Abstract
In so far as parties can foresee the applicability of certain parts of substantive mandatory EU law, their reaction depends on the specific scope and effect of that piece of EU law. If all parties to a contract prefer a solution which differs from substantive mandatory EU law, they will attempt to use party autonomy to evade the respective provisions, e.g. by opting for the applicability of a non-Member State’s law which they deem preferable. Whether an arbitral tribunal will allow parties to make credible commitments in this respect depends on the consequences which upholding the parties’ choice will have for the arbitrators. Those consequences in turn depend on the results which can be reached in the review proceedings. Hence, determining in a generalised manner whether substantive mandatory EU law is over-enforced or under-enforced in international commercial arbitration is not possible. The question can be handled best by narrowing down the analysis on one particular example. For the purpose of this inquiry, the appropriate example is the Commercial Agents Directive’s regime for indemnity or compensation to the commercial agent upon termination.
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- 1.
See supra 11f.
- 2.
For the individual transpositions in Germany, France, Belgium and England cf. infra 166f, 173, 180f and 187f.
- 3.
Art. 1 (2) and (3). Thus a number of agents are left outside of the Directive’s scope, e.g. agents engaged as intermediaries for contracts for services or agents who act on the principal’s behalf but in their own name, Case C-85/03 Mavrona [2004] ECR I-1573.
- 4.
Goyder (2011), p. 215.
- 5.
Pursuant to Art. 5 parties may not derogate from Art. 3 and Art. 4. Accordingly, the commercial agent has a mandatory obligation to look after the principal’s interests and act in good faith, while the principal is obliged to act dutifully and in good faith in his relations with the commercial agent. The same status as a mandatory provision is granted by Art. 10 (4) to certain time limits for the payment of the commission stipulated in Art. 10 (2) and (3). Other examples include Art. 11 (3) and Art. 12 (3) stipulating the mandatory nature of Art. 11 (1) and Art. 12 (1) as well as (2), respectively. This means that the parties can neither agree to alter the reasons for which the commercial agent’s right to commission can be extinguished to the disadvantage of the commercial agent (Art. 11 (1)) nor to reduce the principal’s duty to supply the commercial agent with a statement of the commission.
- 6.
Goyder (2011), p. 28.
- 7.
See Zhou (2014), p. 361.
- 8.
Commission, Report on the Application of Article 17 of Council Directive on the Co-ordination of the Laws of the Member States relating to Self-employed Commercial Agents (86/653/EEC), COM (1996) 364 final, 1–6. Gómez Pomar notes that it may be closer to the truth that Art. 17 (2) was simply copied from § 89b Handelsgesetzbuch, cf. Gómez Pomar (2006) p. 1, n. 14.
- 9.
The wording of Art. 17 (2) (a) in this respect is: ‘The commercial agent shall be entitled to an indemnity if and to the extent that: he has brought the principal new customers or has significantly increased the volume of business with existing customers and the principal continues to derive substantial benefits from the business with such customers.’
- 10.
The wording of Art. 17 (2) (a) in this respect is: ‘The commercial agent shall be entitled to an indemnity if and to the extent that: (…) the payment of indemnity is equitable having regard to all the circumstances and, in particular, the commission lost by the commercial agent on the business transacted with such customers.’ In this context, circumstances that decrease the business risk of commercial agents, e.g. minimum remuneration independent of the volume of transactions and pension entitlements paid by the principal.
- 11.
Or the entire duration of the contract if it goes back less than 5 years, cf. Art. 17 (3): ‘The amount of the indemnity may not exceed a figure equivalent to an indemnity for one year calculated from the commercial agent’s average annual remuneration over the preceding five years and if the contract goes back less than five years the indemnity shall be calculated on the average for the period in question.’
- 12.
For a general overview of the routes of implementation taken in this regard see Bogaert and Lohmann (2000), 69ff; cf. also infra 166f, 173, 180f and 187f.
- 13.
Commission, Report on the Application of Article 17 of Council Directive on the Co-ordination of the Laws of the Member States relating to Self-employed Commercial Agents (86/653/EEC), COM (1996) 364 final, 1–6.
- 14.
