Nexus Notes Private International Business Law 2020-2021: Disclaimer

Private International Business Law Year 2, Block 4 Nexus 2020/2021
NEXUS NOTES
Private International Business Law
2020-2021
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Table of Contents
General information ................................................................................................................................................................... 2
Table of Contents.......................................................................................................................................................... 2
Lecture 1: Introduction to Private International law ..................................................................................... 5
Specifications ......................................................................................................................................................................... 5
Why Private International law .............................................................................................................................................. 5
How to draft the general terms and conditions of a contract .................................................................................. 7
Step 1: Jurisdiction .............................................................................................................................................................. 7
Step 2: Recognition and Enforcement ...................................................................................................................... 8
Step 3: Type of forum clause ......................................................................................................................................... 8
Step 4: Drafting the forum clause ............................................................................................................................... 8
Step 5: Applicable law ....................................................................................................................................................... 8
Step 6: Choosing the applicable law .......................................................................................................................... 9
Step 7: Choice of law clause............................................................................................................................................ 9
Lecture 2: Contractual Obligations ......................................................................................................................10
1. Jurisdiction ........................................................................................................................................................................ 10
Brussels I bis Regulation ....................................................................................................................................................... 11
2
Scope and definitions ..................................................................................................................................................... 11

Rules on jurisdiction ....................................................................................................................................................... 12
Party autonomy in commercial contracts .......................................................................................................... 13
2. Applicable law .................................................................................................................................................................. 14
Rome I Regulation .................................................................................................................................................................... 14
Scope and definitions ..................................................................................................................................................... 14
Applicable law .................................................................................................................................................................... 15
Party autonomy (general rule) ................................................................................................................................. 16
Exceptions to party autonomy .................................................................................................................................. 17
UN Convention on the International Sale of Goods (CISG) ..................................................................................... 17
Lecture 3: Consumer Contracts .............................................................................................................................18
Consumer law............................................................................................................................................................................. 18
Step 1: Recognition and enforcement.............................................................................................................................. 18
Step 2: Applicable law ............................................................................................................................................................ 19
Step 3: Jurisdiction ................................................................................................................................................................... 20
Example: selling from China ....................................................................................................................................... 20
Scope of EU Regulations ........................................................................................................................................................ 21
Expanding the business................................................................................................................................................. 23
Lecture 4: Employment Contract..........................................................................................................................23
Contract negotiations ............................................................................................................................................................. 23
Jurisdiction .................................................................................................................................................................................. 23
Where can the employee sue if we do not make a choice of forum? ................................................... 24
Where can the employer sue if we do not make a choice of forum? ................................................... 25
Applicable law ............................................................................................................................................................................ 26
Lecture 5 and 7: Directors Liability.....................................................................................................................28
First scenario ......................................................................................................................................................................... 29
Second scenario.................................................................................................................................................................... 29
Third scenario ....................................................................................................................................................................... 29
Fourth scenario .................................................................................................................................................................... 29
Jurisdiction .................................................................................................................................................................................. 30
Employment, Contract or Tort ....................................................................................................................................... 30
Employment ........................................................................................................................................................................... 32
Contract (provision of services) .................................................................................................................................... 33
Tort (+ delict and quasi-delict) ...................................................................................................................................... 33
Choice of forum..................................................................................................................................................................... 34
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Multiple defendants ............................................................................................................................................................ 34

Insolvency ............................................................................................................................................................................... 35
Applicable law ............................................................................................................................................................................ 36
First scenario ......................................................................................................................................................................... 36
Second scenario.................................................................................................................................................................... 36
Third scenario ....................................................................................................................................................................... 36
Fourth scenario .................................................................................................................................................................... 36
Classification .......................................................................................................................................................................... 37
Lex societatis ......................................................................................................................................................................... 37
Rome I Regulation .................................................................................................................................................................... 38
Rome II Regulation .................................................................................................................................................................. 39
Insolvency ............................................................................................................................................................................... 40
Lecture 6: Tort .............................................................................................................................................................40
Scope ......................................................................................................................................................................................... 40
Direct damage ....................................................................................................................................................................... 41
Harmful event........................................................................................................................................................................ 42
Applicable law ............................................................................................................................................................................ 43
Rome II Regulation .................................................................................................................................................................. 43
Freedom of choice ............................................................................................................................................................... 44
Absence of choice................................................................................................................................................................. 44
Lecture 7: Recognition and enforcement of foreign judgments ...............................................................45
Brussels Ibis Regulation ........................................................................................................................................................ 45
Scope ......................................................................................................................................................................................... 46
Refusal of recognition and enforcement ................................................................................................................... 46
European Union.................................................................................................................................................................... 47
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Lecture 1: Introduction to Private International law

Specifications
International Private Law – when transnational legal problems are resolved by developing a
supranational body of private law which is part of the international legal order (part of international
law)
Private International law (PIL) – it governs the choice of law to apply when there are conflicts in the
domestic law of different countries related to private transactions (part of National law). This means
that there is a dispute or transaction in a cross-border scenario that involves one of the following:
● what jurisdiction applies - choice of court, forum selection
● choice of applicable law
● recognition or enforcement of a foreign judgment
In the United States, Canada, and Great Britain it is also known as conflict of laws.
For more information, see Private International Law or International Private Law by , Friedrich K
Juenger here
In the European Union

● mostly included in the establishment of an internal market
● regulated by the four freedoms
● include the AFSJ (area of freedom, security and justice, Art. 81 TFEU) which requires judicial
cooperation in civil matters having cross-border implications.
● Relevant laws:
o Brussels I bis Regulation (Brussels I)
o Rome I Regulation (Rome I)
o Rome II Regulation (Rome II)
● Each applies only to contracts stipulated after its entry into force
When no rule is applicable, the court has to apply its own rules of Private international law to solve the
dispute.
Why Private International law

You are the counsel of a Dutch company, which currently only has a Dutch customer-base, but they
seek to expand within Europe.
N.B. This example is used to clarify the basic concept of Private International law. It is used several
times in a more or less consistent way, alternated with the content of the material. What would you
advise them?
In your advice, you need to take into account several improvements that the company could make,
including:
● Open a web-shop to increase the customer network also across borders
● Entering the Belgium market, so they would like to know more about applicable laws
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● Investigate if the production is cheaper in China to reduce production costs

● Order cheaper packaging products from Poland
● Look for new capital to expand the business
First: you must realize that the legal regimes change depending on the country and there is no law
which regulates them all. It is important to know which law applies and when. If a package does not
arrive from Poland, do you apply the Dutch or the Polish law on the situation?
Here we need Private International law, which applies to:

● Private legal matters involving private law
● International situations in the possibility of a clash between two or more conflicting rules from
two or more legal systems (legal diversity + cross-border legal relationship)
Main elements:
Jurisdiction
● Which court has jurisdiction, in which country?
Applicable law
● Which is the law applicable in the present case?
● Foreign law can be applied by national courts following their own national rules
Recognition and Enforcement

● If the judgment has to be enforced in another country, it has to be recognized and applied by
other organs. When does this happen? Under which conditions?
Company: Do we need Private international law?

Yes, if you want to do business in cross-border situations.
● Every country applies different laws. There is no problem if a situation arises in which only one
legal system is concerned.
● When you cross the border, more rules could be applicable and there is no basis on which rule
takes precedence.
● Each country has its own rules of private international law, to determine which law applies
within their territories in case of a cross border situation. There is a lack of a universal basis.
● In the EU, this has been more or less harmonized.
● A lawyer expert in Private international law considers all the courts which are competent to
decide a certain situation and brings the matter in front of the court that applies the law most
favourable to their client.
Course of action within Private international law in case of an international dispute
1. Determine which court has jurisdiction;
2. Determine the law that should be applied to the present case, which the court will decide on
the basis of its own national Private international law;
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3. Determine whether the judgement of the court will be recognized and enforced in other
implicated countries.
Thus, the Dutch court may assume jurisdiction based on its own rules of private international law,
even though the Polish court does so as well. Consequently, parties may decide which laws are more
favourable to them.
N.B. A law is applicable if you can fulfil its scope, which is subdivided in:
● Temporal scope – When you can make use of it
● Formal scope – Who can make use of it/where you can make use of it
● Substantive scope – For what you can make use of it
How to draft the general terms and conditions of a contract

Step 1: Jurisdiction
You can introduce an arbitration clause about the court in which you want to sue, or you would like to
be sued
Art. 4(1) Brussels I Bis Regulation (general rule) - Subject to this Regulation, persons domiciled in a
Member State shall, whatever their nationality, be sued in the courts of that Member State.
• Very difficult to include in your terms and conditions, as it is unpractical to sue every
person in their own country
Art. 25 Brussels I (party autonomy) - In commercial contracts, it gives the possibility for the parties to
agree about the place of settlement of disputes (the choice of forum).
It is wise to include the jurisdiction clause if you are going to conclude a transnational contract, to give
a higher degree of legal certainty. They can decide which court has jurisdiction and thus the parties
will know where they can be sued.
Desired criteria for the choice:

● Close to where your company is incorporated
● Close to one of their headquarters
● Close to where the company’s assets are located
● Where the litigation is cheap
● Where you understand the language
● Other personal reasons
● Compromise between the two parties
The person does not have to be domiciled in the EU or in the suing country in order for a court to have
jurisdiction under Art. 25.
You can choose the law that governs the contract. These can be different within each part of the
contract.
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Step 2: Recognition and Enforcement
Make sure that the judgement of the chosen court is recognized and can be enforced where you need it
to be.
● Within the EU AFSJ (mutual trust and recognition of other EU judgements) very easy, almost
automatic recognition of judgements
● Issue of arbitration: New York Convention (this legislation is not in the focus of the course)
Step 3: Type of forum clause
N.B. Choice of forum is not limited to contracts, but (for now) only to the terms and conditions.
However, we use contracts because in drafting them the parties have complete freedom.
Exclusive jurisdiction clause

● Only one court has jurisdiction for disputes related to the contract
● E.g. every dispute should be referred to a court in the Netherlands
Non-exclusive clause
● Art. 25 Brussels I bis Regulation - one can nominate one court without excluding the
possibility of other party to choose to sue elsewhere.
● e.g. the choice of forum is not limited to the rights of a party to initiate proceedings against the
other party in another court of competent jurisdiction.
Asymmetric (hybrid) clause

● One party has an exclusive clause, while the other has a non-exclusive jurisdiction. During the
negotiation of a contract, the stronger party can ensure this clause to its advantage.
● e.g. nothing in the clause limits the right of the “stronger party” to take the proceedings to
another court(s) of competent jurisdiction.
Step 4: Drafting the forum clause
After considering the options, you decide to draft a forum clause. As the company is Dutch, it is
convenient to choose a Dutch court, and you should include that you do not want to be sued in a court
outside the Netherlands.
Step 5: Applicable law
After choosing the forum clause, you need to determine under which law the contract is governed
• Also conflict of laws
Rome I Regulation → Contractual obligations in civil and commercial matters
Art. 3(1) (party autonomy) - A contract shall be governed by the law chosen by the parties. The choice
shall be made expressly or clearly demonstrated 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 to part only of the
contract.
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Important:
● You can choose which law applies based on the principle of party autonomy.
● The choice can be
o Expressed
o Demonstrated by the terms of the contract
o Demonstrated by the circumstances
● The selected law can apply to the whole contract or only part of it.
● You can choose more applicable laws.
● National courts can apply foreign law.
How do we demonstrate that the contract refers to specific law?

