{"id":326,"date":"2019-07-30T11:46:45","date_gmt":"2019-07-30T11:46:45","guid":{"rendered":""},"modified":"2019-08-07T11:54:10","modified_gmt":"2019-08-07T11:54:10","slug":"principles-choice-of-law-6357","status":"publish","type":"post","link":"https:\/\/www.lawteacher.net\/free-law-essays\/international-law\/principles-choice-of-law-6357.php","title":{"rendered":"The Principles Behind Choice of Law with Regards to the Rome Regulations"},"content":{"rendered":"

INTRODUCTION<\/strong><\/p>\n

Choice
\nof Law simply refers to the law that is applicable in a case. The question of
\nchoice of law is the second most important question that must be answered after
\nthat of jurisdiction in the decision of any international dispute brought
\nbefore the courts. In this work, the principles behind choice of law would be
\nbriefly explained with regards to the Rome Regulations. Also, the relationship
\nbetween a choice of law and the doctrine of public policy would be looked at,
\nas well as a critical evaluation of the role of public policy on choice of law.\n<\/p>\n

CHOICE OF LAW <\/strong><\/p>\n

The
\nterm \u201cChoice of Law\u201d is used to describe the body of law which is applicable to
\nan international dispute as it relates to contractual or non-contractual
\ndisputes.<\/p>\n

The
\nLaw Dictionary[1]<\/a>,
\ndefines Choice of Law as a contract provision specifying the governing
\njurisdiction over disputes arising from or relating to that contract in
\nquestion.<\/p>\n

Generally
\nat Common Law, where parties agree as to the applicability of a law in their
\ndispute, the courts would give effect to such an agreement as was established
\nin the case of  Fraser v Buckle<\/em>[2]<\/a> <\/em>per
\nO\u2019Flaherty <\/p>\n

            \u201cA choice of law will normally
\nbe given effect to providing it is bona fide<\/em> and legal and not contrary
\nto public policy\u201d.[3]<\/a><\/p>\n

However,
\nunder common law, where the parties had no such agreement as to the applicable
\nlaw, the courts would come to a decision as to the law applicable using common
\nlaw rules. The courts would take into consideration the law which has the most
\nclosest and most real connection with the transaction in question or in dispute
\nas decided in the case of Amin Rasheed
\nShipping Corp v Kuwait Insurance Co<\/em>[4]<\/a>.
\nThis is as it relates to contractual disputes.<\/p>\n

For
\nnon-contractual disputes, particularly tort, under common law, where parties
\nhave no agreement, the applicable law in such a situation would be the law
\nwhere the tort took place. This position can however vary depending on the
\ncircumstances of the case as was established in the case of Chaplin v Boys<\/em>[5]<\/a>,
\nwhere the court applied English law even though the two British servicemen were
\nstationed at Malta when the tort occurred. <\/p>\n

Outside
\nof Common Law, where member states of the European Union are concerned, the
\napplicable laws would be the EU Regulations with regard to Choice of Law and
\nthat is the Rome Regulations[6]<\/a>.
\nRome I applies to contractual disputes while Rome II applies to non-contractual
\ndisputes. <\/p>\n

ROME I <\/strong><\/p>\n

            By virtue of the provisions of
\nArticle 3 of the Rome Regulations[7]<\/a>,
\nwhere parties clearly or expressly choose a particular law to be applicable in
\ntheir disputes, such a law shall apply. It also provides that parties may not
\nin simpler terms, run away from the principles of the law of the place of
\njurisdiction by choosing another law where elements of their contract may be
\nrelevant.<\/p>\n

            Nevertheless, in cases where there is
\nno agreement, Article 4 of Rome I[8]<\/a>
\nprovides that in contracts for the sale of goods, the applicable law shall be
\nthe law where the seller has his habitual place of residence[9]<\/a>.
\nFor contracts for the provision of services, it shall be the law where the service
\nprovider has his habitual residence[10]<\/a>.
\nHowever, Article 4 also provides that where the circumstances of the case
\nsuggest a law that is more closely connected to the habitual residence of the
\nseller or service provider, then such a law shall be applicable[11]<\/a>.
\nIt further goes on to provide that where it cannot be determined from the
\ncircumstances of the case the applicable law, then the law of the place which is
\nmost closely connected shall be applicable[12]<\/a>.  <\/p>\n

