Conflict of Laws .net

Prof. Rafael Arenas Garcia (Universitat Autònoma de Barcelona and Àrea de Dret Internacional Privat blog) has written an interesting article on the controversial issue of the law applicable to culpa in contrahendo, discussing the conflict rule set out in Art. 12 of the Rome II regulation: “La regulación de la responsabilidad precontractual en el Reglamento Roma II”.

The article (in Spanish) will be published in the forthcoming issue (2007) of the Anuario Español de Derecho Internacional Privado (Spanish Yearbook of Private International Law - AEDIPr.), but it can be downloaded as a .pdf file from the Àrea de Dret Internacional Privat blog.

The English abstract reads as follows:

Article 12 of Rome II Regulation governs the obligations arising out of dealings prior to the conclusion of a contract. It establishes that the law applicable to these obligations shall be the law applicable to the contract. Where it is not possible to determine such law, the second paragraph of article 12 establishes the application of the general connecting factors of Rome II Regulation. It is also possible to choose the law applicable to culpa in contrahendo.

These solutions are not problem-free. The application of the law governing the future contract is not suitable in order to forbid the breaking of negotiations, without giving to the parties the possibility to rely on the law of the country in which the party has its habitual residence to establish that he can broke off negotiations without liability. It can also be criticized that there is no provision about the cases in which a contract between the parties has been concluded in order to rule the negotiations. As a result of this lack of provision in these cases the law governing culpa in contrahendo will be the law of the future contract instead of the law of the contract that rules the negotiations.

This article analyses these problems and the difficult delimitation between contractual and non-contractual fields in matters relating to obligations arising out of dealings prior to the conclusion of a contract. It also includes de lege ferenda proposals.

Following our post on the release of the final text of the Rome I Regulation, an internal document by the General Secretariat of the Council to the Permanent Representatives Committee (COREPER) confirms that the new Regulation will be soon adopted by the Council (doc. n. 7689/08 of 7 April 2008):

5. The Permanent Representatives Committee is therefore asked to confirm agreement and advise the Council to:

• adopt the Regulation, as set out in PE-CONS 3691/07 JUSTCIV 334 CODEC 1401, as an “A” item at a forthcoming meeting;
• decide to enter in the minutes of that meeting the statements set out in the addendum to this note.

After being signed by the President of the European Parliament, the President of the Council and the Secretaries-General of the two institutions, the legislative act will be published in the Official Journal of the European Union.

Quite surprisingly, as regards the participation of the United Kingdom in the adoption of the Regulation, a footnote of the document states:

In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, the United Kingdom and Ireland have given notice of their wish to take part in the adoption and application of this Regulation.

This is probably a mistake, since the United Kingdom has not so far officially opted in (see Recital n. 45 of the Regulation), and a consultation paper on the matter was launched last week by the Ministry of Justice (see our post here).

[UPDATE on the position of the United Kingdom: a revised version of the document has been released - doc. n. 7689/1/08 REV 1 of 9 April 2008 -, where it is clearly stated that, at present, “[i]n accordance with Articles 1 and 2 of the Protocol […] and without prejudice to Article 4 of the said Protocol, the United Kingdom is not taking part in the adoption of this Regulation and is not bound by it or subject to its application“]

Two statements are set out in the Addendum (doc. n. 7689/08 ADD 1 of 7 April 2008): one by the Council and the Commission, relating to the new conflict rule on insurance contracts (Art. 7 of the new Regulation), and one by the French delegation, on the consistency between the rule on applicable law in consumer contracts (Art. 6) and future revisions of Brussels I Regulation as regards the provisions relating to jurisdiction in the same matter (Section 4, Articles 15-17 of Brussels I Reg.). Here’s the text:

DECLARATION BY THE COUNCIL AND THE COMMISSION RELATING TO THE LAW APPLICABLE TO INSURANCE CONTRACTS

The Council and the Commission note that the rules contained in Article 7 essentially reflect the legal situation as regards applicable law as presently included in the insurance Directives. Any future substantive revision of the present regime should take place in the context of the review clause of this Regulation.

DECLARATION BY THE FRENCH DELEGATION RELATING TO ARTICLE 6 OF ROME I ON THE LAW APPLICABLE TO CONSUMERS

In view of the importance of conflict-of-law rules in international private law, and in order to achieve the objective, laid down in Article 153 of the EC Treaty, of ensuring a high level of consumer protection within the Community, France wishes to state that, in the revision of Regulation 44/2001 EC on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, the provisions relating to jurisdiction (section 4 of Brussels I) must be consistent with Article 6 of the Regulation applicable to contractual obligations (Rome I), concerning the law applicable to consumer contracts.

As we noted in a previous post, the agreement reached by the European Parliament and the Council on the Rome I Regulation was transposed by the EP in its amendments at first reading to the initial Commission’s Proposal. Once revised by the lawyer-linguists, this modified version of the Regulation would have been adopted by the Council, ending the codecision procedure.

The text resulting from the legal and linguistic revision is now available in all languages of the EU in the Register of the Council (doc. PE-CONS 3691/07 of 31 March 2008). Given the heading of the document (European Parliament and the Council), it can be assumed that this is the final version of the Rome I Regulation on the law applicable to contractual obligations.

According to current schedule (see the Rome I OEIL page), the text should be approved by the JHA Council in its meeting of 17/18 April 2008. Further information will be posted as soon as it is available.

The Ministry of Justice has launched a public consultation on whether the UK should opt (back) in to the Rome I Regulation (see all Rome I entries on this site here.) The press release states:

The Rome I proposal will provide clarity over which law applies if a dispute arises over a contract made between people or businesses from different countries, allowing cross border trade to continue with confidence.  

When the European Commission first announced the proposals in 2005, the UK government took the unusual step of opting out of the proposals, as they would not have been in the interests of UK businesses. However, following intense negotiations, a substantially revised and hugely improved version has now been agreed.

