Rome I. Rome Protocols

Author:Paul Lagarde
Profession:Professor Emeritus of the University of Paris I Pantheon-Sorbonne
Pages:128-160
SUMMARY

Rome Convention of 1980 on the Law applicable to Contractual Obligations

 
INDEX
CONTENT

    Paul Lagarde was bom in Rennes on 3 March 1934, and is Professor Emeritus of the University of Paris I Pantheon-Sorbonne, Editor of the Revue critique du droit international prive, and also a member of the Institute of International Law. He was co-rapporteur (with Mario Giuliano) on the Rome Convention of 19 June 1980.

    Main publications

    Droit international prive (collaboration with Henri Battifol), Vol. I; Eighth edition, 1993 Vol. II, Seventh edition, 1983.

    La nationalit franaise, Third edition, Dalloz, Paris, 1997.

    'Le principe de proximite dans le droit international prive contemporain', Recueil des cours de l'Academie de droit international, Vol. 196 (1986-1), pp. 1-237.

Page 128

The Rome Convention of 19 June 1980 on the Law applicable to Contractual Obligations is, after the Brussels Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, the second successful attempt to unify private international law within the European Union.

Moreover, in this respect, it occupies a special place in Community private international law. It is the only convention still in force, the others having been replaced by regulations, either after proving their effectiveness over many years, such as the 1968 Brussels Convention, or before even entering into force, such as the Brussels II Convention of 28 May 1998 or the Convention of 23 November 1995 on Insolvency Proceedings. It is also the only one which does not, strictly speaking, have its legal basis in the Treaty of Rome. Unlike the Brussels I Convention, which was based on Article 220 (now Article 293) of the Treaty and the Brussels II Convention, drawn up pursuant to Article K.3 of the Treaty on European Union (Maastricht), the Rome Convention is simply a convention concluded between the Member States of what was then the European Economic Community. In spirit, however, the Rome Convention is a Community convention and the question of whether to transform it into a regulation now arises.

This text refers to the origins of the convention (I), briefly analyses its content (II), introduces the protocols on its interpretation (III) and, finally, raises questions about its likely future (IV).

I Origins of the Rome Convention

Unification of the rules on jurisdiction by the Brussels Convention of 27 September 1968 necessitated, in order to avoid the danger of forum shopping resulting from the many choices of jurisdiction which the convention opened up, corresponding unification of the rules on conflict of laws. Hence, as early as 1970, the Permanent Representatives Committee (Coreper) decided to follow up an initiative by the Belgian Government and to set up a working party for the purpose.

The original ambition was to unify the rules on conflict of laws in all matters to which the Brussels Convention applied, with the exception of maintenancePage 129 obligations, which were then the subject of proceedings in the Hague Conference on Private International Law. The working party's remit, therefore, initially covered not only contractual obligations, but also extra-contractual obligations and the law on property and valuable securities. After a few exploratory studies, the working party very quickly postponed the rest of its work on property sine die. On the other hand, in 1972, it achieved a preliminary draft convention, drawn up by the six founding States of the European Economic Community, on the law applicable to contractual and non-contractual obligations. This preliminary draft was the subject of wide discussion and many scientific colloquia. It served as the basis of discussion for further negotiations with the three new States which joined the Community in 1973: Denmark, Ireland and the United Kingdom. The negotiations were to result in 1978 in a draft convention finalised in 1980 and limited to conflicts of laws relating to contractual obligations.

Non-contractual obligations were taken out of the draft for two main reasons. It had emerged that very long negotiations, the success of which was not ensured in advance, would be necessary to bring the United Kingdom representatives to abandon the Philipps v Eyre rule unjustifiably favouring the defendant in an action relating to liability by cumulative application of the lex loci delicti and the lex fori. In addition, it had to be recognised that the unification brought about by the preliminary draft would be largely illusory since the

Hague Conference had just drawn up two special conventions unifying conflicts of laws applicable to traffic accidents and accidents caused by products, and only some Member States of the European Economic Community were prepared to ratify them. This defect should be remedied in the not-too-distant future, since the Commission's Directorate-General for Justice and Home Affairs published a proposal for a regulation on the subject in May 2002.

The convention was signed in Rome on 19 June 1980 but entered into force only on 1 April 1991, after the seventh ratification. However, without waiting for the official entry into force, four signatory States had already unilaterally introduced the provisions of the convention into their national legislation: first Denmark (law of 9 May 1984), then Luxembourg (law of 27 March 1986), followed by the Federal Republic of Germany (law of 25 July 1986) and Belgium (law of 14 July 1987). Moreover, certain courts in other States, such as France and, in particular, the Netherlands, had already applied the convention in advance in the form of ratio scripta, although Article 17 thereof states that it is applicable only to contracts made after its entry into force. Since then, the convention has been ratified by the nine signatory States. It was extended to Greece by the Luxembourg Convention of 10 April 1984, to Spain and Portugal by the Funchal Convention of 18 May 1992, and finally to Austria, Finland and Sweden by the convention signed in Brussels on 29 October 1996.

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II Content of the Convention

Basically, the convention first had to adopt a position on the two classic major issues in this area: the role of freedom of choice in determining the law applicable and how to determine the law applicable when the parties have not exercised their right of choice. In addition to general solutions, the convention set special rules for contracts in which a weaker party had to be protected. It then attempted to find solutions for particular points which were the subject of discussion. However, beforehand, it had to define its scope.

1. The Scope of the Convention

Article 1 of the convention amply defines its scope. It states that its rules apply 'to contractual obligations in any situation involving a choice between the laws of different countries'. This formulation saves making the hazardous attempt to define an international contract, since, for the convention to apply, it is sufficient that a question arises as to the law governing the contract. The convention applies to all contracts, with the - very limited - exception of those listed in Article 1(2) and of insurance contracts covering risks situated in the territories of Community Member States, today governed by specific directives. Article 2 furthermore affirms the universal nature of the convention, which is therefore not restricted to intra-Community contractual relations.

2. Freedom of Choice

In Article 3, the convention very clearly sets out the principle of freedom of choice, while firmly upholding the other principle that the contract must be connected with the law of a certain State. The principle of freedom of choice goes hand in hand with the rule that the parties may choose the law of their contract without restriction and without the courts being able to claim any power to correct that choice based on the lack or inadequacy of a link between the contract and the State whose law has been chosen. In other words, the parties, in choosing a specific law, release themselves from the law which would have been applicable had they not made a choice, and particularly from its mandatory rules. That is the meaning of freedom of choice in private international law. Connected with the idea of freedom of choice, there is also the possibility of choosing a law after conclusion of the contract, provided that choice of law does not damage the rights of third parties (Article 3(2)), and the possibility of making a partial choice which includes a certain right to 'depeage.' However, the right to choose does not imply the right to evade all State law. The choice of a non-State law, such as the lex mercatoria or thePage 131 Unidroit principles, is not equivalent to a choice of law within the meaning of the convention and will produce an effect only within the limits authorised by the law objectively applicable where no choice has been made. The twofold consequence of the principle that the contract is necessarily governed by a body of law is, firstly, that once the choice of law has been made, the contract is subject to the mandatory rules of the law chosen, which may in some cases result in the contract being invalid and, secondly, that if the law chosen should be amended after conclusion of the contract and the new provisions are applicable to contracts in force, they will apply to the contract.

To be effective, the choice of law 'must be expressed or demonstrated [de faon certaine] by the terms of the contract or the circumstances of the case' (Article 3(1), second sentence). 'De faon certaine' is at least what the French version of the convention says and this is faithfully reproduced in the Spanish version ('de manera cierta'), but unfortunately it has been translated in different and less restrictive ways in the other languages: 'with reasonable certainty' in the English version, 'mit hinreichender Sicherheit' in the German version, 'in modo ragionevolmente certo' in the Italian version. These variations are regrettable since the threshold for moving from the conflict rule based on freedom of choice and the one based on the objective location of the contract is likely to shift according to the contracting State in which the matter is referred to the courts. The point on which major differences have already arisen is that of the scope to be given to a clause attributing jurisdiction to the courts of a certain State ('choice-of-forum clause'), unaccompanied by a clause relating to the choice of the law of that State. The English and German texts, unlike the French text, allow the interpretation that there is a tacit choice of the law of that State.

