JOINT RESPONSE
TO THE GREEN PAPER
ON THE CONVERSION OF THE ROME CONVENTION OF
1980 ON THE LAW APPLICABLE TO CONTRACTUAL
OBLIGATIONS INTO A COMMUNITY INSTRUMENT AND
ITS MODERNISATION
COM ( 2002) 654 final
BY
ULRICH MAGNUS
Prof. Dr. iur., Professor for private law, private international law and comparative law at the
University of Hamburg; Judge of Appeal at the Hanseatisches Oberlandesgericht Hamburg
AND
PETER MANKOWSKI
Prof. Dr. iur., Professor for private law, private international law and comparative law
at the University of Hamburg
Executive Summary
Answers in order of questions
Question 1: The main contents of the Rome Convention are sufficiently if not widely known
amongst practitioners.
Question 2: The Rome Convention should be converted into a Community instrument,
namely a Regulation.
Question 3: The conflicts rules of a Rome I Regulation should be omnilateral rules. There
should not be two differing sets of conflicts rules for intra-Community and other cases.
Question 4: There should be an extra Article placed between Art. 6 and Art. 7 which protects
the Community minimum standard against derogation by applying the law of a non-Member
State if there is a sufficiently close connection (defined as in Art. 5) with the EU, and thus
integrates the specific conflicts rules now to be found in Directives.
Question 5: In order to keep the uniformity of the entire regime, a cautious approach towards
allowing the ratification of other Conventions is recommended.
Question 6: It seems advisable that the Rome I Regulation should cover arbitration and jurisdiction agreements and determine the law applicable to them as far as this question is not
regulated by other, more specific instruments.
Question 7: Insurance contracts should be subjected to the general instrument and the general
rules. The specific regime for insurance contracts implemented by the Insurance Directives
should be abolished.
Question 8: A conflictual choice of non-national rules (like the UNIDROIT or the European
Principles of Contract Law) should not be admitted, nor a conflictual choice of uniform law
outside its own scope of application. A materiellrechtliche Verweisung as it has ever been
possible nicely does the job required and is entirely sufficient. A lex mercatoria does not exist
and can thus not be a proper object of a choice of law or of a materiellrechtliche Verweisung.
Question 9: Generally, Art. 3 (1) 2 Rome Convention should be retained as it stands. There is
no pressing need for legislative action in this regard. It would be unwise to mention some examples for possible indications as to a choice of law expressly. The only sensible amendment
could be to impose a duty upon courts to ask the parties whether they intend to choose the lex
fori insofar as parties argue exclusively on the ground of the lex fori.
Question 10: Art. 4 Rome I Regulation should (1) drop Art. 4 (1) 1 Rome Convention; (2)
establish Art. 4 (2) 2 Rome Convention as the first and basic rule already in the wording putting it ahead of any other rule; (3) attempt to reformulate Art. 4 (5) Rome Convention so as to
make it unambiguously clear that the escape clause is an exception, e.g. by adding the word
“substantially” or “essentially” to the “closer connections”; (4) not retain Art. 4 (4) Rome
Convention.
Question 11: Art. 4 Rome I Regulation should not contain a special rule for short term holiday leasing agreements.
ii
Question 12: Art. 5 Rome I Regulation should closely follow Art. 15 Brussels I Regulation.
This comprises (1) extending it to all kinds of contracts, (2) disregarding where the consumer
expressed his contractual consent, and (3) adopting the approach taken by Art. 15 (1) lit. c
Brussels I Regulation.
Referring to the possibilities mentioned in the Green Paper this is a clear vote for option vi).
In fact, option ii) is not that different.
Question 13: It is strongly recommended to coin the mandatory provisions envisaged in Art.
3 (3) “internally mandatory”. Art. 5 (1) and Art. 6 (1) could also benefit from a like denomination though it would be even better to insert “protective” in order to stress that an additional
element is required.
Question 14: An attempt to define temporary posting as opposed to permanent posting bears
more dangers than advantages. Therefore, the Community legislator should refrain from such
an attempt.
A new para. (3) should be introduced into Art. 6 reading: “In cases of temporary employment
in another Member State than the State where the employee habitually works, the minimum
working conditions of that other country have to be given recognition.”
Question 15: There should be specific rules dealing with seamen, sailors and flying personnel, but not with cross-border home-working.
Art. 6 (2) (b) should be amended in the following way: “the place of business through which
he (the employee) was engaged and at which his employment relationship is administered”.
The wording of the finishing escape clause of Art. 6 (2) in fine should be amended into “is
essentially more closely connected”.
Question 16: Art. 7 Rome Convention should be maintained, but arranged in reverse order of
the paragraphs. It is strongly recommended to coin the mandatory provisions envisaged in
Art. 7 “internationally mandatory”. A definition to which provisions such an internationally
mandatory character should be attributed, would be very helpful and could run along the lines
as set out in Arblade.
Question 17: The conflict rule on form should be retained in its present shape. There is no
need for legislative action in this area.
Question 18: The property aspects of assignments should be subjected to the law of the assignor’s seat or principal place of business. An additional third paragraph to this aim ought to
be added to Art. 12.
Question 19: Other legislative changes as to Art. 12 or 13 are not advisable. Redress after
voluntary payment on a third party’s debt ought to be provided for by the Rome II Regulation.
Question 20: The substantive conditions of set-off should be subjected to the law of the passive claim (i.e. the obligation that is intended to be extinguished).
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Contents
1. General questions of European international contract law
1. 1. The general approach towards future European international contract law
1.2. Widespread knowledge of the Rome Convention (Question 1)?
1.3. Rome I as a Community instrument (Question 2)?
1.4. Relationship between a Rome I Regulation and international Conventions
(Question 5)
1.5. Conclusion
2. Integration of conflicts rules originally contained in specific directives and
Community minimum standard (Questions 3 and 4)
2.1. Special conflicts rules in Directives as an irritation
2.2. Re-integration in the fundamental instrument
2.3. Going a step beyond the lex scripta
2.4. Systematic order and implications
2.5. Further elements of the proposed conflicts rule
2.6. Conclusion
1
1
1
2
4
5
5
5
7
7
8
9
10
3. Scope of application
3.1. Inclusion or exclusion of arbitration and choice of forum clauses in a future
EU instrument (Question 6)
3.2. Specific Provisions for International Insurance Contracts (Question 7)?
3.3. Conclusion
10
11
12
4. Contractual choice of law (Questions 8 and 9)
4.1. No choice of non-national “law”
4.1.1. No need for allowing a conflictual choice of UNIDROIT or Lando Principles
4.1.2. No choice of “general principles” or “common principles”
4.1.3. No choice of an alleged lex mercatoria
4.1.4. Choosing international conventions (e.g. CISG)
4.1.5. Choosing a future European instrument
4.2. Tacit or implicit choice of law (Question 9)
4.2.1. Neither need nor better alternative for a general reformulation
4.2.2. Tightening the strings against an assumed choice of law
4.3. Conclusion
12
13
13
15
15
16
16
17
17
18
18
5. Connecting factors in lack of a contractual choice of law (Questions 10 and 11)
5.1. Strengthening the rule: putting the principle of characteristic performance first
5.2. The escape clause
5.3. Holiday leasing agreements (Question 11)
5.4. Striking out Art. 4 (4) Rome Convention
5.5. Conclusion
19
19
19
21
22
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10
6. Consumer contracts (Question 12)
6.1. The jungle of possibilities
6.2. The sound solution: copying Art. 15 Brussels I Regulation
6.3. Proposed alterations
6.3.1. Extending Art. 5 to all kinds of contracts
6.3.2. Disregarding where the consumer expressed his consent
6.3.3. Reformulating the necessary link to the consumer’s State along
the same lines as in Art. 15 (1) lit. c Brussels I Regulation
6.4. Conclusion
26
27
7. International Employment Contracts (Questions 14 and 15)
7.1. Temporary posting of employees
7.2. Employment contracts with sailors, seamen and flying personnel
7.3. Cross-border home-working
7.4. Further issues concerning Art. 6 (2) (b)
7.5. The escape clause
7.6. Conclusion
27
28
29
29
30
30
30
8. Mandatory Provisions (Questions 13 and 16)
8.1. General considerations
8.2. Internally or general mandatory provisions
8.3. Protective mandatory provisions
8.4. Internationally mandatory provisions
8.4.1. Internationally mandatory provisions of the forum (Art. 7(2))
8.4.2. Internationally mandatory provisions of third countries (Art. 7 (1))
8.5. Mandatory provisions with respect to form requirements (Art. 9 (6))
8.6. Conclusion
31
31
32
32
33
33
34
35
35
9. Formal requirements (Question 17)
9.1. E-commerce as a real threat?
9.2. Adding the habitual residence as a third branch?
9.3. Conclusion
35
36
36
36
10. Assignment and subrogation (Questions 18 and 19)
10.1. Assignment
10.1.1. Assignment and the conflict of conflicts
10.1.2 Assignment and uniform law
10.1.3. Applying the law of the assignor’s seat or principal place of business
10.2. Subrogation
10.3. Redress after voluntary payments on a third party’s debt without an obligation
10.4. Conclusion
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37
37
38
39
39
40
40
11. International set-off (Question 20)
11.1. Outlines
11.2. Solution
11.3. Conclusion
40
40
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12. Concluding remarks
41
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23
24
25
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1. General questions of European international contract law
1. 1. The general approach towards future European international contract law
European international contract law faces a specific dilemma: the general task of private international law and of international contract law as well is to determine which one of two or
more different national laws governs a case with relations to more than one legal system. Private international law therefore presupposes territories with different law. Europe on the other
hand is becoming more and more an area of uniform law. Is it therefore still necessary to have
conflicts rules for whatever transborder relations within the EU?
The Community reacted to the increasing harmonisation of substantive law within the EU by
creating a kind of specific EU conflicts law.1 Its characteristic is a unilateral system of quasiinterlocal conflicts rules: provisions in EU directives designate only the own law as applicable; certain standards of Community law – mainly with the intention to protect the weaker
party as in the field of consumer protection, of insurance law, of labour law – apply in any
event if a sufficiently close connection with the territory of the EU exists while it does not
matter whether the parties have chosen a Non-EU law or whether relevant objective factors
point to such other law. Specific parts of EU law override this otherwise applicable law. But
unlike traditional omnilateral conflicts law the specific EU conflicts rules do not tell us which
law applies when EU law is not applicable.
This unilateral approach intends to ensure that the outcome of the EU harmonisation of law
and the protection rendered by it benefits all those who are closely connected with the territory of the EU. Moreover, the approach treats the EU Member States at least partly as one
single state irrespective of the fact that the laws of the Member States still differ in many respects. But the unilateral approach – to some extent a “fortress Europe” in private international law – is hardly compatible with the omnilateral approach of traditional conflicts of law
which designates in an abstract way a certain law – which can be either the own one or a foreign one – as applicable to a certain situation. The unilateral approach creates therefore a
number of difficulties (which will be discussed in greater detail below). One of the most evident problems is the consequence of that approach to develop and employ a double system of
conflicts rules, namely one set for inner European cross-border transactions and another one
for all other cross-border transactions.2
It is clearly preferable if not necessary to abide still with the omnilateral conflicts of law system even for inner-EU conflicts as long as significant differences between the legal systems
of the Member States continue to exist. The simple reason why is the bulk of difficulties of
the unilateral approach. However, the specific protective impetus of this latter approach has to
be integrated into the classic conflicts system, mainly under the heading of mandatory provisions.
1.2. Widespread knowledge of the Rome Convention (Question 1)?
The first question posed by the Green Paper on a Rome I instrument addresses the point
whether the Rome Convention is sufficiently known in business circles and also in the judiciary. We do not dispose, and are not aware, of really reliable figures on how familiar merchants and their lawyers are with the Rome Convention. But it is a well-known fact that par1
Some learned writers speak of a “Binnenmarktkollisionsrecht” (conflicts law for the internal market); see in
particular Stefan Grundmann, „Binnenmarktkollisionsrecht – vom klassischen IPR zur Integrationsordnung“,
(2000) 64 Rabels Zeitschrift 457; Stefan Grundmann, „Das Internationale Privatrecht der E-CommerceRichtlinie – was ist kategorial anders im Kollisionsrecht des Binnenmarkts und warum?“, (2003) 67 Rabels
Zeitschrift 246 at 254-262.
2
See thereon Peter Mankowski, „Binnenmarkt-IPR – Eine Problemskizze“, in: Aufbruch nach Europa Festschrift 75 Jahre Max-Planck-Institut fuer Privatrecht (Tuebingen 2001), 595 at 611 et seq.
1
ties to international contracts relatively often try to, and not infrequently do, choose the applicable law. At least this possibility which the Rome Convention offers in its Art. 3 (1) 1, seems
quite well known. Nonetheless, a successful choice of law encounters less often than could be
expected. The yearly collection of German court decisions concerning private international
law cases contains twenty cases on international contract law for the year 2000. In only four
of these cases, i.e. one fifth, an express choice of law had taken place.3 The reasons for these
relatively rare choice of law situations are certainly manifold. It can be speculated that the
parties could not agree on a specific law or that they were content with the objectively applicable law or have simply overlooked the possibility of a choice of law when hastily negotiating their specific contract or even did not know of such a possibility (though in the view and
to the experience of the present authors this last possibility is least likely). Concerning the
further rules contained in the Rome Convention it is our experience that lawyers representing
parties in international contract cases either in or outside court are regularly well informed
about these rules and try ‘to make the most of them’ for their clients.
As far as knowledge on the Rome Convention among judges is concerned it seems indicative
that in none of the twenty cases mentioned above the courts have overlooked that the Convention (as implemented into German law)4 was applicable. Since one of the authors happens to
be a judge as well (though on a part time basis but specialised for international cases) his experience with numerous colleagues supports that judges are normally well aware of the applicability of the (implemented) Rome Convention in Germany. A real problem is, however, the
fact that the Rome Convention has continuously lost its codifying nature because of conflicts
rules in other instruments5 so that it becomes more and more difficult to find the correct basis
for the determination of the applicable law.
1.3. Rome I as a Community instrument (Question 2)?
One of the main issues of the present discussion on the future of international contract law in
Europe concerns the question whether the Rome Convention should be converted into a
Community instrument, perhaps into a regulation. Thus far, the Rome Convention is an international treaty between the EU member states with no central court competent for its uniform
interpretation. The reason for this unsatisfactory situation is the fact that the protocols to the
Convention providing the European Court of Justice with this competence still lack the necessary number of ratifications.6 During the twelve years since the Rome Convention’s first version entered into force (in 1991) the Contracting States were unable to achieve uniformity
even in this respect.
As the Green Paper mentions7 there exist differences in interpretation of the Rome Convention among the Contracting States. Besides the examples already pointed to by the Green Paper8 further differences of interpretation concern the question when the exception clauses in
Art. 4 (5) and Art. 6 (2) Rome Convention can overrule the ordinary conflicts rules as stated
in Art. 4 and 6. Also the question when a provision can be regarded as internationally manda3
Cf. (2000) Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts cases nos. 20 et seq.
Already in 1986 Germany had incorporated the Rome Convention though with slightly modified formulations
into the Introductory Act of the Civil Code (EGBGB); this Act contains the private international law rules.
5
See infra 2.
6
Belgium’s ratification is still missing.
7
Green Paper 2.3 at p. 14 et seq.
8
The Green Paper para. 2.3 at p. 14 et seq. mentions different interpretations as to the question whether art. 1 (1)
of the Rome Convention covers contract chains and when under art. 3(1) a tacit choice of law can be inferred
from a reference to a certain legal concept which is specific to a certain legal system. Also the fact is mentioned
that certain Contracting States have incorporated the provisions of the Rome Convention in their national
statute, sometimes amending the original text (like, e.g., Germany; see above fn. 4). Though this latter point is no
matter of divergent interpretation it adds to differences among the Contracting States concerning the conflicts
rules for international contracts.
4
2
tory in the sense of Art. 7 Rome Convention needs definitely an answer on the basis of a uniform concept. The same is true for the relationship between Art. 5 and 7. Or can internationally mandatory provisions oust even more favourable consumer protection as enshrined in
Art. 5? Though while at present these differences must on the one hand not be too much
stressed and overestimated it is on the other hand quite evident that in the long run and with
further states joining the EU the differences will increase in number and depth unless a central
instance would be competent for the interpretation of the Rome Convention. Nonetheless it
could be questioned whether a uniform interpretation of the Convention rules is at all necessary. It is, however, the firm belief of the present authors that in the EU at least certainty on
the applicable contract law must be ensured. Certainty, and certainty in advance, on the matter
which law will apply to an international contract gives the parties to that contract certainty in
planning and calculation and is therefore of high value in international business transactions.
This certainty can only be achieved by a uniform interpretation of the respective conflicts
rules through one single body of last resort with jurisdiction in that respect. The mentioned
history of the Protocols to the Rome Convention shows – in contrast to the Brussels Convention – that an international treaty is not always an effective way to ensure such uniform interpretation of the rules which the treaty was concluded to unify.
The consequence of the aforementioned consideration is rather clear. The European Court of
Justice should be given jurisdiction to interpret the conflicts rules concerning international
contracts.9 Since it proved unsuccessful to achieve this by way of an international treaty the
only other method to confer such jurisdiction directly onto the European Court of Justice is by
way of a Community regulation. Only a regulation has such direct effect. The instrument of
the directive can only indirectly ensure uniformity and uniform interpretation because the ECJ
can only be seized with the question whether the national implementation complies with the
directive. Moreover, the conflicts rules in a number of directives have brought about further
complexity or even confusion instead of uniformity in the field of international contract law.10
In our opinion they are no model for a European solution. Moreover, with the draft proposal
of a Rome II Regulation and also the Regulations on international procedure11 the Community
has already paved the way to enact private international law instruments as regulations.
Therefore the conversion of the Rome Convention into a Regulation is to be strongly supported.
The only evident problem and disadvantage is the foreseeable workload of the European
Court of Justice. Though Art. 68(1) EC Treaty restricts the procedure of asking for a preliminary ruling under Art. 234 EC Treaty for certain matters to which a conflicts regulation would
belong and admits only references of national courts of last resort, the additional caseload is
nonetheless likely to be very heavy and will perhaps overburden the Court. This will be even
more so when Rome II (conflicts rules for extra-contractual obligations), Rome III (conflicts
rules in family matters) and further Romes are going to be enacted. It is probably necessary to
further limit the reference procedure. One instrument by which this could be at least partially
achieved is by limiting the references to cases which are of general importance for a unionwide uniform interpretation and application of the Community instrument.
9
This was also the clear and convincing intention when the Protocols to the Rome Convention were drafted.
See infra 2.
11
Council Regulation 44/2001/EC of 22 December 2000 on Jurisdiction and the Recognition and Enforcement
of Judgments in Civil and Commercial Matters, OJ 2001 L 12/1; Council Regulation 1347/2000/EC of 29 May
2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and in Matters
of Parental Responsibility for Children of Both Spouses, OJ 2000 L 160/19; Council Regulation 1346/2000/EC
on Insolvency Proceedings, OJ 2000 L 160/1; Council Regulation 1348/2000/EC of 29 May 2000 on the Service
in the Member States of Judicial and Extrajudicial Documents in Civil or Commercial Matters, OJ 2000 L
160/37; Council Regulation 1206/2001/EC of 28 May 2001 on Cooperation between the Courts of the Member
States in the Taking of Evidence in Civil or Commercial Matters, OJ 2001 L 174/1.
10
3
1.4. Relationship between a Rome I Regulation and international Conventions (Question 5)
Also a Rome I Regulation had to clarify its relationship with those international conventions
which deal with the same subject. At present there are not too many such rival conventions
which at the same time have been adopted by one or more EU Member States. Nevertheless
such conventions exist and it is likely that more of them will be created in future. Main examples are the Hague Convention on the Law Applicable to Contracts for the International Sale
of Moveables of 195512 (with its successor Convention of 1985)13 and the Hague Convention
on the Law Applicable to Agency of 1978.14 Another example is the UN Convention on Independent Guarantees and Stand-by Letters of Credit of 199515 which is internationally in force
since 2000 though not yet ratified nor signed by any EU State. This Convention does not only
unify parts of the substantive law but contains also express conflicts rules for international
guarantees and stand-by letters.16 The same is true for the UN Convention on the Assignment
of Receivables in International Trade of 200117 which is not yet in force at all but has already
been signed by Luxembourg.
The coexistence of general conflicts rules – be it instruments like the Rome Convention or
national sets of conflicts rules – and specific rules in conventions of differently wide adoption
poses two problems. On the one hand it is a problem for those who have to apply these rules
always to know and be aware which State has adopted which convention. On the other hand it
is a problem in itself that the various sets of rules – national conflicts rules, general conventions, specific conventions – contain differing solutions. For instance, the Hague Convention
of 1955 starts, too, with freedom of choice of law and continues with the applicability of the
law at the place of business of the seller if no choice has been made. This still conforms to the
principles of the Rome Convention as set out in Art. 3 and 4. But when the contract has been
concluded in the buyer’s country then under the Hague Convention – very much in contrast to
the Rome Convention18 – the law of that country applies.19 Therefore, for identical cases the
different EU States apply different laws thereby requiring the parties, their lawyers and courts
and tribunals to find the correct basis for the applicable law in each given case. This adds to
the complications which are anyhow inherent in, and characteristic of, international business
transactions.
