30.4.2004   

EN

Official Journal of the European Union

C 108/1

1.1

The Commission's main purpose in presenting the Green Paper on the conversion of the Rome Convention of 1980 on the law applicable to contractual obligations into a Community instrument and its modernisation [COM(2002) 654 final of 14 January 2003], henceforth referred to as the ‘green paper’, was ‘to launch a wide-ranging consultation of interested parties on a number of legal questions’ concerning conversion and modernisation, formally declaring that it ‘has neither taken a decision in respect of the necessary to modernise the Rome Convention nor in respect of its conversion into a Community instrument’.

1.2

In contrast the Committee, acting within the scope of its consultative powers, wishes at this stage to express its approval of the principle of converting the Rome Convention into a Community instrument, and of the modernisation of its provisions. In so doing, it is aware that it is fulfilling its consultative role in an area which is vital not only to the regulation of key aspects of the completion of the internal market, but also to the creation of a European civil society with regard to an essential aspect of an area of freedom, security and justice (1).

1.3

In a number of earlier opinions, the Committee called for a debate on the relevance of the provisions of the Rome Convention and on the various difficulties encountered in its implementation concerning several general or sectoral aspects (2).

1.4

By the same token, with regard to conversion into a Community instrument by virtue of the new possibilities provided by the Treaty of Amsterdam for the creation of an area of freedom, security and justice, which were set out in the Vienna action plan, adopted by the Council in 1998 (3) and fleshed out at the Tampere European Council in October 1999, the Committee can only repeat the views it expressed in its earlier opinions on conversion into a Community instrument, on the current Regulation 44/2001 of 22 January 2000 (4), and on the Communication from the Commission on European contract law (5).

1.4.1

In the first of these opinions, the Committee welcomed the Commission's decision to convert the Convention into a draft regulation, as ‘a regulation with direct application’ representing ‘significant progress, in particular insofar as it will create greater legal certainty’ and since ‘the Court of Justice will be able to ensure uniform application of the provisions set out in the regulation in all Member States’.

1.4.2

In the second opinion, the Committee argued that ‘it is undeniable that international traders feel the need for a universal, workable, stable, predictable framework to promote secure and fair transactions and compliance with the relevant provisions and principles of international public law contained in major international conventions and common law’.

1.4.3

With regard to the present initiative, therefore, the Committee would repeat the support it expressed for converting the Brussels Convention into a Community regulation. It would also draw attention to the need for legal consistency, which in turn suggests that a similar approach would be appropriate.

1.5

The Committee also considers that the Commission already has sufficient data compiled from a number of sources (6), including the above-mentioned EESC opinions, to enable it to press ahead with a fully-justified initiative which should not be delayed in view of the forthcoming accession of ten more Member States.

1.6

In view of the advances in substantive and procedural areas already made or in the pipeline, such as, amongst others (7), the Communication from the Commission on European contract law (8) and the Rome II instrument on the law applicable to non-contractual obligations (9), it would be advisable, as a minimum, for all aspects of private international law contained in the various above instruments and documents mentioned to be systematically linked in a single instrument, directly applicable in all Member States, as a means of ensuring uniform application of standardised rules of conflict of laws in all the Member States.

1.7

In addition to the highly technical and legal aspects relating to the modernisation and conversion of the Rome Convention into a Community instrument, the Commission is quite rightly concerned about the socio-economic impact of the initiative and a number of questions are raised in relation to the application of various provisions of the instrument.

1.8

The Committee shares the Commission's concern and, in assessing the proposals to modernise the Convention's content, takes account of available data on the impact of the measures, particularly concerning sectors and areas such as insurance, leasing arrangements, labour law, businesses – especially SMEs – and consumers.

1.9

The Committee wishes, from the outset, to express its general belief that modernisation of private international law arrangements, by consolidation into a single Community instrument, will have a highly beneficial effect on economic and social relations within the EC area, since it will help to standardise conflict rules and thereby generate certainty and confidence.

1.10

If the internal market is to function properly, and particularly freedom of movement and of establishment for natural or legal persons, legal certainty must be increased. Since this involves stability of legal relations, such relations must receive equal treatment in all the EU Member States (although, of course, subject to the constraints of public policy in each country).

