Procedure : 2005/0261(COD)
Document stages in plenary
Document selected : A6-0450/2007

Texts tabled :

A6-0450/2007

Debates :

PV 29/11/2007 - 5
CRE 29/11/2007 - 5

Votes :

PV 29/11/2007 - 7.16
CRE 29/11/2007 - 7.16
Explanations of votes

Texts adopted :

P6_TA(2007)0560

REPORT     ***I
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21 November 2007
PE 374.427v02-00 A6-0450/2007

on the proposal for a regulation of the European Parliament and of the Council on the law applicable to contractual obligations (Rome I)

(COM(2005)0650 – C6-0441/2005 – 2005/0261(COD))

Committee on Legal Affairs

Rapporteur: Cristian Dumitrescu

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 OPINION of the Committee on Employment and Social Affairs
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council on the law applicable to contractual obligations (Rome I)

(COM(2005)0650 – C6-0441/2005 – 2005/0261(COD))

(Codecision procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2005)0650),

–   having regard to Article 251(2) and Articles 61(c) and 67(5) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6-0441/2005),

–   having regard to Rule 51 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs and the opinion of the Committee on Employment and Social Affairs (A6-0450/2007),

1.  Approves the Commission proposal as amended;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend the proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council and Commission.

Text proposed by the Commission  Amendments by Parliament

Amendment 1

Recital 1

(1) The Union has set itself the objective of establishing an area of freedom, security and justice. To that end the Community must adopt measures relating to judicial cooperation in civil matters with a cross-border impact to the extent necessary for the proper functioning of the internal market, including measures promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws.

(1) The Community has set itself the objective of maintaining and developing an area of freedom, security and justice. For the progressive establishment of such an area, the Community is to adopt measures relating to judicial cooperation in civil matters with a cross-border impact to the extent necessary for the proper functioning of the internal market.

Amendment 2

Recital 1 a (new)

 

(1a) According to Article 65, point (b) of the Treaty, these measures are to include those promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws and of jurisdiction.

Amendment 3

Recital 2

(2) For the purposes of effectively implementing the relevant provisions of the Amsterdam Treaty, the Council (Justice and Home Affairs) on 3 December 1998 adopted a plan of action on how best to implement the provisions of the Treaty of Amsterdam on an area of freedom, security and justice, stressing the importance of promoting the compatibility of conflict-of-law rules in order to attain the objective of mutual recognition of judgments and calling for the revision, where necessary, of certain provisions of the Convention on the Law applicable to contractual obligations, taking into account special provisions on conflict-of-law rules in other Community instruments.

deleted

Amendment 4

Recital 3

(3) The Tampere European Council on 15 and 16 October 1999 approved the principle of mutual recognition of judgments as a priority matter in the establishment of a European judicial area. The programme of measures for implementation of the principle of mutual recognition of decisions in civil and commercial matters specifies that the accompanying measures relating to harmonisation of conflict-of-law rules actually do help facilitate the mutual recognition of judgments. In the Hague Programme, the European Council restated that work on the conflict of laws regarding contractual obligations should be actively pursued.

(3) The European Council meeting in Tampere on 15 and 16 October 1999 endorsed the principle of mutual recognition of judgments and other decisions as the cornerstone of judicial cooperation in civil matters and invited the Council and the Commission to adopt a programme of measures to implement the principle of mutual recognition.

Amendment 5

Recital 3 a (new)

(3a) On 30 November 2000, the Council adopted a joint Commission and Council programme of measures for implementation of the principle of mutual recognition of decisions in civil and commercial matters1. The programme identifies measures relating to the harmonisation of conflict-of-law rules as those facilitating the mutual recognition of judgments.

______________

1 OJ C 12, 15.1.2001, p. 1.

Amendment 6

Recital 3 b (new)

(3b) The Hague Programme1, adopted by the European Council on 5 November 2004, called for work to be pursued actively on the rules of conflict of laws regarding contractual obligations ("Rome I").

_____________

1 OJ C 53, 3.3.2005, p. 1.

Amendment 7

Recital 4

(4) The proper functioning of the internal market creates a need, in order to improve the predictability of the outcome of litigation, certainty as to the law and the free movement of judgments, for the rules of conflict of laws in the Member States to designate the same national law irrespective of the country of the court in which an action is brought. For the same reasons there is a need to achieve the greatest harmony between three instruments – this Regulation, Council Regulation (EC) No 2001/44 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I”) and Parliament and Council Regulation (EC) No […] on the law applicable to non-contractual obligations (“Rome II”).

(4) The proper functioning of the internal market creates a need, in order to improve the predictability of the outcome of litigation, certainty as to the law and the free movement of judgments, for the conflict-of-law rules in the Member States to designate the same national law irrespective of the country of the court in which an action is brought.

Amendment 8

Recital 6

(6) The scope of the Regulation must be determined in such a way as to be consistent with Regulation (EC) No 44/2001 and Parliament and Council Regulation (EC) No […] on the law applicable to non-contractual obligations (“Rome II”).

(6) The substantive scope and the provisions of this Regulation should be consistent with Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I”)1 and Council Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (“Rome II”)2.

___________

1 OJ L 12, 16.1.2001, p. 1. Regulation as last amended by Regulation (EC) No 1791/2006 (OJ L 363, 20.12.2006, p. 1).

 

2 OJ L 199, 31.7.2007, p. 40.

Amendment 9

Recital 6 a (new)

(6a) Family relationships should cover parentage, marriage, affinity and collateral relatives. The reference in Article 1(2) to relationships having comparable effects to marriage and other family relationships should be interpreted in accordance with the law of the Member State in which the court is seised.

Justification

Reproduces a recital in Rome II.

Amendment 10

Recital 6 b (new)

(6b) Obligations arising out of dealings prior to the conclusion of a contract are covered by Article 12 of Regulation (EC) No 864/2007. Therefore such objectives should be excluded from the scope of this Regulation.

 

Justification

This recital is necessary having regard to Rome II.

Amendment 11

Recital 7 a (new)

 

(7a) Where a choice of law is made and all other elements relevant to the situation are located in a country other than the country whose law has been chosen, the choice of law should not prejudice the application of provisions of the law of that country which cannot be derogated from by agreement. This rule should apply whether or not the choice of law was accompanied by a choice of court or tribunal. Whereas no substantial change is intended as compared with Article 3(3) of the Rome Convention, the wording has been aligned as far as possible with Article 14 of Regulation (EC) No 864/2007.

Justification

This recital is necessary to explain the references to provisions which cannot be derogated from by agreement and how they relate to Rome II.

Amendment 12

Recital 8

(8) To contribute to the general objective of the instrument – certainty as to the law in the European judicial area – the conflict rules must be highly foreseeable. But the courts must retain a degree of discretion to determine the law that is most closely connected to the situation in a limited number of hypothetical cases.

(8) To contribute to the general objective of the instrument – legal certainty in the European judicial area – the conflict of law rules should be highly foreseeable. The courts should, however, retain a degree of discretion to determine the law that is most closely connected to the situation.

Justification

The words deleted are not themselves conducive to legal certainty in that they could be confusing.

Amendment 13

Recital 8 a (new)

(8a) An agreement of the parties to confer exclusive jurisdiction on one or more courts or tribunals of a Member State to determine disputes under the contract should be one of the factors to be taken into account in determining whether a choice of law was clearly demonstrated.

Justification

This recital is necessary as a result of the deletion of the provision in the Commission’s proposal to the effect that a jurisdiction clause would be deemed to reflect an implicit choice-of-law in the absence of a choice-of-law clause.

