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EC Legislation on Conflict of Laws: Interactions and Incompatibilities between Conflicts Rules

Published online by Cambridge University Press:  17 January 2008

Susanne Knöfel
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Extract

Formerly, EC activity in the area of private law used to be content with approximating member States' substantive laws in specified areas, and, therefore, eventual conflictual implications demanded considerable interpretative efforts. Modern Community legislation, however, increasingly complements the intended substantive-law harmonisation with provisions on conflict of laws. Given the existence of the (Rome) Convention on the Law Applicable to Contractual Obligations, implemented in the United Kingdom by the Contracts (Applicable Law) Act 1990, this new tendency, where it concerns areas falling within the Convention, raises complex questions on both legislative technique and policy. The Convention, in Article 20, expressly reserves the precedence of Community choice of law rules. However, merely to point to this priority rule appears to be too simple a solution as conflicts, before being solved, have to be defined, and that is what this article aims at. Further, as an analysis that deals with European law would be incomplete without taking into account the impact on member States' law, reference will be made to domestic English and, for the purposes of comparison, to domestic German law. The latter appears to qualify for such a comparative approach because, due to the Rome Convention already having been part of the domestic law for a considerable period, certain experience might be expected within that legal system in dealing with contract conflicts issues thereunder.

Type
Shorter Articles, Comments and Notes
Information
International & Comparative Law Quarterly , Volume 47 , Issue 2 , April 1998 , pp. 439 - 445
Copyright
Copyright © British Institute of International and Comparative Law 1998

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References

1. E.g. Council Directive 85/577/EEC of 20 Dec. 1985 to protect consumers in respect of contracts negotiated away from business premises (1985) O.J. L372/31Google Scholar; Council Directive 87/102/EEC of 22 Dec. 1986 for the approximation of the laws, regulations and administrative provisions of the member States concerning consumer credit (1987) O.J. L42/49Google Scholar; Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (1990) O.J. L158/59.Google Scholar

2. E.g. the question whether rules derived from European law interfere with the choice of law process in that they apply, for instance, in spite of an evasive choice of law.

3. (1980) O.J. L266/1Google Scholar, hereafter “Rome Convention” or “Convention”; the Convention came into force on 1 Apr. 1991 (1991) O.J. C52/1.Google Scholar

4. 1990 c.36; the Act came into force on 1 Apr. 1991, S.I. 1991/707Google Scholar; cf. 1990 Act, Sched.1. Art.17.Google Scholar

5. It was implemented by the International Private Law Reform Act (Gaetz zur Neuregelung da Internationalen Privatrechts) of 25 July 1986 (Bundesgesetzblatt (BGB1) I 1142), which came into force on 1 Sept. 1986 and which assimilated the Convention into the Introductory Law of the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch; EGBGB). Article 20 of the Convention corresponds to Article 3(2)2 EGBGB.

6. For discussion of the topic from a German perspective cf. von Hoffmann, Zeitschrift für Rechtsvergleichung (ZfRV) 1995, 45–54Google Scholar; Jayme, and Kohler, , 84 Rev. Crit. de Dr. Int. Privé (1995), 1–40Google Scholar, Praxis des Internationalen Privat- und Verfahrensrechts (IPRax) 1993, 357–371Google Scholar, IPRax 1994, 405–415Google Scholar, IPRax 1995, 343–355Google Scholar, and IPRax 1996, 377–389Google Scholar; Roth, IPRax 1994, 165–175.Google Scholar

7. Council Directive 93/13/EEC of 5 Apr. 1993 on Unfair Terms in Consumer Contracts (1993) O.J. L95/29Google Scholar; Directive 94/47/EC of the European Parliament and the Council of 26 Oct. 1994 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis (1994) O.J. L280/83.Google Scholar

8. Directive 96/71/EC of the European Parliament and the Council of 16 Dec. 1996 concerning the posting of workers in the framework of the provision of services (1997) O.J. L18/1.Google Scholar