However, the convention lays down certain restrictions on freedom of choice. The first relates to purely internal contracts, i.e. those of which all the elements, except for the choice of law or tribunal, are located in one country only. Article 3(3) does not set aside the right to choose in such a case, but states that the choice cannot prejudice the application of the mandatory rules of the law of that country, defined as those which, according to that law, cannot be derogated from by contract.

A second restriction, which this time concerns all contracts, is constituted by the mandatory rules (French: 'lois de police',) referred to in Article 7. One of the most striking provisions of the convention stipulates that, under certain conditions, effect may be given, concurrently with the law chosen or with the applicable law where no law has been chosen, to the mandatory rules of another legal system, if and in so far as those rules must be applied whatever the law applicable to the contract. This means in fact, as the Court of Justice had occasion to point out in its Arblade judgment of 23 November 1999 (Joined Cases C-369/96 and C-376/96 [1999] ECR I-8453), 'national provisionsPage 132 compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the Member State concerned as to require compliance therewith by all persons present on the national territory of that Member State and all legal relationships within that State'. Provision has, however, been made for the right not to apply the mandatory rules in the case of a foreign law (Article 22).

Finally, the convention restricts freedom of choice when exercise of that freedom would have the effect of putting the weaker party at a disadvantage in certain consumer contracts (Article 5) and in employment contracts (Article 6). Rules to protect the consumer or the worker (for example, the nullity of unfair terms or the rules on dismissal) adopted in many States, including European Union Member States, would have no practical application in international relations if they could be countered by the free choice of a foreign law. Hence, in those types of contract and in the circumstances indicated below in Section 4, the convention lays down the rule that choice of law is lawful but that the consumer or worker must not thereby be deprived of the protection which he is guaranteed by the mandatory rules of the law which would be applicable to the contract if no choice has been made. It should be noted that this is close to the provisions of the Brussels I Regulation, which limits in such cases the possibility of stipulating choice-of-forum clauses.

3. Applicable Law Where no Choice has Been Made

Where the parties have not chosen the law applicable, the convention has adopted a method of objectively localising the contract, by designating the law of the country with which the contract is most closely connected (Article 4(1)). In this way, it has tried to rule out any attempt to determine what might have been the implicit or hypothetical will of the parties, which is necessarily unpredictable and based on conjecture, but also any use of fixed localisation criteria, such as the place of conclusion, which often has no meaningful connection with the centre of gravity of the contractual situation. The solution adopted is based on a sound method. So as not to leave it to the court to determine the applicable law solely by its own means or bind it by fixed criteria, the convention (Article 4(2)) has chosen to give priority to a significant piece of evidence - generally speaking, the habitual residence of the party effecting the characteristic performance - while allowing the court to disregard this 'if it appears from the circumstances as a whole that the contract is more closely connected with another country' (Article 4(5)).

Subject to that exception clause, the objective connection of the contract with the law of the party effecting the characteristic performance contributes considerable legal certainty. It also corresponds to a certain economic reality. Where a person, instead of contacting a supplier from his own country, prefers to call onPage 133 a foreign supplier, that person, it is said, accepts the risk of international trade and may as a rule expect that the contract will no longer be subject to his own law, but rather to the law according to which the supplier habitually contracts, that is the law of his habitual residence or of his establishment.

In order to function, the rule presupposes that the characteristic performance can be easily determined. The report accompanying the convention indicates that the characteristic performance is generally that for which payment is due, which does not cause a problem for most named contracts. In most bilateral contracts, in fact, a price must be paid: the price of goods in the case of a sale or the price of works in a works contract, the rent in the case of a lease, the ticket in the case of a transport contract, the premium in an insurance contract, the interest in a loan agreement, the fee in a licensing agreement, etc. The obligation to pay the price is therefore not specific to a type of contract. What is specific, on the other hand, is the obligation of the seller to supply the merchandise, of the contractor to carry out the works requested, of the lessor to provide the lessee with the use of the rented property, etc. In all these contracts, it is easy to determine the characteristic performance.

However, this is not always the case. In practice, there are a number of contractual operations, even relatively simple ones, which may give rise to hesitation. Commercial distribution contracts provide an interesting example. Whatever their form, they all aim to market the products of a certain undertaking on the market entrusted to the distributor. Hence, it might appear that it is the distributor who effects the characteristic performance. This is certainly true of the sales agent or commercial agent who, moreover, receives a price (salary or commission) in payment for his services. It is much more doubtful in the case of the licensee or franchisee. In their relations with their own customers they are - obviously - the ones who effect the characteristic performance, but, in their relations with their licensor or franchisor, the roles are often inverted. The licensor or franchisor himself provides significant services, particularly in the transfer of know-how, and often himself receives a fee, at least in the franchise agreement. Moreover, it is certainly in the interest of the licensor or franchisor to organise his distribution network according to one and the same system of law. Thus, opinions are divided on this point and it is noteworthy that the French Court of Cassation, in a judgment of 15 May 2001, ruled that the characteristic performance was that of the licensor. It would be good if the Court of Justice could settle this issue one day.

Where the characteristic performance cannot be determined, it is necessary to revert to the general principle and decide on a case-by-case basis with which country the contract is most closely connected. The typical example is that of an exchange in which both services could be described as characteristic,Page 134 which amounts to saying that neither of them is. One could also mention certain compensation contracts between banks or various complex contractual operations for which it is advisable, in the interests of legal certainty, to choose an applicable law in the contract itself.

The presumption in favour of the law of the party who effects the characteristic performance is not the only one set out in Article 4 of the convention. Contracts covering a right in immovable property or a right to use immovable property are logically connected, where no choice of law has been made, with the law in which the immovable property is situated (Article 4(3)) and contracts for the carriage of goods are covered by a special, rather complicated, rule (Article 4(4)).

All the connections set out in Article 4(2), (3) and (4) are subject, as already indicated, to an exception clause (Article 4(5)). It would be preferable if this clause could continue to be used, as its name indicates, only in quite exceptional cases. It has happened that some courts have used it improperly to revert to solutions which they used before the convention entered into force, particularly with regard to the provision of securities. However, such abuses are rare. As a legitimate example of the application of the exception clause, we may quote a certain decision excluding from the law of the country in which the immovable property was situated a dispute relating to a holiday let concluded between a lessor and a tenant both having their habitual residence in the forum State, presumed to be different from that in which the immovable property was situated.

4. Special Rules for Consumer Contracts and Employment Contracts

The fact that these contracts are regulated by the convention is indicated not only by the aforementioned restriction of the principle of free choice. Their special nature is also evident from the law applicable to them when no law is chosen.

For the consumer, the specification adopted is a preferential one. If the rule indicated by principle had been adopted, consumer contracts would, when no law is chosen, have been governed by the law applicable to the tradesman or professional approached by the consumer. It is that tradesman or professional that provides the service characteristic of the contract. Article 5 of the convention sets that solution aside and subjects the contract, when no law is chosen, to the law of the State in which the consumer habitually resides, which is presumed to be if not more favourable to the consumer at least more familiar to him and likely to protect him from surprises. That derogation solution may surprise the tradesman or professional, particularly when he is approached in his own country by a foreign consumer who is himself abroad. Accordingly, the convention has restricted the derogation from both the freedom of choicePage 135 and the objective specification of the law of the provider of the characteristic service to certain well-defined possibilities in which it is in fact the tradesman or professional who has taken the initiative that leads to the conclusion of a contract. That is the case (Article 5(2)): (i) where the conclusion of the contract was preceded in the country in which the consumer habitually resides by a specially made proposal or publicity; (ii) where the consumer's co-contractor received the order in the consumer's country (door-to-door selling); (iii) in the sale of goods when the consumer has gone to the seller's country in the context of a journey the seller with the aim of encouraging the consumer to conclude a sale. Those three situations are interpreted strictly and certain cases ruled on in Germany have suggested that they might perhaps be extended. Certain exclusions, such as real estate contracts and transport contracts, also restrict the scope of this article.

For the employee, it has been appreciated that the rule of principle enunciated in Article 4(2) is inappropriate, since it would result in the application of the law of the State of the employee's habitual residence at the time of the conclusion of the contract, which has no localisation value if the employer's establishment and the place where the work is performed are both in another State. Here Article 6 of the convention has more appropriately chosen a link of proximity (rather than a preferential one as in the case of the consumer) and principally opted for the law of the country in which the employee habitually performs his work. If an employee is posted to another country, the law changes only if the posting is definitive. If an employee does not habitually perform his work in a single country, the law applicable is, in principle, that of the country in which the establishment that recruited the employee is located. These specifications are subject to an exception clause framed on the same lines as that in Article 5(5).