Commission, Report on the Application of Article 17 of Council Directive on the Co-ordination of the Laws of the Member States relating to Self-employed Commercial Agents (86/653/EEC), COM (1996) 364 final, 16.
- 15.
This includes situations in which forcing the principal to continue to work with the commercial agent would be unreasonable, e.g. if the agent also worked for a competing principal in violation of a contractual prohibition from doing so, Bundesgerichtshof (Germany), 26 May 1999, VIII ZR 123/98, NJW-RR 1999, 1481, 1483.
- 16.
As is typically the case in consumer protection cf. Art. 12 Directive 2008/122/EC of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts [2009] OJ L33/10; Art. 12 (2) Directive 97/7/EC of 20 May 1997 on the protection of consumers in respect of distance contracts [1997] OJ L144/19; Art. 7 (2) Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees [1999] OJ L171/12; Art. 6 (2) Unfair Terms Directive 93/13/EC.
- 17.
Case C-104/95 Georgios Kontogeorgas v Kartonpak AE [1996] ECR I-6643, para. 25.
- 18.
Recital 2 of the Commercial Agents Directive.
- 19.
Recital 3 of the Commercial Agents Directive.
- 20.
Recitals 2 and 5 of the Commercial Agents Directive; cf. Basedow (1981), p. 203.
- 21.
Recital 2 of the Commercial Agents Directive.
- 22.
- 23.
Recital 2 of the Commercial Agents Directive.
- 24.
Recital 2 of the Commercial Agents Directive.
- 25.
As reflected in the Commercial Agents Directive’s preamble; cf. the thorough analysis by Fock (2002), p. 26.
- 26.
Basedow (1981), p. 201.
- 27.
Bundesgerichtshof (Germany), 30 January 1961, VII ZR 180/60, NJW 1961, 1061, 1062; cf. Cour de cassation (France), 28 November 2000, Allium v Alfin et Groupe Inter Parfums, Clunet 2001, 511–523.
- 28.
In Belgium agents commerciaux originally had no general claim for termination fees. Belgian courts granted indemnity to self-employed agents commerciaux only in cases where the termination was held to be abusive, cf. Stumpf et al. (1986), p. 61; Haumann (1976), p. 51. The situation was, however, wholly different if the contract of a concessionnaire was unilaterally terminated and if its sales concession was exclusive and had unlimited duration, cf. infra 180f.
- 29.
Saintier (2002), p. 80; cf. infra 187f.
- 30.
- 31.
Fock (2002), p. 33.
- 32.
- 33.
Fock (2002), p. 33.
- 34.
See ibid for further references regarding this line of reasoning.
- 35.
Recital 2 of the Commercial Agents Directive.
- 36.
Art. 3 (3) and Art. 3 (4) Rome I Regulation. Regarding these provisions’ predecessor in Art. 3 (3) Rome Convention, Basedow gave the example of a principal that belongs to a group of companies whose head office and legal department is domiciled in a state of the USA. This would enable choosing the law of said state, which typically will not provide for termination fee; Basedow (1996a), p. 1925.
- 37.
Lando (1980), p. 15.
- 38.
Recital 2 of the Commercial Agents Directive.
- 39.
Provisions that reflect this perception include Art. 8, Arts 10–12, Arts 17–19 and Art. 20.
- 40.
- 41.
- 42.
- 43.
Cf. Art. 18 (a) Commercial Agents Directive. In particular, this is understood to be the purpose of Art. 3 (2) Décret no 58-1345, i.e. the French provisions on which the regime for compensation in Art. 17 (3) Commercial Agents Directive was modelled Fock (2002), p. 181. Along those lines, a commercial agent is only entitled to compensation in case of an unwarranted termination Outside of an unwarranted termination by the principal, an entitlement to compensation can also arise in the case of termination due to illness, age or death of the commercial agent. This is, however, not the case where compensation would become due in the sense of Art. 17 (3) Commercial Agents Directive because ‘proper performance of the agency contract’ is not possible in this case because of the commercial agent’s condition.
- 44.
- 45.
Gómez Pomar (2006), p. 17.
- 46.
Cf. generally Schwartz (1992).
- 47.
- 48.
- 49.
Fock (2002), p. 160.
- 50.
