text:
Главная Rome I Regulation: The Law Applicable to Contractual Obligations in Europe
Due to the technical work on the site downloading books (as well as file conversion and sending books to email/kindle) may be unstable from May, 27 to May, 28 Also, for users who have an active donation now, we will extend the donation period.
You may be interested in Powered by Rec2Me
Most frequently terms
et seq400
member state173
You can write a book review and share your experiences. Other readers will always be interested in your opinion of the books you've read. Whether you've loved the book or not, if you give your honest and detailed thoughts then people will find new books that are right for them.
Rome I Regulation Rome I Regulation The Law Applicable to Contractual Obligations in Europe edited by Franco Ferrari Stefan Leible ISBN (print) 978-3-86653-115-4 ISBN (eBook) 978-3-86653-857-3 The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb. d-nb.de. © 2009 by sellier. european law publishers GmbH, Munich. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of the publisher. Design: Sandra Sellier, Munich. Production: Karina Hack, Munich. Typeface: Goudy Old Style and Goudy Sans from Linotype. Printing and binding: Friedrich Pustet KG, Regensburg. Printed on acid-free, non-ageing paper. Printed in Germany. Preface Since it is believed that the proper functioning of the internal market creates a need, in order to improve the predictability of the outcome of litigation, certainty as to the law applicable and the free movement of judgments, for the conflict-of-laws rules in the Member States to designate the same national law irrespective of the country of the court in which an action is brought, it cannot surprise that efforts have been made to draft uniform European conflict-of-laws rules in the area of contract law as well. In this book various authors examine in detail the result to which these efforts have led, namely the Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I). This volume comprises the papers which were presented at the Verona conference in March 2009. It was the third in a series of conferences. It all started in June 2003 at the University of Jena with a conference concerning the "Green Paper on the conversion of the Rome Convention of 1980 on the law applicable to contractual obligat; ions into a Community instrument and its modernisation" (Stefan Leible [ed.], Das Grünbuch zum Internationalen Privatrecht. Beiträge zur Fortentwicklung des Europäischen Kollisionsrechts der vertraglichen Schuldverhältnisse, 2004). Shortly after the publication of the Commissions "Proposal for a regulation of the European Parliament and the Council on the law applicable to contractual obligations (Rome I)" a second conference was held in September 2006 at the University of Bayreuth (Franco Ferrari/Stefan Leible, Ein neues Internationales Privatrecht für Europa – Der Vorschlag für eine Rom I-Verordnung, 2007). May also this volume contribute to what has been an exciting discussion in the past and what will continue to be so for years to come. First and foremost, we wish to thank all contributors. Our thanks also go to Dr. Fransca Ragno for assisting us in organising this event. The conference was sponsored by Verona University Faculty of Law, Universitätsverein Bayreuth e. V., UniCredit Banca SpA and NCTM Studio Legale Associato. We are very grateful for this financial support. Without that sponsorship neither the conference could have been organised nor this book been published. Verona/Bayreuth, May 2009 Franco Ferrari and Stefan Leible List of Editors and Authors George A. Bermann Prof., Jean Monnet Professor of EU Law, Walter Gellhorn Professor of Law; Director, European Legal Studies, Columbia University, School of Law, Jerome L. Greene Hall, 435 West 116th Street, New York NY 10027, USA Franco Ferrari Prof. Dr., LL.M. (Augsburg), Università degli Studi di Verona, Facoltà di Giurisprudenza, Via C. Montanari 9, 37122 Verona, Italia, Inge Rennert Distinguished Visiting Professor, New York University School of Law, 40 Washington Square South, New York, NY 10012, USA Francisco Garcimartín Alférez Prof. Dr., Universidad Rey Juan Carlos, Departamento de Derecho Privado, Campus Vicalvaro, Facultad de Ciencias Jurídicas y Sociales, Pso. Artilleros s/n, 28032 Madrid, España Urs Peter Gruber Prof. Dr., Lehrstuhl für Bürgerliches Recht und Zivilprozessrecht, Johannes Gutenberg- Universität Mainz, Fachbereich Rechts- und Wirtschaftswissenschaften, 55099 Mainz, Germany Jonathan Harris Prof. Dr., Birmingham Law School, University of Birmingham, Edgbaston, Birmingham, B15 2TT, United Kingdom Helmut Heiss Prof. Dr., LL.M. (Chicago), Lehrstuhl für Privatrecht und Rechtsvergleichung, Universität Zürich, Treichlerstrasse 10, 8032 Zürich, Switzerland Michael Hellner Prof. Dr., Juridiska fakulteten, Uppsala Universitet, Associate Professor in Private International Law, P.O. Box 512, Uppsala, Sverige viii List of Editors and Authors Matthias Lehmann Prof. Dr., LL.M. (Columbia), D.E.A. (Paris II), Lehrstuhl für Bürgerliches Recht, Handels- und Wirtschaftsrecht, Europarecht, Internationales Privatrecht und Rechtsvergleichung, Martin-Luther-Universität Halle-Wittenberg, Juristische Fakultät, Universitätsring 2, 06108 Halle (Saale), Germany Stefan Leible Prof. Dr., Lehrstuhl für Bürgerliches Recht, Internationales Privatrecht und Rechtsvergleichung, Rechts- und Wirtschaftswissenschaftliche Fakultät, Universität Bayreuth, 95440 Bayreuth, Germany Ulrich Magnus Prof. Dr., Seminar für ausländisches und internationales Privat- und Prozessrecht, Universität Hamburg, Fachbereich Rechtswissenschaft, Edmund-Siemers-Allee 1 - Flügel West, 20146 Hamburg, Germany Peter Mankowski Prof. Dr., Seminar für ausländisches und internationales Privat- und Prozessrecht, Universität Hamburg, Fakultät für Rechtswissenschaft, Schlüterstraße 28, 20146 Hamburg, Germany Peter Arnt Nielsen Prof., PhD, LL.M. (Cambridge), Juridisk Institut/Law Department, Handelshøjskolen/Copenhagen Business School, Howitzvej 13, 3., 2000 Frederiksberg, Danmark Yuko Nishitani Prof. Dr., Visiting Professor, Hosei University Law School, Tokyo/ Japan; researcher at the University of Cologne, Germany; c/o Max-Planck-Institut, Mittelweg 187, 20148 Hamburg, Germany Fausto Pocar Prof. Dr., Università degli Studi di Milano, Facoltà di Giurisprudenza, Dipartimento di diritto pubblico, processuale, civile, internazionale ed europeo, Via Festo del Perdono, 7, 20122 Milano, Italia Francesca Ragno Dr., Università degli Studi di Verona, Facoltà di Giurisprudenza, Via C. Montanari 9, 37122 Verona, Italia Fryderyk Zoll Prof. Dr. hab., Katedra Prawa Cywilnego UJ, Uniwersytet Jagielloński, Wydzial Prawa i Administracji, Ul. Bracka 12, 31-005 Kraków, Polska Table of contents Preface List of Editors and Authors Party Autonomy Helmut Heiss The Draft Common Frame of Reference as an Instrument of the Autonomous Qualification in the Context of the Rome I Regulation Fryderyk Zoll Article 4 Rome I Regulation: The Applicable Law in the Absence of Choice Ulrich Magnus v vii 1 17 27 Contracts Concerning Intellectual Property Rights Yuko Nishitani 51 Financial Instruments Matthias Lehmann 85 The Rome I Regulation and Contracts of Carriage Peter Arnt Nielsen 99 Insurance Contracts Urs Peter Gruber The Law Applicable to Consumer Contracts under the Rome I Regulation Francesca Ragno Employment Contracts under Article 8 of the Rome I Regulation Peter Mankowski 109 129 171 x Table of contents Assignment of claims in the Rome I Regulation: Article 14 Francisco J. Garcimartín Alférez 217 Set-off Michael Hellner 251 Mandatory Rules and Public Policy under the Rome I Regulation Jonathan Harris 269 Some Remarks on the Relationship between the Rome I and Brussels I Regulations Fausto Pocar Rome I: A Comparative View George A. Bermann Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) 343 349 359 Party Autonomy Helmut Heiss I. Party Autonomy: The Fundamental Principle in European PIL of Contracts Party autonomy has been and will remain the fundamental principle in European private international law in matters of contractual obligations.1 It came without surprise when the Rome Convention of 1980 codified this principle in its art. 3.2 It is also no surprise that Regulation (EC) No 593 / 2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) restates the principle in very similar words.3 In fact art. 3 of Rome I is, to a large extent, a fair copy of art. 3 of the Rome Convention. Changes to the wording of the provision are mostly not intended to bring about a change of content. For example, the second sentence of art. 3 para. 1 of Rome I strengthens the English (as well as the German) wording of the second sentence of art. 3 para. 1 of the Rome Convention by requiring that an implicit choice must be "clearly demonstrated" and not just "demonstrated with reasonable certainty".4 However, the change in wording is not intended to amend art. 3 para. 1 but to bring the English and German text in line with the French text of art. 3 para. 1 of the Rome Convention.5 1 2 3 4 5 See Lagarde / Tenenbaum, De la Convention de Rome au règlement Rome I, Revue critique de droit international privé 97 (2008) 727, 735; Solomon, The Private International Law of Contracts in Europe: Advances and Retreats, Tulane Law Review 82 (2008) 1709, 1722; Mankowski, Die Rom I-Verordnung, Zeitschrift für Europarecht 2009, 2, 3; as to art. 3 of the Rome Convention Martiny, Europäisches Internationales Vertragsrecht in Erwartung der Rom I-Verordnung, Zeitschrift für Europäisches Privatrecht 2008, 79, 87. See Garcimartín Alférez, The Rome I Regulation: Much ado about nothing?, European Legal Forum 2008, I-6; Wagner R., Der Grundsatz der Rechtswahl und das mangels Rechtswahl anwendbare Recht (Rom I-Verordnung), Praxis des internationalen Privat- und Verfahrensrechts 2008, 377, 378 with further references. See for example Leible / Lehmann, Die Verordnung über das auf vertragliche Schuldverhältnisse anzuwendende Recht ("Rom I"), Recht der internationalen Wirtschaft 2008, 528, 532; see also Recital 11 of Rome I. Leible / Lehmann (note 3) 532; Einsele, Auswirkungen der Rom I-Verordnung auf Finanzdienstleistungen, Wertpapier-Mitteilungen 2009, 289, 290. Lagarde / Tenenbaum (note 1) 736; Wagner R. (note 2) 379. 2 Helmut Heiss Moreover, contrary to art. 3 para. 3 of the Rome Convention, art. 3 para. 3 of Rome I does not mention the case in which choosing a foreign law is accompanied by the selection of a foreign forum. Nevertheless, Recital 15 of Rome I points out that no change in substance is intended and a selection of a foreign forum, therefore, does not make the contract international in a way that would present a free choice of law unrestricted by art. 3 para. 3 of Rome I. The only exception is art. 3 para. 4 of Rome I, which incorporates a new rule which did not exist under the Rome Convention.6 Hence, the parties are free to determine the law applicable to their contract by agreement.7 The choice can be exercised either by an explicit or a tacit agreement.8 When determining the existence of a tacit choice of law, Recital 12 of Rome I instructs the judge to pay appropriate attention to a forum selection clause granting courts of a Member State9 exclusive jurisdiction.10 It does not require any specific form. The choice may refer to any law without restrictions. In particular, no relationship and no proximity of the contract to the law chosen are required.11 In other words, the parties may agree on the application of an entirely "neutral" law.12 The only restriction which applies is, at least in proceedings before state courts, that the law chosen must be "law" in a technical sense and not just general principles or any other set of non-binding rules. Moreover, parties may submit different parts of the contract to different laws.13 They may agree on a choice of law clause even after the main contract has been concluded or executed as long as such an ex post choice does not interfere with the rights acquired by third parties.14 European conflict of laws even provides the choice for contracts which are, except for a choice in favour of another law, exclusively connected to one and the same 6 7 8 9 10 11 12 13 14 Lagarde / Tenenbaum (note 1) 735; as to art. 3 para. 4 Rome I see infra II. See the first sentence of art. 3 para. 1 of Rome I and the first sentence of art. 3 para. 1 of the Rome Convention. See the second sentence of art. 3 para. 1 of Rome I and the second sentence of art. 3 para. 1 of the Rome Convention. See the convincing criticism as to the restriction to courts of "Member States" Leible / Lehmann (note 3) 533 concluding that forum selection clauses in favour of courts in third countries must be considered as an indicator for a tacit choice of law as well. As to the impact of Recital 12 see Lagarde / Tenenbaum (note 1) 735; Wagner R. (note 2) 379; Mankowski (note 1) 3; Leible / Lehmann (note 3) 532; as to the relevance of a forum selection clause as an indication of a tacit choice of the lex fori under the Rome Convention see Heiss in Czernich / Heiss (eds.), EVÜ – Das Europäische Schuldvertragsübereinkommen, Wien 1999, art. 3 no 10. See the comparison with US conflicts law by Solomon (note 1) 1723 et seq. See Mankowski (note 1) 3 with a view to "neutral" Swiss law. See the third sentence of art. 3 para. 1 of Rome I and the first sentence of art. 3 para. 1 of the Rome Convention. See art. 3 para. 2 Rome I and art. 3 para. 2 of the Rome Convention. Party Autonomy 3 country. However, in such cases the derogative effect of the choice is restricted to non-mandatory provisions of the law of the country to which the contract is exclusively connected.15 The validity of the choice of law agreement will be determined in accordance with the law chosen even if the choice should turn out to be invalid.16 This test will be done independent of the validity of the main contract (doctrine of separability17). Similarly, Rome I keeps restrictions and exceptions to the principle of free choice of law in place. Art. 6 restates and broadens consumer protection as granted to so-called passive consumers under art. 5 of the Rome Convention. Similarly, art. 8 restates and broadens the protection granted to employees under art. 6 of the Rome Convention. Moreover, art. 7 replaces to a large extent the conflict rules in the directives on insurance law concerning insurance contracts covering risks situated in Member States.18 This includes, in mass risk insurance, substituting the principle of free choice of law with a restricted list of possible choices, which can be extended by the national legislation of the Member State in which the risk is situated.19 Other conflict rules contained in the directives have not been integrated into Rome I, but have, instead, been kept in place by virtue of art. 23.20 This includes, not least, the restrictions to the choice of law in consumer contracts governed by directive law.21 Finally, 15 16 17 18 19 20 21 See art. 3 para. 3 Rome I and art. 3 para. 3 of the Rome Convention. See art. 3 para. 5 Rome I and art. 3 para. 4 of the Rome Convention. See Heiss (note 10) art. 3 no 54 and 55. As to the replacement of Directives law by art. 7 Rome I see Heiss, Insurance Contracts in "Rome I": Another Recent Failure of the European Legislature, Yearbook of Private International Law, Volume 10 (2008) 261, 262. See art. 7 para. 3 Rome I. A critical view on art. 23 Rome I is taken by Garcimartín Alférez (note 2) I-5. See art. 6 para. 2 Council Directive 93 / 13 / EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 no L 95 / 29); art. 12 para. 2 Directive 97 / 7 / EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts (OJ 1997 no L 144 / 19); art. 7 para. 2 Directive 1999 / 44 / EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (OJ 1999 no L 171 / 12); art. 12 para. 2 Directive 2002 / 65 / EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90 / 619 / EEC and Directives 97 / 7 / EC and 98 / 27 / EC (OJ 2002 no L 271 / 16); art. 22 para. 4 Directive 2008 / 48 / EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87 / 102 / EEC (OJ 2008 no L 133 / 66); art. 12 para. 2 Directive 2008 / 122 / EC of the European Parliament and of the Council of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts (OJ 2009 no L 33 / 10). Helmut Heiss 4 art. 9 allows a separate connection of (internationally) mandatory rules which take priority over the law chosen by the party. Art. 9 of Rome I is similar to art. 7 of the Rome Convention, even though its scope may be narrower.22 On the whole, the restrictions and exceptions to the principle of free choice of law have been kept in place. The only new provision is Art. 5 para. 2 subpara. 2 of Rome I, which gives an exhaustive list of choices to the parties of a contract for the carriage of passengers. In summary, the major observation concerning art. 3 of Rome I is that it brings very little change. The major change, the introduction of art. 3 para. 4, will be discussed in the following section. Moreover, Rome II also calls for the application of the law chosen to connected tort claims. The effect of combining contractual and tort claims will briefly be analysed. At the same time, the restriction of party autonomy to a choice of "law" in a technical sense and the exclusion of a choice of general principles of law must be discussed with a view to the Common Frame of Reference of European Contract Law as well as the perspectives for the creation of an Optional Instrument. II. New Art. 3 para. 4 of Rome I 1. The Rule The major novelty which Rome I brings about as far as party autonomy is concerned is the introduction of the new art. 3 para. 4. With this rule, the European legislator has taken up a legislative proposal presented by Jürgen Basedow in 1994.23 It aims at protecting the application of mandatory24 Community law against a choice of the law of a third country in situations which are, in the absence of a choice and a possible selection of a forum in a third country, connected to Member States only.25 Clearly, art. 3 para. 4 of Rome I establishes a rule at Community level analogous to art. 3 para. 3 of Rome I at national level.26 The rationale behind the rules are the same as well: if mandatory rules of national law must not be substituted by the rules of a chosen law, mandatory Community rules must not be substituted by the chosen law of a third country. 22 23 24 25 26 See the probably narrower definition of mandatory rules in art. 9 para. 1 Rome I. Basedow, Materielle Rechtsangleichung und Kollisionsrecht, in: Schnyder / Heiss / Rudisch (eds.), Internationales Verbraucherschutzrecht, Tübingen 1995, 11, 34. In the given context the term "mandatory" law refers to provisions which "cannot be derogated from by agreement" (see the wording of art. 3 para. 4) as opposed to (internationally) mandatory provisions within the meaning of art. 9 para. 1; see also Mankowski (note 1) 13. See for example Lagarde / Tenenbaum (note 1) 737. Solomon (note 1) 1729; Mankowski (note 1) 13. Party Autonomy 5 In contrast to art. 3 para. 3 of Rome I, para. 4 must also deal with a peculiarity of Community law: mandatory Community law may not only be contained in immediately applicable regulations, but also in directives, which apply between the parties to a contract only upon their transposition by the national legislators. In fact, as far as the existing European contract law is concerned, an overwhelming majority of all Community law is contained in directives. Therefore, art. 3 para. 4 of Rome I provides for the application of mandatory Community law "where appropriate as implemented in the Member State of the forum". This rule reflects, first of all, the fact that directives do not have to be transposed literally by national legislators, but rather only in a way which safeguards the achievement of the goals aimed at by the directives.27 More importantly, several directives in the area of consumer contract law have established minimum standard clauses allowing national legislators to introduce or maintain a higher level of consumer protection as long as such increased protection does not violate the EC Treaty, in particular the fundamental freedoms guaranteed by it.28 The wording of art. 3 para. 4 of Rome I indicates that the protection would include the level of protection established by the Member State of the forum.29 Art. 3 para. 4 refers to the law of the forum. It thereby neglects the law applicable to the contract in the absence of a choice of law.30 This is surprising since contracts covered by art. 3 para. 4 of Rome I, because they are exclusively connected to Member States, will always be governed by the law of a Member States in the absence of a choice by the parties. Therefore, one may have expected art. 3 para. 4 of Rome I to refer to the applicable law, rather than the law of the Member State of the forum.31 There is no difference, of course, as far as immediately applicable Community law is concerned. With regard to contract law introduced by directives, it will make a difference because the law of the Member State which is applicable in the absence of a choice may very well have transposed the directive in a different manner than the lex fori. However, it seems that art. 3 para. 4 looks at national transpositions of directive law as being equivalent to each other and, therefore, calls for the application of the lex fori which is most easily applied by the judge.32 27 28 29 30 31 32 See art. 249 para. 3 EC. This method of minimum harmonisation seems to be outdated; the new directives on consumer credits and timesharing (note 21) do not contain minimum standard clauses any more. This approach is also followed by the Proposal for a Directive of the European Parliament and of the Council on consumer rights, COM (2008) 614 final. See Garcimartín Alférez (note 2) I-4 et seq. See also Mankowski (note 1) 13. Similarly Leible / Lehmann (note 3) 534. See Mankowski (note 1) 13. Helmut Heiss 6 2. "Member State" within the Meaning of Art. 3 para. 4 The term "Member State" as used by art. 3 para. 4 is defined in the second sentence of art. 1 para. 4. According to this definition, the term comprises "all the Member States", including those to which Rome I does not apply.33 Since the UK and Ireland have declared to opt into the conflict regime of Rome I, the second sentence of art. 1 para. 4 will be of relevance only for Denmark.34 The inclusion of Denmark is very important because mandatory Community law needs to be protected against a choice of the law of a third country, even when elements relevant to the situation are located in Denmark but not in third countries. In fact, art. 3 para. 4 of Rome I avoids a mistake made by the European legislator whilst drafting the parallel rule in art. 14 para. 3 of Rome II. Art. 14 para. 3 of Rome II uses the term "Member States" which is defined by art. 1 para. 4 of Rome II in a way that explicitly excludes Denmark.35 Therefore, if one were to apply art. 14 para. 3 in connection with art. 1 para. 4 Rome II literally, parties could agree to allowing the law of a third country to govern a product liability case which is connected to EC Member States including only Denmark, and thereby eliminate the protection afforded to the victim by Council Directive of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (85 / 374 / EEC).36 This result clearly contradicts the purpose of art. 14 para. 3, and the second sentence of the new art. 1 para. 4 of Rome I proves that the European legislator has made a mistake. Consequently, from a systematic point of view, it seems possible to interpret the term "Member State" in art. 14 para. 3 as including Denmark.37 The second sentence of Art. 1 para. 4 does not include the countries other than Member States which are party to the Agreement on a European Economic Area, namely Iceland, Liechtenstein and Norway.38 This is a shortcoming because the Agreement on the EEA expands the territorial scope of the internal market and the acquis communautaire to these countries.39 Therefore, the internal market rules, which must not be derogated from by agreement, also deserve being protected by private international law where 33 34 35 36 37 38 39 In this point the term "Member States" in art. 3 para. 4 just like in art. 7 deviates from the same term used in other provisions comprising only Member States to which the Regulation applies (see the first sentence of art. 1 para. 4) and thereby excluding Denmark. As to the non-participation of Denmark in Rome I, see Recital 46. See Heiss / Loacker, Die Vergemeinschaftung des Kollisionsrechts der ausservertraglichen Schuldverhältnisse durch Rom II, JBl 2007, 613, 623. OJ 1985 No L 210 / 29. See Heiss / Loacker (note 35) 623. See Mankowski (note 1) 14. See also Leible / Lehmann (note 3) 534. Party Autonomy 7 all the elements relevant to the situation at the time of the choice are located in countries party to the EEA Agreement. This is demonstrated, not least, by the special conflict rules in Community Directives on consumer contract law applying the protection afforded to the consumer by the directives even if an otherwise valid choice of the parties leads to the application of the law of a third country.40 These special conflict rules