Trading Debts Across Borders: A European Solution?

On April 7, 2009, Richard Fentiman delivered the tenth annual Snyder Lecture at the Indiana University Maurer School of Law.

Introduction

In December 2007 the representatives of the EU Member States finally agreed on the text of Regulation 593/2008 concerning the law applicable to contractual obligations. 1 The ‘Rome I’ Regulation contains harmonized rules for choice of law in contract. It applies in all Member States from December 17, 2009, to contracts concluded after that date. This development is significant for three reasons. First, the Regulation replaces the familiar 1980 Rome Convention, 2 which previously governed contract conflicts in EU national courts. Secondly, it departs from the Convention in important ways. 3 Thirdly, being a Regulation and not a Convention, it is true Community legislation, not merely a treaty between the Member States. Rome I is part of what may be described, contentiously, as the federal law of Europe. But agreement was reached on the Regulation only at the last minute, by agreeing to disagree on one of the Regulation’s principal components. The sticking point was a single provision which exposed tensions not simply between Member States, but between different lobbies in Member States and even within national delegations. This provision begged questions of high technicality, and had exceptional practical importance. It was the stuff of choice-of-law theory, yet mobilized the finance ministries of Europe. It concerned the law governing transactions involving the world’s principal traded commodity, of which both the United States and the UK are major producers—debt.