Advanced Commercial Litigation Revision
SGS 1 – Conflict of Laws I: Contract
Rome I Regulation
International contract? One or more parties based abroad. Subject matter of contract based
abroad: goods shipped from another country etc.
1. Does the Regulation apply?
a. Material scope – Article 1
-Court hearing dispute faced with a conflict of laws?
-Does it relate to a ‘contractual obligation?’
-Is it a civil & commercial matter not excluded under article 1(2)?
b. Temporal scope
-17 December 2009
-article 28: shall apply to contracts contracted after this
-amendment: changes wording to say that regulation applies ‘as from’ date – applies to those
concluded on or after 17 December 2009
If yes to all then in regulation, otherwise not. Result of regulation can mean any countries
law will apply not just one of a member state as set out in article 2 and recital 13. Applied
by courts of EU member state but a law of EU member state does not need to be used.
2. Choice of law by parties?
Express choice of law clause in parties – if have one: Article 3 applies
-Express - in the contract
-Implied – ‘clearly demonstrated from the circumstances of the case?’
oIntention: did parties intend for there to be an applicable law
oWill consider choice of jurisdiction for this (recital 12)
oCourts do not imply lightly so this is not enough
oprevious course of dealing under contracts containing an express choice of law clause
Possible overriding rules under Article 3(3) and 3(4)
Article 3(3)
-Anti-avoidance mechanism
-Recital 15 gives advice: some fundamental principles of law you can’t contract out of
e.g. UCTA
-Parties, goods and payment all based in England – two English parties but contract
subject to a different law: parties allowed to do that but article 3(3) makes the other law
subject to English laws which cannot be derogated from e.g. UCTA – apply that law as
long as doesn’t conflict to those mandatory principles
-Article 3(4) is the same but for community wide EU provisions
UNLESS ANY BESPOKE RULES APPLY:
-Article 6: consumer contracts
-Article 8: employment contracts and recital 36
3. If no choice of law: Article 4 applies
In that situation apply the law of the place where the ‘characteristic performer’ has its
‘habitual residence’
Habitual residence:
-Article 19 – place of their central administration, principle place of business (for sole trader),
individual acting in non-business capacity is where the live
Characteristic Performance
-Not defined in the Regulation: Giuliano-Lagarde report says: the performance for which
the payment is due
1 of 29
,Article 4(3) – get out clause, where court applied article 4(1) or (2) but not happy with
outcome e.g. law applied has little relevant to contract. States that when in all circumstances
the contract is ‘manifestly more closely connected’ with another country. Recital 20.
‘Manifestly’ – not to be used lightly. Idea behind 4(1) is certainty so should be able to get
answer from article 4(1) and (2) unless exceptional.
Article 4(4) – catch all for if can’t work out under 4(1)/(2) the country ‘most closely
connected’ applies without prejudice to articles 5-8 which are bespoke rules in certain
contracts.
Applicable law that is chosen will be subject to: if governed by English law these are not
relevant – they attach English law principles to foreign law.
5. Articles 9 & 21
-apply where foreign law is being applied. Still mention they do not apply even if English law is the
relevant law!
-Article 9: overriding mandatory rules
-Regardless of the law applicable to the contract the forum can apply its own mandatory rules
-Different to article 3(3) as that only applies where have a choice of law and when all
circumstances of contract is different to the choice. Article 9 applies in every case if there is a
choice or not.
-Means that the contract could be one law – subject to another countries mandatory rules under
article 3(3) and then subject to the forum’s mandatory rules under article 9 which take precedent
over them all. Not common in practice.
-Article 21: public policy
-Courts being protectionist – can refuse the contract to be governed by its law if its contract
subject is against the public policy of the forum (court hearing dispute)
-If ‘manifestly incompatible’ – so extreme circumstances
PCR issues: only authorised to advise client on English law. Make sure to instruct foreign
lawyers.
Proof of foreign law: English law hearing case subject to another countries law – that law is
proven as a question of fact before the English court. Will have to be proved by appropriate
evidence like any other fact in dispute, evidence presented by witnesses with experience in
that law.
SGS 2 – Conflict of Laws II: Tort
Tortious claim: encompasses ‘non-contractual’ civil claims. Arise from breach of obligations
imposed by law (common law/statutory). Contractual claims arise from the obligations
agreed between the parties themselves.
Rome II Regulation
1. Does the Regulation apply?
- Material scope
- Is the relevant court or tribunal seized of the dispute faced with a ‘conflict of laws’
- Non-contractual obligation? Tort; Delict; unjust enrichment; agency without authority; culpable
conduct during contract negotiations.
- Civil and commercial matter?
- Exclusions: Article 1(1) and 1(2)
- Temporal scope of Rome II?
• Only applies from 11 January 2009, Article 31 & 32
All law is relevant – not just EU. Extends to all non-contractual cases involving a choice
between the laws of different jurisdictions.