You can refer to specific provisions within the contract itself or some actions agreed between the
parties may express it
Step 6: Choosing the applicable law
You can choose how you want to formulate it

● Expressed choice (more legal certainty)
● Referral to articles
It is important to specify which law is applicable to the contract
Many subjective criteria available:

● The law where your company is located
● A law you are familiar with
● A more convenient law for your legal position
● A law in the same language
● The law of the jurisdiction
● Other personal reasons
Step 7: Choice of law clause
You need to formulate your choice and put in writing what the parties have agreed upon.
Specify:
● Which law applies
● To which part of the contract
● Issues of interpretation
● Etc…
‘With the exception of the CISG’

● CISG – Convention on the International Sale of Goods
● Provides the substantive rules to regulate the relationship between traders/consumers,
regarding the sale of goods. Very clear rules on which rule applies.
● This convention applies automatically with the national law selected.
● But you can exclude its application through a clause in your contract. If you do not expressly
exclude it, the convention will automatically apply within the contracting states.
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The choice of law is considered a contract within the contract, as, even if the contract is deemed
invalid, the choice of law still applies. The validity of the contract strictly depends on the applicable
law.
Lecture 2: Contractual Obligations

Continuing the example, you have to advise the company for the drafting of a contract with a Polish
company which delivers in the Netherlands. It relates to the ordering of packaging material from
Poland. Therefore, we need to sign a contract between the two companies.
Main elements:
Jurisdiction
● Which court has jurisdiction in which country?
Applicable law
● Which is the law applicable in the present case? Foreign law can be applied by national court
following their own national rules
Recognition and Enforcement

● If the judgment has to be enforced in another country, it has to be recognized and applied by
other organs. When does this happen? Under which conditions?
1. Jurisdiction
First, we need to establish jurisdiction to show which law is applicable (jurisdiction = choice of
forum)
Options:
● Choice within the EU/EFTA
o relatively easy to have a judgement enforced
o EFTA = Iceland, Liechtenstein, Norway, Switzerland
● Choice outside the EU/EFTA
o More difficult enforcement
o E.g. In the Netherlands, except for current agreements, a foreign judgement can be
enforced only if it gets tried anew.
● No expressed choice - If the two companies are not able to choose the jurisdiction, you will
have to look at current legislation, which will be valid only for contracts which are within their
temporal and material scope.
In Europe:
● Brussels I bis Regulation (2015)
● Lugano Convention (2007) – EU (UK?) + Switzerland, Norway and Iceland (basically similar to
Brussels I) – very similar rules to the Brussels I bis Regulation
These two cover both issues of Jurisdiction and issues of Enforcement.

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Brussels I bis Regulation

● Scope and definitions of the Regulation (Art. 1-3)
● Jurisdiction (Art. 4-35)
● Recognition and enforcement of judgments (Art. 36-56)
● Authentic instruments and court settlements (Art. 58-60)
● General and final provisions + others (Art. 61-81)
Scope and definitions
It is important to fulfil the scope of a regulation, otherwise the issue will be discovered to be entirely
beyond this regulation.
Substantive – Art. 1
1. This Regulation shall apply in civil and commercial matters whatever the nature of the court or
tribunal. It shall not extend, in particular, to revenue, customs or administrative matters or to the
liability of the State for acts and omissions in the exercise of State authority (acta iure imperii).
○ it applies to ‘civil and commercial matters’

■ involving a legal relationship (e.g. contract)
■ most important element covered by the material scope
■ independent from the definition given by the member states (autonomous
nature)
○ regardless of the nature of the court deciding upon the case (civil, administrative, etc…)
○ between businesses and private parties
○ between businesses
○ involving state authorities in commercial or personal capacity
○ excluding act of omissions in the exercise of State authority
Formal – Art. 4 (formal rule + ground for jurisdiction)

1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality,
be sued in the courts of that Member State.
2. Persons who are not nationals of the Member State in which they are domiciled shall be governed
by the rules of jurisdiction applicable to nationals of that Member State.
○ General rule
○ Independent from nationality
● Exceptions (additional choices of forum):

○ Consumers can sue even if the other party is not domiciled in the EU - Art. 18(1)
○ Employees, same in case of foreign employers - Art. 21 (2)
○ Exclusive jurisdiction – Art. 24
○ Choice of forum, e.g. if they choose otherwise or if foreigners choose European court -
Art. 25-26
○ Choice of a court with alternative jurisdiction – Art. 7-9
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○ The counterclaim can be brought in front of the court before which the other party
already started proceedings – Art. 8(3)
○ Domicile is important.
● How do we establish where a person is domiciled?

○ Art. 63(1) – when one of the following is within the EU:
■ (a) statutory seat of the legal person
■ (b) central administration of the legal person
■ (c) principal place of business of the legal person
○ Art. 66 - temporal, on or after 10 January 2015
Rules on jurisdiction
Scenario: Still in the negotiation, we want to locate jurisdiction in the Netherlands, but the other
company would like to set it in Poland. Therefore, we cannot find an agreement. In such a situation we
do not include any choice of forum and the general rule of Brussels I bis applies. The same applies to
the provision of services.
We have to go to Poland and sue the company there under the general rule of Art.4, unless Art. 7
applies:
● Art. 7(1) (Special jurisdiction) - A person domiciled in a Member State may be sued in another
Member State:
a) in matters relating to a contract, in the courts for the place of performance of
the obligation in question
b) for the purpose of this provision and unless otherwise agreed, the place of
performance of the obligation in question shall be:
● in the case of the sale of goods, the place in a Member State where,
under the contract, the goods were delivered or should have been
delivered,
● in the case of the provision of services, the place in a Member State
where, under the contract, the services were provided or should have
been provided.
● ‘matters relating to a contract’

o independent from the definition given by the member states (autonomous nature)
o Broad and abstract concept
o Follows the scheme and the objectives of the regulation
● Case C-381/08 Car Trim GmbH v KeySafety Systems Srl → how to determine the place of
performance of the obligation in question? Is the place of delivery apparent from the contract?
o ‘sale of goods’ → place of delivery, different from ‘provision of services’ of Article
5(1)(b)
▪ First, the place of delivery as specified in the contract
▪ Second, if nothing is specified, the place where the physical transfer of the
goods took place, as a result of which the purchaser obtained, or should have
obtained, actual power of disposal over those goods at the final destination of
the sales transaction (para 62).
o ‘sale of good’ = first indent Article 7(1)(b) v. ‘provision of services’ = second indent
Article 7(1)(b)
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⇒ This case mainly brings to light that there is a definition issue in regards to the ‘place of
delivery’. Thus, it is advised that parties should agree on a choice of forum prior to concluding
a contract.
Article 7(1) can be used since the Polish company delivers the goods in the Netherlands. Thus, they
can only sue us in the Netherlands based on Article 4 Brussels Ibis Regulation since we do not deliver
to Poland. Overall, it is convenient for us if we do not include the choice of forum and we apply
Brussels I, since in most contractual obligations, one would prefer being sued in the place where they
domicile (cost advantage).
Can we agree on the choice of forum for Poland?

Yes, though both parties need to cooperate in order to come to an agreement based on the principle of
party autonomy.
Party autonomy in commercial contracts
Art. 25(1) - If the parties, regardless of their domicile, have agreed that a court or the courts of a
Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in
connection with a particular legal relationship, that court or those courts shall have jurisdiction,
unless the agreement is null and void as to its substantive validity under the law of that Member
State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise.
● Enables parties to make their own choice of forum.

● ‘Regardless of their domicile’ → even if a Chinese company would be generally outside the
scope of the Brussels regulation, the agreement is enough for a court to have jurisdiction under
the Brussels Regulation even if one of the parties is not domiciled in Europe.
● ‘Agreed’ → If we agree that the forum is a German court, then we are free to do so. If we do not
agree on our own courts, it is reasonable to choose a third court (i.e. neutral forum) that is
convenient for both.
● ‘Substantial validity’:
o Valid under the law of the court with jurisdiction (regulated by national conflict-of-
laws rules)
o Both parties have to agree in order for the choice to be valid - consensus (Alstom Power
Case)
o A choice of law cannot affect mandatory rules of jurisdiction, so that Art. 15, 19, 23
and 24 take precedence.
Tacit consent – Art. 26(1)

1. Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member
State before which a defendant enters an appearance shall have jurisdiction. This rule shall not
apply where appearance was entered to contest the jurisdiction, or where another court has
exclusive jurisdiction by virtue of Article 24.
N.B. If we go to Poland, where we’re being sued, without challenging the choice of forum, it is
considered as an implicit consent to the choice of forum. If we challenge it, the Polish court should
decline the case on the basis on Brussels I
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N.B. It is important to consider whether a judgement of the court you are about to choose is easily
recognized and enforced in your country and in the country of the other company.
Are there international instruments that facilitate recognition & enforcement?
● Brussels I bis Regulation
● Lugano Convention 2007 (EU + Switzerland, Norway and Iceland)
● HCCH, Choice of Court Convention 2005 (EU + Mexico, Singapore, Montenegro, Denmark, UK)
e.g. In our case, we could agree on the exclusive jurisdiction of the German courts to adjudicate any
dispute that may arise (advantages: location, within the EU, accessible to both). These courts will have
jurisdiction under the Brussels Ibis Regulation.
If none of these is applicable, the national rules on international jurisdiction of the individual state
apply, including bilateral treaties with third countries.
e.g. China is not a party to any of these international conventions, thus one will have to rely on the
general rules that exist within China’s jurisdiction.
2. Applicable law
Savigny: national law has no role in determining the applicable law, as that law should be sought
where it belongs by virtue of the nature of the legal relationship between the parties, e.g. the place of
action, the domicile, the location of the goods, etc… (the closest connected law to the legal relationship
at stake = European approach)
After the choice of forum, we have to choose the choice of law thatinfluences:
● Validity of the contract
● Which interpretation prevails
● What is the performance that needs to be undertaken
● When is the contract null and void (full or in part)
Options:
● Agreement on the applicable law
● No choice of law
If no choice is made:
● Lex loci contractus – where the contract is concluded
● Lex loci solutionis – where the delivery occurred
● Law of the closest connection with formulation of the contract – very difficult to determine
● Doctrine of characteristic performance – the characteristics and what is essential in the
contract determines the applicable law
Throughout the EU we can use:

