The Young and the Restless: CESL and (the rest of) national law Matthias E. Storme Full professor KU Leuven, Instituut commercial and insolvency law Symposium “Hugh Beale and the CESL” Lincoln’s Inn London 23 may 2014

Some characteristics of CESL Uniform law Opt-in instrument (≠ CISG) Union law: - automatically part of domestic law - but also (secundary) Union law (≠CISG) with * priority over national law and ** subject to primary law some union rules come naked on the scene, others as CESL are already well vested

Some effects of supremacy CESL itself and Union law in general: - determine the scope of CESL - determine the formation and validity of the choice /opting-in; except incapacity under personal law (possible exception: illegality or immorality of the choice (according to the chosen law) ?)

“Scope” of CESL ratione materiae CESL(R) excludes the rules of the applicable national law within its scope (≠ CISG 7(2)) - art. 6 Rome-I-R is set aside by the CESLR itself (as lex posterior and specialis in relation to 27 Rome-I) - autonomous interpretation, principles of interpretation of EU legislation > underlying principles and objectives - no lacunae within the scope: either an explicit or implicit rule or party autonomy (subject to GF&FD)

“Scope” of CESL ratione materiae Where lies the border between the (scope of) young CESL and the restless ghosts of national law ? - additional defects of consent ? No, except conflict of interest (matter of representation > DCFR II-6:109) - additional rules on unfair terms ? No - unfair trade practices ? Distinguish (S. EP amendment 15) - additional leniency of national law ? No délais de grâce scheme of arrangement (?)

“Scope” of CESL ratione materiae illegality or immorality: outside the scope - i & i under Union law: applies as Union law (eg trade embargo, money laundering, competition law) - i & i under national law: applies, but CESL determines whether it is a question of i & i – cfr. EP amendment 14. within the scope of CESL (incl where the reasons for i&i are addressed in CSEL), there is no place for: - (other) national overriding mandatory provisions - national public policy exception

Outside the scope of CESL Still MS duty to give full effect (art. 4(3) TFEU)! Insofar as the necessary measures are not contained in CESL or other Union law In general: MS have to provide effective judicial protection and add remedies where necessary to give full effect Some EU rights arrive naked, CESL rights are already well vested. Compare other optional instruments (optional cross-border procedures, optional IP’s, optional legal persons)

Principle of effectiveness National law must give effective and equivalent protection. Equivalence ? eg national law on assignment Effectiveness ? Possible examples in matters outisde the scope of CESL - Making the choice for CESL illegal - Language requirements (C-202/11 Las) - Set-off - Concurrency of actions - Ex officio application

EU Charter Art. 51 Charter (and 6 TEU) limits the relevance of the Charter But in applying the CESL, courts & institutions are bound by the Charter < Limitations of private autonomy have to be justified: C-283/11 Sky österreich

Inländerdiskriminierung MS Option in art. 13 (1) CESLR - To extend CESL to domestic contracts Could it be unconstitutional not to exercise the option ? Belgian Const.C. 110/2001 NB. Extension of CESL under art. 13 is Union law, extension of CESL outside art. 13 is purely national law (and Rome-I-R takes over)