Amendment 14

Recital 8 b (new)

(8b) This Regulation does not preclude parties from incorporating by reference into their contract a non-State body of law or an international convention.

Justification

It is considered appropriate to refer to the use of such bodies of non-State law as UNIDROIT in a recital, rather than in the enacting terms.

Amendment 15

Recital 8 c (new)

(8c) Should the Community adopt in an appropriate legal instrument rules of substantive contract law, including standard terms and conditions, such instrument may provide that the parties may choose to apply those rules.

Amendment 16

Recital 8 d (new)

(8d) As far as the applicable law in the absence of choice is concerned, the concept of "provision of services" and "sale of goods" should be interpreted in the same way as when applying Article 5(1)(b) of Council Regulation (EC) No 44/2001 in so far as goods and services are covered by that Regulation. Although franchise and distribution contracts are contracts for services, they are the subject of specific rules.

 

Justification

This clarification appears to be desirable.

Amendment 17

Recital 8 e (new)

(8e) As far as the applicable law in the absence of choice is concerned, multilateral systems should be those where trading is conducted, such as regulated markets and multilateral trading facilities as referred to in Article 4(1), points (14) and (15) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments1, regardless of whether or not they rely on a central counterparty.

_______________________________

1 OJ L 145, 30.4.2004, p. 1. Directive as last amended by Directive 2007/44/EC (OJ L 247, 21.9.2007, p. 1).

Amendment 18

Recital 8 f (new)

(8f) Where there has been no choice of law, the applicable law should be determined in accordance with the rule specified for the particular type of contract. Where the contract cannot be categorised as being one of the specified types or where its elements fall within more than one of the specified types, it should be governed by the law of the country where the party required to effect the characteristic performance has his habitual residence. In the case of a contract consisting of a bundle of rights and obligations capable of being categorised as falling within more than one of the specified types of contract, the characteristic performance of the contract should be determined having regard to its centre of gravity.

Justification

Recitals 8f, 8g and 8h are considered necessary in order to explain the rules on the applicable law in the absence of choice, in the particular in the case of related contracts or contracts consisting of a bundle of rights and obligations capable of being categorised as more than one of the specified types of the contract for which specific rules are laid down.

Amendment 19

Recital 8 g (new)

(8g) Where the contract is manifestly more closely connected with a country other than that indicated in Article 4(1) or (2), an escape clause in those provisions provides that the law of that country should apply. In that event, account should be taken, inter alia, of whether the contract in question has a very close relationship with another contract or contracts.

Amendment 20

Recital 8 h (new)

(8h) In the absence of choice, where the applicable law cannot be determined either on the basis of the fact that the contract can be categorised as one of the specified types or as being the law of the country of the habitual residence of the party which is required to effect the characteristic performance, the contract should be governed by the law of the country with which it is most closely connected. In order to determine that country, account should be taken, inter alia, of whether the contract in question has a very close relationship with another contract or contracts.

Amendment 21

Recital 8 i (new)

(8i) As regards the interpretation of contracts of carriage of goods, no change in substance is intended with respect to Article 4(4), third sentence, of the 1980 Convention on the law applicable to contractual obligations1. Consequently single-voyage charter parties and other contracts the main purpose of which is the carriage of goods should be treated as contracts for the carriage of goods.

 

For the purposes of this Regulation, the term "consignor" should refer to any person who enters into a contract of carriage with the carrier and the term "the carrier" should refer to the party to the contract who undertakes to carry the goods, whether or not he performs the carriage himself.

_____________

1 OJ C 334, 20.12.2005, p. 1.

Amendment 22

Recital 10 b (new)

(10b) Investment services and activities and ancillary services, as referred to in sections A and B of Annex I to Directive 2004/39/EC, as amended, should be subject to the general rule applicable to consumer contracts.

Amendment 23

Recital 10 c (new)

(10c) Various exceptions should be made to the general choice of law rule for consumer contracts. Under one such exception the general rule is not to apply to contracts relating to rights in rem in immovable property or tenancies of such property, unless the contract relates to the right to use immovable property on a timeshare basis within the meaning of Directive 94/47/EC of the European Parliament and of the Council of 26 October 1994 on the protection of purchases in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis1.

_______________________________

1 OJ L 280, 29.10.1994, p. 83.

Amendment 24

Recital 10 d (new)

(10d) For the purposes of this Regulation, references to rights and obligations constituting the terms and conditions governing the issuance, offer to the public or take over bids of transferable securities and to the subscription and redemption of units in collective investment undertakings should include the terms governing, inter alia, the allocation of securities or of the units, rights in the event of over-subscription, withdrawal rights and similar matters in the context of the offer as well as those matters referred to in Articles 9, 10, 11 and 12 of this Regulation, thus ensuring that that all relevant contractual aspects of an offer binding the issuer or the offeror to the consumer are governed by a single law.

Amendment 25

Recital 10 e (new)

(10e) For the purposes of this Regulation, financial instruments are those instruments referred to in Article 4(1), point (17) of Directive 2004/39/EC, as amended, and transferable securities are those instruments referred to in Article 4(1), point (18) of the same Directive.

Amendment 26

Recital 10 f (new)

(10f) For the purpose of this Regulation, financial services such as investment services and activities and ancillary services provided by a professional to a consumer, as referred to in sections A and B of Annex I to Directive 2004/39/EC, as amended, and contracts for the sale of units in collective investment undertakings, whether or not covered by Council Directive 85/611/EEC of 20 December 1995 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)1, should be subject to the general rule applicable to consumer contracts. As such, when a reference is made to terms and conditions governing the issuance or offer to the public of transferable securities or to the subscription and redemption of units in collective investment undertakings, these references should include all aspects binding the issuer or the offeror to the consumer, but should not include those aspects involving the provision of such financial services.

_______________________________

1 OJ L 375, 31.12.1985, p. 3. Directive as last amended by Directive 2005/1/EC of the European Parliament and of the Council (OJ L 79, 24.3.2005, p. 9).

Amendment 27

Recital 10 g (new)

(10g)   It is important to ensure that rights and obligations which constitute a financial instrument are not covered by the general rule applicable to consumer contracts, as that could lead to the applicability of different laws to each of the instruments issued, therefore changing their nature and preventing their fungible trading and offering. Likewise, whenever such instruments are issued or offered, the contractual relationship established between the issuer or the offeror and the consumer should not be necessarily subject to the mandatory application of the law of the habitual residence of the consumer, as there is a need to ensure uniformity in the terms and conditions of an issuance or an offer. The same rationale should apply with regard to the multilateral systems covered by Article 4(1)(hb), where it should be ensured that the law of the habitual residence of the consumer will not interfere with the rules applicable to contracts concluded within those systems or with the operator of such systems.

Amendment 28

Recital 11 a (new)

(11a) The employee should not be deprived of the protection of provisions which cannot be derogated from or which can only be derogated from to his benefit.

Amendment 29

Recital 11 b (new)

(11b) As regards employment contracts, work carried out in another country is to be regarded as temporary if the employee is expected to resume working in the country of origin after carrying out his tasks abroad. The conclusion of a new contract of employment with the original employer or an employer belonging to the same group of companies as the original employer should not preclude the employee from being regarded as carrying out his work in another country temporarily.

Justification

This recital is needed in order to deal with temporary work on another country.

