Skip to main content Accessibility help
×
Home

CONTRACTUAL NETWORKS IN EUROPEAN PRIVATE INTERNATIONAL LAW

  • Uglješa Grušić (a1)

Abstract

This article examines private international law issues raised by transnational contractual networks. The focus is on choice-of-law questions that arise in the context of 1) relations between network members who are contractually bound to one another, 2) relations between network members not connected directly by bonds of contract, and 3) relations between the network and the outsiders. The aim is to assess whether, and to what extent, European private international law is capable of dealing with some of the key challenges posed by contemporary economic and social activity.

Copyright

References

Hide All

1 The Economist, 21 January 2006, special report on ‘The New Organisation: A Survey of the Company’, 18.

2 The following terms have also been used in the literature: business networks; quasi-organizations; quasi-firms; virtual enterprises; multi-party hybrid business arrangements; complex economic organizations. See H Collins, ‘Introduction’ in G Teubner, Networks as Connected Contracts (Hart 2011) 12.

3 The Economist (n 1).

4 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) [2012] OJ L351/1. The Recast replaces Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2001] OJ L12/1, which replaced the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters [1972] OJ L299/32. See also the two Lugano Conventions on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters of 1988 ([1988] OJ L319/9) and 2007 ([2009] OJ L147/5).

5 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) [2008] OJ L177/6, which replaces the Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980 [1980] OJ L266/1.

6 Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) [2007] OJ L199/40.

7 See art 24(2) Brussels I Recast.

8 Art 1(2)(f) and (g) Rome I; art 1(2)(d) Rome II.

9 A reason for this approach of substantive lawyers may be found in what Collins (n 2) describes, at 28, as a ‘double impossibility’: ‘The project of comparative sociological jurisprudence is doubly impossible, because it adds to the existing problem of finding adequate modes of communication between law and socio-economics the further problem of establishing communications (or transplants) between autonomous national legal systems.’

10 See eg Ancel, M-E, ‘The Rome I Regulation and Distribution Contracts’ (2008) 10 YrbkPrivIntlL 221; Bassani, L. and others, ‘Applicable Law and Jurisdiction in Franchising, Commercial Agency and Distribution Agreements’ (2015) 13(6) International Journal of Franchising Law 3; Christie, RH, ‘The Law Governing an International Construction Contract’ (2007) 24 International Construction Law Review 343; Gutiérrez, L García, ‘Franchise Contracts and the Rome I Regulation on the Law Applicable to International Contracts’ (2008) 10 YrbkPrivIntlL 233; Mankowski, P, ‘Commercial Agents under European Jurisdiction Rules: The Brussels I Regulation Plus the Procedural Consequences of Ingmar’ (2008) 10 YrbkPrivIntlL 19; Piroddi, P, ‘International Subcontracting in EC Private International Law’ (2005) 7 YrbkPrivIntlL 289. Compare F Cafaggi and S Clavel, ‘Interfirm Networks across Europe: A Private International Law Perspective’ in F Cafaggi (ed), Contractual Networks, Inter-Firm Cooperation and Economic Growth (Edward Elgar 2011) 201; Cafaggi, F, ‘Contractual Networks and the Small Business Act: Towards European Principles?’ (2008) 4 ERCL 493 (these two articles examine the concept of a contractual network from the perspective of private international law in a holistic manner; their main shortcoming is that they do not address external aspects of contractual networks, ie. problems of the third type mentioned above) and Watt, H Muir, ‘Governing Networks: A Global Challenge for Private International Law’ (2015) 22 Maastricht Journal of European and Comparative Law 352 (the focus of this article is on external aspects of contractual networks).

11 See eg M Amstutz and G Teubner (eds), Networks: Legal Issues of Multilateral Co-operation (Hart 2009); D Campbell, H Collins and J Wightman (eds), Implicit Dimensions of Contract: Discrete, Relational and Network Contracts (Hart 2003); Cafaggi (n 10); H Collins, Regulating Contracts (OUP 1999) ch 10; S Grundmann, F Cafaggi and G Vettori (eds), The Organizational Contract: From Exchange to Long-Term Network Cooperation in European Contract Law (Ashgate 2013); Teubner, Networks as Connected Contracts, with introduction by Collins (n 2).