            Article 9 of the Rome I Regulations[13]<\/a>
\nalso provide for overriding mandatory provisions applicable in the forum state
\nfor the safeguarding of its public interests. While Article 21[14]<\/a>
\nprovides for the public policy exception where if any part of the law chosen is
\ncontrary to public policy of the forum state, such section of the law shall be
\ninapplicable. <\/p>\n

ROME II<\/strong><\/p>\n

            This is applicable with respect to
\nnon-contractual disputes, for the purpose of this paper, particularly tort
\ndisputes. The general rule under the provisions of Rome II Article 4 states
\nthat the law applicable in a tort dispute shall be the law of the place wherein
\nthe damage occurred notwithstanding the country in which the event giving rise
\nto the damage occurred or the countries where the indirect consequences of the
\nevent occurred[15]<\/a>.\n<\/p>\n

            Article 4(2)[16]<\/a>
\nprovides however, that where the person liable and the person who sustained the
\ndamage both have their habitual residence in the same country at the time when
\nthe damage occurs, the law of that country shall apply. This is very similar to
\nwhat was decided in the case of Chaplin
\nv. Boys<\/em>[17]<\/a>.\n<\/p>\n

            Article 4(3)[18]<\/a>
\nalso provides that where the tort is manifestly more closely connected with a
\ncountry other than that where the damage occurred or where the habitual
\nresidence of the parties is, the law of such a country shall be applicable. <\/p>\n

            Article 14(1)[19]<\/a>
\nalso provides that the parties may decide to choose the law applicable in their
\ntort disputes with reasonable certainty either by way of agreement or through
\nthe circumstances of the case. Article 16 provides for the overriding mandatory
\nprovisions while Article 26 provides for the public policy exception[20]<\/a>.\n<\/p>\n

THE THEME OF PUBLIC
\nPOLICY<\/strong><\/p>\n

            According to Ghodoosi[21]<\/a>,
\nthe term public policy did not appear until the 18th<\/sup> century in
\ncommon law. Before then, there were references made to \u201cencounter commone ley,\u201d <\/em>which meant prejudicial to the community or
\nagainst the benefits of the commonwealth. However, one of the first instances
\nof public policy recorded was in the case of Mitchel v. Reynolds[22]<\/strong><\/a>,
\n<\/em>where the court voided a contract which was going to encourage restraint of
\ntrade for being against public policy. <\/p>\n

In a recent Supreme court decision in Irish bank Resolution Corporation Limited v.
\nQuinn[23]<\/strong><\/a>,<\/em>the
\ncourt stated that<\/p>\n

 \u201cFor many hundreds of years, the courts have
\nrefused, on grounds of illegality, to enforce certain contracts. This has been
\nso even where the courts recognize that in an action for breach of contract, to
\nplead illegality may \u201csound at all times very ill in the mouth of the
\ndefendant\u201d. It is not for the defendant\u2019s sake however that the objection is
\never allowed \u201cbut it is founded in general principles of policy that no court
\nwill lend its aid to a man who founds his cause of action upon an immoral or an
\nillegal act\u201d<\/em>.<\/p>\n

In this work, reference has been made to the public
\npolicy exception. As earlier stated, the provisions of the Rome Regulations
\nboth in contractual and non-contractual disputes make reference to a public
\npolicy exception.<\/p>\n

            \u201cThe
\napplication of a provision of the law of any country specified by this
\nRegulation may be refused only if such application is manifestly incompatible
\nwith the public policy (ordre public) of the forum\u201d<\/em>[24]<\/a>.<\/em><\/p>\n

            <\/em>In simpler terms, what
\nthe above provision means is that where a part of the law applicable in a
\ndispute is against the public policy of the forum state.i.e. the state which
\nhas jurisdiction, then such provision of the law would not be applied in the
\nsaid dispute. In the case of Fender v.
\nMildmay[25]<\/strong><\/a>,
\n<\/em>Justice Atkin stated <\/p>\n

\u201c\u2026the doctrine
\n(of public policy) should be invoked only in clear cases, in which the harm to
\nthe public is substantially incontestable and does not depend upon the
\nidiosyncratic inferences of a few judicial minds\u201d.<\/em><\/p>\n

Thus,
\nthe courts would only seem to bring into play the doctrine of public policy
\nwhen it would cause considerable and unquestionable harm to the public and not
\nwhen the judges deem it fit to apply it.<\/p>\n

