How to apply Lex Mercatoria and Rome I in international contracts
The Cohesion Policy 2021-2027 and its impact on International Trade and Private International Law
The European Union's cohesion policy for the period 2021-2027 aims to consolidate "a smarter, greener, more connected, more social and closer to citizens" Europe.
Under the leadership of the von der Leyen Commission, three key pillars have been identified to achieve these goals: digital transformation, environmental sustainability and economic diplomacy.
Of these pillars, economic diplomacy stands out as one of the most relevant bets, especially in a context that was marked by the commercial war between China and the United States.
This conflict not only had economic repercussions, but also geopolitical ones, positioning the European Union on an increasingly complex global stage.
Understand the EU position In the face of these challenges, it is essential for companies and entrepreneurs involved in international trade.
International Trade and its Legal Regime
To contextualize the relevance of the Private international right In this scenario, it is important to define the international trade and its legal framework.
According to Cabello and Padín, International trade is based on the exchange of goods and services between individuals or legal entities from different countries, which involves export and import operations..
One of the most prominent and controversial aspects of international trade is the international sale of goods.
The absence of a unified global regulation has generated the need to harmonize the applicable laws.
In response to this challenge, States have worked together to develop instruments that facilitate the regulation of these transactions, one of the most important being the UNCITRAL (United Nations Commission on International Trade Law).
Private International Law: Conventional, Institutional and Autonomous
The analysis presented here will focus on the role of Private international right, a key discipline for classifying legal norms according to their origin:
- Conventional: International standards.
- Institutional: Supranational or European standards.
- Autónomo: National standards.
This article will focus on the interaction between the first two levels, exploring how international and European regulations influence international trade and cross-border contracts.
Conventional Analysis: Private International Law and Lex Meritoria
El Private international right It is a key discipline in international private relations, responsible for determining three fundamental aspects:
- La international jurisdiction.
- Applicable law.
- Recognition of foreign resolutions.
From a strictly conventional perspective, the process for determining the applicable law has evolved towards a method of direct regulation.
This approach seeks to offer substantive legal responses, avoiding the references and locative criteria common in conflict rules.
This is where the so-called arise special material standards, rules that connect a factual assumption with a legal consequence without the need for intermediaries.
The role of UNCITRAL and the 1980 Vienna Convention
UNCITRAL has played a pioneering role in the development of special material standards.
A prominent example is the United Nations Convention on Contracts for the International Sale of Goods (CISG), adopted in Vienna in 1980.
This document sought to remove legal obstacles in the international trade by adopting uniform rules that take into account different social, economic and legal systems.
However, the Vienna Convention focused only on specific aspects, such as the formation of the contract of sale and the obligations of the parties.
The lack of holistic regulation gave way to the development of a broader set of regulations: the lex mercatoria.
Lex Mercatoria: commercial practice and international law
Of customary and conventional nature, the lex mercatoria is based on international commercial practice.
This set of regulations has established itself as an essential tool for regulating global commercial transactions, complementing instruments such as the Vienna Convention.
Do you have questions about Lex Mercatoria or how it affects your international contracts?
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Sources of Lex Mercatoria: Uses, Contracts and Principles
La lex mercatoria, as a set of international trade regulations, is made up of various sources that have been systematized by doctrine. De la Fuente and Echarri highlight the following:
1. Commercial Uses and Customs
The commercial uses and customs They are commercial practices that, due to their repetition, have acquired normative character among merchants.
La International Chamber of Commerce (ICC) has collected and developed important standards, including:
- INCOTERMS: Rules for interpreting commercial terms in sales contracts.
- Uniform rules regarding collections.
- Uniform rules and practices relating to documentary credits.
- Uniform rules for contractual guarantees.
These instruments are essential to ensure clarity and uniformity in international transactions.
2. Standard Contracts and General Conditions of Contract
Related to adhesion contractsThese instruments represent the contractual standardization promoted by professional associations and specialized organizations.
Standard contracts and general conditions apply to key sectors, such as:
- Machinery and technical equipment.
- Durable consumer goods.
- Wood.
3. General Principles of Law
A prominent pillar is the UNIDROIT Principles, prepared by the International Institute for the Unification of Private Law.
These general rules, applicable to international commercial contracts, allow the parties to freely adopt them to regulate the formation and execution of contracts.
Since their first publication in 1995, the UNIDROIT Principles have been updated, with the latest version being in 2016.
4. Arbitration Jurisprudence
In the arbitration field, UNCITRAL plays a crucial role in providing:
- An official registry for specialized arbitration centers.
- Agreements, model laws and explanatory contractual texts on its website.
These resources support the progressive development and codification of arbitration, ensuring a robust framework for the resolution of international commercial disputes.
Institutional analysis: Rome I and its role in Private International Law
At the institutional level, the European Union has adopted an indirect regulatory approach to determining the applicable law in international private relations.
This method first locates the relationship within the legal system and then refers to a specific rule to resolve the issue.
Unlike special material standards, this approach uses the conflict rules and the Connection point to link a factual assumption with a legal consequence.
As in this RRYP Global success story:
Key Regulations: Brussels I bis and Rome I
In the European Union, the international jurisdiction and the recognition of foreign resolutions are regulated by the Regulation (EU) No. 1215/2012 (Brussels I bis).
However, when it comes to determining the law applicable to contractual obligations, the reference regulation is the Regulation (EC) No. 593/2008 (Rome I).