Gómez Pomar (2006), p. 30.
- 51.
Wittman (1985), p. 174ff.
- 52.
Bundesgerichtshof (Germany), NJW 1990, 2889, 2891; Emde in: Canaris et al. (Eds.) (2008), § 89b HGB, para. 129.
- 53.
From a theoretical perspective ‘loss-based’ compensation is the superior type of termination fee. First, it is more efficient for the party who decides over the termination to face the other party’s cost curve. Otherwise it would be able exploit his superior information. For the termination of commercial agency contracts this means that the principal should face the commercial agent’s cost curve upon termination, cf. Wittman (1985), p. 174ff. Second, it has been demonstrated that ‘loss-based’ compensation is much less prone to mistakes by adjudicators, cf. Polinsky and Shavell (1994), p. 427; Gómez Pomar (2006), p. 31.
- 54.
Fock (2002), p. 142.
- 55.
Indemnity upon termination depends on bringing in new customers, which shows in the value of transactions concluded before termination, cf. Art. 17 (2) (a). Compensation depends on the value of the commercial agency at the time of termination. A particularly valuable commercial agency is assumed to have produced particularly high commissions prior to termination in typical cases.
- 56.
For this effect of ad valorem taxes levied on a product cf. Sloman et al. (2012), p. 78.
- 57.
Commission of the European Communities, Report on the application of Article 17 of Council Directive on the Laws of the Member States relating to Self-Employed Commercial Agents (86/653/EEC), 23 July 1996, COM (1996) 364 final, 7–8. These results are also in line with the experience of the introduction of legal restrictions on termination of franchising agreements. Empirical research in this areas shows that termination restriction laws on franchising agreements lead to less franchising. These termination restriction laws typically require the franchisor to show good cause for termination. Brickley, Dark and Weisbach found that this type of law decreases the total number of franchising agreements in industries where individual units are prone to serving transient customers, cf. Brickley et al. (1991), p. 101. Klick, Kobayashi and Ribstein have detected the same effect. They also analysed whether this effect is offset by a concomitant increase in franchisor-operated establishments. However, their analysis of the development of employment rates in franchising in the fast-food sector in 13 states of the USA revealed no such effect: Klick et al. (2006).
- 58.
- 59.
Commission of the European Communities, Report on the application of Article 17 of Council Directive on the Laws of the Member States relating to Self-Employed Commercial Agents (86/653/EEC), 23 July 1996, COM (1996) 364 final, 7–8.
- 60.
- 61.
Sloman et al. (2012), p. 257.
- 62.
- 63.
Cf. supra 101.
- 64.
In the example used by Zhou, the principal is able to pass on the entire costs of termination fees, cf. Zhou (2014), p. 362. Zhou obviously assumes perfect elasticity of demand, i.e. the graph depicting demand is horizontal.
- 65.
Craswell (1991), p. 361.
- 66.
Recital 2 of the Commercial Agents Directive.
- 67.
Zhou (2014), p. 363.
- 68.
ibid; Gómez Pomar (2006), p. 31.
- 69.
Zhou (2014), p. 363.
- 70.
See Craswell (1991), p. 377 for the comparative difficulties of achieving a pro-consumer position through mandatory warranties in a market in which consumers have different risk attitudes.
- 71.
Cf. infra 107ff.
- 72.
Cf. Art. 1 (2) Commercial Agents Directive.
- 73.
Zhou (2014), p. 364.
- 74.
In the principal–agent problem one party (the commercial agent) performs a service on behalf of another party (the principal) which involves delegating some decision-making authority. The particular challenges in this respect arise due to the fact that a principal cannot perfectly monitor the commercial agent’s activities. As long as both parties are utility maximisers there is good reason to believe that the commercial agent will not always act in the best interests of the principal. This triggers two main problems: moral hazard and adverse selection, cf. Jensen and Meckling (1976), p. 308.
- 75.
Mankiw and Taylor (2006), p. 467.
- 76.
If, for example, an insurer agrees to compensate the insured for full losses resulting from burglary, the insured may take fewer precautions against burglary in terms of not installing an alarm or not checking doors and windows when leaving the house. Therefore, moral hazard causes an insurance covering all losses to raise the probability of burglary in spite of neither party wishing burglary to occur. Moral hazard can also be observed in the realm of commercial agency, Zhou (2014), p. 364.
