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⁴ Especially: Samcrete Egypt Engineers and Contractors v Land Rover Exports Ltd [2001] EWCA Civ 2019, [2002] CLC 533, Kenburn Waste Management Ltd v Bergmann [2002] EWCA Civ 98, [2002] CLC 644, Ennstone Building Products Ltd v Stanger Ltd [2002] EWCA Civ 916, [2002] I WLR 3059, Iran Continental Shelf Co v IRI International Corporation [2002] EWCA Civ 1024, Caledonia Subsea v Microperi 2002 SLT 1022, AMICO v Cellstar [2003] EWCA Civ 206, [2003] ILPr 22.Google Scholar

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⁶ [2001] 1 WLR 1745, [9].Google Scholar

⁷ [1998] 2 All ER 821. See, in addition to those considered in Section IV, Dinkha Latchin v General Mediterranean Holidays [2002] CLC 330, Mirchandani v Somaia (Morritt V-C, 23 Feb 2001), Print Concept GmbH v GEW (EC) Ltd [2001] EWCA Civ 352, [2002] CLC 352.Google Scholar

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⁹ Also Machinale Glasfabriek de Maas BV v Emaillerie Alsacienne SA [1984] ECC 123 (Dutch District Court), Re Claim under a Building Contract [2001] ILPr 395 (Bundesgerichtshof) (both applying the presumption).Google Scholar

¹⁰ Kenburn Waste Management Ltd v Bergmann [2002] EWCA Civ 98, [2002] CLC 644, [41].Google Scholar

¹¹ Lipstein ‘Characteristic Performance—A New Concept in the Conflict of Laws in Matters of Contract for the E.E.C’ (1981) 3 Northwestern Journal of International Law and Business 402, 414. Although in Definitely Maybe, above, n 6, Moore-Bick J noted that Art 4(2) was derived from the law of Switzerland, Swiss law selects the place of characteristic performance, and not the characteristic performer's place of residence: D'Oliveira ‘“Characteristic Obligation” in the Draft EEC Obligation Convention’ (1977) 25 AJCL 303. The relative merit of the Swiss prima facie rule—since it is likely to be more closely connected with the contract in some cases—may reduce the need for an ‘escape’ clause.Google Scholar

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¹⁴ Lagarde ‘The European Convention on the Law Applicable to Contractual Obligations: An Apologia’ (1982) 22 Virginia Journal of International Law 91, n 35. This was noted in Caledonia at first instance: 2001 SLT 1186, [32].Google Scholar

¹⁵ Lagarde, 80 Rev crit de dip (1991) 747, criticizing Bloch v Lima [1992] JCP 21972.Google Scholar

¹⁶ European Commission ‘Green Paper’ COM (2002) 654 final (14 Jan 2003), 25–6. The strong model also appears to be favoured by the Commission in Art 3(3) of its ‘Proposal for a Regulation on the Law Applicable to Non-Contractual Matters’ (‘Rome II’), COM (2003) 427 final. However, the responses to the Commission's Green Paper have been mixed: amongst others, the Dutch government, European Banking Federation and Bar Council of England and Wales saw no need to strengthen the presumption. On the other hand, the ICC, Yahoo! Europe and the Max-Planck Institute for Foreign and Private International Law supported the Commission's proposal. The UK government expressed no concluded view on this point.Google Scholar

¹⁷ Fentiman Foreign Law in English Courts (OxfordOUP 1998), 80–96.Google Scholar

¹⁸ [1972] 2 QB 34,44 (Lord Denning, MR ), 47 (Megaw, Megaw), 50 (Stephenson, Megaw ).Google Scholar

¹⁹ Macneil, ‘Time of Acceptance: Too Many Problems for a Single Rule’ (1964) 112 UPaLRev 947.Google Scholar

²⁰ Collins, et al. (eds) Dicey and Morris on The Conflict of Laws (13th edn London Sweet & Maxwell 2000), §32–112.Google Scholar

²¹ The model is similar to the ‘most significant relationship’ test in the Second Restatement, §188, eg Auten v Auten 308 NY 155,124 NE 2d 99 (1954).Google Scholar

