Article 57 of the 1995 Italian statute of private international law extends the scope of application of the choice of law rules of the 1980 Rome Convention on the law applicable to contractual obligations to any contractual obligation not covered by other international conventions.The object of this article is to offer a critical assessment of the main questions which arise from this choice of law provision. After a short introduction to the Italian statute of private international law, this article goes on to discuss the meaning of the renvoi to the Rome Convention in Article 57 and the relationship between the Contracts Convention and E.C. Treaty provisions on freedom of services. It concludes by analyzing the power of the European Court of Justice to interpret the choice of law rules of the Rome Convention that apply beyond the scope of this convention.

In order to be in a position to fully appreciate the analysis to be presented, it is necessary to provide some information about the recent codification of private international law in Italy. 

Until 1995 the Italian legal system had regulated its private international law on the basis of a small number of statutory provisions and a great deal of case law. Since 1980. many efforts have been made to reduce the subject to a compact written code, but all to no avail. On 31 May 1995, however, the Italian Parliament adopted a complete codification of Italian private international law, Legge 31 maggio 1995 n. 218 sulla riforma del sistema italiano di diritto internazionale privato.¹ This is a very detailed act which contains a number of provisions. The Federal Statute on Private International Law enacted by Switzerland in 1987 was the model of the new Italian law.² The Italian Act of 1995 is an example of macro rather than micro-private international law. It does not deal solely with questions of conflict of laws but extends to matters of jurisdiction and the recognition and enforcement of foreign judgements. In title III,section X, of the new statute of private international law entitled «Obbligazioni contrattuali» there is a provision, Article 57, which deals with the law applicable to international contracts. 

The rest of this article will look in detail at some of the most relevant questions which arise from this choice of law rule.

Article 57 of the 1995 Italian statute of private international law provides that the Rome Convention of 1980 shall apply to any contractual obligation not covered by other international conventions,³ Reference has been made to the text of the Rome Convention as it has been implemented by the law of June 19,1984.n.975. 

At first glance, Article 57 might seem a clear-cut provision which does not engender any serious difficulties.This impression,however,would be false since the reference to the law of June 19, 1984 is highly questionable at least for the following two reasons. First,it is well known that the Rome Convention can be renegotiated after ten years from the date of its entry into force and work has already been undertaken by the Commission on a proposed revision of this convention.⁴ Secondly,Accession Conventions of new states can modify the original text of the Rome Convention and also exclude specific contracts from the sphere of the uniform rules, Therefore,it is clear that in these circumstances some ambiguity might arise with regard to the law applicable to the contracts which are excluded from the sphere of application of the Rome Convention according to the Italian system of private international law.⁵

It is interesting to point out that a different solution has been adopted by the drafters of the 1995 Act in the text of Art. 3.par. 2. This provision extends the application of the jurisdiction rules of the Brussels Jurisdiction and Judgements Convention to cases in which the defendant is not domiciled in a Contracting State.⁶ However,a reference has been made to the Jurisdiction and Judgment Convention as modified by the subsequent conventions in force in Italy. 

It is worth noting that Article 57 does not extend the scope of application of the Rome Convention to any contractual matter excluded from the scope of application of this convention⁷ and not covered by other international conventions. There are, in fact, a number of provisions in the Italian statute of private international law which apply to some of these matters. These are the following: a)Articles 20 to 24 of the Italian statute of private international law contain conflict of law rules that apply to questions involving the status and legal capacity of natural persons, b) Article 25, par. 2 of the Italian statute provides that the law applicable to companies and other bodies corporate or unincorporated shall govern the creation,legal capacity, internal organization or winding up of companies and other bodies corporate or unincorporated and the personal liability of officers and members as such for the obligations of the company or body; c) Article 60 of the Italian statute contains provisions which apply to the relationship between an agent and a principal; d) Article 12 provides that civil proceedings in Italy are governed by the lia lin law. Furthermore, there are provisions in the Italian statute of private international law which extend the application of international conventions to any situation involving a choice between the laws of different countries. Article 59, par.l provides that the obligations arising under bills of exchange, cheques. promissory notes and other negotiable instruments are governed by the 1930 Geneva Convention on the law applicable to bills of exchange. Article 59, par. 2 makes clear that these rules either apply to obligations contracted beyond the territories of the Contracting State; it also states that any law specified by this Convention shall apply whether or not it is the law of a Contracting State.

