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Party Autonomy

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The Interconnection of the EU Regulations Brussels I Recast and Rome I

Part of the book series: Short Studies in Private International Law ((SSIL))

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Abstract

Party autonomy rallies almost unquestioned support in international contract law. However, it is controversial to define the borders and parameters of party autonomy. Lawmakers have regulated party autonomy in international transactions by setting out conditions under which parties may choose the law which governs their contractual relationship or define a forum before which a claim should be brought. The same holds true for the Brussels I Recast and the Rome I Regulations, both of which respect the declared intention of the parties and implement restrictions that limit the choice of forum and law generally or for certain contracts. On a more granular level, the relevant rules pay tribute to the fundamental and distinctive characteristics of rules on jurisdiction and conflict of laws, respectively. The Rome I Regulation pays respect to all circumstances of a case and tends to review the result of a choice considering public policy. The Brussels I Regulation follows a procedural rationale when it provides a variety of options for forum agreements. If choices are made in contradiction with overriding principles, it invalidates the choices altogether.

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Notes

  1. 1.

    Smith 1776.

  2. 2.

    Specifically, which agreements shall be considered as legally binding, to define the rights and duties created by enforceable but otherwise ambiguous agreements, and to determine the consequences of a breach of contract; see Kronman 1980, p. 472.

  3. 3.

    Basedow 2001, p. 32; Kegel and Schurig 2004, p. 653; Lehmann 2008, p. 382; Leible 2004, p. 485; Id., 2007, p. 41; Martiny 2006, p. 1, para 8; Maultzsch 2011, p. 63; McClean and Beevers 2009, paras 13-003; Mills 2019, p. 103; Wicki 1965.

  4. 4.

    This view can, however, not entirely justify party autonomy for legal entities, see Mills 2019, p. 9.

  5. 5.

    Nishitani 2016, pp. 300–344; id., 2000.

  6. 6.

    Without postulating a complete parallelism between jurisdiction and applicable law (keine völlige Identität) Savigny considered both jurisdiction and territorial law as different sides of the totality of the local law (verschiedene Seiten des gesammten örtlichen Rechtszustandes), see Savigny 1849, pp. 77, 91.

  7. 7.

    Von Savigny 1849, pp. 152–153.

  8. 8.

    See, for example, Haudek 1931.

  9. 9.

    Basedow 2015, p. 115.

  10. 10.

    Famous comment by Kegel 1971, p. 255.

  11. 11.

    Mills 2019, pp. 22–28 (providing an overview about competing perspectives).

  12. 12.

    Leible 2004, p. 485; Id., 2007, p. 41; Maultzsch 2011, p. 60.

  13. 13.

    The preliminary documents and relate publications to the Hague Convention on Choice of Court Agreements 2005 provide for further readings on jurisdictional agreements, see https://www.hcch.net/en/instruments/conventions/full-text/?cid=98 (accessed June 2019). For the historical origins of party autonomy in choice of forum, see Mills 2019, pp. 68–84.

  14. 14.

    Watt 2010, p. 254. For the implications on conflict of laws, see Mankowski 2005, p. 891.

  15. 15.

    Rühl 2019, p. 4.

  16. 16.

    Symeonides 2010, p. 514.

  17. 17.

    Recital 19.

  18. 18.

    Kuipers 2009, p. 1511. For the problem of ambiguity of choice-of-law clauses and to the relevance of implied choices, see Stone 2010, pp. 303–309.

  19. 19.

    Plender and Wilderspin 2009, p. 144.

  20. 20.

    This is emphasised by Recital 12, which, however, merely mentions an agreement in favour of ‘courts or tribunals of a Member State’. However, it cannot a contrario be concluded that a choice of jurisdiction in favour of a non-Member State court will have no relevance when interpreting the will of the parties, see Garcimartín 2008, p. 67 (noting that the reason why a forum selection clause in favour of a non-Member States is not mentioned as an indicator for a choice of law would be due to the principle id quod plerumquem accidit. ‘If the parties have chosen the courts of a third country, they will very likely litigate in that country, where obviously the Regulation does not apply’).

  21. 21.

    This chapter will not deal with indirect choice of forum options, for example through choosing certain objective factors such as the place for the performance of the obligation in question under Article 7.

  22. 22.

    A common and simple strategy to delay proceedings is to bring a claim before a court not chosen in the contract, preferably in a judicial system inclined to producing delays. The permissiveness of this practice has been confirmed by the CJEU. In C-116/02 Gasser v MISAT [2003] I-14693, an ‘Italian torpedo’ was used to utilize the advantage of the priority principle by submitting a claim to an Italian court (Tribunale Civile e Penale di Roma) although an Austrian court (Landesgericht Feldkirch) was designated to have jurisdiction by a choice of court clause. The Court dealing with the relationship between a choice and forum made in a contract and the lis pendens rule expressed the priority of the lis pendens rule over choice of court agreements and held that only the court first seised is the competent court to decide whether it has jurisdiction, while the court second seised must stay proceedings until the court first seised has declared that it has no jurisdiction. For an overview on provisional and protective measures against torpedo actions, see Carl 2007.