1.10.1

This aim will be reflected in the protection of the legitimate expectations of parties to contractual relations involving multiple locations, which will also entail ensuring that there is certainty as to which law is applicable to such relations. Such stability will always be valuable when uniformity is achieved in evaluating legal situations and contractual relations in the various EU Member States. Progress towards such uniformity is without question facilitated by unifying the conflict rules, rules which prevent or resolve territorial conflicts of law.

1.10.2

This provides a single vision of such relations, increasing legal certainty regarding the way in which they should be governed, with clear benefits for the planning of commercial life and its geographical extension, freed from concern about shifts in the rules governing contractual relations (10). This also avoids ‘forum shopping’ (11).

1.10.3

Moreover, unification of the conflict rules will provide greater predictability as to which system governs contractual relations between natural persons, in turn facilitating and boosting commercial life, since the players involved will be more ambitious if less concerned about the future of their relations (12).

1.11

The Green Paper is intended primarily for legal specialists, especially universities and judges, companies and associations protecting and upholding the interests of citizens, especially consumers. The questions were drawn up with this in mind, covering almost exhaustively the issues raised by the application of the Rome Convention.

1.12

The Committee, for its part, plans to group the issues raised into major themes, making a distinction between general and specific questions, and to organise the present opinion accordingly.

1.13

In view of the ample academic and case-law information provided by the Green Paper in support of the questions the Rome Convention may raise and the alternative solutions put forward, in the interests of brevity the Committee does not reproduce all the possible arguments, sometimes simply listing the advantages of the solutions proposed.

1.14

However, in a concluding synthesis, the Committee attempts to provide a specific answer to each of the questions asked by the Commission and also raising further questions and making recommendations concerning the future work of the Commission, with the aim of contributing to the formulation and adoption of an instrument meeting current needs in this area.

2.1

The Committee agrees with the Commission's suggestion that the legal basis for the present initiative should be Articles 61(c) and 65(b) of the Treaty, and with its reasons for doing so, since the initiative is not in conflict, but rather in full keeping, with the principles of subsidiarity and proportionality.

2.2

The Committee's preference for the Community instrument to be used is, unambiguously, for a regulation, since this more closely matches the nature of the rules in question and the objective of ensuring certainty of interpretation and implementation by both the different national courts and businesses and private individuals in their transactions.

3.1

The Rome Convention is based on a number of fundamental principles and values which form the historical foundation and shared heritage of the legal systems embodying the rule of law. These include:

3.2

Since at substantive level national legal systems lay down rules to protect consumers or the party considered to be weaker (workers, insured persons or policy-holders) – not so much in order to favour them with increased benefits beyond what would in fairness be due to them, but rather to restore the balance and proportion inherent in the obligation-related aim of all contractual relations – the objective of the approach to protection of the weaker party may, also in the field of private international law, has been strictly limited to ensuring real adherence to the purpose of the conflict rules in this area, thereby preventing the distortion of conflict law which could arise from choice of the applicable law where such choice, under the guise of freedom of choice in the area, serves to conceal what is actually a unilateral choice of lex contractus made by the stronger partner (e.g. business operator, employer, etc.).

3.3

By invoking the rules of necessary and immediate implementation, it is intended to ensure not only the implementation of the commutative justice inherent to contracts, but also that certain substantive public objectives, which may conflict with European countries' economic and social organisation, are not put aside; aims deriving from distributive justice may also be achieved.

3.4

These approaches, which are more or less deeply rooted in private international law, reflect a desire for legal certainty, and in general do not stand in the way of harmony of judgments, even in relation to third countries, as well as the desire for a general trend toward the universality of the connections chosen. In spite of the reservation consisting of the need to ensure compliance with certain public policy interests, or to apply certain protective rules whether or not arising from the incorporation of Community law (13), the Committee considers that the new Community regulation on this matter should still be essentially based on these principles and values.

