Private International Law – Revision
1. Law applicable to Contract
Choice of Law
What is applicable law?
The part of PIL dedicated to the determination of the national law that governs a
case with an international dimension
Party autonomy: law selected by the parties (= choice of law) or,
Absence of choice: determined by the rules of PIL
Areas covered by this course: contract, tort, property and companies
When is applicable law relevant?
In the context of dispute resolution
Also, when a contract is being negotiated during the performance of the contract
(determines rights and obligations)
From the point of view of the Rome I Reg, every contract has an applicable law
and the law is applicable at all times
A basic distinction obligation in civil and commercial matters: one principal
applicable law regime (EU Law)
o Contractual obligations: Regulation (EC) No 593/2008 on the law
applicable to contractual obligations (Rome I)
o Non-contractual obligations: Regulation (EC) No 864/2007 on the law
applicable to non-contractual obligations (Rome II)
EU instruments on applicable law: universal application
The English law regime on applicable law does not apply for civil and commercial
matters covered by the Rome Regulations BUT English law applies to topics
outside EU law (property, trusts, companies)
No international Conventions (unlike in jurisdiction – no Lugano equivalent)
Retained EU law post-Brexit
The Rome I and Rome II Regulations are unilateral instruments
The Rome I and Rome II will be retained EU law after the transition period
Rome I Regulation: Key Features
International contracts
Intra-UK contracts (art 22 Rome I)
Universal application
Irrelevance of domicile of the parties and origin of the designated law
The choice of law rules of the Rome I Regulation: Aims
Recital 6: 1) predictability 2) certainty as to the law applicable 3) free movement
of judgements
Uniformity to avoid forum shopping
Article 3 party autonomy
, Article 4 hard and fast rules in the absence of choice
Rome Convention case law and Giuliano-Lagarde Report continue to apply
(convention and regulation are similar so those interpretative points in the report
are still relevant today for the interpretation of the Regulation)
Recitals and Interpretations: no legal force, guidelines – set out the reasons for
the contents of the regulation and can be used by the courts as an aid to
interpretation
Consistent approach between Brussels I, Rome I and Rome II Regulations
(rec. 7)
Predictability (Rec 6): uniform predictability of the outcome of litigation,
certainty as to the law, free movement of judgements (same national law
irrespective of the court)
Autonomous interpretation – what does autonomous mean in
interpretation? Interpretation should not be dependent on national law –
independent concept to be interpreted by referring to the objectives and
scheme of the regulation and to the general principles which stem from the
corpus of the national legal systems
Rome I Regulation: Scope
Article 1(1): this Regulation shall apply, in situations involving a conflict of laws,
to contractual obligations in civil and commercial matters
2 types of exclusion: 1) matters which are not civil and commercial at all 2)
matters which are civil and commercial but are excluded
Notion of contract
What is the relevance of the law applicable to the contract to define whether
a relationship is contractual or not for the purposes of the Rome I Reg?
o It is irrelevant because we need to look at an autonomous concept of
contract – consistent approach between Brussels 1, Rome I and Rome
II Reg (recital 7)
What are the key features of a contractual obligation in the Rome I Reg?
o Jakob Handte v Traitements An obligation freely assumed with
another identified or identifiable person
o Wide definition: express or implied contracts / negotiated or non-
negotiated contracts / disposable or non-disposable obligations /
unilateral or bilateral contracts
o Arcado case sub-buyer and the manufacturer had no contractual
relationship thus this non-contractual claim would be governed by the
Rome II Reg
, o An agent’s claim for payment for the unjustified termination of an agency
agreement the claim is contractual and is derived from one party’s
right to terminate
Civil and commercial
Article 1: defines civil and commercial matters – 1(1) it excludes customs and
administrative laws
What is the key factor to decide whether an action between a public
authority and a private person is a civil and commercial matter?