Amendment 30

Recital 12

(12) Regarding contracts concluded by agents, conflict rules should be laid down to govern the three legal relationships between the principal, the agent and the third party. A contract concluded between the principal and the third party would remain subject to the general rules of this Regulation.

deleted

Justification

It is proposed to delete the provision on agency.

Amendment 31

Recital 13

(13) Respect for the public policy (ordre public) of the Member States requires specific rules concerning mandatory rules and the exception on grounds of public policy. Such rules must be applied in a manner compatible with the Treaty.

(13) Considerations of public interest justify giving the courts of the Member States the possibility, in exceptional circumstances, of applying exceptions based on public policy and overriding mandatory provisions. The concept of "overriding mandatory provisions" should be distinguished from the expression "provisions which cannot be derogated from by agreement" referred to for example in Article 3(4) and should be construed more restrictively.

Amendment 32

Recital 13 a (new)

(13a) In the context of voluntary assignment, the term “relationship” should make it clear that Article 13(1) also applies to the property aspects of an assignment as between assignor and assignee in legal orders where such aspects are treated separately from the aspects under the law of obligations. However, the term “relationship” should not be understood as relating to any relationship between assignor and assignee that might exist. In particular, it should not comprise preliminary questions as regards a voluntary assignment or a contractual subrogation. The term should strictly be limited to the aspects which are directly relevant to the voluntary assignment/contractual subrogation in question.

Amendment 33

Recital 15

(15) The relationship between this Regulation and certain other provisions of Community law should be spelled out.

(15) A situation where conflict-of-law rules are dispersed among several instruments and where there are differences between those rules should be avoided. This Regulation, however, does not exclude the possibility of inclusion of conflict-of-law rules relating to contractual obligations in provisions of Community law with regard to particular matters.

 

This Regulation should not prejudice the application of other instruments laying down provisions designed to contribute to the proper functioning of the internal market in so far as they cannot be applied in conjunction with the law designated by the rules of this Regulation. The application of provisions of the applicable law designated by the rules of this Regulation should not restrict the free movement of goods and services as regulated by Community instruments, such as Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce)1.

 

_______________________________________

1 OJ L 178, 17.7.2000, p. 1.

Justification

This recital has been copied from Rome II, where it was introduced in conciliation at the wish of Parliament’s delegation.

Amendment 34

Recital 16

(16)Respect for international commitments entered into by the Member States means that this Regulation should not affect conventions relating to specific matters to which the Member States are parties. However, where at the time of conclusion of the contract material aspects of the situation are located in one or more Member States, the application of certain international conventions to which only some of the Member States are Parties would be contrary to the objective of a genuine European judicial area. The rule set out in this Regulation should accordingly be applied. To make the rules easier to read, the Commission will publish the list of the relevant conventions in the Official Journal of the European Union on the basis of information supplied by the Member States.

(16) Respect for international commitments entered into by the Member States means that this Regulation should not affect international conventions to which one or more Member States are parties at the time this Regulation is adopted. To make the rules more accessible, the Commission should publish the list of the relevant conventions in the Official Journal of the European Union on the basis of information supplied by the Member States.

Amendment 35

Recital 16 b (new)

(16b) The Commission will make a proposal to the European Parliament and the Council concerning the procedures and conditions according to which Member States would be entitled to negotiate and conclude on their own behalf agreements with third countries in individual and exceptional cases, concerning sectoral matters, containing provisions on the law applicable to contractual obligations.

Amendment 36

Recital 17

(17) Since the objective of the proposed action, namely better foreseeability of court judgments requiring genuinely uniform rules on the law applicable to contractual obligations determined by a mandatory and directly applicable Community legal instrument, cannot be adequately attained by the Member States, who cannot lay down uniform Community rules, and can therefore, by reason of its effects throughout the Community, be better achieved at Community level, the Community can take measures, in accordance with the subsidiarity principle set out in Article 5 of the Treaty. In accordance with the proportionality principle set out in that Article, a Regulation, which increases certainty in the law without requiring harmonisation of the substantive rules of domestic law, does not go beyond what is necessary to attain that objective.

(17) Since the objective of this Regulation cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and effects of this Regulation, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity set out in Article 5 of the Treaty. In accordance with the principle of proportionality set out in that Article, this Regulation does not go beyond what is necessary to attain its objective.

Amendment 37

Recital 18

(18) In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and the Treaty establishing the European Community, these Member States have stated their intention of participating in the adoption and application of this Regulation. / In accordance with Articles 1 and 2 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and the Treaty establishing the European Community, these Member States are not participating in the adoption of this Regulation, which will accordingly not be binding on those Member States.

(18) In accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, Ireland has given notice of its wish to take part in the adoption and application of this Regulation.

Amendment 38

Recital 18 a (new)

(18a) The United Kingdom has not given notice in accordance with Article 3 of the Protocol on the position of the United Kingdom and Ireland, annexed to the Treaty on European Union and to the Treaty establishing the European Community, and the United Kingdom does therefore not take part in the adoption of this Regulation and is not bound by it or subject to its application.

Amendment 39

Recital 19

(19) In accordance with Articles 1 and 2 of the Protocol on the position of Denmark, annexed to the Treaty on European Union and the Treaty establishing the European Community, that Member State is not participating in the adoption of this Regulation, which will accordingly not be binding on that Member State,

(19) In accordance with Articles 1 and 2 of the Protocol on the position of Denmark, annexed to the Treaty on European Union and to the Treaty establishing the European Community, Denmark does not take part in the adoption of this Regulation, and is not bound by it or subject to its application.

Amendment 40

Article 1

1. This Regulation shall apply, in any situation involving a conflict of laws, to contractual obligations in civil and commercial matters.

1. This Regulation shall apply, in situations involving a conflict of laws, to contractual obligations in civil and commercial matters.

It shall not extend, in particular, to revenue, customs or administrative matters.

It shall not apply, in particular, to revenue, customs or administrative matters.

2. The Regulation shall not apply to:

2. The Regulation shall not apply to:

(a) questions involving the status or legal capacity of natural persons, without prejudice to Article 12;

(a) questions involving the status or legal capacity of natural persons, without prejudice to Article 12;

(b) contractual obligations relating to a family relationship or a relationship which, in accordance with the law applicable to it, has similar effects, including maintenance obligations;

(b) obligations arising out of family relationships and relationships deemed by the law to have comparable effects, including maintenance obligations;

(c) obligations arising out of a matrimonial relationship or a property ownership scheme which, under the law applicable to it, has similar effects to a marriage, wills and successions;

(c) obligations arising out of matrimonial property regimes, property regimes of relationships deemed by the law applicable to such relationships to have comparable effects to a marriage, and wills and succession;

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

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

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

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

(f) questions governed by the law of companies and other bodies corporate or unincorporate such as the creation, by registration or otherwise, legal capacity, internal organisation or winding up of companies and other bodies corporate or unincorporate, the personal liability of officers and members as such for the obligations of the company or body and the question whether a management body of a company or other body corporate or unincorporated can bind the company or body in relation to third parties;

(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;

 

(fa) the question whether an agent is able to bind a principal or an organ to bind a company or body corporate or unincorporated, in relation to a third party;

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

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

(h) evidence and procedure, without prejudice to Article 17;

(h) evidence and procedure, without prejudice to Article 17;

(i) obligations arising out of a pre-contractual relationship.

(i) obligations arising out of dealings prior to the conclusion of a contract.

3. In this Regulation, the term “Member State” shall mean Member States with the exception of Denmark [, Ireland and the United Kingdom].

3. In this Regulation, the term “Member State” shall mean Member States with the exception of Denmark and the United Kingdom. However, in Article 3(5) the term shall mean all the Member States.

