On the 17th October 2013 in response to the preliminary question, the European Court of Justice pronounced an interesting judgment concerning to the United Antwerp Maritime Agencies (Unmar) NV v Navigation Maritime Bulgare in Case C-184/12, relating to interpretation of Rome Convention on the law applicable to contractual obligations – Articles 3 and 7(2). According to these rules, the parties may decide that a contract shall be governed by the law chosen by the parties.
In the case at hand, the parties have concluded a commercial agency contract and provided that it was to be governed by Bulgarian law and that any dispute relating to the agreement was to be determined by the arbitration chamber of the Chamber of Commerce and Industry in Sofia (Bulgaria). As a result of a dispute, Unmar sued his opponent - against contractual provision - in the commercial court in Belgium making use of the Belgian law. NMB raised a plea of inadmissibility alleging that the Belgian court did not have jurisdiction to hear the dispute. This claim proved to be ineffective. Belgian court decided that the case is under the jurisdiction of the court in Belgium and that the Belgian law is applicable in this situation. The court found that the provisions of the law were to be qualified as mandatory rules. Court of Cassation has asked the European Court of Justice whether a national court may disregard, pursuant to Article 7(2) of the Rome Convention, the law of a Member State, which is chosen by the parties to a contract and transposes binding provisions of European Union law, in favour of the law of another Member State, which is the law of the forum, considered to be mandatory in that legal order.
It should be emphasized that the judgment omitted actually the issue of the arbitration agreement and focused on the designation of the applicable law. The European Commission argued, essentially, that unilateral reliance on mandatory rules by a State (in case of harmonization of law in the given field) is contrary to the principles underlying the Rome Convention, in particular the fundamental rule of precedence given to the law chosen contractually by the parties, in so far as that law is that of a Member State which has implemented in its national legal order the binding provisions of European Union law concerned. Consequently, Member States may not act contrary to that fundamental principle by systematically describing their national rules as mandatory unless they expressly relate to an overriding interest.
However, the European Court of Justice decided that such a situation is permitted, if the national court (the Belgian court here) in the detail assesses, that, in the course of transposition of the EU law into domestic legislation, the parties were granted a protection going beyond the (minimal) protection provided in the EU law, taking account in that regard of the nature and of the objective of such mandatory provisions. The Bulgarian law guaranteed only the minimal protection directly taken over from the EU Directive and the Belgian law within the transposition has expanded the protection, therefore the European Court of Justice supported the Belgian court position.
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