● Rome I Regulation
● UN Convention on the International Sale of Goods (CISG) – 94 parties
Rome I Regulation
Scope and definitions
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Temporal – Art. 28
● This Regulation shall apply to contracts concluded after 17 December 2009
● Contracts concluded prior → Rome Convention (predecessor)
Substantive – Art. 1(1)

● This Regulation shall apply, in situations involving a conflict of laws, to contractual obligations
in civil and commercial matters
Formal – Art. 2 (Universal application'

● Any law specified by this Regulation shall be applied whether or not it is the law of a Member
State.
Applicable law
Art. 4 - Applicable law in the absence of choice
1. To the extent that the law applicable to the contract has not been chosen…, the law governing the
contract shall be determined as follows:
(a) a contract for the sale of goods shall be governed by the law of the country where the seller
has his habitual residence;
(b) a contract for the provision of services shall be governed by the law of the country where
the service provider has his habitual residence;
(c) a contract relating to a right in rem in immovable property or to a tenancy of immovable
property shall be governed by the law of the country where the property is situated;
(…)
2. Where the contract is not covered by paragraph 1 or where the elements of the contract would be
covered by more than one of points (a) to (h) of paragraph 1, the contract shall be governed
by the law of the country where the party required to effect the characteristic performance of the
contract has his habitual residence.
3. Where it is clear from all the circumstances of the case that the contract is manifestly more
closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other
country shall apply.
4. Where the law applicable cannot be determined pursuant to paragraphs 1 or 2, the contract shall be
governed by the law of the country with which it is most closely connected.
‘Habitual residence’ → Art. 19(1-2) Rome I Regulation

1. For the purposes of this Regulation, the habitual residence of companies and other bodies,
corporate or unincorporated, shall be the place of central administration. The habitual
residence of a natural person acting in the course of his business activity shall be his principal
place of business.
2. Where the contract is concluded in the course of the operations of a branch, agency or any
other establishment, or if, under the contract, performance is the responsibility of such a
15
branch, agency or establishment, the place where the branch, agency or any other
establishment is located shall be treated as the place of habitual residence.
○ =/= Article 63 Brussels Ibis Regulation

○ The place of central administration equates to the place of the company's
headquarters.
Paras 2 to 4 → escape clauses as they establish that if more different elements of the contract are
located in another country, then these paragraphs apply.
‘Relevant time’ → Art. 19(3) - For the purposes of determining the habitual residence, the relevant
point in time shall be the time of the conclusion of the contract.
N.B. Our example: No choice of law, so the habitual residence of the seller is in Poland. Polish law
would apply under Rome I but since it isn’t to our advantage, we can negotiate a better option by
stating that we would like a choice of law clause in the forum in accordance with Article 3 Rome
Convention.
Party autonomy (general rule)
Art. 3 - Freedom of choice

1. A contract shall be governed by the law chosen by the parties. The choice shall be made
expressly or clearly demonstrated 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 to part only of
the contract. (…)
● Does not matter if a party is not European

● General rule → parties can chose the law
● The choice can be expressed or clearly demonstrated by the contract (e.g. referral to a specific
article) either by its terms or the circumstances of the case.
N.B. Large amount of cases the parties subject the contract to the law of the court that has jurisdiction
● If you sue under French law in a German court you need to find French lawyers probably
speaking German, or German lawyers expert in French law, so it would be more difficult and
expensive.
Criteria for the choice of a beneficial law:

● Law in our language
● Law where the company is located
● Law beneficial to our terms of the contract
● Law less beneficial to the position of the other party
In case of equal negotiation → neutral law that is good for both

● E.g. ‘This contract is formulated in accordance with German law’ (expressed clause)
● England used to be the capital for litigation throughout Europe. Since Brexit, Germany has
offered to take on that role.
Favour principle → Art. 11(2)

16
● Gives a list of laws under which the contract can be deemed formally valid:
● A contract concluded between persons who, or whose agents, are in different countries at the
time of its conclusion is formally valid if it satisfies the formal requirements of:
o The law which governs it in substance under this Regulation, or
o The law of either of the countries where either of the parties or their agent is present at
the time of conclusion, or
o The law of the country where either of the parties had their habitual residence at that
time.
Exceptions to party autonomy
Protection principle → Art. 6

● A choice of law cannot override the mandatory protective rules which would protect the
consumer in his country of habitual residence.
● Therefore, such a choice may not have the result of depriving the consumer of the protection
afforded to him by provisions that cannot be derogated from by agreement by virtue of the law
which, in the absence of choice, would have been applicable.
● Meaning: a consumer is generally protected by the minimum standards of protection of her
country
Overriding mandatory rules → Art. 9

1. Overriding mandatory provisions are provisions the respect for which is regarded as crucial
by a country for safeguarding its public interests, such as its political, social or economic
organisation, to such an extent that they are applicable to any situation falling within their
scope, irrespective of the law otherwise applicable to the contract under this Regulation.
2. Nothing in this Regulation shall restrict the application of the overriding mandatory
provisions of the law of the forum.
UN Convention on the International Sale of Goods (CISG)

N.B. If two parties do not exclude it, the CISG would normally apply as part of the national law of that
state, if it is a party to the convention.
● E.g. ‘This contract is formulated in accordance with German law, with the exception of the
CISG’ (expressed clause)
Advantages Disadvantages
● Unification and simplification ● Does not cover all areas of law, such as validity
○ The CISG would apply of the contract.
uniformly in all member states ○ such issues have to be solved through
avoiding many possible other laws.
conflicts of law. ● New and undefined terms
● Large amount of Contracting States ○ No one in particular ruler oversees it, so
○ 94 parties (missing almost all many national interpretations possible.
African countries) ● Compromising on many issues does not favour
● Unified application and interpretation the buyer or seller.
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○ Very specific substantive rules ● Buyer does not have the right to reject goods in
regarding international the event of non-conformity.
contracts ○ Not very protective
● Broad contractual freedom ● Foreign solutions to domestic problems
○ Can be considered a neutral ○ No specific solutions to domestic
law as it leaves broad problems, they might be solved with
autonomy. national law.
● Can help minimize conflict of law ● Usually when parties have chosen the applicable
issues. law, they exclude the CISG.
In our case, if we have included the choice of law clause in our contract, and this clause will be based
on English law, then English substantive law will govern our contract.
Closing remarks: one should always encourage the company, for whom they are drafting the Terms &
Conditions, to include a choice of forum clause so the Rome Ibis Regulation can apply, especially when
it concerns a counterparty outside the EU.
Lecture 3: Consumer Contracts
Consumer law
Business to consumer (B2C) – asymmetric relationship
● The consumer is considered to be in an inferior bargaining position
● Sometimes the consumer has to accept the term and conditions of the businesses: therefore,
the society affords them weaker protection
● e.g. the baker who is in a stronger position since we cannot discuss the T&C with this bakery,
we just come & buy/consume. Same for all social media.
That is why we need consumer law – to protect the consumer

● Legal counsels are the ‘bad guys’ as they know which law to use and how to get the most out of
it.
● That is why the consumers need to be protected from the companies’ legal advisors.
Reverse direction for consumer law, from a business point of view, to proactively avoid problems:
1. Recognition and enforcement - where should the judgment be recognised & enforced?
2. Applicable law - which law should we choose for our B2C contract?
3. Jurisdiction
Step 1: Recognition and enforcement

Where would we like to sell our products?
It is very easy within the EU, as the Brussels I bis applies, otherwise is very difficult and sometimes it
requires a full second judgement.
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Art. 36(1) - A judgment given in a Member State shall be recognised in the other Member States
without any special procedure being required.
Art. 39 - A judgment given in a Member State which is enforceable in that Member State shall be
enforceable in the other Member States without any declaration of enforceability being required.
We keep a European approach as we want to sell to customers in the EU.

Goal: the judgement has to be enforceable where the consumer lives.
Step 2: Applicable law

Which law should the company choose?
First considering Rome I Regulation:

● Art. 6 - consumer contracts
1. No choice of law 🡪 the law of the habitual residence of the consumer applies
2. Choice of law 🡪 non-derogable mandatory rules still apply + national minimum
standards of protection still apply
E.g. We, as Airbnb located in Ireland, enter into a contract with a Romanian consumer. The latter
realises that they do not agree with the T&C and brings the issue to court. It appears that the consumer
is better protected under Romanian law and thus this law is applicable even though Irish law has been
chosen for the drafting of the T&C.
N.B. Article 6 establishes that multiple laws can apply to consumer contracts. Even if you choose the
law, that law may be set aside in favour of the consumer law where the consumer has his habitual
residence, whenever that law guarantees a higher standard of protection. Applicable only when the
national law affords a higher level of protection for that specific issue.
We chose Dutch law, meaning that if the consumer in Romania has a rule more protective towards
consumers, that law would apply.
‘Mandatory rule’ - clearly pointed out as such in national legislation, compared to derogable rules
which can be derogated through party agreement.
Options - how to decide on the law to apply:

1. Choice of a law, which we want to be applicable, out of personal preference
● It does not prevent a more protective law for consumer to apply
2. Choice for the objectively best law (for the consumer) so that in every MS this law would
apply
● Difficult to find an absolute objective law in everything as MS have different answers
for different problems
3. No choice of law
● So that only one law applies to the contract, and it is the law of habitual residence of
the consumer.
● Practical as you do not need to compare two laws for the same contract.
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Step 3: Jurisdiction
Example based in Europe (under EU Private international law)

