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Class notes International Trade And Transactions -LPC-BPP
International Trade and Transactions Notes- BPP University-LPC -London
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Lecture 1 – Conflict of law – choice of law in contractRome I deals with choice of law in contract while Rome II deals with choice of law in tort.
Two questions to ask
1- In Which jurisdiction might proceedings connected with the contract be brought?
2- Which law governs the contract
Distinction: Judication where you can sue and governing law is which law governs the contract.
An English court will apply English law to answer this question
Three regimes: Common law – Rome convention-Rome I regulation – we will be looking at Rome 1
regulation that superseded Rome convention and common law is the fall-back position
Does it apply?
Þ Material scope – Article 1
Þ Is the court faced with a conflict of laws?
Þ Does it relate to contractual obligation?
Þ Is it civil and commercial matter which is not excluded under article1?
Þ Temporal scope: Art 28 and corrigendum – on 17 Dec 2009
Þ Is there a choice of law -Article 3 – freedom of choice
Þ Choice of law express or implied choice (clearly demonstrated from the circumstances of the
case) here we look at Recitals 12 which says ‘ an agreement between the parties to confer on
one or more courts or tribunals of a member state exclusive jurisdiction to determine disputes
under the contract should be one of the factors to be taken into account in determining
whether a choice of law has been clearly demonstrated.’ So it is one of the factor but it is
not determining factor
If there is no choice of law then we go to article 4
Þ Possible overriding rules under Article 3(3) and 3(4) – recital 15
Þ Referring to mandatory rules, these are fundamental area of laws that have seen so
important so the parties cannot get around then such as UCTA 26 and 27 so UCTA is
type of provision of law that cannot be derogated from by agreement, in other words
UCTA contain anti- avoidance measures art3(3)
Þ Choice of law can be implied
Þ Standard form contract known to be governed by particular system of law such as Llyod
insurance contract is always seen as being subject to English law
Þ Previous course if dealings under contracts containing an express choice of law clause
Þ Choice of a particular form Recital 12
Article 3(1) ‘the parties can select the law applicable to the whole or a part only of the contract’
Try to avoid to have different countries law applies to different parts of the contract - unless it is
so necessary.
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, Article 3(3) anti -avoidance mechanism for example you have contract and (good, payments, and
parties in the UK) and the choice of law is Japanese law. here the court will apply Japanese law
subject to English laws which cannot be derogated from such as UCTA
Þ In absence of law, we have article 4 (1)- there are rules not presumption.
Þ Sale of good, where the seller has his habitual residence
Þ Article 4(2) if your claim falls
Þ outside those types of case have their own bespoke rules under art4(1) or if your contract
covers more than one of those types of contracts
Þ then art 4(2) kicks in – the law of the place where the characteristic performer has its
habitual residence
Þ habitual residence art 19
Þ the habitual of residence for companies and others corporate bodies or unincorporate bodies
is the place of central administration
Þ the habitual residence of natural person acting in the course of his business shall be his
principal place of business so it equally covers sole trader
Þ characteristic performance. it is not defined in Rome 1 but see Giuliano Lagarde report
it is not the person paying money but the performance for which the payment is due art
4(2) (person doing something for money).
Þ ‘Art 4(3) ‘get out clause’ from arts 4(1) and art 4(2): Manifestly more closely connected
with another country? after we choose the applicable law, the court might decide to apply the
law of ‘country most closely connected’ other than the one in art 4 (1) and4(2) .
So if the court is not happy that article art 4 (1) and4(2) truly reflects the centre gravity of the
contract then 4(1) &(2) can be disapplied art4(3).
But The court will need a very good reason for going against it
Þ Art 4(4) if cannot determine applicable law under art 4(1) and 4(2) then country
most closely connected
Þ Bespoke rules art
§ Contract of carriage art 5
§ Consumer contract art 6
§ Insurance contract art 7
§ Employment Contracts 8
Þ Choice of law under article 5(1) carriage of good
Þ First we check if we have express or implied choice of law under art 3 – if not then we look
at the habitual residence of the carrier, the company carrying the goods and habitual
residence will be determined under article 19 but the place where the carrier is based will
only be the applicable law if either the place of receipts is in the same countries where the
carrier habitually resides in other words where’s the cargo actually being taken to,
where the goods being transported to. where the place of receipt in the same place as where
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, the carrier habitually resides then that place will be the applicable law or the place of delivery
if where the carrier resides or if the consignor (the person sending the goods) is habitually
resides in the same country as the carrier. If so, the carrier habitual residence will be the place
the country whose laws will apply to the contract.
Þ But if the place of carrier is different from the place of receipts, then in that situation, we will
use the law of the place of delivery
Þ All subject to art 5(3) gets out clause ‘country manifestly closely connected’
Applicable law will be subject to
Þ Article 9 – overriding mandatory rules -protection mechanism – UCTA – tramps all
laws
Þ Regardless of the law applicable to contract, Art 9 : form can apply its own mandatory
rules . This is different from art 3 (3) because art 3(3) is anti-avoidance mechanism where
the parties have chosen a foreign law that has no connection with the parties. While art 9 is
protectionist mechanism where the court hearing the dispute will apply its own mandatory
rules notwithstanding which countries laws will apply to the contract itself
Þ Article 21 public policy
Þ Interaction between art 3(3) and 9
- Article 3(3) only applies when there is a choice of law between the parties in every
case where a court is applying a foreign law
- Art 3(3)is Anti avoidance and art9 is protectionist and it is applied in every single case.
Þ Scope of the applicable law – art 12
§ Interpretation
§ Consequences of breach- damages
§ Extent of performance
§ Limitation
§ Consequence of nullity
Þ Seeking local advice
§ Before choosing the applicable law or jurisdiction, talk to a local lawyer
§ Laws which cannot be derogated from by agreement
§ Public policy
Þ Proof of foreign law
o Is a question of fact before an English court
o Will have to be proved by appropriate evidence like any other fact in dispute
o Evidence presented by witness with requisite experience in foreign law
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