²² [1997] 2 Lloyd's Rep 1, 5, 10.Google Scholar

²³ Caledonia Subsea v Microperi 2002 SLT 1022, 1032. The point was not argued on appeal.Google Scholar

²⁴ 2001 SLT 1186, [24], [27]: Official Report 2[1980] OJ C282/121. ‘Rebut’ was used in Sierratel, above, n 7.Google Scholar

²⁵ See Clarke, LJin Iran Continental Shelf Co v I.R.I.International Corporation [2002] EWCA Civ 1024.Google Scholar

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²⁸ The French version uses the verb ‘ecarter’, whilst the German version uses ‘gelten nicht’. Three bilingual dictionaries prefer ‘refuter’ or ‘detruire’ and ‘entkraften’ or ‘widerlegen’ respectively as translations for ‘to rebut [a presumption]’:Google ScholarHerbst, , Dictionary of Commercial, Financial and Legal Terms (3rd ednSwitzerlandZug 1968);Google ScholarLindbergh, International Law Dictionary (London 1992);Google ScholarVerbruggen, van Hoof, and Stoll Elsevier's Legal Dictionary (London 2001). Neither version leans in favour of the strong or weak model.Google Scholar

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³⁰ See also Definitely Maybe (Touring) Ltd v Marek Lieberberg [2001] 1 WLR 1745, [15].Google Scholar

³¹ Baffin Land Corp v Monticello Motor Inn Inc (1967) 425 P 2d 623, 628 also states that a simple ‘count up’ of factors is inappropriate.Google Scholar

³² Second Council Directive on the Co-ordination of Laws Relating to Direct Insurance [1988] OJL172/1, above, n 26.Google Scholar

³³ As in AMICO, above, n 4.Google Scholar

³⁴ Definitely Maybe (Touring) Ltd v Marek Lieberberg [2001] 1 WLR 1745, [26] AMICO v Cellstar [2003] EWCA Civ 206, [2003] ILPr 22, [47].Google Scholar

³⁵ In addition to Rome Convention cases from other jurisdictions, both the Inter-American Convention on the Law Applicable to International Contracts 1994 at 33 ILM 7 32 (1994) and Second Restatement have adopted this model.Google Scholar

³⁶ Bloch v Lima, above, n 15.Google Scholar

³⁷ Fentiman, ‘Commercial Expectations and the Rome Convention’ (2002) 61 CLJ 50.CrossRefGoogle Scholar

³⁸ ‘Market expectations’ is a preferable label, to underline the model's objective nature and irrelevance of presumed intention.Google Scholar

³⁹ The American Law Institute Restatement of the Law, Second: Conflict of Laws (St Paul, MNAmerican Law Institute Publishers 1971), §188, referring to the aims in §6.Google Scholar

⁴⁰ Above, text to n 16–18.Google Scholar

⁴¹ Swiss law selects the place of characteristic performance, and not the characteristic performer's place of residence: D'Oliveira, above, n 11.Google Scholar

⁴² Kenburn Waste Management Ltd v Bergmann [2002] EWCA Civ 98 [2002] CLC 644, [29].Google Scholar

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⁴⁴ This would explain Art 8(2)(c) of the 1986 Hague Convention, allowing the buyer's law to apply where the contract arose from an invitation to tender.Google Scholar

⁴⁵ Toulson, J, in CGU International Insurance v Ashleigh (QB, 6 Nov 2001), [22] suggested that the approaches under the laws of Ohio and England were the same, which might present difficulties for the third model. The context suggests that he had in mind only the list of factors in §188 Second Restatement, but his remarks were phrased more widely.Google Scholar

⁴⁶ Eg, Definitely Maybe, above, n 6, because of the overwhelming connections with Germany.Google Scholar

⁴⁷ Favoured in Official Report [1980] OJ C282/21; Machinefabriek, above, n 8, Societe Fort James France v Societe Fabio Perini (Cour d'Appel de Colmar, 20 Oct 1998), Unitras-Marcotec v Mobili (Corte d'Appello di Milano, 18 July 1997).Google Scholar