also apply in the countries party to the EEA Agreement and to contracts governed by the law of these countries. Thus, in my view, the gap in the territorial application of art. 3 para. 4 of Rome I is unintended by the European legislator and the provision may, therefore, be applied to the EEA by analogy.41 If one were not to follow this argument, provisions of Community law may still be enforced against a choice of the law of a third country by virtue of art. 9 ("overriding mandatory provisions") and the principles established by the ECJ in the Ingmar case.42 In any case, Community directives on consumer contract law mostly contain special conflict rules protecting their application against a choice of the law of a third country. Since these special conflict rules are even stricter than art. 3 para. 4 and take priority over the conflict rules of Rome I by virtue of its art. 23, the problem is non-existent in the most important areas of the acquis and thereby restricted to the rest of Community law. 3. Is the Scope of Application of Art. 3 para. 4 Too Narrow? The scope of application of art. 3 para. 4 is much narrower than the proposal for an art. 3 para. 5 as presented by the European Commission in 2005. This proposal read: "Where the parties choose the law of a non-member State, that choice shall be without prejudice to the application of such mandatory rules of Community law as are applicable to the case."43 Clearly, the original proposal did not require an "exclusive" connection to Member States but merely the applicability of Community law which will, as far as provisions of contract law are concerned, apply as soon as the closest connection leads to the application of a Member State's law. Art. 3 para. 4 is also narrower than the special conflict rules in the directives on consumer contract law, which limit a choice of the parties favouring the law of a third country.44 These provisions apply whenever the law applicable in the absence of a choice would be the law of a Member State (which again does not require an exclusive, but only the closest, con40 41 42 43 44 These conflict rules are cited in note 21. See Heiss / Loacker (note 35) 623. ECJ 9th November 2000 Case C-381 / 98 European Case Reports 2000, I-9305 (Ingmar GB). This proposal faced severe criticism; see Mankowski (note 1) 14 with further references in note 143. These directives are listed supra note 21. 8 Helmut Heiss nection to the law of a Member State) and – even though this criterion may be considered superfluous – the case is closely connected with a Member State. Therefore, it has been argued that art. 3 para. 4 will be of little importance. Indeed, this may be the reason why the European legislator has ultimately decided to keep the special conflict rules in the Community directives on consumer contract law restricting a free choice of law by virtue of art. 23.45 Similarly, Jürgen Basedow has explicitly stated that the rule proposed by him in 1994 does not cover the restrictions on a free choice of law as provided by the directives. This is why he has proposed yet another provision amending art. 5 of the Rome Convention (which is now art. 6 of Rome I).46 However, the European legislator has not taken up this part of his proposal. Consequently, mandatory Community law is not sufficiently protected by art. 3 para. 4. Courts may still take recourse to other provisions, such as art. 23 in connection with the Community directives as well as art. 9 (overriding mandatory principles) and / or the principles established by the ECJ in the Ingmar case.47 Ingmar, in particular, has not been overturned by art. 3 para. 4 because it involved a contract that bore relevant connections to the law of a third country.48 It will be interesting to see whether the ECJ will submit provisions of Community law, such as the Directive on commercial agents, to a special connection under art. 9 considering that its application has been explicitly narrowed down to such provisions of a country (including provisions of Community law) which are crucial for the "safeguarding of its public interests, such as its political, social or economic organisation".49 III. Art. 3 of Rome I Allows an "Indirect" ex ante Choice for Contract-Related Tort Claims The scope of party autonomy in matters of non-contractual obligations is narrower than in matters of contractual obligations. Art. 14 para. 1 (b) of Rome II limits the free choice of law to situations "where all the parties are pursuing a commercial activity",50 and where the parties enter into a "freely negotiated" agreement. As a result, a choice exercised before the occurrence of the event giving rise to damage will only be valid if agreed among merchants in 45 46 47 48 49 50 Mankowski (note 1) 14. Basedow (note 23) 34. ECJ 9th November 2000 Case C-381 / 98 European Case Reports 2000, I-9305 (Ingmar GB). Similarly Mankowski (note 1) 15. The question is answered to the affirmative by Mankowski (note 1) 15. For questions of interpretation of this phrase see Leible / Lehmann, Die neue EG-Verordnung über das auf ausservertragliche Schuldverhältnisse anzuwendende Recht ("Rom II"), Recht der internationalen Wirtschaft 2007, 721, 726. Party Autonomy 9 an individual agreement, rather than by referring to a choice of law clause in general contract terms.51 If these conditions are not met, parties may only enter into an ex post choice of law agreement in accordance with art. 14 para. 1 (a) of Rome II. However, the second sentence of art. 4 para. 3, art. 5 para. 2, art. 10 para. 1, art. 11 para. 1 and art. 12 para. 1 of Rome II, which apply the principle that combined non-contractual and contractual claims will both be governed by the law applicable to the contractual claim, broadens the choice of law possibilities significantly. If the law applicable to a contractual relationship is the law chosen by the parties in accordance with art. 3 of Rome I, this chosen law will also apply to a non-contractual obligation which is closely connected to the contract.52 This is of special importance in cases of culpa in contrahendo, which are considered to be non-contractual obligations and, therefore, governed by art. 12 of Rome II and excluded from the scope of application of Rome I.53 This treatment of combined claims may not be a novelty in most countries. It is a well established principle, for example, in Germany under art. 41 EGBGB and in Austria under the second sentence of s. 48 para. 1 of IPRG. However, the rule is of importance because it guarantees the application of the principle throughout Europe, except, of course, for Denmark and the EEA Member States. IV. Art. 3 Does Not Grant an Option for a "28th Regime" The original proposal for Rome I submitted by the European Commission contained an article 3 para. 2 which read: "The parties may also choose as the applicable law the principles and rules of the substantive law of contract recognised internationally or in the Community." This provision was intended to permit a choice in favour of non-State law, such as the UNIDROIT Principles of International Commercial Contracts (UNIDROIT Principles)54, the Principles of European Contract Law (PECL or Lando-Principles),55 or the Draft Common Frame of Reference insofar as it contains rules of contract 51 52 53 54 55 Heiss / Loacker (note 35) 623. See in detail the second sentence of art. 4 para. 3, art. 5 para. 2, art. 10 para. 1, art. 11 para. 1 and art. 12 para. 1 Rome II; see Heiss / Loacker (note 35) 623; Beig, Grenze und Zusammenspiel zwischen Vertrag und Delikt, in: Beig / Graf-Schimek / Grubinger / Schacherreiter, Rom II-VO, Wien 2008, 37, 46 et seq. See art. 1 para. 2 (i) Rome I. See www.unidroit.org. Lando / Beale (eds.), The Principles Of European Contract Law, Parts I and II, Deventer 1999 and Lando / Clive / Prüm / Zimmermann (eds.), The Principles Of European Contract Law, Part. III, Deventer 2003. 10 Helmut Heiss law56 including insurance contract law;57 not, however, the lex mercatoria in general58. This new dimension of party autonomy was welcomed by legal literature in principle.59 In particular, the perspective of doing business in Europe on the basis of uniform principles of contract law was a strong incentive to offer the choice. Accordingly, the "general principles of contract law" would have formed a (uniform) 28th Regime of contract law in Europe. However, some authors argued that the proposed art. 3 para. 2 of Rome I would not sufficiently specify which body of rules should be considered as "recognised internationally or in the Community".60 It was doubted whether the judge would have the right and the means necessary to review a body of non-State law and decide on this issue without any guidelines being given by the legislator.61 Indeed, it would be very problematic for a judge to decide in an individual case whether the principles of a non-State body of law chosen by the parties are "recognised" or not.62 The judge would have to decide, for example, whether he considers research groups drafting principles of European contract law as independent and competent or – due, for example, to personal ties of the members of a research group to the industry – partial and dependent. In the latter case, the "principles" drafted by the group would have to be considered as more or less general contract terms of the industry and not as "recognised" principles. These concerns were discussed by the European Council and by the European Parliament, with different views having been taken.63 The European 56 57 58 59 60 61 62 63 So far the text of the Principles (only) have been published: see von Bar / Clive / SchulteNölke et al. (eds.), Principles, Definitions and Model Rules of European Private Law – Draft Common Frame of Reference (DCFR), Outline Edition, Munich 2009. The Draft CFR Insurance has been published indepently from the rest of the CFR; see www.restatement.info. This position was taken by the European Commission in its proposal COM (2005) 650 final, 5 et seq.; as to the lex mercatoria see Martiny in Reithmann / Martiny (eds.), Internationales Vertragsrecht, Cologne 2004, 72 et seq. with further references. See Leible / Lehmann (note 3) 533 with further references in note 70; further Max Planck Institute for Comparative and International Private Law (MPI), Comments on the European Commission's Proposal for a Regulation of the EP and the Council on the law applicable to contractual obligations (Rome I), Rabels Zeitschrift für ausländisches und internationales Privatrecht 71 (2007) 225, 244. As to this concern Wagner R. (note 2) 380 et seq. As to the lack of specific criteria Leible, Rechtswahl, in: Ferrari / Leible (eds.), Ein neues internationales Vertragsrecht für Europa – der Vorschlag für eine Rom IVerordnung, Jena 2007, 41, 48; Max Planck Institute for Comparative and International Private Law (MPI) 244. See, for example, Kieninger, Der Rom I-Vorschlag – eine geglückte Reform des Europäischen Schuldvertragsübereinkommens?, Zeitschrift für Europarecht 2007, 22, 23. See Wagner R. (note 2) 380. Party Autonomy 11 Commission has not redrafted art. 3 para. 2 of its Proposal in a way that would resolve the issue. There were other concerns of, at least in my view, minor relevance. It was argued that the principles eligible under the proposed art. 3 para. 2 of Rome I would lack democratic legitimacy.64 This view overlooks the fact that art. 3 para. 2 of Rome I does not impose the application of any rules, but rather merely grants party autonomy to the parties. Where the choice of the parties is based on a valid consent, such a choice should not pose any problems of democratic legitimacy. Moreover, most European legal systems recognise customary law. The common observation of rules which are thought to be legal rules makes this source of law "democratic". Similarly, the requirement of "recognition" of the chosen principles would safeguard democratic legitimacy to a sufficient extent. Finally, any partial choice of law as admitted by the first sentence of art. 3 para. 1 of Rome I leads to a law mix and, thus, to an applicable law which does not exist in any country. Another argument is related to the incompleteness of any choice of principles of law. Most of the principles would not form a comprehensive system of contract law and would, therefore, have to be supplemented by national contract law. This would make the application of principles of law more uncertain and costly.65 While this may be true, the argument is not necessarily strong enough to exclude the option. Parties would, of course, consider the risks and costs of their choice and the legislator could leave it up to them to