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OVERRIDING MANDATORY LAWS IN INTERNATIONAL ARBITRATION

Published online by Cambridge University Press:  12 September 2018

Jan Kleinheisterkamp Open the ORCID record for Jan Kleinheisterkamp [Opens in a new window]
Jan Kleinheisterkamp*
Affiliation:
Associate Professor in Law, London School of Economics, [email protected].
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Abstract

Overriding mandatory laws present one of the most pervasive and delicate problems of international arbitration because they affect party autonomy in both its substantive and procedural dimensions. The tension between these concepts both in theory and in practice is a classic emanation of the public–private divide, which is particularly problematic in international and transnational settings. This tension is even stronger in the context of economic integration and regulation, such as in the EU Internal Market. This article revisits and conceptualizes the operation of overriding mandatory laws in the context of arbitration from the perspectives of conflict of laws, public law, and EU law. Drawing on the principles of effectiveness and proportionality, it proposes a practical rather than a theoretical solution to the dialectical relationship between private and public interests in legal certainty.

Keywords

arbitrationconflict of lawsEU lawmandatory lawspublic lawpublic policy
Type
Articles
Information
International & Comparative Law Quarterly , Volume 67 , Issue 4 , October 2018 , pp. 903 - 930
Copyright
Copyright © British Institute of International and Comparative Law 2018 

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References

1 See eg Basedow, J, ‘Exclusive Choice-of-Court Agreements as a Derogation from Imperative Norms’ in Maunsbach, U et al. (eds), Essays in Honour of Michael Bogdan (Juristförlaget 2013) 15Google Scholar. These clauses are not further discussed in the present article, yet the problems and the arguments involved are largely the same.

2 For a classic expression of the former, see Scherk v Alberto-Culver Co, 417 U.S. 506, 516 (1974): ‘Choice-of-law and choice-of-forum provisions in international commercial contracts are “an almost indispensable precondition to achievement of the orderliness and predictability essential to any international business transaction,” and should be enforced absent strong reasons to set them aside.’ For a classic expression of the latter, see Hallstein, W, Die Europäische Gemeinschaft (5th edn, Econ 1979) 53Google Scholar: ‘The majesty of the Law shall create what blood and iron could not achieve in centuries. Since only the self-determined Unity can hope to persist, legal equality and legal unity are insolvably linked.’

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6 See Ph Francescakis, ‘Quelques précisions sur les lois d'application immédiate et leurs rapports avec les règles de conflit de lois’ [1966] Revue critique de droit international privé 1; P Mayer, ‘Les lois de police étrangère’ [1981] Journal de Droit International (Clunet) 277.

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8 See eg Jayme, E, Internationales Privatrecht und Völkerrecht (Beck 2003) 28Google Scholar: referring to what is today art 9(2) of the EU Rome I Regulation as ‘a carte blanche for the caprice of national lawmakers’.

9 See eg M Weininger and R Byrne, ‘Mandatory Rules, Arbitrability and the English Court Gets It Wrong’ (2010) Cahiers de l'Arbitrage / Paris Journal of International Arbitration 201; Dundas, H, ‘EU Law versus New York Convention – Who Wins? Accentuate Ltd v Asigra Inc’ (2010) 76(1) Arbitration 159, 164–5Google Scholar: ‘The fact that EU law (which the judge was bound to apply) condones this [element of dishonesty of pleading on a wholly different basis than what was agreed] is no advertisement for the European Union's credentials as a supporter of a free world trade system; … this is about protectionism.’

10 For the French case law in this direction, see nn 33 and 36.

11 In this sense, see the panel on ‘EU Overriding Mandatory Provisions as Impediment to Access to Arbitral Justice?’ at the Conference of the NYU Center for Transnational Litigation, Arbitration and Commercial Law on ‘The Impact of EU Law on International Commercial Arbitration’ on 31 October and 1 November 2016.