2 of 29
, 2. Freedom of Choice: Article 14
If have a choice of law it will be upheld if:
1. Agreement entered into after the event giving rise to the tortious damage occurred or
2. Agreement entered into before the event giving rise to the tortious damage occurred
and both parties are:
i. pursuing a commercial activity and
ii. freely negotiated the choice of law.
Overriding rules under article 14(2) and 14(3)
•14 (2) – provisions that cannot be derogated from by agreement e.g. UCTA
•UCTA renders void contractual terms that exclude or restrict liability for death or personal injury
caused by negligence
•Can’t choose law to avoid one specific piece of legislation, the majority of the foreign law will
apply but UCTA will still apply
•14(3) – extends this to EU law
•Express/implied choice won't be upheld by the courts if it prejudices the rights of third parties
Article 14(1)
Choice of law is unavailable in claims relating to unfair competition, the restriction of competition
and the infringement of IP rights.
If valid choice: Could be subject to article 16 and 26 obligations if foreign law chosen. General
rule in article 4 does not apply if there has been a valid choice.
3. In the absence of express/implied choice, Article 4:
General rule: Article 4(1) – general rule is the country where the damage occurred
Article 4(2) – where habitual residence of C+D same – law of that country
Article 4(3) – escape clause – when all circumstances ‘manifestly more closely connected with
another country’ that country’s laws will apply (do if 4(1) an (2) suggest an unsatisfactory answer)
a.Bespoke rules/exceptions to article 4
Don’t need to go through article 4(2) as we are in article 4(1) – as soon as recognise a bespoke
rule applies discuss the relevant 4(?) to that and come to conclusion. Article 4(2) wont be relevant
if article 7 is.
Article 5 - product liability
• Subject to article 4(2) (but takes precedence over 4(1))
• 5(1) – must reasonably foresee the damage occurring
• ‘product’ means all movables, with the exception of primary agricultural products and game
• Assessment of damage will be decided pursuant to the applicable law ensures that a claimant
cannot forum shop for the highest possible level of recovery
• Consider article 5(2): ‘manifestly closer connected with another country’ – dismiss it if not
relevant.
• product marketed in that country
Article 7 – Environmental damage
(i) the law applying under Article 4(1) (i.e. the law of the country in which the damage occurs) or
(ii) the law of the country in which the event giving rise to the damage occurred
-recital 24 defines environmental damage as ‘adverse change’ to the land, sea, air
-The claimant has a choice of which they would want: will choose whichever offers best
protection.
Overriding mandatory rules – art.16
•Imposed by the forum irrespective of the law they are using
Safety and conduct rules of place of the tort – art 17
•The court will look at that country’s rules of safety and conduct and if they were following them
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SGS 1 – Conflict of Laws I: Contract
Rome I Regulation
International contract? One or more parties based abroad. Subject matter of contract based
abroad: goods shipped from another country etc.
1. Does the Regulation apply?
a. Material scope – Article 1
-Court hearing dispute faced with a conflict of laws?
-Does it relate to a ‘contractual obligation?’
-Is it a civil & commercial matter not excluded under article 1(2)?
b. Temporal scope
-17 December 2009
-article 28: shall apply to contracts contracted after this
-amendment: changes wording to say that regulation applies ‘as from’ date – applies to those
concluded on or after 17 December 2009
If yes to all then in regulation, otherwise not. Result of regulation can mean any countries
law will apply not just one of a member state as set out in article 2 and recital 13. Applied
by courts of EU member state but a law of EU member state does not need to be used.
2. Choice of law by parties?
Express choice of law clause in parties – if have one: Article 3 applies
-Express - in the contract
-Implied – ‘clearly demonstrated from the circumstances of the case?’
oIntention: did parties intend for there to be an applicable law
oWill consider choice of jurisdiction for this (recital 12)
oCourts do not imply lightly so this is not enough
oprevious course of dealing under contracts containing an express choice of law clause
Possible overriding rules under Article 3(3) and 3(4)
Article 3(3)
-Anti-avoidance mechanism
-Recital 15 gives advice: some fundamental principles of law you can’t contract out of
e.g. UCTA
-Parties, goods and payment all based in England – two English parties but contract
subject to a different law: parties allowed to do that but article 3(3) makes the other law
subject to English laws which cannot be derogated from e.g. UCTA – apply that law as
long as doesn’t conflict to those mandatory principles
-Article 3(4) is the same but for community wide EU provisions
UNLESS ANY BESPOKE RULES APPLY:
-Article 6: consumer contracts
-Article 8: employment contracts and recital 36
3. If no choice of law: Article 4 applies
In that situation apply the law of the place where the ‘characteristic performer’ has its
‘habitual residence’
Habitual residence:
-Article 19 – place of their central administration, principle place of business (for sole trader),
individual acting in non-business capacity is where the live
Characteristic Performance
-Not defined in the Regulation: Giuliano-Lagarde report says: the performance for which
the payment is due
1 of 29
,Article 4(3) – get out clause, where court applied article 4(1) or (2) but not happy with
outcome e.g. law applied has little relevant to contract. States that when in all circumstances
the contract is ‘manifestly more closely connected’ with another country. Recital 20.