Announcing the publication of the ‘Rome I - Should the UK opt in?’ consultation today, Bridget Prentice, Parliamentary Under Secretary of State said:

‘The government has always said that we will not opt into EU measures which are not in our national interest. The original proposal was clearly not right for Britain, but the new and much improved regulation will help to ensure that the rules in this very technical area are applied uniformly. This will ensure a level playing field for British business in Europe.’

Notes to editors

• The 1980 Rome Convention was implemented into UK law by the Contracts (Applicable Law) Act 1990. It applies throughout the UK.
• The original Rome I Regulation was released by the European Commission in December 2005.
• The UK exercised its right not to opt in to the proposed Regulation in May 2006 [see our news item here]. This was only the second time that the UK had opted out of a Regulation under its special arrangements on Title IV of the Treaty establishing the European Community. To opt in, it will have to seek the permission of the European Commission, and agree a timetable for implementation.
• Negotiations on the Rome I Regulation ended with political agreement among Member States in December 2007. Jurist-linguists are presently checking the text for linguistic integrity. The Regulation will be adopted at the next meeting of the Justice and Home Affairs Council in April of June. The main provisions of the Regulation will come into force 18 months later.
• The UK government negotiated on behalf of all UK jurisdictions, and the consultation paper is a joint project of the Ministry of Justice and the devolved administrations.

The conclusion in the (lengthy) consultation paper itself is that,

The Government’s assessment of the Regulation as a whole is that it would be in the national interest for the UK to apply it, subject to gaining the approval of the Commission. Not only have the initial problems with the Commission’s proposal generally been resolved, but also in some significant respects the Regulation represents an improvement on the Convention. Moreover, the maintenance of a single European instrument continues to be of benefit, as it was under the Rome Convention.

The questions posed by the consultation paper are:

• Is it in the national interest for the Government, in accordance with Article 4 of the UK’s Protocol on Title IV measures, to seek to opt in to the Regulation? If not, please explain why.
• Should the Rome I rules apply throughout the UK if the UK opts in to the Regulation? If not, please explain why.
• Do you agree with the Partial Impact Assessment at Annex A of the consultation paper? If not, please explain why.

Your responses need to be received by the UK Government no later than 25 June 2008.

A very interesting volume, collecting the contributions presented by prominent European and Japanese scholars at a conference organised in 2007 by the Max Planck Institute for Private Law in Hamburg, has been recently published by Mohr Siebeck: Japanese and European Private International Law in Comparative Perspective. A presentation of the book, and the TOC, are available on the MPI’s website:

Edited by Jürgen Basedow, Harald Baum und Yuko Nishitani, this conference volume is based on a symposium of the same name that was held in March 2007 at the MPI for Private Law in Hamburg and represents the first comprehensive analysis of the new Japanese private international law in any western language.

The idea of national codification is advancing on a global scale in conflict of laws. A large number of legislative projects dealing with codifying and modernizing private international law, both on the national and the supranational level, have been launched in the past few years. Among such recent initiatives, the advances taken by the European and the Japanese legislators are particularly reflecting these developments. On January 1, 2007, the new Japanese ‘Act on General Rules for Application of Laws’ entered into force replacing the outdated conflict of laws statute of 1898. This major reform finds its parallels in the current efforts of the European Union to create a modern private international law regime for its member states.

This volume presents the first comprehensive analysis of the new Japanese private international law available in any western language and contrasts it with corresponding European developments. Most of the contributors from Japan are scholars who were actively involved in and responsible for preparing the new Act. All of them are renowned experts in the field of private international law. Leading European experts in the conflict of laws supplement the Japanese analyses with comparative contributions reflecting the pertinent discussion of parallel endeavours in the EU. To guarantee better understanding, English translations of both the present and the former Japanese statutes have been added.

Table of Contents:

I. General Introduction
Jürgen Basedow: The Recent Development of the Conflict of Laws - Trevor C Hartley: The Brussels Regulation and Non-Community States - Masato Dogauchi: Historical Development of Japanese Private International Law - Hironori Wanami: Background and Outline of the Modernization of Japanese Private International Law

II. Contractual Obligations
Yuko Nishitani: Party Autonomy and Its Restrictions by Mandatory Rules in Japanese Private International Law - Catherine Kessedjian: Party Autonomy and Characteristic Performance in the Rome Convention and the Rome I Proposal - Fausto Pocar: Protection of Weaker Parties in the Rome Convention and the Rome I Proposal

III. Assignment of Receivables
Aki Kitazawa: Law Applicable to the Assignment of Receivables in Japan (Nihon ni okeru saiken jôto no junkyo-hô) - Eva-Maria Kieninger: General Principles on the Law Applicable to the Assignment of Receivables in Europe

IV. International Company Law
Dai Yokomizo: International Company Law in Japan - Sylvaine Poillot-Peruzzetto: International Company Law in the ECJ Decisions - Daniel Zimmer: The Proposal of the Deutscher Rat für Internationales Privatrecht

V. Non-Contractual Obligations
Toshiyuki Kono: Critical and Comparative Analysis of the Rome II Regulation on Applicable Laws to Non-contractual Obligations and the New Private International Law in Japan - Thomas Kadner Graziano: General Principles of Private International Law of Tort in Europe - Marc Fallon: The Law Applicable to Specific Torts in Europe

VI. International Family Law
Yasuhiro Okuda: Divorce, Protection of Minors, and Child Abduction in Japan’s Private International Law - Maarit Jänterä-Jareborg: Jurisdiction and Applicable Law in Cross-Border Divorce Cases in Europe - Alegría Borrás: Protection of Minors and Child Abduction under the Hague Conventions and the Brussels II bis Regulation

VII. International Civil Procedure Law
Yoshihisa Hayakawa: International Adjudicative Jurisdiction in Japan - Dieter Martiny: Recognition and Enforcement of Foreign Judgments in Germany and Europe

Annex I
Major European Community Legislation in Private International Law

Annex II
Japanese Legislation in Private International Law

Title: Japanese and European Private International Law in Comparative Perspective, edited by Jürgen Basedow, Harald Baum, and Yuko Nishitani, Mohr Siebeck (Materialien zum ausländischen und internationalen Privatrecht/48), Tübingen, March 2008, XVIII + 434 pages.

