Posts Tagged agency

GDE v Anglia Autoflow. Governing law for agency agreements under the Rome Convention.

In GDE LLC & Anor v Anglia Autoflow Ltd [2020] EWHC 105 (Comm) (31) the Rome I Regulation does not apply ratione temporis; the Agency Agreement was concluded on about 9 April 2009 which is a few months before the kick-off date of the Regulation (note there is no default rule for agency in Article 4 Rome I in the event of lack of lex voluntatis). Dias DJ therefore turns to the 1980 Rome Convention.

Parties are in dispute as to the governing law of the Agency Agreement by which the claims should be determined. AAL alleges that the governing law is that of Ontario while the Claimants allege that the Agency Agreement is governed by English law. The point is of critical importance because the Claimants concede that, if AAL is correct, their claim is time-barred under Ontario law: although this, as readers know, assumes statutes of limitation are subject to the governing law – which is far from certain: see Jabir v KIK and Spring v MOD.

Parties’ arguments are at 10 and 11 and of course they reverse engineer. In essence (at 20) claimants say that there was an implied choice of English law. Alternatively, if that is not correct, the presumption in Article 4(2) of the Rome Convention, which would otherwise point to Georgia law, falls to be disapplied in favour of English law. The Defendant says that there was no implied choice and that application of Article 4(2) leads to Ontario law. Alternatively, if (which it denies) the presumption in Article 4(2) leads to any other governing law, the presumption is to be disapplied in favour of Ontario.

At 21 ff follows a rather creative (somewhat linked to the discussion of ex officio Rome Convention application in The Alexandros), certainly unexpected (yet clearly counsel will do what counsel must do) argument that essentially puts forward that under the common law approach of foreign law = fact hence must be proven, any discussion of a law as governing law, not suggested by the parties (here: the laws of (the US State of) Georgia) that is not English law (which clearly the English curia does ‘novit’), cannot go ahead. At 22 Dias DJ already signals that ‘once the wheels of the Convention had been put in motion, they could not be stopped short of their ultimate destination. The idea that the process dictated by the Convention should be hijacked halfway, as it were, on the basis of a pleading point was, to my mind, deeply unattractive.’

At 31 she sinks the argument. I think she is right.

Having at length considered the facts relevant to the contract formation, discussion then turns again to the Rome Convention with at 105 ff a debate on the role to be played by factors intervening after contract formation with a view to establishing [implicit, but certain: see at 117 with reference to the various language versions of the Convention and the Regulation essentially confirming the French version] choice of law or closest connection. (Dias J refers to the Court of Appeal in Lawlor v Sandvik Mining and Construction Mobile Crushers and Screens Ltd, [2013] EWCA Civ 365[2013] 2 Lloyd’s Rep 98 where, at paragraphs 21-27, it pointed out that the common law approach frequently blurred the distinction between the search for the parties’ inferred intention and the search for the system of law with which the contract had its closest and most real connection).

At 120: the hurdle is high: choice of law implicitly made must have nevertheless been made: ‘The court is not looking for the choice that the parties probably would have made if they had turned their minds to the question.’ at 122: In the present case the evidence established that there was no reference by the parties to the question of governing law at all. Choice of court for England (discussed ia with reference to Rome I and to Brussels Ia Article 25) does not change that. At 160 ff therefore follows the discussion of Article 4 of the Rome Convention, leading to a finding of the laws of Ontario as the lex contractus under Article 4(1). Article 4(5) does not displace it.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.4, Heading 3.2.6.

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T v O: Unamar, Ingmar and ordre public /overriding mandatory law in Austria.

Tobias Gosch and Venus Valentina Wong have excellent overview of T v O (why o why do States feel the need the hide the identity of companies in commercial litigation) in which the Austrian Supreme Court (Oberster Gerichtshof) ruled on whether potential claims under the Austrian Commercial Agents Act (Handelsvertretergesetz) can be brought before an Austrian court even if the underlying agency agreement contains an arbitration clause and is governed by the laws of New York.

The contested part of the litigation, as Tobias writes, concerns the following: the Agent conducted the procurement of sea freight business in Austria and other countries of the European Union for the Principal. Whilst the territorial scope of the Agent’s activities complies with the conditions for the international overriding mandatory applicability of the compensation provisions of the Directive as set out by the ECJ in Ingmar, the procurement of business is not covered by the relevant definition in the Directive, which only refers to the sale or purchase of goods. Including the procurement of business therefore is a form of gold-plating and the national law’s decision to do so does not uncontestedly fall under the protection of overriding mandatory law. In other words it does not necessarily override parties’ choice of law and ensuing choice of court.

The judgment refers inter alia to Unamar to justify its direction. Rather like, as I reported at the time, the Belgian Supreme Court, the Austrian Supreme Court, too, fails properly to assess whether the Austrian legislator intended the Austrian provisions to be of overriding mandatory law character per Rome I: “1. Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation.

The European Court of Justice’s general statement in Unamar that gold-plated provisions may fall under overriding mandatory law, looks set by national courts to be turned into a matter of fact priority.  That surely at some point ought to be disciplined by the CJEU.

As Valentina points out, the judgment betrays lack of confidence in commercial arbitration. ‘It is arguable whether the arbitration agreement is really ineffective or inoperable (under Article II(3) NYC or section 584 ACCP respectively) just because it provides for arbitration in New York and New York law as applicable substantive law. A prudent arbitral tribunal seated in New York may very well be able to decide a matter in compliance with (mandatory) EU or national law on commercial agents, in particular if the future award will have to be enforced in a EU member state.’

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8.3.

 

 

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Choice of court and law for the holiday season.

As the holiday season now is in full swing, here’s a choice of court and choice of law clause I received. For us all to ponder on the beaches /in the mountains /whatever retreat we’ll find ourselves on:

‘LAW AND JURISDICTION
This agreement is between the holiday-maker (the renter) and the agency or property owner. Booking ltd is acting only as a representative of the agency or owner listed on the voucher and as such can not be held directly responsible for any problems concerned with the booking. The owners of Booking LTd its employees or agents shall not be liable for any damage, loss or personal injury which may be sustained by persons or property at any time during the reserved stay. In the event of controversies arising from the booking of the rental, the Irish Court only can deal with the matter and Irish law only applies. Signing the booking form and making the booking implies that the General Letting Conditions have been understood and have thereby been accepted without reserve and without exception. If any of the conditions of this contract have become invalid or were invalid or if in this contract there should be a gap, the other conditions cannot be contested.

Any and all issues regarding the property, such as damages, injury, etc, shall be a dispute between the owner or agency and the renter of the property. In such cases, with no exceptions, Irish law will apply and the jurisdiction will be the local courts in Ireland.’

Happy holidays. Geert.

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