In
\nthe case of Fraser v. Buckle<\/em>[26]<\/a>, <\/em>where
\nthe parties had an agreement to let the plaintiffs undergo litigation on behalf
\nof the defendants for a part of their inheritance, the Irish courts did not
\napply a provision of the law applicable to the contract for being champertous
\nas this was contrary to the pubic policy of Ireland. The plaintiff\u2019s tried to
\nargue that the law of champerty was inapplicable to such contracts, that such
\ncontracts were not champertous as the agreements related to proceedings outside
\nIreland and so they could not be contrary to Irish public policy. But the Irish
\ncourts dismissed this argument deciding that the contract was contrary to Irish
\npublic policy irrespective of whether they related to estates in Ireland or
\nabroad[27]<\/a>.<\/p>\n

            Also, in the case of Sporting Index Ltd. V. O\u2019Shea<\/em>[28]<\/a>, <\/em>where
\nthe plaintiff sought to enforce an English Court Judgement obtained based on
\nbetting debts in Ireland, the defendant argued that the judgment was
\nunenforceable by reason of Section 36 of
\nthe Gaming and Lotteries Act, 1956, <\/em>which prohibited the enforcement of any
\nbetting contracts. Counsel for the plaintiff argued that the court was not
\nbeing asked to enforce a betting contract in the present case, but rather, a
\njudgment for monies owed, validly obtained in the English courts enforced in
\nthe Irish jurisdiction. But the courts decided that the plaintiff\u2019s submission
\nwas unrealistic as it was asking the court to permit the plaintiff to enforce a
\ncourt order which would in turn enforce a gambling debt which was contrary to
\nIrish public policy and so the judgment was unenforceable. In making their
\ndecision, the court went further to expand on when it would become necessary to
\napply the doctrine of public policy <\/em>when
\nit stated,<\/p>\n

            \u201c<\/em>Recourse to the public-policy clause can be envisaged
\nonly where recognition or enforcement of the judgment delivered in another
\nContracting State would be at variance to an unacceptable degree with the legal
\norder of the State in which enforcement is sought inasmuch as it infringes a
\nfundamental principle. In order for the prohibition of any review of the
\nforeign judgment as to its substance to be observed, the infringement would
\nhave to constitute a manifest breach of a rule of law regarded as essential in
\nthe legal order of the State in which enforcement is sought or of a right recognised
\nas being fundamental within that legal order\u201d<\/em><\/p>\n

            From the above, it can be clearly
\nseen that the courts would only apply the doctrine of public policy when there
\nis a fundamental and obvious breach of an important rule of law in the forum
\nstate. <\/p>\n

EVALUATION<\/strong><\/p>\n

            It would seem that from all that has
\nbeen discussed so far, there shouldn\u2019t necessarily be an issue as to the role
\nof public policy in ascertaining the choice of law applicable in contractual
\nand non-contractual disputes. However, there have been a series of arguments
\ntossed for and against the principle of public policy and how it has and is
\nbeing applied in the decision making of the courts when it comes to the choice
\nof law involved in a case.<\/p>\n

Ghodoosi[29]<\/a>
\nstated that Justice Burrough had called the doctrine of public policy \u201ca very
\nunruly horse\u201d. Judging this statement merely from reading the cases above where
\npublic policy was applied, one may state or argue that categorizing public
\npolicy as an unruly horse was overstretching. However, a look at the case of Greenwood v. Curtis[30]<\/strong><\/a>
\n<\/em>may make you think differently. In that case, a South Carolina domiciliary
\nsold goods to the defendant in Africa in return for a promise to deliver a
\nquantity of slaves. Part of the slaves were delivered, and the defendant stated
\nan account as to the rest, translating the value of the slaves into cash, so
\nthat the account stated said nothing about slaves. The defendant then gave a
\nnote to the plaintiff\u2019s agent in Africa, translating the debt back into slaves
\nand promising to pay nine four-foot slaves, thirty-seven prime slaves, and a
\nsmall sum of money. The note was to be paid in Africa where the slave trade was
\nlegal. The plaintiff would then have transported the slaves to South Carolina
\nfor sale, the trade being legal there too. Defendant failed to perform, and the
\nplaintiff brought suit on the account stated and on the note in Massachusetts.
\nDefendant\u2019s counsel relied on a Massachusetts statute prohibiting the slave
\ntrade and on the contention that the slave trade was a vicious and immoral
\npractice in his argument that no relief should be granted. The court stated
\nthat this objection may apply to the attempt to recover on the note, but could
\nnot defeat the plaintiff\u2019s attempt to recover the cash amount stated in the account,
\nsince the payment of cash is not immoral[31]<\/a>.
\nEven though the court must have known that the parties did not intend to
\nfulfill their obligations through the payment of cash, it didn\u2019t stop them from
\nvalidating a contract that was obviously for the trade of slaves. Other cases such
\nas the case of Roundtree v. Baker[32]<\/strong><\/a>
\n<\/em>was also recorded where the court made a similar decision for the
\nenforcement of payment of a note concerning the trade of slaves even though
\nslave trade had been abolished long before the dispute arose.<\/p>\n