ISBN: 978-3-16-149547-2. Price: euro 89.

On March 5, 2008, the French supreme court for private matters (Cour de cassation) confirmed its previous case law characterizing exclusive distribution agreements as contracts which are neither sales nor provisions of services for the purposes of article 5(1) of the Brussels I Regulation.

In this case, German company Wolman had awarded French company Cecil the exclusive distribution of its products (wood) in France. After Wolman terminated the contract in 2002, Cecil sued before a French commercial court in Isère.

The Court of Appeal of Grenoble ruled in a judgment of November 16, 2006 that French courts had jurisdiction over the dispute, as the distribution contract ought to be characterized as a provision of service, which had taken place in France.

The Cour de cassation reversed. It held that it was no provision of service for the purpose of article 5, and that the lower courts ought to have identified the obligation in question and found where it was meant to be performed according to the law governing the contract.

As usual, no reasons are given by the Cour de cassation in support of its solution.

Related posts:
French Judgment on Article 5(1) of the Brussels I Regulation, Part I
French Judgment on Article 5(1) of the Brussels I Regulation, Part II
French Judgment on Article 5(1) of the Brussels I Regulation, Part III

It has been a little while since my last trawl through the law journals, and a few articles and casenotes have been published in the intervening period that private international law enthusiasts may wish to add to their reading list:

J.M. Carruthers, “De Facto Cohabitation: the International Private Law Dimension” (2008) 12 Edinburgh Law Review 51 - 76.

P. Beaumont & Z. Tang, “Classification of Delictual Damages - Harding v Wealands and the Rome II Regulation” (2008) 12 Edinburgh Law Review 131 - 136.

G. Ruhl, “Extending Ingmar to Jurisdiction and Arbitration Clauses: The End of Party Autonomy in Contracts with Commercial Agents?” (2007) 6 European Review of Private Law 891 - 903. An abstract:

In the judgment discussed below, the Appeals Court of Munich (OLG München) deals with the question whether jurisdiction and arbitration clauses have to be set aside in the light of the Ingmar decision of the European Court of Justice where they cause a derogation from Articles 17 and 18 of the Commercial Agents Directive. The Court concludes that this question should be answered in the affirmative if it is ‘likely’ that the designated court or arbitral tribunal will neither apply Articles 17 and 18 nor compensate the commercial agent on different grounds. Thus, the Court advocates that Articles 17 and 18 be given extensive protection. This is, however, problematic because such extensive protection imposes serious restrictions on party autonomy, whereas these restrictions are not required by Community law in general or by the principle of effectiveness in particular. Therefore, it is very much open to doubt whether this decision is in the best interests of the Internal Market.

F. Bolton & R. Radia, “Restrictive covenants: foreign jurisdiction clauses” (2008) 87 Employment Law Journal 12 - 14. The abstract:

Reviews the Queen’s Bench Division judgment in Duarte v Black and Decker Corp and the Court of Appeal decision in Samengo-Turner v J&H Marsh & McLennan (Services) Ltd on whether restrictive covenants were enforceable under foreign jurisdiction clauses contained in the long-term incentive plan agreements of UK domiciled employees of multinational companies. Examines the conflict of laws and whether English law applied under the Convention on the Law Applicable to Contractual Obligations 1980 Art.16 and under Regulation 44/2001 Arts.18 and 20.

W. Tetley, “Canadian Maritime Law” L.M.C.L.Q. 2007, 3(Aug) Supp (International Maritime and Commercial Law Yearbook 2007), 13-42. The blurb:

Reviews Canadian case law and legislative developments in shipping law in 2005 and 2006, including cases on: (1) carriage of goods by sea; (2) fishing regulations; (3) lease of port facilities; (4) sale of ships; (5) personal injury; (6) recognition and enforcement of foreign judgments; (7) shipping companies’ insolvency; (8) collision; and (9) marine insurance.

S. James, “Decision Time Approaches - Political agreement on Rome I: will the UK opt back in?” (2008) 23 Butterworths Journal of International Banking & Financial Law 8. The abstract:

Assesses the extent to which European Commission proposed amendments to the Draft Regulation on the law applicable to contractual obligations (Rome I) meet the concerns of the UK financial services industry relating to the original proposal. Notes changes relating to discretion and governing law, assignment and consumer contracts.

A. Onetto, “Enforcement of foreign judgments: a comparative analysis of common law and civil law” (2008) 23 Butterworths Journal of International Banking & Financial Law 36 - 38. The abstract:

Provides an overview of the enforcement of foreign judgments in common law and civil law jurisdictions by reference to a scenario involving the enforcement of an English judgment in the US and Argentina. Reviews the principles and procedures applicable to the recognition and enforcement of foreign judgments in the US and Argentina respectively, including enforcement expenses and legal fees. Includes a table comparing the procedures for the recognition and enforcement of foreign judgments in California, Washington DC and New York.

J. Carp, “I’m an Englishman working in New York” (2008) 152 Solicitors Journal 16 - 17. The abstract:

Reviews case law on issues arising where a national of one country works in another country. Sets out a step by step approach to ascertaining: the law governing the employment contract; the applicability of mandatory labour laws, including cases on unfair dismissal, discrimination, working time, and the transfer of undertakings; which country has jurisdiction; and public policy. Offers practical suggestions for drafting multinational contracts.

J. Murphy - O’Connor, “Anarchic and unfair? Common law enforcement of foreign judgments in Ireland” 2007 2 Bankers’ Law 41 - 44. Abstract:

Discusses the Irish High Court judgment in Re Flightlease (Ireland) Ltd (In Voluntary Liquidation) on whether, in the event that the Swiss courts ordered the return of certain monies paid by a Swiss airline, in liquidation, to an Irish company, also in liquidation, such order would be enforceable in Ireland. Considers whether: (1) the order would be excluded from enforcement under the common law on the basis that it arose from a proceeding in bankruptcy or insolvency; and (2) the order would be recognised on the basis of a “real and substantial connection” test, rather than traditional conflict of laws rules.