Art. 18 – Formal scope (general rule)
1. A consumer may bring proceedings against the other party to a contract either in the courts of
the Member State in which that party is domiciled or, regardless of the domicile of the other
party, in the courts for the place where the consumer is domiciled.
2. Proceedings may be brought against a consumer by the other party to the contract only in the
courts of the Member State in which the consumer is domiciled.
● Consumer = two choices

● Business = one choice
Art. 19 - Choice of forum (limited party autonomy)
The provisions of this Section may be departed from only by an agreement:

1. which is entered into after the dispute has arisen;
2. which allows the consumer to bring proceedings in courts other than those indicated in this
Section; or
3. which is entered into by the consumer and the other party to the contract, both of whom are at
the time of conclusion of the contract domiciled or habitually resident in the same Member
State, and which confers jurisdiction on the courts of that Member State, provided that such an
agreement is not contrary to the law of that Member State.
N.B. only the consumer can have additional choices by agreement, the business remains limited.
Would a choice of forum be worth including in our Terms & Conditions for us as a business?
It may. To avoid allowing consumers the choice of forum, businesses could use an invalid choice of
forum, which does not give the option to the consumer. In this case, even if the clause would be
invalid, the consumer could go there to sue the company, and when the company agrees, that becomes
the chosen court with jurisdiction.
Example: selling from China

● China is a developing country that pays very little money to ship products abroad.
● If we have a subsidy in China, it would be beneficial as we pay low-income taxes and because
the Universal Postal Union allows China to mail with very little money.
● Both parties have assumed jurisdiction in China, which has its own judicial system in terms of
consumer law. It does not have the same basis of Private International Law as we have in the
EU.
N.B. If you buy things for both consumption and business purposes, you might not be a consumer.
Formal scope issues
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Art. 18(1) Brussels I bis: A consumer can bring proceedings against the other party to a contract
either in the courts of the Member State in which that party is domiciled or, regardless of the domicile
of the other party, in the courts for the place where the consumer is domiciled.
● Only applicable to inter-EU consumer issues.

● German customers in Germany would be able to sue the business in Germany, but the
judgement will be very difficult to be enforced in China.
● If consumers are not residing in the EU, then the rules of Private international law of their
country apply.
When applying a certain regulation/convention we must always test its scope because we need to
know if it applies to our specific case.
● Brussels Ibis Regulation
○ substantive scope is civil & commercial matters → very broad, always relates to the
subject matter.
○ formal = the domicile of the defendant within a European Member State, though it also
incorporates recognition of enforcement (judgment should come from a member
state).
■ the domicile of the professional party does not matter
● Rome I Regulation
○ substantive scope is narrower because it applies only to contractual obligations in civil
& commercial matters.
○ formal scope takes into account its universal nature.
● In both, the issue always needs to be an international element in the conflict.
Scope of EU Regulations
Gleichlauf – a concept which allows to apply the interpretation of Art. 17(1) Brussels I in conjunction
with Art. 6(1) Rome I, as found within court rulings in order to come up with common criteria to
define a ‘consumer contract’.
Art. 17(1) Brussels I - Jurisdiction over consumer contracts

● a contract concluded by a person, the consumer, for a purpose which can be regarded as being
outside his trade or profession,
● in all cases where the contract has been concluded with a person who pursues commercial or
professional activities in the Member State of the consumer’s domicile or,
● by any means, directs such activities to that Member State or to several States including that
Member State,
● and the contract falls within the scope of such activities.
Art. 6(1) Rome I - Consumer contracts

● a contract concluded by a natural person for a purpose which can be regarded as being outside
his trade or profession (the consumer) with another person acting in the exercise of his trade
or profession (the professional),
● provided that the professional pursues his commercial or professional activities in the country
where the consumer has his habitual residence or,
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● by any means, directs such activities to that country or to several countries including that
country,
● and the contract falls within the scope of such activities.
One can only expand their business and rely on Articles 17 to 19 Brussels Ibis and Article 6 Rome I, if
these criteria are fulfilled:
1. ‘Consumer’
o a natural person
o acting outside his trade or profession
o to fulfil his/her own consumption needs (using good/service for their own personal needs)
o If a consumer becomes a professional? → Schrems v Facebook
▪ The status of the consumer is assessed at the time of the dispute and not when the
contract has been signed.
▪ Remains consumer only those who do not acquire a substantially professional
character.
▪ If the use of a service over time predominantly becomes used for business
activities, then the consumer ceases to be a consumer.
2. ‘Seller’
o Natural or legal person – professional
o acting in the exercise of his trade or profession
o for the fulfilment of business reasons
o If a person is a consumer and a professional at the same time, he is considered as a
professional under the Regulations - Gruber v Bay Wa (i.e. Gruber was not considered a
consumer in the end)
3. ‘Directed to another Member States’

o Equivalent to the ‘cross-border effect’
o Both ‘pursued’ and ‘directed’ → ‘directing’ easier to establish
o Establishing a branch, store, investment, advertisement, search for customers
o Criteria - Peter Pammer and Hotel Alpenhof: “envisaging doing business with consumers”
within the member state that the seller directs its activities.
▪ Nature of the activity (main business activity)
▪ Travel directions given to customers
▪ Language of support
▪ Currency
▪ Language of service
▪ Language of website
▪ Telephone number with the international (e.g. +31)
▪ Advertisements
▪ Domain name
▪ Reviews by internationals
▪ Shipping options
4. ‘within the professional activities’

o If the buyer does not know, it is still considered a consumer in terms of protection.
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o Causal link & exceptions- Lokman Emrek v Vlado Sabranovic

▪ No causal link required between the conclusion of the contract and the means
employed for directing the commercial activity.
▪ However, an established causal link is evidence to link the contract with the
professional activity.
▪ Certain consumer contracts are not covered.
Expanding the business
Advise a company on how to expand its business in other countries without incurring excessive efforts
and costs. All the above-mentioned aspects should be considered to make sure that it is clear towards
which country you want to direct your business.
i.e. The website/online shop can easily indicate to which countries we are directing our activities. The
countries to which you direct your activities are those from which a consumer can sue you. The
payment method or a pop-up store are also good indicators of who and which countries the
goods/services target.
Lecture 4: Employment Contract
Contract negotiations
Following the example of a company based in the Netherlands, we want to see what happens if they
want to hire employees and open a pop-up shop in other member states.
This would be a case of an international employment contract, covered by Private international law.
Therefore, we need to draft and negotiate an employment contract, from the perspective of the hiring
company.
Negotiation:
● Employers in general has a better bargaining position
● Except when you are looking for a very specific and qualified employee
Jurisdiction
● Always beneficial to include a choice of forum especially considering legal certainty.
● Then. we need to check if we are allowed to include it.
Can we include a choice of forum in employment contracts? Yes, under Brussels I
But we first need to check if Brussels Ibis applies to our situation (is its scope fulfilled?)
● Temporal scope – Art. 66 (after 10 January 2015)
● Substantial scope – Art. 1 (civil and commercial matters)
● Formal scope – Art. 21 (employee working in a member state/employer domiciled in a
member state – broader scope)
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N.B. the employee does not have to be domiciled in the EU for the Brussels Ibis to apply.
Art. 20 Jurisdiction over individual contracts of employment (specific section that clearly outlines
the rules)
1. In matters relating to individual contracts of employment, jurisdiction shall be determined
by this Section, without prejudice to Article 6, point 5 of Article 7 and, in the case of
proceedings brought against an employer, point 1 of Article 8.
2. Where an employee enters into an individual contract of employment with an employer who is
not domiciled in a Member State but has a branch, agency or other establishment in one of the
Member States, the employer shall, in disputes arising out of the operations of the branch,
agency or establishment, be deemed to be domiciled in that Member State.
Art. 21 General rule

1. An employer domiciled in a Member State may be sued:
(a) in the courts of the Member State in which he is domiciled; or
(b) in another Member State:
(i)in the courts for the place where or from where the employee habitually carries out
his work or in the courts for the last place where he did so; or
(ii) if the employee does not or did not habitually carry out his work in any one country,
in the courts for the place where the business which engaged the employee is or was
situated.
2. An employer not domiciled in a Member State may be sued in a court of a Member State in
accordance with point (b) of paragraph 1.
Art. 23 🡪 choice of forum

The provisions of this Section may be departed from only by an agreement:
(1) which is entered into after the dispute has arisen; or
(2) which allows the employee to bring proceedings in courts other than those indicated
in this Section.
Strict conditions for a choice of forum:

● “after the dispute has arisen”
○ Potentially possible, but in practice it is quite unlikely that the parties will agree on the
choice of forum, especially as the bargaining power initial imbalance no longer exists
since the employee has its own position.
● the employee may bring proceedings to another court which could also benefit the employer
(same as consumer contracts)
● by agreement
Where can the employee sue if we do not make a choice of forum?
Brussels Ibis Regulation

● Art. 20 this section applies to this situation.
● Art. 20(1) extension of the definition of ‘domicile’
If we, the Dutch company, open a pop-up shop in Belgium (physical presence) considered as a branch
or other establishment.
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● If we do it, then it affects where the employee can sue us, but does not affect where we can sue
them. So, the employee can:
○ sue us in the Netherlands or Belgium Art. 21(1)(a)
○ sue us where he works (worked) or was engaged Art. 21(1)(b)
● In most cases, the employee will tend to rely on the place of habitual work (may be hard to
establish where that is).
‘Habitual work’ - Rutten v Cross Medical

● (para 23) – where the employee has established the effective centre of his working activities
and where, or from which, he in fact performs the essential part of his duties vis-à-vis his
employer.”
● the place with which the dispute has the most significant link.
● the employee spends most of his working time within one country/state where they have an
office to which he returns to frequently.
● Exceptions:
○ Herbert Weber v Universal Ogden Services Ltd - (para 58) “the subject-matter of the
dispute is more closely connected with a different place of work”
○ Jan Voogsgeerd v Navimer SA - transport services - (para 39) “the place from which
the employee carries out his transport tasks and also receives the instructions
concerning his tasks”, which is always the same”.
The Court must consider all factors that characterise the activity of the employee (where they carry
out their tasks, receive instructions & organise their work, place where their tools are, place of actual
employment, place where employee must report before discharging).
There is a lot of case law about where the employee is supposed to be carrying out his work (habitual
place of employment).
N.B. If you cannot determine the place of work, you have to look at the place where the employee
carries out the majority of it, otherwise you have to focus on the practical terms in the employment
contract (bank transactions, travel routes, instructions, reservations, feedback, etc…) The definition of
‘place of work’ has been stretched out so much that you rarely have to assess the ‘place of
engagement’.
Our case → the place/location is clear and would be Belgium.
Where can the employer sue if we do not make a choice of forum?
Art. 22(1) General rule