12 See Kleinheisterkamp (n 3), focusing primarily in Belgium on Cour de Cassation (16 November 2006) Van Hopplynus Instruments SA v Coherent Inc, [2007] Revue Belge de Droit Commercial 889, analysed in the context of likewise (18 June 1979) Audi NSU v Adelin Petit SA, [1979] Pasicrisie I 1260, [1979] Journal des Tribunaux 626; (2 February 1979) Bibby Line v Insurance Company of North America, [1979] Pasicrisie I 634; (22 December 1988) Gutbrod Werke GmbH v Usinorp de Saint-Hubert et Saint Hubert Gardening, [1988] Journal des Tribunaux 458; and in Germany on Oberlandesgericht München (17 May 2006) [2006] Wertpapier Mitteilungen 1556, [2007] IPRax 322, analysed in the context of Bundesgerichtshof (30 January 1961) [1961] Neue Juristische Wochenschrift 1061.

13 See nn 14 and 15.

14 In addition to the cases discussed in Kleinheisterkamp (n 3) 94–9, see Cour de Cassation (Belgium) (14 January 2010) Sebastian International Inc v Common Market Cosmetics NV, [2010–2011] Rechtskundig Weekblad 2010–2011, 1087 (rejecting the argument that refusing enforcement of the arbitration agreement would be legitimate only if there was fraude à la loi, ie, the parties’ tampering with the connecting factors in bad faith so as to obtain the application of a different law), discussed by Wautelet, P, ‘Arbitration of Distribution Disputes Revisited. A Comment on Sebastian International Inc. v Common Market Cosmetics NV’ in Wautelet, P et al. (eds), The Practice of Arbitration. Essays in Honor of Hans van Houtte (Hart 2012) 217Google Scholar; Cour de Cassation (Belgium) (3 November 2011) Transat International AT Inc v Air Agencies Belgium, Pourvoi no C.10.0613.N, available at <www.juridat.be>, discussed by Hollander, P, ‘Applicable Law, Jurisdiction and Arbitration Issues Affecting International Distribution Agreements’ in Demolin, P et al. (eds), Commercial Distribution, La Distribution Commerciale, Commerciële Distributie (Larcier 2014) 335, 339Google Scholar.

15 In addition to the cases discussed in Kleinheisterkamp (n 3) 99–103, see Bundesgerichtshof (BGH) (5 September 2012) VII ZR 25/12, [2012] Betriebsberater 3103, [2012] Gesellschafts- und Wirtschaftsrecht 486, discussed by Basedow (n 1) 15–31.

16 Council Directive 86/653/EEC on the Coordination of the Laws of the Member States Relating to Self-Employed Commercial Agents, [1986] OJ L382/17.

17 CJEU Case C-381/98, Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000] ECR I-9305.

18 For a case regarding the contractual choice of forum in another Member State, ie, still within an area with harmonized law in the matter, see Corte di Cassazione (20 February 2007) Case No 3841, (2008) XLIV Rivista di diritto internazionale privato e processuale 160; discussed by Basedow (n 1) 18.

19 In Italy, see Corte di Cassazione (30 June 1999) Case No 369, (2000) XXXVI Rivista di diritto internazionale privato e processuale 741, discussed by Ragno, F, ‘Inarbitrability: A Ghost Hovering over Europe?’ in Ferrari, F (ed), Limits to Party Autonomy in International Commercial Arbitration (Juris 2016) 125–61Google Scholar; in England, see Accentuate v Asigra [2009] EWHC 2655 (QB), see text accompanying (n 56); in Austria, see Oberster Gerichtshof (OGH) (1 March 2017) Case 5Ob72/16y, [2007] IHR 123 (with comments by T Eckard at 126).

20 Such as Basedow (n 4) 202 para 253; also Renner, M, Zwingendes transnationales Recht – Zur Struktur der Wirtschaftsverfassung jenseits des Staates (Nomos 2011) 83Google Scholar.

21 In German constitutional law, see Bundesverfassungsgericht (BVerfG) (15 July 1998) 1 BvR 1554/89, 963, 964/94 BVerfGE 98, 365, 395 para 90.

22 cf BVerfG (7 January 2015) 1 BvR 471/10 and 1 BvR 1180/10, BVerfGE 138, 296 para 98: ‘Solving the normative tension between the constitutional values … is the responsibility of the democratic legislator, who in the [political] process of forming a public opinion has to seek a compromise acceptable for all.’

23 See Charter of Fundamental Right of the European Union (CFR) art 52(1), first sentence: ‘Any limitation on the exercise of the rights and freedoms recognised by this Charter must be provided for by law and respect the essence of those rights and freedoms.’