V. Van Den Eeckhout, “Promoting human rights within the Union: the role of European private international law” 2008 14 European Law Journal 105 - 127. The abstract:

This article aims to contribute both to the ‘Refgov’ project, which is focused on the ambition to find ways of promoting human rights within the EU, but also, more in general and apart from the project, to an improved understanding of the crucial place conflict of law rules occupy in the building of a common Europe—a highly political question behind apparently technical issues. In the study the author deals with the parameters, points of interest, etc in relation to private international law which should be heeded if European Member States ‘look at’ each other’s laws, and—in the context of the ‘Refgov’ project—if the idea is to exchange ‘best practices’ or harmonise substantive law, or to harmonise private international law, etc further through a type of open method of coordination. The contribution also shows that private international law issues are decisive in respect of every evaluation of the impact of European integration on human rights, both if this integration process takes place through ‘negative’ harmonisation (for example by falling back on the principle of mutual recognition) and through ‘positive’ harmonisation.

R. Swallow & R. Hornshaw, “Jurisdiction clauses in loan agreements: practical considerations for lenders” (2007) 1 Bankers’ Law 18 - 22. Abstract:

Assesses the implications for borrowers and lenders of the Commercial Court judgment in JP Morgan Europe Ltd v Primacom AG on whether proceedings brought in Germany challenging the validity a debt facility agreement were to be treated as the first seised under Regulation 44/2001 Art.27 (Brussels I Regulation), despite the fact that the agreement contained an exclusive jurisdiction clause in favour of the English courts. Advises lenders on the drafting of loan agreements to help mitigate the risk of a jurisdiction clause being frustrated. Considers the steps that might be taken by the lender once a dispute has arisen.

A. Dutton, “Islamic finance and English law” (2007) 1 Bankers’ Law 22 - 25. Abstract:

Reviews cases relating to Islamic finance, including: (1) the Commercial Court decision in Islamic Investment Co of the Gulf (Bahamas) Ltd v Symphony Gems NV on whether the defendant was liable to make payments under a Sharia compliant contract governed by English law that would contravene Sharia law; (2) the Court of Appeal ruling in Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd (No.1) interpreting a choice of law clause expressed as English law “subject to the principles” of Sharia law; and (3) the Commercial Court judgment in Riyad Bank v Ahli United Bank (UK) Plc on whether the defendant owed a duty of care to a Sharia compliant fund where it had contracted directly with its parent bank.

J. Burke & A. Ostrovskiy, “The intermediated securities system: Brussels I breakdown” (2007) 5 European Legal Forum 197 - 205. Abstract:

Presents a hypothetical case study of a dispute arising from a cross-border securities transaction involving parties from the UK, Sweden and Finland to examine the application of the private international law regime under Regulation 44/2001 Art.5(1) (Brussels I Regulation), the Convention on the Law Applicable to Contractual Obligations 1980 Art.4 (Rome Convention) and the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary. Considers the extent to which commercial developments in the securities industry have outstripped the current conflicts of law rules.

M. Requejo, “Transnational human rights claims against a state in the European Area of Freedom, Justice and Security: a view on ECJ judgment, 15 February 2007 - C292/05 - Lechouritou, and some recent Regulations” (2007) 5 European Legal Forum 206 - 210. Abstract:

Comments on the European Court of Justice ruling in Lechouritou v Germany (C-292/05) on whether a private action for compensation brought against Germany with respect to human rights abuses committed by its armed forces during its occupation of Greece in the Second World War fell within the scope of the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1968 Art.1, thus preventing the defendant from claiming immunity for acts committed during armed conflict. Examines the EC and US jurisprudential context for such private damages claims.

L. Osana, “Brussels I Regulation Article 5(3): German Law Against Restrictions on Competition” (2007) 5 European Legal Forum 211 - 212. Abstract:

Summarises the Hamburg Court of Appeal decision in Oberlandesgericht (Hamburg) (1 Kart-U 5/06) on whether the German courts had jurisdiction under Regulation 44/2001 Art.5(3) (Brussels I Regulation) to order a German tour operator not to incite Spanish hotels to refuse to supply contingents to a competitor German tour operator, behaviour that had been found to be anti-competitive.

C. Tate, “American Forum Non Conveniens in Light of the Hague Convention on Choice of Court Agreements” (2007) 69 University of Pittsburgh Law Review 165 - 187.

E. Costa, “European Union: litigation - applicable law” (2008) 19 International Company and Commercial Law Review 7 - 10. Abstract:

Traces the history of how both the Convention on the Law Applicable to Contractual Obligations 1980 (Rome I) and Regulation 864/2007 (Rome II) became law. Explains how Rome II regulates disputes involving non-contractual obligations and determines the applicable law. Notes areas where Rome II does not apply, and looks at the specific example of how Rome II would regulate a dispute involving product liability, including the habitual residence test.

E.T. Lear, “National Interests, Foreign Injuries, and Federal Forum Non Conveniens” (2007) 41 University of California Davis Law Review 559 - 604 [Full Text Here]. Abstract:

This Article argues that the federal forum non conveniens doctrine subverts critical national interests in international torts cases. For over a quarter century, federal judges have assumed that foreign injury cases, particularly those filed by foreign plaintiffs, are best litigated abroad. This assumption is incorrect. Foreign injuries caused by multinational corporations who tap the American market implicate significant national interests in compensation and/or deterrence. Federal judges approach the forum non conveniens decision as if it were a species of choice of law, as opposed to a choice of forum question. Analyzing the cases from an adjudicatory perspective reveals that in the case of an American resident plaintiff injured abroad, an adequate alternative forum seldom exists; each time a federal court dismisses such a claim, the American interest in compensation is irrevocably impaired. With respect to deterrence, an analysis focusing properly on adjudicatory factors demonstrates that excluding foreign injury claims, even those brought by foreign plaintiffs, seriously undermines our national interest in deterring corporate malfeasance.

I am sure that I have missed various articles or case comments published in the last couple of months. If you spot any that are not on this list (or, even better, if you have written one and it is not on this list), please let me know.

