1. RULES THAT REGULATE AFFAIRS OF PRIVATE PERSONS INTERNATIONALLY

2. Moneymakers Ltd. from England contracted to by goods from a French company Tresbien SA.
The buyer received the delivery and paid for it. However, now the seller claims that the paymet was delayed and claims for compensation. The buyer disagrees. Their first problem?

3. §§ §§ ?
WHICH LAW TO APPLY
- WHERE TO LITIGATE?

4. SOURCES OF PRIVATE INTERNATIONAL LAW
1. Contract
2. International treaties
3. Private international
law of the states concerned
4. Lex mercatoria

5. FORUM IS
Municipal court
Arbitration tribunal

6. PROBLEMS ARISING Forum shopping Homeward trend
= the claimant’s tendency to choose the forum he expects will offer best prospects for a successful lawsuit
Homeward trend
= court’s tendency to apply its own law (lex fori)
Favouring the domestic party

7. REMEDIES TO THE PROBLEMS
Harmonization of laws
Forum non conveniens
A court may refuse to exercise its power to hear a case if
doing so is either inconvenient or unfair
the case has no connection with the forum state
Internationalization of judges and lawyers
Recognition of foreign court rulings

8. CHOICE OF FORUM ? CONVENTION STATE A STATE B STATE C CONTRACT Forum
Selection
Clause
STATE C

9. NATIONAL JURISDICTION
FORUM SELECTION
NATIONAL JURISDICTION
PROVISIONS
INTERNATIONAL
CONVENTIONS
CONTRACTUAL
CHOICE - OF - FORUM

10. NATIONAL JURISDICTION
CONVENTIONS
Brussels I Regulation
Adopted by all of the EU member states but Denmark
Successor of Brussels Convention, still applicable in Denmark
Lugano Convention
Applied by the other European countries
=> The signatory states have agreed to recognize and enforce each other's court rulings
NATIONAL JURISDICTION
PROVISIONS
INTERNATIONAL
CONVENTIONS
CONTRACTUAL
CHOICE-OF-FORUM

11. => By the Brussels – Lugano Conventions, the forum state is
1. The state the parties have agreed on by express or implied act
2. The state of the place of domicile of the defendant, unless
3. The defendant wishes to use his opportunity to bring the lawsuit to a different court.

12. CHOOSING THE GOVERNING LAW§§ §§
§§?

13. OPTIONS Law of the forum state Law applicable in the case
> LEX FORI
Law applicable in the case
> LEX CAUSAE
Qualification
Point of reference

14. REJECTING FOREIGN LAW
A court may reject foreign law being in conflict with the state’s
Ordre Public
= the public policy and the basic legal principles of the state
E.g.
Contracts regarded as illegal
Acts violating human rights
Social norms
Provisions with public interest
Territorial provisions

15. APPLICABLE LAW §§ §§ CONVENTION CONTRACT Forum Selection Clause
Reference
provision §§

16. ”..applicable law is that of ”…the law of the seller’s
RENVOI §§
BUYER’S state §§
SELLER’S state
CONTRACT
Reference
provision:
”..law of the
buyer’s
state”
BUYER
SELLER
LAW OF BUYER’S STATE:
”..applicable law is that of
the seller’s state”
LAW OF SELLER’S STATE:
”…law of the contract” §§
LAW OF BUYER’S STATE:
”…the law of the seller’s
state”…

17. CHOICE-OF-LAW RULES used by municipal courts to determine which state’s law they should apply in hearing a civil dispute
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

18. CONTRACTUAL CHOICE-OF-LAW
Referece provision
Possible in dispositive matters
Must be explicit or otherwise clear
The state whose legal system has been adopted must have a connection with the case
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

19. STATUTORY CHOICE-OF-LAW
TRADE IN MOVABLES
The Hague International Sales Convention, 1955
The United Nations Convention on Contracts for the International Sale of Goods CISG, 1980
CONTRACTS GENERALLY
The Rome Convention on the law applicable to contractual obligations 1980
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

20. If both parties come from the CISG countries
HAGUE CONVENTION
CISG
ROME CONVENTION
Applied
in trade in movables
If the forum state is:
Belgium
Denmark
Finland
France
Italy
Norway
Switzerland
Sweden
Niger
And the CISG is not
applicable
If both parties come from the CISG countries Or
The applicable law
is that of a state which has signed the CISG
in contracts generally
If no specific convention applies
And
If the forum is an EU member state

21. 1. The law stipulated by the Choice of Law Clause in the contract
1. The Hague Convention
The applicable law is:
1. The law stipulated by the Choice of Law Clause in the contract
2. The law of the country of the seller, unless the order was taken in the country of the buyer or in the country of business of the buyer
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

22. 2. The CISG Consists of Choice-of-law provisions
Material harmonization
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

23. The CISG consists of four parts:
1. Sphere of application and general provisions
2. Formation of a contract
3. Sale of goods
4. Final provisions
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

24. CISG CONTRACTING STATES 1 Dec 2005
 Argentina  Australia  Austria  Belarus  Belgium
 Bosnia-Herzegovina  Bulgaria  Burundi  Canada  Chile
 China (PRC)  Colombia  Croatia  Cuba  Cyprus
 Czech Republic  Denmark  Ecuador  Egypt  Estonia
 Finland  France  Gabon  Georgia  Germany  Greece
 Guinea  Honduras  Hungary  Iceland  Iraq  Israel
 Italy  Republic of Korea  Kyrgystan  Latvia  Lesotho
 Lithuania  Luxembourg  Mauritania  Mexico  Moldova
 Mongolia  Netherlands  New Zealand  Norway  Peru
 Poland  Romania  Russian Federation
 Saint Vincent & Grenadines  Singapore  Slovakia
 Slovenia  Spain  Sweden  Switzerland  Syria  Uganda
 Ukraine  United States  Uruguay  Uzbekistan
 Yugoslavia  Zambia  USSR(superseded)
66 signatories