9. Council Reg. (EEC) 3118/93 of 25 Oct. 1993 laying down the conditions under which non-resident carriers may operate national road haulage services within a member State (1993) O.J. L279/1.Google Scholar

10. Cf. Art.3 (freedom of choice) and Art.4 (applicable law in the absence of choice) of the Convention.

11. Cheshire, and North, , Private International Law (12th edn, 1992), p.498Google Scholar; Dicey, and Morris, , The Conflict of Laws (12th edn, 1993), pp.1239–1241Google Scholar; Jackson, , in North, (Ed.), Contract Conflicts (1982), pp.59–80 at p.65Google Scholar; Kaye, , The New Private International Law of Contract of the European Community (1993), pp.70–76, 247Google Scholar; Morse, (1982) 2 Yb.E.L. 107, 123Google Scholar; Plender, , The European Contracts Convention, pp.81, n.1, 154; Philip, in Jackson, idem, pp.81–110, at p.82.Google Scholar

12. Under Art.22(1)(a). For the UK see s.2(2 ) of the Contracts (Applicable Law) Act 1990; for Germany see Bundestags-Drucksache (BT-Drucks.) 10/504, pp.83, 100, 106.Google Scholar

13. Cf. Roth, op. cit supra n.6, at p.169Google Scholar; Jayme, and Kohler, , 84 Rev. Crit, op. cit. supra n.6, at p.19.Google Scholar

14. The formula “close connection” even differs from the “closest connection” under Art.4 of the Convention. Further, it is doubtful whether the connection must be established to an individual member State or whether a collective link to several member States is sufficient; for the latter view Pfeiffer, Neue Juristische Wochenschrift (NJW) 1997, 1212.

15. The law of the member State of connection or the law of the forum may be applicable. An additional uncertainty arises when the member State of connection has not yet implemented the Directive: is the non-harmonised law to apply, and, if so, is it to be interpreted in the light of the Directive? Is recourse to be had to the general provisions of the Convention?

16. In the light of Art.6(2) of the Directive, the relevant provisions definitely fall within Art.7 of the Convention.

17. Text at supra n.12.

18. Sec also the proposal for a Council Directive on the protection of consumers in respect of contracts negotiated at a distance (distance selling): proposal (1993) O.J. C156/14Google Scholar; amended proposal (1993) O.J. C308/18Google Scholar; common position (EC) No.19/95 adopted by the Council (1995) O.J. C288/1.Google Scholar Art.12(2) of the latest version closely follows Art.6(2) of Directive 93/13, except that it refers to a “close connection to the territory of one or more member states”. Thus the observations made apply here correspondingly: in its scope, the proposal (see Arts.2, 3) goes beyond Art.5 of the Convention, as it redefines the criteria relating to the conclusion and the contents of the contract (Art.5(2), (4)) in view of the requirements of modern contracting practice; with respect to Art.7 the same problems as under Directive 93/13 arise. For a detailed analysis see Kronke, , Recht der Internationalen Wirtschaft (RIW) 1996, 985–993.Google Scholar

19. For a survey of other implementations (Greece, France, Germany, Denmark, Ireland and Luxembourg) see Jayme, and Kohler, , IPRax 1995, op. cit. supra n.6, at p.345.Google Scholar

20. S.I. 1994/3159.

21. This has been justified by considerations of expediency avoiding complex differentiations: Eckert, Zeitschrift für Internationales Wirtschaftsrecht (ZIP) 1996, 1241Google Scholar; critical: Jayme, and Kohler, , IPRax 1996, op. cit. supra n.6, at p.387.Google Scholar