4.1

The questions raised with regard to the application of the Rome Convention and its future may be divided into those generated internally and those of external origin. The former result from the Rome Convention's own rules and their underlying value-based choices, and from the methodologies followed; the latter from, for example, the Convention's relation with Community law and other public international law instruments, particularly those intended to unify the conflict rules or substantive law in the field of contracts (whether already concluded or in preparation) (14), and the future relation between the Convention of Rome and the Brussels I Regulation (15).

4.2.1

The structure of the Rome Convention fits within the traditional mould of conventions for the unification of conflict rules. Following a definition of its scope and a declaration of its application to non-contracting states – continuing to apply when its rules indicate that the law of a non-contracting state has jurisdiction – the conflict rules are set out. However, the systematic inclusion of certain provisions raises some reservations.

4.2.2

Thus firstly, after Article 3, the general rule set out in Article 4 already contains a number of special rules concerning contracts for immovable property and for carriage of goods. Since certain contracts merit treatment in separate articles, this dual criterion for distribution of special rules, at least regarding carriage of goods (in deciding to maintain this rule – cf. below), should be reviewed in recognition of the different level of specialisation involved.

4.2.3

Secondly, general rules on transitory law and uniform interpretation appear among rules closer to questions more narrowly related to private international law. The systematic inclusion of these rules should be reconsidered.

4.3.1

The Convention did not seek to extend unification to all conflict-related areas in the field of contracts. Thus contractual obligations arising from family relations and succession, from credit instruments, company matters, activities of representatives or agents, trusts and insurance contracts covering risks situated in Community territory are excluded from its scope.

4.3.1.1

Some of these exclusions resulted from the existence of other regulatory instruments already providing international unification, or from current preparations for specific measures to bring about unification.

4.3.1.2

Work in progress should therefore be outlined and a new assessment made of the regulation's scope.

4.3.2

In view of the unifying purpose and the general character of the rules contained in the future regulation, it is recommended that the scope is extended as far as possible, for example to all insurance contracts, and consequently deleting Article 1(3) and (4), leaving it to Community law and national systems to match these rules with any mandatory provisions regarding transposition, in the field of insurance (16).

4.4.1

The regulation sees fit to adopt the universal character of the Rome Convention, providing that its conflict rules are applicable, even when specifying a law of a third country. A different choice could entail altering the scope of the regulation, for example by limiting it to the resolution of conflicts of laws in certain contracts, which would make it difficult to determine what constitutes a Community contract or a contract influencing or possibly having an effect on the legal and economic life of the Community or on Community territory.

4.4.2

Neither would it suffice, from the point of view of the objectives of Community legislative policy, to apply only the unified conflict rules if these should specify the applicable law as being that of a Member State, and refraining in other cases, even if the contract may have strong effects on the territory or in the life of the Community, leaving the task of ensuring the pursuit of certain Community objectives regarding protection to the internal laws of the Member States and to other Community rules.

4.5.1

Regarding the possibility of choosing a non-state set of rules, whether the general principles of law or, in the field of lex mercatoria, customary commercial practices or usages, whether or not written down and whether or not systematically arranged by international collective entities, and given the complexity involved in studying such sets of rules, the reluctance to accept a description of this type, as well as practice as established in case-law together with the general sense of national laws and the current state of development of such sets of rules and their fragmentary nature, it would be advisable to retain the approach adopted by the Rome Convention to the effect that freedom of choice must relate to a set of laws of state origin (18).

4.5.2

With regard to the possibility of choosing the system contained in an international convention, it should be made clear that it is acceptable for this choice to be a valid resolution of a conflict of laws provided that the convention in question stipulates that the agreement of both parties is a precondition for its application (19). Such a choice would be subject to the usual constraints imposed by other international obligations upon the forum, by its rules of necessary and immediate implementation, and by international public policy (20).

When a convention to which the forum is a party is chosen and which provides that it shall be applicable by virtue of the choice of the parties, the question will be different: the regulation must ensure that it does not prejudice the application of special conventions to which the states may be, or become, bound at international level (cf. Articles 21 and 24).