  23. 23.

    For the scope of jurisdictional agreements in detail, see Garcimartin 2015, pp. 280–282.

  24. 24.

    The French Supreme Court, however, considered one-sided agreements that give one party the right to bring an action not only before the chosen court but also before any other court of competent jurisdiction, as void at several occasions, see Mme X v Rothschild (2012), No. 11-26.022 (Brussels Regulation); ICH v Crédit Suisse (2015), No. 13-27264 (Lugano Convention). By contrast, in eBizcuss.com v Apple Sales International, the Court considered a hybrid-agreement that ostensibly provided for (more) predictability valid.

  25. 25.

    Article 6 refers to the law of the Member State to determine the jurisdiction of the courts for defendants not domiciled in a Member State. It sets out number of exceptions that include jurisdictional agreements pursuant to Article 25 without mentioning Article 26.

  26. 26.

    Case 48/84 Spitzley [1985] ECR 787 [15].

  27. 27.

    Briggs 2008, p. 239.

  28. 28.

    Article 45 provides a list of reasons for the refusal of recognition (and enforcement) of judgments relating to non-jurisdictional and jurisdictional objections.

  29. 29.

    Whether such a manoeuvre can be declined on forum non conveniens grounds is disputed. The Regulation is silent on the issue of non-Member State jurisdiction agreements wherefore some argue that this matter should be dealt with under national rules. Others argue for a reflexive effect to Article 25, hence, to allow a court to treat such a jurisdiction clause as though it was an agreement within the scope of the Regulation. The Recast Regulation has brought an update of the predecessor Regulation when it allows Member States’ courts to consider proceedings pending before the courts of third States for the question of whether they stay or continue the proceedings (Articles 33–34).

  30. 30.

    OJ 1979 C 59/1, 8.

  31. 31.

    See also Rome Convention, Article 3(3): ‘where all the other elements relevant to the situation at the time of the choice are connected with one country only […]’ (emphasis added).

  32. 32.

    For more on the international element and the difficulties with cases involving third-states, see Report on the Convention on the Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters and to the Protocol on its Interpretation by the Court of Justice [1979] OJ C 59/71, 21; Case 281/02, Owusu v. Jackson [2005] ECR I-1383; Frauenberger-Pfeiler 2005, p. 125 (for the applicability of Article 23 Regulation 44/2001 for cases where the designation of a foreign court is the only international aspect); Garcimartin 2015, pp. 285–286.

  33. 33.

    Case C-281/02 Owusu v Jackson [2005] ECR I-1383.

  34. 34.

    Case C-478/12 Maletic v lastminute.com Gmbh and TUI Österreich GmbH [2013] ECLI:EU:C:2013:735.

  35. 35.

    Articles 15, 19, and 23. Regarding the additional possibility for an agreement where both parties are domiciled or habitually resident in the same Member State, see Articles 15(3), 19(3).

  36. 36.

    Recital 37.

  37. 37.

    Case C‐214/89 Powell v Duffryn [1992] ECR I‐1745 [14].

  38. 38.

    For the relationship between the Hague Convention and the Brussels I Recast Regulation, see Garcimartin 2015, p. 284; for the relationship between Brussels I, Hague, and Lugano, see Hartley 2013, pp. 105–126.

  39. 39.

    Agreements on the choice of courts are of no concern of the Rome I Regulation (Article 1(2)(e)).

  40. 40.

    Case C-24/76 Salotti v RÜWA Polstereimaschinen GmbH [1976] ECR 1831; Case C‑222/15 Hőszig v Alstom Power [2016] ECLI:EU:C:2016:525 [40].

  41. 41.

    Case C-221/84 Berghoefer v ASA SA [1985] ECR 2699.

  42. 42.

    Case C-150/80, Elefanten Schuh GmbH v Jacqmain [1981] ECR 1671 [25]. Where the requirements laid down in the Regulation are fulfilled, such consent is indicated, see Mankowski 2011, Article 23 para 39.

  43. 43.

    Kuipers 2009, p. 1510.

  44. 44.

    Id., 1511–1512.

  45. 45.

    Id., 1513.

  46. 46.

    Recital 12, Rome I Regulation.

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    Dr. Christoph Schmon

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Schmon, C. (2020). Party Autonomy. In: The Interconnection of the EU Regulations Brussels I Recast and Rome I. Short Studies in Private International Law . T.M.C. Asser Press, The Hague. https://doi.org/10.1007/978-94-6265-367-2_7

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