- 77.
ibid 364f.
- 78.
Gómez Pomar (2006), p. 10.
- 79.
See ibid 19.
- 80.
Mankiw and Taylor (2006), p. 467.
- 81.
Shapiro and Stiglitz (1984), p. 433.
- 82.
Provided that the threshold of Art. 18 (c) Commercial Agents Directive is not met. In that case the costs for termination at will are not influenced by the introduction of termination fees.
- 83.
Cf. Shapiro and Stiglitz (1984), p. 433.
- 84.
Other ways to achieve this goal are piece rates, share options, discretionary bonuses, promotions, profit sharing, efficiency wages and deferred compensation, cf. Prendergast (1999), p. 7.
- 85.
- 86.
Zhou uses the following examples to illustrate this technique: A principal anticipates that a commercial agent will serve as an intermediary in a total of 10 sales before the contract is terminated. If Art. 17 does not apply, the principal is willing to pay a commission of 10 % for each product sold for the price GBP 100 and the commercial agent will receive a total remuneration of GBP 100. If, however, the commercial agent is entitled to an indemnity anticipated to be GBP 30, the principal will lower the commission to 7 %. Accordingly, the commercial agent will receive GBP 70 in commission and an indemnity of GBP 30 allowing the conclusion that Art. 17 does not increase the commercial agent’s total remuneration. Where the commercial agent is entitled to compensation, cf. Zhou (2014), p. 362.
- 87.
ibid 363.
- 88.
ibid 365.
- 89.
To underline this point Zhou puts forward the case Duncan Moore v Piretta [1999] 1 All ER 174 (QB). In that case the commercial agent met new customers at fairs which the customers attended in response to an advertisement issued by the principal. The judge held that in spite of the principal’s contribution, the commercial agent was still instrumental in bringing the new customers. Zhou concludes that as a result the commercial agent may work less and rely more on the principals than under a regime without termination fees, cf. Zhou (2014), p. 364.
- 90.
Fock (2002), p. 224. The German system on which the indemnity regime in Art. 17 (2) was modelled uses the standard of concurrent causation (‘Mitursächlichkeit’) for connecting the commercial agent’s activities to the conclusion of transactions when calculating commission as well as for connecting the commercial agent’s activities for bringing in new customers when calculating damages; cf. Emde in: Canaris et al. (Eds.) (2008), § 89b HGB, para. 64: ‘Mitursächlichkeit genügt, wie bei § 84, 86 dargestellt, freilich auch hier.’
- 91.
Case C-104/95 Georgios Kontogeorgas v Kartonpak AE [1996] ECR I-6643, para. 19.
- 92.
Zhou extends this argument to compensation according to Art. 17 (3) Commercial Agents Directive. He argues that an amount of compensation which focuses on the damage the termination causes to the commercial agent fails to capture outside influences on the value of the commercial agency. Taking the example of a rise in the market demand for the principal’s product, he argues that compensation exacerbates moral hazard. Yet a commercial agent will benefit equally in terms of commission and in terms of compensation from a rise in the market demand for the principal’s product. This result is independent of whether the commercial agent is shirking or not.
- 93.
Zhou extends his arguments on the superiority of pure commission to the problem of adverse selection; cf. Zhou (2014), p. 365. In doing so, he again relies on the assumption that both commission and indemnity depend less on the commercial agent’s performance as an intermediary than commission. As outlined above, this premise is incorrect. Therefore, Zhou’s result that Art. 17 Commercial Agents Directive worsens the problem of adverse selection fails to convince.
- 94.
Shapiro and Stiglitz (1984), p. 442.
- 95.
German courts make an exception to this rule if the commercial agent received unusually high commission or if the contract’s duration was particularly long. Another exception is made if a contractual stipulation allows the commercial agent to claim all the old customers originally acquired with the commercial agency as new customers in the calculation of indemnity after termination (‘Neukundenregelung’), cf. Oberlandesgericht München (Germany), 4 December 1996, 7 U 395/96, NJW-RR 1997, 986; Oberlandesgericht Düsseldorf (Germany), 24 January 2003, I-16 U 66/01, OLGR 2003, 183; cf. Hagemeister (2004), p. 274 for a comparable view on the English transposition.