As in the case of the restrictions on the freedom of choice, there is a degree of parallelism between the provisions of the Rome Convention and those of the Brussels I Regulation on employment contracts. The parallelism is less in the case of consumer contracts as the regulation takes account of contracts concluded by electronic means, which were unknown when the Rome Convention was negotiated.

5. Miscellaneous Matters
(a) Matters Relating to the Scope of the Law Applicable

Article 10 gives a non-exhaustive list of the matters governed by the law applicable to a contract. It expresses the desire not to encroach upon the field of procedural law, in particular as regards the assessment of damages consequent upon breach (Article 10(1)). The same observation may be made regardingPage 136 the recognition of the proof of contracts or acts intended to have legal effect, which is covered by Article 14. It will be noted that Article 10 (1) (e) makes the consequences of the nullity of a contract subject to the law of the contract, like the obligation to refund. That solution is understandable because the desire to be consistent results in the application of the same law both to the cause of nullity and to its consequences. Here, however, it is not strictly speaking a question of contractual obligations, precisely because there is no valid contract. For that reason, this provision is the subject of reservations on the part of certain Member States.

Special measures have been taken concerning consent and capacity. While consent and the material validity of a contract are governed by the law that would apply to it if it were valid (Article 8 (1)), a party who claims not to have given his consent, for example because he kept silent, may, however, rely upon the law of the State in which he habitually resides, if the effect of his conduct cannot reasonably be determined under the law presumed to govern the contract (Article 8(2)). As regards capacity, which in most continental legal systems is a matter of personal status, the convention does not regulate it directly but restricts itself to confirming a traditional solution dating from a ruling of 16 January 1861 by the French Supreme Court of Appeal in the Lizardi case, based on the theory of appearance to prevent a person who has concluded a contract in one State from invoking his incapacity resulting from the law of another State vis-a-vis a co-contractor who, in good faith, was unaware of that incapacity (Article 11).

The law applicable to the forms of acts is covered by the long Article 9. That provision lays down an alternative conflict rule which is favourable to the validity of an act. For it to be valid in form, it is sufficient for a contract to comply with the formal requirements of the law that governs its form or with those of the law of the country or countries in which the intentions of one or other of the parties to the contract were expressed. An exception is made for the form of consumer contracts governed by Article 5, which remains subject to the law of the State in which the consumer is habitually resident (Article 9(5)).

(b) Voluntary Assignment and Subrogation

These two triangular operations are covered by Articles 12 and 13 of the convention respectively. The idea common to those articles is that the transfer of a right by voluntary assignment or subrogation is subject to its own law, but that the situation of the debtor must not be affected by the transfer. In voluntary assignment, the own law of the transfer is the law of the assignment contract, i.e. the law chosen by common accord by the assignor and the assignee, and in subrogation it is the law that governed the duty of the third party who has satisfied the creditor and claims to have taken over the creditor's rights.

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The inviolability of the debtor's position means that relations between the assignor or the subrogated party, on the one hand, and the debtor, on the other hand, will be governed by the law which governed the original right, the subject of the transfer. Article 12 even provides that the law governing the right to which the assignment relates shall determine the conditions under which the assignment can be invoked against the debtor, but it leaves open the question of the law applicable to the conditions under which the assignment can be invoked against third parties.

III Interpretation of the Convention

The authors of the Rome Convention were well aware of the danger of divergent interpretations to which it was exposed. Accordingly, incorporating a provision that appeared in various United Nations conventions, they adopted an Article 18 that advised those interpreting the convention to take account of its international character and the desirability of achieving uniformity in its interpretation and application. In ajoint declaration, they hoped that jurisdiction in certain matters of interpretation would be conferred on the Court of Justice of the European Communities, as was done in the case of the 1968 Brussels Convention by the protocol of 3 June 1971.

Two protocols to that end were signed on 19 December 1988 after laborious negotiations. The fact that there are two protocols requires some explanation. That fact is the result of a political compromise intended to overcome the opposition of States resolutely hostile to interpretation by the Court of Justice and States just as resolutely in favour of Community interpretation, which is the only guarantee of uniform application of the convention in the contracting States. The first protocol lays down the conditions in which the courts of a contracting State can ask the Court of Justice for its interpretation of the convention. The main difference between this first protocol and the protocol of 3 June 1971 annexed to the Brussels Convention is that it does not oblige the Member States' supreme courts to ask the Court of Justice for its interpretation of the convention if they consider interpretation necessary before they can give a decision. The Rome Convention can be applied by a Member State's courts in a case concerning only the nationals of non-member countries, who are generally not very keen to have the outcome of their cases delayed for a preliminary ruling. Like the Rome Convention, this first protocol provides for its entry into force after seven ratifications.

Why were things not left there and why was a second protocol added? The reason was the desire to associate all Community States (12 at the time), including those which at the time had no intention of ever ratifying the firstPage 138 protocol, with the possibility offered to some of them of having recourse to preliminary interpretation by the Court of Justice. For that reason, the third sentence of Article 6(1) of the first protocol provides that the same first protocol, even if ratified by 7 States, shall not in any circumstances enter into force before the ratification of the second protocol by the 12 Member States. The fears aroused by this complex mechanism proved to be well based, since at the time of writing (July 2003) one signature is still missing from the second protocol and the Court of Justice therefore still has no jurisdiction to interpret the convention.

IV The convention's Prospects

The convention was well received and regarded as a real step forward with respect to the previous situation, but it has nevertheless suffered from competition from other instruments which have undermined the consistency of its solutions and might bring about its revision.

A Competition From Other Instruments

Competition from other texts has to a certain extent been provoked by the convention itself, with the aim of preventing conflicts with existing instruments or future instruments, whether international conventions or Community legislation.

1. International conventions

Article 21 of the convention includes a clause on compatibility with other, existing or future conventions, to which a contracting State is or will be a party. That apparent slackness is, however, counterbalanced by the restriction on the power of the contracting States to conclude in future or even become a member of any multilateral private international law convention in the same field. That restriction, already provided for in Article 24 in the form of a conciliation procedure, is of increasing importance today because of AETR case-law (Court of Justice, 31 March 1971) which gives the Community exclusive powers to conclude treaties in the fields in which it has laid down common rules.

It does not, however, settle the problem of existing conventions, the maintenance in force of which, for those States that are party to them, disrupts the unity of the system that ought to have been produced by the Rome Convention. We have already seen that the existence of two Hague Conventions, onPage 139 the Law applicable to Traffic Accidents and on Products Liability, largely accounted for the abandoning of the provisions of the 1972 preliminary draft on extra-contractual obligations.

As regards contractual matters, the conflict between conventions above all concerns sales contracts. The Rome Convention has in fact to combine with the Hague Convention of 15 June 1955 on the Law governing Transfer of Title in International Sale of Goods and with that of 14 March 1978 on the Law applicable to Agency.

The 1955 Hague Convention concerning the sale of goods at present binds, amongst others, five States that are also party to the Rome Convention (Denmark, Finland, France, Italy and Sweden). While, theoretically, where the parties have not chosen the law of the contract, the Hague Convention uses the law of the seller's place of habitual residence and is therefore in that respect in harmony with the characteristic-service system set up by the Rome Convention, it diverges from it on various points. Considering only the most important, it includes no general exception clause, providing only for the case of very frequent application of the buyer's law, which does not necessarily correspond to the exception clause in the Rome Convention. Above all, however, the Hague Convention applies to sales to consumers and it may be supposed that in matters of sales it renders inapplicable the conflict rule protecting the consumer laid down in Article 5 of the Rome Convention.

One can only regret that in the case of a contract as fundamental as a contract of sale the Member States of the European Economic Community should not have been able to agree on a uniform conflict rule, some applying the Hague Convention and others the Rome Convention. It would be desirable for those States to adopt a common position vis-a-vis the Hague Convention, either denouncing it, as Belgium did recently, supporting it or even all ratifying the more recent Hague Convention of 22 December 1986, which is intended to replace that of 1955 but has not yet entered into force. A basic solution would be for the States party to the Hague Convention to make the declaration provided for in the Final Act of the XIVth session of the Hague Conference in 1980 to the effect that 'the Convention of 15 June 1955 on the Law applicable to International Sales of Goods does not prevent States Parties from applying special rules on the law applicable to consumer sales'. All doubt would thereby be removed regarding the uniform application of Article 5 of the Rome Convention in all the contracting States.

