1. FORUM AND LAW

2. Moneymakers Ltd. from England contracted to by goods from a French company Tresbien SA. The buyer received the delivery and paid for it. However, now the seller claims that the payment was belated and demands for compensation. The buyer disagrees. Problem?

3. §? ? 1. CHOICE OF FORUM 2. CHOICE OF LAW §§ §§ BUSINESS AGREEMENT
Tresbien Money-
Makers
1. CHOICE OF FORUM
2. CHOICE OF LAW

4. ? §§ §§ 1. CHOICE OF FORUM Sources (determinants): 1. Contract
CONVENTION §§ §§
BUSINESS
AGREEMENT
Forum
selection
clause
Tresbien Money-
Makers
1. CHOICE OF FORUM
Sources (determinants):
1. Contract
2. International conventions
3. National laws

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

6. AVOIDING THE PROBLEMS Choice of forum
Harmonization of laws
Internationalization of judges and lawyers
Recognition of foreign court rulings
Forum non conveniens
A court may refuse to exercise its power to hear a case if
hearing the case is either inconvenient or unfair,
the case has no connection with the forum state
AND there is an alternative court

7. STATUTORY CHOICE OF FORUM All EU member states but Denmark
Lugano Convention
European countries
Brussels Convention
EU member states
Brussels I Regulation
All EU member states but Denmark
1. Recognition and enforcement of foreign
court rulings
2. Forum is
Stipulated by the contract
Defendant’s domicile
Appointed by the defendant

8. § ? §§ §§ 2. CHOOSING THE APPLICABLE LAW 1. Contract
CONVENTION §§ §§
BUSINESS
AGREEMENT
Reference
Provision
Tresbien Money-
Makers
2. CHOOSING THE APPLICABLE LAW
1. Contract
2. International conventions
3. National laws
4. Common trade practices

9. 1. CONTRACTUAL CHOICE-OF-LAW
Referece provision
Possible in dispositive matters
Must be explicit or otherwise clear
Most profitable option!

10. Choice of law
Reference provisions, examples: ” This contract shall be governed by and construed in accordance with the laws of France.” “Governing law: This contract shall be governed in all respects by the laws of Germany.” “This contract shall be subject to and shall be construed and enforced pursuant to the laws of Japan, which is the location of the headquarters of the seller (or buyer).” “This agreement shall be governed by and construed in accordance with the laws of the State of Delaware, United States of America without regard to conflicts of laws principles.”

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

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

13. 2. STATUTORY CHOICE-OF-LAW
HAGUE CONVENTION
1955
Appoints the applicable law
ROME CONVENTION
1980
Applied
in trade in movables
If the forum state is:
Belgium
Denmark
Finland
France
Italy
Norway
Switzerland
Sweden
Niger
in contracts generally
If the forum state is an EU member state
And
If there is no more specific convention applicable

14. 1. The law stipulated by the Choice of Law Clause in the contract
1) Hague Convention
The Hague International Sales Convention, 1955
The applicable law is:
1. The law stipulated by the Choice of Law Clause in the contract
2. The law of the country of the seller, unless the order was taken in the buyer’s country
Choice of law

15. Applied in lack of more specific conventions Not applied to
Choice of law
2) Rome Convention
The European Communities Convention on the law applicable to contractual obligations, 1980
Applied in lack of more specific conventions
Not applied to
E.g.
Status or legal capacity of natural persons
Bills of exchange, cheques, promissory notes
Family law
Procedural law, arbitration agreements
Law of companies, foundations, associations
Authority of an agent or a representative

16. Choice of law By the Rome Convention, the applicable law is:
The law of the contract
The law of the country with which the contract is most closely connected
=> the country where the party, who is to effect the performance which is characteristic of the contract, has his habitual residence or central administration
unless it appears from the circumstances as a whole that the contract is more closely connected with another country

17. Rome Convention, specific provisions: Trade of immovable property
=> The law of the country where the immovable property is situated
Consumer trade
=> the minimum protection of the mandatory rules of the consumer’s country’s law
if the seller knew that the buyer is a consumer
Choice of law

18. Choice of law Rome Convention, specific provisions (cont.):
Employment contracts
1. The law of the contract
but
the choice of law shall not have the result of depriving the employee of the protection afforded to him by the mandatory rules of the law which would be applicable in the absence of choice
2. If no choice of law was made, the law of the country where the employee habitually carries out his work in performance of the contract
3. If no such country can be appointed, the law of the country in which the place of business through which he was engaged is situated
Unless it appears from the circumstances as a whole that the contract is more closely connected with another country
Choice of law

19. 3. PRINCIPLES OF NATIONAL LAWS AND COMMON TRADE PRACTICE
Choice of law
Applicable law is that of the state with
Most significant relationship with the case
E.g.
Place of act or injury, nationality, domicile, residence, place of incorporation, where the relationship between the parties was centered, location of property etc.
Governmental interest
The law of the forum state
The law of the state that has the most interest in determining the outcome of the dispute

20. …SO,
Moneymakers Ltd. from England contracted to by goods from a French company Tresbien SA. The buyer received the delivery and paid for it. However, now the seller claims that the payment was delayed and demands for compensation. The buyer disagrees. Your instructions?

21. Tresbien v. Moneymakers, solution
Claimant: Tresbien (seller), defendant: Moneymakers (buyer)
Forum:
1. As contracted
If contract is silent
2. Brussels Convention: Defendant’s country
=> British court
Law:
1. As contracted
2. Statutory choice: Rome Convention
=> Law of the country with which the contract is most closely connected

22. Tresbien v. Moneymakers, solution (cont.)
The Rome Convention:
The law of the country with which the contract is most closely connected
=> the country where the party, who is to effect the performance which is characteristic of the contract, has his habitual residence or central administration unless
it appears from the circumstances as a whole that the contract is more closely connected with another country
=> Seller’s performance is characteristic, buyer just pays
=> French law

23. YOUR CONCLUSION?