- 96.
Cf. Bundesgerichtshof (Germany), NJW 1983, 1727, 1728.
- 97.
Fock (2002), p. 148 argues that this is the sole justification.
- 98.
ibid 147.
- 99.
Cf. ibid 149; Jickeli (1996), pp. 204–205.
- 100.
Case C-465/04 Honyvem Informazioni Commerciali Srl v Mariella De Zotti [2006] ECR I-2879.
- 101.
Cooter and Ulen (2014), p. 286ff.
- 102.
- 103.
Grundmann (2001), p. 514.
- 104.
Rühl (2011), p. 13.
- 105.
- 106.
Recital 2 of the Commercial Agents Directive.
- 107.
Cf. supra 107ff.
- 108.
Cf. Jones (1972), p. 107.
- 109.
- 110.
Cf. in this respect Commission, Notice on exclusive dealing contracts with commercial agents, published in French, Dutch, German and English in [1962] OJ 139, 2921, unofficial English version available at http://ec.europa.eu/competition/antitrust/legislation/edc_en.html accessed 26 November 2016.
- 111.
Art. 33 (1) Amendment to the proposal for a Council Directive to coordinate the laws of the Member States relating to (self-employed) commercial agents [1979] OJ C56/6. The European unit of account was a basket of European currencies. Its value exactly corresponded to the value of the IMF Special Drawing Right on 28 June 1974, i.e. roughly 1.20 USD at the time; cf. Commission Decision No. 3289/75/ECSC, 15 December 1975 [1975] OJ L327, 19 December 1975.
- 112.
Other provisions included those pertaining to the point in time when commission is due, the conditions of del credere agreements and the period of notice in case of termination.
- 113.
- 114.
Jickeli (1996), p. 114.
- 115.
Grundmann (2001), p. 521.
- 116.
Fock (2002), pp. 146, 148.
- 117.
The incentive for the principal to opportunistically terminate the commercial agency is highest when the amount of relationship-specific investments is highest. The commercial agent will invest most heavily at the beginning of the commercial agency.
- 118.
This protective effect even exceeds the Directive’s original purpose of strengthening commercial agents’ protection, which is limited to their position towards principals, cf. Recital 2 of the Commercial Agents Directive. Yet, it is a viable understanding that the purpose of approximating the conditions of competition can be interpreted to cover the approximation of the conditions for risk-averse and risk-seeking commercial agents.
- 119.
Regrettably, there exist neither studies on the ratio of risk-seeking to risk-averse commercial agents in the market nor studies on the magnitude of the positive effect termination fees have on risk-averse commercial agents and their negative effect on risk-seeking commercial agents respectively.
- 120.
- 121.
Whincop and Keyes (1998), p. 437.
- 122.
Cf. Schwarz (2002), p. 57.
- 123.
Commission of the European Communities, Report on the application of Article 17 of Council Directive on the Laws of the Member States relating to Self-Employed Commercial Agents (86/653/EEC), 23 July 1996, COM (1996) 364 final, 3.
- 124.
Klick et al. (2012), p. 38.
- 125.
Iowa Code § 523H.3 and § 523H.14; cf. Holiday Inns Franchising Inc v Branstad, 537 NW 2d 724, 730 (Iowa 1995); American Express Financial Advisors Inc v Yantis, 358 F Supp 2d 818 (ND Iowa 2005).
- 126.
Basedow (1996a), p. 1925; cf. Recital 3 of the Commercial Agents Directive.
- 127.
Kraus (2013), p. 392; Harris (2012), p. US11; Katz (1997), p. 6; Bremermann (2013), p. 186. This has been evidenced by recent court decisions regarding the law of a number of states in the USA as well as the Canadian province of Ontario, see Oberlandesgericht München, 17 May 2006, 7 U 1781/06, IPrax 2007, 322 (regarding California); Cour de cassation (France), 28 November 2000, Allium v Alfin et Groupe Inter Parfums, Clunet 2001, 511 (regarding New York); Accentuate Ltd v Asigra Inc [2009] EWHC 2655 (QB) (regarding Ontario); Oberlandesgericht Stuttgart, 29 December 2011, 5 U 126/11, IHR 2012, 163 (regarding Virginia); Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc [2014] EWHC 2908 (Ch), [2015] 1 Lloyd’s Rep 1 (regarding Texas).