Similar comments can be made regarding the 1978 Hague Convention on the Law applicable to Agency, which is in force in three States of the European Union (France, the Netherlands and Portugal), to encourage the ratification of that convention by all the States of the Union.

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2. Community Legislation

The position of the Rome Convention vis-a-vis Community legislation, especially Community secondary legislation, is even more delicate. Article 20, which does no more than repeat a rule laid down in the second paragraph of Article 57 of the Brussels Convention as revised in 1978, recognises the precedence over the convention of 'provisions which, in relation to particular matters, lay down choice-of-law rules relating to contractual obligations and which are or will be contained in acts of the institutions of the European Communities or in national laws harmonised in implementation of such acts'.

The scope of such a provision was not known at the time. Since then, a great many directives have been adopted on insurance contracts and also to protect consumers and workers who are sent to another country to perform a service, which frequently include conflict-of-law rules or at least provisions determining the scope in the space of the substantive provisions which are the main object thereof. Unfortunately, those provisions, which sometimes vary from one directive to another, are not generally in harmony with those of the Rome Convention, which produces a degree of discord, aggravated by the divergent transposition of those provisions into national law.

In addition, the great freedoms instituted by the Rome Treaty, principally the freedom of movement of persons and of goods, and the right of establishment and the freedom to provide services, are sometimes invoked to influence the results to which the law applicable leads under the Rome Convention or even sometimes against the conflict rule.

Such developments have meant that the idea that it would be appropriate to tidy up, by revising the Rome Convention, has gained some credit.

B Revision of the Rome Convention?

On 14 January 2003, the European Commission published on its website a Green Paper on the conversion of the Rome Convention of 1980 on the Law applicable to Contractual Obligations into a Community instrument and its modernisation. That document invited answers to about 20 questions drafted in a very open fashion. It is too early to say what the result will be. It is simply known that Austria had made its accession to the Rome Convention by the convention of 29 October 1996 conditional upon the revision of Article 5 on consumer protection. It is therefore probable that if there is a revision it will, in any case, involve that article, which is also the one most threatened by the directives adopted since the entry into force of the convention. It is also probable that that possible revision will convert the convention into a regulation, like the Brussels I and II Conventions, rather than a directive, for reasons of enhanced legal certainty and uniform application in the Member States.

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Convention on the law applicable to contractual obligations (consolidated version)

First Protocol on the interpretation of the 1980 Convention by the Court of Justice (consolidated version)

Second Protocol conferring on the Court of Justice powers to interpret the 1980 Convention (consolidated version)

(98/C 27/02)

Preliminary Note

The signing on 29 November 1996 of the Convention on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the Rome Convention on the law applicable to contractual obligations and to the two Protocols on its interpretation by the Court of Justice has made it desirable to produce a consolidated version of the Rome convention and of those two Protocols.

These texts are accompanied by three Declarations, one made in 1980 with regard to the need for consistency between measures to be adopted on choice-of-law rules by the Community and those under the Convention, a second, also made in 1980, on the interpretation of the Convention by the Court of Justice and a third, made in 1996, concerning compliance with the procedure provided for in Article 23 of the Rome Convention as regards carriage of goods by sea.

The text printed in this edition was drawn up by the General Secretariat of the Council, in whose archives the originals of the instruments concerned are deposited. It should be noted, however, that this text has no binding force. The official texts of the instruments consolidated are to be found in the following Official Journals.

Language Version of the Official Journal
1980 Convention
1984 Accession
1988 First Protocol
1988 Second Protocol
1992 Accession Convention
1996 Accession Convention
German L 266
9.10.1980
p.1
L 146
31.5.1984
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p. 17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
English L 266
9.10.1980
p.1
L 146
31.5.1984
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p. 17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
Danish L 266
9.10.1980
p.1
L 146
31.5.1984
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p. 17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
French L 266
9.10.1980
p.1
L 146
31.5.1984
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p. 17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
Greek L 146
31.5.1984
p.7
L 146
31.5.1984
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p. 17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
Irish Special Edition
(L 266)
Special Edition
(L 146)
Special Edition
(L 48)
Special Edition
(L 48)
Special Edition
(L 333)
Special Edition
(C 15)
Italian L 266
9.10.1980
p.1
L 146
31.5.1984
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p. 17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10

Page 142

Language Version of the Official Journal
1980 Convention
1984 Accession
1988 First Protocol
1988 Second Protocol
1992 Accession Convention
1996 Accession Convention
Dutch L 266
9.10.1980
p.1
L 146
31.5.194
p.1
L 48
20.2.1989
p.1
L 48
20.2.1989
p.17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
Spanish Special Edition
Chapter 1
Volume 3
p.36 (See also OJ L 333, p. 17)
Special Edition
Chapter 1
Volume 4
p.36 (See also OJ L 333 p.72)
L 48
20.2.1989
p.1
L 48
20.2.1989
p.17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
Portuguese Special Edition
Chapter 1
Volume 3
p.36 (See also OJ L 333, p. 17)
Special Edition
Chapter 1
Volume 4
p.72 (See also OJ L 333 p.74)
L 48
20.2.1989
p.1
L 48
20.2.1989
p.17
L 333
18.11.1992
p.1
C 15
15.1.1997
p.10
Finnish C 15
15.1.1997
p.70
C 15
15.1.1997
p.66
C 15
15.1.1997
p. 60
C 15
15.1.1997
p.64
C 15
15.1.1997
p.68
C 15
15.1.1997
p.53
Swedish C 15
15.1.1997
p.70
C 15
15.1.1997
p.66
C 15
15.1.1997
p. 60
C 15
15.1.1997
p.64
C 15
15.1.1997
p.68
C 15
15.1.1997
p.53

Page 143

Annex Convention

on the law applicable to contractual obligations1

opened for signature in Rome on 19 June 1980

Preamble

THE HIGH CONTRACTING PARTIES to the Treaty establishing the European Economic Community,

ANXIOUS to continue in the field of private international law the work of unification of law which has already been done within the Community, in particular in the field of jurisdiction and enforcement of judgments,

WISHING to establish uniform rules concerning the law applicable to contractual obligations,

Have Agreed as Follows:
Title I Scope of the Convention
Article 1 Scope of the Convention
  1. The rules of this Convention shall apply to contractual obligations in any situation involving a choice between the laws of different countries.

  2. They shall not apply to:

    (a) questions involving the status or legal capacity of natural persons, without prejudice to Article 11;

    (b) contractual obligations relating to:

    - wills and succession,

    - rights in property arising out of a matrimonial relationship,

    - rights and duties arising out of a family relationship, parentage, marriage or affinity, including maintenance obligations in respect of children who are not legitimate;

    (c) obligations arising under bills of exchange, cheques and promissory notes and other negotiable instruments to the extent that the obligations under such other negotiable instruments arise out of their negotiable character;

    (d) arbitration agreements and agreements on the choice of court;

    (c) questions governed by the law of companies and other bodies corporate or unincorporate such as the creation, by registration or otherwise, legal capacity, internal organization or winding up of companies and other bodies corporate or unincorporate and the personal liability of officers and members as such for the obligations of the company or body;

    (f) the question whether an agent is able to bind a principal, or an organ to bind a company or body corporate or unincorporate, to a third party;

    (g) the constitution of trusts and the relationship between settlors, trustees and beneficiaries;

    (h) evidence and procedure, without prejudice to Article 14.

  3. The rules of this Convention do not apply to contracts of insurance which cover risks situated in the territories of the Member States of the EuropeanPage 144 Economic Community. In order to determine whether a risk is situated in those territories the court shall apply its internal law.

  4. The proceeding paragraph does not apply to contracts of re-insurance.

Article 2 Application of Law of Non-Contracting States

Any law specified by this Convention shall be applied whether or not it is the law of a Contracting State.

Title II Uniform Rules
Article 3 Freedom of Choice
  1. A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or a part only of the contract.

  2. The parties may at any time agree to subject the contract to a law other than that which previously governed it, whether as a result of an earlier choice under this Article or of other provisions of this Convention. Any variation by the parties of the law to be applied made after the conclusion of the contract shall not prejudice its formal validity under Article 9 or adversely affect the rights of third parties.

