Rome I Regulation: binding authority for arbitral tribunals in the European Union?

Abstract

EU Regulation No 593/2008 on the Law Applicable to Contractual Obligations (the “Rome I Regulation”) establishes uniform EU conflict of laws rules for contracts. As a directly applicable EU instrument, the Regulation applies in proceedings before courts and other authorities of the Member States. Its role in arbitration is less clear. Like its predecessor, the 1980 Rome Convention on the Law Applicable to Contractual Obligations, the Regulation does not expressly provide whether it is addressed to arbitral tribunals. A view is gaining ground that, since the Regulation is an instrument of general application, it must be applied in all types of legal proceedings in the territory of the Union, including in arbitration. If this interpretation were to be accepted, the Regulation would significantly limit two fundamental principles established in arbitration laws of the Member States: autonomy of the parties to choose the applicable law and freedom of the arbitrator from any particular conflict of laws system. This article argues that the text, the context, the legislative intent and the purpose of the Regulation, taken as a whole, suggest that the Rome I Regulation is not addressed to arbitral tribunals and that, therefore, it is not binding authority in arbitration. While tribunals may apply the Regulation to determine the applicable substantive law and will often apply it for good reasons, EU law does not require them to do so.