4.5.3

Turning to agreements on the choice of court and arbitration clauses, the close link between procedural questions (to be governed by lex fori and, provided that the case falls within the scope of the Brussels I Regulation, by its rules, and possibly by other international rules) and contractual questions means that the continued exclusion of this matter is acceptable, at the cost of some erosion of the ambition of uniformity.

4.5.3.1

However, if it is decided to adopt a rule on this matter, care will have to be taken to safeguard the existing provisions of Community law or international treaties, whether general or specific, and the specifically contractual aspects which are to be submitted to such a conflict rule will have to be carefully defined, leaving the regulation of procedural aspects and effects to the individual states, since these aspects invariably affect their judicial systems.

4.5.3.2

Provided that the scope of any such rule is clearly defined, its choice of law in the event of conflict of laws could indicate the lex contractus, the law which would be applicable in governing the contract, provided the contract exists and is valid.

4.5.4

Given the specific nature of the problems involved in determining the tacit choice of the parties and their dependence on the particular circumstances, it would seem appropriate to leave such determination in the hands of the judge and evidential procedures within the terms of the procedural rules.

4.5.5

Although subsequent choice or subsequent variation of the law chosen by the parties (Article 3(2)) is based on the interpretation of the rules and objectives of the conflict rule of the Rome Convention, it should be made clear that making such a choice at a later stage may have ex tunc effects, since the position of third parties is safeguarded.

4.7.1.1

It is broadly recognised that it was not the fundamental concern of the constant provisions of the Rome Convention to protect consumers or other ‘weak parties’ in contractual relations and that, in consequence, the ensuing system is not overall best suited to provide effective consumer protection (25).

4.7.1.2

A number of questions must therefore be resolved in order for the system resulting from the new regulation to take proper account of the particularly disadvantageous position of individual consumers in international contracts, especially when confronted with pre-established, standard-form contracts, most particularly in highly specialist fields, such as financial services or contracts for electronic services. Prominent among these questions is the concept of consumers and of consumer contracts which may be covered by the provisions of Article 5 (the current exclusion of certain ‘movable’ or ‘active’ consumers; the non-inclusion of certain contracts concerning immovable property and possible services relating to the use of such property – timesharing; the problem of its application to contracts concluded by means of the same new electronic media through which the relevant advertising and/or provisional offer was communicated); the appropriateness of the suppletive connection chosen in the current Rome Convention; the need to ensure compatibility between the provisions of Article 4, 5 and 9; the present exclusion of straightforward contracts of carriage; the relation with the Brussels I Regulation; without, at the same time, overlooking the need to ensure that the regulation is not weighted in turn against the position of a seller entering into a contract with a consumer, given that in private international law the expectations and security of the former must also be protected.

4.7.2.1

Article 5(1) and (2). It is recommended that ‘mobile’ or ‘active’ consumers also be covered by this special rule governing consumer contracts.

4.7.2.1.1

In view of the important issue of electronic media, there should be a single rule of conflicts for consumer contracts, whether or not electronic commerce is involved, in order to avoid possibly discouraging the use of electronic media.

4.7.2.1.2

Consequently, in order to achieve these two objectives, no account should be taken in defining the scope of Article 5 of the location of certain elements at present considered to be significant, such as the provisional offer and advertising for the product or service, or the issuing of a declaration of negotiations or, in general, the steps required for the conclusion of a contract.

4.7.2.1.3

Therefore cases where the consumer, without being so advised or encouraged by the supplier, travels to the latter's country or should or actually does take receipt of the product or service in that country, should nevertheless remain outside the scope of the provision.

4.7.2.2

Article 5(1). This provision should be extended to contracts the object of which is immovable property – right in rem of periodic occupation or time-share contract.

4.7.2.3

Article 5(3). Consideration should be given to applying the suppletive rule of Article 4 and replacing the present suppletive criterion for application of the law of the place of residence of the consumer. This approach would continue to safeguard the security and the expectations of both parties; moreover, it is far from certain that the law of the place of residence of the consumer is in fact more favourable to him.