  3. The fact that the parties have chosen a foreign law, whether or not accompanied by the choice of a foreign tribunal, shall not, where all the other elements relevant to the situation at the time of the choice are connected with one country only, prejudice the application of rules of the law at the country which cannot be derogated from by contract, hereinafter called 'mandatory rules'.

  4. The existence and validity of the consent of the parties as to the choice of the applicable law shall be determined in accordance with the provisions of Articles 8, 9 and 11.

Article 4 Applicable Law in the Absence of Choice
  1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law of the country with which it is most closely connected. Nevertheless, a separable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.

  2. Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration. However, if the contract is entered into in the course of that party's trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other than the principal place of business, the country in which that other place of business is situated.

  3. Notwithstanding the provisions of paragraph 2 of this Article, to the extent that the subject matter of the contract is a right in immovable property or a right to use immovable property it shall be presumed that the contract is most closely connected with the country where the immovable property is situated.

  4. A contract for the carriage of goods shall not be subject to the presumption in paragraph 2. In such a contract if the country in which, at the time the contract is concluded, the carrier has his principal place of business is also the country in which the place of loading or the place of discharge or the principal place of business of the consignor is situated, it shall be presumed that the contract is most closely connected with that country. In applying this paragraph single voyage charter-parties and other contracts the main purpose of which is the carriage of goods shall be treated as contracts for the carriage of goods.

  5. Paragraph 2 shall not apply if the characteristic performance cannot be determined, and the presumptions in paragraphs 2, 3 and 4 shall be disregarded if it appears from the circumstances as a whole that the contract is more closely connected with another country.

Article 5 Certain Consumer Contracts
  1. This Article applies to a contract the object of which is the supply of goods or services to a person ('the consumer') for a purpose which can be regarded as being outside his trade or profession, or a contract for the provision of credit for that object.

  2. Notwithstanding the provisions of Article 3, a choice of law made by the parties shall not have the result of depriving the consumer of the protectionPage 145 afforded to him by the mandatory rules of the law of the country in which he has his habitual residence:

    - if in that country the conclusion of the contract was preceded by a specific invitation addressed to him or by advertising, and he had taken in that country all the steps necessary on his part for the conclusion of the contract, or

    - if the other party or his agent received the consumer's order in that country, or

    - if the contract is for the sale of goods and the consumer travelled from that country to another country and there gave his order, provided that the consumer's journey was arranged by the seller for the purpose of inducing the consumer to buy.

  3. Notwithstanding the provisions of Article 4, a contract to which this Article applies shall, in the absence of choice in accordance with Article 3, be governed by the law of the country in which the consumer has his habitual residence if it is entered into in the circumstances described in paragraph 2 of this Article.

  4. This Article shall not apply to:

    (a) a contract of carriage;

    (b) a contract for the supply of services where the services are to be supplied to the consumer exclusively in a country other than that in which he has his habitual residence.

  5. Notwithstanding the provisions of paragraph 4, this Article shall apply to a contract which, for an inclusive price, provides for a combination of travel and accommodation.

Article 6 Individual Employment Contracts
  1. Notwithstanding the provisions of Article 3, in a contract of employment a choice of law made by the parties 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 under paragraph 2 in the absence of choice.

  2. Notwithstanding the provisions of Article 4, a contract of employment shall, in the absence of choice in accordance with Article 3, be governed:

(a) by the law of the country in which the employee habitually carries out his work in performance of the contract, even if he is temporarily employed in another country; or

(b) if the employee does not habitually carry out his work in any one country, by 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, in which case the contract shall be governed by the law of that country.

Article 7 Mandatory Rules
  1. When applying under this Convention the law of a country, effect may be given to the mandatory rules of the law of another country with which the situation has a close connection, if and in so far as, under the law of the latter country, those rules must be applied whatever the law applicable to the contract. In considering whether to give effect to these mandatory rules, regard shall be had to their nature and purpose and to the consequences of their application or non-application.

  2. Nothing in this Convention shall restrict the application of the rules of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the contract.

Article 8 Material Validity
  1. The existence and validity of a contract, or of any term of a contract, shall be determined by the law which would govern it under this Convention if the contract or term were valid.

  2. Nevertheless a party may rely upon the law of the country in which he has his habitual residence to establish that he did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with the law specified in the preceding paragraph.

Article 9 Formal Validity
  1. A contract concluded between persons who are in the same country is formally valid if it satisfies the formal requirements of the law which governs it under this Convention or of the law of the country where it is concluded.

    Page 146

  2. A contract concluded between persons who are in different countries is formally valid if it satisfies the formal requirements of the law which governs it under this Convention or of the law of one of those countries.

  3. Where a contract is concluded by an agent, the country in which the agent acts is the relevant country for the purposes of paragraphs 1 and 2.

  4. An act intended to have legal effect relating to an existing or contemplated contract is formally valid if it satisfies the formal requirements of the law which under this Convention governs or would govern the contract or of the law of the country where the act was done.

  5. The provisions of the preceding paragraphs shall not apply to a contract to which Article 5 applies, concluded in the circumstances described in paragraph 2 of Article 5. The formal validity of such a contract is governed by the law of the country in which the consumer has his habitual residence.

  6. Notwithstanding paragraphs 1 to 4 of this Article, a contract the subject matter of which is a right in immovable property or a right to use immovable property shall be subject to the mandatory requirements of form of the law of the country where the property is situated if by that law those requirements are imposed irrespective of the country where the contract is concluded and irrespective of the law governing the contract.

Article 10 Scope of Applicable Law
  1. The law applicable to a contract by virtue of Articles 3 to 6 and 12 of this Convention shall govern in particular:

    (a) interpretation;

    (b) performance;

    (c) within the limits of the powers conferred on the court by its procedural law, the consequences of breach, including the assessment of damages in so far as it is governed by rules of law;

    (d) the various ways of extinguishing obligations, and prescription and limitation of actions;

    (e) the consequences of nullity of the contract.

  2. In relation to the manner of performance and the steps to be taken in the event of defective performance regard shall be had to the law of the country in which performance takes place.

Article 11 Incapacity

In a contract concluded between persons who are in the same country, a natural person who would have capacity under the law of that country may invoke his incapacity resulting from another law only if the other party to the contract was aware of this incapacity at the time of the conclusion of the contract or was not aware thereof as a result of negligence.

Article 12 Voluntary Assignment
  1. The mutual obligations of assignor and assignee under a voluntary assignment of a right against another person ('the debter') shall be governed by the law which under this Convention applies to the contract between the assignor and assignee.

  2. The law governing the right to which the assignment relates shall determine its assignability, the relationship between the assignee and the debtor, the conditions under which the assignment can be invoked against the debtor and any question whether the debtor's obligations have been discharged.

Article 13 Subrogation
  1. Where a person ('the creditor') has a contractual claim upon another ('the debtor'), and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person's duty to satisfy the creditor shall determine whether the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship and, if so, whether he may do so in full or only to a limited extent.

  2. The same rule applies where several persons are subject to the same contractual claim and one of them has satisfied the creditor.

Article 14 Burden of Proof, etc
  1. The law governing the contract under this Convention applies to the extent that it contains, in the law of contract, rules which raise presumptions of law or determine the burden of proof.

  2. A contract or an act intended to have legal effect may be proved by any mode of proof recognized by the law of the forum or by any of the laws referred to in Article 9 under which that contract or act is formally valid, provided that such mode of proof can be administered by the forum.

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Article 15 Exclusion of Convoi

The application of the law of any country specified by this Convention means the application of the rules of law in force in that country other than its rules of private international law.

Article 16 'Ordre Public'

The application of a rule of the law of any country specified by this Convention may be refused only if such application is manifestly incompatible with the public policy ('ordre public') of the forum.

Article 17 No Retrospective Effect

This Convention shall apply in a Contracting State to contracts made after the date on which this Convention has entered into force with respect to that State.

Article 18 Uniform Interpretation

In the interpretation and application of the preceding uniform rules, regard shall be had to their international character and to the desirability of achieving uniformity in their interpretation and application.

Article 19 States With More than One Legal System
  1. Where a State comprises several territorial units each of which has its own rules of law in respect of contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Convention.

  2. A State within which different territorial units have their own rules of law in respect of contractual obligations shall not be bound to apply this Convention to conflicts solely between the laws of such units.