12 Teubner (n 2) 92. Teubner borrows this definition from J Sydow, Strategische Netzwerke: Evolution und Organisation (Gabler 1992) 82.

13 Collins (n 2) 1; see also H Collins, ‘Introduction: The Research Agenda of Implicit Dimensions of Contracts’ in Campbell, Collins and Wightman (n 11) 19–20 and H Collins, ‘The Weakest Link: Legal Implications of the Network Architecture of Supply Chains’ in Amstutz and Teubner (n 11) 187. Similarly, Adams, JN and Brownsword, R, ‘Privity and the Concept of a Network Contract’ (1990) 10 LS 12, 27–8.

14 Seminally, Coase, RH, ‘The Nature of the Firm’ (1937) 4 Economica 386.

15 See generally Collins (n 2) 4–13; Collins (n 11) ch 10; S Grundmann, F Cafaggi and G Vettori, ‘The Contractual Basis of Long-Term Organization – The Overall Architecture’ in Grundmann, Cafaggi and Vettori (n 11) 3, 6–28; Powell, WW, ‘Neither Market nor Hierarchy: Network Forms of Organization’ (1990) 12 Research in Organisational Behaviour 295.

16 I Macneil, The Relational Theory of Contract: Selected Works of Ian Macneil (Sweet & Maxwell 2001); see also Collins, ‘Introduction’ in Campbell, Collins and Wightman (n 11) 18–24.

17 Kirschner, C, ‘Symbiotic Arrangements as a Challenge to Antitrust’ (1996) 152 Journal of Institutional and Theoretical Economics 226; E Schanze, ‘Symbiotic Contracts: Exploring Long-term Agency Structures between Contract and Corporation’ in C Joerges (ed), Franchising and the Law (Nomos 1991) 67; Schanze, E, ‘Symbiotic Arrangements’ (1993) 149 Journal of Institutional and Theoretical Economics 691; see also Collins (n 11) 239–41.

18 Collins (n 2) 14–18; Teubner (n 2) 178.

19 Teubner (n 2) 133–9.

20 ibid 138.

21 See Cafaggi, ‘Contractual Networks and the Small Business Act: Towards European Principles?’ (n 10); C Cafaggi, ‘Contractual Networks and Contract Theory: A Research Agenda for European Contract Law’ in Cafaggi (ed) (n 10) 66; F Cafaggi and S Grundmann, ‘Towards a Legal Framework for Transnational European Networks?’ in Grundmann, Cafaggi and Vettori (n 11) 357.

22 On the regulatory function of private international law see Michaels, R, ‘New European Choice-of-Law Revolution’ (2008) 82 TulLRev 1607; A Mills, The Confluence of Public and Private International Law: Justice, Pluralism and Subsidiarity in the International Constitutional Ordering of Private Law (CUP 2009); Watt, H Muir, ‘Choice of Law in Integrated and Interconnected Markets: A Matter of Political Economy’ (2003) 9 ColumJEurL 383; H Muir Watt, ‘Integration and Diversity: The Conflict of Laws as a Regulatory Tool’ in F Cafaggi (ed), The Institutional Framework of European Private Law (OUP 2006) 107; Watt, H Muir, ‘Private International Law Beyond the Schism’ (2011) 2 TLT 347; Wai, R, ‘Transnational Liftoff and Juridical Touchdown: The Regulatory Function of Private International Law in an Era of Globalization’ (2002) 40 ColumJTransnatlL 209.

23 See art 81 of the Treaty on the Functioning of the EU (consolidated version) [2012] OJ C326/47 (TFEU); Recitals 3 and 4 Brussels I Recast; Recitals 1 and 6 Rome I; Recitals 1 and 6 Rome II.

24 (n 10) 206.