4.7.2.4

Article 5(2) and (3). The substantive minimum level of protection of the consumer must continue to be assured by the mandatory provisions of the law of the consumer's habitual place of residence, which would prevail over the system dictated by the competent law in the light of Articles 3, 4 and 9, unless the supplier were to provide sufficient evidence that in spite of having been reasonably diligent, he was unaware of the place of residence of the consumer.

4.7.2.5

Article 5(2). With regard to contracts entered into remotely through electronic media and the inclusion of mobile consumers vis-à-vis the protection of the legitimate expectations of the business operator, it must be established that the minimum level of protection under the lex domicilii cannot be invoked if the supplier proves that he was unaware of the place of residence of the consumer, or that he was unaware of it without such unawareness being attributable to his negligence, or that it was a consequence of a holding back of information on the part of the consumer, i.e. if such unawareness is attributable to the consumer (which would not be the case, for example, if the supplier had not given the consumer the opportunity, in a contract concluded by electronic means, to send him data concerning his place of residence).

4.7.2.6

Article 5(2) and (3). It is not considered necessary to maximise the substantive protection of the consumer, for example by means of a rule of alternative multiple connection, as this would run counter to what has been said with regard to the present understanding of the principle of protection of the weaker party. It is enough that a minimum level of protection be guaranteed. It is equally important not to unnecessarily jeopardise the value of the security and certainty of both parties or to entirely negate the importance of the wishes of the parties, even in this field.

Consumer contracts could therefore be subject to the general rules of conflict of laws (present Articles 3, 4 and 9), with the proviso that the protection afforded to a consumer by the mandatory provisions of their country of residence may not be reduced, unless the supplier was, in good faith, unaware of the consumer's place of residence; it always being incumbent upon the supplier to prove unawareness in spite of reasonable diligence.

4.7.2.7

Article 5(4) and (5). The exclusion of simple contracts of carriage from the scope of Article 5 is unjustified, although this entails invoking different laws for different credits (it would seem more reasonable for such an exclusion to be retained in Article 15 of the Brussels I Regulation in order to bring proceedings under a single jurisdiction).

4.7.2.8

There is perhaps no need for this article to include inevitable recourse to certain mandatory provisions of a Member State, provided that the contract contains a close connection with that Member State which is not the Member State in which the consumer is resident (the connection could be the place of publication of an offer or of advertising – cf. German legislation of 27 June 2000 (26)), having regard to both current proposals for ‘intra-Community’ contracts and the provisions of Article 7(1), although, in this case, the decision to apply such rules may always lie with the judge (quite apart from the well-known doubts concerning the type of rules under this provision).

4.7.2.9

Since the reasons justifying the favor personae under the Rome Convention and the Brussels I Regulation are the same – in spite of the fact that rules of conflict contain differing stipulations on account of the differing objectives of these two legal texts – the extension which may be made to consumer contracts under Article 5 should be brought into line with Article 15 of the Brussels I Regulation, especially if account is no longer taken of the location of certain steps prior to the contract or which are necessary for it to be concluded (cf. Article 15(1)(c) of the regulation).

4.8.2.1

Without prejudice to the free choice of applicable law under the terms set out in the current Article 6, the Committee believes that the competence of the law of the place in which the work is habitually carried out should be confirmed, provided that a temporary placement is involved, it being made clear that the conclusion, in the host country, of a contract with an employer belonging to the same group as the original employer does not prevent continuation of the placement.

4.8.2.2

Thought should however also be given to whether it is necessary to include a rule ensuring implementation in the host country of the transposal provisions of Directive 96/71 (28).

4.8.2.3

Regarding temporary postings, in spite of attempts at definition, and in view of the wide range of possible scenarios and circumstances in the business world, it might be better to continue without a rigid definition of the concept (either ex ante or ex post), leaving the judge to decide on the existence of a temporary posting in each specific case.

4.8.2.4

Notwithstanding the contribution made by the Report on the Rome Convention, mentioned above, and the trend towards agreement within international legal theory, this opportunity could be taken to provide an explicit solution for work carried out on board vessels or aircraft regularly making international journeys, and on maritime platforms. They could be covered by the suppletive criterion contained in Article 6(2)(b), with the exception clause in Article 6(2) in fine being permanently retained.