- 128.
Together the EU and the United States account for one third of total world trade. In 2014, trade with the United States accounted for 15.2 % of the EU’s total trade, cf. DG Trade, European Union—Trade in goods with USA (2014), 2.
- 129.
In 2014, trade with Canada accounted for 1.7 % of the EU’s total trade, making Canada the 12th-ranked trade partner of the EU, cf. DG Trade, European Union—Trade in goods with Canada (2014), 2.
- 130.
Commission, 14 June 2013, Member States endorse EU-US trade and investment negotiations, Memo 13/564; Commission, 17 June 2013, A Free Trade Agreement between the EU and Canada, Memo 13/573; excerpts of the prospective trade agreements are available at ec.europa.eu/trade/policy/in-focus/ttip accessed 26 November 2016 and at ec.europa.eu/trade/policy/in-focus/ceta accessed 26 November 2016.
- 131.
Feinauer and Weingarten (2013), p. 33.
- 132.
Maaz (2013), p. 75.
- 133.
Bahrdwaj (2013), p. 137.
- 134.
Schlüter (2013), p. 142.
- 135.
Kaiser (2013), p. 170.
- 136.
de Pay (2013), p. 255.
- 137.
Klose (2013), p. 360.
- 138.
Case C-381/98 Ingmar [2000] ECR I-9305.
- 139.
Ingmar GB Ltd v Eaton Leonard Inc [2001] EWHC 3 (QB), paras. 2, 4.
- 140.
Case C-381/98 Ingmar [2000] ECR I-9305, para. 10.
- 141.
Katz (1997), p. 6.
- 142.
Case C-381/98 Ingmar [2000] ECR I-9305, paras. 20–24.
- 143.
ibid paras. 20–21.
- 144.
ibid paras. 23–24.
- 145.
ibid para. 25.
- 146.
ibid para. 26.
- 147.
- 148.
As it had done, for example, in 1999 regarding Belgian labour and social security law, cf. Joined Cases C-369/96 and C-376/96 Arblade [1999] ECR I-8453.
- 149.
Verhagen (2002), p. 138; Staudinger (2001), p. 1976; Salah Mohamed Mahmoud (2006), p. 237; Magnus in: Magnus, Ebke, Hausmann et al. (Eds.) (2011), Art. 9 Rom I-VO, paras. 164–165.; Kindler (2011), p. 203; Staudinger in: Ferrari, Kieninger, Mankowski et al. (2012), Art. 9 Rom I-VO, para. 16; Ferrari in: Ferrari, Kieninger, Mankowski et al. (2012), Art. 3 Rom I-VO, para. 63; Roth opposes this view as far as Art. 9 Rome I Regulation is concerned: Roth (2010), pp. 319–320.
- 150.
Case C-381/98 Ingmar [2000] ECR I-9305, para. 21.
- 151.
Bundesgerichtshof (Germany), 30 January 1961, VII ZR 180/60, NJW 1961, 1061, 1062; Cour de cassation (France), 28 November 2000, Allium v Alfin et Groupe Inter Parfums, Clunet 2001, 511–523. Cf. also Rechtbank Arnhem, 11 July 1991, [1992] NIPR 100; Rechtbank Arnhem, 18 March 1993, [1993] NIPR 473.
- 152.
Treating provisions which aim at protecting structurally weaker parties as overriding mandatory provisions has raised difficulties in international private law for years; cf. Verhagen (2002), p. 144; Shelkoplyas (2003), p. 66. It also remains questionable to what extent provisions of this sort are encompassed by Art. 9 (1) Rome I Regulation, see Staudinger in: Ferrari, Kieninger, Mankowski et al. (2012), Art. 9 Rom I-VO, para. 22; Lüttringhaus (2014), p. 147.
- 153.
Cf. Verhagen (2002), p. 152.
- 154.
Basedow (1988), p. 27.
- 155.