⁴⁸ It is irrelevant that the UK is not a signatory to them, since the expectation exists independently of the treaties. Furthermore, the reason for non-adherence to a treaty may not be disapproval of a particular provision.Google Scholar

⁴⁹ This is implicitly supported by Dicey and Morris, above, n 20, §32–124, which suggests that the presumption will be most readily rebutted where these places diverge.Google Scholar

⁵⁰ Ferguson Shipbuilders Ltd v Voith Hydro 2000 SLT 229 supports this reasoning. On similar facts to those of Example 2, the Cour de Cassation in Ammerlaan Agro Projecten BV v Les Serres de Cosquerou [1999] ILPr 627 adopted the solution suggested, but in a similar case the Bundesgerichtshof disagreed: Re Claim under a Building Contract, above, n 9. A choice of law clause in favour of the law of the place of the construction project is included in several standard construction contracts: ICE 7, GC/Works/1 and United Kingdom Department of Trade and Industry ‘PFI Contract Guidance: Standardization of PFI Contracts’ (Issue 3, 2002), §29.6.Google Scholar

⁵¹ Thus, the governing law coincides with the jurisdiction presumed under Art 5(l)(b) of the Judgments Regulation.Google Scholar

⁵² Kalfelis v Schröder, MUnchmayer, Hengst & Co [1988] ECR 5565.Google Scholar

⁵³ Jaffey, ‘The English Proper Law Doctrine and the EEC Convention’ (1984) 33 ICLQ 531, 553.CrossRefGoogle Scholar

⁵⁴ Ibid554.

⁵⁵ Kaye ‘The New Private International Law of Contract of the EC’ (Aldershot Dartmouth 1993).Google Scholar

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⁵⁷ Official Report [1980] OJ C282/20.Google Scholar

⁵⁸ Fentiman ‘Commercial Expectations and the Rome Convention’ (2002) 61 CLJ 50, 51.Google Scholar

⁵⁹ Above, text to nn 14–15.Google Scholar

⁶⁰ [1999] 2 All ER (Comm) 54.Google Scholar

⁶¹ [2002] EWHC 28, [2002] Lloyd's Rep IR 853.Google Scholar

⁶² AMICO v Cellstar [2003] EWCA Civ 206, [2003] ILPr 22, [25]Google Scholar

⁶³ Above, n 15. Also Glencore International v Commerciale Alluminio Nord (Corte di Cassazione, 28 July 1998) (creditor's law governs).Google Scholar

⁶⁴ This is consistent with the commercial importance of this factor, underlined by the UN Convention on Contracts for the International Sale of Goods 1980, Art 57.Google Scholar

⁶⁵ Bank of Baroda v Vysya Bank [1994] 2 Lloyd's Rep 87.Google Scholar

⁶⁶ Above, n 7.Google Scholar

⁶⁷ Bank of Baroda v Vysya Bank [1994] 2 Lloyd's Rep 87, 92.Google Scholar

⁶⁸ Ibid, 93: Offshore International SA v Banco Central SA [1977] 1 WLR 399, approved Power Curber International Ltd v National Bank of Kuwait SAK [1981] 1 WLR 1233. This argument was relied upon again in the context of a letter of credit transaction by David Steel J in Marconi Communications International Ltd v Pt Pan Indonesia Bank Ltd [2004] EWHC 129 (Comm) following Baroda.

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⁷⁰ 2001 SLT 1186, [26]. All references hereafter are to the Inner House.Google Scholar

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⁷⁴ Bonython v Commonwealth of Australia [1951] AC 201. The artificiality of inferred choice was first criticized by Westlake Private International Law (5th edn LondonSweet & Maxwell 1912) s 212,Google Scholarbut see also Cheshire and North Private International Law (11th edn LondonButterworths 1987), 461–6. However, the remarks of Hobhouse J in Forsikrings Vesta v Butcher [1986] 2 All ER 486, 504 show that the presumed intention model was never firmly rejected.Google Scholar

