Characterization and its Theories

• Meaning of Characterization
• Difficulties of Characterization
• Theories of Characterization
 Meaning of Characterization

• Characterization refers to the practice of placing

a fact based situation before the adjudicating
authority (Court) in the proper legal category to
determine the applicable legal rules. It is also
known as Categorization.
• Characterization offers the relevant guidance for
choosing the correct law when numerous
possibly applicable laws might give a different
result.
 Need for Characterization
• The need for characterisation arises because different
legal systems might categorise the same factual
situation differently, leading to different legal
outcomes.
• For example, one legal system might classify a matter
as a tort (which might involve one set of laws) while
another might see it as a contractual issue (involving a
different set of laws).
• The process of characterisation ensures that the court
identifies the correct category before deciding which
law to apply.
 Example
• A couple gets married in one country but is
domiciled in another. If a dispute arises about
the validity of their marriage, a court would
need to characterize the legal issue as a
matter of marriage formalities, which might
be governed by the law of the place where the
marriage was celebrated, or by the law of the
couple's domicile.
 Significance of Characterization
• Characterisation plays a critical role in PIL by
providing the framework for courts to categorise the
issues at hand and then apply the appropriate legal
rules.
• Without proper characterisation, courts might apply
the wrong legal principles, leading to inconsistent or
unjust outcomes.
• The characterisation process ensures that the courts
not only respect the different legal systems involved
but also maintain the coherence and consistency of
the law.
 Difficulties of Characterization
• Sometimes it might become difficult to determine
whether a dispute falls within a particular category
or another. For ex: Tort Law or Contract Law.
• The municipal law and the foreign law might be
having different views on the correct
characterization.
• For ex: the validity of a Will made before re-
marriage by a widow may be regarded by one law
as a matrimonial matter, but by another law as a
testamentary matter.
 Difficulties of Characterization
• Different legal systems might give different
meanings to the same legal term.
• For ex: the meaning of Domicile differs in
Common Law countries and Civil Law countries.
Civil Law countries prefer to apply the Law of
Nationality or habitual residence.
• Different legal systems might have ideas and
concepts completely unknown to each other. For
ex: the English concept of Trust has no parallel in
Civil Law countries.
 Parties to a Trust

• Settlor
• Trustee
• Beneficiary
 Theories of Characterization
• The Lex Fori Theory
• The Lex Causae Theory
• The Two-Fold Characterization Theory
(Dual Theory of Lex Fori and Lex Causae)
• The Universal Analytical Theory
• The Comparative Law Theory
• The Autonomous Theory
 The Lex Fori Theory

• Propounded in 1891 by German jurist Franz

Kahn.
• The Lex Fori theory is one of the earliest and
most widely adopted approaches to
characterisation.
• This theory suggests that the court should
categorise an issue according to the domestic law
of the forum (the law of the country where the
court is situated).
 Applicability
• According to this theory, the characterisation
process is governed by the domestic law of the
forum.
• If the municipal court determines that a
particular issue falls within a certain category
under its own laws, it will then apply:
• The corresponding legal rules from the
domestic law; or
• International Principles that align with the
domestic law.
 Exceptions
• The Lex Fori theory recognises certain exceptions
where specific laws must be applied instead of the
domestic laws. These exceptions include:
• Lex Situs: The law governing both movable and
immovable property, which typically follows the
law of the location of the property.
• Lex Loci Contractus: The law governing the
formation and validity of contracts, especially
those made via correspondence, which is often
determined by the place where the contract was
made.
 Question

• What do you understand by the term

“Forum Shopping”?
 Criticism
• One of the criticisms of this theory is that it
may lead to forum shopping, where parties
choose to bring their case in a jurisdiction
whose laws are more favorable to their
position.
• Additionally, it may result in the application of
laws that are not closely connected to the
underlying dispute, leading to potentially
unjust outcomes.
 The Lex Causae Theory

• Proposed by Despagnet and Martin Wolff.

• This theory argues that the law which
ultimately governs the issue should also
determine its characterisation.
• For ex: if the court decides that French law
should apply to a case, then the issue should
be categorised according to French legal
concepts.
 Applicability
• Under this theory, the court first identifies the
potentially applicable legal systems and then
uses the categorisation rules of those systems
to classify the issues.
• This means that the characterisation process
might vary depending on which law is
ultimately applied.
 Criticism
• This theory has been criticised for creating a
circular problem. If characterisation is needed
to determine which law applies, how can the
court use that same law to perform the
characterisation?
• Critics argue that this approach might
complicate the process and lead to
uncertainty in legal proceedings.
 The Two-Fold Characterization Theory
(Dual Theory of Lex Fori and Lex Causae)
• This theory attempts to reconcile the Lex Fori and Lex
Causae theories by dividing the characterisation process
into two stages, i.e.
• Primary Characterisation; and
• Secondary Characterisation.
• In the first stage, the court uses its own domestic law
(Lex Fori) to make a preliminary classification of the
issue.
• Once the court has determined the applicable law, it
uses the legal concepts of that law (Lex Causae) for a
more detailed characterisation.
 Applicability
• This dual approach allows the court to begin
with familiar legal categories and then refine
the characterisation using the concepts of the
applicable foreign law.
• This method is particularly useful in complex
cases involving multiple legal systems.
• The Two-Fold Characterisation theory provides
a structured approach that balances the use of
domestic and foreign legal concepts.
 Criticism
• The difficulty in distinguishing between
primary and secondary characterisation can
lead to confusion and inconsistency in its
application.
 The Universal Analytical Theory

• Propounded by Rabel and Eric Beckett.

• This theory proceeds to classify all legal
elements on the basis of general comparative
and analytical jurisprudence.
• It attempts to find in all modern legal systems
certain common factors which could apply as
universal principles of classification.
 Applicability
• This theory might result in the application of
neither the Law Fori, nor the Lex Causae, but
of a law which is neither of the two.
 Criticism
• In practice, it is almost impossible to find
common principles throughout the whole field
of modern legal system.
 The Comparative Law Theory

• Propounded by Rabel and Eric Beckett.

• This theory suggests that characterisation
should be based on a comparative analysis of
different legal systems and grounded in
analytical jurisprudence.
• By comparing different legal systems, courts
can identify the most appropriate legal
category for the issue at hand.
 Applicability
• This approach requires courts to conduct a
comparative analysis of relevant legal systems
and use principles of analytical jurisprudence
to determine the correct characterisation.
• It emphasises the need for a broader
understanding of international legal principles.
 Criticism
• This theory demands a high level of expertise
in comparative law and is complex to apply in
practice.
• It requires courts to go beyond their domestic
legal concepts and engage in a deeper analysis
of foreign legal systems.
 The Autonomous Theory

• Propounded by Wolff.
• According to this theory, each legal norm
should be categorised independently
according to its own legal system, rather than
being influenced by the categorisation rules of
the forum (Lex Fori) or any other legal system.
• The theory emphasises the importance of
respecting the autonomy of foreign legal
systems.
 Application
• Under this theory, when an English Court is
faced with a foreign legal norm, it should
consider the entire foreign legal system before
classifying the norm.
• This theory promotes respect for the diversity
of legal systems and prevents the imposition
of one system’s legal concepts onto another.
• It can lead to more accurate and culturally
sensitive legal outcomes.
 Criticism
• The practical application of this theory can be
challenging, as it requires courts to have a
deep understanding of foreign legal systems.
• Moreover, the theory’s reliance on the
autonomy of foreign laws may be limited by
the public policy and morality of the forum
State’s law (Lex Fori), which can override
foreign norms.