Advanced Commercial Litigation: Revision Summary
ROME I REGULATION (RIR): CHOICE OF LAW IN CONTRACT
RIR: SCOPE OF APPLICATION
- RIR Art 1: Material Scope – Regulation applies in situations involving a conflict of laws in relation to contractual
obligations in civil/commercial matters OTHER THAN cases involving contractual obligations arising out of
revenue/customs/administrative matters.
- RIR Art 1(2): Exclusions – Matters expressly excluded from material scope of the RIR are cases involving
contractual obligations arising out of/in relation to:
(a) status/legal capacity of natural persons;
(b) obligations arising out of family relationships;
(c) wills and succession;
(d) bills of exchange/cheques/promissory notes/other negotiable instruments;
(e) arbitration agreements and agreements relating to choice of court;
(f) law of companies + incorporated/unincorporated associations concerning the creation/registration/legal
capacity/internal organisation/winding up of such entities OR the personal liability of their officers/members for the
obligations of that body;
(g) questions regarding an agent’s capacity to bind their principal to a 3rd party;
(h) constitution of trusts + relationships between trustees/settlors/beneficiaries;
(i) obligations arising out of dealings prior to conclusion of the contract; and
(j) certain insurance contracts.
- RIR Art 1(3): Evidence & Procedure – Matters of evidence/procedure usually fall to be determined by DOMESTIC
RULES of forum SUBJECT TO RIR Art 18 (Burden of Proof).
- RIR Art 2: Applicable Law – Law identified as being applicable to the contractual dispute in question by the RIR
applies to the dispute EVEN if it is NOT the law of an EU Member State – no requirement for any connection between
the EU and the parties as Regulation applies to all cases falling within its material/temporal scope which are brought
before EU Member States’ courts where court must decide upon an issue relating to a conflict of laws.
- RIR Art 28: Temporal Scope – Regulation applies to contracts falling within its material scope concluded ON OR
AFTER 17 DECEMBER 2008 and does NOT have retrospective effect.
RIR: CHOICE OF LAW RULES IN CONTRACTUAL DISPUTES
(1) RIR Article 3: Express Choice of Law
- RIR Art 3(1): Parties’ Choice of Law – Contract governed by law CHOSEN BY PARTIES where choice either
made expressly within the contract OR clearly demonstrated by the terms of the contract and all the circumstances of
the case – choice of law can apply to whole/part of contract.
- Clearly Demonstrated Choice of Law – Choice of law can be IMPLIED from terms of contract/circumstances of
case BUT court will only imply choice of law where parties intentions regarding the applicable law can be
demonstrated with sufficient degree of certainty – includes:
(a) use of standard form contract known to be governed by particular system of law even though there is no
express choice of law clause in the contract; or
(b) parties engaged in previous course of dealing involving contracts which included choice of law clause where
circumstances suggest that omission of similar choice of law clause from contract in question was NOT
deliberate.
- RIR Recital 12: Significance of Jurisdiction Agreements – Exclusive jurisdiction agreement in favour of courts
of an EU Member State is a RELEVANT BUT NOT CONCLUSIVE FACTOR when determining whether a choice
of law has been clearly demonstrated by the terms of the contract/circumstances of case for purposes of RIR Art
3(1).
- RIR Art 3(2): Change of Applicable Law – Parties may, at any time, agree to change the applicable law of the
contract BUT such changes in governing law after conclusion of contract will NOT prejudice the formal validity of the
contract OR adversely affect the rights of 3rd parties.
- RIR Art 3(3): Domestic Mandatory Provisions – Where contract includes a choice of law clause identifying the
applicable law BUT all other elements of the contract are connected with/located in a state OTHER than state whose
law designated by the parties as the applicable law in the choice of law clause, the parties’ choice of law will NOT
prejudice the application of the mandatory provisions of the law of that other state with which the contract connected
which could not be derogated from by agreement if that law had been chosen by the parties as the governing law of the
contract.
- E.g. UCTA 1977 will apply to contract where all aspects of the contract/circumstances of the case connected with
England/Wales BUT parties have agreed that contract should be governed by French law.
- RIR Art 3(4): Mandatory Provisions of EU Law – Where contract includes a choice of law clause identifying a
non-EU Member State’s law as the applicable law BUT all other elements of the contract are connected with/located in
an EU Member State, choice of non-EU Member State’s law as the governing law of the contract will NOT prejudice
the application to that contract the provisions of EU law which cannot be derogated from agreement.
