5.4 Incompleteness of choice of law regimes and effect on ‘legal efficacy’
It will have transpired from the above that a choice of law perspective may not sufficiently take into account a (substantive law) scope perspective, whereas, as we have seen, a scope perspective may very well impact on the substantive consequences of a choice of law perspective – as a matter of ordinary legal methodology of construction of legal provisions. The fact that a choice of law perspective is not in this way holistic, is, in the author’s view, a consequence of the subject matter being regulated by a choice perspective; the task of sorting out connecting factors of a given type of case potentially affected by different legal systems, and that of designating the governing law according to such connecting factors, which is, generally speaking, a legal-formalistic exercise.
When this non-holistic choice of law perspective endeavours to be all-embracing, as the ambition of Rome I appears to be,(1) E.g. Rome I Preamble (6) and (11). it may lead to fallacies or voids when seen from an holistic perspective.
We have, first of all, seen this illustrated in respect of Rome I Article 25, which fails to take into account choice of law regulations embedded in substantive law Conventions, which do not carry the label of regulating ‘conflicts of law’, and are thus seemingly not exempted from Rome I and its primary rule of party autonomy.(2) Section 3.4. – but conversely the Swedish position, Section 4.2.
Second, it is illustrated in respect of the regulation of ‘non-genuine’ choice of law(3) The subject matter having no connection to a state other than the forum, except for a contractual choice thereto, Report p. 19. concerning domestic mandatory rules. Here Rome I Article 3.3 gives overriding effect to domestic mandatory rules as an exception from the otherwise primacy of party autonomy. This, in the author’s view, is a fallacy, in that it is unrealistic for the domestic courts to make a comparison between the foreign law chosen and what parts of it ‘collide’ with, and thus have to yield to, domestic mandatory rules. This has been illustrated by the Swedish choice of law legislator’s approach to the rules of domestic trade under the Swedish Maritime Code: the scope provision of the Maritime Code is simply retained(4) Section 4.2.1. and with no direction to the adjudicator that this scope provision, with its resultant substantive rules, shall be compared with or measured against whatever foreign law is chosen by the contracting parties.(5) As far as the author can see, this approach is strictly speaking non-compliant to Rome I Article 3.3 which retains “the application of provisions of the law of that other country [Sweden] which cannot be derogated from by agreement.” The phrase ‘provisions of the law’ seems to envisage that one looks to each and every provision to check whether it can be derogated from. Not all provisions falling within the scope of the mandatory Chapter of the Maritime Code applicable to domestic trade bear such a status.
Third, it is illustrated in respect of similar questions relating to Rome I Article 9 concerning priority given to ‘international mandatory rules’. Here again it may be unrealistic to ‘decipher’ what specific provisions are of such nature and compare them with whatever the competing rules are of the foreign laws chosen by the parties. This is again illustrated by the Swedish choice of law legislator when it avoids this problem of comparing individual substantive law provisions, but instead considers the part of the Maritime Code we have called the ‘Hague-Visby surplus system’ as substantive rules en bloc, thus falling outside the ambit of choice of law regulation altogether.(6) We have seen it also in the Norwegian Report, which admits the impracticality of adopting such an approach of ‘deciphering’ the nature and background of substantive rules, see Section 4.3.3. Generally, such a split-up system may perhaps work reasonably well within comparable legal systems, but becomes impractical when the system with which to compare it belongs to a different legal tradition. It should be recalled that Rome I and its primary rule of party autonomy apply irrespective of which legal system is designated by such party autonomy, see Article 2. On the other hand, problematic aspects of such comparison may also appear within European legal systems, see footnotes 38 and 47.
Fourth, the all-embracing ambition of Rome I is also exemplified in its provision of such adjudicatory details as the fact that principles of interpretation of contractual provisions are to be taken from the law designated by the choice of law rules, not that of the forum.(7) Rome I Article 12, 1 a). Anyone having had practical experience with e.g. an English law contract dispute being tried before a Norwegian court or arbitral tribunal, will know that principles of interpretation are not capable of simply being adopted from one legal system to another, and such an attempt to ‘import’ principles of construction may even lead to questionable outcomes as a matter of substantive law.(8) The Norwegian arbitration, Hindanger, ND 1968.68 (Professor Brækhus as sole arbitrator) is a good illustration: English law was agreed but Norwegian principles of construction were applied. See also Solvang, Forsinkelse i havn – risikofordeling ved reisebefraktning, 2009, pp. 122 et seq., illustrating the English system of ‘implied terms’ as part of the methodology of construction under English law but without any direct parallel under Norwegian law – also illustrating how ‘contract law principles’ as a complementary source of construction may simply be incompatible under the two systems. See similarly, Solvang, The English doctrine of indemnity for compliance with time charterers’ orders – does it exist under Norwegian law? SIMPLY/MarIus nr 419, 2013, pp. 11–28; Solvang, Charterparty law – some ideas for future research projects, MarIus nr 418, 2013, particularly pp. 35–43; Solvang, On foreseeability in construction of contracts in laytime matters – a comparison between English and Scandinavian law, MarIus nr 424, 2014, pp. 201–214.
What we have pointed to here also has an aspect that is part of the overriding harmonizing aim of choice of law instruments, such as Rome I, namely to foster certainty and foreseeability in contractual relations, and thus promotion of what can be labelled ‘legal efficacy’.(9) Rome I Preamble (16) states: “To contribute to the general objective of this Regulation, legal certainty in the European judicial area, the conflict of law rules should be highly foreseeable. […].” It seems that this goal is to a large extent undermined by the very complexity and thus non-foreseeability created by the choice of law instrument itself. This has been amply illustrated by examples above, and by the strikingly different approaches taken by the Norwegian and Swedish choice of law legislators, both in respect of the understanding of central provisions of Rome I, and in respect of the implications this may have on the understanding of national law.(10) See e.g. the almost impenetrable notion in the Norwegian choice of law Report concerning the methodology to the effect that the scope provision of the Maritime Code ‘presupposes’ prior consultation of choice of law rules, Section 4.3.2.
In summary: Rome I purports to be an all-embracing choice of law system, which as a matter of practical adjudication it is not. In that respect it is worth reiterating how several European courts in the area of substantive law harmonization of sale of goods under CISG have simply omitted the application of Rome I altogether, considering that such disputes, governed by scope provisions of international instruments, fall outside the ambit of Rome I.(11) Section 4.3.3 above. To the author it is an open question why the Swedish and Norwegian choice of law legislators did not even consider such a solution in the parallel questions raised by the relevant scope provisions of the Maritime Codes; that these provide a self-contained scope provision for international substantive law harmonization purposes, falling outside the ambit of Rome I.(12) One could for example construe Rome I Article 1 to such effect. The provision states: “This Regulation shall apply, in situations involving a conflict of laws, to contractual obligations […].” It could well be argued that matters falling within the scope of the Maritime Codes do not ‘involve a conflict of laws’, since such ‘conflicts’ are fully resolved through the relevant scope provisions, in the same manner as disputes falling within the ambit of CISG (and relevant national law scope-implementation provisions) do not ‘involve a conflict of laws’. See also the discussion in Section 4.3.5 above, to the effect that it would as a matter of adjudication be simpler if the Norwegian draft choice of law Act omitted any reference to the Maritime Code scope provision altogether – in the same way as Rome I Article 5 is unrelated to matters falling within the ambit of the Hague-Visby Rules, Section 3.5.