Justification

In particular, these changes are intended to bring the wording into line with Rome II.

Amendment 41

Article 2

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

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

Justification

Corrects a manifest error.

Amendment 42

Article 3

1. Without prejudice to Articles 5, 6 and 7, a contract shall be governed by the law chosen by the parties.

1. A contract shall be governed by the law chosen by the parties.

The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract behaviour of the parties or the circumstances of the case. If the parties have agreed to confer jurisdiction on one or more courts or tribunals of a Member State to hear and determine disputes that have arisen or may arise out of the contract, they shall also be presumed to have chosen the law of that Member State.

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 a part only of the contract.

By their choice the parties can select the law applicable to the whole or a part only of the contract.

2. The parties may also choose as the applicable law the principles and rules of the substantive law of contract recognised internationally or in the Community. However, questions relating to matters governed by such principles or rules which are not expressly settled by them shall be governed by the general principles underlying them or, failing such principles, in accordance with the law applicable in the absence of a choice under this Regulation.

 

3. The parties may at any time agree to subject the contract to a law other than that which previously governed it, whether as a result of an earlier choice under this Article or of other provisions of this Regulation. Any change in the law to be applied that is made after the conclusion of the contract shall not prejudice its formal validity under Article 10 or adversely affect the rights of third parties.

3. The parties may at any time agree to subject the contract to a law other than that which previously governed it, whether as a result of an earlier choice under this Article or of other provisions of this Regulation. Any change in the law to be applied that is made after the conclusion of the contract shall not prejudice its formal validity under Article 10 or adversely affect the rights of third parties.

4. The fact that the parties have chosen a foreign law in accordance with paragraphs 1 or 2, whether or not accompanied by the choice of a foreign tribunal, shall not, where all the other elements relevant to the situation at the time of the choice are connected with one country only, prejudice the application of rules of the law of that country which cannot be derogated from by contract, hereinafter called “mandatory rules”.

4. Where all other elements relevant to the situation at the time of the choice are located in a country other than a country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that country which cannot be derogated from by agreement.

5. Where the parties choose the law of a non-member State, that choice shall be without prejudice to the application of such mandatory rules of Community law as are applicable to the case.

5. Where all other elements relevant to the situation at the time of the choice are located in one or more Member States, the parties' choice of applicable law other that that of a Member State shall not prejudice the application of provisions of Community law, where appropriate, as implemented in the Member State of the forum, which cannot be derogated from by agreement.

6. The existence and validity of the consent of the parties as to the choice of the applicable law shall be determined in accordance with the provisions of Articles 9, 10 and 12.

6. The existence and validity of the consent of the parties as to the choice of the applicable law shall be determined in accordance with the provisions of Articles 9, 10 and 12.

Amendment 43

Article 4

1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3, the contract shall be governed by the law determined as follows:

1. To the extent that the law applicable to the contract has not been chosen in accordance with Article 3 and without prejudice to Articles 4a to 6, the law governing the contract shall be determined as follows:

(a) a contract of sale shall be governed by the law of the country in which the seller has his habitual residence;

(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 in which the service provider 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 of carriage shall be governed by the law of the country in which the carrier has his habitual residence;

 

(d) a contract relating to a right in rem or right of user in immovable property shall be governed by the law of the country in which the property is situated;

(d) 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;

(e) notwithstanding point (d), a lease for the temporary personal use of immovable property for a period of no more than six consecutive months shall be governed by the law of the country in which the owner has his habitual residence, provided the tenant is a natural person and has his habitual residence in the same country;

(e) notwithstanding point (d), a tenancy of immovable property concluded for temporary private use for a period of no more than six consecutive months shall be governed by the law of the country where the landlord has his habitual residence, provided that the tenant is a natural person and has his habitual residence in the same country;

(f) a contract relating to intellectual or industrial property rights shall be governed by the law of the country in which the person who transfers or assigns the rights has his habitual residence;

 

(g) a franchise contract shall be governed by the law of the country in which the franchised person has his habitual residence;

(g) a franchise contract shall be governed by the law of the country where the franchisee has his habitual residence;

(h) a distribution contract shall be governed by the law of the country in which the distributor has his habitual residence.

(h) a distribution contract shall be governed by the law of the country where the distributor has his habitual residence;

 

(ha) a contract for the sale of goods by auction shall be governed by the law of the country where the auction takes place, if such a place can be determined;

 

(hb) a contract concluded within a multilateral system which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments, as defined by Article 4(1), point (17) of Directive 2004/39/EC, in accordance with non-discretionary rules and governed by a single law, shall be governed by that law.

2. Contracts not specified in paragraph 1 shall be governed by the law of the country in which the party who is required to perform the service characterising the contract has his habitual residence at the time of the conclusion of the contract. Where that service cannot be identified, the contract shall be governed by the law of the country with which it is most closely connected.

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 (hb) of paragraph 1, the contract shall be governed by the law of the country where the party who is required to effect the performance of the contract which is characteristic of the contract has his habitual residence.

 

2a. 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.

 

2b. 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.

 

 

Justification

This amendment should be read in conjunction with the new Recitals 8f, 8g and 8h.

Amendment 44

Article 4 a (new)

Article 4a

Contracts of carriage

 

1. To the extent that the law applicable to a contract for the carriage of goods has not been chosen in accordance with Article 3, the law applicable to such contracts shall be the law of the country of the habitual residence of the carrier, provided that the place of receipt or the place of delivery or the habitual residence of the consignor is also situated in that country. If those requirements are not met, the law of the country where the place of delivery as agreed by the parties is situated shall apply.

 

2. To the extent that the law applicable to a contract for the carriage of passengers has not been chosen by the parties in accordance with the second subparagraph, the law applicable shall be the law of the country where the passenger has his habitual residence, provided that either the place of departure or the place of destination is situated in that country. If these requirements are not met, the law of the place where the carrier has his habitual residence shall apply.

 

The parties may choose as the law applicable to the contract for the carriage of passengers in accordance with Article 3, only the law of the country where:

 

(a) the passenger has his habitual residence; or

 

(b) the carrier has his habitual residence; or

 

(ba) the carrier has his place of central administration; or

 

(c) the place of departure is situated; or

 

(d) the place of destination is situated.

 

3. Where it is clear from all the circumstances of the case that the contract, in the absence of a choice of law, 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.

Justification

This straightforward solution is intended to promote legal certainty.

Amendment 45

Article 5

 

 

 

 

1. Consumer contracts within the meaning and in the conditions provided for by paragraph 2 shall be governed by the law of the Member State in which the consumer has his habitual residence.

1. 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 of profession ("the professional") shall be governed by the law of the country where the consumer has his or her habitual residence provided that:

 

(a) the professional pursues his commercial or professional activities in the country where the consumer has his habitual residence, or

 

(b) 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.

2. Paragraph 1 shall apply to contracts concluded by a natural person, the consumer, who has his habitual residence in a Member State for a purpose which can be regarded as being outside his trade or profession with another person, the professional, acting in the exercise of his trade or profession.

2. Notwithstanding paragraph 1, the parties may choose the law applicable to a contract to which this Article applies in accordance with Article 3. Such a choice may not, however, have the result of depriving the consumer of the protection afforded to him by such provisions that cannot be derogated from by contract by virtue of the law which, in the absence of choice, would have been applicable on the basis of paragraph 1.