The Rome Convention deals with this problem in a generous way. It gives priority to any
competing international convention. Its Art. 21 states that “(t)his Convention shall not prejudice the application of international conventions to which a Contracting State is, or becomes,
a party.” Thus far, this provision does not seem to have caused major problems. Though, under the perspective of a single European area of freedom, security and law (Art. 61 EC
Treaty) it is unsatisfactory and impedes the efficiency of trade within the EU if the different
EU States apply different conflicts rules to international contracts.
12
The original text is in French: Convention sur la loi applicable aux ventes à caractère international d’objets
mobiliers corporels of 15 June 1955 (published in [1964] 53 Revue critique de droit international privé 786). EU
member states which have ratified this Convention are: Denmark, Finland, France, Italy and Sweden.
13
The Hague Convention on the Law Applicable to the International Sale of Goods of 30 October 1985, original
English and French text published in (1987) 51 Rabels Zeitschrift 196. This Convention is not yet in force. Cf.
Ole Lando, “The 1985 Hague Convention on the Law Applicable to Sales”, (1987) 51 Rabels Zeitschrift 60.
14
The original English and French text is published in: (1979) 43 Rabels Zeitschrift 176. Both EU Member
States and Contracting States of this Convention are: France, Netherlands and Portugal.
15
The text is published in the UNCITRAL Document A/CN.9/431 of July 4, 1995.
16
See Art. 21 and 22 of the Convention.
17
The text can be found on the Internet under http://www.un.org./Depts/Treaty/.
18
The place of conclusion of contract is almost entirely insignificant under the Rome Convention; see Julius von
Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen Gesetzbuch, Artt. 27-37 EGBGB (13th ed. Berlin
2002) Art. 27 EGBGB notes 85 et seq., Art. 28 EGBGB notes 129 et seq. with references.
19
See Art. 3(2) Hague Convention of 1955.
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Seen from a European point of view it must first be stressed that a Rome I Regulation would
entirely confer the competence onto the Community to negotiate and adopt future international conventions in the field covered by the Regulation. As the Green Paper rightly points
out20 this is the effect of the so-called AETR doctrine.21 Once a Rome I Regulation has been
enacted no single EU State would then any more be allowed to join on its own an existing or
new international convention. However, the Community as such could accede or could
authorise its Member States to do so as the Community has for instance done in case of the
Bunker Oil Convention.22 Thus, a different state of ratification of international conventions on
matters of international contract law among the EU Member States need not be a problem any
longer in the future. But it must be stressed that a mere authorisation of the Member States to
join an international convention – as in the case of the Bunker Oil Convention – would not
ensure a union-wide state of ratification because then again some members would accede
while others would not. Only an adoption through the EU itself can ensure that at the same
time conflicts rules which are contained in international conventions enter into force in all EU
States.
The matter is different with those rather few conventions which are already in force in some
EU Member States – like the mentioned Hague Conventions of 1955 and 1978.23 Community
law as such does not oblige the Member States to denounce these conventions even if a Rome
I Regulation would be adopted. The implicit transfer of legislative power on the Community
when a Rome I Regulation is enacted has no retrospective effect. But the Regulation itself
could establish the obligation of the Member States to denounce competing conventions.
However, the Green Paper seems to favour a less severe sanction, namely an obligation of the
Member States only to notify all relevant conventions which they have adopted.24 Again
viewed from a European perspective the continuance of considerable differences among the
EU Member States as far as conflicts rules for international contracts are concerned appears to
be anything but desirable. Hence, an obligation of the member states to denounce conventions
which contain conflicts rules which deviate from those in a Rome I Regulation, could find
some favour.
1.5. Conclusion
The Rome Convention should be converted into a Community instrument, namely a Regulation. Its main contents are sufficiently if not widely known amongst practitioners.
The conflicts rules of a Rome I Regulation should be omnilateral rules. There should not be
two differing sets of conflicts rules for intra-Community and other cases.
In order to keep the uniformity of the entire regime, a cautious approach towards allowing the
ratification of other Conventions is recommended.
2. Integration of conflicts rules originally contained in specific directives and Community minimum standard (Questions 3 and 4)
2.1. Special conflicts rules in Directives as an irritation
Ever since 1993 when Art. 6 (2) of the Unfair Clauses Directive emerged, the single directives
on partial topics of consumer law contained special conflicts rules. They were to safeguard
20
Green Paper para. 3.1.3 at p. 20.
See the respective decision of the ECJ: Case 22/70, Commission v. Council, [1971] ECR 263.
22
The Community has authorised its Member States to adopt the Convention on Civil Liability for Damage
through Bunker Oil Spill of 2001; see Decision of the Council of 19 September 2002, OJ 2002 L 256/7.
23
See supra fn. 12 and 13.
24
See Green Paper para. 3.1.3 at p. 20.
21
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that the consumer could not be deprived of the protection which the said directives granted to
him, by a contractual choice of the law of an non-member State. The directives did not regulate constellations without such a contractual choice of law clause. From the point of view of
the academic community, these special conflicts rules have always been unwanted intruders
into the realm of the Rome Convention:25 They were pitifully unrelated to, and unconnected
with, the system of the Rome Convention. In particular, they referred to a close connection
with the territory of the EU, a connecting factor both vague and inconsistent with the more
specific determinations of relevant connections in the Rome Convention. Their unilateral
character sharply contrasted with the omnilateral approach taken by the Rome Convention.
Furthermore, they raised questions about a possible conflict between conflicts rules: Should
they prevail over the Rome Convention by ways of the maxim lex specialis derogat legi generali? Or did they to the contrary presuppose that the rules of the Rome Convention were in
operation in advance? Or was there a necessity to establish some kind of co-operation and
coexistence with Art. 5 Rome Convention in particular? The irritation was augmented by the
fact that in most events not two Member States enacted the conflicts rules of the directives in
the same way.26 Hence, the unification of choice of law rules for contracts, the main purpose
of the Rome Convention, was heavily endangered.27 Uniformity is not reached but destroyed.28 This is not for the least part due to the Directives quasi-unilaterally referring to a
close connection with the territory of the EU whereas the single Member State predominantly
is interested in connections with its own territory.29 Furthermore, the pluralism of sources
could easily disturb practitioners.30 The Rome Convention was and is at least some kind of
codification. To think of conflicts law outside and besides the codification which in itself is
conceived as a generally comprehensive instrument, stretches the task put upon practitioners
too far. Quite contrary and opposed to their own goals the conflicts rules in the directives
could thus have effects detrimental to the consumer whom to protect they aim at.31 The only
25
Cf. only Erik Jayme/Christian Kohler, “L’interaction des règles de conflit contenues dans le droit dérivé de la
Communauté européenne et des conventions de Bruxelles et de Rome”, (1995) 84 Revue critique de droit
international privé 1 at 11-36; Michael Wilderspin/Xavier Lewis, „Les relations entre le droit communautaire et
les règles de conflits de lois des États membres (Suite et fin)“, (2002) 91 Revue critique de droit international
privé 289 at 292-294, 307; Christian Kohler, “Der europaeische Justizraum fuer Zivilsachen und das
Gemeinschaftskollisionsrecht” (2003) Praxis des Internationalen Privat- und Verfahrensrechts 401 at 410.
26
Carla A. Joustra, „Europese richtlijnen en internationaal privaatrecht“, (1999) 6370 Weekblad voor
Privaatrecht, Notariaat en Registratie 664 at 667.
27
Cf. only Bernd von Hoffmann, „Richtlinien der Europaeischen Gemeinschaft und Internationales Privatrecht“,
(1995) Zeitschrift fuer Rechtsvergleichung 45 at 52/54; Juergen Basedow, „Europaeisches Internationales
Privatrecht“, (1996) Neue Juristische Wochenschrift 1921 at 1923; Dieter Martiny, „Europaeisches
Internationales Vertragsrecht – Erosion der Roemischen Konvention?“, (1997) Zeitschrift fuer Europaeisches
Privatrecht 107 at 109; Hans Juergen Sonnenberger, „Der Ruf unserer Zeit nach einer europaeischen Ordnung
des Zivilrechts“, (1998) Juristenzeitung 982 at 983; Stefan Leible, „Kollisionsrechtlicher Verbraucherschutz im
EVUe und in EG-Richtlinien“, in: Hans Schulte-Noelke/Reiner Schulze (eds.), Europaeische Rechtsangleichung
und nationale Privatrechte (Baden-Baden 1999), 353 at 379 et seq.; Gerfried Fischer, „Das Kollisionsrecht der
Verbrauchervertraege jenseits von Art. 5 EVUe“, in: Festschrift fuer Bernhard Grossfeld (Heidelberg 1999), 277
at 282.
28
With ultimate clarity Catherine Kessedjian, „La Convention de Rome du 19 juin 1980 sur la loi applicable aux
obligations contractuelles – Vingt ans après“, in: Private Law in the International Arena – Liber amicorum Kurt
Siehr (The Hague/Zuerich 2000), 329 at 333 et seq.
29
Cf. Marc Fallon/Stéphanie Francq, „Towards Internationally Mandatory Directives for Consumer Contracts?“,
in: Private Law in the International Arena – Liber amicorum Kurt Siehr (The Hague/Zuerich 2000), 155 at 165
et seq.; Klaus Bitterich, „Die kollisionsrechtliche Absicherung der AGB-Richtlinie (Art. 6 Abs. 2) –
Rechtszersplitterung statt Kollisionsrechtseinheit in Europa“, (2002) Zeitschrift fuer Rechtsvergleichung 123.
30
Cf. only Stefan Leible, „Kollisionsrechtlicher Verbraucherschutz im EVUe und in EG-Richtlinien“, in: Hans
Schulte-Noelke/Reiner Schulze (eds.), Europaeische Rechtsangleichung und nationale Privatrechte (BadenBaden 1999), 353 at 379.
31
Erik Jayme/Christian Kohler, „Europaeisches Kollisionsrecht 1997 – Vergemeinschaftung durch
„Saeulenwechsel“?“, (1997) Praxis des Internationalen Privat- und Verfahrensrechts 385 at 388; Hans Juergen
6
comforting issue was that the conflicts rules stemming from the directives were applied only
in very rare instances, if ever. The unsystematic legislation ensuing had not to be held accountable for the only reason that it was mainly irrelevant. The theoretical disturbance was
diminished by practical irrelevance. That does little consolation however.
2.2. Re-integration in the fundamental instrument
Question 3 of the Green Paper reflects the academic uproar about Community legislation containing conflicts rules which were established in an unsystematic manner not visibly coordinated with the Rome Convention. And question 4 paves the ways by offering the appropriate escape device, namely integration of the purposes behind the conflicts rules contained
in the directives by establishing a Community minimum standard which cannot be derogated
from by the parties if there is a defined and reasonably close connection with EU territory,
The necessary next step of co-ordinating the now existing two systems must be to define that
close connection principally after the model provided by Art. 5 (2) thus bringing the connecting factors within the overall system of consumer protection in PIL into line with each other.
This reduces unnecessary redundancy or, even worse, frictions, and avoids any discrepancies
in the conflicts law of the Member States.32 Furthermore, a generalisation rules out the possibility that two Community instruments contain conflicting conflicts rules.33
2.3. Going a step beyond the lex scripta
Additionally a step beyond specific conflicts rules expressly spelt out in existing directives
might be required: Besides this lex scripta there exist conflicts rules which were judge-made
by the ECJ. The famous Ingmar-case34 is nothing but a judge-made conflicts rule developed in
effect by way of analogy to the then existing lex lata35 although it does not expressly employ
this methodical approach but rather ambulates in the neighbourhood of mandatory rules. It
was an attempt to repair the shortcoming that older directives (i.e. directives which were established before 1993) do not contain specific conflicts rules. Hence, future legislation should
rise to the occasion and try to re-integrate such judge-made rules in the lex scripta too. Unwritten rules are fairly dangerous devices as they to a certain extent wreck security and endanger the auspices of the unknowing and uncunning. The ECJ extended the realm of the special conflicts rules in casu to the Commercial Agents Directive36. The leading candidate for a
Sonnenberger, „Der Ruf unserer Zeit nach einer europaeischen Ordnung des Zivilrechts“, (1998) Juristenzeitung
982 at 983.
32
Catherine Kessedjian, „La Convention de Rome du 19 juin 1980 sur la loi applicable aux obligations
contractuelles – Vingt ans après“, in: Private Law in the International Arena – Liber amicorum Kurt Siehr (The
Hague/Zuerich 2000) 329 at 335.
33
Cf. Richard Plender/Michael Wilderspin, The European Contracts Convention (2nd ed. 2001) para. 7.33.
34
ECJ November 9, 2000 - Case C-381/98 Ingmar GB Ltd. v. Eaton Leonard Technologies Inc. [2000] ECR I9305 at I-9332 to I-9335 paras. 14-26.
35
Klaus Bitterich, „Die analoge Anwendung des Art. 29a Abs. 1, 2 EGBGB auf Verbraucherschutzrichtlinien
ohne kollisionsrechtlichen Rechtssetzungsauftrag“, (2002) Verbraucher und Recht 155 at 161-163; Thomas
Pfeiffer, „Eingriffsnormen und ihr sachlicher Gegenstand“, in: Festschrift fuer Reinhold Geimer (Munich 2002),
821 at 832; Christian von Bar/Peter Mankowski(-Peter Mankowski), Internationales Privatrecht, Vol. I:
Allgemeine Lehren (2nd ed. Munich 2003) § 4 note 103; Walter G. Paefgen, “Kollisionsrechtlicher
Verbraucherschutz im Internationalen Vertragsrecht und europaeisches Gemeinschaftsrecht”, (2003) Zeitschrift
fuer Europaeisches Privatrecht 266 at 291 et seq. Sceptical nevertheless, but only de lege lata Dieter Martiny,
„Europaeisches Internationales Vertragsrecht vor der Reform“, (2003) Zeitschrift fuer Europaeisches Privatrecht
590 at 603.
36
Council Directive 86/453/EEC of 18 December 1986 on the co-ordination of the laws of the Member States
relating to self-employed commercial agents, OJ 1986 L 382/17.
7
further extension are the directives on door-step selling37 and consumer credits38.39 Both date
from the 1980s and do not contain specific conflicts rules (as they sure would have if they
dated from the 1990s). In the case of the Consumer Credit Directive, the revising process
presently pending might cure the matter and provide the remedy.
2.4. Systematic order and implications
The specific conflicts rules now to be found in Directives ought to be integrated into the
Rome I Regulation. They should define a Community minimum standard from which the
general applicability of the law of a non-Member State could not derogate to the detriment of
the protected person. The close connection should be defined along the lines generally followed in Art. 5.40 This new, integrated rule should be extended to the standard granted by
Directives implemented prior to 1993 not containing a specific conflicts rule yet, e.g. the Consumer Credit Directive and the Door-Step Selling Directive. The wording should not refer to
specified and listed Directives but rather to the protective standard established by Community
acts and measures and national acts implementing them. This generalisation has the major
advantage that it avoids, and in fact extinguishes, the pointillism now prevailing and makes it
unnecessary to adapt the Rome I Regulation every time and again once a new Directive or
Regulation has entered into force in the field of the law on consumer contracts.41
The extension of the protective rules should best be placed as an extra article placed between
Art. 6 and Art. 7. Designing it as an extra paragraph of Art. 542 would be inconsistent with
covering other protective regimes in contracts with other classes of protected persons who are
not consumers, for instance commercial agents. The proposed conflicts rule and the proposed
systematic order truly reflect the Community interest in seeing the Community standard applied to contracts within the Internal Market. Spending an extra article avoids indulging into
lengthy discussions on the nature of this interest, i.e. whether it constitutes a public interest or
only reflects legitimate and recognised interests of the protected private parties. One might
justify this as protecting the Internal Market as something common to all Member States and
akin to a pure inland case.43 Adding an extra paragraph to Art. 3 or extending Art. 3 (3) to
intra-Community cases44 is not a convincing alternative as this would imply that the Commu37
Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated
away form business premises, OJ 1985 L 372/31.
38
Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and
administrative provisions of the Member States concercing consumer credit, OJ 1987 L 42/48.
39
Compare Ansgar Staudinger, „Die ungeschriebenen kollisionsrechtlichen Regelungsgebote der
Handelsvertrerter-, Haustuerwiderrufs- und Produkthaftungsrichtlinie“, (2001) Neue Juristische Wochenschrift
1974 at 1977; Michael Wilderspin/Xavier Lewis, „Les relations entre le droit communautaire et les règles de
conflits de lois des États membres (Suite et fin)“, (2002) 91 Revue critique de droit international privé 289 at
297.
40
Infra 6.3 3.
41
Stefan Klauer, Das europaeische Kollisionsrecht der Verbrauchervertraege zwischen Roemer EVUe und EGRichtlinien (Tuebingen 2002) 334.
42
As proposed e.g. by Bernd Ehle, Wege zu einer Kohaerenz der Rechtsquellen im europaeischen
Kollisionsrecht der Verbrauchervertraege (Frankfurt/Main etc. 2002) 269, 275 et seq.; Stefan Klauer, Das
europaeische Kollisionsrecht der Verbrauchervertraege zwischen Roemer EVUe und EG-Richtlinien (Tuebingen
2002) 336 et seq.
43
Cf. Juergen Basedow, „Materielle Rechtsangleichung und Kollisionsrecht“, in: Anton K. Schnyder/Helmut
Heiss/Bernhard Rudisch (eds.), Internationales Verbraucherschutzrecht (Tuebingen 1995), 11 at 19, 27 et seq.;
Ansgar Staudinger, „Rom, Bruessel, Berlin und Amsterdam: Chiffren eines Europaeischen Kollisionsrechts fuer
Verbrauchervertraege“, (2000) Zeitschrift fuer Rechtsvergleichung 93 at 95 et seq.
44
As proposed by Ole Lando, (1993) 57 Rabels Zeitschrift 155 at 163; Juergen Basedow, „Materielle
Rechtsangleichung und Kollisionsrecht“, in: Anton K. Schnyder/Helmut Heiss/Bernhard Rudisch (eds.),
Internationales Verbraucherschutzrecht (Tuebingen 1995), 11 at 34; Andreas Baumert, „Die Umsetzung des Art.
6 Abs. 2 der AGB-Richtlinie im System des europaeischen kollisionsrechtlichen Verbraucherschutzes“, (1995)
Europaeisches Wirtschafts- und Steuerrecht 57 at 69; Ralf Michaels/Hans-Georg Kamann, „Europaeisches
8
nity standard applied only if there is a choice of the law of a non-Member State, and as this
would lose contact with, and would not cover, Art. 9 Timesharing Directive45 which clearly
applies even if there is no choice of law. To distinguish between cases where a choice of law
is made and cases where no choice of law is made, would be systematically unconvincing.46
Of course it is true that choice of law is the preferred instrument for exerting greater bargaining power by the superior party,47 but if the main aim is to protect the Community standard
where there is a sufficiently close link to EC territory, this aim applies irrespective of a choice
of law. Furthermore, extending Art. 3 (3) would have to struggle and to come up with an answer as to why the law of non-Member State should not apply even in the event that it is more
advantageous and favourable to the protected person than the Community standard.48 To the
contrary, establishing a principle of favourability like in Art. 5 is the correct approach49 and
fully considered in our proposal.
2.5. Further elements of the proposed conflicts rule
Technically, a clarification that the proposed extra article applies notwithstanding Art. 5 and
vice versa would be helpful. Finally, the legislator would have to make a choice whether to
apply the lex fori or the law of the Member State to which the case is closely connected.50 The
basic assumption must be that at least the Community minimum standard is met by the laws
of all Member States. Applying the lex fori could lead to a better protection than demanded by
EC law due to some autonomous decision of the national legislator.51 To stick with the lex fori
even if the forum state is not the one closely linked with the case, lacks a proper justifica-
Verbraucherschutzrecht und IPR“, (1997) Juristenzeitung 601 at 604; Bernhard Rudisch, „Der Beitritt
Oesterreichs zum Roemer Schuldvertragsuebereinkommen: Gruende, Hintergruende und Konsequenzen“, (1999)
63 Rabels Zeitschrift 70 at 104; Stefan Leible, „Kollisionsrechtlicher Verbraucherschutz im EVUe und in EGRichtlinien“, in: Hans Schulte-Noelke/Reiner Schulze (eds.), Europaeische Rechtsangleichung und nationale
Privatrechte (Baden-Baden 1999), 353 at 383; Juergen Basedow, „The Communitarization of the Conflict of
Laws under the Treaty of Amsterdam“, (2000) 37 CMLRev 687 at 689; Jan Kropholler, Internationales
Privatrecht (4th ed. Tuebingen 2001) 292.
45
Directive 94/47/EC of the European Parliament and the Council of 26 October 1994 on the protection of
purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable
properties on a timeshare basis, OJ 1994 L 280/83.
46
Cf. Karsten Thorn, „Verbraucherschutz bei Vertraegen im Fernabsatz“, (1999) Praxis des Internationalen
Privat- und Verfahrensrechts 1 at 8 et seq.