Rome I establishes the legal framework for resolving conflicts of laws in international contracts, and its interaction with other regulations, such as Brussels I bis, is essential to achieving a harmonised legal system in the European Union.
Key aspects of the Rome I Regulation
Rome I aims to consolidate a Area of Freedom, Security and Justice in the European Union, in accordance with the provisions of the Title V of the Treaty on the Functioning of the European Union.
To do this, look for the unification of conflict law and the mutual recognition of judicial decisions in civil and commercial matters.
1. Area of application
Rome I applies to the Contractual obligations In situations of conflict of laws, provided that these obligations have been freely agreed to by the parties (case ERGO Insurance Group).
This approach excludes non-contractual liability regulated by Rome II and connects with Brussels I bis under the framework of Civil patrimonial law.
2. Territorial and Temporal Scope
The regulation requires the existence of two or more legal systems in conflict.
It also addresses the case law of multi-legislative States (Article 22), although it leaves it to the Member States to decide how to apply this provision.
3. Relationship with Other Instruments
Rome I complements other European regulations such as Brussels I bis, creating a coherent legal system for international transactions in civil and commercial matters.
Exclusions and application of the Rome I Regulation: Key aspects
El Rome I Regulation It establishes a legal framework for determining the law applicable to contractual obligations in international situations, but also specifies a number of clear exclusions from its scope.
According to Article 1.2, the following aspects are excluded:
- Marital status and capacity of natural persons.
- El Family law.
- Economic-matrimonial and similar regimes.
- Foreign exchange law.
- arbitration.
- Corporate Law.
- The intermediation.
- The trusts.
- The preliminary negotiations.
- Insurance contracts for certain benefits.
Territorial and temporal scope of Rome I
Territorially, the regulation applies to the Member States of the European Union, with the sole exception of Denmark, which, as noted in recital 46, is not participating in or bound by this instrument due to its opting out.
Temporarily, Rome I came into force on December 17th 2009, as established in articles 28 and 29 of the regulation.
Universal application and legal prevalence
One of the highlights of Rome I is its universal application.
According to Article 2, the law designated by the regulation will apply even if you do not belong to a Member State of the European Union.
This gives you efficacy erga omnes, which means that it takes precedence over national regulations, as occurs in Spain, where it displaces several sections of the Article 10 and the article 11 of the Spanish Civil Code.
Compatibility with other legal instruments
The regulation also addresses its relationship with other instruments:
- El Article 23 ensures its compatibility with other provisions of the European Union.
- El Article 24 regulates its connection with the Rome Convention of 1980, antecedent of Brussels I.
- El Article 25 establishes its relationship with other international conventions to which the Member States are party.
Autonomy of the will and general rules of Rome I
Rome I gives a central role to the conflictual autonomy of will, allowing parties to freely choose the law applicable to their contracts.
Only in the absence of an express choice does the regulation lay down rules to determine the applicable law.
This flexibility allows companies and individuals to clearly establish the legal terms that will govern their international relations, avoiding legal uncertainties.
How does Rome I affect your international contracts?
El Rome I Regulation It is a key tool for companies and entrepreneurs operating in global markets, but its correct application can be complex.
En RRYP GlobalWe offer specialized advice in Private international right, helping you ensure that your contracts comply with European regulations and protect your interests.
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Our team of experts is ready to offer you clear and effective solutions.
The law chosen by the parties in the Rome I Regulation: How does Lex Mercatoria fit in?
El Article 3 of the Rome I Regulation establishes a key principle for international contracts:
"The contract shall be governed by the law chosen by the parties."
However, this choice has an important limitation: the law selected must be state law.
This criterion, originally interpreted in the Giuliano-Lagarde Report for the Rome Convention of 1980 and extrapolated to Rome I, explicitly excludes the possibility of choosing instruments such as the New Lex Mercatoria, UNIDROIT Principles to INCOTERMS as formal applicable law.
The exception in recital 13: Incorporation by reference
Despite this restriction, Rome I allows some flexibility through the Recital 13, which states:
"This Regulation does not prevent the parties from incorporating by reference into their contract a non-State law or an international convention."
This means that, although the contract must be subject to a state law, it is possible to integrate commercial practices or non-state instruments such as New Lex Mercatoria in the content of the contract.
In other words, the Lex Mercatoria can influence the material autonomy, but not in the formal autonomy.
Legal certainty and intra-community trust
This restriction has a clear justification: to guarantee the legal security and intra-community trust.
In an environment marked by the plurality of forums regulated in Brussels I bis, Rome I seeks to minimize the shopping forum and provide stability to parties in cross-border disputes.
In addition, Rome I implements mechanisms such as:
- Connection points determined.
- Protection of the weaker party in consumer contracts.
- Alternative connection points, favoring the validity of the contract (please validate).
Compatibility between Lex Mercatoria and Rome I
Although limited, the New Lex Mercatoria is compatible with the European Union law, provided that it is incorporated within the framework permitted by Rome I.
This ensures that international trade practices can coexist with Community rules, allowing Member States to maintain a competitive position in global trade.
In a context where international trade and regional dynamics become more relevant, it is essential to understand how the European Union law can offer a robust, resilient and adaptable legal framework at a global level.
Why is Rome I important for your international business?
Correctly understand and apply the Rome I Regulation It is essential to ensure legal certainty in international contracts.
En RRYP Global, we are experts in Private international right, helping companies and individuals to structure their contracts in accordance with European regulations.
👉 Contact us today for a personalized consultation. Our team will guide you through every step to protect your interests in international trade and cross-border contractual relationships.