Article 20 Precedence of Community Law

This Convention shall not affect the application of provisions which, in relation to particular matters, lay down choice of law rules relating to contractual obligations and which are or will be contained in acts of the institutions of the European Communities or in national laws harmonized in implementation of such acts.

Article 21 Relationship With Other Conventions

This Convention shall not prejudice the application of international conventions to which a Contracting State is, or becomes, a party.

Article 22 Reservations
  1. Any Contracting State may, at the time of signature, ratification, acceptance or approval, reserve the right not to apply:

    (a) the provisions of Article 7 (1);

    (b) the provisions of Article 10 (1) (e).

  2. ...2

  3. Any Contracting State may at any time withdraw a reservation which it has made; the reservation shall cease to have effect on the first day of the third calendar month after notification of the withdrawal.

Title III Final Provisions
Article 23
  1. If, after the date on which this Convention has entered into force for a Contracting State, that State wishes to adopt any new choice of law rule in regard to any particular category of contract within the scope of this Convention, it shall communicate its intention to the other signatory States through the Secretary-General of the Council of the European Communities.

  2. Any signatory State may, within six months from the date of the communication made to the Secretary-General, request him to arrange consultations between signatory States in order to reach agreement.

  3. If no signatory State has requested consultations within this period or if within two years following the communication made to the Secretary-General no agreement is reached in the course of consultations, the Contracting State concerned may amend its law in the manner indicated. The measures taken by that State shall be brought to the knowledge of the other signatory States through the Secretary-General of the Council of the European Communities.

Page 148

Article 24
  1. If, after the date on which this Convention has entered into force with respect to a Contracting State, that State wishes to become a party to a multilateral convention whose principal aim or one of whose principal aims is to lay down rules of private international law concerning any of the matters governed by this Convention, the procedure set out in Article 23 shall apply. However, the period of two years, referred to in paragraph 3 of that Article, shall be reduced to one year.

  2. The procedure referred to in the preceding paragraph need not be followed if a Contracting State or one of the European Communities is already a party to the multilateral convention, or if its object is to revise a convention to which the State concerned is already a party, or if it is a convention concluded within the framework of the Treaties establishing the European Communities.

Article 25

If a Contracting State considers that the unification achieved by this Convention is prejudiced by the conclusion of agreements not covered by Article 24 (1), that State may request the Secretary-General of the Council of the European Communities to arrange consultations between the signatory States of this Convention.

Article 26

Any Contracting State may request the revision of this Convention. In this event a revision conference shall be convened by the President of the Council of the European Communities.

Article 27
Article 28
  1. This Convention3 shall be open from 19 June 1980 for signature by the States party to the Treaty establishing the European Economic Community.

  2. This Convention shall be subject to ratification, acceptance or approval by the signatory States. The instruments of ratification, acceptance or approval shall be deposited with the Secretary-General of the Council of the European Communities4.

Article 29
  1. This Convention5 shall enter into force on the first day of the third month following the deposit of the seventh instrument of ratification, acceptance or approval.

  2. This Convention shall enter into force for each signatory State ratifying, accepting or approving at a later date on the first day of the third month following the deposit of its instrument of ratification, acceptance or approval.

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Article 30
  1. This Convention shall remain in force for 10 years from the date of its entry into force in accordance with Article 29 (1), even for States for which it enters into force at a later date.

  2. If there has been no denunciation it shall be renewed tacitly every five years.

  3. A Contracting State which wishes to denounce shall, not less than six months before the expiration of the period of 10 or five years, as the case may be, give notice to the Secretary-General of the Council of the European Communities. Denunciation may be limited to any territory to which the Convention has been extended by a declaration under Article 27 (2)6.

  4. The denunciation shall have effect only in relation to the State which has notified it. The Convention will remain in force as between all other Contracting States.

Article 31

The Secretary-General7 of the Council of the European Communities shall notify the States party to the Treaty establishing the European Economic Community of:

(a) the signatures;

(b) deposit of each instrument of ratification, acceptance or approval;

(c) the date of entry into force of this Convention;

(d) communications made in pursuance of Articles 23, 24, 25, 26 and 308;

(e) the reservations and withdrawals of reservations referred to in Article 22.

Article 32

The Protocol annexed to this Convention shall form an integral part thereof.

Article 33

This Convention9, drawn up in a single original in the Danish, Dutch, English, French, German, Irish and Italian languages, these texts being equally authentic, shall be deposited in the archives of the Secretariat of the Council of the European Communities. The Secretary-General shall transmit a certified copy thereof to the Government of each signatory State.

Page 150

In witness whereof the undersigned, being duly authorized thereto, having signed this Convention.

Done at Rome on the nineteenth day of June in the year one thousand nine hundred and eighty.

[Signatures of the plenipotentiaries]

Page 151

Protocol

The High10 Contracting Parties have agreed upon the following provision which shall be annexed to the Convention:

'Notwithstanding the provisions of the Convention, Denmark, Sweden and Finland may retain national provisions concerning the law applicable to questions relating to the carriage of goods by sea and may amend such provisions without following the procedure provided for in Article 23 of the Convention of Rome. The national provisions applicable in this respect are the following:

- in Denmark, paragraphs 252 and 321 (3) and (4) of the "Solov" (maritime law),

- in Sweden, Chapter 13, Article 2 (1) and (2), and Chapter 14, Article 1 (3), of "sjolagen" (maritime law),

- in Finland, Chapter 13, Article 2 (1) and (2), and Chapter 14, Article 1 (3), of "merilaki"/"sjlagen" (maritime law).'

In witness whereof the undersigned, being duly authorized thereto, have signed this Protocol.

Done at Rome on the nineteenth day of June in the year one thousand nine hundred and eighty.

[Signatures of the "Plenipotentiaries]

Page 152

Joint Declaration

At the time of the signature of the Convention on the law applicable to contractual obligations, the Governments of the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, the French Republic, Ireland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands and the United Kingdom of Great Britain and Northern Ireland,

  1. anxious to avoid, as far as possible, dispersion of choice of law rules among several instruments and differences between these rules, express the wish that the institutions of the European Communities, in the exercise of their powers under the Treaties by which they were established, will, where the need arises, endeavour to adopt choice of law rules which are as far as possible consistent with those of this Convention;

  2. declare their intention as from the date of signature of this Convention until becoming bound by Article 24, to consult with each other if any one of the signatory States wishes to become a party to any convention to which the procedure referred to in Article 24 would apply;

  3. having regard to the contribution of the Convention on the law applicable to contractual obligations to the unification of choice of law rules within the European Communities, express the view that any State which becomes a member of the European Communities should accede to this Convention.

In witness whereof the undersigned, being duly authorized thereto, have signed this Joint Declaration.

Done at Rome on the nineteenth day of June in the year one thousand nine hundred and eighty.

[Signatures of the Plenipotentiaries]

Page 153

Joint Declaration

The Governments of the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, the French Republic, Ireland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands and the United Kingdom of Great Britain and Northern Ireland,

On signing the Convention on the law applicable to contractual obligations; Desiring to ensure that the Convention is applied as effectively as possible;

Anxious to prevent differences of interpretation of the Convention from impairing its unifying effect;

Declare themselves ready:

  1. to examine the possibility of conferring jurisdiction in certain matters on the Court of Justice of the European Communities and, if necessary, to negotiate an agreement to this effect;

  2. to arrange meetings at regular intervals between their representatives.

In witness whereof the undersigned, being duly authorized thereto, have signed this Joint Declaration.

Done at Rome on the nineteenth day of June in the year one thousand nine hundred and eighty.

[Signatures of the Plenipotentiaries]

Page 154

First Protocol

on the interpretation11 by the Court of Justice of the European Communities of the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980

THE HIGH CONTRACTING PARTIES TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY,

HAVING REGARD to the Joint Declaration annexed to the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980,

HAVE DECIDED to conclude a Protocol conferring jurisdiction on the Court of Justice of the European Communities to interpret that Convention, and to this end have designated as their Plenipotentiaries:

[Plenipotentiaries designated by the Member States]

WHO, meeting within the Council of the European Communities, having exchanged their full powers, found in good and due form,

Have Agreed as Follows
Article 1

The Court of Justice of the European Communities shall have jurisdiction to give rulings on the interpretation of:

(a) the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980, hereinafter referred to as 'the Rome Convention';

(b) the Convention on accession to the Rome Convention by the States which have become Members of the European Communities since the date on which it was opened for signature;

(c) this Protocol.