On Friday, 14th March, the 20th Journée de droit international privé, organised by the Swiss Institute of Comparative Law (ISDC) and the University of Lausanne (Center of Comparative Law, European Law and Foreign Legislations), will analyse the new Rome I Regulation, whose final adoption is expected in one of the first Council’s sessions in early 2008 (see our previous post here).

Here’s a short presentation of the programme (our translation from French):

20e Journée de droit international privé

“The new Rome I regulation on the law applicable to contractual obligations” (Le nouveau règlement européen ‘Rome I’ relatif à la loi applicable aux obligations contractuelles)

Introductory remarks: Walter Stoffel (University of Fribourg) - The 20th anniversary of the “Journées de droit international privé” and award of the “Prix Alfred E. von Overbeck” of the ISDC.

First Session: General Aspects (Généralités)

Chair: Andrea Bonomi (University of Lausanne)

• Michael Wilderspin (European Commission): The new “Rome I” regulation: the European Commission’s point of view (Le nouveau règlement “Rome I”: point de vue de la Commission européenne);
• Eva Lein (ISDC): The new synergy Rome I/Rome II/Brussels I (La nouvelle synergie Rome I/Rome II/Bruxelles I);
• Caroline Nicholas (UNCITRAL, Wien): Relationships with international conventions: UNCITRAL/The Hague/Unidroit (Les relations avec le droit conventionnel: CNUDCI/La Haye/Unidroit).

Second Session: Basic Principles (Principes de base)

Chair: Peter Mankowski (University of Hamburg)

• Stefan Leible (University of Bayreuth): Choice of applicable law (Le choix de la loi applicable);
• Bertrand Ancel (University of Paris I): Law applicable in the absence of choice (La loi applicable à défaut de choix).

Third Session: Some Special Contracts (Quelques contrats particuliers)

Chair: Bertrand Ancel (University of Paris I)

• Helmut Heiss (University of Zurich): Insurance contracts (Les contrats d’assurance);
• Peter Mankowski (University of Hamburg): Consumer contracts (Les contrats conclus par les consommateurs);
• Francisco J. Garcimartin Alférez (University of Madrid ‘Rey Juan Carlos’): Contracts on financial instruments (Les contrats portant sur des instruments financiers).

Fourth Session: Specific mechanisms (Mécanismes spécifiques)

Chair: Stefan Leible (University of Bayreuth)

• Eleanor Cashin Ritaine (Director, ISDC): Assignment, subrogation and set-off (La cession de créance, la subrogation et la compensation)
• Andrea Bonomi (University of Lausanne): Lois de police and public policy (Les lois de police et l’ordre public)

Concluding remarks: Tito Ballarino (University of Padova) - Emerging of new values and filling loopholes (Emergence de nouvelles valeurs et comblement des lacunes).

The conference will be held in French, German and English (no translation is provided).

For the detailed programme and further information (including fees), see the ISDC website and the downloadable leaflet. An online registration form is available.

(Many thanks to Prof. Giulia Rossolillo - University of Pavia - for the tip-off, and to Béatrice Angehrn - ISDC - for providing additional information on the conference)

Mo Zhang (Temple University) has posted “Party Autonomy and Beyond: An International Perspective of Contractual Choice of Law” on SSRN; it originally appeared in the Emory International Law Review, Vol. 20, No. 511, 2006. The abstract reads:

As a popular choice of law doctrine, party autonomy allows the parties in international contracts (or foreign contracts) to choose governing law of particular jurisdiction they prefer. Premised on freedom of contract, this doctrine has evolved in many ways since it was introduced in the 1600’s and has become an internationally accepted principle governing choice of law in contracts. In international community, the doctrine of party autonomy has been adopted and applied through the rule-based framework or mechanism. But the acceptance of party autonomy in the United States is intertwined with interest or policy analysis so closely that it is often quite difficult for the parties to predict the ultimate outcome of the choice of law they have made. In addition, the interest and policy analysis based American choice of law approaches and the choice of law rules so developed in the US hardly have any general application internationally. Also, the connection requirement has rendered the US contractual choice of law in discordance with international common practice. In fact, both interest analysis and connection requirement are not necessarily needed with regard to the choice of law by the parties. Choice of law should be ruled based and the rules should be intended to maximize the individual or private welfare rather than the state interest.

Download the article.

The Austrian Supreme Court of Justice (Oberster Gerichtshof) has referred the following questions to the ECJ for a preliminary ruling:

1. Is a contract under which the owner of an incorporeal right grants the other contracting party the right to use that right (a licence agreement) a contract regarding ‘the provision of services’ within the meaning of Article 5(1)(b) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Brussels I Regulation)?

2. If Question 1 is answered in the affirmative:

2.1. Is the service provided at each place in a Member State where use of the right is allowed under the contract and also actually occurs?

2.2. Or is the service provided where the licensor is domiciled or, as the case may be, at the place of the licensor’s central administration?

2.3. If Question 2.1 or Question 2.2 is answered in the affirmative, does the court which thereby has jurisdiction also have the power to rule on royalties which result from use of the right in another Member State or in a third country?

3. If Question 1 or Questions 2.1 and 2.2 are answered in the negative: Is jurisdiction as regards payment of royalties under Article 5(1)(a) and (c) of the Brussels I Regulation still to be determined in accordance with the principles which result from the case-law of the Court of Justice on Article 5(1) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (the Brussels Convention)?

The reference can be found at the website of the ECJ - Falco Privatstiftung and Thomas Rabitsch v Gisela Weller-Lindhorst (Case C-533/07).

The fourth issue of the French Journal du Droit International (Clunet) has been released. It contains three articles dealing with private international law issues (the table of contents in French can be found here).

First, the Journal offers the end of the article of Ms Legros (the first part of which was published in the third issue of the Journal) on Conflicts of Norms in the Field of International Contracts for Carriage of Goods (”Les conflits de normes en matière de contrats de transport internationaux de marchandises“). The second part of the study focuses on jurisdictional and enforcement issues.