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ROME I REGULATION (RIR): CHOICE OF LAW IN CONTRACT
RIR: SCOPE OF APPLICATION
- RIR Art 1: Material Scope – Regulation applies in situations involving a conflict of laws in relation to contractual
obligations in civil/commercial matters OTHER THAN cases involving contractual obligations arising out of
revenue/customs/administrative matters.
- RIR Art 1(2): Exclusions – Matters expressly excluded from material scope of the RIR are cases involving
contractual obligations arising out of/in relation to:
(a) status/legal capacity of natural persons;
(b) obligations arising out of family relationships;
(c) wills and succession;
(d) bills of exchange/cheques/promissory notes/other negotiable instruments;
(e) arbitration agreements and agreements relating to choice of court;
(f) law of companies + incorporated/unincorporated associations concerning the creation/registration/legal
capacity/internal organisation/winding up of such entities OR the personal liability of their officers/members for the
obligations of that body;
(g) questions regarding an agent’s capacity to bind their principal to a 3rd party;
(h) constitution of trusts + relationships between trustees/settlors/beneficiaries;
(i) obligations arising out of dealings prior to conclusion of the contract; and
(j) certain insurance contracts.
- RIR Art 1(3): Evidence & Procedure – Matters of evidence/procedure usually fall to be determined by DOMESTIC
RULES of forum SUBJECT TO RIR Art 18 (Burden of Proof).
- RIR Art 2: Applicable Law – Law identified as being applicable to the contractual dispute in question by the RIR
applies to the dispute EVEN if it is NOT the law of an EU Member State – no requirement for any connection between
the EU and the parties as Regulation applies to all cases falling within its material/temporal scope which are brought
before EU Member States’ courts where court must decide upon an issue relating to a conflict of laws.
- RIR Art 28: Temporal Scope – Regulation applies to contracts falling within its material scope concluded ON OR
AFTER 17 DECEMBER 2008 and does NOT have retrospective effect.
RIR: CHOICE OF LAW RULES IN CONTRACTUAL DISPUTES
(1) RIR Article 3: Express Choice of Law
- RIR Art 3(1): Parties’ Choice of Law – Contract governed by law CHOSEN BY PARTIES where choice either
made expressly within the contract OR clearly demonstrated by the terms of the contract and all the circumstances of
the case – choice of law can apply to whole/part of contract.
- Clearly Demonstrated Choice of Law – Choice of law can be IMPLIED from terms of contract/circumstances of
case BUT court will only imply choice of law where parties intentions regarding the applicable law can be
demonstrated with sufficient degree of certainty – includes:
(a) use of standard form contract known to be governed by particular system of law even though there is no
express choice of law clause in the contract; or
(b) parties engaged in previous course of dealing involving contracts which included choice of law clause where
circumstances suggest that omission of similar choice of law clause from contract in question was NOT
deliberate.
- RIR Recital 12: Significance of Jurisdiction Agreements – Exclusive jurisdiction agreement in favour of courts
of an EU Member State is a RELEVANT BUT NOT CONCLUSIVE FACTOR when determining whether a choice
of law has been clearly demonstrated by the terms of the contract/circumstances of case for purposes of RIR Art
3(1).
- RIR Art 3(2): Change of Applicable Law – Parties may, at any time, agree to change the applicable law of the
contract BUT such changes in governing law after conclusion of contract will NOT prejudice the formal validity of the
contract OR adversely affect the rights of 3rd parties.
- RIR Art 3(3): Domestic Mandatory Provisions – Where contract includes a choice of law clause identifying the
applicable law BUT all other elements of the contract are connected with/located in a state OTHER than state whose
law designated by the parties as the applicable law in the choice of law clause, the parties’ choice of law will NOT
prejudice the application of the mandatory provisions of the law of that other state with which the contract connected
which could not be derogated from by agreement if that law had been chosen by the parties as the governing law of the
contract.
- E.g. UCTA 1977 will apply to contract where all aspects of the contract/circumstances of the case connected with
England/Wales BUT parties have agreed that contract should be governed by French law.
- RIR Art 3(4): Mandatory Provisions of EU Law – Where contract includes a choice of law clause identifying a
non-EU Member State’s law as the applicable law BUT all other elements of the contract are connected with/located in
an EU Member State, choice of non-EU Member State’s law as the governing law of the contract will NOT prejudice
the application to that contract the provisions of EU law which cannot be derogated from agreement.
1