24 See Treaty on European Union (TEU) art 5(1), first sentence, and (3), as well as CFR art 52(1), second sentence.

25 F Partnoy, ‘Financial Derivatives and the Costs of Regulatory Arbitrage’ (1997) 2 Journal of Corporate Law 211, 227.

26 See Watt, H Muir and Brozolo, LG Radicati di, ‘Party Autonomy and Mandatory Rules in a Global World’ (2004) 4(1) Global Jurist Advances, art 2 para 2Google Scholar, although arguably confusing cause and effect.

27 For a critical discussion, see Francq, S, ‘Regulation and Party Autonomy – Public Interests in Private International Law’ (2016) 59 Japanese Yearbook of International Law 251, 278–83Google Scholar.

28 A Riles, ‘Managing Regulatory Arbitrage: A Conflict of Laws Approach’ (2014) CornellIntlLJ 63, 65: ‘The ability of financial institutions to act beyond the reach of regulators threatens the sovereignty of nation-states and the well-being of national economies. Yet as regulators are well aware, the threat is possible only because of the differences in legal regimes. For off-shore investors, a patchy regulatory landscape is key to the business model; the very purpose of booking the transactions offshore, or through an entity that is not subject to a particular kind of regulation, is to circumvent regulatory authority.’

29 As captured by the US Supreme Court in Scherk v Alberto-Culver Co, 417 U.S. 506, 516 (1974), cited in (n 2).

30 Radicati, ‘Mondialisation’ (n 3) paras 37 and 38; see also Watt, H Muir, ‘Choice of Law in Integrated and Interconnected Markets: A Matter of Political Economy’ (2003) 9 ColumJEurL 383Google Scholar; LG Radicati di Brozolo, ‘Antitrust: A Paradigm of the Relations between Mandatory Rules and Arbitration: A Fresh Look at the “Second Look”’ [2004] IntALR 23.

31 See, for example, in the US Moses H. Cone Memorial Hospital v Mercury Construction Corp., 460 U.S. 1, 24 (1983); see also in England Westacre Investments Inc v Jugoimport-SPDR Ltd [1999] QB 740, 773.

32 Cour de Cassation (civ 1er) (30 March 2004) Uni-Kod v Ouralkali [2004] Revue de l'Arbitrage 723–24.

33 Cour de Cassation (civ 1er) (29 June 2007) PT Putrabali Adyamulia v Rena Holding and Mnogutia Est Epices [2007] Revue de l'Arbitrage 507.

34 Cour d'appel de Paris (18 November 2004) Thalès v Euromissile [2004] Revue de l'Arbitrage 751, with note by LG Radicati di Brozolo, ‘L'illicéité qui ‘crève les yeux’: critère du contrôle des sentences au regard de l'ordre public international’ [2005] Revue de l'Arbitrage 529; confirmed by Cour de Cassation (civ 1er) (4 June 2008) SNF v Cytec [2008] Revue de l'Arbitrage 473; but see below (n 83).

35 Wai, R, ‘Transnational Liftoff and Juridical Touchdown: The Regulatory Function of Private International Law in an Era of Globalization’ (2002) 40 ColumJTransnatlL 209, 218Google Scholar.

36 See T Clay, L'arbitre (2001) 227 para 271, similarly already P Fouchard, ‘L'arbitrage international en France après le décret du 12 mai 1981’ [1982] Journal de Droit International (Clunet) 374 para 11; P Mayer, ‘Le contrat illicite’ [1984] Revue de l'arbitrage 205, 208.

37 For this conceptual exaltation, see the French Cour de Cassation (civ 1er) (8 July 2015) Pourvoi no 13-25846, Sté Ryanair Ltd v Syndicat mixte des aéroports de Charente (SMAC), available at <http://www.legifrance.gouv.fr>.

38 E Gaillard, Aspects philosophiques du droit de l'arbitrage international (2007) 176–83 paras 115–118.

39 Sweet, A Stone, ‘The New Lex Mercatoria and Transnational Governance’ (2006) 13 JEPP 627, 641Google Scholar.

40 Holmes, OW, ‘The Path of the Law’ (1897) 10 HarvLRev 457, 461Google Scholar; invoked by Gaillard (n 38) 24–5.

41 Voser, N, ‘Current Development: Mandatory Rules of Law as a Limitation on the Law Applicable in International Commercial Arbitration’ (1996) 7 AmRevIntlArb 319, 337Google Scholar; Mayer (n 3) 292; Mayer, P, ‘Reflections on the International Arbitrator's Duty to Apply the Law’ (2001) 17(3) ArbIntl 235, 246Google Scholar.