An employer may bring proceedings only in the courts of the Member State in which the
employee is domiciled.
Art. 22(2) Exception – counterclaim

The provisions of this Section shall not affect the right to bring a counterclaim in the court in
which (…) the original claim is pending.
Important – generally a choice of forum is included within the employment contract
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● The employee usually consults the contract of employment and does not always know the
options available, so for lack of information or personal choice they might still decide to sue us
where we want.
● In our case, we can thus ensure that the proceedings will take place in the Netherlands.
Art. 25(1) - Prorogation of jurisdiction

If the parties, regardless of their domicile, have agreed that a court or the courts of a Member
State are to have jurisdiction to settle any disputes which have arisen or which may arise in
connection with a particular legal relationship, that court or those courts shall have
jurisdiction, unless the agreement is null and void as to its substantive validity under the law
of that Member State.
N.B. When the employee is domiciled outside Europe, Brussels I would not apply and it is very
important to make a choice of forum, otherwise we have to rely on the national law applicable in the
country where the employee is domiciled.
If we decide to start legal proceedings in the Netherlands, even if it is not a legal forum under Brussels
I, the employee could agree:
● Because he likes the choice of forum;
● Because he does not contest the jurisdiction (implied choice).
● BUT, the employee can decline the choice of forum, though they often think they do not have a
choice.
i.e. a Dutch court must check whether the employee knew that they had another choice of forum, but
will not ask the employee if they want to start proceedings in Belgium.
N.B. the employee can be sued where they work, not where they lives → provision trying to find the
closest connection between the applicable law and the contract (difference between consumer and
employee)
N.B. a choice of law which grants the employer with an additional choice of forum is always invalid
under Brussels I.
Applicable law
Which law governs our employment contract? What can we expect from our employee based on the
contract?
If the jurisdiction has been established in the EU, then the court will probably apply Rome I.
Can we make a choice of law? Can we deviate from the law applicable in the place where the employee
carries out her work? Yes, we can, based on Rome I - general rule of party autonomy.
But we first need to check if Rome I applies to our situation (is its scope fulfilled?)
● Temporal scope – Art. 28 (after 17 December 2009) (before🡪 Rome Convention)
● Substantial scope – Art. 1 (civil and commercial matters)
● Formal scope – Art. 2 (Any law – Universal application)
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General rule → party autonomy (Art. 3)

● If you make a choice, which law would you choose as a company?
○ Law that is most beneficial
○ Law in our language
○ Less employment taxes
○ More flexible for employer
○ Less rights for the employee
However, that choice of law is limited:

Article 8(1) Rome I Regulation ‘Individual employment contracts’
1. An individual employment contract shall be governed by the law chosen by the parties in
accordance with Article 3. Such a choice of law may not, however, have the result of
depriving the employee of the protection afforded to him by provisions that cannot be
derogated from by agreement under the law that, in the absence of choice, would have
been applicable pursuant to paragraphs 2, 3 and 4 of this Article.
2. To the extent that the law applicable to the individual employment contract has not been
chosen by the parties, the contract shall be governed by the law of the country in which or
from which the employee habitually carries out his work in performance of the contract.
The country where the work is habitually carried out shall not be deemed to have changed
if he is temporarily employed in another country.
3. Where the law applicable cannot be determined pursuant to paragraph 2, the contract shall
be governed by the law of the country where the place of business through which the
employee was engaged is situated.
4. Where it appears from the circumstances as a whole that the contract is more closely
connected with a country other than that indicated in paragraphs 2 or 3, the law of that
other country shall apply.
● Choice of law - Art. 8(1)

○ Every law can be chosen.
○ But it cannot guarantee less rights than the law which would apply if no choice of law
was made. That choice cannot set aside the mandatory provisions that protect the
employee.
○ Regulation imposes a minimum standard of protection.
○ In the end, there may be two laws governing the employment contract.
● No choice - Art. 8
○ (2) law where the employer works
○ (3) law applicable where he was engaged
○ (4) law with the closest connection based on the circumstances
It is hard to determine which law grants more protection, as they provide different schemes of
protection which can be applicable in different circumstances.
● Difficult to determine which one provides for more protection, but this comparison only comes
into play when one of the parties enters into legal proceedings. Then, it is up to the Court to
make a comparison.
● Is still important to compare the two (or more) potentially applicable laws.
● As it is still an ongoing issue, it should not be done too strictly.
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‘provisions that cannot be derogated from by agreement’ → In general, all the provisions which do
not state that they can be derogated from by party agreement are considered non-derogable under
Art. 8 Rome I.
‘closely connected’ → Extensive case law to determine this. The EU approach does not relate to the
flag principle to establish jurisdiction in employment contracts (especially critical in case of truck
drivers, pilots, etc…), but all the different factors on a case-by-case basis.
E.g. where you receive instructions, where you have to come back every time, where you keep your
tools, etc…
‘habitual place of employment’: different national courts have different interpretations see above
at ‘habitual work’
• Herbert Weber v Universal Ogden Services Ltd
• Jan Voogsgeerd v Navimer SA
Would it still make sense to include a choice of law?

● It will apply in general and provides a general level of legal certainty.
● In general, the law chosen is that of the place of work.
● Otherwise, several laws can be applicable to the same contract.
● In case we open several branches, it could be beneficial to have all the contracts under Dutch
law or the same judicial system.
Lecture 5 and 7: Directors Liability

In a global economy with cross-border competition sparked an increase of corporate activity within
the realm of Private International law. For many actions, including debt of damage, many companies
are separate legal entities with own responsibility, not linked to their members or owners.
In case of a director, it is often associated with the conduct of the whole company and shielded from
personal liability, which can nonetheless arise in case of:
• Misconduct
• Negligence
• Breach of fiduciary duty
• Losses
• Damages
• Breach of contract
Which can arise vis-à-vis the company, its shareholders or the creditors.
Private International law is relevant when these actions or omissions occur in different states (i.e. with
a cross-border effect)
N.B. director’s liability is explained according to EU law.
Possible fields of law civil law, fiscal law, criminal law
Within civil liability:

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• Internal liability
o Liability towards the company
o This is the case when the director breach one of his/her duties under:
Corporate law
Rules of association of the company
Employment contract
Other contracts or statutory duties
• External liability
o Liability towards third parties
Shareholders, creditors, insolvency agent, etc…
o Usually when the director, following an act or omission in breach of law or his duty, is
personally liable for damages.
i.e. If a fraud has been committed, there can be scenarios giving rise to both internal and external
liability (very rare case)
First scenario
(See slides for the text)
• Violation of the Articles of association

• He should have asked the shareholders for permission.
• The company can hold Sven liable
o Breach of corporate law
o If that was written in a contract: Breach of contract
o If there was an employment contract: Breach of employment contract
Second scenario
• Embezzlement of funds (fraud)

• Illegal, Frits can be liable towards the company
o Breach of corporate law
o Tort (secondary claim in case the court find no breach of corporate law)
Third scenario
• When they terminate the contract, no liability towards the company

• Sven would be liable towards the IT company if they incur losses
• The third party can hold the person signing the contract liable
o Tort (Liability outside corporate law)
Fourth scenario
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• In case of insolvency, the company goes bankrupt

• The directors keep entering into contracts and conducting business until the end
• Creditors can initiate proceedings against the directors
o Insolvency (if the insolvency agent is the plaintiff)
o Tort (if the creditor is the plaintiff)
To establish liability and distinguish them you need to look at:

• The breached duties
• The presence of a contract
• An action or omission in tort
Jurisdiction
Employment, Contract or Tort
Problematic to establish jurisdiction.

• No specific category of ‘director’s liability’ in the Brussels Regulation
• We need to associate the case with one category, such as insolvency, contracts, tort, etc…
• Question: Does it fall within ‘employment’, ‘contract’ or ‘tort’?
• The abovementioned terms are to be determined through an autonomous interpretation which
is not dependent on the classification given by the law of the different Member States ( the
meaning is the same within the EU as it derives from EU law)
• The answer to this question allows us to specify the case, see which provisions of the
Regulation are applicable and finally determine the jurisdiction for the specific case under
Brussels I (in the EU)
• If the director does not work under the supervision of the company, then no employment
• In external liability there is no contractual liability, but sometimes breach of corporate law.
• Breach of corporate law is part of the tort category.
Holterman Ferho Case

the company decided to hold the director liable. Three separate actions. Separate indicators for the
three categories:
1. Individual contract of employment’ & ‘Worker’

o Is the individual bound by an ‘individual contract of employment’ to the company of
which they were a director and manager? Could they be classified as a ‘workers’?
(c.47) Was the defendant able to influence the will of that company’s
administrative body of which they were the manager? Who had the authority to
issue them with instructions and to monitor their implementation?
If they do have such influence, then there is no relationship of subordination in
regards to the definition of a ‘worker’.
(c.49) This person must have, in their capacity as director & manager, for a
certain period of time performed services for & under the direction of that
company, in return for which they received remuneration?
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2. ‘Matters relating to a contract’

o Does an action brought about by a company against its former manager on the basis of
an alleged breach of their obligation under company law, come within the concept of
‘matters relating to a contract’?
(c.53) If the defendant chose to manage & administer the company, and the
company undertook to remunerate them for those services, then the actions
brought by the company comes within the concept of ‘matters relating to a
contract’.
(c.55) Then we must establish where the obligation, that is the basis for the
claim, was performed or ought to have been performed → the place.
(c.62) Observe any document/text that may define the obligations of the
manager vis-à-vis that company.
(c.63-65) Otherwise, we must take into consideration the fact that those
services were provided on behalf of that company, taking into account the time
spent in those places & the importance of the activities carried out. However,
these services should not be contrary to the parties’ intentions as indicated by
what was agreed.
3. ‘Wrongful conduct’, ‘tort, delict or quasi-delict’ & ‘the place’

o What constitutes ‘wrongful conduct’? What is considered to be the ‘place’ where the
‘wrongful conduct’ occurred?
(c.70) A claim comes under ‘tort, delict or quasi delict’ only if it does not
concern the legal relationship of a contractual nature between the company &
the manager.
(c.72) The place where ‘the harmful event occurred or may occur’ covers both
• the place where the damage occurred, &
• the place of the event giving rise to it.
The defendant may be sued in either place.
(c. 73-74) A court may have jurisdiction to adjudicate a case, if there is a
particular connection between the dispute and the court of the place where the
harmful event occurred or may occur, exists. It includes the proximity & ease of
taking evidence.
(c.79) The action is considered a tort or delict where the conduct complained of
is not considered a breach of the manager’s obligations.
(c.79) The Court must establish the closest link between the place of the event
giving rise to the damage and the place where the damage occurred.