LTU v Eurocontrol an action between a public authority and a
person governed by private law, in which a public authority has
acted in the exercise of its powers, is excluded from the area of
application of the Convention
Article 1(2) (a) status or legal capacity of natural persons (expect article 13)
Article 13 = incapacity – age and mental health / may also include
intoxication (affects your consent)
(b) obligations arising out of family relationships, including
maintenance obligations
(c) obligations arising out of matrimonial property regimes, wills
and succession
Rome III (divorce / separation), Rome IV (matrimonial property
regimes), Brussels II (divorce and paternal responsibility),
Succession Regulation
If the legal system of an EU MS conceives marriage as a type of
contract, will the law applicable to that marriage be determined
by the Rome I Reg? no, contract is an autonomous concept and
does not include marriage
(g) the question whether an agent is able to bind a principal in
relation to a 3rd party (agent)
The general rules: choice of law
Party autonomy recital 11: “the parties’ freedom to choose the applicable law
should be one of the cornerstones of the system of conflict of law rules in
matters of contractual obligations
Article 3 it is a freedom; it is not compulsory for parties to choose a law to
govern their contract
3 (1): the choice shall be made expressly or clearly demonstrated by
the terms of the contract or the circumstances of the case means
that there is a clause in the contract specifying the choice of law
, Express choice
o Direct choice = choice of law clause; choice of law term incorporated T&C;
autonomous choice of law agreement
o Indirect choice = eg this contract shall be governed by the law of the place
of performance
Implied choice
o Terms of the contract and circumstances of the case
o jurisdiction clauses: forum – ius
o Examples: standard form contracts (insurance, shipping etc), related
transactions, previous dealings between the parties containing an express
choice, reference to rules of a legal system or use of term pertaining to a
legal system
Concept of applicable law
Can parties choose non-state law in the Rome I Regulation non-state law is
not a choice. Only incorporation by reference as part of the contract
What does ‘renvoi’ mean and what is the meaning of art 20?
o Translation = resent – we don’t want to be ‘resent’ to another applicable
law
o Renvoi = “The situation where the reference to an applicable law includes
the choice of law rules of that legal system”
o Exclusion of renvoi it excludes rules of PIL of the designated law (art
20) exclusion, stops a third law coming into the picture
Options of choice
o Parties can choose more than 1 applicable law
o Parties can choose the applicable law any time during their relations –
does not have to be at the time of the contract
o Can parties change the choice of law made? Yes – freedom of contract
(article 3 (2))
o Can parties choose a law that makes the contract invalid or
unenforceable? In theory, yes. But the favor validatis rule might influence
the implied choice analysis
Reading:
1. Rome I Regulation, arts. 1-3, 12, 13, 18 [Compare art. 3 Rome Convention with art. 3
Rome I Regulation]
Article 1: material scope (1) this regulation shall apply, in situations involving
a conflict of laws, to contractual obligations in civil and commercial matters.
It shall not apply to revenue, customs or administrative measures
o (2) The following shall be excluded from the scope of this regulation:
A) Qs involving the status or legal capacity of natural persons
B) obligations arising out of family relationships
1. Law applicable to Contract
Choice of Law
What is applicable law?
The part of PIL dedicated to the determination of the national law that governs a
case with an international dimension
Party autonomy: law selected by the parties (= choice of law) or,
Absence of choice: determined by the rules of PIL
Areas covered by this course: contract, tort, property and companies
When is applicable law relevant?
In the context of dispute resolution
Also, when a contract is being negotiated during the performance of the contract
(determines rights and obligations)
From the point of view of the Rome I Reg, every contract has an applicable law
and the law is applicable at all times
A basic distinction obligation in civil and commercial matters: one principal
applicable law regime (EU Law)
o Contractual obligations: Regulation (EC) No 593/2008 on the law
applicable to contractual obligations (Rome I)
o Non-contractual obligations: Regulation (EC) No 864/2007 on the law
applicable to non-contractual obligations (Rome II)
EU instruments on applicable law: universal application
The English law regime on applicable law does not apply for civil and commercial
matters covered by the Rome Regulations BUT English law applies to topics
outside EU law (property, trusts, companies)
No international Conventions (unlike in jurisdiction – no Lugano equivalent)
Retained EU law post-Brexit
The Rome I and Rome II Regulations are unilateral instruments
The Rome I and Rome II will be retained EU law after the transition period
Rome I Regulation: Key Features
International contracts
Intra-UK contracts (art 22 Rome I)
Universal application
Irrelevance of domicile of the parties and origin of the designated law
The choice of law rules of the Rome I Regulation: Aims
Recital 6: 1) predictability 2) certainty as to the law applicable 3) free movement
of judgements
Uniformity to avoid forum shopping
Article 3 party autonomy
, Article 4 hard and fast rules in the absence of choice
Rome Convention case law and Giuliano-Lagarde Report continue to apply
(convention and regulation are similar so those interpretative points in the report
are still relevant today for the interpretation of the Regulation)
Recitals and Interpretations: no legal force, guidelines – set out the reasons for
the contents of the regulation and can be used by the courts as an aid to
interpretation
Consistent approach between Brussels I, Rome I and Rome II Regulations
(rec. 7)
Predictability (Rec 6): uniform predictability of the outcome of litigation,
certainty as to the law, free movement of judgements (same national law
irrespective of the court)
Autonomous interpretation – what does autonomous mean in
interpretation? Interpretation should not be dependent on national law –
independent concept to be interpreted by referring to the objectives and
scheme of the regulation and to the general principles which stem from the
corpus of the national legal systems
Rome I Regulation: Scope
Article 1(1): this Regulation shall apply, in situations involving a conflict of laws,
to contractual obligations in civil and commercial matters
2 types of exclusion: 1) matters which are not civil and commercial at all 2)
matters which are civil and commercial but are excluded
Notion of contract
What is the relevance of the law applicable to the contract to define whether
a relationship is contractual or not for the purposes of the Rome I Reg?