determine the issue. Finally, there were concerns of whether a choice under the proposed art. 3 para. 2 of Rome I would eliminate mandatory rules.66 While it is true that a choice of law under private international law derogates from all of the rules of law otherwise applicable, including mandatory provisions, this is a generally accepted principle and not a problem per se. Moreover, private international law protects the application of mandatory rules of law in many ways, e. g. in completely domestic cases, in consumer and employment contracts as well as in cases of internationally mandatory rules. Since a choice under the proposed art. 3 para. 2 of Rome I would have been a choice of law, these restrictions would have applied and mandatory law would have been sufficiently protected. However, the legislator decided not to adopt the proposed art. 3 para. 2 of Rome I.67 Instead, Recital 13 of the Regulation states in rather cryptic words: "This Regulation does not preclude parties from Incorporating by reference into their contract a non-State body of law or an international convention". This Recital is of little help because it states no more than the obvious.68 It 64 65 66 67 68 See Wagner R. (note 2) 380. See Wagner R. (note 2) 380. See Wagner R. (note 2) 379. Lagarde / Tenenbaum (note 1) 736. Similarly Wagner R. (note 2) 380; Mankowski (note 1) 3; unclear Einsele (note 4) 290. Helmut Heiss 12 would be of importance, however, if one were to draw an argumentum e contrario from It, according to which the Recital makes clear that a choice under conflict law could never refer to non-State bodies of law and international conventions, such as the CISG69 or conventions on transport law.70 In my view, such argumentum e contrario should not be accepted. The fact that general principles of contract law cannot be the subject of a choice under art. 3 of Rome I was made sufficiently clear when the legislator abandoned the proposed art. 3 para. 2 of Rome I.71 No argumentum e contrario drawn from Recital 13 is necessary to establish this view. The argumentum would, however, seriously restrict the future development of conflict law where, for example, international conventions are concerned. Furthermore, Recital 13 gives no answer to the question of whether parties could choose a European recommendation on contract law enacted by the European legislator. This question would become pressing if the European legislator decided to transpose the DCFR or at least parts of it into a recommendation.72 The concern surrounding the "recognition" of general principles of contract law as well as the democratic legitimacy of such principles would obviously disappear. This is why it would be rather formalistic to argue that a recommendation could not be chosen because it is not part of State law. The argumentum e contrario mentioned would, however, lead to such a formalistic view because it also forbids a choice of international conventions. Again, for the sake of an uninhibited and smooth further development of conflict law in Europe, no argumentum e contrario should be drawn from Recital 13. V. Does Recital 14 Open the Door for an Optional Instrument ("2nd Regime")? 1. The Project Recital 14 sounds a lot more promising than Recital 13: "Should the Community adopt, in an appropriate legal instrument, rules of substantive contract law, including standard terms and conditions, such instrument may provide that the parties may choose to apply those rules." The Recital announces the possi69 70 71 72 See, for example, Schlechtriem, Internationales UN-Kaufrecht4, Tübingen 2007, 18. The Max Planck Institute for Comparative and International Private Law (MPI) (note 59) 245 specifically mentions the need for granting a choice of law in favour of such conventions. See for example Mankowski (note 1) 3 who draws the argumentum e contrario from the abandonment of the proposed art. 3 para. 2. See for example Ernst, Der 'Common Frame of Reference' aus juristischer Sicht, Archiv für die civilistische Praxis, 208 (2008) 248, 264 with further references. Party Autonomy 13 bility of a future optional instrument73 of European contract law, even though it remains rather vague in its wording.74 It seems that the European legislator promises options for the future which it has not granted in Rome I itself. From a legal point of view Recital 14 may be considered superfluous because nobody doubts the possibility of introducing such an optional instrument in spite of art. 3 of Rome I as it stands. Recital 14 is, however, of political importance because it openly states the possibility of a future optional instrument in Rome I, thus in an act of legislation. This announcement is accompanied and thereby strengthened by several political statements given by different political players in Europe. The European Commission has deliberated the creation of such an optional instrument in several of its communications.75 Recital 14 of Rome I was also reinforced by the European Parliament resolution of 3 September 2008, in which the European Parliament repeatedly expressed its opinion that the CFR could serve, among other things, as a model for an optional contract law.76 The European Economic and Social Committee has also already avowed itself to an optional instrument, which is viewed by the European Economic and Social Committee as suitable for realising the internal market, at least in the area of insurance contract law.77 It is considering the elaboration of yet another opinion, in which the Committee is expected to favour an optional instrument of European contract law in general. 2. Technical Aspects In addition to its political relevance, Recital 14 provides some indications on technical aspects of a choice of an Optional Instrument. Obviously, Recital 14 does not mention a revision of art. 3 of Rome I. Rather, it refers to a separate legal instrument. Since it should be independent from national law and must overcome the restraints of art. 3 of Rome I, a Regulation would be an 73 74 75 76 77 As to the concept see Staudenmayer, 'Ein optionelles Instrument im Europäischen Vertragsrecht?', Zeitschrift für Europäisches Privatrecht 2003, 828; Basedow, 'Ein optionales Europäisches Vertragsgesetz – Opt-in, opt-out, wozu überhaupt?', Zeitschrift für Europäisches Privatrecht 2004, 1. See also Lagarde / Tenenbaum (note 1) 736; Garcimartín Alférez (note 2) I-6. COM (2003) 68 final, no 89 et seq; COM (2004) 651 final, no 2.1.2; see as well Annex II. European Parliament resolution of 3 September 2008 on the common frame of reference for European contract law, P6_TA-PROV(2008)0397; see www.copecl.org. EESC, CESE 1626 / 2004, no. 6.5. Helmut Heiss 14 appropriate legislative instrument.78 Art. 308 EC could provide the EC with jurisdiction to legislate.79 A Regulation establishing an Optional Instrument of European Contract Law would have to provide for a rule opening the choice of the instrument to the parties which would be unrestricted by art. 3 of Rome I. Such a rule could read: Article 1 (Option) This Regulation shall apply when the parties, notwithstanding any limitations of choice of law rules under private international law, have agreed that their contract shall be governed by it.80 The rule explicitly frees the choice of the Optional Instrument from any restrictions imposed by private international law. Clearly, the discussion as to whether a non-State body of law or an international convention could be chosen by the parties as the law applicable to their contract would not apply to the Optional Instrument. The rule does, however, raise other questions. First of all, it is questionable whether an Optional Instrument could and should set aside all the limitations of choice of law under private international law. Secondly, it is not entirely clear what the relationship of the choice under the proposed art. 1 of the Optional Instrument would be to Rome I, particularly to a choice under art. 3 of Rome I.81 The first question must be answered in the affirmative: An Optional Instrument is a tool which enhances the proper functioning of the internal market. Differences in national contract law form a barrier to the functioning of the internal market, especially when the choice of law of the parties is restricted by mandatory conflict rules, such as art. 3 para. 382 (and potentially 4), 5 para. 2 subpara. 2, 6, 7, 8 and 9. Providing parties with an option in favour of a European contract law would allow the use of general contract terms throughout Europe and, thus, avoid problems and costs of dealing with 27 different re- 78 79 80 81 82 See also Leible / Lehmann (note 3) 533. For a broader discussion of the issue, see Hesselink / Rutgers / de Booys, The legal basis for an optional instrument on European contract law, Centre for the Study of European Contract Law Working Paper Series No. 2007 / 04; Leible, Was tun mit dem Gemeinsamen Referenzrahmen für das Europäische Vertragsrecht? – Plädoyer für ein optionales Instrument, BB 2008, 1469 (1474). This provision is modelled on art. 1:102 Principles of European Insurance Contract Law (PEICL); see www.restatement.info. As to the relationship to the CISG see e. g. Leible (note 79) 1474. See also Leible (note 79) 1473. Party Autonomy 15 gimes of contract law.83 It could be argued that permitting such an unrestricted choice would undermine the protection awarded, for example, to consumers under art. 6 of Rome I or to policyholders under art. 7 of Rome I.84 However, this argument misses the point. First of all, an Optional Instrument including areas of mandatory contract law, such as consumer or insurance law, would have to provide for a high level of consumer or policyholder protection, as the case may be.85 This would be in line with art. 95 para. 3 EC. Therefore, the Optional Instrument would not be to the detriment of the weaker party. Hence, the incentive of the entrepreneur or insurer, as the case may be, to incorporate a clause in its general contract terms opting for the Instrument would not be to enjoy a regime of contract law with more relaxed standards of protection for the weaker party, but to be able to use the same general terms for all contracts concluded throughout Europe. Secondly, the proposed art. 1 of the Optional Instrument does not open a choice in favour of a foreign law but only unilaterally in favour of the EC Regulation. The Regulation would, however, be part of each Member State's law. The choice in favour of the Optional Instrument would, therefore, be a choice in favour of the law of the Member State in which the consumer or policyholder has his habitual place of residence.86 In line with this observation, national courts would have to apply the Optional Instrument as European Law and, therefore, not as foreign law. As a consequence, German courts, for example, could not deny access to its supreme court, the BGH. Equally, institutions offering out of court complaint and redress mechanisms, such as Ombudsman Bureaus, could not refuse to decide on a case because it is subject to foreign law. These observations do not apply when a contract has no connection to the law of a Member State. It is questionable whether the proposed art. 1 of the Optional Instrument should also provide the option to parties both having their habitual place of residence in third countries; for example, to an American seller and a Mexican purchaser of goods, or for that matter to two Mexican parties in a purely national contract situation. It would also not be convincing to grant the option without any of the restrictions imposed by private international law, such as art. 6 of Rome I, to a consumer or policyholder having his habitual place of residence in a third country. Third country consumers and policyholders are protected by art. 6 of Rome I and should remain protected if a European instrument was chosen which, after all, is foreign law to a third country consumer. This is why the option under the 83 84 85 86 Heiss / Downes, Non-Optional Elements in an Optional European Contract Law. Reflections from a Private International Law Perspective, European Review of Private Law 2005, 693, 697 et seq. See in general Rutgers, An Optional Instrument and Social Dumping, Centre for the Study of European Contract Law Working Paper Series No. 2006 / 03. Heiss / Downes (note 83) 699; Leible (note 79) 1474. Heiss / Downes (note 83) 708. 