26. The CISG does not apply to sales
Of goods bought for personal, family or household use unless the seller neither knew nor ought to have known that the goods were bought for such use
On execution or otherwise by authority of law
Of stocks, shares, investment securities, negotiable instruments or money
Of ships, vessels, hovercraft or aircraft
Of electricity
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

27. transaction (each party’s
SCOPE OF THE CISG
Is it an International
transaction (each party’s
place of business is in
a different country)?
YES NO
YES
YES
Have both
countries
ratified
the CISG?
Is the
contract a
sale of
goods
transaction?
Is it a
commercial
(merchant-
to-merchant)
transaction?
Did the
parties
opt-out of
the CISG
in a choice
of law
clause? NO
YES NO
Has the
country with
the closest
connection to
the contract
ratified
the CISG? NO NO
CISG
governs
YES
Domestic
law
governs NO NO
YES
Does the
ratifying country
exclude the
CISG coverage
unless both
countries
have ratified? NO
YES
Modified from:
Richards, E
Law for global Business.
Irwin, USA
Did the parties opt-in
to the CISG in a
choice of law clause?
YES

28. > Hague Convention > Seller’s law > Swedish law
If there is no reference provision in the contract, how to choose the governing law in the following cases? The suit is filed at a French court:
A representative of a British company has visited a Swedish manufacturer in Gothenburg.
Two weeks later the British company sent by an order of 100 station wagons.
> Hague Convention > Seller’s law > Swedish law

29. > Hague Convention > Buyer’s law > Turkish law
If there is no reference provision in the contract, how to choose the governing law in the following cases? The suit is filed at a French court:
A Swedish construction company is represented by an agent in Ankara, Turkey.
A Turkish company placed the agent an order of 5 luxury bastu modules to be delivered from Stockholm and built in Ankara.
> Hague Convention > Buyer’s law > Turkish law

30. If there is no reference provision in the contract, how to choose the governing law in the following cases? The suit is filed at a French court:
In trade of technical appliances, which provisions are applied to a dispute arising in an agreement between a French and an American company?
> The CISG

31. Superseded by specific conventions
GOVERNMENTAL
INTEREST
3. The Rome Convention
Superseded by specific conventions
Not applied to e.g.
Status or legal capacity of natural persons
Bills of exchange, cheques, promissory notes
Family law
Procedural law, arbitration agreements
Law of companies, foundations, associations
Authority of an agent or a representative
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

32. Recognizes "ordre public" of the forum state
The Rome Convention
Excludes renvoi
=> the choice of law provisions of the country specified by the Convention shall not be applied
Recognizes "ordre public" of the forum state
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

33. By the Rome Convention, the applicable law is:
The law chosen by the parties
The law of the country with which the contract is most closely connected
=> the country where the party, who is to effect the performance which is characteristic of the contract, has his habitual residence or central administration unless
it appears from the circumstances as a whole that the contract is more closely connected with another country
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

34. Rome Convention, specific provisions: Trade of immovable property
=> The law of the country where the immovable property is situated
Carrier
=> the law of the country where the carrier has his principal place of business, unless
it appears from the circumstances as a whole that the contract is more closely connected with another country
Consumer trade
=> the minimum protection of the mandatory rules of the consumer’s country’s law
if the seller knew that the buyer is a consumer
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

35. Case
A Spanish travel agency Dreamtravels has marketed holiday trips in Belgium. Mr. De Chavigny bought a journey to Costa del Sol but was dissatisfied with the accommodation.
Instead of being a luxury hotel room with view to the sea as agreed, his was a very modest room with windows to the back yard.
Which law applies to the case?
> Consumer’s law > Belgian law

36. Rome Convention: Employment contracts but
1. The law of the contract
but
the choice of law shall not have the result of depriving the employee of the protection afforded to him by the mandatory rules of the law which would be applicable in the absence of choice
2. If no choice of law was made, the law of the country where the employee habitually carries out his work in performance of the contract
3. If no such country can be appointed, the law of the country in which the place of business through which he was engaged is situated
Unless it appears from the circumstances as a whole that the contract is more closely connected with another country
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

37. Case
Mr. Jackson, an Englishman, works for a German company which has a branch office in London. Mr. Jackson works as a sales representative of the company and he travels around the world for nine months a year.
Which law shall be applied to his employment relationship?
=>
The law provided by the contract
If there is no contractual choice-of-law,
and
Irrespective of the contract, the mandatory provisions of,
the law of England if the employment contract was concluded in the employer’s London office; if not,
the German law

38. MOST SIGNIFICANT RELATIONSHIP
The law of the state that has the most contacts with the parties and their transaction
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

39. Most significant relationship General factors: Which state’s law will
Be furthered the most by applying it to the case
Best promote the underlying policies of the legal subject-matter area involved
Specific factors:
Place of act or injury, nationality, domicile, residence, place of incorporation, where the relationship between the parties was centered, location of property etc.
GOVERNMENTAL
INTEREST
MOST SIGNIFICANT
RELATIONSHIP
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW

40. Case
Swedebuild Ag from Sweden has agreed to renovate the headquarters of Fox Inc. in New Orleans U.S., and now the work is almost finished. However, the buyer is not satisfied with the quality of work. The parties have a dispute on whether the work is defective and whether the buyer is entitled to remedies.
Under which law should the case be solved?

41. GOVERNMENTAL INTEREST
MOST SIGNIFICANT
RELATIONSHIP
The law of the forum state
The law of the state that has the most interest in determining the outcome of the dispute
STATUTORY
CHOICE – OF LAW
CONTRACTUAL
CHOICE – OF - LAW