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COMMISSION RECOMMENDATION

of 15 January 1985

concerning the Convention of 19 June 1980 on the law applicable to contractual obligations

(Only the German text is authentic)

(85/111/EEC)

I

The Convention on the law applicable to contractual obligations, opened for signature in Rome on 19 June 1980, has been signed by all 10 Member States of the Community: it was signed on 19 June 1980 by Belgium, the Federal Republic of Germany, France, Ireland, Italy, Luxembourg and the Netherlands, on 10 March 1981 by Denmark and on 7 December 1981 by the United Kingdom; on 10 April 1984, the representatives of the Governments of the Member States signed the Convention on the accession of the Hellenic Republic to the Convention on the law applicable to contractual obligations.

The Convention is the first step towards unification and codification of general rules of conflict in the field of civil law in the Community. Unification will make it easier to determine the law applicable and will increase legal certainty. It should also ensure that all courts in the Community always apply the same substantive law to the same matter in dispute between the same parties. Where the parties are free to choose between courts in different Member States, their choice should not prejudice the question of the substantive law in accordance with which the action is to be judged. The aim, therefore, is to prevent forum shopping. The Convention is thus a logical complement to the legal unification process begun with the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (the Judgments Convention).

II

The Convention creates uniform conflict rules for contractual obligations within the Community. Its provisions have the character of unified law. This can be seen from the preamble, which expresses the wish of the Member States 'to continue in the field of private international law the work of unification of law which has already been done within the Community, in particular in the field of jurisdiction and enforcement of judgments' and 'to establish uniform rules concerning the law applicable to contractual obligations'.

Title II of the Convention accordingly bears the heading 'Uniform rules'. Article 25 of the Convention provides for consultations between the signatory States in cases where a Contracting State considers that 'the unification achieved by this Convention is prejudiced by the conclusion of other agreements'. The Joint Declaration of 19 June 1980 annexed to the Convention also states that differences of interpretation of the Convention should not be allowed to impair its unifying effect. It may be inferred from this that all the Contracting States have an obligation to incorporate the Convention into national law in a manner which is in line with the character of the Convention as a common source of law, embodying unified rules.

Uniform interpretation is possible only if the courts of the Contracting States can acknowledge and apply the provisions of the Convention as rules common to all the Contracting States. In the Commission's view, the Contracting States are obliged to give effect to the Convention in such a way as to ensure that this is possible. If the Convention could be referred to indirectly for interpretative purposes only in cases where the interpretation of the law implementing it was doubtful, this would contradict the character of the Convention as an instrument embodying unified rules.

Giving effect to the Convention in the Federal Republic of Germany, if carried out, as planned, in accordance with Article 1 (2) of the draft Law on the Convention on the law applicable to contractual obligations (Entwurf des Gesetzes zum EuIPRUE, Bundestag publication 10/503) would prevent direct application of the provisions contained in Articles 1 to 21 of the Convention. Furthermore, if the incorporation of these Community provisions into the Law introducing the Civil Code (Einfuehrungsgesetz zum Buergerlichen Gesetzbuch) were effected with amendments, omissions and adjustments to the logical arrangement of that introductory Law, this would undo a set of rules that was uniform and common to all the Member States of the Community. Under Article 36 of the draft Law on the Convention, the German courts are to take account of the international character of the provisions corresponding to the Convention. Article 36 of the draft Law is modelled on Article 18 of the Convention and reads as follows:

'Article 36

Uniform interpretation

In the interpretation and application of the provisions of this chapter relating to contractual obligations, regard shall be had to the international character of the rules and to the desirability of achieving uniformity in their interpretation and application in the Contracting States which are parties to the Convention of 19 June 1980 on the Law applicable to contractual obligations (BGBL. . . . II p. . . . ).'

Article 36 of the draft Law does not allow performance of the obligations arising from Articles 1 to 21 of the Convention, Articles whose direct application is precluded by Article 1 (2) of the draft Law.

A number of provisions contained in Articles 1 to 21 of the Convention are not included in the draft Law, e.g. Article 1 (1) and (2) (a), (b), (d), (g) and (h) (Scope), Article 20 (Precedence of Community law) and Article 21 (Relationship with other conventions).

Some of the provisions of the Convention which have been incorporated into the draft Law have been redrafted or changed in substance. The provisions subject to such changes are, in particular, Article 13 'Subrogation' (Article 33 (3) EGBGB-E), Article 15 'Exclusion of renvoi' (Articles 3 and 4 of the draft Law), Article 16 'Ordre public' (Article 6 of the draft Law) and Article 19 'States with more than one legal system' (Article 4 (3) of the draft Law).

In general terms, comprehension and interpretation of the Convention are made more difficult because its provisions are divided up among various sections of the draft Law.

Even scrupulous application of Article 36 of the draft Law would not allow the desired goal of legal clarity and legal certainty through legal uniformity to be achieved. On the contrary, the work of the courts would be made more difficult, because they would have to compare texts which differed from one another in form and substance and would have to decide which provisions of national law corresponded to the Convention, in order, where necessary, to refer matters to the Court of Justice of the European Communities for interpretation.

The systematization aimed at in incorporating the Convention into the draft Law would, in its proposed form, result not only in a formal modification of the uniform law common to all the Member States of the Community, but also in a substantive change in that uniform law.

The manner in which implementation of the Convention is envisaged would render practically nugatory the jurisdiction of the European Court in respect of the Federal Republic of Germany. This would be contrary to the obligation accepted correspondingly by the Federal Republic of Germany in the Joint Declaration on the Convention on the law applicable to contractual obligations opened for signature in Rome on 19 June 1980 'to examine the possiblity of conferring jurisdiction in certain matters on the Court of Justice of the European Communities and, if necessary, to negotiate an agreement to this effect'.

Since the agreed aim in the signing of the Convention by all the Member States of the Community was to achieve unification in an important area of private international law, it is essential that the codification, arrangement and drafting of its provisions for the purposes of national law should also respect the limits necessarily imposed by such unification. Each Member State must refrain from all measures which might jeopardize achievement of the stated aims of the Convention, and should introduce only those measures which are best suited to achieving such goals.

III

For these reasons, the Commission delivers the following recommendation pursuant to the Treaty establishing the European Economic Community, and in particular the second indent of Article 155 thereof:

1. The Commission recommends that the Federal Republic of Germany should make full use of all the scope afforded by its constitution in order to ensure that:

(a) its courts can resort directly to the wording of the Convention on the law applicable to contractual obligations;

(b) changes in the content, formulation and order of the provisions of the Convention on the law applicable to contractual obligations and omissions and adaptations of those provisions are avoided in giving effect to the Convention under national law.

2. This recommendation is addressed to the Federal Republic of Germany.

Done at Brussels, 15 January 1985.

For the Commission

COCKFIELD

Member of the Commission