4.8.2.4.1

This would also go some way to countering the temptation to grant a degree of extraterritoriality to these modes of transport and to apply the law of the flag state which, as is known, does not always have the most substantial connection, particularly in light of the use of flags of convenience.

4.8.2.4.2

Thus, without prejudice to the present Article 6(1), the law of the place of the body having hired the worker would be applicable, if the worker did not habitually carry out his work in that country, or if he carried it out on board a means of transport subject to registration and not travelling in the same country, on a maritime platform, or in a territory not subject to state sovereignty, unless another law displayed a closer connection, the specific circumstances of the case having been considered.

4.8.2.5

It should be remembered, concerning collective agreements in force in countries in contact with a given multi-location employment relation that, in keeping with consistent international legal theory, and in spite of the debate on the authoritative nature of such agreements, the provisions of collective agreements are applicable provided they have the nature of mandatory rules in the field of one of the relevant laws, in the light of either Article 6 (involving an agreement in the country of the law chosen, lex loci laboris or the law of the place of the body hiring the worker) or Article 7.

4.8.2.6

On the other hand, the opportunity should be taken to make clear whether the regulation applies to international collective agreements. The particular nature of this approach, even if not developed in international practice, together with the theoretical argument over the nature of collective agreements, is enough to justify it.

4.8.2.6.1

The approximation of regulatory solutions in the field of employment would be best carried out within the framework of Community steps to unify or align the substantive laws of the Member States. Such steps may or may not entail drafting international or Community collective agreements and defining the conditions for doing so. This work therefore will focus not so much on the strictly-defined field of rules of conflict, the subject of the regulation, but rather on approximation of substantive law.

4.10.2.1

The present Article 3(3), concerning an objectively internal contract (since, even in the absence of an explicit rule, the approach will necessarily be maintained), should be replaced, because a rule of conflicts should not be brought to bear on a purely internal situation. No referral by the parties to a foreign law in connection with an objectively internal contract can ever override the application of the mandatory rules of the legal system within which all the objective connections exist.

4.10.2.1.1

In consequence, this referral should not be seen as conflict-related (kollisionsrechtliche Verweisung); it is bound to have a purely substantive value or that of a substantive transposal (materiellrechtliche Verweisung). In other words, it should be seen as the expression of private free choice in the field of internal substantive law, not as an expression of free choice of law by the parties, who can only choose which law is competent when they are parties to a contract presenting connections with more than one state.

4.10.2.1.2

The gap created by the abolition of this rule could be filled by a provision encompassing the concept of an objectively ‘intra-Community’ contract to which, regardless of any choice of the law of a third country, the mandatory rules of Community law or of transposal of Community law in force in the legal system which is competent in a suppletive quality must always be applied, also because this gap (matching Article 3(3)) is appropriate from the point of view of consolidation.

4.10.2.1.3

The Committee believes that this restriction should only be effective when all the objective connections set out in the contract tie it to Member States. However, particularly in the view of the possibility of a choice or change of choice of competent law after the contract was signed, conjunction of all the connections of the contract within Community territory should perhaps relate to the moment at which the law was chosen and not, as proposed in the current version of the Green Paper, the moment when the contract was signed.

4.10.2.1.4

In this way compliance with a minimum level of efficacy of Community secondary law will immediately be ensured, provided that the parties invest professio iuris in an ‘intra-Community’ contract.

4.10.2.2

Consideration must be given to the question of whether it is appropriate or advisable to insert a general provision governing the implementation of mandatory protective rules arising from the transposal of Community law, where the contract displays a close connection with a Member State (that Member State's transposal rules being applicable in this case), as in the example of the German law of 2000.

4.10.2.2.1

However, it may suffice to recognise that the provisions of Article 7 (which always leave the judge with some margin of appreciation), together with the primacy of Community law and Articles 3(3) and 5, even with the adjustments to be made (cf. above, enabling the competent law in a suppletive capacity to be the law indicated in Article 4, subject only to the minimum level of protection) and Article 6 (compelling the application of certain transposal rules of certain legal systems and particularly that which would be objectively competent, or that of the host country of a worker on placement) are enough to lead to such implementation (30).