25 See n 10.

26 Art 8(1) Brussels I Recast. See also arts 8(2) (third party proceedings) and 8(3) (counter-claims).

27 On the delimitation of the spheres of application of arts 7(1) and 7(2) see Case C-26/91 Jakob Handte & Co GmbH v Traitements Mécano-chimiques des Surfaces SA [1992] ECR I-3967 and the recent Case C-548/12 Brogsitter v Fabrication de Montres Normandes EURL ECLI:EU:C:2014:148, [2014] QB 753, noted by Dickinson, A, ‘Towards an Agreement on the Concept of “Contract” in EU Private International Law?’ [2014] LMCLQ 466. In addition, the rules of jurisdiction in contract and tort are difficult to apply to transnational contractual networks whenever the performance of the contract or the harmful event occur in more than one State: see Grušić, U, ‘Jurisdiction in Complex Contracts under the Brussels I Regulation’ (2011) 7 JPrivIntL 321; Lehmann, M, ‘Where Does Economic Loss Occur?’ (2011) 7 JPrivIntL 527.

28 See Case C-543/10 Refcomp SpA v Axa Corporate Solutions Assurance SA ECLI:EU:C:2013:62 [2013] 1 Lloyd's Rep 449; Muir Watt (n 10) 362–4.

29 R Brownsword, ‘Network Contracts Revisited’ in Amstutz and Teubner (n 11) 31.

30 Art 1 Rome I.

31 See text accompanying n 29.

32 See Recital 13 Rome I (‘This Regulation does not preclude parties from incorporating by reference into their contract a non-State body of law or an international convention.’). Compare art 3(2) of the proposal for Rome I, COM(2005) 650 final and art 3 of the Hague Principles on Choice of Law in International Commercial Contracts, Hague Conference on Private International Law, Prel Doc No 6 – revised of July 2014.

33 [1984] AC 50 (HL), 65.

34 Art 3(1) Rome I.

35 Giuliano, M and Lagarde, P, ‘Report on the Convention on the Law Applicable to Contractual Obligations’ [1980] OJ C282/1, para 3 of the comment of art 3.

36 European Commission, Green paper on the conversion of the Rome Convention of 1980 on the law applicable to contractual obligations into a Community instrument and its modernization, COM(2002) 654 final, section 3.2.4.1.

37 Fons, M Penades, ‘Commercial Choice of Law in Context: Looking Beyond Rome’ (2015) 78 MLR 241.

38 Penades Fons concludes ibid, at 256, that ‘the application of the doctrine of connected contracts under either implied choice or the escape clause is used as a mechanism to enhance the commercial soundness of the operation. That is, as an instrument for the unification of the legal order applicable to the plurality of agreements constituting a transaction or a chain of transactions.’ English cases on implied choice in related contracts include Groupama Navigation et Transports v Catatumbo CA Seguros [2000] 2 Lloyd's Rep 350 (CA) (reinsurance); Emeraldian Ltd Partnership v Wellmix Shipping Ltd [2010] EWHC 1411 (Comm), [2011] 1 Lloyd's Rep 301, [170] (guarantee related to a charterparty); FR Lurssen Werft GmbH & Co KG v Halle [2010] EWCA Civ 587, [2011] 1 Lloyd's Rep 265, [20]–[21] (commission contract related to two shipbuilding contracts); Gard Marine and Energy Ltd v Tunnicliffe [2010] EWCA Civ 1052, [2011] 2 All ER (Comm) 208, [39]–[45] (reinsurance); Star Reefers Pool Inc v JFC Group Ltd [2011] EWHC 339 (Comm), [2011] 2 Lloyd's Rep 215, [23]–[24] (guarantee related to a charterparty); Stonebridge Underwriting Ltd v Ontario Municipal Insurance Exchange [2010] EWHC 2279 (Comm), [2010] 2 CLC 349, [35] (reinsurance); Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2012] EWCA Civ 265, [2012] 1 WLR 3674, [45], [49] and [55] (guarantee and warranty of authority related to a charterparty); Alliance Bank JSC v Aquanta Corp [2012] EWCA Civ 1588, [2013] 1 All ER (Comm) 819, [54] (implied indemnity related to a guarantee); Pathfinder Minerals Plc v Veloso [2012] EWHC 2856, [46] (sale of shares in relation to an equity funding agreement); BAT Industries Plc v Windward Prospects Ltd [2013] EWHC 4087 (Comm), [2014] 2 All ER (Comm) 757, [74] (contract for transfer of legal defence in New York litigation and contract for execution of settlement agreement). Compare Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd [1999] 2 All ER (Comm) 54 (CA) (reinsurance); Tonicstar Ltd (Operating as Lloyd's Syndicate 1861) v American Home Assurance Co [2004] EWHC 1234 (Comm), [2012] 1 CLC 271, [10] (reinsurance) (in these two cases, there was no implied choice that would achieve the unity of applicable law). See further Okoli, CSA, ‘The Significance of the Doctrine of Accessory Allocation as a Connecting Factor under Article 4 of the Rome I Regulation’ (2013) 9 JPrivIntL 449; Penades Fons ibid, 256–7 and 268–73.