16 Helmut Heiss Optional Instrument should not take priority over Rome I. In contrast, the option should follow the applicability of the law of a Member State. If the law applicable to a contract is the law of a Member State, this law would consist of 2 regimes of contract law: the traditional national system and the European Optional Instrument (the "2nd Regime"). If the contract is governed by the laws of two Member States, as may be the case following a law mix under the second sentence of art. 6 para. 2 of Rome I, both Member States have a 1st national and a 2nd European Regime of contract law. The contract would, thus, present an unrestricted choice. If, however, the contract is concluded with a consumer in a third country, the law mix under the second sentence of art. 6 para. 2 of Rome I could lead to the application of the chosen law of a Member State and the mandatory provisions of the third country consumer law. Only the law of the Member State could be replaced by the Optional Instrument, not, however, the more favourable mandatory provisions of the third country consumer law. This is a desirable result because the Optional Instrument is a foreign source of law to the third country consumer. Equally, an American and a Mexican merchant could use their free choice of law in favour of a Member State law, which would then permit the option in favour of the European instrument. Again, this is a desirable result because it reinforces the principle of free choice of law in international situations. Moreover, if the situation were exclusively connected to a Member State law, art. 3 para. 3 of Rome I would not restrict such choice. This is desirable, because it allows all of the contracts concluded in the internal market to be submitted to the instrument and avoids the costs incurred by applying different legal regimes to domestic and international contracts. Legal policy is not against such choice because the Optional Instrument is part of the law of the Member State like all EU law. If, however, all the elements are located in a third country, art. 3 para. 3 would restrict the choice in favour of the law of a Member State and, therefore, of the Optional Instrument. This, again, is desirable because the Optional Instrument is foreign law from the perspective of the parties to such a contract. Thus: the best results are achieved, if the option is given where contracts are governed by the law of a Member State and insofar as the law of a Member State applies. A European Optional Instrument should, therefore, not be a 28th Regime of the European Union, but rather form a 2nd Regime of contract law in each Member State. The Draft Common Frame of Reference as an Instrument of the Autonomous Qualification in the Context of the Rome I Regulation Fryderyk Zoll I. The Draft Common Frame of Reference and International Private Law The final Outline Edition of the Draft Common Frame of Reference has just been published.1 It includes not only contract law, but also major sections in other areas of private law that usually comprise a dominant part of national codifications. The Draft Common Frame of Reference sometimes is described as an "academic version," which should distinguish this project from the "political" CFR – a device that should be a toolbox for the European legislator. How much of the DCFR will become a part of the political CFR remains open. There are also other projects like the French revised version of the Principles of European Contract Law (PECL),2 also called the Cadre Commun de Référence,3 which offer another alternative to the political bodies. It is not my objective to compare these different, but often deeply related and interconnected projects, which provide a common core of the principles for private law. In this paper I examine the role such projects of researchers from many European Union member states may play in the area of international private law, particularly in providing a unified international private law in the area of contractual relationships. This question as such is not an evident one – the DCFR was not developed to solve problems arising from the conflict of laws. Rather the DCFR is a set of the substantive rules resembling a code. It was to fulfill several functions, the main one probably being the "restatement" function. In addition, by reflecting the common European tradition and attempting to find a useful synthesis with member state law, the project seeks to 1 2 3 von Bar / Clive / Schulte-Noelke (eds.), Principles, Definitions and Model Rules of European Private Law. Draft Common Frame of Reference, Munich 2009. Lando/Beale (eds.), Principles of European Contract Law, vol. I and II, prepared by the Commission on European Contract Law, The Hague 1999; Lando / Clive / Prüm / Zimmermann (eds.), vol. III, The Hague 2003. Fauvarque-Cosson (ed.), Projet de Cadre Commun de Référence – Principes Contractueles Communs, Société de la Législaion Comparée, Paris 2008. 18 Fryderyk Zoll facilitate a process of law-making on different levels – not only the European, but also the national. This second function might be regarded as even more important than the first. The idea of a toolbox presented to the European legislator is a quite dramatic change in the process of European law making.4 The existing lack of context for law contributes to incoherency in Community private law. Through implementation, European law always takes on a purely national context. So long as this condition exists, real harmonization of private law seems unachievable. These problems of inconsistency and incoherency lead to the idea of the legislator's toolbox, which could provide a context of European law that would allow the law maker to make national contract laws more consistent by drafting against an assumed model of law. It is not clear whether such a system will work, because still even coherently originated law would be implemented into the very different national systems. Then new tensions may emerge – between the fictitious European context and the real national law. Even if the question of the applicability of the toolbox to the legislative process regarding substantive law is open and uncertain, the toolbox may provide a very useful instrument in the area of the international private law. At first appearance, the DCFR and the EC regulations on the area of the international private law do not have a lot in common. The DCFR has been drafted in the way typical for substantive law. It is envisaged as an instrument which will help solve problems after the applicable law has been determined. The DCFR does not provide rules to determine the applicable law. Nevertheless, one particular feature of the DCFR may matter from the perspective of private international law. This is the question of the qualification of the concepts used by international private law. One of the main aims of the DCFR was to provide a consistent set of legal terms.5 Legal terms and concepts are developed from the base of a given legal system. Differences in law lead almost inevitably to differences in language; even when the language is common to more than one country. This makes harmonization and unification of European law extremely difficult. Particular words are often hard to translate into other languages, because the differences in law make the legal terminology unique. Many formal equivalents at the pure linguistic level are not real equivalents because they disguise different legal concepts. This can occur even in the same language. For example, the differences in German and Austrian legal systems result in quite different terminology. The DCFR aimed to support a development of consistent European terminology, first in English, then in other European languages. If the enormous 4 5 COM (2003) final, Official Journal 63/1 – Action Plan; see also Schulze, in Justiz und Recht im Wandel der Zeit. Festgabe 100 Jahre Deutscher Richterbund, Köln 2009, 231; Beal, The Common Frame of Reference in General – a resumé of the current status, in Schulze (ed.), New Features in Contract Law, Munich 2007, p. 345-346. Beale (note 4), p. 348. The DCFR as an Instrument of the Autonomous Qualification 19 intended translation work will be completed, a net of equivalent terms and notions in languages of the Union will emerge. It may have influence also on the national "context," bringing all systems closer to each other, at least on the linguistic level . An integral part of the DCFR is a list of the terminology, which has been used in this text. It is a well known phenomenon that international private law uses the names of the legal institutions without clarity, in which context these notions are used. The search of the linkage with the law closest to the legal relationships starts with the search of the proper name for the legal relationships in question in order to apply international private law. In the frame of the national international private laws, many proposals to solve the problem of qualification have been developed.6 But international private law instruments, which have been developed on the international level, needed a way to interpret legal concepts, which may be accepted by all countries bound by such an instrument. The aim of this paper is to examine whether the DCFR may be a useful instrument in this respect. II. A Dream of the Autonomous Qualification – is the DCFR a capable instrument? At least four theories aim to solve the qualification problem.7 All of them have their advantages and flaws, but Ernst Rabel's theory of autonomous interpretation is a particularly unique one.8 This theory assumes that the notions used by international private law are to be interpreted independently from the meaning that would be given either on the substantive level or the level of conflict of laws by the national legal systems. Interpretation of legal concepts has to be done in line with comparison of the different national laws. This comparison should lead to the determination of a globally unified meaning of the terms. On one hand, this theory of solving of qualification has been seen as extremely attractive, but on the other almost useless. This uselessness of the autonomous theory resulted from the existing differences of the national legal systems. Without advanced process of the harmonization of the laws on the supranational, or at least on the level of the international law, the 6 7 8 See: Kegel / Schurig, Internationales Privatrecht, 9th ed., Munich 2004, p. 327. There are: qualification by the substantive lex fori, lex causa qualification, autonomous qualification and functional qualification (at least at the level of the primary qualification). Rabel, Das Problem der Qualifikation, Rabels Zeitschrift 1931, nr. 5, pp. 241-288; Kegel / Schurig (note 6), p. 344; Posch, Bürgerliches Recht, VII. Inernationales Privatrecht, 4th ed., Vienna, New York 2008, p. 35. Fryderyk Zoll 20 development of the unified terminology and concepts necessary for unified qualification must fail.9 We are today in the stage of European law development which allows us to think about implementation of Rabel's theory. The idea of a legislative toolbox and the emergence of texts aiming to create a vision of a single private law create a common world of notions and concepts. One can imagine that the terminology developed in the DCFR could be used for the interpretation of the notions used in the Rome I Regulation. Such a step would facilitate the interpretation of the Regulation and secure the homogeneity of such interpretation in the Member States. However before this can happen, several methodological problems arise. First, the newly published DCFR is not a commonly accepted text. Even its role as fundamental for the official toolbox is not yet secure. Second, one needs to clarify whether Rabel's theory of the autonomous qualification is really a best t heory, even if the condition for its application, a unified set of terminology, was achieved. Maybe the applied and flexible "functional" interpretation of the given act would be a better instrument. It is also possible that a need for the "two steps qualification", primary and secondary, cannot disappear entirely with the usage of the toolbox.10 1. The unofficial status of the DCFR The DCFR is not an official text. It is a private "academic' project. It is not even a "toolbox" of the Community. Does that exclude a role for the DCFR as an effective instrument of the unified interpretation of the concepts used in the Rome I Regulation?11 Even if some parts of it (for example related to contractual obligations) gained an official status as the toolbox of the Commission, the result would not become a source of Community law. Such a toolbox would have only an internal function in assistance with the law drafting process. Of course the official toolbox of the Commission would be a more secure device to revealthe intention of the Commission and may