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UK Government Decides Not to 'Opt in' to the Proposed Rome I Regulation

On 15 December 2005 the European Commission published the latest fruit of the initiative it began in the field of private international law after the entry into force of the Treaty of Amsterdam in 1999: the proposal for a Regulation on the law applicable to contractual obligations (Rome I) [COM (2005) 650 final].

The proposed Rome I Regulation is to replace the Rome Convention of 1980 which, since its entry into force in 1991, has become an essential element of the legal structure under which international businesses choose to determine and regulate their contractual relations. An overwhelming majority of professionally drafted commercial contracts with an international element contain a choice of law clause relying on the principle of party autonomy, as enshrined in Article 3 of the Convention. Overall, the Convention has brought a significant degree of certainty and harmonisation to the question of applicable law for contracts, which is one of the most important constituents of legal certainty in international transactions.

The proposal is based on Article 61(c) in conjunction with 67(5) of Title IV EC. Pursuant to Article 1 of the Protocol added by the Treaty of Amsterdam on the position of the United Kingdom and Ireland (No. 4, 1997), in principle neither country takes part in the adoption by the Council of proposed measures covered by Title IV of the Treaty. Nonetheless, based on Article 3 of the Protocol, both the UK and Ireland could have notified the President of the Council within three months after the presentation of the proposal to the Council that they wish to take part in the adoption and application of the proposed Rome I Regulation. The UK was to take this decision before 9 of May 2006. It chose not to do so.

Meetings on Rome I are due to start in June 2006 but negotiations will probably not be starting in earnest until autumn of this year. According to Oliver Parker of the Department for Constitutional Affairs, the United Kingdom will be keen to participate fully in the negotiations, although the UK will have no vote when the instrument comes forward for the adoption by the Council which may affect the Government's negotiation position. If Rome I is subsequently adopted, the UK will have, in accordance with Article 4 of the Protocol, a purely national decision whether it would nevertheless would wish to be party. If the decision is taken that the UK would seek not to become a party to a Rome I Regulation, the UK will remain a party to the Rome Convention.

On 26 of April 2006 the British Institute of International and Comparative Law organized a highly successful seminar on the Rome I proposal. The seminar was chaired by The Rt Hon Lady Justice Arden DBE, and the proposal was introduced and analyzed by four experts: Professor Jonathan Harris (University of Birmingham) Andrew Dickinson (Consultant, Clifford Chance LLP; Honorary Fellow, BIICL) Oliver Parker (Department for Constitutional Affairs) and Jacob Van de Velden (BIICL). A report of the seminar can be found here. The institute hopes to organize more seminars in the field of European conflict of laws in due course. These in turn may lead to a publication which comprehensively analyzes the prospective European instruments on the conflict of laws for contractual and non-contractual obligations.

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