47
Cf. Rolf Wagner, „Zusammenfuehrung verbraucherschuetzender Kollisionsnormen aufgrund EG-Richtlinien
in einem neuen Art. 29 a EGBGB“, (2000) Praxis des Internationalen Privat- und Verfahrensrechts 249 at 253
48
Bernd Ehle, Wege zu einer Kohaerenz der Rechtsquellen im europaeischen Kollisionsrecht der
Verbrauchervertraege (Frankfurt/Main etc. 2002) 264. Cf. Ansgar Staudinger, „Die ungeschriebenen
kollisionsrechtlichen
Regelungsgebote
der
Handelsvertrerter-,
Haustuerwiderrufsund
Produkthaftungsrichtlinie“, (2001) Neue Juristische Wochenschrift 1974 at 1976; Ralf Michaels/Hans-Georg
Kamann, „Grundlagen eines allgemeinen gemeinschaftsrechtlichen Richtlinienkollisionsrechts –
“Amerikanisierung” des Gemeinschaftsrechts?“, (2001) Europaeisches Wirtschafts- und Steuerrecht 301 at 310;
Klaus J. Hopt(-Jan von Hein), Handelsvertreterrecht (3rd ed. Munich 2003) § 92 c HGB note 10.
49
Arnaud Nuyts, „L’application des lois de police dans l’espace“, (1999) 88 Revue critique de droit
international privé 31 at 64-66; Ralf Michaels/Hans-Georg Kamann, „Grundlagen eines allgemeinen
gemeinschaftsrechtlichen Richtlinienkollisionsrechts – “Amerikanisierung” des Gemeinschaftsrechts?“, (2001)
Europaeisches Wirtschafts- und Steuerrecht 301 at 310.
50
The latter was proposed though in a slightly different form by Art. 11 (3) of the Draft Proposal of a Rome II
Regulation. But see thereto the amendment proposed by the Hamburg Group for Private International Law,
„Comments on the European Commission’s Draft Proposal for a Council Regulation on the Law Applicable to
Non-Contractual Obligations“, (2003) 67 Rabels Zeitschrift 1 at 34 et seq.
51
Cf. Ansgar Staudinger, „Art. 29 a EGBGB des Referentenentwurfs zum Fernabsatzgesetz“, (1999) Praxis des
Internationalen Privat- und Verfahrensrechts 414 at 417.
9
tion.52 Undoubtedly, having to investigate a law alien to the forum would enhance costs and
difficulties. But it definitely gets the support of the purism of conflicts law.53 It would implement a marketplace approach54 (or country-of-destination approach) as quite appropriate for a
protective regime. There might arise questions of choice once again, whenever close connections in the defined sense link the case with more than one Member State.55 In these rare instances one should apply the law of the Member State to which the case bears the closest connection.56 However, bearing in mind the rules on jurisdiction and the fact that consumers pursue their goals at home if ever, it would be astonishing and exceptional indeed if the lex fori
and the applicable law did not converge.
2.6. Conclusion
There should be an extra Article placed between Art. 6 and Art. 7 which protects the Community minimum standard against derogation by applying the law of a non-Member State if there
is a sufficiently close connection (defined as in Art. 5) with the EU, and thus integrates the
specific conflicts rules now to be found in Directives.
3. Scope of application
3.1. Inclusion or exclusion of arbitration and choice of forum clauses in a future EU instrument (Question 6)
Thus far arbitration and jurisdiction clauses have been more or less regarded as procedural
matters falling outside the classic international contract law. The Rome Convention therefore
explicitly excludes “arbitration agreements and agreements of choice of court” (Art.
1(2)(d)).57 Partly such agreements are dealt with by other international instruments, namely
jurisdiction clauses by Art. 23 Brussels I Regulation and arbitration clauses in particular by
the New York Convention on Arbitration of 1958.58 However, these instruments do not regulate in detail when a choice of forum agreement or arbitration agreement is validly concluded.
Nor do they designate the law which applies to that question. If at all they address certain
elements of an agreement – for instance Art. 23 Brussels I Regulation is understood to require
autonomously the consent of the parties to a jurisdiction clause.59 On the other hand Art. 23
does not indicate in any way which law governs the issue of mistake, withdrawal, renuncia52
Robert Freitag/Stefan Leible, „Von der Schwierigkeit der Umsetzung kollisionsrechtlicher
Richtlinienbestimmungen“, (1999) Zeitschrift fuer Wirtschaftsrecht 1296 at 1298; Peter Mankowski, „ECommerce und Internationales Verbraucherschutzrecht“ (2000) MultiMedia und Recht Supplement 7 p. 22 at 36.
53
Cf. Peter von Wilmowsky, „Der internationale Verbrauchervertrag im EG-Binnenmarkt“, (1995) Zeitschrift
fuer Europaeisches Privatrecht 735 at 760; Elisabeth Kapnopoulou, Das Recht der missbraeuchlichen Klauseln
in der Europaeischen Union (Tuebingen 1997) 155 et seq., 223, 225; Christiane Ruehl, 㤠12 AGBG im System
des internationalen Verbraucherschutzrechts“, (1999) Recht der Internationalen Wirtschaft 321 at 323.
54
Cf. Brigitta Lurger, „Zur Umsetzung der Kollisionsnormen von Verbraucherschutzrichtlinien“, in: Die
internationale Dimension des Rechts – Festschrift fuer Willibald Posch (Vienna 1996), 179 at 202.
55
Cf. Ansgar Staudinger, „Art. 29 a EGBGB des Referentenentwurfs zum Fernabsatzgesetz“, (1999) Praxis des
Internationalen Privat- und Verfahrensrechts 414 at 417.
56
Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“ (2000) MultiMedia und Recht
Supplement 7 p. 22 at 37; Robert Freitag/Stefan Leible, „Ergaenzung des kollisionsrechtlichen
Vebrraucherschutzes durch Art. 29 a EGBGB“, (2000) Europaeisches Wirtschafts- und Steuerrecht 342 at 345 et
seq.
57
But there was extensive discussion and a split decision on this matter among the delegations negotiating the
Rome Convention; compare A.V. Dicey/J.H.C. Morris(-Lawrence Collins), The Conflict of Laws (13th ed.
London 2000) paras. 32-034 et seq.
58
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958.
59
Cf. Jan Kropholler, Europaeisches Zivilprozessrecht (7th ed. Heidelberg 2002) Art. 23 Brussels I Regulation
notes 23 et seq.
10
tion or the like with regard to a jurisdiction clause. The courts have applied the provisions of
the Rome Convention per analogiam to those questions.60
3.2. Specific Provisions for International Insurance Contracts (Question 7)?
The conflicts rules for international insurance contracts have taken a development that is
rather distinct from the general conflicts rules for international contracts. The Rome Convention applies only partly to insurance contracts, namely to direct insurance contracts covering
insured risks which are situated outside the territory of the EU, and to all reinsurance contracts (Art. 1(3) and (4)). Direct insurance contracts concerning risks situated in the EU are
explicitly excluded from the scope of the Convention (Art. 1(3)). In essence and paradoxically, the general conflicts codification of the EU applies to non-EU insurance contracts but
does not regulate EU insurance contracts.61 The reason for this situation is that another expert
group was working on international insurance law at the same time while the Rome Convention was negotiated. The Rome Convention was intended not to interfere with this separate
work.62 The final outcome of the separate work were several generations of Directives on life
insurance and non-life insurance63 containing specific conflicts rules. These rules are, however, overly complicated and constitute together with the provisions of the Rome Convention
“a set of rules whose complexity can hardly be exceeded.”64 The Green Paper recognises that
the current state of international insurance contract law in the EU is unsatisfactory. The Paper
asks whether and in which way this situation should be amended.65
There can only be but one recommendation: The specific conflicts rules for international insurance contracts should and could be integrated into a Rome I Regulation and brought in line
with its general rules.66 There is no convincing reason to separate the international insurance
law from the general international contract law.67 In general, the solutions of the present
Rome Convention should suffice to resolve the conflicts problems of international insurance
contracts. First, the parties should generally be allowed to choose the applicable law. Absent a
choice according to Art. 4 (2) 2 Rome Convention the law at the place of the insurer’s busi60
See, e.g., Bundesgerichtshof December 15, 1986 – Case II ZR 34/86, 99 Entscheidungen des
Bundesgerichtshofs in Zivilsachen 207 (in case of an arbitration agreement); Marc Fallon, “La dérogation
volontaire à la compétence internationale”, (2003) Revue critique de jurisprudence belge 271 at 308 with further
references. A.V. Dicey/J.H.C. Morris(-Adrian Briggs/Lawrence Collins), The Conflict of Laws (13th ed. London
2000) para. 12-096 doubt that in the context of Art. 23 Brussels I Regulation all questions of validity of a
jurisdiction clause can be decided without recourse to some applicable national law.
61
Except
reinsurance
contracts.
See
on
these
Peter
Mankowski,
“Internationales
Rueckversicherungsvertragsrecht”, (2002) Versicherungsrecht 1187.
62
See Mario Giuliano/Paul Lagarde, Report on the Convention on the law applicable to contractual obligations,
OJ 1980 C 282 Art. 1 Rome Convention note III 1 9th lemma in fine.
63
Second Non-Life Insurance Directive (No. 1988/357/EEC) of 22 June 1988 with later amendments; Second
Life Assurance Directive (No. 1990/619/EEC) of 8 November 1990 also with later amendments; Third Non-Life
Insurance Directive (No. 1992/49/EEC) of 18 June 1992.
64
Jan Kropholler, Internationales Privatrecht (4th ed. Tübingen 2001) 469; similarly A.V. Dicey/J.H.C.
Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) paras. 33-117 and 33-144 („a matter of
some complexity“, “an extremely complex web of choice of law rules”); drastically Gerhard Kegel/Klaus
Schurig(-Gerhard Kegel), Internationales Privatrecht (8th ed. Munich 2000) 595 (“the stork which has brought
this, should give up its licence”).
65
Green Paper para. 3.2.2.2 at p. 21 et seq.
66
See similarly Fritz Reichert-Facilides, Zur Kodifikation des deutschen internationalen
Versicherungsvertragsrechts, (1990) Praxis des Internationalen Privat- und Verfahrensrechts 1 at 13; Julius von
Staudinger(-Christian Armbruester), Kommentar zum Buergerlichen Gesetzbuch, Artt. 27-37 EGBGB (13th ed.
Berlin 2002) Anhang I zu Art. 37 EGBGB note 28; Peter Mankowski, „Das Gruenbuch zur Rom I-Verordnung“,
(2003) Zeitschrift fuer Europaeisches Privatrecht 483 at 488.
67
A.V. Dicey/J.H.C.Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) para. 33-126 term the
present approach moderately as “somewhat artificial” leading to “inconsistent results”.
11
ness would govern the contract.68 This sound solution has been approved by the Czech, the
Polish, the Hungarian, the Romanian and most recently the Russian legislator.69 Nevertheless,
insurance contracts for private purposes and covering privately held risks, are consumer contracts and will thus fall under Art. 5.70 That has the consequence that the law at the place of
the policy-holder would regularly apply – bearing in mind that the conditions under which
Art. 5 comes into play be changed as proposed below. In case of Art. 5 any chosen law would
apply only if it was more favourable to the policy holder than the law at the place of the policy-holder’s habitual residence.
Whether in addition the fact where the insured risk is situated should, play a significant role
remains open to discussion. It can, however, be stated with certainty that the location of the
risk within or outside a certain region – instead of a certain country – should not serve as a
connecting or distinguishing factor.71 The reason is that this factor does not indicate a close
connection of an insurance contract with a certain country and its legal system. It remains,
however, necessary to determine whose country‘s law applies since the legal systems of the
Member States concerning insurance contracts are still far from uniform despite the efforts to
harmonise this branch of the law. Under the general regime the location of the risk insured
could probably be serve as a factor under the escape clause. However, defining where a risk is
located (or better: assumed to be located) is a rather strenuous task and takes tremendous effort as Art. 2 (d) Second Direct Insurance Directive amply demonstrates. It might not be
worth the while to undertake this effort in order just to give some guidelines for using the escape clause.
3.3. Conclusion
It seems advisable that the Rome I Regulation should cover arbitration and jurisdiction
agreements and determine the law applicable to them as far as this question is not regulated
by other, more specific instruments.
Insurance contracts should be subjected to the general instrument and the general rules. The
specific regime for insurance contracts implemented by the Insurance Directives should be
abolished.
4. Contractual choice of law (Questions 8 and 9)
The freedom of contractual choice of law by the parties is the basic and most fundamental
principle of the entire Rome Convention. Its merits and advantages are so obvious that they
68
Compare A.V.Dicey/J.H.C. Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) para. 33R116 (formulating the principles mentioned in the text as Rule 184); Jan Kropholler, Internationales Privatrecht
(4th ed. Tübingen 2001) 469; Dieter Martiny, in: Muenchener Kommentar zum Buergerlichen Gesetzbuch, vol.
X (3rd ed. Munich 1998) Art. 37 EGBGB note 182; Julius von Staudinger(-Ulrich Magnus), Kommentar zum
Buergerlichen Gesetzbuch, Artt. 27-37 EGBGB (13th ed. Berlin 2002) Art. 28 EGBGB notes 483 et seq.; but
contra Julius von Staudinger(-Christian Armbruester), Kommentar zum Buergerlichen Gesetzbuch, Artt. 27-37
EGBGB (13th ed. Berlin 2002) Anhang I zu Art 37 EGBGB note 11.
69
Sec. 10 (2) (d) Czech (and Slovakian) Private International Law Act of December 4, 1963; Art. 27 § 1 No. 3
Polish Private International Act of November 12, 1965; sec. 25 (k) Hungarian Private International Law Act of
May 31, 1979; Art. 103 (d) Romanian Private International Law Act of September 22, 1992; Art. 1211 (3) No.
12) Russian Civil Code of November 26, 2001, Sobarnie zakonodatel’stva Rossijskoj Federacii 2001 No. 49 pos.
4552, German translation in: (2003) 67 Rabels Zeitschrift 341.
70
See Jan Kropholler, Internationales Privatrecht (4th ed. Tübingen 2001) 469; Dieter Martiny, in: Muenchener
Kommentar zum Buergerlichen Gesetzbuch, Vol. X (3rd ed. Munich 1998) Art. 37 note 166; Julius von
Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen Gesetzbuch,, Artt. 27-37 EGBGB (13th ed. Berlin
2002) Art. 29 EGBGB note 53; Julius von Staudinger(-Christian Armbruester), Kommentar zum Buergerlichen
Gesetzbuch,, Artt. 27-37 EGBGB (13th ed. Berlin 2002) Anhang I zu Art 37 EGBGB note 14 s.
71
See also A.V. Dicey/J.H.C. Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) para. 33-126.
12
need not even to be listed.72 It is absolutely commonplace, generally accepted and the cornerstone of everyday drafting practice in commercial business. To implement substantial changes
in this regard would amount to bringing law and practice out of line and out of accordance
which to the mutual benefit exists so far. The principle thus is easily accepted. Following suit,
the Green Paper accordingly is only concerned with some rather marginal issues. These relate
to tacit choice of law on one hand (Question 9) and the choice of non-municipal, i.e. not state
made bodies of rules on the other hand (Question 8).
4.1. No choice of non-national “law”
Question 8 stirs quite some war of confession. The notions of so-called a-national law and in
particular of a lex mercatoria have been the subject on an intense and on-going debate for
decades.
4.1.1. No need for allowing a conflictual choice of UNIDROIT or Lando Principles
In particular both sets of Principles, the UNIDROIT Principles of International Commercial
Contracts73 and the Lando Principles (the European Principles of Contract Law), have their
strong defenders as a possible candidate for a genuine conflictual choice of a law.74 Opposed
to those true believers are the sceptics.75 They are not convinced that it is necessary to go beyond allowing a materiellrechtliche Verweisung in favour of the Principles. They are not prepared to permit a genuine conflictual choice of the Principles (and even less of any lex mercatoria). The entire matter deeply touches the basic of both conflicts law and the definition of
law.76 Should one concede that there exist non-governmental lawmakers having the power to
implement something that has, or could get, the binding force of law? Who is to vest such
power in whom? To which extent should “business” be allowed to define its own rules, literally ab legibus solutum? “Private legislation” cries out for evaluation that at least certain
minimum standards are met. Whom should be called upon to execute such evaluation? Personal sympathy for excellent professoral and academic work by most respected colleagues
72
See, however, for such a list Peter Mankowski, „Europaeisches Internationales Privat- und Prozessrecht im
Lichte der Oekonomischen Analyse“, in: Claus Ott/Hans-Bernd Schäfer (eds.), Vereinheitlichung und
Diversitaet des Zivilrechts in transnationalen Wirtschaftsraeumen (Tuebingen 2002), 118 at 122-124; Peter
Mankowski, „Ueberlegungen zur sach- und interessengerechten Rechtswahl in Verträgen des internationalen
Wirtschaftsverkehrs“, (2003) Recht der Internationalen Wirtschaft 2 at 3 et seq.
73
http://www.unidroit.org/english/principles/contents.html.
74
Cf. only Katharina Boele-Woelki, Principles en IPR (Deventer 1995); Katharina Boele-Woelki, „Principles
and Private International Law“, (1996) Uniform Law Review 652; Katharina Boele-Woelki, „Die Anwendung
der UNIDROIT-Principles auf internationale Handelsvertraege“, (1997) Praxis des Internationalen Privat- und
Verfahrensrechts 161 at 164-168; Johannes Christian Wichard, „Die Anwendung der UNIDROIT-Principles fuer
internationale Handelsvertraege durch Schiedsgerichte und staatliche Gerichte“, (1996) 60 RabelsZ Zeitschrift
269 at 282-290; Stefan Leible, „Aussenhandel und Rechtssicherheit“, (1998) 97 Zeitschrift fuer vergleichende
Rechtswissenschaft 286 at 313-317; Frank Vischer, „Die kollisionsrechtliche Bedeutung der Wahl einer
nichtstaatlichen Ordnung fuer den staatlichen Richter am Beispiel der Unidroit Principles of International
Commercial Contracts“, in: Festschrift fuer Peter Schlechtriem (Tuebingen 2003), 445.
75
E.g. Franco Ferrari, „Le champ d’application des „Principes pour les contrats commerciaux internationaux“
élaborés par Unidroit“, (1995) Revue internationale de droit comparé 985 at 988 et seq.; Franco Ferrari, „Das
Verhaeltnis zwischen den Unidroit-Grundsätzen und den allgemeinen Grundsaetzen internationaler
Einheitsprivatrechtskonventionen“, (1998) Juristenzeitung 9 at 16 et seq.; Peter Mankowski, „Ueberlegungen zur
sach- und interessengerechten Rechtswahl in Verträgen des internationalen Wirtschaftsverkehrs“, (2003) Recht
der Internationalen Wirtschaft 2 at 11 et seq. with ample references in footnote 132 in fine.
76
The best and most recent overview over the respective arguments may be found in Friedrich Blase, Die
Grundregeln des europaeischen Vertragsrechts als Recht grenzueberschreitender Vertraege (Muenster 2001)
192-242.
13
might admittedly mitigate such necessity in the particular event of both sets of Principles.77
But principiis obsta. Behind the Principles there lies a floodgate argument that admitting one
set of “private legislation” would establish a prima facie case that one would have to admit
other such sets, too. The possible externalities give rise to the question. These disadvantages
would not be outweighed by competing advantages since the practical difference between a
conflictual choice or a materiellrechtliche Verweisung tends to be marginal.78
There is a second line of argument against permitting a conflictual choice of the Principles:
Does the practice really need the option of a genuine and proper conflictual choice of the
Principles? A succinct argument counters, and effectively downs, any such suggestion: Even
in arbitration where such a conflictual choice is held to be permitted,79 the percentage of cases
where it actually occurs is pretty low and does not indicate an urgent need for such a device.
The parties have an option out of the entire system of state-made conflicts rules – and they do
not use it in substantial numbers.80 The most recent statistic on ICC cases81 reveals a percentage of some 0.8 % of all reviewed contracts in which parties opted to choose a non-national
law.82 In more than hundred cases before the Court of Arbitration of the Chamber of Commerce in Vienna, the Principles were not chosen a single time.83 Hence, even where a market
for such extended “law” shopping existed, practitioners confided by far more in national, in
State-made law. To the contrary, very experienced and learned practitioners in the field of
arbitration warned against selecting the Principles as the applicable “law”.84 Additionally, the
possibility to choose the Principles in arbitration provides another succinct argument against a
practical need to permit such choice in state courts. Once again it starts with: The parties already have an option, and they did and do not use it regularly.85 So, drawing a clear line does
not do bad justice to the parties. If they want the Principles, they could opt for them as a materiellrechtliche Verweisung or they simply could revert to arbitration. Even proponents of a
77
See Peter Mankowski, „Ueberlegungen zur sach- und interessengerechten Rechtswahl in Verträgen des
internationalen Wirtschaftsverkehrs“, (2003) Recht der Internationalen Wirtschaft 2 at 11.
78
Cf. H. Patrick Glenn, „An International Private Law of Contract“, in: International Conflict of Laws for the
Third Millenium – Essays in Honor of Friedrich K. Juenger (Ardsley, NY 2001) 53 at 62; Russell J. Weintraub,
„Lex mercatoria and the UNIDROIT Principles of International Commercial Contracts“, ibid., 141 at 153.
79
Cf. e.g. for sec. 1051 (1) Zivilprozessordnung in Germany Herbert Kronke, „Internationale Schiedsverfahren
nach der Reform“, (1998) Recht der Internationalen Wirtschaft 257 at 262 et seq.; Dieter Martiny, „Die
Bestimmung des anwendbaren Sachrechts durch das Schiedsgericht“, in: Festschrift fuer Rolf A. Schuetze
(Munich 1999), 529 at 536 et seq.; Abbo Junker, „Deutsche Schiedsgerichte und Internationales Privatrecht (§
1051 ZPO)“, in: Festschrift fuer Otto Sandrock (Heidelberg 2000), 443 at 460 et seq. and generally Anton K.
Schnyder/Pascal Grolimund, „“Opting in“ oder „Opting out““, in: Festschrift fuer Peter Schlechtriem
(Tuebingen 2003), 395.