39 Giuliano-Lagarde Report (n 35) 17. But see Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd ibid (choice of law in a contract was implied on the basis of an implied choice of law in a related contract).

40 Similarly, Cafaggi and Clavel (n 10) 213.

41 See arts 9 and 12(2) Rome I.

42 The third sentence of art 3(1) provides: ‘By their choice the parties can select the law applicable to the whole or to part only of the contract.’

43 Giuliano-Lagarde Report (n 35), para 4 of the comment of art 3.

44 For the theory of characteristic performance see Giuliano-Lagarde Report (n 35) 19; Lipstein, K, ‘Characteristic Performance – A New Concept in the Conflict of Laws in Matters of Contract for the EEC’ (1981) 3 Northwestern Journal of International and Business Law 402; d'Oliveira, HUJ, ‘‘‘Characteristic Obligation” in the Draft EEC Obligation Convention’ (1977) 25 AmJCompL 303.

45 Art 4(1)(a) and (b) Rome I. For the distinction between sales and services contract see Case C-381/08 Car Trim v KeySafety Systems [2010] ECR I-1255 (on the application of what is now art 7(1)(b) Brussels I Recast to a long-term supply contract between an Italian manufacturer of air bag systems and a German manufacturer of components); Case C-9/12 Corman-Collins SA v La Maison du Whiskey SA ECLI:EU:C:2013:860, [2014] QB 431 (on the application of what is now art 7(1) Brussels I Recast to a distribution agreement).

46 (n 32) 6. For diverging case law on the determination of the characteristic performance of franchise and distribution contracts see García Gutiérrez (n 10) 234–6; Ancel (n 10) 223–6.

47 See Recital 19 Rome I which states that, in the case of a contract consisting of a bundle of rights and obligations capable of being categorized as falling within more than one of the specified types of contract, the characteristic performance of the contract should be determined having regard to its centre of gravity.

48 (n 32) 6.

49 See text accompanying n 17.

50 See Killion, WL, ‘The Modern Myth of the Vulnerable Franchisee: The Case for a More Balanced View of the Franchisor-Franchisee Relationship’ (2008) 28 Franchise Law Journal 23.

51 Ancel (n 10) 226–7; García Gutiérrez (n 10) 238–40; M McParland, The Rome I Regulation on the Law Applicable to Contractual Obligations (OUP 2015) [10.236] (but see [10.224]).

52 (n 46).

53 See also Recital 29.

54 (n 37).

55 Similarly, Atrill, S, ‘Choice of Law in Contract: The Missing Pieces of the Article 4 Jigsaw’ (2004) 53 ICLQ 549, in particular 558–9; Fentiman, R, ‘Commercial Expectations and the Rome Convention’ (2002) 61 CLJ 50; Fentiman, R, ‘Choice of Law in Europe: Uniformity and Integration’ (2008) 82 TulLRev 2021, 2048; R Fentiman, ‘The Significance of Close Connection’ in J Ahern and W Binchy (eds), The Rome II Regulation on the Law Applicable to Non-Contractual Obligations (Martinus Nijhoff 2009) 85, 94–7; R Fentiman, International Commercial Litigation (OUP 2010) [4.108], [4.110]–[4.121]. See also Ministry of Justice, ‘Rome I – Should the UK Opt In’, Consultation Paper CP05/08 of 2 April 2008, [54] (‘in the context of related contracts … it is of commercial importance for a single law to be applied to the whole transaction rather than having different laws applying to each of the component parts of the transaction’, emphasis added).

