Autonomy is perceived when there’s a liberty to choose among the existing alternatives[1]. And in legal context, it means that the parties will have the liberty to mold their contractual relationship as per their convenience[2]. When we look at the aspect of party autonomy in context to private international law, one of the crucial aspects that pop up is limitations. Limitations are there in private international law in context to party autonomy to limit the independent choice of law and thus protect the specific interest. It can either be the interest of parties or it can be the interest of other individuals or of any community as a whole[3].
There are certain limitations that are disseminated in the concept of party autonomy. For example Equality treatment[4]: The Parties are independent to choose their own Law, but they cannot do so by violating the principle relating to equal treatment of parties. Let’s discuss this with an example of arbitration agreement. When an arbitration agreement is framed then the concerning parties can abuse it by introducing unfair terms. There might be instances when the terms that have been chosen by the parties can be interpreted in a way which may lead to unfair treatment, so it’s the duty of the arbitrators to maintain the basic traits with respect to institution of arbitration and restrict the autonomy of parties.
Let’s discuss the limitations of party autonomy in the light of Rome Convention and Rome I. The Article 3 of Rome Convention talks about parties’ independence about the choice of law. As per the convention, there is independence but not total independence. While dissecting Article 3 it reveals that the party autonomy limitations have been discussed in paragraph 3. And according to the article party autonomy is there but the parties cannot escape from the mandatory rules that are applicable in case of absence of choice of law for a given contract (when the contract has no noteworthy foreign element[5])that is to say preventing the internationalization of a domestic contract to avoid necessary and mandatory rules and regulations[6]. As said otherwise it’s an attempt by the parties to change the Jus Cogen rule which is otherwise applicable on the contract. According to Article 3 paragraph 3 of Rome I (In an agreement when all the relevant elements as to the situation, during the choice of law are installed in a country which is not a country whose law has been chosen, such choice of parties should not ruin the preconception of the application of the provisions of law that are there in that other country which cannot be derogated from by an agreement). As per Article 3 paragraph 4 of Rome I it says where all the other elements which are relevant to a given situation during the time of choice, is located in one or more member states, in such a situation the parties choice of law should not prejudice the functionality of the community laws, where appropriate as implemented in the Member State of the colloquy which cannot be derogated from by agreement.”
There are certain protective mandatory rules which act as a barrier to party autonomy with respect to the choice of law. For example, Article 5.2 of the Rome convention talks about special cases of limitation to party autonomy as to the choice of law. This article deals with consumer contracts and it helps the consumers to seek the protection of mandatory rules of the country in which he/she has a habitual residence during the time of conclusion of the contract in his own country with a supplier of abroad[7]. Here the party autonomy as to the choice of law is regulated as such it is in the favor of the weaker party- the consumer. These mandatory rules have similar traits as that of jus cogens rules. Next is Article 6.1 of Rome convention. This provision talks about discrete employment contracts of individuals: “despite the provisions given under Article 3, in an employment contract the choice of law as selected by the parties to the contract shall not deprive the employee of the protection which vests on him because of mandatory rules which is applicable under paragraph 2 in case of absence of choice”. The Article 7 of the Rome Convention talks about internationally mandatory rules. According to the article, effect is favored in respect to mandatory rules of law of the country with which the situation is closely connected.
There are three regulatory models for party autonomy within the European mechanism. First, Prima facie free choice of law in combination with a separate application. In this model, the free choice of law is restricted by a separate application. And this is done in order to satisfy certain protective functions. This model is generally deployed, in conflict of laws in Rome I regulations for different types of contracts. Like, a separate application needs to be attached with an initially free choice of law is talked about in Article 6(2) of Rome I regulations (which is for consumer contracts). Second, a primary limitation of party autonomy, predominantly to ostensible connected laws. In this model, operation takes place by confining the scope of applicable laws. This type of solution on one hand protects individuals against the obtrusion of material laws and on other hand it also aims to enforce specific public and sovereign interest. Third, a time related limitation of party autonomy. This model functions in a very formal way. In this model the involved parties are issued a special warning in the form of a time 'break'.
Bibliography
Books/Documents Referred
- Rome Convention
- Rome I
- Ebrahimi Seyed Nasrollah, ‘Mandatory rules and other party autonomy limitations in international contractual obligations’, Athena Press,(2005).
Webpages:
http://study.com/academy/lesson/what-is-autonomy-definition-ethics.html
http://conflictoflaws.net/2008/party-autonomy-and-beyond-an-international-perspective-of-contractual-choice-of-law/
[1] http://study.com/academy/lesson/what-is-autonomy-definition-ethics.html (as accessed on January 21st 2017)
[2] http://conflictoflaws.net/2008/party-autonomy-and-beyond-an-international-perspective-of-contractual-choice-of-law/ (as accessed on January 21st 2017)
[3] http://conflictoflaws.net/2008/party-autonomy-and-beyond-an-international-perspective-of-contractual-choice-of-law/ (as accessed on January 22nd 2017)
[4]http://www.arbitrationicca.org/media/4/48108242525153/media012223895489410limits_
to_party_autonomy_in_international_commercial_arbitration.pdf (as accessed on 24th January 2017)
[5] Seyed Nasrollah Ebrahimi, ‘ Mandatory rules and other party autonomy limitations in international contractual Obligations’, Athena Press, (2005), p. 310.
[6] Seyed Nasrollah Ebrahimi, ‘ Mandatory rules and other party autonomy limitations in international contractual Obligations’, Athena Press, (2005), p. 310
[7] Seyed Nasrollah Ebrahimi, ‘ Mandatory rules and other party autonomy limitations in international contractual Obligations’, Athena Press, (2005), p. 385
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