In the 5 top myths about international law, I omitted intentionally conflict of laws rules. Now, I return to them because the biggest traps of international law – and not only them – hide in there. Whether you’re doing business with foreign contractors or you’re an “average Joe” who occasionally goes abroad – it’s worth knowing about these traps. In this post I shall explain what the conflict of laws rules (provisions) are, where to find them and how they work.
TRAPS OF INTERNATIONAL LAW: WHAT ARE CONFLICT OF LAWS RULES ?
The conflict of laws rules (or provisions, as they are often called) are simply rules governing the law applicable to a contract or other event (e.g. a delict). Conflict of laws rules answer a question according to which law one should assess a contract or an event provided the latter has legal consequences.
In addition, conflict of laws rules are applicable only if in such an event or a contract has an “international element”. For example, the parties to a sales contract are you and a company from Brazil. Or you, as a Polish or Czech citizen, have married in Las Vegas with an Argentinian, etc.
This is how this “international element” works.
TRAPS OF INTERNATIONAL LAW: WHERE WILL YOU FIND CONFLICT OF LAWS RULES ?
Well. Now that you know what it is, now the question is where these conflict of laws rules can be found ?
Firstly, each civilized legal system contains conflict of laws legislation. Countries self-regulate legal cooperation with foreign states.
In Poland, the conflict of laws rules can be found primarily in the Act of 4 February 2011 on Private International Law (Dz.U. 2011, No 80, item 432) and part four of the Polish Code of Civil Procedure (KPC), which contains provisions on international civil procedure.
The international part of Polish KPC explains, among others, when a court case with an “international element” can and when it must be settled by Polish courts and according to Polish civil procedure.
Secondly, these conflict of laws rules indicate when and under what terms our Polish courts recognize decisions of foreign courts or governmental/administrative bodies.
Finally, these conflict of laws rules state when and under what terms Polish courts find foreign courts governmental/administrative bodies enforceable (effective) in Poland.
Identically like Poland, Ukraine, Japan and Belgium etc. also have their own conflict of laws rules.
Naturally, of course, conflict of laws rules can also be included in international agreements between states. Both: bilateral and multilateral.
In addition, the fundamental principle of international law says that international agreements take precedence over national laws and this rule is worth keeping in mind. equivalent of the Polish law, because it varies from country to country).
In general, it is worth remembering that international law usually takes precedence over national law.
Do you remember my example of a car accident caused by a Polish citizen in Ukraine from a previous post? In that situation, the decision which law applies to the assessment of the Polish driver’s liability will be based on the conflict of laws rules set forth in the international agreement. All counties “involved” in that accident are parties to the Convention on the Law Applicable to Traffic Accidents.
TRAPS OF INTERNATIONAL LAW: EU CONFLICT OF LAWS RULES
To make the whole thing of the conflict of laws rules even more interesting, the European Union has added its 3 cents to this issue which adds another layer to the fabric of international law traps, poetically speaking.
Ther are two regulations currently in force At EU level which need to be mentioned as main sources for conflict of laws rules. I am thinking of course about the famous Rome I and Rome II regulations.
The Rome I concerns contracts and states which law should be used to interpret the contracts listed in the this EU regulation (because, not all contracts are governed by its provisions). The conflict of law provisions of Rome I apply only if the parties to the agreement themselves have not chosen the law applicable to its interpretation. Pointing them in the contract, of course.
The full name of Rome I is Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (OC 17.12.2008, p. 1). EU L 177, 04.07.2008)
But attention ! If you think that if this IS EU regulation, it only applies to contracts between EU citizens or EU companies, then you are wrong.
Well, this post is about traps of international laws after all, right?
Rome I is not at all limited only to contracts between EU citizens or companies but also regulates contracts with companies or non-EU citizens
For example, if a Polish company bought a car from a Dubai company and they didn’t indicate under which laws the contract was to be interpreted, then according to Rome I this contract will be interpreted in accordance with the United Arab Emirates law, because the seller of this car was the Dubai company.
That is why I keep pointing out importance of entering into contracts a clause on the applicable law and the courts’ jurisdiction. I have already written about this in a post about the conclusion of favorable contracts also with foreign contractors.
If you forget to do this, you will find yourself at the mercy of conflict of laws rules which can be a disaster for you.
Think about it.
TRAPS OF INTERNATIONAL LAW: WHAT YOU WON’T AVOID, SO IT’S BETTER TO KNOW ABOUT IT
However, there are situations when you will have to fully rely on conflict of laws rules. When?
Then, when an event has legal consequences and has an “international element, but it is not a contract. A car accident abroad is a classic example here.
All the liability and damage resulting from events other than contracts, will also be governed by conflict of laws rules either domestic, of a country where an event occurred or set forth in an international agreement/treaty.
Good example of a legal act regulating consequences of such international, non- contractual events is EU Rome II Regulation. Which full title is: Regulation (EC) No 864/2007/EC of the European Parliament and of the Council of 11 July 2007 concerning the law applicable to non-contractual obligations (“Rome II”) (OJ L 133, 11.12.2007, p. 1). EU L 199, 31.07.2007).
To make it even more interesting, there are cases when, as a rule, countries reserve their exclusive right to resolve an issue.
Typically such “country exclusive matters”, will be: granting citizenship, administrative proceedings (matters of public administration), as well as a turnover of real estates. In addition “risky” can be marriages, divorces, separations, childcare and all administrative and personal matters in general, so to speak.
The moral is this: you need to be careful and vigilant when it comes to international laws.
Especially in case of contracts with a foreign customers or clients since you can make your life very easy or… quite contrary. A moment of inattention and a simple dispute over an unpaid invoice will turn into a super long and mega complicated court battle across 3 continents.
Or even worse. About which I will write more in my post on Schrödinger’s divorce.