            The above cases may make one to determine
\nthat the courts deem it fit to apply the doctrine of public policy when they
\nwant to as there are no laid out definite rules in deciding whether or not a
\nparticular contract or law is classified as contrary to public policy other
\nthan when the courts believe it would not be in the best interest of the public
\nto do so and then I question this of course, because from the above cases of
\nGreenwood[33]<\/a>
\nand Roundtree[34]<\/a>,
\ndid the courts really act in the best interest of the public?<\/p>\n

Nutting[35]<\/a>
\nstated, <\/p>\n

\u201cif the courts
\nare let free to refuse recognition to foreign rights of action by reverting to
\nan entirely unlimited conception of public policy, their enforcement must
\nnecessarily be uncertain and capricious\u201d<\/em>. <\/p>\n

In
\naddition to Nutting\u2019s statement, I would also like to add when the courts also
\nallow certain foreign rules to apply by reverting back to an entirely unlimited
\nconception of public policy, their enforcement must of necessity become
\nunpredictable, inconsistent and ambivalent.<\/p>\n

Williams[36]<\/a>,
\nstated <\/p>\n

            \u201cA
\ncondition is against public policy if it is in the interest of the state that
\nit should not be performed. What is contrary to public policy has varied from
\ntime to time, and many conditions now upheld, in former days, would have been
\ndeclared to be contrary to the (public) policy of the law. The rule remains,
\nbut its application varies with the principles which for the time being guide
\npublic opinion\u201d.<\/em><\/p>\n

In
\ntrying to understand the above statement, one could suggest that public policy is
\nand would always be changing. It has no limits and is not confined to a
\nparticular thing or time frame. What is contrary to public policy today may not
\nbe contrary to public policy tomorrow and what was not contrary to public
\npolicy yesterday could be contrary to public policy tomorrow. The concept of
\npublic policy is as changing as the type of clothes people wear or the songs
\nthey sing. One cannot define where public policy begins and where it ends nor
\ncan it be said that this is and would of a certainty continue to be contrary to
\npublic policy. Why? Because the court determines what guides the principles of
\npublic policy as it goes and deems fit. <\/p>\n

            Granted, the many arguments may be
\ncausing some form of legal push to make the courts begin to make some
\ndeterminants available to decide when public policy should be applied as in the
\nrecent case of Irish Bank Resolution
\nCorporation Ltd v. Quinn[37]<\/strong><\/a>,
\n<\/em>where the Supreme Court set out certain criteria which are likely to be the
\nbasis on which Irish courts will in future, determine the question of the
\nenforceability of a contract in respect of which there is an allegation of some
\ndegree of illegality, but that is that enough? And that is just one aspect of
\nthe numerous ways the issue of public policy may come into play. Besides, at
\nthe end of the day, it is still the decision of the court to determine what
\nfalls within that category and what doesn\u2019t.<\/p>\n

CONCLUSION<\/strong><\/p>\n

            It cannot be argued that the
\ndoctrine of pubic policy is an important part of any judicial system and as
\nmuch as it may bring up questions of uncertainty and doubt, it is still very
\ncrucial in determining the choice of law in a given case. However, I am of the
\nopinion in agreement with Justice Burrough that the doctrine of public policy
\nis of a certainty \u201ca very unruly horse\u201d. It has no boundaries, no reins by
\nwhich it can be controlled or checked. It changes with the times and seasons as
\nwell as with the particular judge who sits to determine a case. There is no
\nbasic and specific laid down principle by which the applicability of the
\ndoctrine of public policy may be definitive and for this reason, it would
\ncontinue to bring up more arguments for and against it.<\/p>\n

            My suggestion would be for the
\ncourts and law makers to look intensively at the doctrine of public policy and
\ntry to refine its scope to as much as they can, accommodate various situations
\nand determine various cases based on a somewhat certain and irrefutable
\nblueprint to sort of mitigate the many questions of ambiguity that may continue
\nto arise in relation to the role of public policy in determining the choice of
\nlaw applicable in a dispute whether it be contractual or non-contractual.<\/p>\n

BIBLIOGRAPHY<\/strong><\/p>\n