4.10.2.3

On the other hand, in addition to the comments concerning Article 3(3), it is worth restating that disparities in the transposal of directives by Member States and the issue of non-transposal do not appear to be relevant to the specific field of rules of conflict, but rather to the drive for harmonisation; it is up to the Member States, in their internal law, to ensure that the objectives of Community law in this area are achieved in those cases covered by directives.

4.10.2.4

In spite of the possibly ambiguous nature of the title, evoking a certain historical background to the concept of ‘mandatory rules’, the definition of the rules covered by the provisions of Article 7 should be maintained at formal level, i.e. by reference to the immediate character of their application, regardless of the law applicable by virtue of the rules of conflict, rather than opting for a substantive interpretation of these rules based on their object or content.

4.10.2.4.1

In reality, the provisions of Article 7 are another effort to harmonise judgments, but with the aim of promoting the application of certain rules for the transposal of Community law which might not be applied because of other Rome Convention rules (or possibly on account of imperfect transposal into a national legal system to be taken into account in the light of a rule of conflicts, or simply because such transposal has not occurred at all) – although this latter does not appear to be the underlying legal objective, particularly since Article 7(1) is of universal character.

4.10.2.5

With regard to the mandatory rules or of necessary and immediate implementation of third countries, it must be decided which is the best means: either the principle of international harmony of judgments, at which private international law aims, or the unifying approach underpinning the Rome Convention and the future regulation (31).

4.10.2.5.1

Assuming that it is preferable to take account of, or apply, such rules from third-country legal systems, in order to put the values of private international law into practice, the Committee deems it sufficient to grant a margin of appreciation to the judge, as is the case at present, bearing in mind that a decision on such consideration or application will, provided it tallies with the objectives of private international law, entail careful analysis of the circumstances of the case and the overall content of such third-country legal systems (the current text, moreover, calls for the judge to take careful account of the nature, purpose and possible consequences of not invoking these rules, which must be compared with the effects of application or consideration).

4.10.2.5.2

This margin of appreciation may be enough, especially considering that the risks to certainty and predictability have already been allowed for when consideration of the rules was first accepted. Imposing excessive detail on the conditions for application or consideration of the rules may not only prove difficult, if done in an abstract manner, but may influence the judge to the extent that he may not be able to make a proper assessment of the requirements of legal certainty in each individual case: the final result being that the details provisions would undermine their own purpose.

4.10.2.6

In view of the established primacy of Community law, it may be decided – in spite of the instructive interest of such an exercise – that it would be unnecessary to enshrine explicitly the approach taken in the Arblade case, i.e. Article 7 should contain a reminder that the application of rules of necessary and immediate implementation cannot constitute an unjustified obstacle to the freedom of movement embodied in the original law.

4.13.1

Comparative question of clarification of conceptual frameworks (e.g. case of factoring). The question is whether to introduce clarifications which, by contributing to the drive for unification, will come into conflict with the differing nuances of national legislation. Account will also have to be taken of the proximity of the two rules (Articles 12 and 13) with regard to the judgment concerning conflict of laws underpinning them, and of the connections chosen, which reflect the trilateral nature of these relations.

4.13.1.1

Since this is in reality a question of qualification, it should be left in the hands of the judge, particularly since legal certainty does not seem to be subject to an unacceptable level of risk in the light of the similar structure of the two rules of conflicts, which both eventually trigger the distributive application of different laws.

4.13.2

Question of the invocation of assignment against third parties (possible holders of rights which may be assigned to the original assignor/creditor). The problem arises of whether the regulation should expressly state which law is most appropriate to regulate this question, given the risks of forum shopping. The aim of unification would suggest unifying the rule applicable to this question, therefore deterring those involved from forum shopping. Due consideration must be given to the value of certainty and predictability, and to the risks of invoking different laws. Since predictability would not be jeopardised, and uniform treatment would be guaranteed for third parties with claims competing with those of the assignee vis-à-vis the assignor, the Committee considers that preference should be given to application of the law governing the assignment.

