Private International Business Law Notes
Week 1
Readings:
Companies today: participate in global economy/seek growth abroad
Eg business with foreign partners, to set up an establishment abroad, to serve customers
from different countries, to employ foreign workers or to have foreign shareholders and
directors.
Within the EU: establishment of the internal market ensuring the free movement of goods,
services, capital and persons.
+digital single market which proposes new opportunities for businesses through
e-commerce.
Private international law: the field of law that deals with private legal relationships that
include an international element, such as a foreign place of business, domicile, nationality
or place of action
Three main areas:
1. Jurisdiction: which court is internationally competent to adjudicate a dispute.
2. Applicable law/conflict of laws
>Once a court has assumed jurisdiction, it must decide which law it will apply to the case
(national or foreign law)-> must solve the conflict of laws.
3. The recognition and enforcement of foreign judgments: when and under which
conditions a foreign judgement is recognised and enforced.
Pre-conditions for existence:
Question of which law applies is solved by the conflict of laws.
Two preconditions for existence of conflict of laws:
a. Legal diversity: In the absence of legal diversity, i.e. if all legal systems in the world
were the same, no conflict of laws would arise.
b. Cross-border legal relationships: If no one ever ventured outside national borders,
no conflict of laws would arise.
Character of PIL:
‘Private international law’ is national law and is not based on principles of international
law. It is not based on world-wide common grounds applicable to all countries in the world.
≠International law: universal common basis.
>PIL: Each country has its own PIL rules.
,International unification of PIL rules can only be achieved through specific arrangements
on an international level.
>Hague Conference on Private International Law,a global organisation dedicated
to the unification of PIL rules, carries out this task on a global level and creates PIL treaties.
EU and PIL:
Art.81 TFEU: It is an autonomous goal of the EU to create an area of freedom, security and
justice in which the free movement of persons is ensured and citizens in the EU are
afforded a high level of protection.
>Orders the unification of all PIL rules.
Under these provisions, the European Union has the power to develop European
instruments in all areas of PIL.
For companies doing business in the EU or with parties domiciled in EU Member States:
- Brussels Ibis Regulation (jurisdiction)
- Rome I Regulation (applicable law contractual obligations)
- Rome II Regulation (applicable law non-contractual obligations)
>European regulations, due to their supranational (Union law) character, take precedence
over the national rules of the Member States. The national PIL rules of the MS cease to
apply to these subjects.
Every European regulation states:
● Temporal scope: precisely from when the regulation will apply
>If matter falls outside the temporal scope, it will be necessary to examine whether there is
an earlier or later regulation.
● Material scope: to which matters it relates
>If matter is outside the material scope, it will have to be examined whether another
regulation might apply to that subject.
● Formal scope: what its territorial scope is
>If the case falls outside the formal scope, usually no other regulation is applicable.
->If no regulation is applicable, the court where the case is pending will have to apply its
own (national) rules of private international law.
Temporal scope:
Eg. Matter falls within material scope of Rome I regulation
BUT states that it only applies to contracts after 2009. Then the case falls outside.
Substantive scope:
,Eg. Rome II Regulation deals with the area of law
BUT excludes defamation from the material scope. Therefore, falls outside and the judge
will have to apply his national conflict of law rules.
Formal Scope:
Eg. Case concerns Turkey (not domiciled in EU MS)> Brussels Ibis Regulation does not
apply.
National rules of jurisdiction apply to see if the court has jurisdiction.
>The ECJ plays an important role in the interpretation of the various PIL regulations. The
Court’s interpretation of a preliminary ruling question binds the national court, which must
then rule in accordance with that interpretation.
National rules of international jurisdiction: under which circumstances and conditions the
national court is competent in a private law matter with a cross border character.
>Since state sovereignty does not extend beyond national borders, the judge of a country
has no power to judge disputes between non-residents.
International regulations:
Positive (more than one State claims jurisdiction) or negative (no State claims jurisdiction)
conflicts due to the internationally differing rules of jurisdiction.
Solution: unification of international rules of jurisdiction.
The Hague Conference:
>International level
>Operate on basis of consensus
Hague Conventions: subject-specific
EU:
Distribution of jurisdiction among the courts of the MS.
>More effective than IO (eg Hague Conference)
Brussels Ibis Regulation.
Residual function of national rules of jurisdiction:
Only when the Brussels Ibis Regulation and the 2005 Hague Convention are not
applicable=> rules of international jurisdiction of individual MS apply
- Also, may have concluded treaties w/ non-EU countries.
Friedrich Carl von Savigny:
, For each legal relationship, the area of law to which it belongs or is subject, should be
sought out.
Conflict of laws rules: referral rules=> they refer the inter. legal relationship to a national
legal system.
>A conflict of laws rule should be such that no matter before which national court a case is
brought, the same law is always designated as applicable.
Protection principle:
The neutral Savignian system of referral rules only works: if legal systems are based on
more or less the same values and standards+the jurisprudence is of good quality.
Party autonomy: weaker contracting party is protected according to a particular law.
Favour principle:
Sometimes a referral rule is designed to favour a certain result of substantive law.
Overriding mandatory rules:
>Take priority over the law applicable according to the conflict rules.
Art. 9 Rome I Regulation+Art.16 Rome II Regulation.
Public Policy:
When conflict w/ the fundamental values of a legal order, the application of that law is
precluded because it is contrary to the public policy of that country.
Lecture 1:
3 EU Regulations:
- Brussels Ibis Regulation
- Rome I
- Rome II
+Insolvency Regulation
PIL:
● International setting- cross-border legal relationships= enter w/ a party abroad (eg
in NL buy package from Poland)
Eg cross border tort, infringement of IP in another country
Condition: cross-border legal relations
Gruma BV= sports apparel sale, located in NL