42 Radicati, ‘Arbitration and Competition Law’ (n 3) 18 and n 50.

43 ibid.

44 See eg Lew, J, ‘Competition Law – Limits to Arbitrators’ Authority’ in Mistelis, L and Brekoulakis, S (eds), Arbitrability: International and Comparative Perspectives (Kluwer Law International 2009) 241, 245Google Scholar; but see above (n 34).

45 Paulsson, J, The Idea of Arbitration (Oxford University Press 2013) 133CrossRefGoogle Scholar.

46 Born, G, International Commercial Arbitration (2nd edn, Wolters Kluwer 2014) 2705Google Scholar.

47 cf CJEU Case C-168/05 Claro v Centro Móvil Milenium [2006] ECR I-10421 para 39.

48 Interesting yet unrealistic, and silent on the conflict-of-laws question, are two law and economics approaches to incentivizing arbitrators to respect mandatory laws: Guzman, AT, ‘Arbitrator Liability: Reconciling Arbitration and Mandatory Rules’ (2000) 49(5) DukeLJ 1279Google Scholar (proposing to make arbitrators financially liable for failing to follow mandatory rules); Posner, E, ‘Arbitration and the Harmonization of International Commercial Law: A Defense of Mitsubishi’ (1999) 39 VaJIntlL 647Google Scholar (suggesting random judicial review in substance of awards so as to create the fear of losing reputation by arbitrators if outed by courts).

49 See eg Radicati, ‘Antitrust’ (n 30) 28, relying on Naón, H Grigera, Choice of Law Problems in International Commercial Arbitration (Mohr 2001) 13Google Scholar.

50 Cour de Justice du Canton de Genève (7 November 1989) Omnium de Traitement et de Valorisation (OTV) v Hilmarton, confirmed by the Federal Tribunal, 17 April 1990, both in (1994) XIX YBCA 214, especially the former at 217–18.

51 See V Heuzé, ‘La morale, l'arbitre et le juge’ [1993-3] Revue de l'Arbitrage 179.

52 Northrop Corp v Triad Int'l Marketing SA, 811 F.2d 1265, 1270 (9th Cir. 1987), referring to the passage of Scherk v Alberto-Culver Co, 417 U.S. 506, 516 (1974) cited above (n 29); Northrop pre-empts at least for California the application of section 187(2) Restatement (Second) Conflicts.

53 See Northrop (n 52) 1267.

54 But see the argument made by Mitsubishi's lawyer before the US Supreme Court, arguing that Swiss law would allow a renvoi to US law, Transcript of Oral Argument Mitsubishi v Soler at 18, 473 U.S. 614 (1985) (No. 83–1569). On such renvoi under art 19 of Swiss Law of Private International Law, see H van Houtte, ‘The Application by Arbitrators of Articles 81 & 82 and Their Relationship with the European Commission’ (2008) EBLR 63, 67–8.

55 Oberster Gerichtshof (1 March 2017) (n 19) para III(4).

56 ICC Award No 6379 (1990) XVII YBCA 212; ICC Award No 12193 (2004) (2007) 134 Journal du Droit International 1276; both cited by Wautelet (n 14) 227 nn 65 and 67. See also Cour d'appel de Paris (24 November 2005) [2006] Revue de l'Arbitrage 717.

57 Excerpt of the award of 3 March 2008, paras 18–20, cited in Accentuate v Asigra [2009] EWHC 2655 (QB) para 73.

58 ibid para 96.

59 See (n 48); see also Radicati, LG ‘Mandatory Rules and International Arbitration’ (2012) 23 AmRevIntlArb 49, 72Google Scholar.

60 Tugendhat J subsequently rejected a part of the legal costs claimed by the victorious English distributor; see Accentuate Ltd v Asigra Inc [2013] EWHC 889 (QB).

