Posts Tagged lois d’application immediate
Wallis v Air Tanzania. A good reminder of the (soon to be resurrected) UK reservation viz the Rome Convention.
In Wallis Trading Inc v Air Tanzania Company Ltd & Anor  EWHC 339 (Comm), at stake is a claim by Wallis Trading, a Liberian company which carried on the business of acquiring and leasing aircraft, against Air Tanzania and the Government of Tanzania in respect of sums which Wallis says are due to it from the Defendants arising out of a lease of an aircraft by Wallis to ATCL.
Of interest to the blog is the discussion of the Rome Convention at 74 ff. Defendants contend that the Lease is invalid, and ‘null and void’ because it was entered into in breach of the Procurement Legislation. Butcher J holds that the Lease expressly provided that English law was to be its governing law. The putative law of the lease therefore is English law (the bootstrap of Article 8 Rome Convention, now Article 10 Rome I. The Procurement Legislation is not part of English law, and non-compliance with it does not, as a matter of English law, render the Lease invalid, null or void.
What however about the application of A7 Rome Convention’s rule on lois de police /mandatory law?
1. When applying under this Convention the law of a country, effect may be given to the mandatory rules of the law of another country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to their nature and purpose and to the consequences of their application or non-application.
2. Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract]
Here, Butcher J points out that Article 7(1) of the Rome Convention does not have the force of law in the United Kingdom: the UK had entered an Article 22 reservation viz the lois de police rule. The impossibility of same viz Rome I led to the stricter language in Article 9. In the event of Rome I not being part of the future relations between the UK and the EU, the Convention and its reservation will once again be applicable.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 3.2.8, Heading 184.108.40.206.
Are proclamations of lois de police an absolute prerogative of the Member States? Italy’s response to Covid19 /Corona and the package travel sector.
Thank you Ennio Piovesani for signalling and reviewing one of the first conflicts-specific developments on the Corona /Covid 19 landscape. Update 28 March 2020 see the comments on and Ennio’s comprehensive response to his own post and comments, for further interesting discussion going beyond the immediate Corona context.
In an effort to safeguard the economic position of the travel sector, the Italian Government by decree has essentially frozen the travel sector’s statutory duty to reimburse travellers whose package travel has become impossible due to the pandemic. Ennio reports that the decree refers specifically to Article 9 Rome I’s overriding mandatory law provisions (earlier applied in Unamar), (in his translation): ‘“The provisions of the present article constitute overriding mandatory provisions within the meaning of Article 17 of Law of 31 May 1995, No. 218 [“Italian PIL Act”] [5, 6] and of Article 9 of Regulation (EU) No. 593/2008 of the European Parliament and of the Council, of 17 June 2008 [“Rome 1 Regulation”]”.
Ennio signals and important issue: how much leeway may be given to Member States to push their own definition of the concept of ‘lois de police’ /overriding mandatory law in light of the CJEU definition in Joined Cases C-369/96 and C-376/96 Arblade. In Brussels Ia of course the CJEU has pushed the concept of ordre public in a limited direction. Lois de police however are different from ordre public and Rome I is not Brussels Ia, and I am therefore not so pessimistic as Ennio when it comes to leaving a lot of discretion to Member States. What to me looks a touch more problematic is the relation with the package travel Directive 2015/2302 which applies to many of the travel arrangements concerned and which is the source of many of the protections for travellers.
No doubt to be continued.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 3, Heading 220.127.116.11.
DES v Clarins. The law applicable to ending commercial agency: Granarolo (and Rome I’s /Rome Convention’s overriding mandatory law rules) applied by Paris Court of Appeal.
In RG 16/05579 DES v Clarins (I have a copy on file for those finding it difficult to get access) the Paris Court of Appeal on 19 September 2018 effectively applied the CJEU’s Granarolo judgment on jurisdiction, to issues of applicable law. Yet it leaves many questions unanswered and does not carry out a neat and tidy analysis at all.
Companies belonging to the Clarins group (of France and Luxemburg) were sued for breach of their business relationship with a French company that distributed Clarins cosmetics in Algeria through local companies there, and for the alleged sudden halt in negotiations to try and resuscitate their contractual relationship.
The Court of appeal first of all (p.16-17 of the PDF version of the judgment) summarily rejects objections to the anchoring of non-France based defendants onto Clarins, with domicile in département 92 – Hauts de Seine: claimants request damages from all defendants, on the basis of the same facts and the same legal basis. So as to avoid conflicting judgments the Court sees no reason at all not to join the cases.
In terms of applicable law, the Court refers to Granarolo to qualify the relationship as contractual (reference is made to a tacit contract), yet then skips the application of the cascade rules of the Rome Convention (which applied ratione temporis rather than Rome I) to simply jump straight to the qualification as the relevant French rules as lois de police. As Christophe points out, there are plentry of the Convention’s default categories which could have applied to the case. Skipping the cascade to go straight to the exception is not the right way to go about conflict of laws.
The Court similarly cuts plenty a corner by summarily qualifying the sudden stop to negotiations to resuscitate a previous contractual relationship as non-contractual and applying French law as lex loci damni per Rome II (p.18), particularly as Rome II has a specific rule for culpa in contrahendo.
I am assuming an appeal with the Supreme Court is underway.
(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 18.104.22.168, Heading 22.214.171.124.9; Chapter 3, Heading 3.2.8, Heading 126.96.36.199).
Update 22 November 2019 for a similar case see Handoush v. Lease Financing Group.
Rincon ((2017) 8 Cal. App 5th 1) is another case suited to comparative conflicts classes. It applies California’s restrictive regime on waiver of jury trial to a contract governed by New York law and with choice of court for New York.
‘Lois de police‘, also known as lois d’application immédiate or lois d’application nécessaire, are included in the EU’s Rome I Regulation (on applicable law for contracts) in Article 9. (I reported earlier on their application in Unamar).
Jason Grinell has background to the case. Parties had made choice of law and choice of court in favour of New York. The link with New York was real (in EU terms: this was not a ‘purely domestic’ situation), inter alia because of the involvement of New York-based banks, parties being sophisticated commercial undertakings, and the contract having been negotiated in NY. However the real estate development is located at San Francisco, giving CAL a strong link to the case. Under CAL law, parties generally cannot waive a jury trial before the commencement of a lawsuit unless they use one of two methods approved by the legislature. New York law does not have the same provision and choice of court clauses in favour of New York do not include reference to the only options available under CAL law.
In the case at issue, the boilerplate choice of court clause was set aside by the Court of Appeal. The lower court had denied a substantial enough Californian interest in the case – the CA disagreed. The relevant part of the judgment runs until p.22.
That comparative conflicts binder is filling out nicely.
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…
(Handbook of) European Private international law, 2nd ed. 2016. Chapter 2, Heading 188.8.131.52, Chapter 3, Heading 3.2.5 , heading 3.2.8.
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.