#5123 - Interfrigo - Conflict of Laws BCL

Interfrigo (2009)

Facts

Proceedings brought by Intercontainer Interfrigo (ICF) SC ('ICF'), a company established in Belgium, against Balkenende Oosthuizen BV ('Balkenende') and MIC Operations BV ('MIC'), two companies established in the Netherlands, seeking an order for the payment by those two companies of unpaid invoices which had been issued on the basis of a charter party entered into by the parties.

Questions

By the second part of its second question and the third and fourth questions, the national court in essence asks in which circumstances it is possible, under the second sentence of Article 4(1) of the Convention, to apply different national laws to the same contractual relationship, in particular as regards the limitation of the rights under a contract such as that at issue in the main proceedings.

Must the exception in the second clause of Article 4(5) of the... Convention be interpreted in such a way that the presumptions in Article 4(2) [to] (4) of the... Convention do not apply only if it is evident from the circumstances in their totality that the connecting criteria indicated therein do not have any genuine connecting value, or indeed if it is clear therefrom that there is a stronger connection with some other country?

Holding

Question 1 – Separability

It is apparent from the wording of that provision that the rule providing for the severance of a contract is of an exceptional nature. In that regard, the Giuliano and Lagarde report states that the words 'by way of exception' in the last sentence of Article 4(1) 'are... to be interpreted in the sense that the court must have recourse to severance as seldom as possible'.

As the Advocate General pointed out in paragraphs 83 and 84 of his Opinion, the possibility of separating a contract into a number of parts in order to make it subject to a number of laws runs counter to the objectives of the Convention and must be allowed only where there are a number of parts to the contract who may be regarded as independent of each other.

Consequently, in order to determine whether a part of a contract may be made subject to a different law it is necessary to ascertain whether the object of that part is independent in relation to the purpose of the rest of the contract.

The answer to the second part of the second question and the third and fourth questions is that the second sentence of Article 4(1) of the Convention must be interpreted as meaning that a part of a contract may be governed by a law other than that applied to the rest of the contract only where the object of that part is independent.

Question 3 – Application of Art. 4(4)

By its fifth question, the national court asks whether the exception in the second clause of Article 4(5) of the Convention must be interpreted in such a way that the presumptions in Article 4(2) to (4) of the Convention do not apply only if it is evident from the circumstances in their totality that the connecting criteria indicated therein do not have any genuine connecting value, or whether the court must also refrain from applying them if it is clear from those circumstances that there is a stronger connection with some other country.

It is also apparent from that report that Article 4(5) of the Convention leaves the court 'a margin of discretion as to whether a set of circumstances exists in each specific case justifying the non-application of the presumptions in paragraphs 2, 3 and 4' and that such a provision constitutes 'the inevitable counterpart of a general conflict rule...