56 See also Recital 21 which refers to the existence of related contracts as a relevant factor for the direct application of the principle of the closest connection.

57 Case C-305/13, ECLI:EU:C:2014:2320, [2015] QB 319, [49].

58 [1994] 2 Lloyd's Rep 87 (QB). Other leading English cases on choice of law for letters of credit include Offshore International SA v Banco Central SA [1977] 1 WLR 399 (QB); Power Curber International Ltd v National Bank of Kuwait SAK [1981] 1 WLR 1233 (CA); European Asian Bank AG v Punjab and Sind Bank [1981] 2 Lloyd's Rep 651 (QB); Bank of Credit and Commerce Hong Kong Ltd v Sonali Bank [1995] 1 Lloyd's Rep 227 (QB); Marconi Communications International Ltd v Pt Pan Indonesia Bank TBK [2005] EWCA Civ 422, [2007] 2 Lloyd's Rep 72. See also C Hare, ‘The Rome Convention and Letters of Credit’ [2005] LMCLQ 417; CGJ Morse, ‘Letters of Credit and the Rome Convention’ [1994] LMCLQ 560.

59 See para 3.1(6)(c) Civil Procedure Rules Practice Direction 6B.

60 [1994] CLC 41 (QB) 48.

61 ibid 48-9.

62 Other English cases on the use of the escape clause to determine the applicable law of related contracts include Lincoln National Life Insurance Co v Employers Reinsurance Corp [2002] EWHC 28 (Comm), [2002] Lloyd's Rep I.R. 853, [23]–[25] (reinsurance); Emeraldian Ltd Partnership v Wellmix Shipping Ltd (n 38), [171] (guarantee related to a charterparty); Gard Marine and Energy Ltd v Tunnicliffe (n 38), [46]–[47] (reinsurance); British Arab Commercial Bank Plc v Bank of Communications [2011] EWHC 281 (Comm), [2011] 1 Lloyd's Rep 664, [32]–[35] (counter-guarantee); Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd (n 38), [49]–[54] (warranty of authority related to a charterparty); Alliance Bank JSC v Aquanta Corp (n 38), [54] (implied indemnity related to a guarantee); BAT Industries Plc v Windward Prospects Ltd (n 38), [74] (contract for transfer of legal defence in New York litigation and contract for execution of settlement agreement). Compare Credit Lyonnais v New Hampshire Insurance Co Ltd [1997] CLC 909 (CA) (insurance; the applicable law was determined under the choice-of-law rules of the Insurance Companies Act 1982 which were influenced by the Rome Convention); Samcrete Egypt Engineers and Contractors SAE v Land Rover Exports Ltd [2001] EWCA Civ 2019, [2002] CLC 533 (guarantee related to a distribution contract); Caledonia Subsea Ltd v Microperi Srl 2002 SLT 1022 (subcontracting); Dornoch Ltd v Mauritius Union Assurance Co Ltd [2006] EWCA Civ 389, [2006] 2 All ER (Comm) 385, [40]–[43] (reinsurance) (in these four cases, the escape clause was not (specifically) used to achieve the unity of applicable law). See further Okoli (n 38); Penades Fons (n 37) 256–7 and 268–73.

63 See Tang, Z, ‘Law Applicable in the Absence of Choice – The New Article 4 of the Rome I Regulation’ (2008) 71 MLR 785, 797800.

64 See S Rammeloo, Corporations in Private International Law: A European Perspective (OUP 2001).

65 See the escape clause of art 4(5) of the Rome Convention.

66 It is unclear whether the existing Recital 20 of Rome I is supposed to apply only in the former or also in the latter situation.

67 For example, art 4(1) of the Rome Convention, after stating that the contract shall be governed by the law of the country with which it is most closely connected, provided as follows: ‘Nevertheless, a severable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.’

68 (n 10) 226, 228, 243–4.

69 See Case C-64/12 Anton Schlecker v Melitta Josefa Boedeker, the Opinion of Advocate General Wahl, ECLI:EU:C:2013:241, [2014] QB 320, [21].