better serve to apply historic interpretation. Another way for the DCFR to fulfill the function of an interpretation instrument will be to gain acceptance by the ECJ for such a role. It would need also a broad acceptance of the community of researchers and practitioners 9 10 11 Koch / Magnus / v. Mohrenfels, IPR und Rechtsvergleichung, 3th ed., Munich 2004, p. 19. On the primary and secondary qualification see: Schwimann, Internationales Privatrecht, Vienna 2001, p. 22-27. Regulation EC (No 593/2008 of the European Parliament and the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), Official Journal L 177/6. The DCFR as an Instrument of the Autonomous Qualification 21 that this text reflects in the most convincing manner the European tradition. One must remember that there are other texts in this field. The French Cadre Commun de Référance, the Project of the Gandolfi Group, or even the "sister-project" to the DCFR – the Acquis Principles.12 The "old" PECL, a fundamental for all these developments, must not be removed from this list. The DCFR, however, has one advantage in this respect in comparison with the other texts. It is a much more complete system. To achieve a proper result for the qualification process the DCFR provides a much needed context of a given area of law. The real scope of contractual obligation may not be determined without a clear concept of tort, or even of property law.13 By going far beyond contract law, the DCFR provides a broader context then the other private collections of rules. For example, non-discrimination law may be located in the DCFR in the frame of contractual obligations. The Acquis Principles, even if they reach the same conclusion on the legal point, do not put the resolution in the context of the broader system of the private law. They do not provide sufficient material to solve the problem of the qualification. It is necessary to wait in order to evaluate the position of the DCFR in the academic discussion. It is evident that if the DCFR was converted into the CFR and distinguished with the label of the EC official toolbox it would facilitate the fulfillment of the qualification process. Probably the CFR will only adopt a part of the DCFR. Then it will be incomplete, which will diminish its applicability for this purpose. Nevertheless even in such limited field of the application, the fact that the political CFR would emerge from the set of rules with the broader context would help in the process of qualification. 2. The Adequacy of the Autonomous Qualification based on the DCFR The idea of autonomous qualification at the time of its elaboration by Ernst Rabel was an inspiring concept, expressing a vision of a future global legal system. It was rather an ideological project than a pragmatic idea, feasible for the application at the time of its beginning. A somehow modest response to the method of the functional qualification has been developed. This method is not based on the ideological underpinning of the autonomous qualification, but it tries to interpret the notions used in international private law independently from their equivalents in national substantive law. Even if this method has also promoted the comparative method of the interpretation, it was not enough 12 13 Research Group on Existing EC Contract Law (Acquis Group), Principles of the Existing EC Contract Law (Acquis Principles) Volume I, Contracts, Munich 2007. Van Erp, DCFR and Property Law (in:) Schulze, Common Frame of Reference and Existing EC Contract Law (Munich, 2008) p. 254. The DCFR contains only the rules on transfer on property, security rights in movables and trust. 22 Fryderyk Zoll to strengthen the process of establishing the unified net of legal notions. It has made the qualification process purely national. In the supranational texts, like the Rome I Regulation, a need for a unified interpretation of the terminology is inevitable. The notions and concepts used in this text need to get a common European content. The time has come for a practical adaptation of Rabel's theory. On the ground of the different unified laws within the Community, including the Conventions opened only to the Member States, a sort of autonomous interpretation already has been used. The ECJ stresses a need for unified interpretation of the notions, which have been used in those acts.14 The ECJ tries to use the comparative method to establish a commonly accepted meaning of the words, even as to basics like contract. M. Lehmann, however, has proven correctly that due to the differences in the legal traditions it is extremely difficult to find a basis for the common notion of the contract.15 M. Lehmann raises the crucial question concerning the applicability of such texts like the DCFR or other academic projects envisaging a concept of unified European substantive private law (or at least contract law). Lehmann is unsure whether the notions used in such texts, which are addressing primarily the harmonization of substantive law, fulfill the same function in the field of justice as its equivalents in international private law. M. Lehmann stresses the existence of "autonomous justice" of international private law.16 For this reason he suggests a functional approach, seeking the explanation of such notions like contractual obligation in the joined analysis of the Rome I and Rome II Regulations.17 He assumes that the main idea of the Rome I Regulation is the recognition of private autonomy and the application of the law of the party who renders the characteristic performance. The function of the Rome II Regulation should be a determination of reconciliation among the interests of the wrongdoer and the victim and the predictability of the rules governing the human behavior and security.18 These are probably correct descriptions of the contractual rights and obligations arising from other sources than contract in the area of international private law. But the applicability of this principle 14 15 16 17 18 See ECJ: LTU v. Eurocontrol [1976], European Case Reports p. 1541; Rich v. Impianti [1991], p. 3855, Peters v. ZNAV, [1983], p. 987; Handte [1992] I – European Case Reports, p. 987. See Wilderspin, The Rome Convention. Experience to date before the Courts of the Member States and Interpretation by the Court of Justice of the European Communities of the Brussels Convention and its possible impact on the interpretation of the Rome Convention (in:) P. Lagarde / B. v. Hoffman, L'européanisation du droit intenational privé, ERA, Köln 1996, p. 57-58. Lehmann, Vertragsbegriff und vorvertragliche Rechtsverhältnisse (in:) Leible / Ferrari, Ein neues Internationales Vertragsrecht für Europa, Jena 2007, p. 20-21. Lehmann (note 15), p. 24. Lehmann (note 15), p. 28-30. Lehmann (note 15), p. 28-30. The DCFR as an Instrument of the Autonomous Qualification 23 in order to delimit the scope of both regulations is quite circular. In all cases of non-performance of the obligation we face also a problem of balancing the interests between the person who violates its obligation, and the person whose interests are concerned by non-performance. But if the source of the violated obligation was in contract, the Rome I Regulation applies; if not in contract then generally in Rome II. In both cases the expectations concerning the system of non-performance from the point of view of the international private law are this same: it is a balance of the interests of the non-performing party and the affected creditor – "the victim." The functional interpretation of the norms belonging to international private law was always a "temporary remedy" due to the lack of the international consistent system of terminology. If such a system, even only in Europe, would exist, there would be no space for functional interpretation. It is only a result of the lacking harmony of the legal systems. International private law has its own functions, but this is not a reason to create a new disharmony between converging substantive law and the conflict of laws. To some extent the development of "two steps – qualification" is a result of such growing disharmony between international private law and the national substantive laws. The unified European international private law should assist in the process of the harmonization and unification of substantive law rather than create new fundamental differences in the basic concepts of law, as for example the notion of "contract". The European legislator seeks to achieve an internal harmony of the European bodies of the international private and procedural law. This endeavor does not exclude the linkage of such interpretation to the texts in seeking a unification of substantive law. The crucial problem, however, with the usage of such texts in order to solve the qualification problem consist on this same difficulty, which has been faced by the ECJ in its effort to find the unifying conclusions for comparative analysis. Given the divergence in European systems, the choice of the drafters of the DCFR is often choosing one tradition and abandoning the other. In such a sense Lehmann is right in criticizing the results achieved in PECL by the definition of the contract, stressing the fundamental relevance of the "agreement".19 It is of course true that essential differences in legal systems exist and to "restate" the common European tradition means always to make the choices that are most likely to be most widely accepted. This result cannot be achieved by simple comparison. It requires texts, which can be considered models or toolboxes of emerging European private law. The DCFR is an important candidate to play such a role.20 19 20 Lehmann (note 15), p. 24. Lagarde, Cadre commun de reference et droit international privé (in:) Schulze, Common Frame of Reference and Existing EC Contract Law, Munich 2008, p. 265. Fryderyk Zoll 24 III. The Qualification Problem in the Rome I Regulation and the use of DCFR The problem of qualification in the Rome I Regulation appears in almost all places, where the Regulation contains the notions derived from substantive law. The most important qualification problem concerns the scope of application of the Regulation which requires a determination of the contractual relationships. Martiny names a number of the challenges for qualification in the scope of application of the Rome I Regulation that are focused primarily on the issue of non-contractual versus contractual relationship.21 These are for example the questions of non-discrimination law governing the access to public offered goods and services and the right to redress of the final seller. Also the different kinds of the action directe are named in this context. Even notions that are defined in the Rome I Regulation such as the notion of the consumer22 need an additional qualification. In this particular case a reference to the texts like DCFR may be particularly helpful,23 also due to the circumstance that the procedural notion of the "consumer", as defined in the ECJ judgment in Gruber24, seems to be to narrow, to fulfill the protective objectives of substantive consumer law.25 The narrow "functional" approach in the process of interpretation of such notions only confined to the private international law may create gaps in the effective system of the consumer protection.26 The question of the qualification of the liability for the breach of negotiation is so far settled because the Rome II Regulation27 has qualified it as the liability which arises from the non – contractual obligation. It refers, however, back to the law applicable for contracts.28 The Rome I Regulation contains also a list of contracts, which are not closer defined in the Regulation itself. (art. 4, 5, 7 and 8). The DCFR may be used to find arguments in order to facilitate the process of qualification of some of these notions. According to the DCFR the rules on non-discrimination located in Book II govern the obligation arising from 21 22 23 24 25 26 27 28 Martiny, Europäisches Internationales Vertragsrecht, Zeitschrift für Europäisches Privatrecht 1/2008, p. 83. Art. 6 of the Rome I Regulation. See however: Lagarde (note 20), p. 278-281. Rs. C-464/01. See however recital 7 of the Rome I Regulation. Micklitz (in:) Micklitz / Reich / Rott, Understanding Consumer Law, Antwerp, Oxford, Portland 2009, p. 284; Solomon, Verbraucherverträge (in:) Ferrari / Leible, Ein neues Internationales Vertragsrecht für Europa, Jena 2007, p. 95. Official Journal L 199, p. 40. Leible / Lehmann, Die Verordnung über das auf vertragliche Schuldverhältnisse anzuwendende Recht ("Rom I"), Recht der Internationalen Wirtschaft 8 / 2008, p. 530. See also ECJ Taccone v. Wagner, Rs. C-344/00. The DCFR as an Instrument of the Autonomous Qualification 25 contract and other juridical acts. This may provide an argument for the linkage of the situation of the non discrimination at the access to the publically offered goods and services to the contractual rights at the level of private international law. The question of the qualification of pre-contractual duties and the liability for their breach would be treated according to the DCFR system as also covered by contractual relationship because it is located in Book II of the DCFR. As already mentioned, the Rome II regulation deals with the question of bad faith negotiation, and it finds a sort of compromise between different European traditions. Art. 12 qualifies it as a case of non- contractual liability and refers to the law applicable for contracts. Here there is no need for the assistance of the DCFR. But for other pre-contractual duties such a need may exist and the use of the DCFR would justify the application of the Rome I Convention. The questions of action direct and right to redress is more difficult to solve in this way. There is not an equivalent of the action direct in the system of DCFR. In such a case DCFR is not helpful. In the case of the right to redress there will be such a provision (which is not adopted yet) in the Acquis Principles but not in the DCFR itself. Therefore is DCFR also in such a case not helpful. The DCFR has its own terminology and institutions. It cannot reflect every particularity of a given legal system. In such cases other methods of qualification are needed. It needs to be stressed, that even if the Draft Common Frame of Reference would be broader accepted by the international community, it does not provide a solution for every problem of the qualification. Any such unification of European law must abandon some traditions in order to achieve a level of coherency. But at the least, recent developments have brought some tools like the DCFR, which allow the application of Rabel's theory of qualification. Some sort of official acceptance of such texts: a "political" CFR, with enough content and context, may help to create an even more reliable tool to implement the idea of the autonomous qualification, which creates not only harmony within the system of European international private law, but also a consistency among European international private law and national substantive law systems. Article 4 Rome I Regulation: The Applicable Law in the Absence of Choice Ulrich Magnus I. Introduction Although the main pillar of the Rome I Regulation is the principle of party autonomy (Art. 3), Art. 4 appears to be the most important provision of the whole Regulation. On the one hand the parties are free to choose the applicable law and there are only few restrictions which limit the effects of such choice. But on the other hand, the necessary corollary to the parties' autonomy is a default rule that designates the applicable law in the absence of choice. Several reasons can be responsible that no choice was reached: very often the parties cannot agree on a single applicable law because each party insists on its own law; sometimes the parties merely overlook the possibility to designate the governing law; sometimes a choice of law is invalid. In all these cases a default rule is needed to fill the gap left by the parties. Art. 4 serves that aim. It contains the most basic conflicts rule which applies if neither the parties nor any other, more specific rule determines the applicable law. In order to designate the objectively applicable law Art. 4 has to define the conflicts rule that in general is most appropriate for international contracts. In this sense the provision is the expression of the central idea which law is best suited to apply to contracts with a foreign element. In fact, this is the core issue of international contract law. Art. 4 does however not provide one single conflicts rule for all kinds of contracts but establishes a rather differentiated net of conflicts rules for contractual obligations. The present paper is exclusively concerned with Art. 4 Rome I Regulation. It will pursue the differences with its precursor (Art. 4 Rome Convention) and will examine the details of the present provision. The Regulation's further provisions on the objectively applicable law for specific contracts (consumer contracts, employment contracts, insurance contracts, transport contracts)1 are however left aside. They are dealt with by other contributions. 1 See Arts. 5-8 Rome I Regulation. Ulrich Magnus 28 II. The differences between Art. 4 Rome Convention and Art. 4 Rome I Regulation 1. The general approach Both, Art. 4 Rome I Regulation and Art. 4 Rome Convention, are based on the general principle that the law of the closest connection should govern a contract and that the closest connection is generally best determined by the conflicts concept of characteristic performance. Both instruments regard for most cases that law as the most appropriate and the most closely connected that is in force at the place where the party is 'seated' which is to effect the performance that characterises the contract. Both instruments do however not use the term "seat"2 but define it more accurately for legal and natural persons.3 Though their formulations differ in this respect their results are probably entirely identical. Under Art. 19 Rome I Regulation the "habitual residence" at the time of conclusion of the contract4 is the principal territorial connecting factor.5 This is generally the place where a (natural) person has his or her home and uses to live.6 However, for natural persons acting in the course of their business it is the principal place of this business.7 "Habitual residence" does actually not fit for legal persons. The Article specifies the term therefore for all kinds of companies as the place of their central administration.8 Where a branch, agency or other establishment concludes the contract or has to perform it the place decides where the branch, agency or establishment is located.9 For the sake of brevity I will use "seat" and "seated" here for all these different situations. 2 3 4 5 6 7 8 9 Art. 60 lit. a Brussels I Regulation uses the "statutory seat" (alternatively together with the "central administration" and the "principal place of business") in order to determine jurisdiction. This possibility of options is however neither meant nor appropriate for the determination of the applicable law where one single law instead of different alternative options is necessary; see also Recital 39 Rome I Regulation. See now Art. 19 Rome I Regulation and former Art. 4 (2) Rome Convention. See Art. 19 (3) Rome I Regulation. This was also the solution under Art. 4 (2) sent. 1 Rome Convention. See also Garcimartín Alférez, The Rome I Regulation: Much ado about nothing? EurLF 2008, I-61 (I-69). Art. 19 (1) sent 2 Rome I Regulation; the same applies under Art. 4 (2) sent. 2 Rome Convention. Art. 19 (1) sent. 1 Rome I Regulation; in the same sense Art. 4 (2) sent. 1 Rome Convention. This was also in rather similar form contained in Art. 4 (2) sent. 2 Rome Convention. Under Art. 19 (2) Rome I Regulation it is now possible that the concluding and the performing branch, agency or other establishment are two different organisations and are also located in different countries. Which of the two then is relevant Article 4 Rome I Regulation 29 However, in comparison to the Rome Convention the Rome I Regulation diversifies this general conflicts approach and provides a more differentiated set of special conflicts rules than the Rome Convention does. On the other hand, the Rome I Regulation follows closely the Rome Convention as regards the balance between certainty/predictability and flexibility/justice to the single case. Unlike the US-American international contract law neither a governmental interest analysis nor a general weighing or grouping of contacts10 – with rather unpredictable results in each single case – is generally necessary. Instead of this too flexible approach, the European instruments have opted in favour of greater certainty: they prescribe by rather firm rules which law applies and allow only to a limited – and now even more limited – extent to apply another than the basically applicable law. The Rome I Regulation has strengthened this general European attitude of precise and foreseeable conflicts rules. 2. Different structure of the two provisions Apart from these similarities there are evident differences concerning the structure of Art. 4 Rome I Regulation and Art. 4 Rome Convention. Yet, it is doubtful whether these structural differences are of any material relevance or whether they concern only the formal order without further consequences. If one compares the structure of the two provisions, Art. 4 of the Regulation starts with a list of specific contracts for which para. 1 of the provision determines the applicable law. It then formulates the rule – for cases not on the list or covered by more than one contract type of the list – that the law at the place of that party is applicable that renders the characteristic performance (para. 2); an escape clause provides that a manifestly closer connection to another country leads to the law of that country (para. 3). For any residual cases the law of the closest connection applies (para. 4). By contrast, Art. 4 Rome Convention shows a quite opposite structure.11 That provision starts with the general principle that the law of the closest connection shall govern (para. 1). 10 11 should depend on the circumstances of the case, mainly whether the concluding or the performing branch etc. has greater influence and importance for the transaction in question; similarly Garcimartín Alférez, The Rome I Regulation: Much ado about nothing? EurLF 2008, I-61 (I-70). See Art. 9 Inter-American Convention on the Law Applicable to International Contracts of 1994, § 188 Restatement (Second) on Conflicts of Law and for instance Art. 3537 Louisiana Civil Code. For critique of the structure of Art. 4 Rome Convention see Magnus / Mankowski, The Green Paper on a Future Rome I Regulation – on the Road to a Renewed European Private International Law of Contracts, ZVglRWiss 103 (2004) 131 (158 et seq.). 30 Ulrich Magnus It then formulates one general and two specific presumptions which law is to be regarded as most closely connected (para. 2-4). But a closer connection with another country prevails over the presumptions (para. 5). The comparison shows that both provisions contain almost the same ingredients but have them differently ordered. This change was intended and it has more than a mere formal effect. The intention behind the new order – and some changed formulations12 – was to reduce the possible discretion and to create greater certainty with respect to the objectively applicable law.13 Parties should be sure in advance which law applies to their contract even in the absence of a choice of law. In order to achieve most possible predictability with respect to the applicable law, the draft proposal of the Rome I Regulation even provided for inflexible rules on the applicable law and excluded any redress to a more closely connected law.14 This, however, overstretched the aspect of certainty and disregarded too much the aspect of flexibility and justice to the single case. The Regulation returned to the main contents of Art. 4 Rome Convention though in a new order. Despite its formal nature, the new order has repercussions on the interpretation of Art. 4 Rome I Regulation. It is evident that in comparison to Art. 4 Rome Convention the discretion to apply the escape clause and deviate from the regularly designated law should be reduced. Under the Regulation the threshold is now higher which allows to deviate from the primarily designated law and to apply instead a more closely connected law. This is not only expressed by calling the listed cases no longer presumptions and by the requirement of a "manifestly" closer connection in Art. 4 (3) Rome I Regulation but also by the new order of the whole Article which gives first priority to the fixed conflicts rules in Art. 4 (1) Rome I Regulation. Although the difference between the two provisions is only one of degree (of discretion) it is by no means unimportant. In particular, it may support a more uniform, namely more reluctant application of the escape clause15 which should be made use of only if strong reasons point to a more closely connected law. Thus far, the interpretation of the escape clause under the Rome Convention differed considerably 12 13 14 15 The Rome I Regulation avoids to speak of presumptions as the Rome Convention does; the Regulation has also slightly amended the wording of the escape clause (see below VI.). See Recitals 6 and 16 Rome I Regulation; see also Kenfack, Le règlement (CE) n° 593/2008 du 17 juin 2008 sur la loi applicable aux obligations contractuelles (« Rome I »), navire stable aux instruments efficaces de navigation?, J. D.I. 2009, 3 (7). Compare Art. 4 Proposal of 15 December 2005, COM (2005) 650 fin.; see thereto Mankowski, Der Vorschlag für die Rom I-Verordnung, IPRax 2006, 101 (103 et seq.). Now Art. 4 (3) Rome I Regulation which corresponds to former Art. 4 (5) Rome Convention. Article 4 Rome I Regulation 31 among European jurisdictions16 (and the European Court of Justice could not remedy this mischief since until recently the Court lacked the competence to interpret the Rome Convention and to unify its interpretation). 