80
One should not overestimate the importance of single cases prominently featured where e.g. the UNIDROIT
Principles were applied. The most prominent of these instances to-date might be the Arthur Andersen case; ICC
Award No. 9797 of July 28, 2000; Michael Joachim Bonell, „A“Global“ Arbitration Award Decided on the
Basis of the UNIDROIT Principles“, (2001) 17 Arbitration International 249.
81
See for application of the UNIDROIT Principles in ICC arbitration Fabrizio Marrella/Francois Gèlinas, „The
UNIDROIT Principles for International Commercial Contracts in ICC Arbitration“, (1999) 10 (2) ICC
International Court of Arbitration Bulletin 26-119; Fabrizio Marrella, „UNIDROIT Principles in ICC Arbitration
1999-2000“, (2001) ICC Bulletin 49-55 with appendices 56-115; Fabrizio Marrella, La nuova Lex Mercatoria
(Milano 2003) pp. 389-489.
82
Pierre Mayer, „The Role of the UNIDROIT Principles in ICC Arbitration Practice“, (2002) 13 ICC
International Court of Arbitration Bulletin, Special Supplement 105 at 108.
83
Werner Melis, „The Vienna Court of Arbitration and the UNIDROIT Principles“, (2002) 13 ICC International
Court of Arbitration Bulletin, Special Supplement 133 et seq.
84
Hilmar Raeschke-Kessler, „The UNIDROIT Principles in Contemporary Contract Practice“, (2002) 13 ICC
International Court of Arbitration Bulletin, Special Supplement 99 et seq.
85
On the rare instances where the UNIDROIT Principles were applied outside ICC arbitration, Fabrizio
Marrella, La nuova Lex Mercatoria (Milano 2003) pp. 491-518.
14
conflictual choice thus admit that not permitting a conflictual choice of not state-made bodies
of rules presents no serious obstacle due to this procedural aspect of party autonomy.86
4.1.2. No choice of “general principles” or “common principles”
The perplexity of a choice of principles common to two or more legal orders (in casu French
and English law) has already puzzled the House of Lords87 and would have been disregarded
if the need therefore had arisen. Need one say more? Most courts would feel absolutely
daunted and asked for too much if they were called upon to ascertain such common principles
by comparing two or more legal orders and to extract what they have in common.88 Lacunae
would be the most natural consequence. This holds true flowing from substance even if one
discounts the lack of knowledge both as to comparative methodology and foreign law in the
judiciary. A choice of “general principles”, “principles of international law” or “principles
generally followed in international trade” suffers quite the same fate. Bad and imprecise compromises compromise their draftsmen and do little, if any good to the parties’ interests they
are aimed at to protect. Parties should pray that no conflict of interest may arise and that such
clause may never be subjected to judicial scrutiny! Such clause is prone with difficulty.89 Prudent draftsmen try to avoid such uncertainty90 (and only vanity or – as in the Channel tunnel
case - the struggle for prestige might advocate for the other way).
4.1.3. No choice of an alleged lex mercatoria
The case against any “choice” of a so-called or more precisely: alleged lex mercatoria, be it
conflictual or be it only meritorious as a materiellrechtliche Verweisung, is easily made:91 The
proponents of such a “choice” are kindly invited to describe the content of the potentially chosen object first. Unless there are generally (or almost generally) accepted answers as to the
content of an alleged lex mercatoria, there cannot be any “choice”. Practitioners have to opt
for a secure way. They could not possibly choose a more insecure path than to rely on lex
mercatoria. Even the most elaborate attempts to collect such content piece by piece have not
unearthed something even remotely close to a kind of system, but only a rough assembly of
general clauses and sometimes even contradictory “rules”.92 To the contrary, they revealed
how incoherent and inconsistent the acclaimed notion of lex mercatoria in fact is, thus doing
lethally damaging service to their own cause. No-one in his plain mind could predict which
“rules” of lex mercatoria would govern a future case. Planning would be almost impossible
due to a severe lack of precision and reliable guidelines. Not astonishingly, practitioners are
up to the challenge and simply refrain from actively choosing lex mercatoria. Not even the
86
Friedrich K. Juenger, „The Problem with Private International Law“, in: Private Law in the International
Arena – Liber amicorum Kurt Siehr (The Hague/Zuerich 2000) 289 at 306.
87
Channel Tunnel Group Ltd. v. Balfour Beatty Construction Ltd. [1993] A.C. 334 at 357, 368 (H.L., per Lord
Mustill).
88
Cf. Stefan Grundmann, „General Principles of Private Law and Ius Commune Modernum as Applicable
Law?“, in: Liber amicorum Richard M. Buxbaum (London/The Hague/Boston 2000), 213 at 223.
89
Roy M. Goode, „Usage and Its Reception in Transnational Commercial Law“, (1997) 46 International and
Comparative Law Quarterly 1 at 30; Klaus Peter Berger, „Einheitliche Rechtsstrukturen durch außergesetzliche
Rechtsvereinheitlichung“, (1999) Juristenzeitung 369 at 376.
90
Cf. Friedrich Blase, „Proposing a New Road Map for an Old Minefiled“, (2003) 20 Journal of International
Arbitration 267 at 275.
91
Peter Mankowski, „Ueberlegungen zur sach- und interessengerechten Rechtswahl in Verträgen des
internationalen Wirtschaftsverkehrs“, (2003) Recht der Internationalen Wirtschaft 2 at 13.
92
CENTRAL Transnational Law Database, http://www.tldb.de; Klaus Peter Berger/Holger Dubberstein/Sascha
Lehmann/Viktoria Petzold, „Anwendung transnationalen Rechts in der internationalen Vertrags- und
Schiedspraxis“, (2002) 101 Zeitschrift fuer vergleichende Rechtswissenschaft 12; Klaus Peter Berger, „Lex
Mercatoria Online“, (2002) Recht der Internationalen Wirtschaft 256.
15
magnifying glass, but only the microscope could possibly detect relevant cases.93 If arbitrators
occasionally instrumentalise lex mercatoria as an escape device in order to avoid applying
“strict” State-made rules, it would be the more serious and proper course for them to ask the
parties to allow them to decide as amiables compositeurs or alike.94 Otherwise parties could
face a severe principal-agent-problem.95
4.1.4. Choosing international conventions (e.g. CISG)
In some instances, parties to a contract declare a uniform law applicable on their contract
which does not cover the contract by force of law. The main example international is shipping: Through paramount clauses parties import the Hague Rules, the Visby Rules or a respective national law incorporating the Hague or Visby Rules into charterparties. Neither the
Hague nor the Visby Rules apply ex lege to charterparties, but only to bills of lading. The
Green Paper96 quotes two other examples, namely Dutch cases where the parties had opted for
the CMR97 (and not the CISG as the Green Paper98 alleges). Another opportunity could in
deed be a contractual choice of the CISG. Although such conventions generally have legislative backing and are undeniably law, this holds only true for cases which fall into the scope of
application of the respective convention. Outside its own and self-defined scope of application
the convention does not have the quality of law. Applying the previously proven yardstick one
should ask the simple question whether there is a proper practical need to go beyond a materiellrechtliche Verweisung and admit a genuine conflictual choice. Once again, the answer
is to the negative. There are no limits which need to be lifted by allowing a conflictual choice.
In B2B-commerce for instance, there generally are only very few internally mandatory rules.
Hence, parties reach their goal to see the rules contained in the CISG applied, already by a
materiellrechtliche Verweisung. This purpose fulfilled, it would be unwise for the Community
legislator to put some systemic dynamite into the Rome I Regulation.
To the contrary, in other instances liberating the parties from the limits put on contractual
autonomy by the lex causae insofar as they are allowed to choose uniform law conflictually,
could mean to subject the contract to outdated standards. In particular, to apply the limitations
of liability contained in older Conventions on specific parts of transportation law would do
grave unjustice to shippers and would be a major incentive for carriers to exert their greater
bargaining power. Problems of informational asymmetry would exacerbate the situation. Uniform law is not to be hailed simply because it is uniform law.
4.1.5. Choosing a future European instrument
Presently, there is much debate whether and, if so, in which form to implement some kind of
European Contract Code or European Civil Code. The Commission put forward five options.
One of them is an optional instrument.99 It would be implement as a full instrument of Community law, but would only apply if the parties to a contract choose so. Opting-in is the key93
See Felix Dasser, „Contribution to Discussion“, (2002) 13 ICC International Court of Arbitration Bulletin,
Special Supplement 128.
94
Peter Mankowski, „Ueberlegungen zur sach- und interessengerechten Rechtswahl in Verträgen des
internationalen Wirtschaftsverkehrs“, (2003) Recht der Internationalen Wirtschaft 2 at 14.
95
Peter Mankowski, „Ueberlegungen zur sach- und interessengerechten Rechtswahl in Verträgen des
internationalen Wirtschaftsverkehrs“, (2003) Recht der Internationalen Wirtschaft 2 at 14.
96
Green Paper para. 3.2.3 at p. 23.
97
Hoge Raad May 26, 1989 – Case 13443, (1992) Nederlandse Jurisprudentie No. 105 at p. 358 with note by
Jan C. Schultsz; Hoge Raad January 5, 2001 – Case C99/162HR, (2001) Nederlandse Jurisprudentie No. 391 at
p. 2927 with note by K.F. Haak
98
Green Paper para. 3.2.3 at p. 23.
99
Option IV a of the Communication from the Commission to the Council and the European Parliament of July
11, 2001 on European Contract Law, COM (2001) 398 final p. 20 para. 66.
16
word for this technique. Suppose that such an instrument will be implemented: Would choosing it be a proper conflictual choice of law or only a materiellrechtliche Verweisung? Submittedly the first answer would be correct.100 Such an instrument would not be a non-national
law,101 but would as an act of Community law have the legislative backing by all of the Member States. Whether an act of law is mandatory, dispositive or subject to an express option in
its favour does not make a difference as to the basic quality that it is an act of law. That does
not state, however, anything about how attractive to parties an optional instrument would be
and how far it could possibly stand the competition by the CISG.102
4.2. Tacit or implicit choice of law (Question 9)
4.2.1. Neither need nor better alternative for a general reformulation
Assuming or implying a tacit or implicit choice of law is a matter of fact and degree.103 Any
attempt of customising the various possible indicators is thus doomed from the very outset. It
would have to define the single indicator and its comparative weight quite exactly and to mention possible exemptions and exceptions to sub-rules. Even formulating sub-rules would require the utmost diligence. Simply asserting, for instance, that an jurisdiction clause could be
an indicator, would be short-sighted. Such assertion almost instantly would have to be made
subject to the instant qualification that only an exclusive jurisdiction clause could have these
effects, but not an optional one or an alternative one. “And how about service-of-suit
clauses?” could ask those familiar with modern reinsurance contracts.104 Stating any basic rule
would trigger off consequential questions in their shades. Naming sub-rules, exemptions and
exceptions with the required precision would lead to an implosion of the very wording of Art.
3 (1) 2. It would grow from one single sentence to an empire of its own with at least five or
six sub-rules plus the respective qualifications. Additionally to the sub-rules, there still would
have to be a more general rule, a kind of catch-all-remaining-clause since not even the most
ingenious mind could come up with a complete and comprehensive list of all possible indicators whilst on the other hand it would be unwise to exclude not expressly mentioned indicators. Besides that, every list or alternatively an accompanying official record would have to
clarify sufficiently whether the eiusdem generis-rule applies or not, i.e. whether further indicators could only be recognised by way of analogy to listed ones being of similar kind and
shape.
There are further systematic reservations: Overloading the wording would bring the rule out
of balance with firstly Art. 3 (1) 1 and secondly with Art. 4. Spelling out particular instances
in the context of tacit choice law would more or less necessarily imply that the same course is
taken whenever it comes down to making general rules operable. The foremost candidates
which would require similar listing of indicators, would be Art. 4 (5) and Art. 6 (2) in fine. On
the other hand it would look quite odd to spend one single and simple sentence on the most
basic rule, namely express choice of law whilst investing eventually a long paragraph in the
first substitute, namely tacit choice of law. Keeping the balance between the single parts of
100
Horst Eidenmueller, „Obligatorisches versus optionales europaeisches Vertragsgesetzbuch“, in: Claus
Ott/Hans-Bernd Schäfer (eds.), Vereinheitlichung und Diversitaet des Zivilrechts in transnationalen
Wirtschaftsraeumen (Tuebingen 2002), 237 at 241 and Peter Huber, „European Private International Law,
Uniform Law and the Optional Instrument“, (2003) (2) ERA-Forum 85 at 95 concurring.
101
Peter Huber, „European Private International Law, Uniform Law and the Optional Instrument“, (2003) (2)
ERA-Forum 85 at 95.
102
Peter Huber, „European Private International Law, Uniform Law and the Optional Instrument“, (2003) (2)
ERA-Forum 85 at 93.
103
Richard Plender/Michael Wilderspin, The European Contracts Convention (2nd London ed. 2001) para. 5.11.
104
Cf. Peter Mankowski, „Internationales Rueckversicherungsvertragsrecht“, (2002) Versicherungsrecht 1177 at
1180.
17
the system might not be the utmost interest of an legislator, but diligent draftsmen should
keep an open eye on this issue too.
4.2.2. Tightening the strings against an assumed choice of law
Nevertheless, one issue deserves specific attention: At least German judges105 and their Dutch
colleagues106 display a strong tendency to assume (if not to say: to impute) a choice of the
respective lex fori if the parties undisputedly discuss matters entirely on the ground of that
very lex fori (so called Rechtswahl durch Prozessverhalten). Of course, assuming this makes
the live easier for the judges as they can apply their home law and are not bound to enquire
into foreign law. This is a strong incentive. However, it is by far not guaranteed that the parties, their advisors or Counsel did know about the conflictual implications which might be
derived from their behaviour. But such knowledge about conflictual consequences ought to be
the basic requirement for a choice of law by the parties.107 The courts which assume a choice
of the lex fori mostly fall victim to a perceptive forum bias. This bias might turn out to be to
the detriment of at least one party. From a more general perspective, an unreflected bias towards lex fori defies the utmost goal of inter- or supranational instruments aimed at unifying
conflicts law, since it ultimately is one kind of facultative approach towards choice of law108
whereas such an instrument must demand its mandatory application by the courts of its member states.
The cure for the illness might be a duty imposed upon the court to ask the parties expressly
whether they want to chose the lex fori. If the parties prefer such a choice, so it be. The parties
do so with actual knowledge and at their own risk. Nevertheless, such a choice would be an
express one, and one quite rightly leaves the realm of the assumed and imputed. Raising the
parties’ awareness assures against hidden risks and against unknowingly (and unwillingly)
doing injustice to one party harming this party’s interests. The main objection against imposing a duty to ask upon the court is the necessary interference with the procedural law of the
forum. If the procedural law of the forum gives the judge only a reactive, not a proactive role,
the proposed duty would become some kind of novelty. The European conflicts law, however,
by its mere existence demands that it is applied ex officio. Otherwise the uniformity of conflicts law it is aiming at, could never be reached and would be totally illusionary. Hence, respecting national traditions which eventually would lead to a facultative conflicts law would
be conceptionally misplaced and ought to be disregarded.
4.3. Conclusion
A conflictual choice of non-national rules (like the UNIDROIT or the European Principles of
Contract Law) should not be admitted, nor a conflictual choice of uniform law outside its own
scope of application. A materiellrechtliche Verweisung as it has ever been possible nicely
105
E.g. Bundesgerichtshof September 20, 1995 – Case VIII ZR 52/94, 130 Entscheidungen des
Bundesgerichtshofs in Zivilsachen 371; BGH April 23, 2002 – Case XI ZR 136/01, (2002) Zeitschrift fuer
Wirtschaftsrecht (ZIP) 1155 at 1157; BGH March 25, 2003 – Case XI ZR 224/02, (2003) ZIP 838 at 839;
Oberlandesgericht Frankfurt am Main January 1, 1995 – Case 5 U 46/92, (1995) Wertpapier-Mitteilungen 1179;
Oberlandesgericht Hamm June 9, 1995 – Case 11 U 191/94, (1996) Recht der Internationalen Wirtschaft 689.
106
Cf. only most recently Hof Amsterdam July 22, 1999 – Case 894/98, (2001) Nederlands Internationaal
Privaatrecht (NIPR) No. 190 p. 328; Hof ´s-Hertogenbosch May 22, 2001 – Case C9900010/MA, (2001) NIPR
No. 266 p. 446; Rechtbank Rotterdam January 21, 1999, (2001) NIPR No. 120 p. 243; Rechtbank Utrecht
August 4, 1999 – Case 83804/HA ZA 98-613, (2000) NIPR No. 152 p. 237.
107
Cf. only Oberlandesgericht Muenchen (Munich) January 9, 1996 – Case 25 U 4605/95, (1996) Recht der
Internationalen Wirtschaft 329 at 330.
108
Gerhard Bolka, „Zum Parteieneinfluss auf die richterliche Anwendung des IPR“, (1972) Zeitschrift fuer
Rechtsvergleichung 241 at 250 et seq.
18
does the job required and is entirely sufficient. A lex mercatoria does not exist and can thus
not be a proper object of a choice of law or of a materiellrechtliche Verweisung.
Generally, Art. 3 (1) 2 Rome Convention should be retained as it stands. There is no pressing
need for legislative action in this regard. It would be unwise to mention some examples for
possible indications as to a choice of law expressly. The only sensible amendment could be to
impose a duty upon courts to ask the parties whether they intend to choose the lex fori insofar
as parties argue exclusively on the ground of the lex fori.
5. Connecting factors in lack of a contractual choice of law (Questions 10 and 11)
5.1. Strengthening the rule: putting the principle of characteristic performance first
To strengthen the presumption it would be most helpful to omit the present Art. 4 (1) 1 Rome
Convention and to put the presumption and principle of characteristic performance now contained in Art. 4 (2) Rome Convention at the very beginning of the future Art. 4. Art. 4 (1) 1
Rome Convention is exhausted by asserting time and again the basic principle of modern conflicts law. The closest connection as such is a maxim, but not a proper and operable connecting factor.109 Art. 4 (1) 1 Rome Convention comes close to being a non-rule.110 Its content is
generally added by the following presumptions which in turn can claim preference according
to the maxim of lex specialis.111 On the other hand its mere existence disturbs practitioners (in
particular inexperienced ones not familiar with cross-border cases) who believe it already to
be the rule. Furthermore, it appears to lend more force to contentions invoking the escape
clause of Art. 4 (5) and thus indirectly weakens the real rules contained in paragraphs 2 and 3.
An internal restructuring should be added: That the party providing the characteristic performance does not act in the course of its professional business is a rare case. Cross-border
selling or offering by private parties undeniably happens occasionally, but the vast and by far
overwhelming majority of cases concerns professional parties. Cross border C2C- or C2Bcommerce is the exception, cross border B2B- or B2C-commerce is by far the rule. This
should be reflected by putting the present Art. 4 (2) 2 Rome Convention up-front, slightly
reworded. The small changes in the wording are only necessary insofar as they are prompted
by the reversal of position with the present (2) 1. Where the present (2) 2 can shorten its
wording by referring to the present (2) 1, the future (1) 1 must carry the full load itself.
5.2. The escape clause
The escape clause is a dangerous device only to be instrumentalised prudently and with great
caution. Unfortunately, courts sometime do not employ the necessary caution and, in fact,
make the exception the rule. The escape clause is for instance used as a means for establishing
a home-bound trend, a forum bias in order to apply the lex fori. The most recent example in
this regard is provided by the Cour de Cassation: The delivery of the transported goods in
France was held sufficient to disregard Art. 4 (4) Rome Convention and to apply French law
109
Uwe Blaurock, „Vermutungen und Ausweichklausel in Art. 4 EVUe – ein tauglicher Kompromiss zwischen
starren Anknuepfungsregeln und einem flexible approach?“, in: Festschrift fuer Hans Stoll (Tuebingen 2001),
463 at 472 et seq.
110
See Friedrich K. Juenger, „Parteiautonomie und objektive Anknuepfung im EG-Uebereinkommen zum
Internationalen Vertragsrecht“, (1982) 46 Rabels Zeitschrift 57 at 72.
111
Jolanta Kren Kostkiewicz, „Das Verhaeltnis zwischen dem engsten Zusammenhang und der
charakteristischen Leistung (Art. 117 Abs. 1 und 2 IPRG) – dargestellt anhand ausgewählter
Innominatvertraege“, in: Private Law in the International Arena – Liber amicorum Kurt Siehr (The
Hague/Zuerich 2000), 361 at 367.