70 Heermann mentions a credit card transaction as an example of a ‘mini’ contractual network: PW Heermann, ‘The Status of Multilateral Synallagmas in the Law of Connected Contracts’ in Amstutz and Teubner (n 11) 103. It should be noted that Teubner's concept of connected contracts, through which he conceptualizes in legal terms contractual networks, has its root in art 358 of the German Civil Code (BGB) which is concerned with the particular problems of consumers’ withdrawal from contracts entered into using a credit arrangement with the bank and the retailer.

71 The personal scope of the special choice-of-law rules for consumer contracts is determined by art 6 of Rome I. These rules apply only where the professional (a) pursues his commercial or professional activities in the country where the consumer has his habitual residence, or (b) by any means, directs such activities to that country or to several countries including that country, and the contract falls within the scope of such activities. There is also a list of situations in which the application of art 6 is excluded.

72 Collins advances strong reasons to treat the parties to a temporary agency work relation as forming part of a network: Collins (n 2) 7, 59–62 and 65.

73 The special choice-of-law rules for employment contracts apply to ‘individual employment contracts’: art 8. For an examination of the personal scope of these rules see U Grušić, The European Private International Law of Employment (CUP 2015) ch 3 and Case C-47/14 Holterman Ferho Exploitatie BV v Spies von Büllesheim ECLI: EU:C:2015:574, [2015] IL Pr 44.

74 See Recital 23 Rome I.

75 Art 6 Rome I.

76 Art 8 Rome I.

77 For the application of art 8 of Rome I to posting of workers abroad by employment agencies see Grušić (n 73) section 5.3. See also ibid, ch 8, on the posting of workers in Europe.

78 Art 9(1) Rome I.

79 Case C-381/98 Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000] ECR I-9305. See also Case C-184/12 United Antwerp Maritime Agencies (Unamar) NV v Navigation Maritime Bulgare ECLI:EU:C:2013:663, [2014] 1 Lloyd's Rep 161.

80 See, for example, statutes enacted in the United States addressing what has been perceived as abuses of the relations of power and domination in network contracts in certain market sectors: EU Federal Trade Commission Rule: Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures 16 CFR pt 436; California Franchise Investment Law (1971); Delaware Franchise Security Law (1970); New Jersey Franchise Practices Act (1971); US Petroleum Marketing Practices Act 15 USC sections 2801–2806; US Automobile Dealers Day in Court Act 15 USC sections 1221–1225.

81 See the decisions of the French Cour de cassation (Ch Mixte, 30 November 2007, pourvoi n 06-14006; Cass Civ 3, 30 January 2008, pourvoi n 06-14641; Cass Civ 3, 8 April 2008, pourvoi n 07-10763), holding that the French law No 75-1334 of 1975, which recognizes an action directe among non-contracting network members, is an overriding mandatory provision whenever the contract is for the construction of an immoveable in France. See also Piroddi, P, ‘The French Plumber, Subcontracting, and the Internal Market’ (2008) 10 YrbkPrivIntlL 593 and Rosher, P, ‘Forty Years On: French Law on Sub-Contracting’ (2015) 32 International Construction Law Review 44.

82 For the overriding nature of English consumer and employment protection legislation see: Office of Fair Trading v Lloyds TSB Bank plc and others [2007] UKHL 48, [2008] 1 AC 316 and Serco Ltd v Lawson; Botham (FC) v Ministry of Defence; Crofts v Veta Ltd [2006] UKHL 3, [2006] 1 All ER 823; for a critical view of these cases see Bisping, C, ‘Avoid the Statutist Trap: The International Scope of the Consumer Credit Act’ (2012) 8 JPIL 35 and Grušić (n 73) ch 6.

83 Arts 9(2) and 9(3) Rome I.

84 See Fallon, M and Meeusen, J, ‘Private International Law in the European Union and the Exception of Mutual Recognition’ (2002) 4 YrbkPrivIntlL 37. See also Case C-184/12 United Antwerp Maritime Agencies (Unamar) NV v Navigation Maritime Bulgare (n 79).

85 (n 27). For a different view see Piroddi (n 10) 322–3.

