The lex rei sitae rule

Since the time modern society existed and because that it is shaped upon a state-centric model, there has been a need to find a rule to settle disputes, or, even better, to avoid them in situations where multiple States claim jurisdiction on the same “matter”. The concepts of jurisdiction, sovereignty and territory are closely interconnected and they are the main grounds for defining competences between States and relations between legal orders. In order to delimitate the competences between States, the idea of territory plays a crucial role. From this point of view, territory and sovereignty are the two faces of the same coin. The emphasis on territoriality is a reflection of the persistent Westphalian bent of the international legal order: a system of territorially delimited nation- States that have full and exclusive sovereignty over their own territory, and no sovereignty over other States’ territory. The outcomes of such delimitation of powers are a clear affirmation of the unrivalled primacy of the State’s law within its territory and a set of negative obligations in the field of international relations that aim to grant a peaceful co-existence between States. Following the Westphalian system, the State’s sovereignty is not limited to the territorial dimension of the statehood but extends over all the individuals and other things within the territory . 

In private international law, the lex rei sitae rule comes into consideration when two or more different legal systems come into contact with each other and become relevant to understand which legal system should apply to one specific case. When a situation of conflit mobile arises in the field of property law, the lex rei sitae rule constitutes a connecting factor with the applicable legal system, stating that is applicable the law in which the thing is located and, in this sense, could be seen as a rule that facilitates trade by connecting an object to the place where it has its physical and economic ties. The strict connection between the lex rei sitae rule and rules of national property law is due to the strong perception of property law as a purely national law and its strong relation to public policy. The rules of property law, as well as the lex rei sitae rule, are therefore a manifestation of a nationalist design principle and, pursuing this direction, the traditional way to deal with foreign rules is to favour the own national rules over those of a foreign country. The “non-traditional” way to deal with foreign rules, even if it is not part of leading private international law theories, has been deeply discussed by private international lawyers and is known as the droit acquis doctrine or the vested rights doctrine. The droit acquis doctrine moves from the assumption that rights, even if foreign, must be recognised on the basis that they have been lawfully come into existence under the law of another country; from a property law point of view this means that property rights are recognised based on the fact that they have been acquired or created under a foreign legal system and then subsequently applied in the host legal order.