22. Thus far the provision follows the wording of its predecessor within the Standard Contract Terms Act.

23. Under the German implementation, a gap in the consumer protection aimed at in the Directive (cf. Recital 22 of the Preamble) might occur where the contract has a close connection not with the territory of Germany but of another member State that has not implemented the Directive. This case, presumably within Art.6(2) of the Directive, does not fall within the new s.12 of the Standard Contract Terms Act. An analogous application (cf. Heinrichs, , NJW 1996, 2195–2197) of s.12 might encounter doubts because of its dear wording that mirrors a presumably deliberate legislatory decision. Even an application of Art.34 is scarcely of any help because of the self-limiting provision set up in s.12.Google Scholar

24. Narrower Recital 14 of the Preamble. See also the proposal for a European Parliament and Council Directive on the sale of consumer goods and associated guarantees (1996) O.J. C307/8, Art.6(2): “irrespective of the law applicable to the contract”.Google Scholar

25. Timeshare schemes may be operated as licences or leases, as members' clubs or companies, or finally as ownership in property bonds; for UK law cf. Edmonds, , International Timesharing (3rd edn, 1991)Google Scholar, chap.2, for German law see Mankowski, , RIW 1995, 364–370.Google Scholar Provided that the Convention applies at all under its Art.1(1), 2(e) (presumably in the case of licences and leases), the service element has to be identified. Here, the application of Art.5(1) is the more conceivable the closer a timeshare contract comes to a hotel contract, cf. Mankowski, ibid; more widely Jayme, IPRax 1995, 234–236. Further, where services are exclusively supplied outside the consumer's home country, those are excluded by Art.5(4)(b).Google Scholar

26. Cf. Mankowski, idem, p.367; Jayme, ibid; now BGH NJW 1997, 1697.

27. Cf. BGH, ibid, where a timeshare contract was held not to be a contract whose object was the supply of services for the purposes of Art.29(1) EGBGB even if it provided for management of the timeshare property and for temporary membership of an apartmentswapping scheme.

28. Cf. text at supra n.17.

29. Cf. Mäsch, Europäiscbe Zeitschrift für Wirtschaftrecht (EuZW) 1995, 14.Google Scholar

30. Cf. the implementation into German law, i.e. the Act on the Transfer of Rights to use Immovable Properties on a Timeshare Basis (Gesetz über die Veräuβerung von Teilzeitnuizungsrechten an Wohngebüuden) of 20 Dec. 1996, BGBI. I 2154. In s.8 two situations are enumerated where the domestic law applies internationally: the first, requiring the property to be sited in the territory of a member State, is intended to stipulate Art.7(2) (cf. BT-Drucks. 887/95, p.29); the second, describing a situation similar to that of the new s.12 of the Standard Contract Terms Act, refers to specific sales practices.Google Scholar

31. Cf. Recital 17 of the Preamble.

32. Cf. for the application of concurring sets of rules under Arts.6(1) and 7(2) of the Convention and for the problem of “most favourable” rules Dicey, and Morris, , op. cit. supra n.11, at p.1309.Google Scholar

33. Roth, , op. cit. supra n.6, at p.168Google Scholar; Jayme, and Kohler, , 84 Rev. Crit., op. cit. supra n.6, at p.33.Google Scholar

34. I.e. national road services operated within a member State by carriers non-resident therein, cf. Art.1 of the Regulation.

35. Basedow, , Zeitschrift für Handeis- und Wirtschaftsrecht (ZHR) 156 (1992), 413–442, at p.427.Google Scholar

36. Ibid; Roth, , op. cit. supra n.6, at p.171.Google Scholar

37. Basedow, ibid; Roth, ibid.

38. Highly critical: Jayme, and Kohler, , 84 Rev. Crit., op. cit. supra n.6, at p.37Google Scholar; IPRax 1994, op. cit. supra n.6, at p.405Google Scholar; IPRax 1995, op. cit. supra n.6, at p.343.Google Scholar

39. Cf. only Morse, , op. cit. supra n. 11, at pp. 145et seq.Google Scholar

40. It may be doubted, with respect, whether this aim has been reached through the German and English implementation of Directive 93/13.