Article 2

Any of the courts referred to below may request the Court of Justice to give a preliminary ruling on a question raised in a case pending before it and concerning interpretation of the provisions contained in the instruments referred to in Article 1 if that court considers that a decision on the question is necessary to enable it to give judgment:

(a) - in Belgium:

'la Cour de cassation' ('het Hof van Cassatie') and 'le Conseil d'Etat' ('de Raad van State'),

- in Denmark: 'Hojesteret',

- in the Federal Republic of Germany: 'die obersten Gerichtshofe des Bundes',

- in Greece:

Ta antata Dikastria

- in Spain:

'el Tribunal Supremo',

- in France:

'la Cour de cassation' and 'le Conseil d'Etat',

- in Ireland:

the Supreme Court,

- in Italy:

'la Corte suprema di cassazione' and 'il Consiglio di Stato',

- in Luxembourg:

'la Cour Superieure de Justice', when sitting as 'Cour de cassation',

- in Austria:

the 'Oberste Gerichtshof, the 'Verwaltungs-gerichtshof and the 'Verfassungsgerichtshof,

- in the Netherlands: 'de Hoge Raad',

- in Portugal:

'o Supremo Tribunal de Justica' and 'o Supremo Tribunal Administrativo',

Page 155

- in Finland:

'korkein oikeus/hogsta domstolen', 'korkein hallinto-oikeus/hogsta forvaltningsdomstolen', 'markkinatuomioistuin/marknadsdomstolen' and 'tyotuomioistuin/arbetsdomstolen',

- in Sweden:

'Hogsta domstolen', 'Regeringsratten', 'Arbets-domstolen' and 'Marknadsdomstolen',

- in the United Kingdom:

the House of Lords and other courts from which no further appeal is possible;

(b) the courts of the Contracting States when acting as appeal courts.

Article 3
  1. The competent authority of a Contracting State may request the Court of Justice to give a ruling on a question of interpretation of the provisions contained in the instruments referred to in Article 1 if judgments given by courts of that State conflict with the interpretation given either by the Court of Justice or in a judgment of one of the courts of another Contracting State referred to in Article 2. The provisions of this paragraph shall apply only to judgments which have become res judicata.

  2. The interpretation given by the Court of Justice in response to such a request shall not affect the judgments which gave rise to the request for interpretation.

  3. The Procurators-General of the Supreme Courts of Appeal of the Contracting States, or any other authority designated by a Contracting State, shall be entitled to request the Court of Justice for a ruling on interpretation in accordance with paragraph 1.

  4. The Registrar of the Court of Justice shall give notice of the request to the Contracting States, to the Commission and to the Council of the European Communities; they shall then be entitled within two months of the notification to submit statements of case or written observations to the Court.

  5. No fees shall be levied or any costs or expenses awarded in respect of the proceedings provided for in this Article.

Article 4
  1. Except where this Protocol otherwise provides, the provisions of the Treaty establishing the European Economic Community and those of the Protocol on the Statute of the Court of Justice annexed thereto, which are applicable when the Court is requested to give a preliminary ruling, shall also apply to any proceedings for the interpretation of the instruments referred to in Article 1.

  2. The Rules of Procedure of the Court of Justice shall, if necessary, be adjusted and supplemented in accordance with Article 188 of the Treaty establishing the European Economic Community.

Article 5

This Protocol12 shall be subject to ratification by the Signatory States. The instruments of ratification shall be deposited with the Secretary-General of the Council of the European Communities.

Article 6
  1. To enter13 into force, this Protocol must be ratified by seven States in respect of which the Rome Convention is in force. This Protocol shall enter into force on the first day of the third month following the deposit of the instrument of ratification by the last such State to take this step. If, however, the Second Protocol conferring on the Court of Justice of the European Communities certain powers to interpret the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980, concluded in Brussels on 19 December 198814 enters into force on a later date, this Protocol shall enter into force on the date of entry into force of the Second Protocol.

  2. Any ratification subsequent to the entry into force of this Protocol shall take effect on the first day of the third month following the deposit of the instrument of ratification, provided that the ratification, acceptance or approval of the Rome Convention by the State in question has become effective.

Article 7

The Secretary-General15 of the Council of the European Communities shall notify the Signatory States of:

(a) the deposit of each instrument of ratification;

(b) the date of entry into force of this Protocol;

(c) any designation communicated pursuant to Article 3 (3);

(d) any communication made pursuant to Article 8.

Article 8

The Contracting States shall communicate to the Secretary-General of the Council of the European Communities the texts of any provisions of their laws which necessitate an amendment to the list of courts in Article 2 (a).

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Article 9

This Protocol shall have effect for as long as the Rome Convention remains in force under the conditions laid down in Article 30 of that Convention.

Article 10

Any Contracting State may request the revision of this Protocol. In this event, a revision conference shall be convened by the President of the Council of the European Communities.

Article 11

This Protocol16, drawn up in a single original in the Danish, Dutch, English, trench, German, Greek, Irish, Italian, Portuguese and Spanish languages, all 10 texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Communities. The Secretary-General shall transmit a certified copy to the Government of each Signatory State.

In witness whereof, the undersigned Plenipotentiaries have affixed their signatures below this Protocol.

Done at Brussels on the nineteenth day of December in the year one thousand nine hundred and eighty-eight.

[Signatures of the Plenipotentiaries]

Page 157

Joint Declarations
Joint Declaration

The Governments of the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland,

On signing the First Protocol on the interpretation by the Court of Justice of the European Communities of the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980,

Desiring to ensure that the Convention is applied as effectively and as uniformly as possible,

Declare themselves ready to organize, in cooperation with the Court of Justice of the European Communities, an exchange of information on judgments which have become res judicata and have been handed down pursuant to the Convention on the law applicable to contractual obligations by the courts referred to in Article 2 of the said Protocol. The exchange of information will comprise:

- the forwarding to the Court of Justice by the competent national authorities of judgments handed down by the courts referred to in Article 2 (a) and significant judgments handed down by the courts referred to in Article 2 (b),

- the classification and the documentary exploitation of these judgments by the Court of Justice including, as far as necessary, the drawing up of abstracts and translations, and the publication of judgments of particular importance,

- the communication by the Court of Justice of the documentary material to the competent national authorities of the States parties to the Protocol and to the Commission and the Council of the European Communities.

In witness whereof, the undersigned Plenipotentiaries have affixed their signature below this Joint Declaration.

Done at Brussels on the nineteenth day of December in the year one thousand nine hundred and eighty-eight.

[Signatures of the "Plenipotentiaries]

Page 158

Joint Declaration

The Governments of the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland,

On signing the First Protocol on the interpretation by the Court of Justice of the European Communities of the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980,

Having regard to the Joint Declaration annexed to the Convention on the law applicable to contractual obligations,

Desiring to ensure that the Convention is applied as effectively and as uniformly as possible,

Anxious to prevent differences of interpretation of the Convention from impairing its unifying effect,

Express the view that any State which becomes a member of the European Communities should accede to this Protocol.

In witness whereof, the undersigned Plenipotentiaries have affixed their signatures below this Joint Declaration.

Done at Brussels on the nineteenth day of December in the year one thousand nine hundred and eighty-eight.

[Signatures of the Plenipotentiaries]

Page 159

Second Protocol

conferring on the Court of Justice of the European Communities certain powers to interpret the Convention on the law applicable to contractual obligations; opened for signature in Rome on 19 June 1980

THE HIGH CONTRACTING PARTIES TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY,

WHEREAS the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980, hereinafter referred to as 'the Rome Convention', will enter into force after the deposit of the seventh instrument of ratification, acceptance or approval;

WHEREAS the uniform application of the rules laid down in the Rome Convention requires that machinery to ensure uniform interpretation be set up and whereas to that end appropriate powers should be conferred upon the Court of Justice of the European Communities, even before the Rome Convention enters into force with respect to all the Member States of the European Economic Community,

HAVE DECIDED to conclude this Protocol and to this end have designated as their Plenipotentiaries:

[Plenipotentiaries designated by the Member States]

WHO, meeting within the Council of the European Communities, having exchanged their full powers; found in good and due form,

Have Agreed as Follows:
Article 1
  1. The Court of Justice of the European Communities shall, with respect to the Rome Convention, have the jurisdiction conferred upon it by the First Protocol on the interpretation by the Court of Justice of the European Communities of the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980, concluded in Brussels on 19 December 198817. The Protocol on the Statute of the Court of Justice of the European Communities and the Rules of Procedure of the Court of Justice shall apply.