Temporal scope: Article 66 on or after 10 January 2015
Substantive scope: Article 1 civil and commercial matters
31
• Exception: Art. 1(2)(b) it does not apply in case of bankruptcy, proceedings relating to the
winding-up of insolvent companies or other legal persons, judicial arrangements, compositions
and analogous proceedings.
Formal scope: Article 4 (general rule on jurisdiction) the defendant shall be sued where he/she/it
is domiciled (this general rule is also called ‘forum rei’.
• Domicile: Article 62 (use of national law when the director is a natural person)
• Exceptions: Sections 2-7 of Chapter II
• Forum rei: Forum rei is a Latin term that means “forum of the thing”. It refers to the court of
the country in which the subject of a dispute is situated.
• Article 4 Brussels Ibis Regulation

o When a claim is initiated against a director, the courts of the domicile of the director
will have jurisdiction.
o establishes where the domicile of the defendant is
o Thus, the Court will apply the law of the country in which an action is brought.
o Establishes the domicile of the defendant if the director is a legal person.
o Awards jurisdiction to the court of the statutory seat, central administration or
principal place of business of the director.
Recognition and enforcement Article 2(a), (b) and (c)
How to use the distinction made under Holterman v Ferho in applying Brussels I (i.e. which is the
relevant article to use):
Internal Liability
Contractual liability Contract Art. 7(1) Brussels Ibis
Corporate law liability Contract Art. 7(1) Brussels Ibis
Employment law liability Individual employment contract Arts. 20-23 Brussels Ibis
(employment)
Liability outside corporate Tort Art. 7(2) Brussels Ibis
law
External liability
Corporate law liability Tort Art. 7(2) Brussels Ibis
Liability outside corporate Tort Art. 7(2) Brussels Ibis
law
Insolvency Insolvency Arts. 3 and 6 Insolvency
Regulation
Source: Mathijs H ten Wolde and Kirsten C Henckel, Business and private international law (Zutphen, 2021) 109.
Employment
First is it an employment contract? If yes, use this section, if no, go to contract.
Special jurisdiction: Article 22
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1. An employer may bring proceedings only in the courts of the Member State in which the
employee is domiciled.
2. The provisions of this Section shall not affect the right to bring a counter-claim in the court in
which, in accordance with this Section, the original claim is pending.
Is this an employment contract, he has to be subordinate to a certain extent?

If it is the case, then we can only sue him where he is domiciled.
Contract (provision of services)
Second is there a breach of contract or corporate law? If yes, use this section, if no, go to tort.
has domicile.
Special jurisdiction: Article 7(1)

• A person domiciled in a Member State may be sued in another Member State:
o in matters relating to a contract, in the courts for the place of performance of the
obligation in question.
o for the purpose of this provision and unless otherwise agreed, the place of performance
of the obligation in question shall be:
• in the case of the sale of goods, the place in a Member State where, under the
contract, the goods were delivered or should have been delivered,
• in the case of the provision of services, the place in a Member State where,
under the contract, the services were provided or should have been provided;
o if point (b) does not apply then point (a) applies;
‘where the services were provided or should have been provided’ if it is written in the contract,
it very easy to determine, otherwise the place in which he carries out most of his managing activities.
N.B. A management contract and corporate law are classified under the section for the provision of
services
If you made a choice of forum, then that would apply
For more information, see the lecture on contractual obligations
Tort (+ delict and quasi-delict)
Third is there a breach of contract or corporate law? If no, use this section.
has domicile.
Special jurisdiction: Article 7(2)

• A person domiciled in a Member State may be sued in another Member State: in matters
relating to tort, delict or quasi-delict, in the courts for the place where the ‘harmful event’
occurred or may occur.
33
For external liability, in case of breach of corporate law duties tort applies.
Most cases are decided as a breach of corporate law. You hardly arrive to tort.
‘Harmful event’ Mines de Potasse (landmark case): in this case, the ECJ made a distinction between
Handlungsort and Erfolgsort
• Handlungsort = the place of the event giving rise to the damage (where the director carries
out his duties)
• Erfolgsort = the place where the damage occurs (where the alleged damage is manifest)
• In most situations the two happen in the same location
• In case they are different places, the plaintiff is allowed to choose in which one she prefers to
sue the defendant under Article 7(2)
• Strict interpretation: Holterman Ferho Case paras 78

o the term ‘place where the harmful event occurred’ cannot be construed so
extensively as to encompass any place where the adverse consequences can be felt of
an event which has already caused damage actually taking place elsewhere.
o There has to be a strong connection (causation) between the place and the damage (i.e.
no indirect damages)
• In case of external liability: Supreme Court of the Netherlands 2020 ECLI:NL:HR:2020:1223

o Handlungsort: the place that is connected to the activities carried out by the company
and to the financial situation related to those activities.
Choice of forum
Art. 25 Prorogation of jurisdiction

1. If the parties, regardless of their domicile, have agreed that a court or the courts of a
Member State are to have jurisdiction to settle any disputes which have arisen or which may
arise in connection with a particular legal relationship, that court or those courts shall have
jurisdiction, unless the agreement is null and void as to its substantive validity under the law of
that Member State. Such jurisdiction shall be exclusive unless the parties have agreed
otherwise.
4. Such agreements shall have no legal force if they are contrary to Articles 15 (conditions for
insurances), 19 (conditions for consumer contracts) or 23 (conditions for employment contracts),
or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue
of Article 24 (exclusive jurisdiction).
‘Particular legal relationship’ – not applicable in case of tort, not including cases falling under the
Insolvency Regulation
Multiple defendants
• This section applies to the whole Brussels I, not only in case of directors.
Art. 8(1): A person domiciled in a Member State may also be sued:
34
• where he is one of a number of defendants, in the courts for the place where any one of them
is domiciled, provided the claims are so closely connected that it is expedient to hear and
determine them together to avoid the risk of irreconcilable judgments resulting from separate
proceedings.
Following scenario 4, it is important to remember that Brussels I allows to sue different defendants in
the same place as the two claims are the same:
• As Frits and Stephan continued to carry on the business even when the company was going
bankrupt, we can establish the following things:
o The Handlungsort is in the Netherlands, so you could sue both of them there
o Stephan is domiciled in the Netherlands, so we can sue him there
o Frits is domiciled in Germany, so we can sue him there
• We can start proceedings for both in the place where ONE OF THE TWO is domiciled (we can
sue both defendants in the Netherlands or in Germany)
Insolvency
In case of insolvency, Brussels I does not apply due to Art. 1(2)(b), so we have to look at these articles
of the Insolvency Regulation:
Art. 3 Insolvency Regulation ‘International Jurisdiction’

1. “The courts of the Member State within the territory of which the centre of the debtor's main
interests is situated shall have jurisdiction to open insolvency proceedings (...). The centre of
main interests shall be the place where the debtor conducts the administration of its interests
on a regular basis, and which is ascertainable by third parties.
2. (...) the courts of another Member State shall have jurisdiction to open insolvency proceedings
against that debtor only if it possesses an establishment within the territory of that other
Member State. The effects of those proceedings shall be restricted to the assets of the debtor
situated in that territory (…)
Art. 6 Insolvency Regulation ‘Jurisdiction for actions deriving directly from insolvency proceedings
and closely linked with them’.
1. The courts of the Member State within the territory of which insolvency proceedings have
been opened in accordance with Article 3 shall have jurisdiction for any action which derives
directly from the insolvency proceedings and is closely linked with them, such as avoidance
actions.
2. Where an action referred to in paragraph 1 is related to an action in civil and commercial
matters against the same defendant, the insolvency practitioner may bring both actions
before the courts of the Member State within the territory of which the defendant is
domiciled, or, where the action is brought against several defendants, before the courts of the
Member State within the territory of which any of them is domiciled, provided that those
courts have jurisdiction pursuant to Regulation No 1215/2012 (Brussels I)
3. For the purpose of paragraph 2 actions are deemed to be related where they are so closely
connected that it is expedient to hear and determine them together to avoid the risk of
irreconcilable judgments resulting from separate proceedings
‘Centre of the debtor's main interests’ in case of Gruma, it would be the Netherlands
35
‘Other actions’ In case an insolvency action is related to a civil and commercial one, the two actions
can be brough where the defendant (or one of the defendants) is domiciled, ONLY if that court would
have jurisdiction pursuant to Brussels I.
N.B. Insolvency regulation does not cover when the creditor what to start proceedings based on tort
Applicable law
First scenario
• Violation of the Articles of association

• He should have asked the shareholders for permission.
• The company can hold Sven liable.
o Breach of company law
o Rely on national law (Dutch company law in this case)
o Polish law would apply (as the Netherlands apply the incorporation theory and then
Polish law is the law where the subsidiary is incorporated)
Second scenario
• Embezzlement of funds (fraud)

• Illegal, Frits can be liable towards the company
o Breach of company law
o Independent Tort (secondary claim in case the court find no breach of corporate law)
o BUT Art. 1(2)(d) non contractual obligation out of the law of company are excluded
from this Regulation
Third scenario
• When they terminate the contract, no liability towards the company

• Sven would be liable towards the IT company if they incur losses
• The third party can hold the person signing the contract liable
o Tort (Liability outside corporate law)
o Tort issue that clearly falls within Rome II Regulation
o Thus, in case of internal liability, lex societatis is more certain to apply. For external
liability, it could also apply, but this is not the case in Dutch law that applies company
law
Fourth scenario
36
• In case of insolvency, the company goes bankrupt

• The directors keep entering into contracts and conducting business until the end
• Creditors can initiate proceedings against the directors
o Article 7(1) Insolvency Regulation
lex concursus
these proceedings & their effects are subject to the law of the country in who
territory the insolvency proceedings are opened
Does this apply to the liability of directors? Is it also covered by this
provision? CJEU has not ruled on this issue specifically.
o Dutch law could also apply
Classification
N.B. Each claim could be dealt with differently because there is no uniform rule on director’s liability.
Internal v External Liability