It shall apply on condition that the contract has been concluded with a person who pursues a trade or profession in the Member State in which the consumer has his habitual residence 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, unless the professional did not know where the consumer had his habitual residence and this ignorance was not attributable to his negligence.

 

3. Paragraph 1 shall not apply to:

3. Paragraphs 1 and 2 shall not apply to:

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

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

(b) contracts of carriage other than contracts relating to package travel within the meaning of Directive 90/314/EEC of 13 June 1990;

(b) a contract of carriage other than a contract relating to package travel within the meaning of Directive 90/314/EEC of 13 June 1990;

(c) contracts relating to a right in rem or right of user in immovable property other than contracts relating to a right of user on a timeshare basis within the meaning of Directive 94/47/EC of 26 October 1994.

(c) a contract relating to a right in rem in immovable property or a tenancy of immovable property other than a contract relating to the right to use immovable properties on a timeshare basis within the meaning of Directive 94/47/EC;

 

(d) rights and obligations which constitute a financial instrument and rights and obligations constituting the terms and conditions governing the issuance or offer to the public and take-over bids of transferable securities and the subscription and redemption of units in collective investment undertakings in so far as these do not constitute provision of a financial service;

 

(e) a contract to subscribe for or purchase a new issue of transferable securities, as defined by Article 4(1), point (18) of Directive 2004/39/EC, or rights and obligations to subscribe for or redeem units in collective investment undertakings;

 

(f) a contract concluded within the type of system falling within the scope of Article 4(1)(hb) of this Regulation.

Amendment 46

Article 6

1. Notwithstanding the provisions of Article 3, in a contract of employment a choice of law made by the parties shall not have the result of depriving the employee of the protection afforded him by the mandatory rules of the law which would be applicable under this Article in the absence of choice.

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 such provisions that cannot be derogated from by contract under the law that, in the absence of choice, would have been applicable pursuant to paragraphs 2, 2a and 3.

2. A contract of employment shall, in the absence of choice in accordance with Article 3, be governed:

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, failing that, 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.

(a) by the law of the country in or from which the employee habitually carries out his work in performance of the contract. The place of performance shall not be deemed to have changed if he is temporarily employed in another country. Work carried out in another country shall be regarded as temporary if the employee is expected to resume working in the country of origin after carrying out his tasks abroad. The conclusion of a new contract of employment with the original employer or an employer belonging to the same group of companies as the original employer does not preclude the employee from being regarded as carrying out his work in another country temporarily;

 

(b) if the employee does not habitually carry out his work in or from any one country, or he habitually carries out his work in or from a territory subject to no national sovereignty, by the law of the country in which the place of business through which he was engaged is situated.

 

 

2a. 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 he was engaged is situated.

3. The law designated by paragraph 2 may be excluded where it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract shall be governed by the law of that country.

3. 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 2a, the law of that other country shall apply.

Amendment 47

Article 7

Article 7

Contracts concluded by an agent

deleted

1. In the absence of a choice under Article 3, a contract between principal and agent shall be governed by the law of the country in which the agent has his habitual residence, unless the agent exercises or is to exercise his main activity in the country in which the principal has his habitual residence, in which case the law of that country shall apply.

 

2. The relationship between the principal and third parties arising out of the fact that the agent has acted in the exercise of his powers, in excess of his powers or without power, shall be governed by the law of the country in which the agent had his habitual residence when he acted. However, the applicable law shall be the law of the country in which the agent acted if either the principal on whose behalf he acted or the third party has his habitual residence in that country or the agent acted at an exchange or auction.

 

3. Notwithstanding paragraph 2, where the law applicable to a relationship covered by that paragraph has been designated in writing by the principal or the agent and expressly accepted by the other party, the law thus designated shall be applicable to these matters.

 

4. The law designated by paragraph 2 shall also govern the relationship between the agent and the third party arising from the fact that the agent has acted in the exercise of his powers, in excess of his powers or without power.

 

Amendment 48

Article 8

Mandatory rules

Overriding mandatory provisions

1. Mandatory rules are rules the respect for which is regarded as crucial by a country for safeguarding 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.

1. Overriding mandatory provisions are provisions 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 rules of the law of the forum in a situation where they are mandatory.

2. Nothing in this Regulation shall restrict the application of the overriding mandatory provisions of the law of the forum.

3. Effect may be given to the mandatory rules of the law of another country with which the situation has a close connection. In considering whether to give effect to these mandatory rules, courts shall have regard to their nature and purpose in accordance with the definition in paragraph 1 and to the consequences of their application or non-application for the objective pursued by the relevant mandatory rules and for the parties.

 

Justification

This amendment is designed to clarify the meaning of overriding mandatory provisions (see also Recital 13 as amended). It has also better-regulation aims as it will bring Rome I into line with Rome II. This would also facilitate the ultimate merger of Rome I and Rome II into a single instrument.

Amendment 49

Article 10

 

-1. A contract concluded between persons who or whose agents are in the same country at the time of conclusion is formally valid if it satisfies the formal requirements of the law which governs it in substance under this Regulation or of the law of the country where it is concluded.

1. A contract is formally valid if it satisfies the formal requirements of the law which governs it in substance under this Regulation or the law of the country in which one or other of the parties or his agent is when it is concluded or the law of the country in which one or other of the parties has his habitual residence at that time.

1. A contract between persons who or whose agents are in different countries is formally valid if it satisfies the formal requirements of the law which governs it in substance under this Regulation, or of the law either of the countries where either of the parties or either of their agents is present at the time of conclusion, or of the law of the country where either of the parties had his habitual residence at that time.

2. A unilateral act intended to have legal effect relating to an existing or contemplated contract is formally valid if it satisfies the formal requirements of the law which governs or would govern the contract in substance under this Regulation or of the law of the country in which the act is performed or the law of the country in which the person who drafted it has his habitual residence at that time.

2. A unilateral act intended to have legal effect relating to an existing or contemplated contract is formally valid if it satisfies the formal requirements of the law which governs or would govern the contract in substance under this Regulation or of the law of the country in which the act was done or the law of the country in which the person who effected it had his habitual residence at that time.

3. Paragraphs 1 and 2 of this Article shall not apply to contracts that fall within the scope of Article 5. The form of such contracts shall be governed by the law of the country where the consumer has his habitual residence.

3. Paragraphs -1, 1 and 2 of this Article shall not apply to contracts that fall within the scope of Article 5. The form of such contracts shall be governed by the law of the country where the consumer has his habitual residence.

4. Notwithstanding paragraphs 1 to 3 of this Article, a contract the subject matter of which is a right in immovable property or a right to use immovable property shall be subject to the mandatory requirements of form of the law of the country where the property is situated if by that law those requirements are mandatory provisions within the meaning of Article 8.

4. Notwithstanding paragraphs -1 to 3 of this Article, a contract the subject matter of which is a right in rem in immovable property or a tenancy of immovable property shall be subject to the requirements of form of the law of the country where the property is situated if by that law those requirements are imposed irrespective of the country where the contract is concluded and irrespective of the law governing the contract, and cannot be derogated from by agreement.

Amendment 50

Article 13

1. The mutual obligations of assignor and assignee under a voluntary assignment or contractual subrogation of a right against another person shall be governed by the law which under this Regulation applies to the contract between the assignor and assignee.

1. The relationship between assignor and assignee under a voluntary assignment or contractual subrogation of a claim against another person (“the debtor”) shall be governed by the law which under this Regulation applies to the contract between the assignor and assignee.

