Private International Law Sciences Po Paris Spring 2017

1. Private International LawSciences Po ParisSpring 2017 PIL for tort law Giuditta Cordero-Moss, Ph.D., Dr.Juris Professor, Oslo University

2. Forum I • Norwegian producer buys from a Swedish supplier spare parts to be included in its products • The Swedish supplier buys some components from Germany, assembles them in its plant in Sweden and sells them to the Norwegian producer • The spare parts are assembled in the Norwegian producer’s products and sold worldwide • The components from Germany are defective, therefore the spare parts the Swedish producer sells to the the Norwegian producer are defective • Which court has jurisdiction on the Norwegian producer’s claim against the German sub-supplier?

3. Forum II • Norwegian producer negotiates with a potential Swiss buyer • The buyer obtains a prototype, breaks off the negotiations and has the products manufactured in China • Where can the producer bring action against the potential buyer?

4. Qualification • No formal agreement between the parties: non-contractual obligation

5. Forum for non-contractual claims • Defendant’s forum (Art. 4 Brussels I, Art. 2 Lugano) • Place of damage (locus delicti/damni) (Art. 7.3 Brussels I, art. 5.3 Lugano) • Place of branch (Art. 7.5 Brussels I, art. 5.5 Lugano) • Agreed forum (Art. 23 Brussels I, Art. 21 Lugano)

6. Place of damage • Courts of the place where the damage occurred • Art. 7.3 Brussels I, art. 5.3 Lugano • Interpreted as place where damage occurred (locus damni) or • Place where event giving rise to damage occurred (locus delicti)

7. Damage • C-12/15 (Universal) • During contract negotiations, the buyer’s lawyer disregards the buyer’s comments and accepts a formulation that gives a 5 times higher price • The damage arises in the place where the contract was negotiated and signed • Not where the buyer has its assets • Not where the buyer has made payment from

8. Direct damage • Direct damage • Not indirect consequences • C-220/88 /Dumez France) • C-364/93 (Marinari) • C-186/02 (Kronhofer) • C- 189/08 (Zuid Chemie) • C-12/15 (Universal) • C-350/14 (Florin Lazar)

9. Can pure economic loss be direct damage? • C-375/13 Kolassa (consumer brought action against bank who issued securities purchased through broker) • Rt. 2015 s. 129 (creditor brought action against bank who with false information induced debtor to transfer money to the bank. The damage consists in the creditor’s loss of the possibility to exercise its security right on that sum of money)

10. Choice of law REGULATION (EC) No 864/2007 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 July 2007 on the law applicable to non-contractual obligations (Rome II), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:199:0040:0049:EN:PDF

11. Article 4.1 • [...] the law of the country in which the damage occurs • irrespective of the country in which the event giving rise to the damage occurred and [NB! Different from forum rules!] • irrespective of the country or countries in which the indirect consequences of that event occur

12. Example • Norwegian producer negotiates with a potential Swiss buyer • The buyer obtains a prototype, breaks off the negotiations and has the products manufactured in China • Which law regulates the relationship?

13. Qualification I • No formal agreement between the parties: non-contractual obligation (Art 12 Rome II) • But:

14. Qualification IIculpa in contrahendo • Art. 12 • The law applicable to a non-contractual obligation arising out of dealings prior to the conclusion of a contract, regardless of whether the contract was actually concluded or not, shall be the law that applies to the contract or that would have been applicable to it had it been entered into

15. Qualification IIIUnjust enrichment • Art. 10 • If a non-contractual obligation arising out of unjust enrichment, including payment of amounts wrongly received, concerns a relationship existing between the parties, such as one arising out of a contract or a tort/delict, that is closely connected with that unjust enrichment, it shall be governed by the law that governs that relationship

16. Qualification IVnegotiorungestio • Art. 11 • If a non-contractual obligation arising out of an act performed without due authority in connection with the affairs of another person concerns a relationship existing between the parties, such as one arising out of a contract or a tort/delict, that is closely connected with that non-contractual obligation, it shall be governed by the law that governs that relationship.

17. Discrepancy forum/governin law I • Brussels I, Lugano: locus delicti for non-contractual obligations • Rome II: same connecting factor as contract or tort, depending on circumstances

18. Lex loci damni • Norwegian producer buys from a Swedish supplier spare parts to be included in its products • The Swedish supplier buys some components from Germany, assembles them in its plant in Sweden and sells them to the Norwegian producer • The spare parts are assembled in the Norwegian producer’s products and sold worldwide • The components from Germany are defective, therefore the spare parts the Swedish producer sells to the the Norwegian producer are defective • Which country’s law governs the claim?

19. Discrepancy forum/governing law II • Forum: choice between locus damni and locus delicti • Choice of law: only locus damni

20. Only locus damni is relevant • Rome II, recital 16: Uniform rules should enhance the foreseeability of court decisions and ensure a reasonable balance between the interests of the person claimed to be liable and the person who has sustained damage. A connection with the country where the direct damage occurred (lex loci damni) strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability.

21. Is the law of activity fully irrelevant? • Rome II recital 34: In order to strike a reasonable balance between the parties […] • Art. 17: In assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability

22. Exception I • Two Norwegian ships collide in English waters • Which law governs the claim?

23. Common habitual residence • Art. 4.2 Rome II: However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.

24. Exception II • Construction contract between an English employer and a Norwegian contractor • The contractor’s employees act negligently and cause damage to the employer’s property • The construction contract has a governing law clause choosing English law

25. Manifestly closer connection • Art. 4.3 Rome II: Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a preexisting relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.

26. Party autonomy • Traditionally: Party autonomy only for contract law • Art. 14 Rome II: If one of the parties in not a business, the agreement must be entered into after the event occurred • Interests: • Predictability • Broad definition of non-contractual