See ibid 27 referring to the German provision on which the indemnity option in Art. 17 Commercial Agents Directive was modelled.
- 156.
Recitals 2 and 3 of the Commercial Agents Directive.
- 157.
For the ECJ’s treatment of remaining disparities in intra-EU cases cf. infra 202ff.
- 158.
Cf. supra 102.
- 159.
For example, the Late Payment Directive also aims at approximating the conditions of competition, see Recital 5 of Directive 2011/7/EU of 16 February 2011 on combating late payment in commercial transactions (recast) OJ [2011] OJ L48/1. Following the logic of Ingmar, this would mean that its mandatory provisions become overriding mandatory provisions. Parties from non-Member States would then, always be bound by, for example, the level of interest as defined in Art. 2 (5) to (7) Directive 2011/7/EU in spite of having agreed to the application of their own law, cf. Freitag and Leible (2001), p. 293.
- 160.
- 161.
Case C-339/89 Alsthom Atlantique v Sulzer [1991] ECR I-107, para. 15.
- 162.
Case C-381/98 Ingmar [2000] ECR I-9305, Opinion of AG Léger, para. 57.
- 163.
Case C-381/98 Ingmar [2000] ECR I-9305, para. 15.
- 164.
Basedow (1995), p. 32.
- 165.
Cf. supra 120.
- 166.
- 167.
As reflect in the opinion Supreme Court of the United States delivered by Stewart J. in Scherk v Alberto Culver Co 417 US 506, 519 (1974): ‘We cannot have trade and commerce in world markets and international waters exclusively on our terms, governed by our laws, and resolved in our courts.’
- 168.
Muir Watt and Radicati di Brozolo (2004), p. 94.
- 169.
Rühl (2011), p. 13.
- 170.
Grundmann (2001), p. 518.
- 171.
Cf. supra 102f, 118f.
- 172.
Advocate General Léger also drew a parallel between the field of EU competition law and the distortion of competition as referenced in the Directive’s second recital in his opinion, see Case C-381/98 Ingmar [2000] ECR I-9305, Opinion of AG Léger, paras. 27ff. This overlooks the fact that EU law differentiates between a distortion and a restriction of competition, cf. Schwarz (2002), p. 60.
- 173.
The Court of First Instance held that under public international law the application of EU Competition Law is justified when the restriction of competition has a foreseeable, immediate and substantial effect in the EU, cf. Gencor v Commission, T-102/96, ECR II-753, paras. 90, 92. For an analysis of the prospective development of this criterion in conflicts of law after Art. 6 Rome II Regulation came into force cf. Massing (2010), p. 189.
- 174.
- 175.
Commission Notice on agreements of minor importance which do not appreciably restrict competition under Article 81(1) of the Treaty establishing the European Community (de minimis) OJ 2001, C-368/13.
- 176.
Schwarz (2002), p. 64.
- 177.
- 178.
Case C-306/96 Javico v YSLP [1998] ECR I-1997, para. 24.
- 179.
- 180.
- 181.
Cf. Arts 5, 6, 7, 8 Rome I Regulation, Art. 14 Rome II Regulation.
- 182.
- 183.
Factors disrupting the flow of information between a principal and the market, such as differences in language, culture, political systems, education level or industrial development, are referred to as psychic distance, cf. Johanson and Wiedersheim-Paul (1975), p. 305.
- 184.
- 185.
Johanson and Vahlne (1977), p. 24. For further empirical evidence of this succession of stages cf. Martin et al. (1998), p. 566. It is also possible that a principal is able to leapfrog the stage of setting up a sales subsidiary by FDI, cf. Clark et al. (1997), p. 616; Johanson and Vahlne (2009), pp. 1420, 1422. Nevertheless, this involves terminating the commercial agency.
- 186.
Note that almost all sales subsidiaries in the export organisation in the Swedish special steel as well as the pulp and paper industry had been established through acquisition of the former agent or have been organised around some person employed by the agent, cf. Johanson and Vahlne (1977), p. 24.
- 187.
Cf. Basedow (1995), p. 32.
- 188.
- 189.
Grundmann (2001), p. 518.
- 190.
Whincop and Keyes (1999), p. 250.
- 191.
- 192.