2. The law governing the original contract shall determine the effectiveness of contractual limitations on assignment as between the assignee and the debtor, the relationship between the assignee and the debtor, the conditions under which the assignment can be invoked against the debtor and whether the debtor’s obligations have been discharged.

2. The law governing the assigned or subrogated claim shall determine the following matters:

(a) the assignability of the claim, including the effectiveness as against the assignee of contractual and legal limitations on assignment or subrogation as between the assignee and the debtor;

(b) the relationship between the assignee and the debtor;

(c) the conditions under which the assignment can be invoked against the debtor;

(d) whether the debtor’s obligations have been discharged; and

(e) whether the assignee is entitled to the claim, including the proceeds thereof, as against other assignees of the same claim, creditors of the assignor and other third parties.

3. The question whether the assignment or subrogation may be relied on against third parties shall be governed by the law of the country in which the assignor or the author of the subrogation has his habitual residence at the material time.

 

Amendment 51

Article 14

Statutory subrogation

Legal subrogation

Where a person has a contractual claim upon another and a third person has a duty to satisfy the creditor, the law which governs the third person’s duty to satisfy the creditor shall determine whether the third person is entitled to proceed against the debtor.

Where a person ("the creditor") has a contractual claim against another ("the debtor") and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether and to what extent the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.

Amendment 52

Article 15

Multiple liability

Multiple debtors

Where a creditor has a claim upon several debtors who are jointly liable and one of those debtors has in fact satisfied the creditor, the law of the obligation of this debtor towards the creditor governs the right of this debtor to claim against the other debtors. Where the law applicable to a debtor’s obligation to the creditor provides for rules to protect him against actions to ascertain his liability, he may also rely on them against other debtors.

If a creditor has a claim against several debtors who are liable for the same claim, and one of the debtors has already satisfied the claim in whole or in part, the law governing the debtor's obligation towards the creditor shall also govern the debtor's right to claim recourse from the other debtors. The other debtors may rely on the defences they had against the creditor to the extent allowed by the law governing their obligations towards the creditor.

Amendment 53

Article 16

Statutory offsetting

Set-off

1. Statutory offsetting shall be governed by the law applicable to the obligation in relation to which the right to offset is asserted.

Where the right to set-off is not agreed by the parties, set-off shall be governed by the law applicable to the claim against which the right to set-off is asserted.

Amendment 54

Article 17, paragraph 1

1. The law governing the contract under this Regulation shall apply to the extent that it contains, in the law of contract, rules which raise presumptions of law or determine the burden of proof.

1. The law governing a contractual obligation under this Regulation shall apply to the extent that, in matters of contractual obligations, it contains rules which raise presumptions of law or determine the burden of proof.

Amendment 55

Article 18

Assimilation to habitual residence

Habitual residence

1. For companies or firms and other bodies or incorporate or unincorporate, the principal establishment shall be considered to be the habitual residence for the purposes of this 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.

Where the contract is concluded in the course of operation of a subsidiary, a branch or any other establishment, or if, under the contract, performance is the responsibility of such an establishment, this establishment shall be considered the habitual residence.

1a. Where the contract is concluded in the course of operation of a branch, agency or any other establishment, or if, under the contract, performance is the responsibility of such an establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence.

2. For the purposes of this Regulation, where the contract is concluded in the course of the business activity of a natural person, that natural person’s establishment shall be considered the habitual residence.

2. When determining the habitual residence the relevant point of time shall be the time of the conclusion of the contract.

Amendment 56

Article 20

Ordre public

Public policy of the forum

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

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

Amendment 57

Article 21

Where a State comprises several territorial units each of which has its own rules of law in respect of contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation.

1. Where a State comprises several territorial units, each of which has its own rules of law in respect of contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation.

 

2. A Member State where different territorial units have their own rules of law in respect of contractual obligations shall not be required to apply this Regulation to conflicts solely between the laws of such units.

Amendment 58

Article 22

This Regulation shall not prejudice the application or adoption of acts of the institutions of the European Communities which:

 

This Regulation shall not prejudice the application of provisions of Community law which, in relation to particular matters, lay down conflict-of-law rules relating to contractual obligations.

(a) in relation to particular matters, lay down choice-of-law rules relating to contractual obligations; a list of such acts currently in force is provided in Annex 1; or

(b) govern contractual obligations and which, by virtue of the will of the parties, apply in conflict-of-law situations; or

(c) lay down rules to promote the smooth operation of the internal market, where such rules cannot apply at the same time as the law designated by the rules of private international law.

 

Justification

This provision has been aligned on the corresponding provision of Rome II.

Amendment 59

Article 22 a (new)

 

Article 22a

1. This Regulation shall replace the Rome Convention in the Member States, except as regards the territories of the Member States which fall within the territorial scope of that Convention and to which this Regulation does not apply pursuant to Article 299 of the Treaty.

2. Insofar as this Regulation replaces the provisions of the Rome Convention, any reference to the Convention shall be understood as a reference to this Regulation.

Amendment 60

Article 23

1. The Member States shall notify the Commission, no later than six months after the entry into force of this Regulation, of the list of multilateral conventions governing conflicts of laws in specific matters relating to contractual obligations to which they are Parties. The Commission shall publish the list in the Official Journal of the European Union within six months thereafter.

After that date, the Member States shall notify the Commission of all denunciations of such conventions, which the Commission shall publish in the Official Journal of the European Union within six months after receiving them.

1. This Regulation shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-of-laws rules relating to contractual obligations.

2. This Regulation shall not prejudice the application of international conventions referred to in paragraph 1. However, where, at the time of conclusion of the contract, material aspects of the situation are located in one or more Member States, this Regulation shall take precedence over the following Conventions:

- the Hague Convention of 15 June 1955 on the law applicable to international sales of goods;

- the Hague Convention of 14 March 1978 on the law applicable to agency.

2. However, this Regulation shall, as between Member States, take precedence over conventions concluded exclusively between two or more of them in so far as such conventions concern matters governed by this Regulation.

3. This Regulation shall take precedence over bilateral international conventions concluded between Member States and listed in Annex II if they concern matters governed by this Regulation.

 

Amendment 61

Article 23 a (new)

Article 23a

List of Conventions

 

1. By .....*, Member States shall notify the Commission of the conventions referred to in Article 23(1). After that date, Member States shall notify the Commission of all denunciations of such conventions.

 

2. The Commission shall publish in the Official Journal of the European Union within six months of receipt:

(i) a list of the conventions referred to in paragraph 1;

(ii) a list of the denunciations referred to in paragraph 1.

 

____

* 12 months after the date of adoption of this Regulation.

Amendment 62

Article 23 b (new)

Article 23b

Review clause

 

1. Not later than ...*, the Commission shall submit to the European Parliament, the Council and the European Economic and Social Committee a report on the application of this Regulation. If necessary, the report shall be accompanied by proposals to adapt this Regulation. The report shall be preceded, not later than ...**, by:

(i) a study on the effects of Article 5 of this Regulation which will consider in particular:

(a) the effects on consumer contracts concluded by electronic means;

(b) the effects of the application of more than one law to the same contract and

(c) consistency with Article 15 of Regulation No 44/2001;

(ii) a study on the promotion of ADR in the field of electronic commerce and how it might usefully be fostered and promoted by legislative and other means; that study will also consider to what extent on-line ADR schemes might be used in combination with trust marks in order to increase consumer confidence in electronic commerce and obviate the need for court proceedings;

(iii) such proposals as the Commission may consider appropriate within the framework of the contract law project in order to introduce standard contract terms and conditions for use in particular in cross-border electronic transactions between businesses and consumers;

(iv) a review of the provisions on applicable law contained in Community legislation on insurance.