o It is irrelevant because we need to look at an autonomous concept of
contract – consistent approach between Brussels 1, Rome I and Rome
II Reg (recital 7)
What are the key features of a contractual obligation in the Rome I Reg?
o Jakob Handte v Traitements An obligation freely assumed with
another identified or identifiable person
o Wide definition: express or implied contracts / negotiated or non-
negotiated contracts / disposable or non-disposable obligations /
unilateral or bilateral contracts
o Arcado case sub-buyer and the manufacturer had no contractual
relationship thus this non-contractual claim would be governed by the
Rome II Reg
, o An agent’s claim for payment for the unjustified termination of an agency
agreement the claim is contractual and is derived from one party’s
right to terminate
Civil and commercial
Article 1: defines civil and commercial matters – 1(1) it excludes customs and
administrative laws
What is the key factor to decide whether an action between a public
authority and a private person is a civil and commercial matter?
LTU v Eurocontrol an action between a public authority and a
person governed by private law, in which a public authority has
acted in the exercise of its powers, is excluded from the area of
application of the Convention
Article 1(2) (a) status or legal capacity of natural persons (expect article 13)
Article 13 = incapacity – age and mental health / may also include
intoxication (affects your consent)
(b) obligations arising out of family relationships, including
maintenance obligations
(c) obligations arising out of matrimonial property regimes, wills
and succession
Rome III (divorce / separation), Rome IV (matrimonial property
regimes), Brussels II (divorce and paternal responsibility),
Succession Regulation
If the legal system of an EU MS conceives marriage as a type of
contract, will the law applicable to that marriage be determined
by the Rome I Reg? no, contract is an autonomous concept and
does not include marriage
(g) the question whether an agent is able to bind a principal in
relation to a 3rd party (agent)
The general rules: choice of law
Party autonomy recital 11: “the parties’ freedom to choose the applicable law
should be one of the cornerstones of the system of conflict of law rules in
matters of contractual obligations
Article 3 it is a freedom; it is not compulsory for parties to choose a law to
govern their contract
3 (1): the choice shall be made expressly or clearly demonstrated by
the terms of the contract or the circumstances of the case means
that there is a clause in the contract specifying the choice of law
, Express choice
o Direct choice = choice of law clause; choice of law term incorporated T&C;
autonomous choice of law agreement
o Indirect choice = eg this contract shall be governed by the law of the place
of performance
Implied choice
o Terms of the contract and circumstances of the case
o jurisdiction clauses: forum – ius
o Examples: standard form contracts (insurance, shipping etc), related
transactions, previous dealings between the parties containing an express
choice, reference to rules of a legal system or use of term pertaining to a
legal system
Concept of applicable law
Can parties choose non-state law in the Rome I Regulation non-state law is
not a choice. Only incorporation by reference as part of the contract
What does ‘renvoi’ mean and what is the meaning of art 20?
o Translation = resent – we don’t want to be ‘resent’ to another applicable
law
o Renvoi = “The situation where the reference to an applicable law includes
the choice of law rules of that legal system”
o Exclusion of renvoi it excludes rules of PIL of the designated law (art
20) exclusion, stops a third law coming into the picture
Options of choice
o Parties can choose more than 1 applicable law
o Parties can choose the applicable law any time during their relations –
does not have to be at the time of the contract
o Can parties change the choice of law made? Yes – freedom of contract
(article 3 (2))
o Can parties choose a law that makes the contract invalid or
unenforceable? In theory, yes. But the favor validatis rule might influence
the implied choice analysis
Reading:
1. Rome I Regulation, arts. 1-3, 12, 13, 18 [Compare art. 3 Rome Convention with art. 3
Rome I Regulation]
Article 1: material scope (1) this regulation shall apply, in situations involving
a conflict of laws, to contractual obligations in civil and commercial matters.
It shall not apply to revenue, customs or administrative measures
o (2) The following shall be excluded from the scope of this regulation:
A) Qs involving the status or legal capacity of natural persons
B) obligations arising out of family relationships