• Need to make a distinction as the claim will be classified differently.
• The national laws of each MS will deal with the classification of these claims differently ⇒ deal
with this on the basis of lex fori.
Lex fori – the law of the court that has jurisdiction applies (i.e. the court applies its own court)
• However, as deriving from EU law, the definitions in the Regulations should have autonomous
meaning, independently applied.
• there are no separate categories for director’s liability
• depending on the claim that is initiated, the classification will be different ⇒ important to
establish whether this is internal & external liability.
• Is there some sort of contract of services, tort, employment, insolvency?
Internal Liability
Contractual liability Company law Lex societatis
Corporate law liability Company law Lex societatis
Employment law Company law or Individual employment Lex societatis or Art. 8
liability contract (employment) Rome I
Liability outside Tort Art. 4(3) Rome II and Lex
corporate law societatis
External liability
Corporate law liability Company law Lex societatis
Liability outside Tort Art. 4 Rome II
corporate law
Insolvency Insolvency Art. 7 Insolvency
Regulation
Source: Mathijs H ten Wolde and Kirsten C Henckel, Business and private international law (Zutphen, 2021) 118.
Lex societatis
37
It is the laws that governs the company and its internal structure, applicable in corporate law and
contract law
• In absence of international or European rules, lex societatis applies in accordance with
national Private international law
N.B. Very fine line when distinguishing internal from external law when looking at corporate law
liability, often falls within lex societatis.
Incorporation Theory
• Mostly applies to countries most lenient to trade (i.e. Scandinavian, NL, Belgium, Switzerland,
UK)
• more countries moving to this theory.
• the law that applies to company includes those where the company has its statutory seat/place
of incorporation.
• Book 10 of Dutch Civil Code → only deals with issues of Private International law: it states that
when it comes to determining the applicable law, the NL applies the incorporation theory
o Art. 10:118 DCC - where does the company have its statutory seat
o Art. 10:119 DCC- this particular provision specifically refers to director liability
• Party autonomy since one can decide their statutory seat when they create the company.
• Even if you move your headquarters in France, if you are incorporated in the Netherlands the
applicable law will remain Dutch law.
Real-Seat Theory
• France, Portugal, Spain, Italy
• The law where the company is actually located applies place of central administration /
operational headquarters.
• Limited party autonomy
• Two opposing ways to apply the law in Europe.
• These theories help in determining the applicable law.
Rome I Regulation
Temporal scope – Art. 28 (after 17 December 2009)
Substantial scope – Art. 1 (civil and commercial matters)

● Exclusion: The following shall be excluded from the scope of this Regulation:
o Art. 1(2)(f) ‘Questions governed by the law of companies and other bodies, corporate
or unincorporated, such as the creation, by registration or otherwise, legal capacity,
internal organisation or winding-up of companies and other bodies, corporate or
unincorporated, and the personal liability of officers and members as such for the
obligations of the company or body’
Kerr v Postnova, para 34 – all the complex acts that are necessary for the creation of a company and
the regulation of its internal organization are excluded from the scope of Rome I.
It is generally considered that internal liability of directors is excluded from Rome I, regardless the
nature of the claim. It is therefore necessary to apply national Private international law.
38
Rome II Regulation
Temporal scope – Art. 31 (after 11 January 2009)
Material scope - Art. 1(1) - This Regulation shall apply, in situations involving a conflict of laws, to
non-contractual obligations in civil and commercial matters.
• N.B. there are a lot of exception provided in Art. 1
• In general, it applies to tort or non-contractual obligations
• Art. 1(2)(d) non-contractual obligation out of the law of company are excluded from this
Regulation
• When something falls under lex societatis, Rome II does not apply, and this exclude most of the
situation of internal liability
• Independent Tort (not involving the relationship between the director and the company) is
however under the scope of Rome II (scenario 1)
• ‘non-contractual obligations’ Art. 2(1-2)
1. For the purposes of this Regulation, damage shall cover any consequence arising out of
tort/delict, unjust enrichment, negotiorum gestio or culpa in contrahendo.
2. This Regulation shall apply also to non-contractual obligations that are likely to arise.
Formal scope - Art. 3 (universal application)

• Any law specified by this Regulation shall be applied whether or not it is the law of a Member
State.
Article 4(1) Rome II (general rule) → law of the country where the damage occurred.
• Unless otherwise provided for in this Regulation, the law applicable to a non-contractual
obligation arising out of a tort/delict shall be the law of the country in which the damage
occurs irrespective of the country in which the event giving rise to the damage occurred and
irrespective of the country or countries in which the indirect consequences of that event
occur.
• Lex loci damni the law where the damage occurs
Exceptions:
• Art. 4(2) - However, where the person claimed to be liable and the person sustaining damage
both have their habitual residence in the same country at the time when the damage occurs,
the law of that country shall apply.
• Art. 4(3) - Where it is clear from all the circumstances of the case that the tort/delict is
manifestly more closely connected with a country other than that indicated in paragraphs 1
or 2, the law of that other country shall apply. A manifestly closer connection with another
country might be based in particular on a pre-existing relationship between the parties, such
as a contract, that is closely connected with the tort/delict in question.
In case the tort is manifestly more closely connected with the MS where the damage occurred, the law
of that country applies.
39
N.B. Thus, in case of internal liability, lex societatis is more certain to apply. For external liability, it
could also apply, but this is not the case in Dutch law that applies company law.
Insolvency
Company forced to enter into insolvency, while Frits & Stephan continue to carry on business as usual.
The insolvency practitioner may initiate proceedings → Does this apply to the liability of director?
• Article 7(1) Insolvency Regulation
o insolvency proceedings and their effects are subject to the law of the territory in which
the insolvency proceedings are opened.
o lex concursus is the rule of private international law that determines which law
applies to insolvency proceedings, namely that of the state where the insolvency
proceedings were opened.
o Does this apply to the liability of directors? Is it also covered by this provision? CJEU
has not ruled on this issue specifically.
Lecture 6: Tort
Situations:
1. A Dutch company is infringing a French trademark of a company based in France (the
company owning the trademark sues us)
2. A Dutch company issues misleading general and financial information in prospectus to
make it for attractive for investors (damaged investors are suing us)
Both issues are very different, but considered similar as non-contractual obligations (tort) dealt by the
same article in Brussels I

Scope

• Even suing in tort under the regulation has to be under civil and commercial matters
• Exception: Art. 1(2)(b) it does not apply in case of bankruptcy, proceedings relating to the
winding-up of insolvent companies or other legal persons, judicial arrangements, compositions
and analogous proceedings.
Formal scope:
• Art. 4 (general rule on jurisdiction) the defendant shall be sued where he/she/it is
domiciled.
o Domicile: Article 62 (natural person), Article 63 (legal person)
• Art. 7(2) - Alternative ground (forum delicti)
40
o A defendant can be sued in tort before the courts of the place where the harmful
event (tort, offence, or injury) occurred or may occur.
Latin reminder:
• ‘forum’ = the place where the courts have jurisdiction
• ‘locus’ = the place
• ‘delicti’ = literally ‘of the tort’
Therefore:
• Locus delicti The place where the tort, offence, or injury has been committed
• Forum loci delicti The courts in the place where the tort, offence, or injury has been
committed have jurisdiction.
In Situation 1, the tort happens in France, e.g. Because the company is based in France or because the
trademark is registered there.
Forum rei (Art. 4) vs Forum delicti (Art. 7(2))

• In tort, the regulation provides jurisdiction also for the courts where the damage occurs in
addition to those where the defendant is domiciled.
• This is to facilitate the link between the court and the dispute, as forum delicti brings some
advantages:
o The court is closer to the harmful event
o More direct administration of justice
o More efficient proceedings
o Easier for the court to gather evidence and information
o Easier to establish liability
o Predictability and legal certainty
• Once you determine the Handlungsort or Erfolgsort, it is then possible to confer jurisdiction to
the court that is objectively best placed.
If somebody is suing us in tort, there was no contract and no choice of forum, so the general rule of Art.
4 applies. Tort is determined through an autonomous interpretation which is not dependent on the
classification given by the law of the different Member States ( the meaning is the same within the
EU as it derives from EU law)
National courts have to ask the ECJ to clarify the case
‘Tort’ under the Brussels I includes:

• Imminent tort (something that has still to happen)
• Negative declaratory actions (big role for Intellectual property) asking for a judgement
which declares that we are not infringing any trademark
• No specific subtitles to subdivide the category of tort.
Direct damage
You can sue in tort for all sort of damage linked to the action:
• Direct damage
• Indirect damage
• Pure Financial loss
41
However: Marinari v Lloyds

• ONLY the location where the direct damage occurs count for jurisdiction.
Harmful event
Mines de Potasse very important in case of Tort.