61 Quinke, D, ‘Arbitration of Disputes from Commercial Representation in Germany’ in Böckstiegel, KH et al. (eds), Arbitration in Germany (2nd edn, Kluwer 2015) 817, 825 para 30Google Scholar, suggests ‘reasonable certainty’ as the threshold rather than a ‘likely danger’ of non-application of the forum's overriding mandatory provisions as required by the OLG München (n 12).

62 Basedow (n 1) 29.

63 CJEU Case C-126/97 EcoSwiss China Time Ltd v Benetton International NV [1999] ECR I-3055 para 36, referring to what is now art 3(1)(b) TFEU, which defines the regulation of competition in the Internal Market as an exclusive competence of the EU.

64 ibid para 32, relying on Case 102/82 Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co. KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co KG [1982] ECR 1095 para 14, which also established in paras 10–13 that an arbitral tribunal is not ‘a court or tribunal of a member state’ within the meaning of (now) art 267 TFEU.

65 ibid para 37.

66 See eg S. Brekoulakis, ‘Arbitrability – Persisting Misconceptions and New Areas of Concern’ in Mistelis and Brekoulakis (n 44) 19, 21; Lew (n 44) 255.

67 Case C-126/97 EcoSwiss (n 63) para 48.

68 See eg E Cheng and B Ward, ‘Application of EcoSwiss to French Annulment Proceedings’ (27 January 2005) available at <http://www.internationallawoffice.com>; R Nazzini, ‘International arbitration and public enforcement of competition law’ [2004] ECLR 153, 155. For Thalès see (n 34).

69 Opinion of Advocate General M Wathelet in CJEU Case C-567/14 Genentech v Hoechst and Sanofi-Aventis (17 March 2016) paras 55–72, especially 58.

70 Case 102/82 Nordsee (n 64) para 14 (‘Community law must be observed in its entirety throughout the territory of all the Member States; parties to a contract are not, therefore, free to create exceptions to it’); Case C-126/97 EcoSwiss (n 63) para 40 (‘it is manifestly in the interest of the Community legal order that, in order to forestall differences of interpretation, every Community provision should be given a uniform interpretation, irrespective of the circumstances in which it is to be applied (Case C-88/91 Federconsorzi [1992] ECR I-4035, paragraph 7)’).

71 cf CJEU Case 6/64 Costa v ENEL [1964] ECR 585 para 17: ‘The law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as community law and without the legal basis of the Community itself being called into question.’

72 CJEU Case C-231/96 Edis v Ministero della Finanze [1998] ECR I-4951 para 34, relying on Case C-261/95 Palmisani v INPS [1997] ECR I-4025 para 27; reaffirmed in Case C-260/96 Ministero delle Finanze v SPAC [1998] ECR I-4997 para 18; Case C-228/96 Aprile v Amministrazione delle Finanze dello Stato [1998] ECR I-7141 para 18; Case C-343/96 Dilexport Srl v Amministrazione delle Finanze dello Stato [1999] ECR I-575 para 25; Case C-453/99 Courage v Crehan [2001] ECR I-6297 para 29.

73 Joined Cases C-392/04 and C-422/04 i-21 and others v Germany [2006] ECR I-8559 para 57.

74 cf TFEU art 291, which reiterates the Member States’ duty of effective implementation of EU law and specifies in para 2 that implementing powers may be conferred upon the Commission ‘[w]here uniform conditions for implementing legally binding Union acts are needed’.

75 For the status of general principles of law as primary EU law, see CJEU Case 29/69, Stauder [1969] ECR 419 para 7.

76 See Joined Cases C-392/04 and C-422/04 i-21 and others v Germany [2006] ECR I-8559 para 57; see W Schroeder, AEUV Art. 288 para 43 in Streinz, R (ed), EUV/AEUV (2nd edn, Beck 2012)Google Scholar.

77 Schroeder (n 76) para 43 and n 141; CM Kakouris, ‘Do the Member States Possess Judicial Procedural “Autonomy”?’ (1997) 34 CMLRev 1389, 1404.

78 Joined Cases C-392/04 and C-422/04 i-21 (n 72) para 58; Joined Cases 205-215/82 Deutscher Milchkontor and Others v Germany [1983] ECR 2633 para 22.