  2. The Rules of Procedure of the Court of Justice shall be adapted and supplemented as necessary in accordance with Article 188 of the Treaty establishing the European Economic Community.

Article 2

This Protocol18 shall be subject to ratification by the Signatory States. The instruments of ratification shall be deposited with the Secretary-General of the Council of the European Communities.

Article 3

This Protocol19 shall enter into force on the first day of the third month following the deposit of the instrument of ratification of the last Signatory State to complete that formality.

Article 4

This Protocol20, drawn up in a single original in the Danish, Dutch, English, French, German, Greek, Irish, Italian, Portuguese and Spanish languages, all 10 texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Communities. The Secretary-General shall transmit a certified copy to the Government of each signatory.

Page 160

In witness whereof, the undersigned Plenipotentiaries have affixed their signature below this Protocol.

Done at Brussels on the nineteenth day of December in the year one thousand nine hundred and eighty-eight.

[Signatures of the "Plenipotentiaries]

-------------------------------------

[1] Text as amended by the Convention of 10 April 1984 on the accession of the Hellenic Republic - hereafter referred to as the '1984 Accession Convention' -, by the Convention of 18 May 1992 on the accession of the Kingdom of Spain and the Portuguese Republic - hereafter referred to as the '1992 Accession Convention' - and by the Convention on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden - hereafter referred to as the '1996 Accession Convention'.

[2] Paragraph deleted by Article 2 (1) of the 1992 Accession Convention.

[3] Article deleted by Article 2 (1) of the 1992 Accession Convention.

[4] Ratification of the Accession Conventions is governed by the following provisions of those conventions:

- as regards the 1984 Accession Convention, by Article 3 of that Convention, which reads as follows:

'Article 3

This Convention shall be ratified by the signatory States.

The instruments of ratification shall be deposited with the Secretary-General of the Council of the European Communities.',

- as regards the 1992 Accession Convention, by Article 4 of that Convention, which reads as follows:

'Article 4

This Convention shall be ratified by the signatory States.

The instruments of ratification shall be deposited with the Secretary-General of the Council of the European Communities.',

- as regards the 1996 Accession Convention, by Article 5 of that Convention, which reads as follows:

'Article 5

This Convention shall be ratified by the signatory States.

The instruments of ratification shall be deposited with the Secretary-General of the Council of the European Union.'.

[5] The entry into force of the Accession Conventions is governed by the following provisions of those Conventions:

- as regards the 1984 Accession Convention, by Article 4 of that Convention, which reads as follows:

'Article 4

This Convention shall enter into force, as between the States which have ratified it, on the first day of the third month following the deposit of the last instrument of ratification by the Hellenic Republic and seven States which have ratified the Convention on the law applicable to contractual obligations.

This Convention shall enter into force for each Contracting State which subsequently ratifies it on the first day of the third month following the deposit of its instrument of ratification.',

- as regards the 1992 Accession Convention, by Article 5 of that Convention which reads as follows:

'Article 5

This Convention shall enter into force, as between the States which have ratified it, on the first day of the third month following the deposit of the last instrument of ratification by the Kingdom of Spain or the Portuguese Republic and by one State which has ratified the Convention on the law applicable to contractual obligations.

This Convention shall enter into force for each Contracting State which subsequently ratifies it on the first day of the third month following the deposit of its instrument of ratification.',

- as regards the 1996 Accession Convention, by Article 6 of that Convention, which reads as follows:

'Article 6

  1. This Convention shall enter into force, as between the States which have ratified it, on the first day of the third month following the deposit of the last instrument of ratification by the Republic of Austria, the Republic of Finland or the Kingdom of Sweden and by one Contracting State which has ratified the Convention on the law applicable to contractual obligations.

  2. This Convention shall enter into force for each Contracting State which subsequently ratifies it on the first day of the third month following the deposit of its instrument of ratification.'.

    [6] Phrase deleted by the 1992 Accession Convention.

    [7] Notification concerning the Accession Convention is governed by the following provisions of those Conventions:

    - as regards the 1984 Accession Convention, by Article 5 of that Convention, which reads as follows:

    'Article 5

    The Secretary-General of the Council of the European Communities shall notify Signatory States of:

    (a) the deposit of each instrument of ratification;

    (b) the dates of entry into force of this Convention for the Contracting States.',

    - as regards the 1992 Accession Convention, by Article 6 of that Convention, which reads as follows:

    'Article 6

    The Secretary-General of the Council of the European Communities shall notify the signatory States of:

    (a) the deposit of each instrument of ratification;

    (b) the dates of entry into force of this Convention for the Contracting States.',

    - as regards the 1996 Accession Convention, by Article 7 of that Convention, which reads as follows:

    'Article 7

    The Secretary-General of the Council of the European Union shall notify the signatory States of:

    (a) the deposit of each instrument of ratification;

    (b) the dates of entry into force of this Convention for the Contracting States.'.

    [8] Point (d) as amended by the 1992 Accession Convention.

    [9] An indication of the authentic texts of the Accession Convention is to be found in the following provisions:

    - as regards the 1984 Accession Convention, in Articles 2 and 6 of that Convention, which reads as follows:

    'Article 2

    The Secretary-General of the Council of the European Communities shall transmit a certified copy of the Convention on the law applicable to contractual obligations in the Danish, Dutch, English, French, German, Irish and Italian languages to the Government of the Hellenic Republic.

    The text of the Convention on the law applicable to contractual obligations in the Greek language is annexed hereto. The text in the Greek language shall be authentic under the same conditions as the other texts of the Convention on the law applicable to contractual obligations.'

    'Article 6

    This Convention, drawn up in a single original in the Danish, Dutch, English, French, German, Greek, Irish and Italian languages, all eight texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Communities. The Secretary-General shall transmit a certified copy to the Government of each Signatory State.',

    - as regards the 1992 Accession Convention, in Articles 3 and 7 of that Convention, which read as follows:

    'Article 3

    The Secretary-General of the Council of the European Communities shall transmit a certified copy of the Convention on the law applicable to contractual obligations in the Danish, Dutch, English, French, German, Greek, Irish and Italian languages to the Governments of the Kingdom of Spain and the Portuguese Republic.

    The text of the Convention on the law applicable to contractual obligations in the Portuguese and Spanish languages is set out in Annexes I and II to this Convention. The texts drawn up in the Portuguese and Spanish languages shall be authentic under the same conditions as the other texts of the Convention on the law applicable to contractual obligations.'

    'Article 7

    This Convention, drawn up in a single original in the Danish, Dutch, English, French, German, Greek, Irish, Italian, Portuguese and Spanish languages, all texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Communities. The Secretary-General shall transmit a certified copy to the Government of each Signatory State.',

    - as regards the 1996 Accession Convention, in Articles 4 and 8 of that Convention, which read as follows:

    'Article 4

  3. The Secretary-General of the Council of the European Union shall transmit a certified copy of the Convention of 1980, the Convention of 1984, the First Protocol of 1988, the Second Protocol of 1988 and the Convention of 1992 in the Danish, Dutch, English, French, German, Greek, Irish, Italian, Spanish and Portuguese languages to the Governments of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden.

  4. The text of the Convention of 1980, the Convention of 1984, the First Protocol of 1988, the Second Protocol of 1988 and the Convention of 1992 in the Finnish and Swedish languages shall be authentic under the same conditions as the other texts of the Convention of 1980, the Convention of 1984, the First Protocol of 1988, the Second Protocol of 1988 and the Convention of 1992.'

    'Article 8

    This Convention, drawn up in a single original in the Danish, Dutch, English, Finnish, French, German, Greek, Irish, Italian, Portuguese, Spanish and Swedish languages, all 12 texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Union. The Secretary-General shall transmit a certified copy to the Government of each signatory State.'

    [10] Text as amended by the 1996 Accession Convention.

    [11] Text as amended by the 1996 Accession Convention.

    [12] See footnote 2 on page 41.

    [13] See footnote 3 on page 41.

    [14] See page 44.

    [15] See footnote 2 on page 42.

    [16] See footnote 4 on page 42.

    [17] See page 34.

    [18] See footnote 2 on page 41.

    [19] See footnote 3 on page 41.

    [20] See footnote 4 on page 42.