4.2 Sweden
4.2.1 International trade
The above stated dilemma is openly addressed by the Swedish legislator. After having pointed out that Rome I Articles 3 and 5.1 are at odds with the Hague-Visby Rules to which Sweden is committed as a state party, the preparatory works state:
“The Regulation [Rome I] therefore gives the parties the opportunity to contract out of the Hague-Visby Rules, even in the type of trade falling within the scope of application of the Rules, for example by choosing the laws of a state which is not party to the Rules. In order for Sweden to be able to fulfill its international obligations, provisions must therefore be found which give the Convention or laws implementing the Convention application to cases being covered by the Convention. Such rules are based on the Hague-Visby Rules and are therefore allowed according to Rome I (article 25.1).”(1) Prop. 2013/14:243 p. 33 (author’s translation).
In other words, the Swedish legislator resorts to Rome I Article 25 to achieve the result of retaining Sweden’s Hague-Visby obligations. As we have seen, this may be questioned since Article 25, according to its wording, deals with conventions which ‘lay down conflict-of-law rules’, while the Hague-Visby Rules provides for substantive harmonizing law, not choice of law rules in the traditional sense. However, in the author’s view, the Swedish position is tenable, since the effect of the scope provision of the Hague-Visby (and the corresponding national law regulation) is that of restricting contractual choice of law to the confines of the relevant scope.(2) Section 2.3.3 above. Moreover, the Swedish position is tenable in the sense that what we have called clashing of perspectives – the choice of law perspective and the substantive law scope perspective – must find its solution, and this expansive construction of Article 25 is one way of resolving it.
However, this retaining of the application of the Hague-Visby substantive rules through an expansive construction of Rome I Article 25, does not resolve our further dilemma of the ‘Hague-Visby surplus system’ of the Nordic Maritime Codes. As we have seen, the mandatory substantive scope of the Nordic Codes is far wider than that of the Hague-Visby Rules.(3) Section 2.3 above. By limiting the restriction on party autonomy under Rome I merely to the substantive provisions of the Hague-Visby Rules themselves, one would end up in awkward practical situations of having to ‘decipher’ the contents of the Maritime Code in order to discern which parts of it correspond to the (original) Hague-Visby Rules.
This dilemma is also resolved by the Swedish legislator, through retention of the content of the Maritime Code, including its ‘Hague-Visby surplus system’. The technique deployed to achieve this is in the author’s view inventive. The legislator takes the view that the ‘Hague-Visby surplus system’ of the Maritime Code concerns the mandatory nature of the Code’s substantive rules, and that such questions of substantive law lie outside the legislator’s mandate, which is restricted to (formal) questions concerning choice of law.(4) Prop. 2013/14:243 p. 34–35. This approach is in the author’s view ‘inventive’, since such questions relating to the extent of the Code’s substantive mandatory rules, clearly form part of the wider topic of choice of law. This can be illustrated by an example: In a dispute before a Swedish court, a contractual choice is made to English law (England being a Hague-Visby state). The dispute concerns a claim against the performing carrier. Such a claim is part of the substantive mandatory rules of the Swedish Code (the Nordic ‘surplus system’) but not of the English COGSA. There is obviously then a need to decide, as a matter of choice of law, whether the Swedish Maritime Code’s system is applicable to the claim, or whether one shall have to look to English law – with its system of tort of bailment on terms as applicable against performing carriers. Clearly, the only practical solution here would be to apply the Swedish Maritime Code, but to state that such questions, which would have to be addressed and resolved, do not involve choice of law, seems artificial or, as stated: ‘inventive’.However, despite this technique perhaps deserving the characterization of being inventive, it again illustrates our point that a clashing of perspectives needs to be resolved, and the pathway chosen by the Swedish legislator leads to pragmatically sensible solutions, in effect illustrating a choice of law perspective yielding to a substantive law perspective.
4.2.2 Domestic trade
Also with respect to domestic trade, the mandatory system of the Maritime Code is retained by the Swedish legislator. Its justification for doing so is twofold.
First, in situations where domestic trade has no connecting factors to foreign law other than a contractual choice of law provision referring to foreign law,(5) What we earlier have called ‘non-genuine’ choice of law. the mandatory system of the Code is retained as a matter of national mandatory law pursuant to Rome I Article 3.3.(6) Ibid. p. 35.
Second, in domestic trade where there is an additional foreign law factor by means of one of the parties (in practice: the carrier) being non-Swedish, the mandatory system of the Code is retained by reason of the system of the Code – as originating from the Hague-Visby Rules – enjoying the status of ‘overriding mandatory provisions’ within the meaning of Rome I Article 9. It is worth quoting the legislator’s reasoning in this respect:
“The mandatory rules for the carriage of general cargo are based on the internationally recognized Hague-Visby Rules which were created amongst other reasons to protect the interest of the weaker party in the contract relation, the cargo owner, in its demand for safe carriage of the goods. The rules must be deemed to be of fundamental importance to this type of protection and for the economic structure of maritime trade in Sweden. The mandatory rules for the carriage of general cargo should therefore be applied also to domestic trade when the laws of another state otherwise apply to the contract. This means that the current position of the law on domestic trade is in principle retained.”(7) Ibid. p. 36 (author’s translation).