⁷⁵ Eg The Adriatic [1931] P 241, 251.Google Scholar

⁷⁶ [1971] AC 572, 600, approving Jacobs v Credit Lyonnais (1884) 12 QBD 589, 601.Google Scholar

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⁸⁸ Criticized in Akai v People's Insurance (1996) 188 CLR 418, 441.Google Scholar

⁸⁹ For an extensive analysis of the issues raised in the context of implied terms, see Peden, ‘Policy Concerns Behind Implication of Terms in Law’ (2001) 117 LQR 459.Google Scholar

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⁹² National Bank of Greece v Pinios [1990] 1 AC 637, 682 and reference to Reddie v Williamson (1863) 1 Macph 228, 237.Google Scholar

⁹³ Lord Somervell deployed the same reasoning in Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555, 599.Google Scholar

⁹⁴ Implication of terms from trade usage may cover two doctrines; one of inferred intention, the other concerning cases in which the usage is applied as a desirable, objective policy goal (eg Hunt v Chamberlain (1896) 12 TLR 186: party unaware of usage nonetheless bound).Google Scholar

⁹⁵ Baxter advocated an approach that asks which of two competing laws would be least impaired by the application of the other law: ‘Choice of Law and the Federal System’ (1963) 16 Stanford Law Review 1.Google Scholar

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⁹⁷ This principle also applies to the implication of contractual terms: ‘Most of the statements against too readily implying terms are in…cases of written and often detailed contracts…The position is different when the contract…is silent as to matters which have to be settled one way or the other if the contract is to be effective’ (Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555, 597 per Lord Somervell).Google Scholar

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¹⁰⁰ Notwithstanding the remarks of the Lord Chancellor: HL Deb vol 518 col 439 (24 Apr 1990).Google ScholarSee Cheshire, and North, Private International Law (13th ednLondonButterworths 1999) 542.Google Scholar

¹⁰¹ ‘Whether the result is a matter of ‘inferred intention’ or not may be open to jurisprudential discussion’ (Compagnie Tunisienne de Navigation SA v Compagnie d'Armement Maritime SA [1971] AC 572, 595 per Lord Wilberforce).Google Scholar

¹⁰² [1984] AC 50.Google Scholar

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¹⁰⁴ For the purposes of analysis only: the validation principle may not have been accepted at common law or under the Convention. But see AMICO v Cellstar [2003] EWCA Civ 206, [2003] ILPr 22 at [43], where Mance LJ seems to contemplate its potential relevance where the parties were aware of the legal consequences of selecting particular laws.Google Scholar

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¹⁰⁶ A similar argument is made by Wyatt, ‘Choice of Law in Contract Matters—A Question of Legal Policy‘ (1974) 37 MLR 399, 409. It is bolstered by reference to the analogy with implied contractual terms: in such cases it remains unnecessary to separate the inferred intention and objective determination stages, but the courts have done so for the sake of doctrinal clarity.CrossRefGoogle Scholar

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¹⁰⁸ Dicey and Morris, above, n 20, §32–112.Google ScholarNorth, CfPrivate International Law Problems in Common Law Jurisdictions (London 1993) 127.Google Scholar

¹⁰⁹ Samcrete Egypt Engineers and Contractors v Land Rover Exports Ltd [2001] EWCA Civ 2019, [2002] CLC 533, [39]; Credit Lyonnais v New Hampshire Insurance [1997] 2 Lloyd's Rep 1, 6. In Rossano v Manufacturers' Life Insurance Company [1963] 2 QB 352 the two tests produced different results.Google Scholar

¹¹⁰ Bonython, above, n 80.Google Scholar

¹¹¹ [1970] AC 583,603–4.Google Scholar

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¹¹³ Above, text to nn 123–7.Google Scholar

¹¹⁴ Such an argument has been made by Jaffey, Topics in Choice of Law (LondonBIICL 1996),Google Scholarch 3 and Pelichet ‘Report on the Law Applicable to International Sale of Goods’ (1982) in HagueConference on Private International Law, Proceedings of the Extraordinary Session ofOctober 1985, 79.Google Scholar