4.13.3

Question of conflict between assignees and their resolution. The considerations set out in the point above would, mutatis mutandis, be valid here. Possible recourse to the law governing the assignment is suggested in the event of a contradiction between the legal systems governing the various assignment relations (although the primacy of this law could lead to different laws being applied to the assignees and to third parties intending to press their claims on the original assignor/creditor – cf. the previous paragraph).

4.13.4.1

The very helpful Report on the Convention of Rome explained that there was no intention to exclude subrogation resulting from payment not based on an obligation, but rather on simple ‘economic interest recognised by law’ (35), from the scope of Article 13, although the subrogation may then be ex lege.

4.13.4.2

The text should perhaps now be amended to make it clear that this hypothesis should also cover this rule, indicating which connection will prevail.

4.13.4.3

It might also be advisable to flesh out this rule by specifying, similarly, which law should govern the existence or extension of subrogation in the event that satisfaction of the credit is based on a well-founded economic interest, and which law should govern or which situation should provide the grounds for this economic interest – although the judge must be given an adequate margin of appreciation, safeguarded inter alia by the inclusion of an exception clause.

5.1

As mentioned above (point 1.14), although the Committee has touched upon other matters in order to make the fullest possible contribution to the issues raised by the Commission, it sets out below a summary reply to each of the questions contained in the Commission's questionnaire.

5.2.1

The experiences gathered by EESC members in their places of origin point to an overall feeling that judges in general have little, and purely theoretical, knowledge of the Rome Convention: very few judges, particularly in the lower courts, possess a sound knowledge of its tenor and potential.

5.2.2

The same broadly applies to economic actors, especially consumers and SMEs. Only large companies, principally multinationals, have the specialist legal know-how to derive benefit from the Rome Convention in the wording of their contracts, especially standard-form contracts.

5.2.3

On the basis of their personal experience in their places of origin, EESC members are also convinced that this state of affairs is damaging to smooth contractual negotiating, and underlies the increasing conflicts in cross-border transactions.

5.5.1

The EESC would welcome the introduction of a clause as described by the Commission in point 3.1.2.2 of the green paper, particularly insofar as it counters abuse of freedom of choice, as a means of blocking application of the rules providing greatest protection to the rights of certain weaker parties to contracts.

5.5.2

The reply is given in point 4.10.2.1 of the present opinion, where an amendment to the proposed wording of the green paper is suggested, since rules which, although grounded in Community legislation, would be of internal origin, are involved.

5.22

It is pointed out that, in addition to these questions, the present opinion has touched upon other matters not specifically included in the questionnaire, such as issues concerning the structure of the Rome Convention (point 4.2.2 and 4.2.3), the effects of subsequent choice of competent law by the parties (4.5.5), contracts for carriage of goods (4.6.4.2) and the law applicable to the capacity of legal persons (4.12.2).

6.1

The Committee supports the two main objectives of the Green Paper, to convert the Rome Convention into a Community instrument and to modernise its content, and urges that this be done as quickly as the complex nature of the subject allows.

6.2

It is the Committee's view that the Community instrument should take the form of a regulation, and agrees that the legal basis should be Articles 61(c) and 65(b) of the Treaty, as suggested by the Commission.

6.3

The Committee reaffirms the main principles underpinning the convention, and believes that they should be carried over into the regulation.

6.4

The Committee's proposals, which are set out in detail above, are based on the need not only to update some of the provisions of the Rome Convention in line with intra-Community commercial transactions and new contractual instruments, especially distance selling, but also to settle a number of questions of interpretation raised in the study of law and in the courts during the period in which the Rome Convention has been in force.

6.5

In its opinion and its replies to the Commission's twenty questions, as well as in its own questions, the Committee has striven to put forward solutions which preserve a balance between the interests of the parties concerned, in compliance with the established principles of law constituting the common heritage of the legal systems of the Member States.

6.6

The Committee is however aware that the issue has not been exhaustively examined and therefore urges the Commission to take proper account, in the final draft of the text it is to submit, of all the contributions it receives in response to its highly positive initiative represented by the Green Paper.