19
to the underlying contract of maritime carriage.112 A little bit sarcastically and ironically one
could re-formulate the escape rule for practical purposes (or rather practitioners’ purposes): If
para. (2) leads to the application of the lex fori it will be followed; if it does not, it will be disregarded by employing para. (5). That such a rule would already be inconsistent with, and
contrary to, the wording, not to mention the systematic structure of Art. 4 goes without saying. Generally French courts show a certain tendency to disregard the presumptions if it appears to please.113
However, there is also authority giving cause for optimism by making only cautious and restrictive use of the escape clause. The undisputed leader is the famous Balenpers-decision of the
Hoge Raad,114 which got due attention in England.115 The German higher courts show at least a
strong tendency towards its results,116 and so does the English Court of Appeal.117 A restrictive
approach was also approved by the Scottish courts.118 The restrictive approach mitigates the two
inherent dangers of instrumentalising the escape clause extensively. These dangers are, firstly,
clinging to rules stemming from national conflicts law and, secondly, as already mentioned a
forum bias, a homebound trend with the judiciary to prefer the lex fori to applying foreign
law.119 Courts should also be not allowed to formulate sub-rules for certain classes of contracts
through applying the escape clause.120 The escape clause is meant to repair concrete shortcomings of the rules,121 not to replace the rules on a more abstract level. There is no leeway for
expressing antipathy to the characteristic performance principle by importing traditional national rules through the backdoor of the escape clause. The abstract rules are set. The escape
112
Cour de Cassation, chambre commerciale March 4, 2003, (2003) 92 Revue critique de droit international
privé 285 at 287 with disapproving note by Paul Lagarde = (2003) 55 Droit maritime francais 556 at 557 with
note by Philippe Delebecque.
113
E.g. Cour de Cassation, 1ère chambre civile February 16, 1994, (1994) 83 Revue critique de droit
international privé 341; Cour d’appel Versailles February 6, 1991, (1991) 80 Revue critique de droit
international privé 745 with note by Paul Lagarde = (1992) 119 Journal du droit international 125 with note by
Jacques Foyer = (1992) Revue trimestrielle de droit européen 525 with note by Hélène Gaudemet-Tallon;
Tribunal de Grande Instance Poitiers December 22, 1999, (2001) 90 Revue critique de droit international privé
670 with note by Pauline Rémy-Corlay.
114
Hoge Raad September 25, 1992 – Case 14566, (1992) Nederlandse Jurisprudentie No. 750 at p. 3263.
115
Definitely Maybe (Touring) Ltd. v. Marek Lieberberg Konzertagentur GmbH [2001] 1 Weekly Law Reports
1745 at 1748 et seq. (Q.B.D., Morison J.).
116
Bundesgerichtshof February 25, 1999 – Case VII ZR 408/97, (1999) Neue Juristische Wochenschrift 2442 at
2443; Oberlandesgericht Brandenburg May 25, 2000 – Case 12 U 159/99, (2002) Rechtsprechung der
Oberlandesgerichte in den Neuen Bundeslaendern 3 at 5. Cf. also (with regard to the parallel Art. 6 (2) in fine
Rome Convention) Bundesarbeitsgericht (BAG) August 24, 1989 – Case 2 AZR 3/89, 63 Entscheidungen des
Bundesarbeitsgerichts (BAGE) 17 at 26 et seq.; BAG October 29, 1992 – Case 2 AZR 267/92, 71 BAGE 297 at 308
et seq.; BAG May 3, 1995 – Cases 5 AZR 15 to 17/94 , 80 BAGE 84 at 91; Landesarbeitsgericht (LAG)
Duesseldorf December 7, 1990 – Case 9 Sa 1397/90, (1992) Recht der Internationalen Wirtschaft 402; LAG
Hamburg October 19, 1995 – Case 2 Sa 91/94, (1996) Die Rechtsprechung der deutschen Gerichte auf dem Gebiet
des Internationalen Privatrechts (IPRspr.) No. 50 a at p. 108; LAG Niedersachsen November 20, 1998 – Case 3 Sa
909/98, Arbeitsrechts-Blattei Entscheidungs-Sammlung 920 No. 6 at p. 4 et seq. with note by Peter Mankowski
(November 1999); Hessisches LAG August 14, 2000 – Case 10 Sa 982/99, (2000) IPRspr. No. 40 at p. 85.
117
Ennstone Building Products Ltd. v. Stanger Ltd. [2002] 2 All England Reports (Commercial Cases) 479 at 489
(C.A., per Keene L.J.); Samcrete Egypt Engineers and Contractors SAE v. Land Rover Exports Ltd. [2002]
Commercial Law Cases 533 para. 45 (C.A.). But cf. also Kenburn Waste Management Ltd. v. Heinz Bergmann
[2002] International Litigation Procedure 588 at 593-595 (C.A., per Robert Walker L.J.).
118
Caledonia Subsea Ltd. v. Micoperi srl 2002 Scots Law Times 1022 (Court of Session, Inner House), 2001
Scots Cases 716 at 725 et seq. (Court of Session, Outer House, Lord Hamilton).
119
Peter Mankowski, „Rechtssicherheit, Einzelfallgerechtigkeit und Systemgerechtigkeit bei der objektiven
Anknuepfung im Internationalen Schuldvertragsrecht – Zur Reichweite des Artikel 4 Absatz 5 EVUe“, (2002)
Zeitschrift fuer Europaeisches Privatrecht 811 at 819 et seq.
120
Peter Mankowski, „Rechtssicherheit, Einzelfallgerechtigkeit und Systemgerechtigkeit bei der objektiven
Anknuepfung im Internationalen Schuldvertragsrecht – Zur Reichweite des Artikel 4 Absatz 5 EVUe“, (2002)
Zeitschrift fuer Europaeisches Privatrecht 811 at 813-815 with ample references.
121
Hoge Raad September 25, 1992 - Case 14566, (1992) Nederlandse Jurisprudentie No. 750 at p. 3263.
20
clause must not be a device for launching a general attack against them. It is the exception and
not the rule.
It is rather difficult to propose a certain and specific wording which could help effectively tightening the ropes, but an elegant solution would be to borrow from Art. 6 (2) in fine Rome Convention and thus to demand that the connections with another law must be substantially or essentially closer before setting the rule aside is allowed. However, there is little hope that such an
alteration and amendment of the wording would stop courts willing to deviate from the rule,
from pursuing their course. To think otherwise would be tantamount to underestimating the
respective judges’ ingeniosity and geniality. If a judge is determined to apply a certain law
(mostly the lex fori) in spite of Art. 4 (2), he will find good enough a reason to do so.
On the other hand, giving examples when the escape clause might be employed (for instance
within a complex structure of interlinked contracts122 or contracts concluded at a localised product exchange or in a localised auction123) could overload the wording. Furthermore, it could be
misleading as still a diligent weighing of contacts would be additionally required. Examples
could easily be mistaken as sub-rules and trigger off a rather schematic application which was
in fact unwarranted by legislation. Hence, the possible disadvantages of examples would outweigh the possible advantages.
5.3. Holiday leasing agreements (Question 11)
Short-time leases of holiday premises are of considerable economic importance. At first
glance, one feels tempted to adopt a special rule for them largely borrowing from Art. 22 No.
1 subpara. 2 Brussels I Regulation.124 But on closer examination one should resist this temptation. The explanation comes easy if one takes into account properly that Art. 22 Brussels I
Regulation deals with exclusive jurisdiction not subject to contractual derogation by the parties whereas Art. 4 (3) constitutes only a default rule in the event that the parties have not provided for a contractual choice of law. This is a fundamental difference: The parties can avoid
any injustice possibly caused by Art. 4 (3). Even disregarding the difference concerning the
allowed amount of party autonomy, there is further leeway in conflicts law which the Brussels
I Regulation does not offer: Art. 22 No. 1 subpara. 1 Brussels I Regulation is a strict, hard and
fast rule whereas Art. 4 (3) is subject to Art. 4 (5). The level of rigidity is completely and utterly different if one compares the precise details of both regimes.
To these arguments an intrinsic argument ought to be added: Art. 22 No. 1 subpara. 2 Brussels
I Regulation does a sensible job by smoothening the full exacerbation otherwise exerted by
Art. 22 No. 1 subpara. 1 Brussels I Regulation. It does no good justice to subject parties to
short term leases mandatorily to the jurisdiction of the state where the premises are located in
any possible event. The strict application of the original Art. 16 No. 1 Brussels Convention by
the ECJ125 drew very heavy and fully justified criticism from both academic and practitioners’
quarters.126 Art. 22 No. 1 subpara. 2 Brussels I Regulation owes its very existence only to the
necessity to cure the rigidity of Art. 22 No. 1 subpara. 1 Brussels I Regulation, at least par122
Peter Mankowski, „Die Ausweichklausel des Art. 4 V EVUe und das System des EVUe“, (2003) Praxis des
Internationalen Privat- und Verfahrensrechts 464 at 471.
123
As under a slightly different concept Art. 1211 (4) sub 3) of the new Russian PIL Act of Nove,ber 26, 2001
(published in a German translation in [2003] 67 Rabels Zeitschrift 341) does.
124
Cf. Dieter Martiny, in: Muenchener Kommentar zum Buergerlichen Gesetzbuch, Vol. X (3rd ed. Munich 1998)
Art. 28 EGBGB note 121.
125
ECJ January 15, 1985 – Case 241/83 Erich Rösler v. Horst Rottwinkel, [1985] ECR 99; ECJ February 26,
1992 – Case C-280/90 Elisabeth Hacker v. Euro-Relais GmbH, [1992] ECR I-1111; ECJ January 27, 2000 –
Case C-8/98 Dansommer A/S v. Andreas Goetz, [2000] ECR I-393.
126
See in particular Thomas Rauscher, “Die Ferienhausentscheidung des EuGH – Unbilligkeit oder Konsequenz
europaeischer
Rechtspflege“, (1985)
Neue
Juristische
Wochenschrift
892; Karl
Kreuzer,
„Zustaendigkeitssplitting kraft Richterspruchs“, (1986) Praxis des Internationalen Privat- und Verfahrensrechts
75.
21
tially. But the cure offered by Art. 22 No. 1 subpara. 2 Brussels I Regulation is a rather limited one due to the bad influence of lobbying in particular by Mediterranean Member States
which overly cared for the benefit of their respective holiday industry.127 Summarisingly,
even apart from the different purposes served and the very substantial difference in the
strength of the respective rule, the immanent shortcoming of the possible model strongly advocates against an unreflected import of Art. 22 No. 1 subpara. 2 Brussels I Regulation into
the rules on conflict of laws.
Hence, the recommendation is against a specific rule for short-term leases of holiday premises. If the rule contained in Art. 4 (3) Rome Convention proves to be inappropriate in casu,
the escape clause comes into operation as an apt instrument for correcting the rule,128 exactly
what the escape clause is designed for.
5.4. Striking out Art. 4 (4) Rome Convention
The Green Paper does not pay all too much specific attention to Art. 4 (4) Rome Convention.
But it may be submitted that it would be wise to strike out Art. 4 (4) Rome Convention. This
rule bears no proper justification. It was designed to avoid the application of the law of a flag
of convenience State.129 But this has never been the alternative that would have come into
operation if Art. 4 (4) Rome Convention had not existed. The alternative would have been the
application of Art. 4 (2) 2 Rome Convention. In reality, the operating carriers – and only operating carriers are parties to genuine contracts of carriage – have always had their relevant
places of business in States of the first world.130 The maritime lawyer whose writings sparked
developing Art. 4 (4) Rome Convention improperly mixed and confused property holding
companies with operating carriers.131 Furthermore, the fear of flags of convenience is a specific phenomenon of maritime traffic. It does not have counterparts in the other areas of transportation.132 Even if the accusations had been true for maritime traffic, there would not have
been a justification for a rule covering all kind of transportation contracts.
If the complicated combination in Art. 4 (4) Rome Convention is not fulfilled this poses quite
some kind of conundrum: Which conflicts rule is to apply then? The best solution was to fall
127
Georges A.L. Droz/Hélene Gaudemet-Tallon, „La transformation de la Convention de Bruxelles du 27
septembre 1968 en Règlement du Conseil concernant la compétence judiciaire, la reconnaissanece et l’exécution
des décisions en matière civile et commerciale, (2001) 90 Revue critique de droit international privé 601 at 649;
Christian von Bar/Peter Mankowski(-Peter Mankowski), Internationales Privatrecht, Vol. I: Allgemeine Lehren
(2nd ed. Munich 2003) § 5 note 170.
128
Bundesgerichtshof October 12, 1989 – Case VII ZR 339/88, 109 Entscheidungen des Bundesgerichtshofs in
Zivilsachen (BGHZ) 29 at 36; Landgericht Koeln (Cologne) January 22, 1992 – Case 26 O 142/91, (1992)
Verbraucher und Recht 156 at 157; Peter Mankowski, „Rechtssicherheit, Einzelfallgerechtigkeit und
Systemgerechtigkeit bei der objektiven Anknuepfung im Internationalen Schuldvertragsrecht – Zur Reichweite
des Artikel 4 Absatz 5 EVUe“, (2002) Zeitschrift fuer Europaeisches Privatrecht 811.
129
Erling Selvig, „Certain Problems Relating to the Application of the EEC Draft in the Field of International
Maritime Law“, in: Ole Lando/Bernd von Hoffmann/Kurt Siehr (eds.), European Private International Law of
Obligations (Tuebingen 1975), 195 at 197, 199; Miguel Virgós Soriano, „El convenio de Roma de 19 de junio
de 1980 sobre ley aplicable a las obligaciones contractuales, in: Eduardo García de Enterría/Julio D. González
Campos/Santiago Munoz Machado (eds.), Tratado de derecho cumintario europeo, Vol. III Vol. III (Madrid
1986) 753 at 786; Axel Flessner, Reform des Internationalen Privatrechts: Was bringt sie dem Seehandelsrecht?
(Hamburg 1987) 27 f.
130
Peter Mankowski, Seerechtliche Vertragsverhaeltnisse im Internationalen Privatrecht (Tuebingen 1995) 1315.
131
See Erling Selvig, „Certain Problems Relating to the Application of the EEC Draft in the Field of
International Maritime Law“, in: Ole Lando/Bernd von Hoffmann/Kurt Siehr (eds.), European Private
International Law of Obligations (Tuebingen 1975), 195 at 197, 199; applauded by Bernd von Hoffmann,
„General Report on Contractual Obligations“, in: Ole Lando/Bernd von Hoffmann/Kurt Siehr (eds.), European
Private International Law of Obligations (Tuebingen 1975), 1 at 8.
132
See Peter Mankowski, Seerechtliche Vertragsverhaeltnisse im Internationalen Privatrecht (Tuebingen 1995)
15 et seq.
22
back on Art. 4 (2) 2 Rome Convention disguised as a structuring sub-rule under the nominally
applicable Art. 4 (1) 1 Rome Convention.133 There simply are no substantial and even less
convincing reasons against the application of the general rule contained in Art. 4 (2) 2 Rome
Convention. Transport is not that different as it likes to believe, at least from the point of view
of conflicts law. If there are peculiarities those peculiarities stem from special Conventions –
and these special Conventions will prevail by virtue of Art. 21. However, the transformation
into the future Rome I Regulation offers the opportunity to strike out and drop Art. 4 (4)
Rome Convention, a rule not serving a real or discernible purpose and complicating matters
unnecessarily.
5.5. Conclusion
Art. 4 Rome I Regulation should
- (1) drop Art. 4 (1) 1 Rome Convention;
- (2) establish Art. 4 (2) 2 Rome Convention as the first and basic rule already in the wording putting it ahead of any other rule;
- (3) attempt to reformulate Art. 4 (5) Rome Convention so as to make unambiguously clear
that the escape clause is an exception, e.g. by adding the word “substantially” or “essentially” to the “closer connections”;
- (4) not contain a special rule for short term holiday leasing agreements;
- (5) not retain Art. 4 (4) Rome Convention.
6. Consumer contracts (Question 12)
The most controversial provision of the entire Rome Convention undoubtedly is Article 5
dealing with the international protection of consumers. How substantial and widespread the
controversy was is truly reflected by the number of variations and the alternatives the Commission subjects to discussion. Not less than eight of them appear to merit consideration. At
least this is the number of possibilities listed in the Green Paper.134
6.1. The jungle of possibilities
Already simply reading, or flicking through, the bunch of alternatives reminds of Prosser’s
(in)famous dictum that conflicts law is “a dismal swamp filled with quaking quagmires and
inhabited by learned, but eccentric professors who theorise about mysterious matters in a
strange and incomprehensible jargon [whereas] the ordinary court, or lawyer, is quite lost
when engulfed and entangled in it”.135 The range of possibilities includes: (1) maintaining Art
5 at is, only adding a Community minimum standard; (2) generally maintaining Art. 5 as it is
but including the mobile (active consumer) and extending it to more types of contracts; (3)
generalising Art. 3 and 4, but combined with a general application of the mandatory rules of
the state of the consumer’s residence; (4) applying a chosen law in matters where a harmonisation of substantive law has already been reached; (5) systematically applying the law of the
consumer’s place of residence; (6) copying Art. 15 Brussels I Regulation; (7) generally copying Art. 15 Brussels I Regulation but implementing the condition that the law of the consumer’s residence could only be applied if the supplier was aware of it or should have been
133
Hof Leeuwarden Dec. 2, 1981, (1983) Nederlandse Jurisprudentie No. 564 at p. 1792 with note by Jan C.
Schultsz; Oleg N. Sadikov, „Conflict of Laws in International Transport Law“, (1985 I) 190 Recueil des Cours
189, 235; René van Rooij/Joost L. den Dulk, Internationaal Contractenrecht (Deventer/´s-Gravenhage 1990) 65;
Peter Mankowski, Seerechtliche Vertragsverhaeltnisse im Internationalen Privatrecht (Tuebingen 1995) 68-70.
134
Green Paper para. 3.2.7.3 i-viii at pp. 30-32.
135
William L. Prosser, „Interstate Torts“, 51 Michigan Law Review 959 at 971 (1953).
23
aware of it; (8) permitting only a restricted choice of law, namely the choice of the law of the
State where the business is established.136 The spectator becomes disturbed, admittedly on a
very high level. The feeling of getting lost in an universe of its own is even fostered if one
takes into consideration that there are other alternatives not listed plus the possibilities of
combinations of two or more alternatives.137
6.2. The sound solution: copying Art. 15 Brussels I Regulation
Despite all controversy in the past, the avenue to be taken for the future appears to be clear: to
follow the lead established by Art. 15 Brussels I Regulation.138 The main and utterly convincing argument is to keep the parallel between jurisdiction and applicable law as far as possible
(at least insofar as both stem from European sources). Art. 15 Brussels I Regulation was designed as a front-runner. To decide differently would enlarge the amount of political costs to
be invested in order to reach a solution. There is no need to re-live and thus double all the
struggles the discussion and the law-making process went through until reaching Art. 15
Brussels I Regulation. The hope that novel arguments could surface is minimal, if not zero at
all. Hence, it would be a wise decision to adopt the solution already prompted and favoured
by the sister regulation. Even the fiercest lobbyists should see some force in this course. One
should accept that the General Direction SanCo won the battle against the General Direction
Internal Market. In the past, lobbyists failed to produce statistical figures that accurately
measured the presumed losses following from conflicts rules protecting consumers. Unless
they deal with this matter more professionally, i.e. unless they procure reliable and accountable data, they will lose the next battle too.139 At least they fight the battle uphill since Art. 15
Brussels I Regulation has entered into force.
Additionally, there is one “minor detail” that escapes the attention of most writers but makes a
world of difference: Under an ordinary consumer contract the amount at stake does not make
it worthwhile for the consumer to litigate and to invoke the protection granted to him by the
law. The most rational strategy the consumer could adopt is in most instances rational apathy:
He internalises his losses and refrains himself from doing future business with the enterprise
in question, putting its name on a mental “black list”.140 Hence, the probability that the enterprise will ever have to face the realisation of the Rechtsanwendungsrisiko effectively is rather
low.141 Furthermore, in the majority of instances where – after giving careful consideration to
the respective pros and contras – a consumer decides to take action, the enterprise in question
(if it is a serious market-player not going for fraudulent one-off contracts) will evaluate
whether it would not be the better course to settle, and to deal with, the consumer’s complaint
even if not compelled to do so by law.142 It will remember and recall an old but nevertheless
true saying: Only a pleased customer is a good customer - and offers an opportunity for repeat
business.
136
Green Paper para. 3.2.7.3 i-viii at pp. 30-32.
Some of them are not strict alternatives in the terms of philosophical logics.
138
The same recommendation is given by Ludovic Bernardeau, „ Droit international privé et services financiers
de détail – 2° partie: Les conflits de lois“, (2003) Euredia 59 at 85.
139
Peter Mankowski, „Das Gruenbuch zur Rom I-Verordnung“, (2003) Zeitschrift fuer Europaeisches
Privatrecht 483 at 486.
140
Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“ (2000) MultiMedia und Recht
Supplement 7 p. 22 at 32; Peter Mankowski, „Electronic Commerce und Internationales Privatrecht“,
(1999/2000) Molengrafica 97 at 120.
141
Peter Mankowski, „Internationaler Verbraucherschutz und Internet“, in: Internet und Recht (Vienna 2002),
191 at 212 et seq.
142
Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“ (2000) MultiMedia und Recht
Supplement 7 p. 22 at 32; Peter Mankowski, „Internationaler Verbraucherschutz und Internet“, in: Internet und
Recht (Vienna 2002), 191 at 212.