79 See Basedow (n 1) 29, cited at (n 62).

80 See K Lenaerts and T Corthaut, ‘Of Birds and Hedges: The Role of Primacy in Invoking Norms of EU Law’ [2006] ELRev 287, 309 (emphases in the original, internal citations omitted).

81 But see Nazzini (n 68) 155, arguably misreading the judgment's para 37 (n 64).

82 ECJ Case 68/99 Commission v Greece [1989] ECR 2965 paras 23–24; for the Member States’ discretion see ECJ Case 50/76 Amsterdam Bulb BV v Produktschap voor Siergewassen [1977] ECR 137 para 32.

83 Joined Cases C-6/90 and C-9/90 Francovich and Others v Italy [1991] ECR I-5357 para 35; Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur v Germany and ex parte Factortame [1996] ECR I-1029 para 31; Case C-392/93 ex parte British Telecommunications [1996] ECR I-1631 para 38; Case C-5/94 ex parte Hedley Lomas [1996] ECR I-2553 para 24; Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others v Germany [1996] ECR I-4845 para 20.

84 AG Wathelet in Genentech (n 68) paras 67 and 72. See now also Cour d'appel de Paris (21 February 2017) Belokon v Kirghizistan, No 15/01650, available at <https://www.italaw.com/sites/default/files/case-documents/italaw8476.PDF> at 8 finding that ‘the prohibition of money laundering is part of the number of principles, the violation of which the French legal order cannot accept even in an international context’ and setting aside an award after very detailed scrutiny, albeit insisting that the violation would be ‘manifeste, effective et concrète’ at 15.

85 In that sense, Kleinheisterkamp (n 3) 116.

86 Ragno (n 19) 158. The choice of this legal concept of conflict of laws is, strictly speaking, not convincing, as it refers to the manipulation of the connecting factors by the parties so as to circumvent the application of otherwise applicable law, which is not the case when the relevant connecting factor is the parties’ exercise of party autonomy; see Rigaux, F and Fallon, M, Droit international privé (3rd edn, Larcier 2005) 215–17 para 5.73Google Scholar.

87 Basedow (n 1) 30–1.

88 In Belgium, Cour de Cassation, Sebastian International (n 14).

89 See text accompanying (n 81).

90 Mitsubishi Motors Corp v Soler Chrysler-Plymouth 473 U.S. 614 (1985) at 638: ‘Having permitted the arbitration to go forward, the national courts of the United States will have the opportunity at the award-enforcement stage to ensure that the legitimate interest in the enforcement of the anti-trust laws has been addressed.’

91 See in the US Baxter International v Abbott Laboratories 325 F.3d 954 (7th Cir. 2003).

92 Not discussed here, for lack of space, is whether the courts’ attitude would mean a re-installation of abolished rules of inarbitrability of matters covered by internationally mandatory laws and that the non-application of these laws would not constitute violations of public policy. As much as they would deserve further clarification, both arguments are arguably conceptually misguided and, in any case, not decisive for the present purposes.

93 See section II.C.

94 See Treaty on European Union (TEU) Art 5(1), first sentence, and (3), as well as CFR art 52(1), second sentence.

95 In Germany, BVerfG 12 November 1958 – 2 BvL 4, 26, 40/56, 1, 7/57 Preisgesetz (1958) 8 BVerfGE 274 at 328; in Belgium eg Cour d'arbitrage Arrêt 167/2004 of 28 October 2004 – SA Les AP Assurances v G Van Leekwijck et H Wouters, (2005) 10 Revue de Droit commercial belge 1052, 1054. In France: Cour constitutionnelle, no 2008–562 DC of 21 February 2008, Loi relative à la rétention de sûreté, ECLI:FR:CC:2008:2008.562.DC, paras 14, 17, 19, 23 (elaborating for the first time the criteria of the test of proportionality as recognized in German and EU law).

96 CJEU Case C-233/94 Germany v Parliament and Council [1997] ECR I-2405 para 56; Case C-84/94 UK v Council [1996] ECR I-5755 para 57; see already Case C-331/88 FEDESA [1990] ECR I-4057 para 14. Similarly in Germany BVerfG 18 July 2005 – 2 BvF 2/01 Risikostrukturausgleich (2005) 113 BVerfGE 167 para 224.