The second article is authored by Professor Emmanuel Gaillard, who teaches at Paris XII university, and who is also a leading practionner of international commercial arbitration. It discusses the Representations of International Arbitration, Between Sovereignty and Autonomy (”Souverainté et autonomy: réflexions sur les représentations de l’arbitrage international“). The English abstract reads:

The autonomy of international arbitration vis-à-vis national legal orders raises important question of legal theory. There are several representations of international arbitration: that assimilating the arbitrator to the courts of a single legal system; that perceiving the autonomy of international arbitration as detached of national legal systems; and that considering such autonomy as anchored in the entirety of the legal systems that accept, under certain conditions, to recognize the arbitral award. Significant practical consequences follow from these distinctions.

The third is authored by Didier Lamethe, who is the Secrétaire Général of EDF International, a subsidiary of the French national electricity company. His article discusses the Languages of International Arbitration (”Les langues de l’arbitrage international : liberté or contraintes raisonnées de choix ou contraintes réglementées ?“). The English abstract reads:

As far as international contracts are concerned, language plays a key part beyond the negotiation and the signature, in the event of deviations of interpretation ending up in an arbitration. Thus arises the question of the choice an the backgrounds of the choice of the language(s) regarding not only the proceedings, but also some sides of the proceedings. This essays puts up the principles of a sharing-out between the feasible and the forbidden, the content of arbitration rules making up a reference for a comparative analysis of great interest. Such an approach outlines the areas of freedom for the choice to be made and gives a demonstration of the imprecise figure of the constraints.

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Following our post on the forthcoming JHA Council session (6-7 December 2007), here’s a document prepared by the General Secretariat of the Council for the Permanent Representatives Committee (COREPER), providing a short presentation of the Parliament’s vote on Rome I and the text of the EP legislative resolution at first reading (see our post here):

I. INTRODUCTION

The Committee on Legal Affairs adopted sixty-four amendments to the proposal for a Regulation (amendments 1- 64). In accordance with the provisions of Article 251(2) of the EC Treaty and the joint declaration on practical arrangements for the codecision procedure, a number of informal contacts have taken place between the Council, the European Parliament and the Commission with a view to reaching an agreement on this dossier at first reading, thereby avoiding the need for a second reading and conciliation.

In this context, the rapporteur, Mr Cristian DUMITRESCU (PES - RO), and the PES, EPP-ED, ALDE, UEN and Greens/EFA political groups together tabled a further twenty-one compromise amendments (amendments 65-85).

These amendments had been agreed during the informal contacts referred to above. During the debate, Vice-President of the Commission Frattini made a statement regarding Article 5a on behalf of the Commission, and invited the Council to support it.

II. VOTE

At the vote which took place on 29 November 2007, the plenary adopted the twenty-one compromise amendments (amendments 65-85) and forty-nine of the Committee’s original amendments […].

The amendments adopted correspond to what was agreed between the three institutions and ought therefore to be acceptable to the Council.

Consequently, once the lawyer-linguists have scrutinised the text, the Council should be in a position to adopt the legislative act. […]

As regards the legal-linguistic revision of the EP text, the document sets a deadline of 18 January 2008 for the national delegations to send their observations to the Council’s Directorate for the Quality of Legislation: it is therefore likely that, if a political agreement is reached in the Council on 7 December 2007, the Rome I Regulation will be officially adopted in one of the Council’s session in early 2008.

The Council’s discussion on Rome I, that will take place on 7 December about 11h00 AM, will be open to the public, like every deliberation under the co-decision procedure. It will therefore be broadcasted on the Council’s website.

- - -

As regards the debate that preceded the vote in the European Parliament (29 November 2007), the transcription (mainly in French) has been made available on the EP website. Most part of the speakers (among which Commissioner Frattini and the EP Rapporteur Dumitrescu) focused on the conflict rule on consumer contracts (art. 6 of the EP legislative resolution), one of Parliament’s main concerns, pointing out the balance struck in the provision between the need of protection of the weaker party and the commercial interests of the “professionals” (especially SMEs).

According to rapporteur Dumitrescu, the United Kingdom, that has not so far given notice of its wish to take part in the adoption of the Rome I Regulation, may be reconsidering its position, in the light of the text resulting from the informal agreement between EP and Council.

On 6 and 7 December the Justice and Home Affairs Council will hold its 2838th session in Brussels, under the Portuguese Presidency. Among the “Justice” issues, scheduled for Friday 7th, the Presidency will inform about the agreement reached with the European Parliament on the Rome I Regulation (see our post on the EP report and legislative resolution at first reading). Here’s an excerpt from the background note:

The Presidency will inform the Council about a first reading agreement reached with the European Parliament on a Proposal for a Regulation of the law applicable to contractual obligations. […] Numerous informal meetings have been held with the European Parliament with a view to reaching a first reading agreement in the framework of the co-decision procedure. The European Parliament adopted its report on 29 November 2007.

As regards the JHA “External Relations” issues, the Presidency will inform on the outcome of the diplomatic conference on the new Convention on the international recovery of child support and other forms of family maintenance. The Convention, that was drafted in the frame of the Hague Conference on Private International Law (of which the EC is a member since April 2007), was finalised at the end of the twenty-first session of the diplomatic conference, held in The Hague from 5 to 23 November 2007, along with a Protocol on the Law Applicable to Maintenance Obligations (see the HCCH’s press release). It was signed on the same day by the United States of America. The text of the Convention and Protocol, and the preliminary documents, are available on the HCCH website.

As reported in our previous post, the EP’s plenary session adopted today in Brussels, at first reading, a legislative resolution on the Rome I Proposal. While largely based, as regards the conflict rules, on the draft legislative resolution contained in the report voted by the JURI Committee on 21 November 2007, the EP’s final text is the result of some further amendments filed jointly by all the EP political groups before the plenary’s vote.

Three of these last-minute amendments are worth mentioning:

- a new Art. 7 provides a conflict rule on insurance contracts (the issue has been discussed at length in the Council’s Committee on Civil Law Matters: see doc. n. 8935/1/07 of 4 May 2007);

- a third paragraph is added to Art. 9 on overriding mandatory provisions:

Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of the contract have to be or have been performed, in so far as those overriding mandatory provisions render the performance of the contract unlawful. In considering whether to give effect to those provisions, regard shall be had to their nature and purpose and to the consequences of their application or non-application.