- 193.
Cf. Basedow (1995), p. 32.
- 194.
Case C-381/98 Ingmar [2000] ECR I-9305, para. 25.
- 195.
Case C-381/98 Ingmar [2000] ECR I-9305, Opinion of AG Léger, para. 75.
- 196.
Commission of the European Communities, Report on the application of Article 17 of Council Directive on the Laws of the Member States relating to Self-Employed Commercial Agents (86/653/EEC), 23 July 1996, COM (1996) 364 final, 10.
- 197.
Weller (2005), p. 135.
- 198.
Another simple expedient would be a choice of court agreement, which is typically permitted for commercial agency relations according to Art. 23 Brussels I Regulation, cf. Roth (2002), p. 382.
- 199.
Cf. ECJ, 23 March 1982, 102/81 Nordsee v Reederei Mond, ECR 1095, para. 14; ECJ, 1 June 1999, C-126/97, Eco Swiss v Benetton International, ECR I-3055, para. 32.
- 200.
Accentuate Ltd v Asigra Inc [2009] EWHC 2655 (QB); Oberlandesgericht München, 17 May 2006, 7 U 1781/06, IPrax 2007, 322–324; Cour de cassation (Belgium), 3 November 2011, N ° C.10.0613.N, Air Transat v Agencies Air Belgium, available at http:/jure.juridat.just.fgov.be/pdfapp/download_blob?idpdf=F-20111103-3 accessed 26 November 2016.
- 201.
BGH (Germany), 5 September 2012, VII ZR 25/12, BeckRS 2012, 20587; Oberlandesgericht München (Germany), 17 May 2006, 7 U 1781/06, IPrax 2007, 322–324; Cour de cassation (France), 28 November 2000, Allium v Alfin et Groupe Inter Parfums, Clunet 2001, 511–523. The fact that the same substantive result can be reached both with an arbitration agreement and a choice of court typically brings about the same response by reviewing courts. As far as the respective decisions can be used to assess the Member States’ treatment of arbitration agreements and awards using this technique, they are therefore included in the present inquiry. Cf. in a case not related to EU law: Bundesgerichtshof, (Germany), 15 June 1987, II ZR 124/86, NJW 1987, 3193, 3194: ‘Aus demselben Grunde wurde auch einer Gerichtsstandsvereinbarung die Wirksamkeit versagt, die bei ihrer Anwendung in Verbindung mit einer Rechtswahlklausel zur Folge hätte, daß die zur Entscheidung berufenen Gerichte den Termineinwand nicht beachten (…). Nichts anderes kann gelten, wenn die Vereinbarung eines ausländischen Schiedsgerichts in Verbindung mit einer Rechtswahl dazu führt, daß dem Börseninländer der Termineinwand versagt wird, wie dies hier unstreitig der Fall wäre. Würde die Schiedsabrede anerkannt, stünden die börsenrechtlichen Schutzvorschriften zur Disposition der Parteien, was ihrem Charakter als unabdingbaren gesetzlichen Bestimmungen widerspräche.’
- 202.
For non-North American countries whose law does not provide for termination fees see infra 217.
- 203.
- 204.
- 205.
Cf. Art. 20 Commercial Agents Directive. The divide in the law of commercial agency between common law and the EU was echoed during the transposition of the Commercial Agents Directive in England, cf. infra 187.
- 206.
Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc [2014] EWHC 2908 (Ch), [2015] 1 Lloyd’s Rep 1, para. 12.
- 207.
Singleton (2010), p. 64.
- 208.
Basedow (2014), p. 352.
- 209.
Cf. supra 112ff.
- 210.
The combination of a choice of law clause and an arbitration agreement was referred to as a ‘tandem’ in the infamous footnote in Mitsubishi Motors Corp. v Soler Chrysler-Plymouth, Inc., 473 US 614, 637, n. 19 (1985); cf. Weller (2005), p. 246 for the development of the ‘tandem’ criterion in the United States.
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Engelmann, J. (2017). Assessment of Arts 17 to 19 Commercial Agents Directive and Their Impact on Cross-Border Commercial Agency. In: International Commercial Arbitration and the Commercial Agency Directive. International Law and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-47449-6_3
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