97 CJEU Case 151/78 Sukkerfabriken Nykøbing v Ministry of Agriculture [1979] ECR 1 para 22 (obiter); Case C-292/97 Kjell Karlsson and Others [2000] ECR I-2737 para 45.

98 Case C-331/88 FEDESA [1990] ECR I-4057 para 13.

99 Basedow (n 1) 29–30.

100 ibid 30.

101 ibid 22 and 31.

102 See below the two paras preceding (n 120).

103 Basedow (n 7) 20, 27–8.

104 See (n 95).

105 See text accompanying (n 30).

106 Admittedly, the one to refuse any such settlement, Nabisco, was taken off the hook by the US Supreme Court, which refused to interpret the RICO Act as granting the EU a right of action in US courts, thus frustrating the EU's hope to use the US private enforcement mechanisms against racketeer-influenced and corrupt practices: RJR Nabisco v European Community, No. 15–138 (S.Ct. 20 June 2016); see S Francq, ‘Agora: Reflections on RJR Nabisco v European Community: A European Story’ ASIL Unbound (9 August 2016) <https://www.asil.org/sites/default/files/Francq%2C%20A%20European%20Story.pdf>.

107 For the recognition of contractual freedom as protected by fundamental rights and thus subject to the principle of proportionality under EU law, see (n 96); for examples of Member States’ constitutional law, see (n 94).

108 See (n 89). See already Kleinheisterkamp (n 3) 115–17.

109 Mitsubishi (n 90) 637 n 19.

110 See text accompanying nn 14 and 15.

111 Mitsubishi (n 90) 637 n 19.

112 Similarly, the Australian Federal Court in Comandate Marine Corp v Pan Australia Shipping Pty Ltd [2006] FCAFC 192 paras 241 and 254; compare in the US Mohamed v Uber Technologies, Inc., __ F.3d __, 2016 WL 4651409 (9th Cir., Sept. 7, 2016), with reference to American Express Co v Italian Colors Restaurants, 133 S.Ct. 2304, 2310 (2013) (quoting fn 19 of Mitsubishi).

113 See text after nn 79 and 90.

114 See eg Hague Convention on the law applicable to agency (14 March 1978) art 6; Rome I Regulation 593/2008 of 17 June [2008] OJ L177/6, art 4 paras 1(b) and (f) (for service and distribution agreements). In this sense also the Portuguese Supremo Tribunal de Justiça (11 October 2005) Case 478/05, available at <http://www.dgsi.pt>; but see for transport law in Germany see Oberlandesgericht Köln (2 August 2005) BeckRS 2005, 10360 = TranspR 2005, 472: ‘The literature conditions the effectiveness of an arbitration agreement to the provision expressly providing that the arbitral tribunal has to apply the CMR.’

115 See (n 29).

116 cf Solman Distribs v Brown-Forman Corp, 888 F.2d 170, 172 (1st Cir. 1989) (in a US inter-state case on a choice-of-law clause in favour of California law in a Maine distribution contract: ‘Defendant merely contends the state recognizes that its business has the necessity of “certainty.” This is to ignore that there would be a corresponding uncertainty on plaintiff's part. A distributor's uncertainty, its economic livelihood, may readily be thought at far greater risk, having in mind that the [producer] can always cancel freely if it is not receiving proper performance.’).

117 Scherk v Alberto-Culver Co, 417 U.S. 506, 517 (1974).

118 Kleinheisterkamp (n 3) 114.

119 See eg Dundas (n 9) 164: ‘As a former Head of Legal at an international oil company, I have major conceptual difficulty with the concept that a Canadian contract with Canadian arbitration, as agreed by the parties, should in fact, by operation of EU law, turn out to be a Brussels sprout … [T]here is an element of dishonesty in Accentuate contracting on one basis, then pleading a wholly different basis’ (emphasis in the original).

120 See also (n 102).

121 cf The Bremen v Zapata Off-Shore Co, 407 U.S. 1, 9 (1972), cited by Scherk v Alberto-Culver Co, 417 U.S. 506, 519 (1974).

122 For such an example in the Federal Court of Australia, see Casaceli v Natuzzi SpA [2012] FCA 691 para 50: ‘the applicants sought to surround their claims with an aura of important public policy issues when, in substance, the dispute is a commercial cause between two companies involved in the international furniture trade by which one company seeks damages from another.’