understanding at the negotiation stage.
This can radically change:
- who is liable,
- what defences you have,
- what damages regimes apply,
- and which party ultimately bears the financial risk.
The real danger lies in what you don’t see
Most businesses do not assess the legal meaning of these clauses until a dispute arises. By then, the text is binding and the consequences can be severe.
The Supreme Court’s message is unmistakable:
A single partial choice of law can determine your entire risk profile.
And once you are locked into that system, you may find yourself facing liabilities you never intended to accept — especially against foreign counterparties with strong negotiating leverage.
What you should do when drafting international contracts
If your contracts contain references to foreign legislation, technical standards or transport regimes, you must understand:
- exactly which foreign rules you have activated,
- how they interact with the main governing law,
- whether you lose protections under Dutch law,
- and whether your risk exposure changes significantly.
This should not be checked only after something goes wrong. At that point, it is too late.
Prevention is far more cost-effective than litigation
This Supreme Court judgment is more than a legal nuance.
It is a warning:
Know what you choose.
Know what you reference.
Know what binds you.
If you want to ensure that your partial choice of law works in your favour — not against you — it is important to have your international agreements reviewed by specialists.
ACG International assists companies in drafting, reviewing and negotiating international contracts. If your agreement contains any foreign legal reference, statute or regime, this is the moment to verify what it truly means.
Avoid surprises. Feel free to contact us.