The quote is of interest since the mandatory rules of the Swedish Maritime Code are essentially not reflecting the protective rules of Hague-Visby Rules, but rather those of the Hamburg Rules.(8) Section 2.3. The paradox therefore ensues that the legislator at the time – in 1994 – did not consider the Hague-Visby Rules to be sufficiently protective of the cargo side, hence the Code was expanded with the substantive system of the Hamburg Rules. The Hague-Visby Convention was retained at the time essentially on formal grounds, due to its international prevalence – not because of, but rather despite, its substantive rules.(9) Particularly because of their fairly obsolete system of the carrier being exempt from liability through navigational fault, and their fairly low limitation amounts. These provisions were, however, retained in the Code as a consequence of Sweden remaining a state party to the Rules, Section 2.3 above.
The current choice of law legislator, on the other hand, invokes the substantive rules of the Hague-Visby Rules as being of paramount importance to the cargo owners and their ‘demand for a safe carriage of the goods’. This fairly superficial view of the history and substantive law parts of the Hague-Visby Rules and the Swedish Maritime Code is, in itself, illustrative of the type of clashing of perspectives which is the underlying theme of this article.
It is worth summarizing how the Swedish legislator shifts its perspective when confronted by the dilemmas involved in reconciling Rome I with the Hague-Visby Rules and the Swedish Code, involving international and domestic trade combined:
First, the legislator construes Rome I Article 25 expansively, by stating that the Hague-Visby Rules is a choice of law convention. Second, it considers the Hague-Visby Rules to be of an ‘overriding mandatory nature’ as a means of retaining what, in effect, is not the Hague-Visby Rules but an extended Swedish (Nordic) version of the Rules, i.e. the ‘Hague-Visby surplus system’. Third, it retains this ‘surplus system’ of the Code by considering it to involve questions of substantive law, thus falling outside the ambit of Rome I and the choice of law questions to be addressed by the legislator.
4.2.3 Scope versus choice of law provisions – an illustration of consequences
Some further remarks shall be made concerning our interest in differing views on what is to be considered legislative scope of application and choice of law provisions.
In Section 2.2 we reviewed the history of the Nordic Maritime Codes and how the scope provision of Article 10 of the Hague-Visby Rules was implemented into the Codes, while at the same time being expanded with added geographical connecting factors, constituting the overall scope of application of the Codes, including that of the ‘Hague-Visby surplus system’. As part of that review we discussed ‘quasi choice’ provisions within this overall mandatory scope of application, including the fact that for domestic trade in one of the Nordic states, the law of the relevant state was to apply, in order for the ‘correct’ national domestic law to become applicable.(10) Section 2.3.3.
Moreover, we saw in Section 4.2.1 how the Swedish perspective on what constitutes scope of application and what constitutes choice of law, was instrumental in retaining the system of the Code, by viewing the Hague-Visby as a choice of law convention for the purposes of Rome I Article 25. That perspective on the delineation between choice of law and scope of application has, however, had some further effects.
One such effect is of a formal nature, in that the naming of the respective Maritime Code provisions has been altered. What was before called a provision for ‘Scope of application’ while now being considered a choice of law provision (in line with the understanding of Rome I Article 25), is re-named ‘Contract terms’.(11) Swedish: ‘Avtalsbestämmelser’. Moreover, a new provision is introduced, named ‘Scope of application’, which merely states that the provisions of the Code apply to ‘carriage of general cargo’.(12) Section 2: “This chapter applies to sea carriage of general cargo” (author’s translation).The reference to “this chapter” is stated as a demarcation against the chapter on chartering of ships, which essentially contains non-mandatory rules. The interrelation between the two chapters lies beyond the scope of this article. But it should be recalled that the earlier Swedish version, as that of the current Norwegian Code Section 252, contained a scope of application provision which entailed the entirety of topics, both of substantive law and ‘quasi choice’ of law, as discussed in Section 2.3.3. In other words, the Swedish current legislator’s view on what constitutes choice of law provisions has led to renaming of what the earlier legislator considered to be scope of application provisions.
Those changes are basically non-material. However, one important material change is made in that the previous ‘quasi choice’ of law of the domestic rules in the respective other Nordic Codes is abolished, apparently because it, in the legislator’s view, entailed a choice of law provision in violation of Rome I. That change is potentially dramatic, in view of the history of the Code and the Nordic ‘package’ of joint legislation, essentially for the protection of the cargo side.
To take an example: If a Norwegian domestic trade dispute were to be brought before a Swedish court, and the contract referred to the laws of state not being party to the Hague-Visby or its protective scheme, then the Swedish court would seemingly have to give effect to that choice; domestic trade is not Hague-Visby trade, and there would seem to be no other exception to the primary rule of party autonomy in Rome I.(13) The Swedish legislator takes the view that ‘overriding mandatory provisions’ within the meaning of Rome I Article 9 would apply to a Swedish domestic dispute involving a non-Swedish party, Section 4.2.2 above. However, that approach seems not to apply to our present example of a Norwegian domestic case being brought before a Swedish court. That would be a striking result in view of the Nordic cooperation and what it aimed at achieving. It would also be striking in view of the fact that Sweden retains full effect to the mandatory rules for its own domestic trade, and that the scope provision (including the ‘Hague-Visby surplus system’) is retained, hence being applicable to inter-Nordic trade.(14) The way the provision is amended is by a simple add-on to the effect that it cannot be derogated from in either domestic or Hague-Visby trade.
This is, therefore, an example of how perspectives on the nature of scope versus choice provisions may play a significant role. In view of the inventive techniques by which Sweden otherwise manages to retain the Swedish Maritime Code unaffected by Rome I, it is surprising that no efforts were made also to retain this intrinsic part of the inter-Nordic system of the Code. If taking a (substantive law) scope of application perspective, it could for example be argued that this type of choice is of a ‘quasi choice’ nature; it form parts of the regulatory scheme within the mandatory substantive law scope of the Code.
In the next section we shall see a further dramatic twist in the same direction.