- as a result of the introduction of the provision on insurance contracts, Art. 20 on the exclusion of renvoi is redrafted as follows:

The application of the law of any country specified by this Regulation means the application of the rules of law in force in that country other than its rules of private international law, unless provided otherwise in this Regulation.

A provisional edition of the Rome I legislative resolution is available in the collection of the texts adopted by the EP in the session (see p. 73 ff.). Further information will be provided, as soon as the minutes of the sitting are available.

The EP’s Committee on Legal Affairs (JURI) adopted in its meeting of 20 November 2007 a Draft Legislative Resolution on the Rome I Proposal on the law applicable to contractual obligations, on the basis of a new set of 62 “final” compromise amendments presented by the rapporteur, Ian Dumitrescu.

According to the Rome I page of Diana Wallis’ website (who acts as an EP shadow rapporteur in the Rome I codecision procedure, after her successful work on Rome II Regulation), the final amendments, which modify a substantial part of the recitals and provisions of the Regulation, have been drafted by the rapporteur following a series of informal trialogues with the Council Presidency and the Commission (thus adopting a different approach from the one taken in the Rome II procedure, in which an agreement could be found by the institutions only in the last-resort Conciliation Committee).

The vote on the Draft Legislative Resolution at first reading by the Parliament’s plenary session is scheduled on 29 November 2007. According to the Rome I OEIL page, the text will be then examined by the Council in its meeting of 6 December 2007: given the agreement reached in the trialogues, it is entirely possible that the text will gain at least political agreement in the Council, thus making the adoption of the act far more imminent than previously expected (see Council’s document no. 15325/07 of 19 November 2007 - currently not accessible, whose title reads “Approval of the final compromise package with a view to a first reading agreement with the European Parliament”).

Further information on the evolution of the codecision procedure will be posted as soon as it is available.

As we announced in the last posting concerning the CLIP group, they are preparing an international conference on issues arising where in the intersection of intellectual property law and private international law. The conference program includes the following topics and speakers:

Are there any Common European Principles of a Private International Law with regard
to Intellectual Property?
Prof. Dr. Annette Kur, Max Planck Institute for Intellectual Property Law, Munich

The ALI Principles Governing Jurisdiction, Choice of Law and Judgments in
Transnational Intellectual Property Disputes
Prof. Dr. Rochelle C. Dreyfuss, New York University

“Contracts Relating to Intellectual or Industrial Property Rights” under the Rome I
Proposal
Prof. Dr. Matthias Leistner, University of Bonn

The Law Applicable to Non-Contractual Obligations Arising from an Infringement of
Registered IP Rights
Prof. Dr. Peter Mankowski, University of Hamburg

The Law Applicable to Infringements of Non-Registered IP Rights
Prof. Dr. Haimo Schack, University of Kiel

Extraterritorial Application of IP Law - An American View
Prof. Dr. Graeme B. Dinwoodie, Chicago-Kent College of Law

The Private International Law of IP and of Unfair Commercial Practices: Coherence or
Divergence?
Prof. Dr. Pedro Miguel de Asensio, University Complutense of Madrid

Cross Border IP Litigation – Still an Issue under the Brussels I Regulation?
Prof. Dr. Paul Torremans, University of Nottingham/University of Ghent

A Spider without a Web? Multiple Defendants in IP Litigation
Prof. Dr. Marcus Norrgård, Swedish School of Economics and Business
Administration, Helsinki

The Future of Centralised Patent Litigation in Europe – Between EPLA and the
Community Patent Regulation
Dr. Stefan Luginbühl, European Patent Office

Jurisdiction in Cases Concerning IP Infringements on the Internet
Dr. Axel Metzger, Max-Planck Institute for Comparative and International Private
Law, Hamburg

The opening speach on behalf of the DFG Graduate School n. 1148 “Intellectual Property and the Public Domain”, University of Bayreuth belongs to Prof. Dr. Diethelm Klippel, and the introduction into the conference has been entrusted to Prof. Dr. Stefan Leible and Prof. Dr. Ansgar Ohly of the University of Bayreuth. The conference will take place in Bayreuth, Germany on 4 and 5 April 2008.

The detailed program of the conference can be downloaded here.

Simon Schwarz (Hamburg) has published a comprehensive article on “The Law Applicable to Voluntary Agency in a Comparative Perspective” (“Das Internationale Stellvertretungsrecht im Spiegel nationaler und supranationaler Kodifikationen”) in the latest issue of the “Rabels Zeitschrift für ausländisches und internationales Privatrecht” (RabelsZ 71 (2007) pp. 729-801).

Here is the English summary:

Questions relating to an agent’s authority represent a basic problem of contract law and are of considerable practical importance in international market transactions. The article analyses which law should govern the powers of an agent to bind his principal vis-à-vis a third party. To this end, the article examines, systemises, and evaluates the pertinent solutions adopted in more than twenty jurisdictions as well as in the European Commission’s Proposal for a Rome I-Regulation of December 2005. The findings may be summarised as follows:

1. Due to the characteristic triangular relationship of the agency situation there is a clear need for a separate conflicts rule dealing with the agent’s authority.

2. The agent’s place of business and the place where the agent acted represent the most commonly accepted and best founded connecting factors in this respect while the place of the habitual residence of the agent should not be taken into account. As to the question which law should prevail if the agent actually does not act in the country of his business establishment, the solutions differ considerably among the various legal systems. Basically, applying the law of the place of business of a professional agent constitutes a sound and sensible solution which particularly meets the needs of international trade. Therefore, this connecting factor should generally take precedence over the lex loci actus provided that the agent’s place of business was actually foreseeable to the third party.

3. Most of the legal systems recognise party autonomy with regard to the law governing the agent’s authority, which appears to be a particularly reasonable concept. As to its implementation, however, there are some variations in detail. Both as a matter of principle and of business practice the most appropriate approach seems to be to allow the principal to designate the law applicable to the agent’s powers unilaterally, i.e., without the consent of the agent or the third party, provided that this designation is in writing and is foreseeable to the third party. Since the ambit of the law chosen by the principal also extends the possible liability of the agent as falsus procurator the choice must be foreseeable to the agent as well.

