In absence of the Recast Brussels Regulation, by reference to the above example, if party A initiates proceedings against party B in an English court, the court would be required to determine under the common law rules of forum non conveniens whether it has jurisdiction, or whether a different jurisdiction would be an appropriate and more convenient alternative forum to hear the dispute instead. Nevertheless, exclusive jurisdiction clauses are given significant weight by the court and deviation usually takes place only under exceptional circumstances.
However, if party B then files a claim against party A in the court of an EU Member State in contravention of the exclusive jurisdiction agreement, there is no automatic obligation under the regulation on the EU Member State court to decline jurisdiction in favour of the English court and in fact the opposite may be true if either party A or party B is domiciled in an EU Member State.
It is a fundamental principle of the regulation that subject to its other provisions , persons domiciled in an EU Member State shall be sued in the courts of that EU Member State. Another point of contention with respect to the above is a set of new rules introduced with the Recast Brussels Regulation, which apply to proceedings commenced from 10 January onwards. These rules state that, where an EU Member State court has jurisdiction on the grounds of domicile of the defendant, but proceedings are already pending before a court of a third state i.
These new rules raise many questions regarding the principle of comity particularly with respect to the exclusive jurisdiction agreements in favour of the third state courts and it is currently unclear how they would be applied in practice. However, on the face of it, it would appear that, in light of the example above, if party A was domiciled in an EU Member State and party B initiated proceedings against party A in a court of that EU Member State in contravention of the exclusive jurisdiction agreement, that court may only stay proceedings in favour of any English court if the English proceedings were brought first in time and the conditions above are met.
Therefore, it would seem that a hard Brexit may have potential to cause significant inconvenience to litigants going forward. In order to address this potential inequity, there has been talk of reinstating the use of anti-suit injunctions and the broad range of powers available under them to punish parties wilfully breaching exclusive jurisdiction agreements in a post-hard Brexit scenario. Finally, it also deserves to be mentioned that it is at least arguable that the UK could continue to participate within the Recast Brussels Regulation framework by reverting to the provisions of the Brussels Convention  — an earlier iteration — to which the UK acceded in The second potential outcome is that the UK government reaches an agreement with the EU, i.
Any such agreement may also include matters relating to the Recast Brussels Regulation, Rome I Regulation and Rome II Regulation within its scope — although the latter two can in any event be transposed into national law just like in the case of a hard Brexit. Under this scenario, there is likely to be little to no impact on derivatives transactions as far as jurisdiction is concerned and business is likely to continue as usual subject to the continued application of other relevant regulations. However, actual analysis can only be carried out once the details of any agreement are published.
The third potential outcome is that the UK government continues to participate within the EU jurisdictional framework by virtue of seeking to rejoin the Lugano Convention  of which it is currently a member by virtue of EU membership which, broadly speaking, extends the scope of the Brussels Regulation the earlier iteration of the Recast Brussels Regulation to the EFTA states of Norway, Iceland and Switzerland. The Lugano Convention scenario is in principle available in combination with a hard Brexit scenario, as well as any soft Brexit scenario that does not touch on jurisdiction.
The Convention does not deal with matters relating to choice of law so these would need to be implemented separately. Protecting court choices and maintaining mutual recognition and enforcement of judgments are central to this objective. In principle, this scenario would be a relatively effective and expedient solution to many of the issues relating to jurisdiction post Brexit already addressed in this blog, because it would entail joining a pre-existing framework with which the UK is already familiar and there would be no need to negotiate a bespoke solution.
However, there are nevertheless some difficulties with and drawbacks to this approach. The first political hurdle is that accession to the Convention will require the approval of all contracting parties to the Convention,  i. The second political hurdle is the jurisdiction of the ECJ. The potential for this outcome is significant given the existing formidable array of jurisprudence from the English courts dealing with matters of jurisdiction which have not been tested in EU courts and are under the existing framework limited to application in England only.
For these reasons, it is possible that the EU would prefer to instead pursue an approach akin to the status quo under the Recast Brussels Regulation under which it retains full jurisdiction over the interpretation of jurisdiction as between the UK and the other Member States — for which the Lugano approach in its existing form is unsuited. In addition to the issues highlighted above, a number of shortcomings arise from the fact that the Convention, broadly speaking, incorporates the provisions of the Brussels Regulation — the predecessor to the Recast Brussels Regulation — and has not adopted the reforms introduced by the successor.
If and until these changes are implemented to the Lugano Convention, their benefits could not be reaped under English jurisdiction. The most significant of these reforms relate to the conduct of parallel proceedings in different EU Member States so-called lis pendens rules and the requirement for at least one party to the contract to be domiciled in an EU Member State in order to be able to benefit from the protections afforded to exclusive jurisdiction agreements by the regulation.
The Recast Brussels Regulation introduced a new rule stating that, where the parties have agreed to submit to the exclusive jurisdiction of a particular court or EU Member State, when that court is seised, any other court in any other EU Member State must stay proceedings until such a time as the court specified in the exclusive jurisdiction agreement resolves the issue of jurisdiction.
By way of an example, reusing the example from earlier on in the blog, consider a dispute between party A and party B who have agreed to submit to the exclusive jurisdiction of the English courts under section 13 b of the ISDA Master Agreement again assuming that the parties are using an up to date and valid exclusive jurisdiction clause and not the default clause under the ISDA Master Agreement. In this example, party B files a claim against party A in the court of an EU Member State  in contravention of the exclusive jurisdiction agreement. Party A then files a claim against party B in the English courts.
Under the Recast Brussels Regulation, when the English court subject to the exclusive jurisdiction agreement is seised, the court in the other EU Member State must stay proceedings. By contrast, under the Lugano Convention, because the court in the EU Member State was the first court to be seised, the English court must stay proceedings until the EU Member State court declines jurisdiction. In the 19th century, he developed a new approach to determine the applicable law in an international situation. Instead of unilateral rules that determined the scope of application of a national rule but remain silent on the applicability of foreign law, he introduced multilateral COL rules.
According to von Savigny, legal relationships must be allocated to a legal system, which can be the legal system of the forum country but can also be a foreign one. He established categories of legal relationships, such as obligations and property, and designed COL rules that link these categories to a particular jurisdiction through objective connecting factors, such as the location of the property or the place of performance of a contractual obligation.
Nevertheless, together with the public policy exception, the doctrine of overriding mandatory provisions has retained its function as a general correction mechanism in contemporary European COL.
In the Rome I Regulation, overriding mandatory rules are regulated in Art. Contrary to Art. Overriding mandatory provisions are provisions the 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.
This description aligns with the meaning given by the Court of Justice in the Arblade case. This decision can in its turn be viewed as an affirmation of the definition by Francescakis; see Ph. What becomes clear from the definition is that overriding mandatory provisions are not just mandatory provisions. In other words, these provisions are internationally binding. Not only are overriding mandatory rules enforceable irrespective of a choice of law by the parties; they also supersede the law applicable on the basis of the objective COL rules of the Regulation.
After all, their application is dependent solely on the question of whether or not the situation falls within the scope of the provision. The definition given in Art. How should this be determined? The European legislature seems to afford a wide margin of appreciation to the courts. The Interrelationship in Contractual Obligations , at In addition, it is not entirely clear what kinds of public interests are being targeted.
Does it exclude provisions that protect weaker parties? This issue will be discussed in Section 2. Does it mean that the provision in question should only aim at protecting national public interests, or can a rule protecting a European public interest, such as the free movement of goods and free and undistorted competition, also qualify as an overriding mandatory provision?
Plender and M. Wilderspin, Private International Law on Obligations , at In Unamar v. The facts of this case were the following. The one-year agreement contained a choice of law clause for Bulgarian law and an arbitration clause for the arbitration chamber of the Chamber of Commerce and Industry in Sofia Bulgaria.plaswingcontsar.tk
APPLICABLE LAW TO DISTRIBUTION CONTRACTS IN THE EUROPEAN UNION REGULATION / (ROME I)
The agreement was renewed annually until the end of , when NMB terminated the contract. Unamar brought proceedings before the Antwerp Commercial Court and ordered compensation. NMB contested the jurisdiction of the court, since parties had included an arbitration clause in the contract. However, the Belgian court ruled that it was competent to hear the case.
It also ruled that, notwithstanding the choice for Bulgarian law, Art. The Antwerp Court of Appeal declared that the arbitration clause was valid and that the Antwerp court had no jurisdiction. It also ruled that the provisions of the Belgian law on commercial agency contracts could not be qualified as overriding mandatory provisions.
Consequences of Brexit for European Private International Law
Moreover, the Court of Appeal held that, since Bulgaria also implemented the EU Agency Directive, establishing minimum standards for the protection of agents, Unamar received sufficient protection on the basis of the chosen law, even though Bulgarian law provided less protection than Belgian law.
Unamar brought an appeal in cassation, and the Court of Cassation requested a preliminary ruling by the CJEU, asking whether the Belgian provisions exceeding the scope and the level of protection of the Agency Directive could be applied as overriding mandatory provisions of the lex fori within the meaning of Art.
In order to answer the question referred to by the Belgian Court of Cassation, the CJEU had to give its opinion on the concept of overriding mandatory rules. It makes reference to the Arblade case and Art. In addition, the CJEU imposes two restrictions with regard to giving effect to overriding mandatory rules. The first one is based on the provisions of the EU Treaty, in particular the four freedoms.
According to the CJEU, the application of national rules shall not be detrimental to the primacy and uniform application of EU law. See more details regarding the limitations that EU primary law imposes on the application of overriding mandatory rules; J. Fetsch, Eingriffsnormen und EG-Vertrag , at ff. In the German literature, it has been argued that application of the overriding mandatory rules should not only be in conformity with the four freedoms, but should also comply with the Charter of Fundamental Rights of the European Union.
Parkwood not yet published in ECR , Rec. Here, the CJEU pays explicit attention to the relationship between overriding mandatory provisions and party autonomy, the latter being the cornerstone of the Rome Convention and Rome I Regulation. It refuses, however, to draw radical conclusions. This issue will be considered in more detail in Section 5. According to Art. Does this imply that rules aiming at the protection of individual interests cannot be regarded as overriding mandatory provisions?
The legislative history of the Rome I Regulation provides no clarity on this matter. In order to qualify as an overriding mandatory provision, a rule should at least partly pursue a state interest, and the protection of this state interest should not simply be ancillary to the purpose of protection of an individual interest. However, in other countries, such as the United Kingdom and France, it is thought that provisions aimed at protecting individual interests, such as consumers or employees, can be regarded as overriding mandatory rules.
Although these provisions do not serve a specific public interest, it is reasoned that a Member State can nevertheless have an interest in applying provisions based on public policy considerations, since the abuse of weaker parties can be viewed as a threat for civil society. Strikwerda, Inleiding tot het Nederlandse Internationaal Privaatrecht , at For this reason, the application of the rule itself is of public interest.
In the Netherlands, according to the majority opinion in the literature, provisions aimed primarily at the protection of weaker parties can be applied as overriding mandatory rules.
Moreover, the purpose of a rule can change over time. This is true of Art. In Nuon v.
In previous case law, the key question was whether at the time of dismissal it was foreseeable that the employee would fall back on the Dutch labour market. However, in this case the Supreme Court stated that the applicability of the provision depended on whether the situation of this employee could be distinguished sufficiently from the situations of other employees working in the Netherlands and who were undoubtedly entitled to protection. Until now, the CJEU has not addressed explicitly the issue as to whether the application of a rule based on the protective principle can be regarded as crucial by a state for the safeguarding of its public interest in the sense of Art.
Since the request of the Belgian court for a preliminary ruling in this case did not address the question of whether rules based on the protective principle fall within the scope of Art. Kuipers and J. In my opinion, however, in Unamar the Court at least confirmed implicitly that a rule aimed primarily at the protection of a weaker party could be viewed as an overriding mandatory rule.
Jurisdiction and Applicable Law after Exit Day: If not that agreement, then what?
Considerations based on the importance of the Agency Directive for the proper functioning of the internal market, which was emphasised by the Court in its Ingmar v. See also below, Section 4.
It is difficult to imagine that the Court could reach the same conclusion and simultaneously reject the idea that national provisions based on the protective principle and not aimed explicitly at the protection of a state interest could be qualified as overriding mandatory rules. In keeping with Art.