Posts Tagged bijzonder dwingend recht

Von Munchausen ft. von Savigny. Szpunar AG in Nikiforidis.

Update 19 October 2016. The court held yesterday. I shall have review it soon.

Szpunar AG’s Opinion in C-135/15 Hellenic Republic v Grigorios Nikiforidis has travelled half the world with me in my briefcase. Time to tackle the blog queue…

As I had reported earlier, the Bundesarbeitsgericht has given the CJEU an opportunity to provide much needed clarity on the application of Rome I to continuing (employment) contracts, and on the Regulation (or as the case may be, the Rome convention)’s provisions on overriding mandatory law.

The Opinion (not available in English) first of all clarifies the temporal scope of Rome I. Article 28 Rome I provides that it applies to contracts concluded ‘as from 17 December 2009’ (this is the corrected format; initially Article 28 read ‘after’). When exactly a contract is ‘concluded’ needs to be determined in accordance with the putative lex causae as identified by the Regulation (an extension of Article 10(1), suggested by most if not all of relevant scholarship). What, however, about ‘continuing’ contracts’: those concluded before the temporal scope of the Regulation, continuing after, however renewed, renegotiated, amended…: do these continue to be covered by the Rome convention ad infinitum, or is there a cut-off point at which these continuing contracts become newly concluded?

I had suggested in my earlier posting that one’s intuitive assumption may be to prefer autonomous interpretation of the concept ‘concluded’. That, after all, is the standard approach of the Court. However I argued that in the current state of (lack of) harmonisation of contractual law, it is more likely that the Court will prefer an Article 10(1) type solution. Szpunar AG is of the same opinion. He first of all points out (at 33) that secondary EU  law need not necessarily include verbatim transitionary measures. In the absence of a specific regime, the general rule is that the new provisions immediately apply to future effects of situations that arose under the old regime. Rome I’s transitory regime therefore, with its reference to date of ‘conclusion’  is an exception to that general principle. Can that moment of conclusion be autonomously defined? Szpunar AG shares my intuition (at 35 ff): along the lines of Article 10’s regime (the von Munchausen or the ‘bootstrap’ principle) the lex causae has to determine the moment of conclusion. For long-term contracts, this will inevitably lead to uncertainty (at 49). Yet that does not take away the soundness of the rule.

 

Next up is the application of Article 9’s provision on overriding mandatory provisions. This is the first time the CJEU will rule on that Article (Unamar was held under the Rome Convention). The Regulation quite deliberately limited the room for manoeuvre for the court seized to apply overriding mandatory law other than that of the forum: only such laws of the country where the obligations arising out of the contract ‘have to be performed’ can come into calling. That place is likely to be Germany in the case at issue (the Regulation does not define ‘place of performance’ under Article 9(3)) – however the AG suggests differently: there are a variety of reasons to assume that Greece, too, can be that place (at 95).

Szpunar AG first of all, in his very first para, remarks that scholarly attention to ‘lois de police’ far exceeds its featuring in practice. He also notes that von Savigny himself discussed ordre public (at 68 with references) and succinctly discusses the difference between the two (at 69-70). He repeats (at 78) that scholarly attention to overriding mandatory law has been excessive. He then rejects the suggestion that Article 9(3) needs to be applied restrictively to such a degree that its application becomes pretty much near-impossible. Importantly, he rejects in the process (a la Kainz) a strict parallel between ‘performance’ in Article 9(3) Rome I and Article 7(1) Brussels I Recast, and suggest that while the latter needs strict interpretation in line with the overall interpretative rules of that Regulation, there is no such need for Article 9(3) (at 92).

I wonder whether the Court will still hold before the recess (professor Szpunar Opined in April: I did flag there is a queue of cases waiting to be reviewed…

Geert.

(Handbook of) European Private international law, 2nd ed. 2016. Chapter 2, Heading 2.2.8.3, Chapter 3, Heading 3.2.5 , heading 3.2.8.

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Employment, foreign mandatory rules and Greek public finance.

Postscript 21 September 2015: the case is C-135/15 Hellenic Republic v Grigorios Nikiforidis.

The German Federal Labour Court, the ‘Bundesarbeitsgericht’, has provided the ECJ with an opportunity to provide much needed clarity on the application of Rome I to continuing (employment) contracts, and on the Regulation (or as the case may be, the Rome convention)’s provisions on overriding mandatory law. The Bundesarbeitsgericht has issued a press release on the case, Giesela Rühl flagged the case in March, and Lisa Günther has more detailed input on the overall context. Claimant is a Greek, employed by the Greek State at the Greek primary school in Nuremberg (Germany). His salary was reduced in accordance with relevant Greek Saving Laws. Claimant asks for payment of the sums withheld. Is the German court bound to apply the Greek Saving Laws?

The case (which as yet to appear on the ECJ’s website) first of all seeks clarification on the temporal scope of Rome I. Article 28 Rome I provides that it applies to contracts concluded ‘as from 17 December 2009’ (this is the corrected format; initially Article 28 read ‘after’). When exactly a contract is ‘concluded’ needs to be determined in accordance with the lex causae as identified by the Regulation (an extension of Article 10(1), suggested by most if not all of relevant scholarship). There has hitherto been much less noise about the application of Article 28 to ‘continuing’ contracts’: those concluded before the temporal scope of the Regulation, continuing after, however renewed, renegotiated, amended…: do these continue to be covered by the Rome convention ad infinitum, or is there a cut-off point at which these continuing contracts become newly concluded? Any suggestion along these latter lines presumably requires determination of a threshold. For instance, adaptation of price in line with inflation presumably is not sufficient to speak of a ‘new’ contract. But would contractually foreseen price renegotiation to take account of economic cycles, lead to such a new contract?

One’s intuitive assumption may be to prefer autonomous interpretation of the concept ‘concluded’ however in the current state of (lack of) harmonisation of contractual law, it is more likely that the Court will prefer an Article 10(1) type solution.

Next up is the application of Article 9’s provision on overriding mandatory provisions. This is the first time the ECJ will rule on that Article (Unamar was held under the Rome Convention). The Regulation quite deliberately limited the room for manoeuvre for the court seized to apply overriding mandatory law other than that of the forum: only such laws of the country where the obligations arising out of the contract ‘have to be performed’ can come into calling. That place is likely to be Germany in the case at issue (the Regulation does not define ‘place of performance’ under Article 9(3)).

No doubt the ECJ will cut some corners, per judicial economy, however the case nevertheless promises to be entertaining.

Geert.

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