4. The scope of the conflict rule on agency should be designed comprehensively rather than restrictively in order to avoid difficult problems of characterisation. Hence, the rule should not merely adjudicate the existence and the extend of the agent’s actual or apparent authority but should encompass the legal consequences of the exercise of the agent’s powers with regard the principal/third party relation as well as the agent/third party relation, including the liability of the falsus procurator and the effects of an undisclosed agency.

Which law governs the establishment of a Louvre museum in Abu Dhabi? The answer can be found in an international agreement concluded in March 2007 between the French state and the United Arab Emirates to that effect (the Agreement). The French Parliament has ratified the Agreement on 9 October 2007. The French text of the Agreement can be found here.

Although the Agreement was concluded between the two States, more actors are involved. One is the Louvre Museum. The Louvre Museum controls the use of the name Louvre and thus granted the United Arab Emirates (UAE) permission to use its name. Another actor is a new French agency established for the occasion, the International Agency for French Museums. The Agreement provides that the agency will advise the UAE on a variety of issues regarding the creation of the museum. Each of these two entities are autonomous and have legal personality under French law.

This background is necessary to understand the provisions of the Agreement dealing with choice of law (articles 17, 18 and 19). These provisions provide for a different choice of law depending on which of these entities is involved.

1) As between the States, article 17 provides that disputes ought to be resolved amicably. No rules of decision are provided.

2) As far as the Louvre is concerned, article 18 provides that any dispute regarding the use of the name Louvre shall be decided by French courts pursuant to French law.

3) Finally, article 18 provides that disputes between the agency and the UAE shall be resolved by way of arbitration, and article 19 provides that arbitral tribunals shall decide such disputes pursuant to English law. Interestingly enough, article 19 also provides that the contracting parties (i.e. the States) owe a duty of good faith to each other, and that so do the agency and the UAE.

These provisions raise several issues. First, why did the negotiators choose to distinguish between the Louvre Museum and the newly created agency? One possibility is that the subject matter of the potential dispute (use of the name Louvre) was perceived as belonging exclusively to courts and as being unarbitrable, as under the French law of arbitration, intellectual property is regarded as partly unarbitrable. Second, why did the negotiators choose English law, and why did they then add on a duty of good faith? It seems to me that the only reasonable answer to the first part of this second question is that they were looking for a law which was both sophisticated and “neutral”. But then they decided to add on a duty of good faith. Were they scared of the consequences of the application of a law which was perceived as not including such a duty? What will it mean, however, from a practical perspective, for the tribunal to apply English law with a duty of good faith? All comments welcome!

(This post was written by Jacco Bomhoff of Leiden University on his Comparative Law Blog, and is reproduced here with his permission.)

It’s official; dozens of private international law commentators, including such luminaries as professors Briggs (UK), Gaudemet-Tallon (France) and Geimer (Germany), have for years completely misread the ECJ. At least, that is what the Court’s Third Chamber suggests in last week’s ruling in Case C-98/06, Freeport/Arnoldsson. According to the new judgment, when the Court said, in its classic Brussels Convention decision in Réunion Européenne and others that:

two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and in the other on liability in tort or delict cannot be regarded as connected,

it didn’t actually mean that,

two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and in the other on liability in tort or delict cannot be regarded as connected.

Right. Of course. So, what is really going on?

The heart of the controversy is a single paragraph in the ECJ’s 1998 judgment Réunion Européenne and others. Although the questions referred to the ECJ by the French Cour de cassation in that case did, in fact, only concern articles 5(1) and 5(3), the ECJ, almost in passing, offered a sweeping statement on art. 6(1) of the (then) Brussels Convention on jurisdiction over multiple defendants at the domicile of one of them. The Cour de cassation’s reference did not touch upon art. 6(1), probably because the court was keenly aware of the fact that as the relevant proceedings were not brought in the court of the domicile of one of the defendants, that article could never apply. The Cour de cassation did, however, want to ask the ECJ more generally to rethink its narrow conception of when a single court could take jurisdiction over several related claims, in particular as French private international law allowed joinder of claims in many more cases. ‘We know’, the French court seems to say, ‘of the strict Convention requirements for jurisdiction over multiple defendants when cases are merely related, but could you allow an exception for cases where, quote: “the dispute is indivisible, rather than merely displaying a connection?”

The ECJ began by pithily remarking that “the Convention does not use the term `indivisible’ in relation to disputes but only the term `related’” (par. 38). The Court went on to refer to art. 6(1) as one of the articles that allow defendants to be sued in the courts of another Contracting state than the one in which they are domiciled. This article could not apply because the proceedings in question had not been brought before the courts for the place where one of the defendants was domiciled (par. 44-45). The acknowledged inapplicability of art. 6(1), however, did not stand in the way of the following general statement on the provision:

“48 (…) the Court held in Kalfelis that, for Article 6(1) of the Convention to apply there must exist between the various actions brought by the same plaintiff against different defendants a connection of such a kind that it is expedient to determine the actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings.

49 In that connection, the Court also held in Kalfelis that a court which has jurisdiction under Article 5(3) of the Convention over an action in so far as it is based on tort or delict does not have jurisdiction over that action in so far as it is not so based.

50 It follows that two claims in one action for compensation, directed against different defendants and based in one instance on contractual liability and in the other on liability in tort or delict cannot be regarded as connected.”

The ruling in Réunion was condemned almost immediately and virtually universally. Briggs and Rees labeled the decision as “extraordinary and, one is driven to conclude, simply wrong” (Civil Jurisdiction and Judgments 2002, 175) and Gaudemet-Tallon called the Court’s conclusion “trop catégorique” (Rev. crit. Dr. int. priv. 1999, 339). Courts in different Member States took divergent approaches to the unwelcome statement in Réunion. The English Court of Appeal, for example, in Brian Watson v. First Choice Holidays (25 june 2001, [2002] I.L.Pr. 1) said: