Critically assess any two provisions of Rome I and evaluate their relevance in international business decision making. Based on your assessment, how important a change is Britains acceptance of Rome 1, in terms of the effects it will have on decisions in English courts relating to contractual obligations in transnational commercial disputes? Give examples to justify your answer.

The principles of this does not fall far from the know principle in the UK of freedom of contract, that it should be possible for equal parties to agree upon the terms of their contract, in case of the Rome Convention and the Rome I to agree upon the law governing the contract. That a contract is governed by the law chosen by the parties can also be seen in English case law in Vita Food[4]where the chosen law was expressed in the bill of landing or as in Whitworth Street Estates[5] in 1970 where it was decided that as the contract was construed according to English law, English law became the applicable law. In Union of India[6] in 1975 the sentence “to be settled in London” determined the applicable law.

Based on the Vita, Withworth and the Union of India case mentioned above, the Article 3 of the Rome I will not have great impact on the rulings by English courts as the approach was already established under the common law system.

In Iran Continental Shelf Oil O v IRI the claimant claimed under Article 3 the applicable law would be Iranian and the defendant that the applicable law would be American, but the interpretation of the English court of Article 3, was that Article 4 would become applicable, as they had not explicitly chosen which law should govern their contract[7].

Applicable law in the absence of choice

Article 4 in the Rome Convention and the Rome I deals with the question when no law has been chosen, as explained by Wilderspin it provided several connecting factors to be used to determine which law is applicable in the absence of choice[8], and according to Einarsson is this the most controversial article in the Rome Convention[9], which has been more tailored in the Rome I[10]

However, if one looks at the test of connecting factors, as introduced in Samcrete[11], it is clear that this test does not differ much from tests applied many years before by English courts in Mount Albert Borough Council[12] or in Bonython[13]where connecting factors were used to determine jurisdiction and applicable law. Consequently one could argue that the Rome I will most likely also not mean big chances to decisions in English courts.

The fact that in the negotiation of the Rome Regulation it was the first time that the United Kingdom did not use its right to opt in[14] can further support the view that Rome I would not have great impact on decisions made by English courts relating to contractual obligations in transnational commercial disputes.  

Why was the UK hesitant to join?

So one may wonder why the United Kingdom was hesitant to join, one answer can perhaps be found in a poll done by the Magazine for Entrepreneurs[15] in which it is stated that 55% of the firms asked by the British Chamber of Commerce was unsure about which type of trading relationship would benefit them and some even expressed that the burden of the regulations and legislation in the European Union was making them less competitive in the global market. So one argument for the United Kingdom to join could be to ensure that they were part of a development towards harmonizing the legal aspect of the European Union and thus help commerce to work more smoothly within the European community?

[1] Other steps; Hague Conference on Private International Law, the Vienna Convention on the International Sale of Goods, the UNIDROIT Principles of International Commercial Contracts, although none of these were mandatory.

[2] R Hayward, Conflict of Laws, 4th edn, Cavendish Publishing Limited, 2006, pp. 107

[3] S M M Billah, Choice of Law in Contracts, http://www.academia.edu/1735233/Contract, accessed March 9, 2013

[4] Vita Food Products v Unus Shipping Co Ltd (1939) AC 277

[5] Whitworth Street Estates (Manchester) Ltd -v- James Miller & Partners Ltd [1970] AC 572; [1970] Lloyd's Rep 269

[6] Union of India -v- Aaby's Rederi A/S, The Evje [1975] AC 797

[7] Iran Continental Shelf Oil Co 7 Ors v IRI International Corp [2002] EWCA Civ 1024 (28 June 2002), http://judgmental.org.uk/judgments/EWCA-Civ/2002/%5B2002%5D_EWCA_Civ_1024.html, accessed March 9, 2013

[8] M Wilderspin, The Rome I Regulation: Communitarisation and modernisation of the Rome Convention, (2008) 9 (2),pp. 265

[9] J S H Einarsson, The Law of Contract under the Rome Convention, University of Akureyri, BA Exam, 2008, http://skemman.is/stream/get/1946/1616/5166/1/Jon_Stefan_Hjaltalin_loka%C3%BAtg%C3%A1fa.pdf, accessed March 8, 2013

[10] Modernisation of the EU Choice of Law rules applicable to contractual obligations, (2009), www.linklaters.com/pdfs/publications/.../091124NewsletterRomeI.pdf, accessed March 9, 2013

[11] Samcrete Egypt Engineers & Contractors SAE v Land Rover Exports Ltd (2001) EWCA 2019

[12] Mount Albert Borough Council v Australasian Assurance Society Ltd [1938] AC 224

[13] Bonython v Commonwealth of Australia [1951] AC 201

[14] M Wilderspin, pp 261

[15] A Jovitt; Poll: UK firms want more free trade, less integration with Europe, http://www.enforbusiness.com/news/poll-uk-firms-want-more-free-trade-less-integration-europe-20128556, accessed March 8, 2013