• the establishing of a harmful event is important as it might add one or even two extra choices
compared to the general rule of Art. 4
• in this case, the ECJ said you have to make a distinction between Handlungsort and Erfolgsort
• Handlungsort = the place of the event giving rise to the damage (where the director carries
out his duties)
• Erfolgsort = the place where the damage occurs (where the alleged damage is manifest)
• In most situations the two happen in the same location
• In case they are different places, the plaintiff is allowed to choose in which one she prefers to
sue the defendant under Article 7(2)
In Situation 1, infringing a trademark in France, the Erfolgsort happens in France for sure, the
Handlungsort might be in the Netherlands or in France, depending on the situation.
‘Place where the harmful event occurs’ in case the event giving rise to the damage (Handlungsort)
is composed by several acts:
1. Look at the place where most of the acts occurred
2. If not, look at the place where the decisive/essential/crucial damaging event occurred
3. If difficult or impossible to determine the Handlungsort, then only the Erfolgsort and the forum
rei (domicile) apply (para 33, Réunion européenne v Spliethoff).
Wintersteiger Case (trademark case on Google ads, using the same reasoning of Brussels I)
• Para 32 - It is, in particular, established that the place where the event giving rise to an alleged
damage occurred may constitute a significant connecting factor from the point of view of
jurisdiction, since it could be particularly helpful in relation to the evidence and the conduct of
proceedings.
• Para 39 - an action relating to infringement of a trademark registered in a Member State
because of the use, by an advertiser, of a keyword identical to that trade mark on a search
engine website operating under a country-specific top-level domain of another Member State
may be brought before either the courts of the Member State in which the trademark is
registered or the courts of the Member State of the place of establishment of the advertiser.
• Austrian trademark was infringed, the plaintiff could bring a claim in Austria or when the
advertiser is established.
Kolassa Case
• Para 67 - The former provision encompasses legal prospectus liability. The ‘place where the
harmful event occurred’ must be interpreted as encompassing the place in which the
certificate holder is domiciled, if the publication of the prospectus in the Member State in
which the holder is domiciled gives rise to financial damage.
42
Situation 1 under Brussels I A Dutch company is infringing a French trademark of a company

based in France (the company owning the trademark sues us). The French company can sue:
• Where the defendant is domiciled (The Netherlands)
• Where the event giving rise to the damage occurs (The Netherlands, if the
decisive/essential/crucial damaging event occurred there)
• Where the effects of the direct damage are manifest/where the trademark is registered
(France)
Three potential places where they could sue.
Situation 2 under Brussels I A Dutch company issues misleading general and financial
information in prospectus to make it for attractive for investors. Damaged investors can sue us:
• Where the defendant is domiciled (The Netherlands)
• Where the event giving rise to the damage occurs (The Netherlands, as the issuing of the
prospectus occurred there)
• Where the effects of the direct damage are manifest/ where the loss occurred (where the
applicant is domiciled)
Three potential places where they could sue.
Applicable law
In general, tort is a non-contractual obligation so that Rome II applies, which is however broader that
that.
International instruments:
• Hague Convention on traffic accidents
• Hague Convention on product liability
Lex loci delicti by analogy from the rules on jurisdiction in Brussels I, it means that the law where
the tort has been committed applies
BUT Rome II applies the Lex loci damni (Art. 4)
Rome II Regulation
Temporal scope – Art. 31 (after 11 January 2009)
Material scope - Art. 1(1) - This Regulation shall apply, in situations involving a conflict of laws, to
non-contractual obligations in civil and commercial matters.
• N.B. there are a lot of exception provided in Art. 1.
• In general, it applies to tort or non-contractual obligations
• Art. 1(2)(d) non-contractual obligation out of the law of company are excluded from this
Regulation
• When something falls under lex societatis, Rome II does not apply, and this exclude most of the
situation of internal liability
• Independent Tort (not involving the relationship between the director and the company) is
however under the scope of Rome II (scenario 1)
43
• ‘non-contractual obligations’ Art. 2(1-2)

1. For the purposes of this Regulation, damage shall cover any consequence arising out of
tort/delict, unjust enrichment, negotiorum gestio or culpa in contrahendo.
2. This Regulation shall apply also to non-contractual obligations that are likely to arise.
Formal scope - Art. 3 (universal application)

• Any law specified by this Regulation shall be applied whether or not it is the law of a Member
State.
Freedom of choice
Even when tort occurs, parties can make a choice of law

• Art. 14(1) - 1. The parties may agree to submit non-contractual obligations to the law of their
choice:
a) by an agreement entered into after the event giving rise to the damage occurred; or
b) where all the parties are pursuing a commercial activity, also by an agreement freely
negotiated before the event giving rise to the damage occurred.
In case of two parties (companies) having a commercial relationship (i.e. a contract), it is possible to
make a choice before the event occurs.
Absence of choice
If no choice is made:
• Regular torts delicts Art. 4
• Special torts delicts Arts. 5-9
• Non-contractual obligations other than tort /delict Arts. 10-13
Article 4(1) Rome II (general rule) → law of the country where the damage occurred.
• Unless otherwise provided for in this Regulation, the law applicable to a non-contractual
obligation arising out of a tort/delict shall be the law of the country in which the damage
occurs irrespective of the country in which the event giving rise to the damage occurred and
irrespective of the country or countries in which the indirect consequences of that event
occur.
• Lex loci damni the law where the direct damage occurs
N.B. like for jurisdiction, only the direct damage count for assessing the applicable law, so that indirect
and consequential damages must be excluded.
Exceptions:
• Art. 4(2) - However, where the person claimed to be liable and the person sustaining damage
both have their habitual residence in the same country at the time when the damage occurs,
the law of that country shall apply.
• Art. 4(3) - Where it is clear from all the circumstances of the case that the tort/delict is
manifestly more closely connected with a country other than that indicated in paragraphs 1
or 2, the law of that other country shall apply. A manifestly closer connection with another
44
country might be based in particular on a pre-existing relationship between the parties, such
as a contract, that is closely connected with the tort/delict in question.
Infringement of intellectual property rights

• Art. 8(1) - The law applicable to a non-contractual obligation arising from an infringement of
an intellectual property right shall be the law of the country for which protection is claimed.
Lecture 7: Recognition and enforcement of foreign

judgments
Scenarios
1. A Dutch company has obtained a judgment from Dutch court condemning a French company
(with headquarters in France) to pay damages for copyright infringement.
Where would we want to enforce such a judgment? Where will this money come from?
If the company is located in France, then their assets are most probably located there as well. As such,
the judgment should be enforced where the judgment debtor can find the source of money to pay for
those damages.
We need the judgment to be recognised and enforced in France (relatively easy)
2. Spanish company enters into a legal relationship with a Dutch Company and wants to subject
all disputes arising from the contract to the exclusive jurisdiction of the Argentinian courts.
Will the Dutch company agree to this?
Argentina is not an EU MS making the enforcement and recognition somewhat difficult.
We need the judgment to be recognised and enforced in Spain from Argentina (extremely
difficult)
N.B. to choose the court, we must ensure that this judgment will be recognised & enforced elsewhere.
What facilitates the recognition and enforcement of the judgment?
• International instruments
o Brussels Ibis Regulation
o Lugano Convention 2007
o HCCH Choice of Court Convention 2005 - countries party to it are limited (Mex, Sing,
Montenegro, EU, Den, UK)
• Bilateral agreements
o Governed by the national laws of the two countries involved (e.g. Australia and New
Zealand agree to recognize and enforce each other’s judgements)
Brussels Ibis Regulation

45
Since NL is part of EU, it will most likely apply the Brussels Ibis Regulation
Scope
Formal scope: Formal scope if different when looking at recognition and enforcement.
• Recognition: Article 36(1)
o A judgment given in a Member State shall be recognised in the other Member States
without any special procedure being required.
• Enforcement: Article 39
o A judgment given in a Member State which is enforceable in that Member State shall be
enforceable in the other Member States without any declaration of enforceability
being required.
Art. 36: No special procedure → Member States automatically recognise judgment rendered from
another European Member States.
Art 39: Enforceable in other Member States if also enforced in the Member State of origin. (i.e. If it’s
enforceable in the NL, then it can also be so in other Member States)
Refusal of recognition and enforcement
Refusal of recognition
Art. 45 list of grounds that, if present, can be invoked before the court to prevent the recognition of
foreign judgements.
• Court can argue that there are no grounds for refusal of recognition
• Non-recognition → counter party can initiate legal proceedings based on specific grounds, but
these only play a part when someone actually invoked them, otherwise more or less automatic
recognition.
• Some grounds:
o contrary to public policy
o default of appearance (not served properly)
o a similar judgment between the same parties has already been addressed
o irreconcilable with earlier judgment
o conflict with rules of consumers, insured parties & employees (to protect the weaker
party)
Refusal of enforcement
Art. 46 On the application of the person against whom enforcement is sought, the enforcement of a
judgment shall be refused where one of the grounds referred to in Article 45 is found to exist.
46
European Union
In scenario 1 (within the EU)

• it is easy when the two countries are Member States.
• Should not look at substance of the case (more or less blindly recognised principle of
mutual trust)
• Brussels I is easy to apply
In scenario 2 (outside the EU)

• it is more difficult since Argentina is not part of the EU and falls outside scope of Brussels I
• We probably would not agree to such a choice of forum
• Issue of Argentinian court there is no international instrument to facilitate recognition and
enforcement, so that the contract would be subject to national rules of jurisdiction of the given
parties (e.g. Spain, favourable to them)
• If we were to say yes, we should check whether the counterparty has its assets in Argentina, so
that and Argentinian judgement would be much more effective.
47

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Private International Business Law Year 2, Block 4 Nexus 2020/2021

The Nexus Educational Committee invites you to communicate any possible

THESE NOTES ARE NOT FOR COPY-PASTE!

Andrea & Nexus

Scope and definitions ..................................................................................................................................................... 11

Multiple defendants ............................................................................................................................................................ 34

Lecture 1: Introduction to Private International law

In the European Union

Why Private International law

● Investigate if the production is cheaper in China to reduce production costs

Here we need Private International law, which applies to:

Recognition and Enforcement

Company: Do we need Private international law?

Course of action within Private international law in case of an international dispute

1. Determine which court has jurisdiction;

How to draft the general terms and conditions of a contract

Desired criteria for the choice:

Step 2: Recognition and Enforcement

Step 3: Type of forum clause

Exclusive jurisdiction clause

Asymmetric (hybrid) clause

Step 4: Drafting the forum clause

Step 5: Applicable law

Rome I Regulation → Contractual obligations in civil and commercial matters

How do we demonstrate that the contract refers to specific law?

Step 6: Choosing the applicable law

You can choose how you want to formulate it

Many subjective criteria available:

Step 7: Choice of law clause

‘With the exception of the CISG’

Lecture 2: Contractual Obligations

Recognition and Enforcement

These two cover both issues of Jurisdiction and issues of Enforcement.

Brussels I bis Regulation

Scope and definitions

○ it applies to ‘civil and commercial matters’

Formal – Art. 4 (formal rule + ground for jurisdiction)

● Exceptions (additional choices of forum):

● How do we establish where a person is domiciled?

● ‘matters relating to a contract’

Can we agree on the choice of forum for Poland?

Party autonomy in commercial contracts

● Enables parties to make their own choice of forum.

Tacit consent – Art. 26(1)

Throughout the EU we can use:

Substantive – Art. 1(1)

Formal – Art. 2 (Universal application'

Art. 4 - Applicable law in the absence of choice

‘Habitual residence’ → Art. 19(1-2) Rome I Regulation

○ =/= Article 63 Brussels Ibis Regulation

Party autonomy (general rule)

Art. 3 - Freedom of choice

● Does not matter if a party is not European

Criteria for the choice of a beneficial law:

In case of equal negotiation → neutral law that is good for both

Favour principle → Art. 11(2)

Exceptions to party autonomy

Protection principle → Art. 6