International private law Flashcards
What is the applicable private law ?
Application of private law in transnational relationships is determined by rules of « IPL ».
Basically 2 types of rules of IPL:
- conflict rules (national or uniform);
- substantive rules of IPL (mostly uniform rules) (often applied only after the conflict rule)
conflict rules
Starting point: a state will apply the law applicable by virtue of the conflict rule even if foreign law
Unity or diversity of conflict rules ? Often harmonised (Hague Conference, EU), but also often diverse > jurisdiction is important in case different conflict rules lead to a different result.
Structure of conflict rules
- conflict category > connecting factor
- Classify the issue in a category (such as property, contract, tort, …)
- Concretisation of the connecting factor refers to the applicable law (e.g. law chosen by the parties, law of nationality, law of residence or seat, location of a thing, place of damage, …)
- (NB possible renvoi ?)
Exceptions to conflict rules
Exceptions to the determination of the applicable law by conflict rules:
A) exception of international public order (art. 21 Rome-I-R)
B) treatment of « overriding mandatory » law (loi d’application immédiate, Eingriffsnormen) (analogous to public law):
- 1° application of domestic overriding rules (always) (art. 9 (II)) (e.g. Belgian Act of July 12, 2015 against vulture funds) Limitative according to ECJ (2016 in Greece/ Nikiforidis; salary cut for teacher working in Germany paid by Greek government: Greek law not as such overriding in Germany) but other provisions may be taken into account as factual elements) Definition & criteria of overriding in Art. 9 I : autonomous EU-concept; interpreted restrictively in C-184/12 Unamar and C-149/18 Agostinho da Silva Martins v Dekra : only if the court hearing the case finds, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it is of such importance in the national legal order that it justifies a departure from the law applicable. Some EU rules are also overriding: consumer protection: protection commercial agent C-381/98 Ingmar)
2° application of foreign overriding rules (rare), see art. 9 (III) Rome-I-R.: “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” (comp. Art. 16 Hague Convention on Agency)
- (the Rome Convention was more flexible, as are the Hague Agency and Trust Conventions)
- Comp. § 187(2) US restatement 2nd of Conflict of Laws: “fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue” (comparative impairment doctrine)
Exceptions to conflict rules - Requirement of internationality ?
Traditional requirement - more or less in the Rome-I reg
• Under pressure, see e.g.
- conflict rule for company law
- ECJ Vinyls case law on voidable transactions
conflict rules: company law
• Category « company law » (and other legal persons)
• Connection factor: either principal seat or incorporation theory
- Conflict rule sometimes in some of its effects set aside by EU law (free movement), see ECJ judgments in Centros & in Inspire Art
- Tendency towards incorporation theory, but restricting the category (see below)
• Issues within this category are mainly:
- requirements for incorporation (eg capital requirements)
- functioning of the company
- dissolution and liquidation of the company.
- Tendency to exclude from this category creditor protection rules, and classify them as insolvency rules (thus dependent on lex of the COMI, center of main interest, i.e. real seat). Eg ECJ in Kornhaas. (See topic 11 insolvency)
conflict rules: procedure
- Category « procedural law »
- Issues within this category:
- procedure s.s.
- evidence ? (in part procedural, in part substantive law)
• Connection factor: lex fori (Forum = court itself)
conflict rules: property law
- Category « property law » (see also Ch. 12 insolvency regulation)
- Issues within this category:
- types of property rights, includes proprietary security rights;
- mode of acquisition and loss of property,
- rights included in ownership or other property rights
• Connection factor: lex rei sitae (location)
- immovables: immovable
- movables things: possible conflit mobile. E.g. reservation of title in international sale
- Receivables and other rights to performance: place of debtor or of creditor or lex causae ? Yet unsolved. EU Commission made a proposal.
- documentary intangibles: lex cartae sitae
- dematerialised or intermediated securities: see Hague Convention on Securities held with an intermediary (April 1, 2017 in force in USA, Switzerland, Mauritius)
conflict rules: intellectual property law
- Intellectual property rights are ‘territorial monopolies’ (national or multinational).
- Recognition is territorial (although many rules of recognition in other countries of IP rights recognised first in another country)
- Protection is determined by the law of the territory for which protection is sought (lex loci protectionis, art. 8 I Rome-II-Reg) (for jurisdiction, see Ch. 11)
- Patrimonial aspects (IP as immaterial property) also territorial, but in case of unitary multinational IP rights, only a single property law applies (law where the right is situated, usually residence of the holder, see e.g. the unitary patent in Ch. 7)
conflict rules: contract
- Worldwide: only Hague « principles » on choice of law in business contracts (approved 19 March 2015)
- In the EU: Rome Treaty of 1980 replaced since 17 Dec. 2009 by Reg. 593/2008 (« Rome-I ») (except for Denmark & overseas)
- unless specific Treaties concluded before 17 June 2008 and incl. nonmember states (art. 24 ff)* or specific EU rules (art. 27)
conflict rules: contract: category
- Category « contractual obligations » in civil & commercial matters (incl. individual labour contracts) (excl. arbitration agreements, trusts, company law, family relations, etc.). Also excluded: jurisdiction agreements (governed by Brussels-Regulation)
- Issues within this category: art. 10 - 12 (incl. formation, validity, form, interpretation, performance, extinction, prescription, effects of nullity).
- Not: what constitues money in a certain currency: determined by the law of that currency (lex monetae)
- Not: precontractual liability (incl. Prospectus liability), see Rome-II.
- ? Whether tort law applies between contract parties (questions of ‘cumul’). In matters of jurisdiction, this is in EU law qualified as ‘contractual’. Unclear as to applicable law (can one exclude tort claims under a the law of the place of tort that allows a cumul ?) , but art. 4, III Rome-II points in the same direction.
- But a contract does anyway not protect a supplier against tort claims by third parties (including downstream contract parties) where allowed under foreign law
- Protection of creditors in case of merger of companies > lex societatis (ECJ in C’493/14, KA finanz)
conflict rules: contract: mandatory provisions ?
- Overriding mandatory provisions: see supra.
- Legislator may try to give extraterritorial effect to certain mandatory rules by imposing on domestic players to put certain clauses in their contracts under foreign law.
- E.g. Art. 55 Bank Recovery Directive: Financial institutions in the EU & EEA must put in their contracts under non EEA-law a ‘bail-in’ clause to give effect to the bail-in powers of the BRRD.
- E.g. under the GDPR transfer of personal data to a non-EU country with an inadequate level of protection may only take place with safeguards. Such safeguards may in particular result from appropriate contractual clauses. The EU Commission has approved certain model caluses meeting this standard.
conflict rules: contract Rome-I Reg.
• Reg. 593/2008 « Rome-I »
• Connection factor:
- Primary factor: choice of law (art. 3 freedom of choice) in relationship with an international element (otherwise, mandatory rules of the domestic law remain applicable, art. 3,3) (analogous rule for EU mandatory law in 3,4)
- In consumer contracts as defined by art. 6 (see next slide), and individual employment contracts (art. 8), choice only relates to non-mandatory law (NB. Injunction for unfair terms is a matter governed by Rome-II)
- Limited choice in insurance contracts (other than large risks) art. 7
conflict rules: consumer contracts in Rome-I Reg.
▪ Which consumer contracts (art. 6) ?
- activities pursued in the state of the consumer
- activities directed – by any means- to the state of the consumer
- (with 5 exceptions and without prejudice to separate rules for carriage and insucrance)
▪ Applicable law in these contracts: - law of the habitual residence of the consumer
▪ NB. High level of protection and mandatory application of EU consumer protection raises cost of imported goods and services
conflict rules: contract Rome-I Reg.
- Subsidiary connection factor if no choice of law:
- First, judge must check whether the contract has to characterised as one of the following
- sales in art. 4 (a) (residence seller)
- services in art. 4 (b) (residence service provider)
- immovable property or tenancy in art. 4 (c/d) ,
- franchising and distribution in art. 4 (e/f) (residence franchisee, distributor)
- contracts for carriage: art. 5
- If not (or mixed), the court determines the characteristic performance (art. 4 II): law of the residence of its debtor
- Escape clause : « closest connection » if manifestly closer than the one indicated above (art. 4 IV)
- « Residence » defined in art. 19 Rome-I.