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¹¹⁷ Compagnie Tunisienne de Navigation SA v Compagnie d'Armement Maritime SA [1971] AC 572, 600. This may be a concern as to who applies the law, rather than its substantive content.Google Scholar

¹¹⁸ Offshore International, above, n 73.Google Scholar

¹¹⁹ Dow Jones & Co v Gutnick [2002] HCA 56, (2003) 194 ALR 433, [153]. This may be a different means of achieving a consistent approach to cases involving concurrent claims in contract and tort: see generally Briggs ‘Choice of Choice of Law?’ [2003] LMCLQ 12. However, the identification of the relevant ‘market’ and whether such expectation is objective or subjective in nature are significant obstacles, and it is notable that the rules at common law, under the 1995 Act and in the Commission's Draft Rome II Regulation favoured a strong model.Google Scholar

¹²⁰ Eg, Vienna Sales Convention. See Example 1.Google Scholar

¹²¹ This explains the approach in Definitely Maybe, above, n 6.Google Scholar

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¹²³ Consistent with the implication of contractual terms in law.Google Scholar

¹²⁴ Samcrete Egypt Engineers and Contractors v Land Rover Exports Ltd [2001] EWCA Civ 2019, [2002] CLC 533, [26].Google Scholar

¹²⁵ Ibid, [39].

¹²⁶ Samcrete Egypt Engineers and Contractors v Land Rover Exports Ltd [2001] EWCA Civ 2019, [2002] CLC 533, [41].Google Scholar

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¹³⁰ The place of performance was an ‘important factor’: Whitworth Street Estates v Miller [1970] AC 583, 605.Google Scholar

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¹³² Ibid, [28].

¹³³ Ibid, [29].

¹³⁴ Ennstone Building Products Ltd v Stanger Ltd [2002] EWCA Civ 916, [2002] 1 WLR 3059, [39].Google Scholar

¹³⁵ However, David, Steel J has recently followed Baroda in a case concerning letters of credit: Marconi Communications International Ltd v Pt Pan Indonesia Bank Ltd [2004] EWHC 129 (Comm).Google Scholar

¹³⁶ This broader approach may be supported by analogy with the identification of the ‘place of performance of the obligation in question’ under Art 5(1) of the Judgments Regulation. In Pugliese v Finmeccanica SpA, Alenia Aerospazio Division [2003] ECRI-3573, the ECJ held that circumstances beyond the terms of the contract in question ought to be considered, including the circumstances foreseen by the contracting parties: Pugliese, [24].Google Scholar

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¹³⁸ Ibid, [86].

¹³⁹ Caledonia Subsea v Microperi 2002 SLT 1022, 1031 (Lord Cameron), 1032 (Lord Marnoch).Google Scholar

¹⁴⁰ Briggs, ‘Recent Cases in the English Courts: Private International Law’ (2002) 73 BYBIL 439, 473–9.Google Scholar

¹⁴¹ Caledonia Subsea v Microperi 2002 SLT 1022, 1029.Google Scholar

¹⁴² Dinkha, above, n 7.Google Scholar

¹⁴³ Above, n 66.Google Scholar

¹⁴⁴ AMICO v Cellstar [2003] EWCA Civ 206, [2003] ILPr 22, [25].Google Scholar

¹⁴⁵ Ibid, [44].

¹⁴⁶ [2004] EWHC 129 (Comm), [27]–[30].Google Scholar

¹⁴⁷ Lord Wilberforce criticized the unsettling effect of the Convention: HL Deb vol 518 col 438 (24 Apr 1990).Google Scholar

¹⁴⁸ Caledonia Subsea v Microperi 2002 SLT 1022, [26].Google Scholar

¹⁴⁹ European Commission ‘Green Paper‘ COM (2002) 654 final (14 Jan 2003), 25–6. See also above, text to n 16.Google Scholar

¹⁵⁰ Governor of the Bank of Scotland of the Mound v Butcher, above, n 145; Definitely Maybe, above, n 6; Mirchandani v Somaia, above, n 7; AMICO, above, n 4.Google Scholar