3. Differences in substance With the exception of the last mentioned issue the substantive differences between Art. 4 Rome I Regulation and Art. 4 Rome Convention are of minor importance. • In contrast to Art. 4 (1) sent. 2 Rome Convention the Regulation does no longer mention the possibility of dépéçage for the objectively applicable law. The prior provision had caused no case law; its further existence appeared superfluous. The respective provision of the Rome Convention has therefore been omitted. It is doubtful whether this omission means a complete exclusion of any dépéçage of the objectively applicable law. But the fact that Art. 3 (1) sent. 2 Regulation retains the possibility of a dépéçage in case of the parties' choice of law may e contrario point in that direction. Also from Art. 4 (2) Rome I Regulation an argument in the same direction could be derived since this provision designates a single law for cases which fall under two or more of the cases listed in Art. 4 (1) and for which a dépéçage could be imagined. Finally, it fits with the Regulation's restrictive approach as to the judge's discretion to allow the parties but not the judge to split a contract into different, reasonably severable parts governed by different law. There appear to be no forceful reasons in favour of a judge-made dépéçage. Should a case arise which requires with urgency a split designation of the governing contract law it is highly likely that the contract can be severed into different contracts to reach that result. Therefore, Art. 4 Rome I Regulation excludes any dépéçage.17 • The most evident difference between the two provisions is the list of the applicable law for specific types of contract which is now contained in Art. 4 16 17 As to the application of the escape clause see on the one hand – rather high threshold for its application (an essentially closer connection) –, e. g., Hoge Raad, Netherlands International Law Review XLII (1995) 259; BGH NJW-RR 2005, 206; on the other hand – rather low threshold (a merely closer connection suffices) –, e. g., Definitely Maybe (Touring) Ltd. v. Marek Lieberberg Konzertagentur GmbH [2001] 2 Lloyd's Rep. 455; see thereto also Lando/Nielsen, The Rome I Regulation, Common Market Law Review 45 (2008) 1687 (1701); Martiny, Objektive Vertragsanknüpfung und Form, in: Leible (ed.), Das Grünbuch zum Internationalen Vertragsrecht – Beiträge zur Fortentwicklung des Europäischen Kollisionsrechts der vertraglichen Schuldverhältnisse, 2004, 109 (118 et seq.). This view was also articulated by members of Member State delegations who had negotiated the Rome I Regulation and were present at the conference in Verona. Ulrich Magnus 32 • • • 4. (1) Rome I Regulation whereas Art. 4 Rome Convention did not contain a similar list.18 But the general presumption of Art. 4 Rome Convention had mainly the same outcome as the present list. Only few rules now contained in the present list were disputed under Art. 4 Rome Convention. The list settles these disputes, generally in the sense of the formerly prevailing view. That is true for the rules concerning franchise contracts, distributorship agreements and auction sales.19 A new addition is para. 1 lit. d which took over the second part of Art. 22 no. 1 Brussels I Regulation and intends to coordinate jurisdiction and applicable law for certain short-term tenancy contracts.20 Likewise new is para. 1 lit. h which determines the applicable law for specific financial instrument contracts. Although Art. 4 (1) Rome I Regulation in contrast to Art. 4 (2) Rome Convention does not state any longer that it establishes a presumption with regard to the applicable law, there is no difference in that respect between the two instruments: The rules provided in Art. 4 (1) Rome I Regulation can be overturned by a manifestly closer connected law.21 In fact, the new provision equally provides for a mere presumption,22 however a stronger one than under the Rome Convention. While Art. 4 (2) Rome Convention did not need to address the case of mixed contracts Art. 4 (2) Rome I Regulation needs to solve the problem that a contract may fall under more than one of the categories listed by Art. 4 (1). Whereas Art. 4 (2) Rome Convention itself defined the territorial connecting factor (habitual residence, central administration, relevant place of business), the Regulation deals with that question separately and generally in Art. 19. But in substance both regulations are more or less identical. Unnecessary distinctions? It can be critically seen that Art. 4 (1) Rome I Regulation makes it necessary to distinguish between the different types of contracts listed in that provision. Sales of goods and provision of services – do they really have to be distinguished if anyway the law of the characteristically performing party is appli18 19 20 21 22 A similar list can be found in Art. 117 (3) Swiss Act on Private International Law although also in § 12 RAG (Rechtsanwendungsgesetz – Act on the Application of Law) of the former German Democratic Republic and also in the former Private International Law Acts of other formerly Socialist countries. See thereto below under IV. 5.-7. For critique as to this new rule see Mankowski IPRax 2006, 104 By Art. 4 (3) Rome I Regulation; see thereto below under VI. In the same sense Mankowski, Die Rom I-Verordnung – Änderungen im europäischen IPR für Schuldverträge, IHR 2008, 133 (137). Article 4 Rome I Regulation 33 cable? Was then not the old presumption under Art. 4 (2) Rome Convention that the law at the seat of the characteristically performing party applied the easier and thus better rule? This reasoning can be defended for Art. 4 (1) lit. a and b Rome I Regulation. But it is not true for the other cases regulated by the list of para. 1. For franchise and distributorship contracts the Regulation now clarifies who the characteristic performer is and for the remaining cases of the list the Regulation deviates from the concept of characteristic performance. And even for sales and service contracts it can be argued that the Regulation gives insofar clear rules which are easy to apply, exemplify the general concept of characteristic performance and are therefore useful in particular for practitioners who deal with international contract cases only occasionally.23 Nonetheless, Art. 4 (1) Rome I Regulation makes it necessary to distinguish between certain different listed contract types, for instance sales and distribution contracts. This raises the matter of qualification which, however, had to be solved also under Art. 4 (2) – (4) Rome Convention. Insofar, the Rome Convention explicitly required a uniform interpretation which also extended to the qualification issue.24 The present Regulation does not contain a comparable provision. But as community law the Regulation has to be interpreted in the way community law is interpreted and that means generally an autonomous EU-interpretation which sets specific national concepts aside.25 Moreover, the European Court of Justice has now the final say in matters of interpretation of the Regulation.26 III. The general sequence of application of Art. 4 Rome I Regulation Under Art. 4 Rome I Regulation a clear sequence of application needs to be observed.27 First, the rules of the list of Art. 4 (1) Rome I Regulation must be applied. The list does, however, not cover every kind of contract but only some particularly important contracts. For the majority of the listed contract types (lit. a, b, d, e, f) the Regulation follows the general rule that the law at the seat of the party is applicable that renders the characteristic performance. For the 23 24 25 26 27 In the same sense Mankowski, Die Rom I-Verordnung – Änderungen im europäischen IPR für Schuldverträge, IHR 2008, 137. Art. 18 Rome Convention. For details of the interpretation of community law compare, e. g., Reich, Understanding EU Law – Objectives, Principles and Methods of Community Law, 2nd ed., 2005, 24 et seq. The right to refer cases to the ECJ is granted only to courts of last instance (Art. 68 EC Treaty). See also Franck, Le règlement « Rome I » sur la loi applicable aux obligations contractuelles, JDI 2009, 41 (57). Ulrich Magnus 34 other types a different rule is prescribed which takes account of a specific connection of that type of contract with a certain place (lit. c, g) or of a particular need to apply one single law (lit. h).28 Secondly, for all cases not covered by Art. 4 (1) the applicable law must, as far as possible, be determined in accordance with Art. 4 (2) Rome I Regulation and the concept of characteristic performance. Thirdly, even if the applicable law could be determined either under para. 1 or under para. 2 of Art. 4 Rome I Regulation it must be still further examined whether there is a manifestly closer connection with another law (para. 3). If so, then this law is the applicable law instead. Fourthly, a final step becomes necessary if the contract is neither covered by the types of the list of para. 1 nor falls under para. 2. Then the law of the closest connection must be determined and becomes directly applicable (para. 4). IV. The listed cases As mentioned above the list of Art. 4 (1) Rome I Regulation contains only some, yet practically important cases. Theoretically it is necessary to precisely define and distinguish each of the listed cases from other contracts. Under practical aspects this is however unnecessary in those cases in which anyway the law at the seat of the characteristically performing party applies. But since this is true for few cases only, the following text analyses the listed cases in some detail. 1. Sale of goods (lit. a) a) General rule With contracts of sale of goods, Art. 4 (1) lit. a Rome I Regulation covers the most common sales type and subjects it to the rule that the law at the seller's seat applies. This rule only exemplifies the principle that the law at the seat of the party is applicable that renders the characteristic performance. But it must be taken into account that lit. a does not apply to consumer sales as far as they meet the requirements of Art. 6 (1) Rome I Regulation and are therefore covered by this provision. Also auction sales follow a separate rule (Art. 4 (1) lit. g Rome I Regulation). Moreover, Art. 4 (1) lit. a Rome I Regulation will often be superseded by the Vienna UN Convention on Contracts for the International Sale of Goods (CISG) of 1980. It is common ground that the CISG as uniform substantive law takes precedence over conflicts rules even if unified by 28 See also Recital 28 Rome I Regulation. Article 4 Rome I Regulation 35 an inter- or supranational instrument.29 Some EU Member States are further bound by the Hague Convention on the Law Applicable to International Sales of Goods of 1955.30 The practical importance of lit. a is therefore somewhat limited. Its application requires a number of delimitations to other rules. The provision, apparently so simple, must be handled with care. b) The Hague Convention of 1955 Art. 25 (1) Rome I Regulation gives already existing conventions on international contract law priority over the Rome I Regulation. Only if the international convention has been concluded exclusively between two or more EU-Member States takes the Regulation precedence over the respective convention (Art. 25 (2) Rome I Regulation). With respect to sales of goods the Hague Convention on the Law Applicable to International Sales of Goods of 1955 has to be taken account of. This Convention is in force not only in the EU-Member States Denmark, Finland, France, Italy and Sweden but also in the Non-Member States Niger, Norway and Switzerland. Therefore, to international sales of goods Denmark, Finland, France, Italy and Sweden mus