137
24
6.3. Proposed alterations
In detail, following Art. 15 Brussels I Regulation induces a threefold challenge, namely:
- to extend Art. 5 to all contracts between a consumer and an enterprise, regardless of their
content, unless some specific regime claims to regulate a specific kind of contract, and in
the consequence to eliminate the restriction that only contracts for the delivery of goods or
service are covered;143
- to drop the second requirement now to be found in Art. 5 (2) 1st lemma Rome Convention
that the consumer must have expressed his consent to the contract in the country where he
has his habitual residence;
- to borrow as the single, i.e. the one and only criterion for international applicability that
the enterprise must have directed commercial activities towards, or have done business in,
the state where the consumer has his habitual residence, or a number of states including
this state.144
6.3.1. Extending Art. 5 to all kinds of contracts
Contrary to almost general opinion held among practitioners, the most substantial alteration
will be the first of the proposed ones, the extension to in principle all kinds of contracts.145 In
particular, it unambiguously subjects consumer loans and credits without a designated specific
purpose to Art. 5146 and will thus bring Art. 5 in line with the Consumer Credit Directive
eventually. Furthermore, it tackles the growing importance of intangible “goods” in the information society. For the purposes of Art. 5 it will become unnecessary to discuss whether
software delivered on-line constitutes a “good” or not. The importance of tangibility vanishes
and belongs to concepts of the past. Contracts on the transfer of rights, including intellectual
property rights, to a consumer should be equally covered by the rejuvenated Art. 5. In PIL the
proposed change also covers leases and rents of real property.147 Insofar it is even broader
than Art. 15 Brussels I Regulation but for the only reason that Art. 22 no. 1 Brussels I Regulation specifically detains such contracts from the ambit of Art. 15 Brussels I Regulation
whereas the Rome I Regulation will not contain specific exclusive conflicts rules for these
kinds of contracts.
6.3.2. Disregarding where the consumer expressed his consent
The additional requirement now to be found in Art. 5 (2) 1st lemma Rome Convention that the
consumer must have expressed his consent to the contract in the country where he has his
habitual residence, serves no discernible purpose and lacks a forfeitable justification.148 In
modern times, the place where acts of communication are issued, has become more and more
143
Cf. already Carla A. Joustra, „Internationale consumentenovereenkomsten: wijziging van artikel 5 EVO
gewenst!“, (1997) Ars Aequi 828 at 832.
144
Hans Stoll, „Zur Neuordnung des internationalen Verbrauchervertragsrechts“, in: Aufbruch nach Europa –
Festschrift 75 Jahre Max-Planck-Institut fuer Privatrecht (Tuebingen 2001) 463 at 471-473.
145
Cf. Michael Wilderspin, “Le règlement (CE) 44/2001 du Conseil: conséquences pour les contrats conclus par
les consommateurs”, (2002) Revue européenne de droit de la consommation 5 at 21; Veronika Mochar/Simone
Seidl, „Internationales Verbraucherschutzrecht und e-commerce“, (2003) Oesterreichische Juristenzeitung 241
at 252.
146
Hans Stoll, „Zur Neuordnung des internationalen Verbrauchervertragsrechts“, in: Aufbruch nach Europa –
Festschrift 75 Jahre Max-Planck-Institut fuer Privatrecht (Tuebingen 2001) 463 at 468.
147
Hans Stoll, „Zur Neuordnung des internationalen Verbrauchervertragsrechts“, in: Aufbruch nach Europa –
Festschrift 75 Jahre Max-Planck-Institut fuer Privatrecht (Tuebingen 2001) 463 at 468.
148
Cf. only Wolfgang Weitnauer, Der Vertragsschwerpunkt (Frankfurt am Main 1981) p. 120.
25
fortuitous.149 In particular, contracts concluded online clearly display this.150 The general idea
behind Art. 5 relates to the enterprise exclusively: Slightly exaggerating and using martial
terminology, the enterprise must have invaded into the consumer’s State, more precisely, the
contracting market in the consumer’s State.151 For this general idea it does not matter where
the consumer expresses his consent. To the contrary, the said restriction vindicated tactics by
ingenious businessmen to make the consumer travel to the place of business of the enterprise
in order simply to sign the contract. Such conduct was recognised in particular in investment
banking. That the consumer was induced to cross the border, does not make him an “active”
consumer acting on his own motion and initiative.152 Hence, striking out the requirement
closes a gap and avoids a hole in the consumer’s legal armour.
6.3.3. Reformulating the necessary link to the consumer’s State along the same lines as in Art.
15 (1) lit. c Brussels I Regulation
Catching almost the entire attention in the process of drafting Art. 15 Brussels I Regulation
was the third alteration. It was severely attacked by the lobbies of those enterprises which
engaged in e-commerce (and which favoured, not surprisingly, some kind or the other of
country-of-origin-approach153 whereas consumer protection even under the original Art. 5
Rome Convention was bound to the country of destination rule154). However, already for Art.
5 Rome Convention the better arguments are in favour of treating web-sites as advertisements
and to leave it to the enterprise to protect itself by refusing contract offers from consumers
located in countries with which they do not want to do business. Self-protection is the key for
the enterprise in contractual matters.155 Simply inserting a disclaimer in its web-site on the
other hand does not in itself protect the enterprise. Who loudly brags around that he will not
do business with certain countries but secretly concludes contracts with customers from those
countries, commits self-contradiction and cannot claim legal recognition of his tactics. In the
majority of cases no informational problem as to where the customer is located will arise. If
delivery of ordered goods has to take place in the real world, the enterprise has generally all
necessary information about its customer’s address.156 Enterprises are bound to ask their respected customers about their whereabouts. The higher the earnings, the more this is a simple
149
Thomas Senff, Wer ist Verbraucher im internationalen Zivilprozess? (Frankfurt am Main etc. 2001) p. 281;
Hans Stoll, „Zur Neuordnung des internationalen Verbrauchervertragsrechts“, in: Aufbruch nach Europa –
Festschrift 75 Jahre Max-Planck-Institut fuer Privatrecht (Tuebingen 2001) 463 at 471.
150
Alexander R. Markus, „Revidierte Uebereinkommen von Bruessel und Lugano: Zu den Hauptpunkten“,
(1999) Schweizerische Zeitschrift fuer Wirtschaftsrecht 205 at 213.; Hans-W. Micklitz/Peter Rott,
„Vergemeinschaftung des EuGVUe in der Verordnung (EG) Nr. 44/2001“, (2001) Europaeische Zeitschrift fuer
Wirtschaftsrecht 325 at 331.
151
Cf. only Dieter Martiny, in: Muenchener Kommentar zum Buergerlichen Gesetzbuch, Vol. X (3rd ed. Munich
1998) Art. 29 EGBGB note 18; Julius von Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen
Gesetzbuch,, Artt. 27-37 EGBGB (13th ed. Berlin 2002) Art. 29 EGBGB note 65; Peter Mankowski,
„Internationales Privatrecht“, in: Gerald Spindler (ed.), Vertragsrecht der Internet-Provider (Cologne 2000) ch.
III note 30 and Oberlandesgericht Duesseldorf October 26, 1999 – Case 21 U 48/99, (2000) Monatsschrift fuer
Deutsches Recht 575 at 576; Rayner v. Davies [2003] 1 All England Law Reports (Commercial Cases) 394 at
402 (C.A., per Mummery L.J.).
152
See COM (1999) 348 final p. 17.
153
Global Business Dialogue on Electronic Commerce – Issue Group Policy Paper Jurisdiction (Draft Version
4.0), June 11, 1999, lines 244 et seq. The „Dialogue“ consisted of partners like Microsoft, Bertelsmann, and
Deutsche Bank.
154
Cf. only Stefania Savini, „Delocalizzazione del contratto stipulato su Internet – Problemi di giurisdizione e
legge applicabile“, (2002) Contratto e impresa/Europa 1131 at 1154.
155
Peter Mankowski, „Das Internet im Internationalen Vertrags- und Deliktsrecht“, (1999) 63 Rabels Zeitschrift
203 at 248 et seq.; Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“, (2000)
MultiMedia und Recht Supplement 7 p. 22 at 25.
156
Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“, (2000) MultiMedia und Recht
Supplement 7 p. 22 at 26.
26
matter of commercial self-protection. Otherwise the enterprise singlehandedly would deprive
itself of any opportunity to check its customer’s standing or liquidity and to rate this particular
customer.157 If on the other hand consumers fraudulently disguise their whereabouts by giving
a false address they cannot claim legal protection afterwards, but are for good reason deprived
of such protection.158
Upon closer inspection, the third alteration turns out not to be a major change in substance,
but only a change in the wording.159 The mere re-formulation might be slightly clearer than
the original wording. But it should not generate any misapprehension as to the interpretation
of the original version. Nor should it give rise to any distinguishing between so-called active
and so-called passive web-sites as the Commission misconceivedly put forward in the context
of Art. 15 Brussels I Regulation.160 Such distinguishing would amount to a misunderstood
import of American concepts that separated from their roots would not mould into new, European surroundings;161 it is suspect for getting mixed with the different notion of activity or
passivity of consumers.162 Employing a broader wording at least avoids the traps inherent in a
detailed enumeration.163
6.4. Conclusion
Art. 5 Rome I Regulation should closely follow Art. 15 Brussels I Regulation. This comprises
(1) extending it to all kinds of contracts, (2) disregarding where the consumer expressed his
contractual consent, and (3) adopting the approach taken by Art. 15 (1) lit. c Brussels I Regulation.
Referring to the possibilities mentioned in the Green Paper this is a clear vote for option vi).
In fact, option ii) is not that different.
7. International Employment Contracts (Questions 14 and 15)
The Rome Convention provides for the protection of employees in a similar way as for the
protection of consumers. Art. 6(1) of the Convention allows for a choice of the applicable
law. But again, the choice cannot deprive the employee “of the protection afforded to him by
the mandatory rules of the law which would be applicable … in the absence of choice.” The
objectively applicable law sets therefore the minimum-standard. The objectively applicable
law is defined in Art. 6(2) Rome Convention: it is the law at the ordinary workplace, even if
the employee is temporarily employed in another country (a); if there is no habitual workplace
in any one country the law of that country governs “in which the place of business through
which he was engaged is situated” (b). An escape clause at the end of Art. 6 (2) allows to apply a closer connected law instead. In essence, this concept of specific protection of employ157
Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“, (2000) MultiMedia und Recht
Supplement 7 p. 22 at 26.
158
Peter Mankowski, „Das Internet im Internationalen Vertrags- und Deliktsrecht“, (1999) 63 Rabels Zeitschrift
203 at 249 et seq.; Peter Mankowski, „E-Commerce und Internationales Verbraucherschutzrecht“, (2000)
MultiMedia und Recht Supplement 7 p. 22 at 26 et seq.
159
Cf. Joakim S.T. Øren, “International Jurisdiction over Consumer Contracts in e-Europe”, (2003) 52
International and Comparative Law Quarterly 665 at 686-694.
160
See Proposal for a Council Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in
Civil and Commercial Matters, OJ 1999 C 376/17.
161
Peter Mankowski, „Internationaler Verbraucherschutz und Internet“, in: Internet und Recht (Vienna 2002),
191 at 199 et seq.; Joakim S.T. Øren, “International Jurisdiction over Consumer Contracts in e-Europe”, (2003)
52 International and Comparative Law Quarterly 665 at 683-686.
162
Peter Mankowski, „Internationaler Verbraucherschutz und Internet“, in: Internet und Recht (Vienna 2002),
191 at 200.
163
Cf. Carla A. Joustra, „Internationale consumentenovereenkomsten: wijziging van artikel 5 EVO gewenst!“,
(1997) Ars Aequi 828 at 829.
27
ees in international labour law has proved to be useful and practical. It ensures that employees
normally enjoy the protection of the law at the place where they work. The judgments164 of
the ECJ concerning the corresponding jurisdiction provision in the Brussels Convention (Art.
5 no. 1; now Art. 19 Brussels I Regulation) have already clarified some points also of relevance for Art. 6 Rome Convention. The Green Paper thus rightly asks only questions of minor
importance for international employment law.
7.1. Temporary posting of employees
The first question165 is whether the temporary posting of employees abroad – which leaves
untouched the applicability of the law at the home workplace – should be dealt with in another and clearer way. The background is the Directive on “posting of workers”.166 This Directive provides that employees who are employed in one EU country and are sent to another
EU country to work there for a limited time must be granted at least the same minimum labour conditions which apply there. At first glance, it is not easy to reconcile the concept of the
Directive with Art. 6 Rome Convention. The aim of the Directive is to disallow the practice to
recruit workers in one (‘cheap’) country with low workers’ protection and then to employ
them for some time in fact in another (‘expensive’) country with higher protective standards.
Under Art. 6 Rome Convention only the low protection would be applicable because of the
mere temporary nature of the posting. But under Art. 7(2) Rome Convention a similar protection as under the Directive could be achieved if the minimum provisions listed in Art. 3 of the
Directive would be regarded as internationally mandatory rules. Now, the Directive removes
any doubt that these provisions constitute at least inner-EU mandatory rules. As the Green
Paper rightly observes Art. 6 Rome Convention and the Directive on posting of workers fit
together quite well though the regulation in its entirety is not very transparent.167 The transparency could be improved by appending a new para. (3) to Art. 6 saying that “(I)n cases of
temporary employment in another Member State than that State where the employee habitually works the minimum working conditions of that other country have to be given recognition.”
The Green Paper addresses the further point whether and how the duration of a temporary
posting could and should be clarified.168 The answer to this question could safely be left to the
courts. In general, it will be necessary that the parties have limited the duration of the work
abroad in advance, in particular for a certain project or the like. But there may be also cases
where it becomes apparent only afterwards that the employment abroad was for a short period; then according to the circumstances of the case it should be possible to apply the labour
law of the ‘sending’ country. True, this produces some uncertainty for cases of this kind169 but
secures at the same time the necessary flexibility which is required for these cases which are
not very frequent.
The Green Paper asks also whether an amendment should be introduced into Art. 6 that a new
contract with an employer of the same group in another country does not exclude this being
164
ECJ May 26, 1982 – Case 133/81, Roger Ivenel v. Helmut Schwab, [1982] ECR 1891; ECJ January 15, 1987
– Case 266/85, H. Shenavai v. K. Kreischer, [1987] ECR 239; ECJ February 15, 1989 – Case 32/88, Six
Constructions Ltd. v. Paul Humbert, [1989] ECR 341; ECJ July 13, 1993 – Case C-125/92, Mulox IBC Ltd. v.
Hendrick Geels, [1993] ECR I-4075; ECJ January 9, 1997 – Case C-383/85, Petrus Wilhelmus Rutten v. Cross
Medical Ltd., [1982] ECR I-57; ECJ February 27, 2002 – Case C-37/00, Herbert Weber v. Universal Ogden
Services Ltd., [2002] ECR I-2013; ECJ April, 10, 2003 – Case C-437/00, Giulia Pugliese v. Finmeccanica SpA,
Alenia Aerospazio Division, [2003] Recht der Internationalen Wirtschaft 619 (not yet in ECR).
165
Question no. 14 of the Green Paper.
166
Directive 1996/71/EC of 16 December 1996, OJ 1997 L 18/1.
167
Green Paper para. 3.2.9.2 at p. 36.
168
Green Paper para. 3.2.9.2 at p. 36 et seq.
169
This fear is expressed in Green Paper para. 3.2.9.2 at p. 37.
28
considered as a temporary assignment.170 The solution implied in this question appears to be
justified: as the case may be the posting of an employee to another subsidiary of the employer
in another country under a new employment contract may or may not be a temporary employment abroad. The mere fact of a formally new contract should not decide against such a
solution. On the other hand, the posting to a subsidiary of the employer is not in itself and not
necessarily always a case of temporary employment. Because the decision depends very much
on the circumstances of the case an amendment of the kind considered by the Green Paper
would not add much to the clarity of the provision but rather raise new problems (when is a
contract new and what constitutes a group of enterprises ?). However, the Green Paper’s consideration could be expressed in the recitals accompanying a Rome I Regulation.
7.2. Employment contracts with sailors, seamen and flying personnel
Further minor problems with Art. 6 Rome addressed in the Green Paper171 concern the applicable law in case of typical “international” employment contracts, namely those of sailors and
flying personnel. It is disputed whether the law of the place where the employing enterprise is
located under Art. 6 (2) (b) Rome Convention172 or whether the law of the flag of the vessel or
of the place of the plane’s register should apply under Art. 6 (2) (a) Rome Convention.173 Despite some disadvantages of both solutions (in particular easy manipulation of the relevant
places, problems with flags of convenience etc.) a uniform European solution seems preferable. Therefore, it would be helpful if a future instrument would provide for one of these solutions.
7.3. Cross-border home-working
The last problem addressed by the Green Paper is the applicable law in case of cross-border
home-working. Art. 6 Rome Convention designates the law of the place of actual work as
applicable.174 This law might grant less protection to employees than the law at the place of
the employer’s business or at the place where the employee has to deliver the results of his or
her work.175 However, the escape clause of Art. 6 (2) in fine allows, if necessary, the application of the objectively closer connected law which might by chance be the more protective
law. Again, it seems unnecessary to enact a more specific conflicts rule only for international
170
Green Paper para. 3.2.9.2 at p. 37.
Green Paper para. 3.2.10 at p. 37 et seq.
172
Preferring this solution e.g. Rechtbank Alkmaar March 30, 1989, June 21, 1990 and June 20, 1991, (1992)
Nederlands Internationaal Privaatrecht No. 96 at p. 144 and 146; Frank Sven Heilmann, Das
Arbeitsvertragsstatut (Konstanz 199) 187 et seq.; Frank Esslinger, Die Anknuepfung des Heuervertrages
(Munich 1991) 56-62 et passim (for seamen and sailors) and Bundesarbeitsgericht December 12, 2001 – Case 5
AZR 255/00, Arbeitsrechtliche Praxis Art. 30 EGBGB n.F. No. 10 page 4 with note by Monika Schlachter (August
2002); Hessisches LAG November 16, 1999 - Case 4 Sa 463/99, Arbeitsrechts-Blattei Entscheidungs-Sammlung
920 No. 7 at p. 5-7; Julius von Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen Gesetzbuch,, Artt.
27-37 EGBGB (13th ed. Berlin 2002) Art. 30 EGBGB note 162 (for flying personnel).
173
Preferring this solution e.g. Peter Mankowski, „Arbeitsvertraege von Seeleuten im Internationalen
Privatrecht“, (1989) 53 Rabels Zeitschrift 487 at 495-510; Abbo Junker, Internationales Arbeitsrecht im Konzern
(Tuebingen 1992) 188; Martin Franzen, „Internationales Arbeitsrecht“, Arbeitsrecht-Blattei Systematische
Darstellungen 920 note 102 (October 1993); Martin Franzen, Der Betriebsinhaberwechsel nach para. 613 a
BGB im internationalen Arbeitsrecht (Heidelberg 1994) 96 et seq.; Peter Mankowski, Seerechtliche
Vertragsverhaeltnisse im Internationalen Privatrecht (Tuebingen 1995) 466-494; Peter Mankowski, Case note,
Arbeitsrecht-Blattei Entscheidungs-Sammlung 920 No. 7 p. 13 at 16-18 (March 2001); Abbo Junker, Case note,
(2002) Sammlung Arbeitsrechtlicher Entscheidungen 258 at 260; Peter Mankowski, Case note, ArbeitsrechtBlattei Entscheidungs-Sammlung 920 No. 8 p. 11 at 14-16 (March 2003).
174
Peter Mankowski, „Internet, Telearbeit und Internationales Arbeitsvertragsrecht“, (1999) Der Betrieb 1854 at
1855 et seq.
175
Cf. Stephanie Springer, Virtuelle Wanderarbeit (Darmstadt 2003) 195 et seq.
171
29
home working contracts since it had to cover rather different situations which can be dealt
with sufficiently by the existing rules.
7.4. Further issues concerning Art. 6 (2) (b)
Some further controversial issues concerning Art. 6 Rome Convention are not mentioned by
the Green Paper. The first is the precise meaning of “the place of business” through which the
employee was engaged.176 Is the meaning of “place of business” the same as in Art. 4 (2) 2
Rome Convention which uses the same expression meaning by it a regular organisational centre of an enterprise from where its external business is carried on?177
Secondly and more importantly, does Art. 6 (2) (b) only refer to the place of business which
was involved in the conclusion of contract,178 or is it the place from where the orders are issued and the directions are given, or where the accounting, wage-paying and organisational
administration of the employment relationship is performed?179 Suffice it here to express our
view that the place of business where the contract was concluded alone is not sufficient. Some
further connection – as the organisational administration or the like – of the employment relationship with the place of business is required. Art. 6 (2) (b) of a Rome I Regulation therefore
could be amended in the following way: “the place of business through which he (the employee) was engaged and at which his employment relationship is administered”.
7.5. The escape clause
A last problem that should be addressed is the escape clause of Art. 6 Rome Convention. It is
not entirely clear whether this clause comes into play where the connection with another law
than that designated by the ordinary conflicts rules is only – even slightly – closer or whether
it is necessary that the connection is essentially closer with that other law. This latter position
is taken by some courts180 and it is in our view the correct understanding of the escape clause.
The respective wording of the escape clause should therefore be amended into “is essentially
more closely connected”.
7.6. Conclusion
176
Art. 6 (2) (b) Rome Convention.
See, e.g., the discussion by Peter Kaye, The New International Law of Contract of the European Community
(Aldershot, Brookfield 1993) 235 et seq.; Peter Mankowski, Book Review, (1995) 59 Rabels Zeitschrift 148 at
151 et seq.