86 Lehmann (n 27) 531.

87 ibid, 541–9.

88 See PE Nygh, Autonomy in International Contracts (Clarendon 1999) 240–7.

89 But see A Briggs, Private International Law in English Courts (OUP 2014) [8.105] (‘In more complex cases, of course, which arise where the commercial relationship comprises a number of linked contracts and a number of associated contracting parties, this analysis may be more difficult and not for the faint-hearted. It is submitted, however, that the court should start first from principles. If the gist of the tort, as pleaded, could just as easily have been put forward as a claim for breach of a particular contract, it is not helpful to look beyond it to the broader contractual matrix to complicate the application of Article 4(3).’)

90 Muir Watt (n 10) has advanced, at 366–7, another solution for achieving network-favourable outcomes in this context. According to her, the existence of reciprocal actions among network participants will induce or enhance cooperation. ‘This could perfectly well be attained by means of the method and approach implemented by the 1973 Hague Convention on the law applicable to product liability, now replaced by Rome II Regulation (Article 5). Put simply, the conflict rule ensures the application of a single law in the relation between actors at the two ends of the chain. This approach is particularly fitting because an essential element of the network is that it mandates not to distinguish between contractual and non-contractual relationships among participants, and encourages their equal treatment in terms of the access to rights and allocation of duties.’ (footnote omitted)

91 See Teubner (n 2) ch 6. See also Collins, H, ‘Ascription of Legal Responsibility to Groups in Complex Patterns of Economic Integration’ (1990) 53 MLR 731; O De Schutter, ‘Extraterritorial Jurisdiction as a Tool for Improving the Human Rights Accountability of Transnational Corporations’, available at <http://cridho.uclouvain.be/documents/Working.Papers/ExtraterrRep22.12.06.pdf>45–6.

92 See <http://business-humanrights.org/>, where many cases have been reported.

93 Lubbe v Cape Plc [2000] 1 WLR 1545 (HL) (on forum non conveniens); Durham v T&N Plc, Court of Appeal, 1 May 1996, unreported.

94 Connelly v RTZ Corp Plc (No 2) [1998] AC 854 (HL) (on forum non conveniens).

95 Ngcobo v Thor Chemicals Holdings Ltd [1995] TLR 579 (CA) (on the striking out of the defendant's notice of appeal against a refusal to stay proceedings); Sithole v Thor Chemicals Holdings Ltd [1999] TLR 110 (CA) (on the setting aside of a default judgment and stay of proceedings).

96 See Vava v Anglo American South Africa Ltd [2012] EWHC 1969 (QB), [2013] Bus LR D48 and [2013] EWHC 2131 (QB) [2013] Bus LR D65 (both cases concerned the domicile of the defendant for the purposes of the Brussels I Regulation).

97 See Guerrero v Monterrico Metals Plc [2009] EWHC 2475 (QB) (on disclosure and freezing orders) and [2010] EWHC 3228 (QB) (on the amendment of particulars of claim).

98 See Arroyo v Equion Energia Ltd (Formerly BP Exploration Co (Colombia) Ltd) [2013] EWHC 3173 (TCC) (on permission to include a claim for general damages); see also <http://business-humanrights.org/en/bp-lawsuits-re-casanare-colombia>.

99 See Motto v Trafigura Ltd [2011] EWCA Civ 1150, [2012] 1 WLR 657 (on the proportionality of a bill of costs).

100 See Kesabo v African Barrick Gold Plc [2013] EWHC 4045 (QB) (on costs arising out of an application for an anti-suit injunction).

101 <http://business-humanrights.org/en/koh-kong-sugar-plantation-lawsuits-re-cambodia#c86294>; M Mohan, ‘The Road to Song Mao: Transnational Litigation from Southeast Asia to the United Kingdom’ [2014] AJIL Unbound e-30.

104 The unusual case of Trafigura is an exception. It did not concern an organizational network or a contractual network. Another exception is the Song Mao litigation where the claimants commenced proceedings against the purchaser of sugar grown on the land arguing that they remained the legal owners of the land and thus the rightful owners of crops grown on it.

