Update 13 02 2024 in a further judgment on the merits ECLI:NL:RBAMS:2024:732, the NCC made an interesting application of CJEU Wikingerhof, distinguishing between contract and tort for some of the alleged shortcomings of a contractual party. The court did so proprio motu: [4.7] parties themselves were in agreement on the non-contractual nature of those obligations. One assumes they were not in agreement on the lex causae for both in Rome I and Rome II, that likely would have established (impromptu) lex voluntatis. Applying Wikingerhof,
[4.8]:
“The Court cannot see how the lawful or unlawful nature of reporting any allegedly unfounded interim test results can be determined without:
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- interpreting the contract with respect to the existence of a contractual obligation to report interim test results,
- determining the status of interim test results,
- determining the stage of the clinical study where these results were given, and
- determining the contents of the unblinded data generated under the Agreement.
Therefore, the Court’s conclusion is that the interpretation of the Agreement is indispensable. This means, under the ECJ standard, that New York law is also applicable to DiaMedica’s statements regarding the alleged reporting of interim test results.”
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Diamedica Therapeutics Inc v Pharmaceutical Research Associates Group BV NCC22/018 ECLI:NL:RBAMS:2023:2540 highlights the IMHO troubled Rome I implications for property rights as opposed to contractual rights. The judgment was issued by the NCC, the Netherlands Commercial Court. (The NCC origin also explains the judgment already being available in English).
The claim is one for revindication by PRA of documents and digital data pertaining to the clinical trials regarding a medicine developed by DiaMedica. The court held that whereas the contractual relationship between the parties is governed by the laws of the State of New York as the lex voluntatis (the law parties chose to apply to the contract), Dutch law governs the question whether a property right can be created on documents and data situated in the Netherlands.
In discussing the applicable law issues, the court in my view lacks the clarity of approach required in this area, particularly seeing as a State’s approach towards digital data clearly is an important element in the attractiveness of its contract law for the sector.
[4.5] the Court holds that per Article 3(1) Rome I, the lex voluntatis, the laws of New York, covers the interpretation of the agreement. This includes the existence of a right to suspend contractual obligations, here: whether PRA may retain the Documents or suspend surrendering the Documents in order to secure payment of its final invoice. It equally holds however that the existence of a property right (footnotes omitted)
is not a matter of contract but a matter of property law. The Rome I Regulation is not applicable. As there is no treaty or regulation guiding this issue, the rules of Dutch domestic private international law apply. Under Article 10:127(1) of the Dutch Civil Code (DCC) the property law regime relating to things, as a rule, is the law of the state in whose territory the thing is situated (the lex rei sitae). The ‘thing’ in question are the Documents which are situated in the Netherlands. Therefore, Dutch law governs the manner in which rights in rem arise, whether such rights can be created, and if so, what the requirements are for a transfer or creation of rights (Article 10:127(4) DCC). Also, the question whether a revindication claim can be initiated, and if so by whom, is governed by the lex rei sitae. Hence: Dutch law.
, leading to a finding in favour of DiaMedica on the basis of Dutch law.
The merits of the case are not of interest to this blog: the identification of applicable law to the property rights, is. The NCC’s analysis shows the difficulty with the in my view unsatisfactory, if seemingly solidly rooted (see the Guiliano-Lagarde Report most succinctly p.10; Dicey 33-033 and 33-054; other standard works pay less attention to the issue) conclusion that ‘property’ rights are not caught by the Regulation, only contractual rights. See here nota bene for an Opinion of Vlas AG for the Dutch Supreme Court, flagging that in restitution cases the analysis may be more complicated than the NCC in current case suggests.
In the discussion of digital assets in particular (see eg here re UNIDROIT work on same, and here for the UK Law Commission paper), the property rights element surely is essential. This in my view gives those States with lex voluntatis also covering the property aspects (such as arguably Belgium’s residual private international law rules) an edge when it comes to regulatory competition in the area.
Nota bene just this morning, professor Lehmann posted a paper on the wider issue, calling for people to drop focus on the property analysis. Rebus sic stantibus however, the issue of relevance in the case here, remains: parties in my view would do well to identify a lex contractus which encompasses property rights in party autonomy. Unusually perhaps and most probably not by design, this makes laws such as those of Belgium, a clear winner (whether as lex contractus for the whole contract of merely, by way of dépeçage, for the property aspects only).
Geert.
gavc law - geert van calster 