‘Manifestly’ – not to be used lightly. Idea behind 4(1) is certainty so should be able to get
answer from article 4(1) and (2) unless exceptional.
Article 4(4) – catch all for if can’t work out under 4(1)/(2) the country ‘most closely
connected’ applies without prejudice to articles 5-8 which are bespoke rules in certain
contracts.
Applicable law that is chosen will be subject to: if governed by English law these are not
relevant – they attach English law principles to foreign law.
5. Articles 9 & 21
-apply where foreign law is being applied. Still mention they do not apply even if English law is the
relevant law!
-Article 9: overriding mandatory rules
-Regardless of the law applicable to the contract the forum can apply its own mandatory rules
-Different to article 3(3) as that only applies where have a choice of law and when all
circumstances of contract is different to the choice. Article 9 applies in every case if there is a
choice or not.
-Means that the contract could be one law – subject to another countries mandatory rules under
article 3(3) and then subject to the forum’s mandatory rules under article 9 which take precedent
over them all. Not common in practice.
-Article 21: public policy
-Courts being protectionist – can refuse the contract to be governed by its law if its contract
subject is against the public policy of the forum (court hearing dispute)
-If ‘manifestly incompatible’ – so extreme circumstances
PCR issues: only authorised to advise client on English law. Make sure to instruct foreign
lawyers.
Proof of foreign law: English law hearing case subject to another countries law – that law is
proven as a question of fact before the English court. Will have to be proved by appropriate
evidence like any other fact in dispute, evidence presented by witnesses with experience in
that law.
SGS 2 – Conflict of Laws II: Tort
Tortious claim: encompasses ‘non-contractual’ civil claims. Arise from breach of obligations
imposed by law (common law/statutory). Contractual claims arise from the obligations
agreed between the parties themselves.
Rome II Regulation
1. Does the Regulation apply?
- Material scope
- Is the relevant court or tribunal seized of the dispute faced with a ‘conflict of laws’
- Non-contractual obligation? Tort; Delict; unjust enrichment; agency without authority; culpable
conduct during contract negotiations.
- Civil and commercial matter?
- Exclusions: Article 1(1) and 1(2)
- Temporal scope of Rome II?
• Only applies from 11 January 2009, Article 31 & 32
All law is relevant – not just EU. Extends to all non-contractual cases involving a choice
between the laws of different jurisdictions.
2 of 29
, 2. Freedom of Choice: Article 14
If have a choice of law it will be upheld if:
1. Agreement entered into after the event giving rise to the tortious damage occurred or
2. Agreement entered into before the event giving rise to the tortious damage occurred
and both parties are:
i. pursuing a commercial activity and
ii. freely negotiated the choice of law.
Overriding rules under article 14(2) and 14(3)
•14 (2) – provisions that cannot be derogated from by agreement e.g. UCTA
•UCTA renders void contractual terms that exclude or restrict liability for death or personal injury
caused by negligence
•Can’t choose law to avoid one specific piece of legislation, the majority of the foreign law will
apply but UCTA will still apply
•14(3) – extends this to EU law
•Express/implied choice won't be upheld by the courts if it prejudices the rights of third parties
Article 14(1)
Choice of law is unavailable in claims relating to unfair competition, the restriction of competition
and the infringement of IP rights.
If valid choice: Could be subject to article 16 and 26 obligations if foreign law chosen. General
rule in article 4 does not apply if there has been a valid choice.
3. In the absence of express/implied choice, Article 4:
General rule: Article 4(1) – general rule is the country where the damage occurred
Article 4(2) – where habitual residence of C+D same – law of that country
Article 4(3) – escape clause – when all circumstances ‘manifestly more closely connected with
another country’ that country’s laws will apply (do if 4(1) an (2) suggest an unsatisfactory answer)
a.Bespoke rules/exceptions to article 4
Don’t need to go through article 4(2) as we are in article 4(1) – as soon as recognise a bespoke
rule applies discuss the relevant 4(?) to that and come to conclusion. Article 4(2) wont be relevant
if article 7 is.
Article 5 - product liability
• Subject to article 4(2) (but takes precedence over 4(1))
• 5(1) – must reasonably foresee the damage occurring
• ‘product’ means all movables, with the exception of primary agricultural products and game
• Assessment of damage will be decided pursuant to the applicable law ensures that a claimant
cannot forum shop for the highest possible level of recovery
• Consider article 5(2): ‘manifestly closer connected with another country’ – dismiss it if not
relevant.
• product marketed in that country
Article 7 – Environmental damage
(i) the law applying under Article 4(1) (i.e. the law of the country in which the damage occurs) or
(ii) the law of the country in which the event giving rise to the damage occurred
-recital 24 defines environmental damage as ‘adverse change’ to the land, sea, air
-The claimant has a choice of which they would want: will choose whichever offers best
protection.
Overriding mandatory rules – art.16
•Imposed by the forum irrespective of the law they are using
Safety and conduct rules of place of the tort – art 17
•The court will look at that country’s rules of safety and conduct and if they were following them
3 of 29