105 For the importance of access to justice see the United Nations Guiding Principles on Business and Human Rights, available at <http://business-humanrights.org/en/un-guiding-principles>, in particular principle 25. Compare the German Lidl lawsuit (<http://business-humanrights.org/en/lidl-lawsuit-re-working-conditions-in-bangladesh>) and the French Auchan lawsuit (<http://business-humanrights.org/en/auchan-lawsuit-re-garment-factories-in-bangladesh>) where the German and French supermarkets were sued for allegedly misleading advertisements regarding the conditions in which the clothing that they were selling was produced by their suppliers from Bangladesh; see also the German KiK lawsuit commenced in 2015, in which the survivors and families of victims of a fire in a textile factory in Pakistan that resulted in 260 deaths seek compensation from KiK, the factory's main customer (<http://business-humanrights.org/en/kik-lawsuit-re-pakistan>).

106 Compare Chandler v Cape Plc [2012] EWCA Civ 525, [2012] 1 WLR 3111 with Thompson v Renwick Group Plc [2014] EWCA Civ 635, noted by U Grušić (2015) 74 CLJ 30.

107 Compare van Dam, C, ‘Tort Law and Human Rights: Brothers in Arms. On the Role of Tort Law in the Area of Business and Human Rights’ (2011) Journal of European Tort Law 221 and Rott, P and Ulfbeck, V, ‘Supply Chain Liability of Multinational Corporations?’ (2015) 23 European Review of Private Law 415, 430–6.

108 See Goldhaber, MD, ‘Corporate Human Rights Litigation in Non-US Courts: A Comparative Scorecard’ (2013) 3 UC Irvine Law Review 127, 133–4. The government is proposing further changes to the system of legal fees that are expected to make it even more difficult for victims of alleged gross violations of human rights and the environment committed overseas to access justice in the UK: see ‘David Cameron Calls for Action on “Spurious Claims” Against Iraq Veterans’, The Guardian, 22 January 2016.

109 Section 44(4) of the 2012 Act.

110 Section 46(1).

111 Section 26(1) (‘Costs ordered against an individual in relevant civil proceedings must not exceed the amount (if any) which it is reasonable for the individual to pay having regard to all the circumstances’).

112 Case C-412/10 Homawoo v GMF Assurances ECLI:EU:C:2011:747, [2012] IL Pr 2.

113 Wealands v Harding [2006] UKHL 32, [2007] 2 AC 1.

114 Arts 4(1) and 15(c) Rome II. Arts 4(2) (the rule of the common habitual residence of the tortfeasor and the victim) and 4(3) (escape clause) are unlikely to apply.

115 R Meeran, ‘Tort Litigation against Multinationals (“MNCs”) for Violation of Human Rights: An Overview of the Position outside the US’, available at <http://business-humanrights.org/sites/default/files/media/documents/richard-meeran-tort-litigation-against-mncs-7-mar-2011.pdf> 15.

116 This is not a fanciful proposition. Many transnational corporations voluntarily subscribe to various non-State bodies of law that concern corporate social responsibility. See eg the UN Guiding Principles on Business and Human Rights, Global Compact (<http://www.unglobalcompact.org/>), Agenda 21 (<http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=52&ArticleID=49>), the International Labour Organisation Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (<http://www.ilo.org/empent/Publications/WCMS_094386/lang--en/index.htm>), the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises (<http://www.oecd.org/daf/inv/mne/>) and the ISO 26000 Guidance Standard on Social Responsibility (<http://www.iso.org/iso/home/standards/iso26000.htm>).

117 Some inspiration can be drawn from art 7 of Rome II, which lays down choice-of-law rules for environmental damage. For a critical view of art 7 see Grušić, U, ‘International Environmental Litigation in EU Courts: A Regulatory Perspective’ (2016) 35 YEL.

I am grateful to Professor Paul Torremans, Dr Manuel Penades Fons and anonymous referees for their useful comments and suggestions. The usual disclaimer applies.

Keywords

Related content

Powered by UNSILO

CONTRACTUAL NETWORKS IN EUROPEAN PRIVATE INTERNATIONAL LAW

  • Uglješa Grušić (a1)

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.