 

_____

* Two years after the date of application of this Regulation.

** One year after the date of entry into force of this Regulation.

Amendment 63

Article 23 c (new)

Article 23c

Application in time

This Regulation shall apply to contracts concluded after its date of application.

Justification

Unlike in the case of torts and delicts, contracts are entered into deliberately and voluntarily. It is essential for the parties to know that the provisions on applicable law contained in this Regulation will apply only to contracts concluded after its date of application. Therefore proceedings brought after the date of application concerning contracts concluded before that date will apply the Rome Convention.

Amendment 64

Article 24

Entry into force and application in time

Date of entry into force and application

This Regulation shall enter into force on the twentieth day following its publication in the Official Journal of the European Union.

This Regulation shall enter into force on the twentieth day following its publication in the Official Journal of the European Union.

This Regulation shall apply from [one year after entry into force].

This Regulation shall apply from [eighteen months after entry into force] except for Article 24 which shall apply from [12 months after the date of adoption].

It shall apply to contractual obligations arising after its entry into application. However, for contractual obligations arising before its entry into application, this Regulation shall apply where its provisions have the effect of making the same law applicable as would have been applicable under the Rome Convention of 1980.

 

This Regulation shall be binding in its entirety and directly applicable in all Member States.

This Regulation shall be binding in its entirety and directly applicable in all Member States in accordance with the Treaty establishing the European Community.


EXPLANATORY STATEMENT

The proposal for a regulation (Rome I) purports to convert the 1980 Rome Convention into a Community instrument and to revise it, where necessary.

Although the need for the adoption of a regulation has been called in question in some quarters, your rapporteur considers that it is worthwhile on the following grounds: (a) a regulation is more readily amended than a convention and, as part of the acquis communautaire, can be more rapidly extended to new Member States; (b) the possibility of references to the Court of Justice for preliminary rulings will be secured (see Belgium’s delay in implementing the protocols to the Rome Convention on its interpretation by the Court of Justice); (c) a regulation will afford a single instrument directly binding on national courts, whereas ratification of an international convention in many countries necessitates the adoption of national legislation in order to make the convention binding in domestic law. The only drawback is that the regulation will not apply to Denmark. It is to be hoped that the United Kingdom will overcome its initial reluctance and ultimately take part in the adoption of the regulation.

Having said this, your rapporteur notes that many of the provisions of the proposed regulation are novel as compared with the Rome Convention. These have been discussed in depth in committee and appropriate amendments made to the Commission's text.

The amendments contained in this report are designed to improve the text as proposed by the Commission in the light of the various submissions that have been made to the rapporteur and also with a view to making it more consistent with the Rome II.

Lastly, the rapporteur observes that there are numerous discrepancies between the language versions of the Commission’s proposal. He trusts that these will be eliminated by the lawyer-linguists of Parliament and the Council in the course of the procedure.


OPINION of the Committee on Employment and Social Affairs (14.9.2006)

for the Committee on Legal Affairs

on the proposal for a regulation of the European Parliament and of the Council on the law applicable to contractual obligations (Rome I)

(COM(2005)0650 – C6-0441/2005 – 2005/0261(COD))

Draftsman: Jan Andersson

SHORT JUSTIFICATION

The aim of the Commission's proposal is not to establish a new set of legal rules, but to convert an existing convention, the Rome I Convention of 1980 (the Convention), into a Community instrument. However, the Commission has also tried to modernise certain provisions in the Convention, in particular those relating to contract of employment.

The proposal has been preceded by consultations of the Member States and the civil society, in particular through a Green paper and a public hearing.(1) The green paper received about 80 replies from governments, universities, practitioners etc.(2) The European Community has legal competence to adopt Community instruments concerning Conflict-of-laws rules (or private international law) under Article 61(c) EC Treaty.

The proposal was presented by the Commission, December 15th 2005. The Committee on Legal Affairs has been appointed the responsible Committee in the European Parliament.

The Committee on Employment and Social Affairs has decided to give a draft opinion on the proposal for the responsible committee due to the close connection between the Directive 96/71/EC, concerning the posting of workers in the framework of the provision of services, and the proposal. The proposal also covers important changes in the rules of applicable law to the contract of employment.

This draft opinion addresses inconsistencies and legal technical elements that can be clarified in order to improve the Regulation. The overall ambition is to provide greater legal certainty for the law applicable to employment contracts.

AMENDMENTS

The Committee on Employment and Social Affairs calls on the Committee on Legal Affairs, as the committee responsible, to incorporate the following amendments in its report:

Text proposed by the Commission  Amendments by Parliament

Amendment 1

Recital 11

(11) Regarding individual employment contracts, the conflict rule should make it possible to identify the centre of gravity of the employment relationship, looking beyond appearances. This rule does not prejudge the application of the mandatory rules of the country to which a worker is posted in accordance with Directive 96/71/EC of 16 December 1996 concerning the posting of workers in the framework of the provision of services.

(11) Regarding individual employment contracts, the conflict rule should make it possible to identify the centre of gravity of the employment relationship, looking beyond appearances. This Regulation is without prejudice to the application of the mandatory rules of the country to which a worker is posted in accordance with Directive 96/71/EC of 16 December 1996 concerning the posting of workers in the framework of the provision of services.

Justification

The relationship and reference to Directive 96/71/EC in the Regulation must be clear. The rule laid down in the first sentence is not the only element for which the regulation should be without prejudice to the Posting Directive. The wording "prejudge" also seem ambiguous and is changed to "without prejudice". The amendment gives clarification and consistency in relation to Directive 96/71/EC.

Amendment 2

Recital 11 a (new)

 

(11a) Directive 96/71/EC lays down minimum rules for the protection of workers applicable to posted workers on the territory of a Member State other than the State in which they normally work and does not prevent Member States from imposing other terms and conditions of employment laid down in collective agreements, nor from imposing other employment conditions where these are public policy provisions.

 

OJ L 18, 21.1.97, p. 1.

Justification

This new recital clarifies the specific nature of the rules set out in Directive 96/71/EC which does not prevent Member States from adopting more protective measures at national level for instance by imposing other employment conditions in case of public policy provisions.

Amendment 3

Article 6, paragraph 1

1. Notwithstanding the provisions of Article 3, in a contract of employment a choice of law made by the parties shall not have the result of depriving the employee of the protection afforded him by the mandatory rules of the law which would be applicable under this Article in the absence of choice.

1. Notwithstanding the provisions of Article 3, in an individual contract of employment a choice of law made by the parties shall not have the result of depriving the employee of the protection afforded him by the mandatory rules of the law which would be applicable under this Article in the absence of choice.

Justification

The heading to Article 6 refers to “Individual Employment Contracts”, while the text in Article 6 speaks about “a contract of employment”. This discrepancy was also present in the Convention. This discrepancy is somewhat ambiguous. "Contract of employment" seems to be a wider notion, potentially including collective agreements in some Member States, while the wording “individual employment contract” would rule out the application of article 6 on collective agreements. The wording “individual contract of employment” is added for reason of consistency.

Amendment 4

Article 6, paragraph 2

2. A contract of employment shall, in the absence of choice in accordance with Article 3, be governed:

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

Justification

The wording “notwithstanding the provisions of Article 4” appearing in the Convention has been deleted by the Commission. This text is reintroduced due to clarity and consistency.