178
For this position e.g. Landesarbeitsgericht (LAG) Niedersachsen November 20, 1998 – Case 3 Sa 909/98,
Arbeitsrechts-Blattei Entscheidungs-Sammlung 920 No. 6 at p. 4; Hessisches LAG November 16, 1999 - Case 4 Sa
463/99, Arbeitsrechts-Blattei Entscheidungs-Sammlung 920 No. 7 at p. 6 et seq.; Frank Sven Heilmann, Das
Arbeitsvertragsstatut (Konstanz 1991) 59 et seq.; Jeannine Hoppe, Die Entsendung von Arbeitnehmern ins
Ausland (Berlin 1999) 187.
179
For this position e.g. Peter Mankowski, Case note, Arbeitsrechts-Blattei Entscheidungs-Sammlung 920 No. 7 p.
6 at 8-11 (November 1999); Peter Mankowski, Case note, Arbeitsrechts-Blattei Entscheidungs-Sammlung 920 No.
7 p. 13 at 18-23 (March 2001) with further references.
180
Bundesarbeitsgericht (BAG) August 24, 1989 – Case 2 AZR 3/89, 63 Entscheidungen des
Bundesarbeitsgerichts (BAGE) 17 at 26 et seq.; BAG October 29, 1992 – Case 2 AZR 267/92, 71 BAGE 297 at 308
et seq.; BAG May 3, 1995 – Cases 5 AZR 15 to 17/94 , 80 BAGE 84 at 91; Landesarbeitsgericht (LAG)
Duesseldorf December 7, 1990 – Case 9 Sa 1397/90, (1992) Recht der Internationalen Wirtschaft 402; LAG
Hamburg October 19, 1995 – Case 2 Sa 91/94, (1996) Die Rechtsprechung der deutschen Gerichte auf dem Gebiet
des Internationalen Privatrechts (IPRspr.) No. 50 a at p. 108; LAG Niedersachsen November 20, 1998 – Case 3 Sa
909/98, Arbeitsrechts-Blattei Entscheidungs-Sammlung 920 No. 6 at p. 4 et seq. with note by Peter Mankowski
(November 1999); Hessisches LAG August 14, 2000 – Case 10 Sa 982/99, (2000) IPRspr. No. 40 at p. 85;
Kantongerecht ’s-Hertogenbosch September 9, 1999 - Case 2477/98, (2000) Nederlands Internationaal
Privaatrecht No. 36 at p. 98.
177
30
An attempt to define temporary posting as opposed to permanent posting bears more dangers
than advantages. Therefore, the Community legislator should refrain from such an attempt.
There should be specific rules dealing with seamen, sailors and flying personnel, but not with
cross-border home-working.
Art. 6 (2) (b) should be amended in the following way: “the place of business through which
he (the employee) was engaged and at which his employment relationship is administered”.
The wording of the finishing escape clause of Art. 6 (2) in fine should be amended into “is
essentially more closely connected”.
A new para. (3) should be introduced into Art. 6 reading: “In cases of temporary employment
in another Member State than the State where the employee habitually works, the minimum
working conditions of that other country have to be given recognition.”
8. Mandatory Provisions (Questions 13 and 16)
8.1. General considerations
One of the most intriguing problems of modern international contract law is that of “mandatory provisions”. Each country regards certain provisions of its law as mandatory, some central provisions even as absolutely indispensable. If the law of another country has to be applied according to normal conflicts rules it becomes a problem whether and to which extent
these mandatory provisions should override the actually applicable law. It must, however, be
stated that the theoretical interest in, and the dogmatic importance of, this problem is by far
greater than the practical relevance though the problem is by no means practically irrelevant.
In a wide sense all provisions are mandatory which are declared binding by a legal system and
which cannot be derogated from by the parties’ consent. The reasons why a certain provision
has been made mandatory vary considerably. Partly the mandatory provision is intended to
protect an (often weaker) party from injustice; partly general political, social, economic, cultural (“public”) interests of society as a whole motivate the obligatory character of the norm.
In international contract law the question is to which extent and under which conditions mandatory rules should be recognised. Provisions of this kind encounter either as part of the applicable contract law (lex causae) itself, as part of the law of the state where the deciding
court is situated (lex fori) and as part of the law of third countries which are for one or another
reason also concerned with, and interested in, the case. It is rather evident that the more mandatory provisions of another law than that applicable to a contract are recognised the more the
general system of conflicts of law is undermined since the direct application of mandatory
provisions renders specific conflicts rules superfluous. Any system of conflicts rules must
therefore aim at a reasonable balance between general application of the ordinarily designated
law and exceptional application of mandatory provisions of another law; this latter law must
be sufficiently connected with the case and its application must be sufficiently justified by
convincing reasons.
The Rome Convention addresses “mandatory provisions” in several articles – namely in Art.
3 (3); 5 (1); 6(1); 7 (1) and (2) and 9 (6) – but not always in the same sense. For the purposes
of the Rome Convention the following categories of mandatory provisions must be distinguished: any provision which cannot be derogated from by the parties’ consent (general or
internally mandatory rules) – this category is dealt with by Art. 3(3) Rome Convention; mandatory provisions specifically protecting the weaker party, either the consumer or the employee (protective mandatory rules) – addressed by Art. 5(2) and 6(2); mandatory provisions
which apply irrespective of the actually applicable law (internationally mandatory rules) –
referred to in Art. 7(1) and (2); and mandatory provisions concerning only form requirements
with regard to immovable property (mandatory rules on form requirements) – mentioned in
Art. 9(6). Except those provisions which fall under Art. 3 (3) Rome Convention, all other
31
categories of mandatory provisions must meet some qualification which is, however, only
indirectly indicated by the wording and context of the mentioned articles.
8.2. Internally or general mandatory provisions
In international contract law it is settled that the applicable law generally includes all mandatory provisions of whatever kind of the designated contract law.181 However, by choice of law
the parties can normally determine another law with fewer or even no mandatory provisions.
Such choice regularly benefits only one of the parties. That is the reason why Art. 3 (3) Rome
Convention limits the effect of such choice if all elements of the case (except the choice of
law and an eventual choice of jurisdiction) are connected with one country only. In that case
the choice of law cannot (and should not) oust the mandatory provisions of whatever kind of
the law to which all the other elements point. Though this conflicts rule has not aroused much
case law it is to be regarded as useful. For, it disallows parties to escape from rules which the
law regards as binding into which the contract is entirely embedded. However, it would be
useful to amend the wording by inserting “internally” before “mandatory” just in order to
make unambiguously clear that Art. 3 (3) does not contain a universally applicable definition
of “mandatory rules” for the entire Rome I Regulation182 (which misunderstanding occurred
not to seldom183). Art. 3 (3) does the job required quite nicely and does not need further elaboration.
8.3. Protective mandatory provisions
Art. 5 (1) and 6 (1) of the Rome Convention address only mandatory provisions which when
the chosen law is compared to the objectively applicable law, are more favourable to the consumer or employee. Then only the more favourable provisions apply . The aim of the two
Articles is the protection of the weaker party by means of conflicts rules. Mandatory provisions relevant here must be those which belong to the “actually” applicable law, namely the
law that would apply had no choice been made. This law grants a minimum protection of
which the consumer or employee cannot be deprived even by a valid choice of law. Therefore,
of relevance are only mandatory provisions which concern the consumer’s or employee’s protection.184 Other mandatory provisions do not matter here. Nevertheless, the basic degree of
mandatoriness required is only the level of internally mandatory rules as defined in Art. 3
(3).185 Finally, it is not necessary that the protective mandatory provisions apply irrespective
of the applicable law.186
181
See, e.g., A.V. Dicey/J.H.C. Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) para.33136.
182
See Manlio Frigo, „La determinazione della legge applicabile in mancanza di scelta dei contraenti e le norme
imperative nella convenzione di Roma“, in: Giorgio Sacerdoti/Manlio Frigo (a cura di), La convenzione di Roma
sul diritto applicabile ai contratti internazionali (Milano 1993), 17 at 29 et seq.; Peter Mankowski, Book
Review, (1995) 59 Rabels Zeitschrift 730 at 732 et seq.
183
Cf., e.g., David C. Jackson, „Mandatory Rules and Rules of „Ordre Public““, in: Peter M. North (ed.),
Contract Conflicts (Amsterdam/New York/Oxford 1982), 58 at 65; William Binchy, Irish Conflict of Laws
(Dublin 1988) 561.
184
See also A.V. Dicey/J.H.C. Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) para. 33016.
185
See only Bundesarbeitsgericht October 29, 1992 – Case 2 AZR 267/92, 71 Entscheidungen des
Bundesarbeitsgerichts 297 at 309; Julius von Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen
Gesetzbuch,, Artt. 27-37 EGBGB (13th ed. Berlin 2002) Art. 30 EGBGB note 72 with ample references.
186
A.V. Dicey/J.H.C. Morris(-C.G.J. Morse), The Conflict of Laws (13th ed. London 2000) para. 33-016; Julius
von Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen Gesetzbuch,, Artt. 27-37 EGBGB (13th ed.
Berlin 2002) Art. 30 EGBGB note 73.
32
8.4. Internationally mandatory provisions
8.4.1. Internationally mandatory provisions of the forum (Art. 7(2))
The category of internationally mandatory provisions which apply irrespective of the applicable law is addressed by Art. 7 Rome Convention. According to Art. 7(2) any such norm of the
forum could be applied unrestrictedly if one takes the wording to the letter and absolutely
verbatim. However, the prevailing view requires in addition a sufficiently close connection
between the case and the country of the forum (which anyhow will normally be present due to
jurisdiction requirements).187 Art. 7(2) is not infrequently applied in court practice.188 The
main question is always which binding provisions of a legal system qualify as internationally
mandatory and according to which criteria should this question be determined. At the outset it
must be stressed that the general definition of what a provision characterises as internationally
mandatory has to be provided uniformly either by a Rome I Regulation itself or by the European Court of Justice. On the other hand it is equally clear that the single state has the say
which of its provisions should function as internationally binding (provided they meet the
requirements of the general definition).
The Green Paper189 rightly points to the fact that the ECJ has already formulated a definition
of internationally mandatory provisions in Arblade.190 This definition focuses on the purpose
of the respective norm. The predominant purpose of the norm must aim at the “protection of
the political, social or economic order in the Member State”, must be deemed crucial for this
purpose and must “require compliance therewith by all persons present on the national territory of that Member State”.191 In essence, the norm must mainly serve important public interests instead of private interests which a state wants to enforce towards all persons on its territory without regard to the international elements of the case. This definition conforms also to
the prevailing view in national court practice and legal writing.192
The Green Paper poses the question (Question 13) whether the future Rome I instrument
should specify the respective meaning of “mandatory provision” as used in the different articles.193 It is our view that a definition in the kind of that given by the ECJ would be helpful
for the understanding of Art. 7(2). But probably it would suffice to add the word “internationally” where Art. 7(2) refers to “mandatory” provisions. Art. 7(2) could then read: „Nothing in
this [Regulation] shall restrict the application of the rules of the law of the forum in a situation
where they are internationally mandatory irrespective of the law otherwise applicable to the
187
See, e.g., Bundesgerichtshof March 19, 1997 – Case VIII ZR 316/96, 135 Entscheidungen des
Bundesgerichtshofs in Zivilsachen 124; Dietmar Czernich/Helmut Heiss (-Helmut Heiss), EVUe – Das
Europaeische Schuldvertragsübereinkommen (Vienna 1999) Art. 7 EVUe note 7 et seq.; Jan Kropholler,
Internationales Privatrecht (4th ed. Tübingen 2001) 476; Thomas Pfeiffer, „Eingriffsnormen und ihr sachlicher
Regelungsgegenstand“, in: Festschrift fuer Reinhold Geimer (Munich 2002), 821 at 833. Though Art. 7(2) Rome
Convention goes on saying that „(n)othing in this Convention shall restrict the application of the rules of the law
of the forum ...“ and may therefore support the view that no close connection is required, it has to be taken into
account that Art. 7(1) – which is the more general and starting provision of Art. 7 - explicitly presupposes such
close connection. Thus, the systematic argument strengthens the prevailing view.
188
See for instance the yearly German case collection (supra fn. 3): In 2000 it counts four cases where Art. 7(2)
Rome Convention (= Art. 34 EGBGB) has been applied.
189
Green Paper para. 3.2.8.3 at p. 34.
190
ECJ November 23, 1999 - Cases C-369/96 and C-376/96, Criminal proceedings against Jean-Claude
Arblade, Arblade & Fils SARL and Bernard Leloup, [1999] ECR I-8453 at I-8512 para. 30.
191
See ECJ November 23, 1999 - Cases C-369/96 and C-376/96, Criminal proceedings against Jean-Claude
Arblade, Arblade & Fils SARL and Bernard Leloup, [1999] ECR I-8453 at I-8512 para. 30.
192
See for instance Bundesarbeitsgericht August 24, 1989 – Case 2 AZR 3/89, 63 Entscheidungen des
Bundesarbeitsgerichts 17 at 32; A.V. Dicey/J.H.C. Morris(-Lawrence Collins), The Conflict of Laws (13th ed.
London 2000) para. 1-056 („crystallised rules of public policy“); Jan Kropholler, Internationales Privatrecht
(4th ed. Tübingen 2001) 476.
193
Green Paper Question 13 at p. 34.
33
contract.” But also a second sentence could be added: “Internationally mandatory rules are
rules compliance with which is deemed to be so crucial for the protection of the political, social, cultural or economic order in the Member State concerned that compliance therewith is
required of all persons present on the territory of that state.”
The Green Paper addresses also the disputed relationship between Art. 5 and 6 (concerning
protection of consumers and employees) on the one hand and Art. 7 on the other. Some legal
authors regard the relationship in principle as mutually exclusive.194 Others accord Art. 5 and
6 principal priority.195 Still another view gives Art. 7 relative priority meaning that consumers
and employees should be granted the most favourable protection rendered either by the chosen law, by the objectively applicable law or by internationally mandatory law of the forum. If
the internationally mandatory law of the forum is less protective then it is to be applied only
where overriding public interests require its strict application.196 The Green Paper seems to
share the position last mentioned.197 The courts have more or less avoided to fix a strict relationship, let alone a strict hierarchy between Art. 5 or 6 and Art. 7.198
The present authors favour the view that gives Art. 7 relative priority over Art. 5 or 6. That
means that generally consumer- or employee-protective provisions are to be applied as provided for by Art. 5 or 6. And generally provisions for the protection of these persons are not
to be regarded as internationally mandatory.199
8.4.2. Internationally mandatory provisions of third countries (Art. 7 (1))
Art. 7 (1) Rome Convention refers to internationally mandatory provisions of third countries.
This provision has not been uniformly accepted by the Contracting States. Not less than five
Member States200 have not ratified this part of Art. 7 due to a possible reservation under Art.
22 (1) (a) Rome Convention. In sharp contrast to the extended discussion of Art. 7(1) in legal
writings the provision has aroused almost no case law.201 Therefore extended discussion
194
See, e.g., Jan Kropholler, Internationales Privatrecht (4th ed. Tübingen 2001) 478 s.
See, e.g., Bundesgerichtshof March 19, 1997 – Case VIII ZR 316/96, 135 Entscheidungen des
Bundesgerichtshofs in Zivilsachen 124; Paul Lagarde, «Le nouveau droit international privé des contrats après
l’entrée en vigueur de la Convention de Rome du 19 juin 1980 », (1991) 80 Revue critique de droit international
privé 287 at 316; Otto Palandt(-Andreas Heldrich), Buergerliches Gesetzbuch (62nd ed. 2003) Art. 34 note 3c.
196
See, e.g., Peter Kaye, The New International Law of Contract of the European Community (Aldershot,
Brookfield 1993) 263 s.; Dieter Martiny, in: Muenchener Kommentar zum Buergerlichen Gesetzbuch, Vol. X
(3rd ed. Munich 1998) Art. 34 note 120; Julius von Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen
Gesetzbuch,, Artt. 27-37 EGBGB (13th ed. Berlin 2002) Art. 34 EGBGB notes 36 et seq.
197
Green Paper para. 3.2.8.3 at p. 34. According to the view expressed there Art. 7 can render protection in
(any?) case where Art. 5 or 6 does not provide protection.
198
An example is Bundesgerichtshof March 19, 1997 – Case VIII ZR 316/96, 135 Entscheidungen des
Bundesgerichtshofs in Zivilsachen 124 though the outcome of this decision is that a consumer who is not
protected by Art. 5 Rome Convention does normally not enjoy protection through Art. 7 either.
199
So in particular Peter Mankowski, „Keine Sonderanknuepfung deutschen Verbraucherschutzrechts ueber Art.
34 EGBGB“, (1996) Deutsche Zeitschrift fuer Wirtschaftsrecht 273; Abbo Junker, „Empfiehlt es sich, Art. 7
EVUe zu revidieren oder aufgrund der bisherigen Erfahrungen zu praezisieren?"“ (2000) Praxis des
Internationalen Privat- und Verfahrensrechts 65 at 70-72.
200
Namely Germany, Ireland, Luxembourg, Portugal and the United Kingdom.
201
There appears to be only two German cases in point where the question came up for decision since the Rome
Convention was implemented in Germany in 1986: Oberlandesgericht Hamburg May 6, 1993 – Case 6 U 3/93,
(1994) Recht der Internationalen Wirtschaft 686 with note by Peter Mankowski and Landgericht Frankfurt/Main
March 14, 2003 – Case 2-21 O 294/02, (2003) Wertpapier-Mitteilungen 783 with note by Helmut Grothe,
Entscheidungssamlung zum Wirtschafts- und Bankrecht I H 4. – 1.03 at p. 698. Few further cases are only
indirectly concerned with the application of internationally mandatory provisions of third countries; see the
references by Julius von Staudinger(-Ulrich Magnus), Kommentar zum Buergerlichen Gesetzbuch,, Artt. 27-37
EGBGB (13th ed. Berlin 2002) Art. 34 EGBGB notes 122 et seq. In the United Kingdom it is said that no single
case of this kind has arisen for decision in the last 70 – now more than 80 – years since Ralli Bros. v. Compania
195
34
seems unnecessary also here. Art. 7 (1) could be kept without doing all too much harm to
anyone.202
In rare and exceptional circumstances internationally mandatory law of a third country may be
applied along the lines formulated by Art. 7(1) Rome Convention. However, the vagueness of
the requirements of Art. 7(1) leaves it – in our view rightly – more or less to the courts to apply such foreign law.203 For a Rome I Regulation at least the order of paras. 1 and 2 of Art. 7
should be changed because the present para. 1 is in practice by far less important than para. 2.
8.5. Mandatory provisions with respect to form requirements (Art. 9 (6))
The last category of mandatory provisions are those rules which are internationally binding
and concern form requirements with respect to contracts on immovable property. Where these
conditions are met then the lex rei sitae applies (Art. 9(6) Rome Convention). Again, this provision has caused neither much case law204 nor extensive debate. It seems reasonable to apply
such provisions to contracts on immovable property which the law of the country where the
property is situated enforces in any event (even in the event of an international element of that
contract). Therefore, this provision should be upheld and maintained in a Rome I Regulation.
8.6. Conclusion
It is strongly recommended to coin the mandatory provisions envisaged in Art. 3 (3) “internally mandatory”. Art. 5 (1) and Art. 6 (1) could also benefit from a like denomination though
it would be even better to insert “protective” in order to stress that an additional element is
required.
Art. 7 Rome Convention should be maintained, but arranged in reverse order of the paragraphs. It is strongly recommended to coin the mandatory provisions envisaged in Art. 7 “internationally mandatory”. A definition to which provisions such an internationally mandatory
character should be attributed, would be very helpful and could run along the lines as set out
in Arblade.
9. Formal requirements (Question 17)
The next stop on the road map is Art. 9 on formal requirements. The Commission apparently
is concerned that this traditional rule based on a favor validitatis and following the bifurcated
lead to the lex causae on one hand and the lex loci on the other hand might not be well suited
enough to cope with e-commerce in particular.
9.1. E-commerce as a real threat?
Naviera Sota y Aznar [1920] 1 K.B. 614; see A.V. Dicey/J.H.C. Morris(-Lawrence Collins), The Conflict of
Laws (13th ed. London 2000) para. 32-148.
202
Abbo Junker, „Empfiehlt es sich, Art. 7 EVUe zu revidieren oder aufgrund der bisherigen Erfahrungen zu
praezisieren?"“ (2000) Praxis des Internationalen Privat- und Verfahrensrechts 65 at 72 et seq.
203
It may be mentioned that the Inter-American Convention on the Law Applicable to International Contracts of
17 March 1994 ([1994] 33 International Legal Materials 732) contains this very rule in its Art. 11(2): “It shall
be up to the forum to decide when it applies the mandatory provisions of the law of another State with which the
contract has close ties.”
204
An example is OLG Brandenburg February 22, 1996 – Case 5 U 91/95, (1997) Recht der Internationalen
Wirtschaft 424 at 425. Cf. also OLG Frankfurt/Main November 30, 1994 – Case 13 U 180/93, (1995) Recht der
Internationalen Wirtschaft 1033 with note by Peter Mankowski.
35
But the emergence of e-mail and electronic contracting does not pose a major threat to Art.
9.205 To the contrary, Art. 9 is well suited to deal with all known modes of contracting. To
justify this assertion, one needs only to consider the interest of the parties concerned. The parties’ interest when concluding a contract is not to be overly hampered by formal requirements.
It is in the parties’ interest to validate their contract and thus to show that the contract complied with the formal requirements of the applicable law. In order to accomplish this feat, an
interested party will demonstrate where it expressed its contractual intention. Where mere
transmitters (for instance servers) are located, bears no relevance.206 The parties themselves
will provide the necessary evidence where they acted respectively. If a party fails to serve its
own interest in this regard, this party only encounters home-made complications caused by its
own negligent conduct as to not secure sufficient evidence. One should overestimate neither
the importance nor the dangers or particularities of e-commerce.
Some accompanying remarks appear necessary or at least helpful as to contracting in ecommerce via the Internet: There simply is no place like Cyberspace. Even less there is a sovereign called Cyberspace.207 No-one exists in, and not a single person lives in, a cyberspace.
No-one ceases to exist in the real world if he chooses to conclude a contract electronically. A
party dealing with another by e-mail, is not a virtual person acting in a virtual world, but a
thoroughly and perfectly real person sitting in front of some perfectly real and tangible means
of electronic communication like its own PC.208 Hence, its conduct is properly governed by
the regulations for the real world. The notion of Cyberspace and border-less freedom from
regulation is pure ideology.209
9.2. Adding the habitual residence as a third branch?
The Green Paper puts forward a proposal that alternatively a third branch could be added to
Art. 9 namely the law of the habitual residence of the author of the statement of intention to
contract.210 This appears unnecessary. The fear that the place where the contractual consent is
expressed by one person, could not be identified is unjustified. This person’s habitual residence is but one pawn in the game insofar as it serves as the connecting factor in an implicit
auxiliary rule that it should be presumed (or at least be taken as an indication) that – save for
evidence to the contrary – a person expressed and issued his consent to the contract at his habitual residence.211
9.3. Conclusion
The conflict rule on form should be retained in its present shape. There is no need for legislative action in this area.
205
Contra Groupe Européenne de Droit International Privé (Session de Lund – 21-23 septembre 2001), (2001)
90 Revue critique de droit international privé 774 at 776 (Paul Lagarde); Erik Jayme, “Revision des EVUe,
Scheidung und Lebenspartnerschaft, E-Commerce”, (2002) Praxis des Internationalen Privat- und
Verfahrensrechts 63 at 64.
206
Peter Mankowski, „Internet und besondere Aspekte des Internationalen Vertragsrechts (Teil 2)“, (1999)
Computer und Recht 581 at 586 et seq.
207
Peter Mankowski, „Wider ein transnationales Cyberlaw!“, (1999) Archiv fuer Presserecht 138 at 139 et seq.
208
Gregory J. Wrenn, “Cyberspace is Real, National Borders are Fiction: The Protection of Expressive Rights
Online through Recognition of National Borders in Cyberspace”, 38 Stanford Journal of International Law 97 at
103 (2002).
209
See Horatia Muir Watt, „Yahoo! Cyber-Collision of Cultures: Who Regulates?“, 24 Michigan Journal of
International Law 673 at 681-684 (2003).
210
Green Paper para. 3.2.12.3 at p. 39.
211
See Peter Mankowski, „Das Internet im Internationalen Vertrags- und Deliktsrecht“, (1999) 63 Rabels
Zeitschrift 203 at 252.
36
10. Assignment and subrogation (Questions 18 and 19)
10.1. Assignment
The penultimate chapter of the Green Paper consisting of questions 18 and 19 deals with Art.
12 and 13 Rome Convention on assignment and subrogation respectively. These matters are
rather complex since at least three persons are involved and every involve person carries its
own interests which ought to be taken into account.
10.1.1. Assignment and the conflict of conflicts
Assignment of claims is everyday pratice, even everyday cross-border practice. The main
difficulty is the triangular situation, and matters get more and more complicated in the event
of successive, multiple or, even worse, conflicting assignments. Assignments provide very
important security for the assignee – and his creditors whereas on the other hand the assignor’s creditors are also stakeholders in a wider sense. Every rule dealing with the law applicable to assignments in relation to their property aspects has to bear that in mind and to pay
due regard to those indirect interests. Now enter the modern gladiators: The Hoge Raad prefers Art. 12 (1) and the law applicable between assignor and assignee,212 but the Bundesgerichtshof by Art 12 (2) of the Rome Convention and the law applicable to the assigned
claim.213 To-date this appears to be the only open conflict between supreme courts of different
Member States under the entire Rome Convention. The English Court of Appeal lend tentative support to the approach taken by the German courts.214 Even more complicating the matter, strong French voices advocate for applying neither para. 1 nor para. 2 of Art. 12, but the
law of the seat or place of business of the debitor cessus.215 Academic debate brought forward
another possible solution drawing more and more support, namely to apply the law of the assignor’s seat or place of business.216 In the first place, one should ask, whether there is a practical need to go into this depth. Unfortunately, the answer must be affirmative. The issue at
stake is not one merely of academic interest, but of high importance for creditors. It is concerned with the possible conflicts of creditors, particularly so, if an assignor assigned the
same claim two or more times to different assignees. That conflicting judgments by national
supreme courts exist, strongly indicates that the matter was worth bringing it up.
10.1.2 Assignment and uniform law
212
Hoge Raad May 16, 1997 – Case no. 16470, (1998) Nederlandse Jurisprudentie No 585 at p. 3326 et seq.
with note by Thomas M. de Boer; following this approach e.g. Hof Amsterdam November 26, 1998 – Case
703/98 SKG, (2000) Nederlands Internationaal Privaatrecht (NIPR) No. 190 at p. 320; Rechtbank Rotterdam
March 16, 2000, (2001) NIPR No. 272 at p. 454; Rechtbank Rotterdam August 31, 2000 – Case HA ZA 991609, (2001) NIPR No. 124 at p. 247.
213
Bundesgerichtshof September 26, 1989 – Case XI ZR 178/88, 108 Entscheidungen des Bundesgerichtshofs in
Zivilsachen (BGHZ) 353 at 357; Bundesgerichtshof June 20, 1990 – Case VIII ZR 158/89, 111 BGHZ 376 at 379
et seq.; Bundesgerichtshof November 26, 1990 – Case II ZR 92/90, (1991) Neue Juristische Wochenschrift 1414;
Bundesgerichtshof February 24, 1994 – Case VII ZR 34/93, 125 BGHZ 196 at 205. To this authority one could
easily add judgments by at least eight German courts of appeal (Oberlandesgerichte).
214
Raiffeisen Zentralbank Oesterreich AG v. Five Star Trading LLC [2001] 3 All England Law Reports 257 =
[2001] 2 Weekly Law Reports 1344 (C.A.); note by R. Stevens/T.H.D. Struycken, „Assignment and the Rome
Convention“, (2002) 118 Law Quarterly Review 15.
215
Anne Sinay-Cytermann, „Les conflits de lois concernant l’opposabilité des transferts de créance“, (1992) 81
Revue critique de droit international privé 35 at 42; Dorothée Pardoel, Les conflits des los en matière de cession
de créance (Paris 1997) para. 357 et passim.
216
In particular Eva-Maria Kieninger, „Das Statut der Forderungsabtretung im Verhaeltnis zu Dritten“, (1998)
62 Rabels Zeitschrift 678 at 702-710; Dietmar Czernich/Helmut Heiss(-Bernhard Lorenz), EVUe – Das
Europaeische Schuldvertragsuebereinkommen (Vienna 1999) Art. 12 EVUe notes 60-62.
37
A glance at modern uniform law and its scope of application might help as the criteria employed there could at least theoretically be of quite some assistance here and serve as a kind of
tie-breaker. Unfortunately, the uniform law at hands, the UNCITRAL Convention on Assignment in Receivables Financing of January 1, 2002,217 in its Article 3 uses for the purpose
of defining its international scope of application the seat or place of business of the assignor,
the assignee and the debitor cessus more or less indiscriminately. The approach taken there
(and intended to widen the sphere of applicability218) could not possibly be transformed in a
workable multilateral conflicts rule. However, the UNCITRAL Convention in but one regard
decided against harmonisation of substantive law and contains a conflicts rule as a secondbest solution.219 This specific issue are the relations to third parties, in particular between the
assignee and competing claimants, and the matter of rank. The option preferred in Artt. 22; 30
UNCITRAL Convention is to apply the law of the State in which the assignor is located, i.e.
the law of the assignor’s seat or principal place of business.220 The reasons were to be found
in a commercial and pragmatic perspective on e.g. securitisation, project financing and financing; of particular importance were the numbers of claims which are assigned in a single and
practically uniform transaction. Claims often are pooled. It would make such pooling and
bundling virtually impossible if the lex causae of the single claim was to be applied whereas
applying the assignor’s law keeps and safeguards the unity of the transaction.221 The interests
and stakes of the assignor’s unsecured creditors are also maintained.222 Thus UNCITRAL
opted for an minority view in the overall picture. This was however hailed as a generally convincing solution breaking up the deadlock.223 The proponents of this particular view, the former minority view, of course advice to adopt the solution found in the UNCITRAL Convention.224 In their favour they have the strong argument that doing so would avoid frictions once
the UNCITRAL Convention has entered into force for a substantial number of EU Member
States. Such frictions might be mitigated by giving the conflicts rules of the UNCITRAL
Convention prevalence according to lex specialis derogat legi generali. But nevertheless there
would be a danger of the undesirable result that the conflicts rule contained in the future
Regulation would only apply in some Member States whilst the others would in effect follow
a different approach.
217
UN Doc. A/56/17.
Franco Ferrari, „The Uncitral Draft Convention on Assignment in Receivables Financing: Critical Remarks
on Some Specific Issues“, in: Private Law in the International Arena – Liber amicorum Kurt Siehr (The
Hague/Zuerich 2000), 179 at 189.
219
Cf. Mike Danielewsky/Andreas Lehmann, „Die UNCITRAL-Konvention ueber internationale
Forderungsabtretungen und ihre Auswirkungen auf Asset-Backed-Securities-Transaktionen“, (2003)
Wertpapier-Mitteilungen 221 at 230.
220
Cf. Spiros V. Bazinas, „Der Beitrag von UNCITRAL zur Vereinheitlichung der Rechtsvorschriften ueber
Forderungsabtretungen: Das Uebereinkommen der Vereinten Nationen ueber Abtretungen von Forderungen im
internationalen Handel“, (2002) Zeitschrift fuer Europaeisches Privatrecht 782 at 796.
221
Cf. Hans Kuhn, „Materielle Rechtsvereinheitlichung und IPR – Das internationale Zessionsrecht im
UNCITRAL-Uebereinkommen ueber die Forderungsabtretung“, in: Liber discipulorum – Festschrift fuer Kurt
Siehr (Zuerich 2001), 93 at 105 et seq.
222
Eva-Maria Kieninger, „Das Statut der Forderungsabtretung im Verhaeltnis zu Dritten“, (1998) 62 Rabels
Zeitschrift 678 at 702; Hans Kuhn, „Materielle Rechtsvereinheitlichung und IPR – Das internationale
Zessionsrecht im UNCITRAL-Uebereinkommen ueber die Forderungsabtretung“, in: Liber discipulorum –
Festschrift fuer Kurt Siehr (Zuerich 2001), 93 at 106.
223
Jules Deschamps, „The Priority Rules of the United Nations Receivables Convention“, 12 Duke Journal of
Comparative and International Law 389 (2002).
224
Eva-Maria Kieninger, „Vereinheitlichung des Rechts der Forderungsabtretung – Zur United Nations
Convention on Assignment of Receivables in International Trade“, in: Raum und Recht – Festschrift 600 Jahre
Wuerzburger Juristenfakultaet (Berlin 2002) 297 at 314; cf. also Hamburg Group for Private International Law,
„Comments on the European Commission’s Draft Proposal for a Council Regulation on the Law Applicable to
Non-Contractual Obligations“ (2003) 67 Rabels Zeitschrift 1 at 47 et seq.
218
38
10.1.3. Applying the law of the assignor’s seat or principal place of business
Applying the law of the State where the assignor is located combines the advantages of other
solutions and avoids some of their respective disadvantages. It allows to maintain pooling and
does not split a unity. It enables third parties to calculate which law is applicable. No choice
of law as between assignor and assignee might produce hidden obstacles. On the other hand,
the parties to an assignment in advance can also easily establish which law will be applicable.225 And finally, all assignments of the same claim by the same assignor are subject to the
same law. The ugly incident of double or multiple assignments is sensibly covered.
There are only two points which disfavour the proposed solution: Firstly, the necessity would
arise to characterise very carefully and to distinguish between assignability in relation to third
parties or amongst assignor and assignee on one hand and assignability in relation to the debitor cessus on the other hand, which latter issue would in any event be governed by the lex
causae of the assigned claim. However, this question of characterisation would arise anyhow
even if one favoured the application of the said lex causae. Secondly, not subjecting the matter to the law applicable to the obligations as between assignor and assignee might lead to
applying two different laws when it comes to redress after it was discovered that an obligation
to assign had never existed.226 But these cases are rare and, weighing the respective advantages and disadvantages of the solutions, should eventually be treated as a quantité négligeable for rule-making not the least since assignor and assignee have ample opportunity to
choose between themselves as the law of the assignor’s State as the applicable law, and by
these means to harmonise the laws applicable to the different issues concerning themselves.
10.2. Subrogation
The conflicts rule for subrogation goes one step beyond dealing with contractual claims exclusively insofar as it also covers the subrogation into claims originating from non-contractual
dealings. There is some potential for a possible conflict with the Rome II Regulation. However, a true conflict can easily be avoided by inserting the same conflicts rule on subrogation
in both Regulations. As Art. 15 (1) Draft Rom II Regulation knowingly and purposefully copies Art. 13 Rome Convention,227 any alteration in the Rome I regime would run the danger to
become one-sided and would destroy the uniformity sought after. To have two conflicts rules
on the same subject differing if only in detail, would be the worst possible result that could be
achieved in this particular point.
Between assignment and subrogation, some legal orders228 know as a tertium the actio de
beneficio cedendarum, i.e. that the law entitles a person to claim and demand from another
person the assignment of a claim against a third party. The title for the transfer is not contractual, but the mode of the transfer is assignment (and thus contractual). It is not a transfer ex
lege and thus not a proper subrogation. Hence, without a discernible practical need any alteration of the rule on subrogation should bear in mind that there is a third institute which a com-
225
Cf. - in favour of applying Art. 12 (1) Rome Convention contrasted to Art. 12 (2) – Theodor M. de Boer,
„Overzicht der Nederlandse rechtspraak – internationaal privaatrecht, Overgang van vorderingen (1979-1986)“,
(1987) Weekblad voor Privaatrecht, Notariaat en Registratie 346 at 347; Carla A. Joustra, „The Voluntary
Assignment of Future Claims“, (1994) Praxis des Internationalen Privat- und Verfahrensrechts 395 at 397; Peter
Mankowski, „Warenuebereignung durch Dokumentenuebertragung und Internationales Privatrecht“, in:
Seehandelsrecht und Seerecht – Festschrift fuer Rolf Herber (Hamburg/Muenster 1999), 147 at 184.
226
Astrid Stadler, Gestaltungsrecht und Verkehrsschutz durch Abstraktion (Tuebingen 1996) 713; Peter
Mankowski, „Warenuebereignung durch Dokumentenuebertragung und Internationales Privatrecht“, in:
Seehandelsrecht und Seerecht – Festschrift fuer Rolf Herber (Hamburg/Muenster 1999), 147 at 184.
227
COM (2003) 427 final p. 28.
228
For instance, German law in § 255 BGB.
39
prehensive codification would be bound to cover. Once again, the question of cots of legislation arises.
10.3. Redress after voluntary payments on a third party’s debt without an obligation
Redress after voluntary payments on a third party’s debt in the absence of an obligation are
another concern which bothers the Commission.229 Another time a clear recommendation can
be made: This matter ought to be left to the Rome II Regulation. In a comparative perspective,
such modes of redress are not treated as matters in contract, but as matters in unjust enrichment, restitution, negotiorum gestio and alike. Additionally, it would be unwise to distinguish
between voluntarily paying another person’s contractual debt and other instances of voluntary
payments without an obligation.230
10.4. Conclusion
The property aspects of assignments should be subjected to the law of the assignor’s seat or
principal place of business. An additional third paragraph to this aim ought to be added to Art.
12.
Other legislative changes as to Art. 12 or 13 are not advisable. Redress after voluntary payment on a third party’s debt ought to be provided for by the Rome II Regulation.
11. International set-off (Question 20)
11.1. Outlines
The last of the twenty questions posed by the Green Paper refers to international set-off. Indeed, set-off is often raised in international cases.231 The debtor who is normally also the defendant in civil proceedings raises the defence that he is entitled to a sum or claim (the ‘active’ claim) against the creditor or plaintiff which he sets off against the creditor’s/plaintiff’s
claim (the ‘passive’ claim). The Rome Convention expressly mentions neither set-off nor the
question which law should govern the conditions under which set-off can be raised. The only
indirect and inconclusive hint to be found in the Convention is hidden in Art. 10(1)(d) which
provides that ”the various ways of extinguishing obligations” are governed by the law applicable to the contract. It is common understanding that the “ways of extinguishing” comprise
also set-off. But since the mutual claims more often than not originate from different contracts
it is the question the applicable law of which claim should prevail in such a case. Not unexpectedly, the question is disputed in Europe. The most favoured solutions are on the one hand
a cumulation of the laws governing the claim against which, and the claim with which set-off
is raised.232 On the other hand, the view is taken that the law governing the passive claim
should apply.233
229
Green Paper para. 3.2.14.2 at p. 42.
Hamburg Group for Private International Law, „Comments on the European Commission’s Draft Proposal for
a Council Regulation on the Law Applicable to Non-Contractual Obligations“ (2003) 67 Rabels Zeitschrift 1 at
50.
231
See, e.g., Bundesgerichtshof November 7, 2001 – Case VIII ZR 263/00, (2002) Neue Juristische
Wochenschrift 2182 at 2183; Amtsgericht Duisburg April 13, 2000 – Case 49 C 502/00, (2001) Internationales
Handelsrecht 114; Oesterreichischer Oberster Gerichtshof October 22, 2001 – Case 1 Ob 77/01g, (2002)
Internationales Handelsrecht 24; Oberlandesgericht Koeln (Cologne) May 28, 2001 – Case 16 U 1/01, (2002)
Internationales Handelsrecht 21; Landgericht Bonn July 30, 2002 – 18 O 135/01, (2003) WertpapierMitteilungen 780.
232
Cf. for France: Henri Batiffol/Paul Lagarde, Droit international privé, vol. II (7th ed., Paris 1983) para. 614;
Pierre Mayer, Droit international privé (6th ed. Paris 1998) para. 749; Paul Lagarde, Le nouveau droit
international privé des contrats après l’entrée en vigueur de la Convention de Rome du 19 juin 1980, (1991)
230
40
11.2. Solution
It is advocated here that first a Rome I Regulation should provide for the law which governs
the substantive conditions of set-off whereas the mere procedural effects of set-off are governed by the lex fori. Moreover, the law of the obligation that is intended to be extinguished
by set-off – the law applicable to the passive claim – should rule. The main reason for this
suggestion is that cumulation overly increases the difficulties for set-off because the requirements of two legal systems must be fulfilled. On the other hand, the law of the passive claim
should apply because it is the creditor of this claim who involuntarily looses the claim. He
must be able to calculate which protection against involuntary set-off is granted to him by the
law whereas the creditor of the active claim aggressively uses it (if there is no set-off ipso
iure, i.e. no compensatio iuris) and thus can be held to invest into information about the attacked object. He steps over in the other person’s territory. Furthermore, Art. 6 (1) in fine of
the Insolvency Regulation is a strong argument in favour of the proposed solution as it refers
to set-off against a claim by the person fallen into insolvency to be allowed by the law applicable to that very claim.
11.3. Conclusion
The substantive conditions of set-off should be subjected to the law of the passive claim (i.e.
the obligation that is intended to be extinguished).
12. Concluding remarks
The Rome I Convention is a proven masterpiece of draftsmanship in private international law.
It contains only rather few shortcomings and even less genuine flaws. In practice only few
problems were detected, mostly in the area of cross-border B2C business. Hence, there is no
need for a revolution, but only an evolution of its rules. Quite rightly, the Green Paper takes a
cautious and thus evolutionary approach addressing specific issues where in detail some need
for slight renovation might have arisen. The present writers clearly advise to stay with a rather
traditional approach leaving conflicts law in its own rights.
Revue critique de droit international privé 287 at 334 s.; for Italy: Eduardo Vitta, Diritto internazionale privato,
vol. I (Padova 1975) p. 305; for Spain: Alfonso Luis Calvo Caravaca et al., Derecho internacional privado, vol.
II (2nd ed. Granada 2000) p. 308.
233
Cf. for Austria: Dietmar Czernich/Helmut Heiss(-Dietmar Czernich), EVUe – Das Europaeische
Schuldvertragsuebereinkommen (Vienna 1999) Art. 10 EVUe note 32; for Germany: BGH (1994) Neue
Juristische Wochenschrift 1416; Ulrich Spellenberg, in: Muenchener Kommentar zum Buergerlichen
Gesetzbuch, vol. X (3rd ed. Munich 1998) Art. 32 note 50; Julius von Staudinger(-Ulrich Magnus), Kommentar
zum Buergerlichen Gesetzbuch,, Artt. 27-37 EGBGB (13th ed. Berlin 2002) Art. 32 EGBGB note 61; for the
United Kingdom: A.V. Dicey/J.H.C. Morris(-Lawrence Collins), The Conflict of Laws (13th ed. London 2000)
para. 32-205 (though not for the procedural set-off).
41