Amendment 5

Article 6, paragraph 2, point (a)

(a) by the law of the country in or from which the employee habitually carries out his work in performance of the contract. The place of performance shall not be deemed to have changed if he is temporarily employed in another country. Work carried out in another country shall be regarded as temporary if the employee is expected to resume working in the country of origin after carrying out his tasks abroad. The conclusion of a new contract of employment with the original employer or an employer belonging to the same group of companies as the original employer does not preclude the employee from being regarded as carrying out his work in another country temporarily;

(a) by the law of the country in which the employee habitually carries out his work in performance of the contract. The place of performance shall not be deemed to have changed if he is temporarily employed in another country. However, his employment and pay conditions shall be subject to the law of the country in which he is temporarily employed. Work carried out in another country shall be regarded as temporary if the employee is expected to resume working in the country of origin after carrying out his specific tasks abroad.

Justification

The text "work carried out in another country shall be regarded as temporary if the employee is expected to resume working in the country of origin after carrying out his tasks abroad" did not appear in the Convention. It carries a risk of a broad interpretation of "tasks". What if the task of the worker is, e.g. to represent the employer established in Member State X for his activities in Member State Y? When is such a task "carried out"? It could potentially be a very long period. The inclusion of "specific" points out that the temporary activity in another country should be interpreted narrowly.

The text did not appear in the Convention. In a conflict between the local employer and the employee the only relevant place of work must be in the country of posting. Another law might be applied, but only through the escape clause of Section 3. This new addition extends and thereby obscures the meaning of the place of work as the regular connecting factor. Moreover, this rule could also stimulate that employment contracts are signed only as cover for the real contract. This rule should therefore be deleted.

The terms ‘from which’ are highly ambiguous. The amendment aims to prevent regular posting from a Member State where employment law is less developed than in the country of posting.

Amendment 6

Article 6, paragraph 2, point (a a) (new)

 

(aa) if the employee does not habitually carry out his work in any one country, by the law of the country from which the employee habitually caries out his wok in performance of the contract;

Amendment 7

Article 6, paragraph 2, subparagraph 2 (new)

unless it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract shall be governed by the law of that country.

Amendment 8

Article 6, paragraph 3

3. The law designated by paragraph 2 may be excluded where it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract shall be governed by the law of that country

deleted

Justification

This flexibility clause should be reserved for exceptional cases, such as that of employees required, for instance, to work in aircraft, on ships or on oil rigs. For this reason it is preferable to include the clause in the paragraph dealing specifically with that issue.

Amendment 9

Article 8, paragraph 1

1. Mandatory rules are rules the respect for which is regarded as crucial by a country for safeguarding 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.

1. For the purposes of this Article, mandatory rules are rules the respect for which is regarded as necessary by a country for protecting workers or for safeguarding 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.

Justification

The text “for the purpose of this article” is added for the sake of clarity and consistency. Mandatory requirements occur in different articles of the Regulation, but also with different meanings. It is therefore important to settle that the definition of mandatory rules in Article 8 is only for the purpose of that specific article to contract of employment.

The word ”crucial” is replaced by “necessary”. The Posting of workers Directive (POW) is based on the possibility for the host MS to derogate from the law of the MS of origin in case of posting. A narrow definition of what can be considered the “hard core” provision of the labour law of the host MS, which could be applied in case of posting, could undermine the list of art. 3(1) POW or prevent its extension to other fields of labour protection. The definition of mandatory rules also risks to undermine the application by MS of terms and conditions of employment on matters other than those referred to in art. 3(1) in the case of “public policy provisions”.

The notion of mandatory rules cannot be defined/interpreted in a restrictive manner; it should at least concern rules that are crucial for the protection of workers.

PROCEDURE

Title

Proposal for a regulation of the European Parliament and of the Council on the law applicable to contractual obligations (Rome I)

References

COM(2005)0650 – C6-0441/2005 – 2005/0261(COD)

Committee responsible

JURI

Opinion by
  Date announced in plenary

EMPL
16.2.2006

Enhanced cooperation – date announced in plenary

 

Drafts(wo)man
  Date appointed

Jan Andersson
19.4.2006

Previous drafts(wo)man

 

Discussed in committee

22.6.2006

12.9.2006

 

 

 

Date adopted

13.9.2006

Result of final vote

+:

–:

0:

26

12

0

Members present for the final vote

Jan Andersson, Jean-Luc Bennahmias, Iles Braghetto, Philip Bushill-Matthews, Milan Cabrnoch, Alejandro Cercas, Ole Christensen, Bairbre de Brún, Derek Roland Clark, Harald Ettl, Richard Falbr, Carlo Fatuzzo, Ilda Figueiredo, Joel Hasse Ferreira, Roger Helmer, Karin Jöns, Jan Jerzy Kułakowski, Sepp Kusstatscher, Jean Lambert, Raymond Langendries, Bernard Lehideux, Elizabeth Lynne, Thomas Mann, Mario Mantovani, Jan Tadeusz Masiel, Maria Matsouka, Ria Oomen-Ruijten, Pier Antonio Panzeri, Jacek Protasiewicz, José Albino Silva Peneda, Jean Spautz, Anne Van Lancker, Gabriele Zimmer

Substitute(s) present for the final vote

Françoise Castex, Richard Howitt, Jamila Madeira, Dimitrios Papadimoulis, Leopold Józef Rutowicz, Gabriele Stauner, Patrizia Toia

Substitute(s) under Rule 178(2) present for the final vote

 

Comments (available in one language only)

...

(1)

COM(2002)0654 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.

(2)

All contributions are published on DG Justice and Home affairs web page; http://europa.eu.int/comm/justice_home/news/consulting_public/rome_i/news_summary_rome1_en.htm


PROCEDURE

Title

Law applicable to contractual obligations (Rome I)

References

COM(2005)0650 - C6-0441/2005 - 2005/0261(COD)

Date submitted to Parliament

15.12.2005

Committee responsible

       Date announced in plenary

JURI

16.2.2006

Committee(s) asked for opinion(s)

       Date announced in plenary

EMPL

27.4.2006

LIBE

16.2.2006

 

 

Not delivering opinions

       Date of decision

LIBE

22.2.2006

 

 

 

Rapporteur(s)

       Date appointed

Cristian Dumitrescu

23.2.2006

 

 

Previous rapporteur(s)

Maria Berger

 

 

Discussed in committee

21.6.2006

11.9.2006

20.11.2006

20.12.2006

 

26.2.2007

19.3.2007

2.5.2007

11.6.2007

 

10.9.2007

 

 

 

Date adopted

20.11.2007

 

 

 

Result of final vote

+:

–:

0:

25

0

0

Members present for the final vote

Carlo Casini, Marek Aleksander Czarnecki, Bert Doorn, Cristian Dumitrescu, Monica Frassoni, Lidia Joanna Geringer de Oedenberg, Neena Gill, Othmar Karas, Piia-Noora Kauppi, Klaus-Heiner Lehne, Katalin Lévai, Antonio López-Istúriz White, Hans-Peter Mayer, Manuel Medina Ortega, Aloyzas Sakalas, Diana Wallis, Tadeusz Zwiefka

Substitute(s) present for the final vote

Mogens N.J. Camre, Charlotte Cederschiöld, Luis de Grandes Pascual, Vicente Miguel Garcés Ramón, Kurt Lechner, Eva Lichtenberger, Marie Panayotopoulos-Cassiotou, Gabriele Stauner

Substitute(s) under Rule 178(2) present for the final vote

Toine Manders, Tomáš Zatloukal

Last updated: 22 November 2007Legal notice