The following paragraph will outline the different interpretations of the renvoi to the Rome Convention which have been suggested in scholarly writings.

Legal writers seem to be very divided as to the meaning of the renvoi to the Rome Convention i Article 57 of the Italian statute of private international law. As regards this, one can roughly identify three main views, which we should examine separately. 

The first view tends to demonstrate that the renvoi to the Rome Convention has no legal meaning.Indeed,some authors hold that there are provisions in the Italian statute of private international law such as Articles 42, par.2 and 59 that unlike Article 57 explicitly extend the spheres of application of the conventional rules.According to professor Picone⁸, this suggests that the renvoi to the Rome Convention has been inserted in the text of Article 57 only to stress the importance of this convention. This author holds firmly to the «postmodern» position on the nature of private international law rules,⁹ and maintain that there are conflict of law provisions which do not produce any legal effect, but merely «remind» interpreters of the conventions applicable in a specific situation.¹⁰

In sharp contrast to the above view,a good part of the literature opposes the trends favoring the interpretation of Article 57 as a provision without a legal meaning; such authors hold to traditional positions on the nature of conflict of law rules,and maintain that due to the introduction of renvoi to the Rome Convention in Article 57,conventional rules must apply to any contractual matters.¹¹

Lastly, a third approach attempts to reconcile the above two views by sustaining that the renvoi to the Rome Convention in Article 57 has a legal meaning but does not deter mme the application of the conventional rules to any contractual matter.According to the supporters of this thesis,conventional rules do not apply to the contractual matters which are covered by other rules of the Italian statute. On the contrary, conventional rules normally apply to contractual matters not covered by other statutory rules.¹² Judges, however, may exercise a discretionary power in this regard and apply other conflict of law rules to contractual matters not covered by other statutory rules.¹³

What we have succinctly described so far is a summary of scholarly views on the meaning of the renvoi to the Rome Convention, It appears that the language and context of Article 57 do not clearly support the last two interpretations, but strongly militate against the second. The phrase «in all the circumstances», read in isolation, would ordinarily tend to support the second interpretation. Other than this, there is no basis for the second interpretation. The context outside Article 57 is inconclusive on the meaning of «in all the circumstances», Articles 3,par. 2,42, 45 and 59 of the Italian statute of private international law which extend the scope of application of international conventions do not contain this phrase, Furthermore, such an extensive interpretation of the phrase «in all the circumstances» and of the scope of application of the conventional rules would go against the language and meaning of Articles 14 (ascertainment of foreign law). 18 (ren voi to federal legal systems) and 23 (capacity of persons) of the Italian statute. It is clear, in fact, that these provisions apply to contractual matters. There is no support in the drafting history and language of the new statute of private international law to maintain a prevalence of the conventional rules on these statutory provisions. 

The third interpretation would be a reasonable one. Logically it is a proper interpretation as well. However, it may not be the one that most readers will derive from the phrase «in all the circumstances», even if read in isolation, it does obviously conflict with the language in Article 57.

On the contrary, it appears that the first interpretation derives support from the language and context of Article 57 Professor Picone has pointed out correctly¹⁴ that there is little room for an extension of the conventional rules beyond the scope of application of the Rome Convention.¹⁵ Moreover, an analysis of all the evidence points overwhelmingly to this interpretation of Article 57 since this provision enlarges the Convention’s sphere of application to encompass only the arbitration agreements and the constitution of trusts which are not covered by other choice of law provisions.33 Finally, this interpretation is suggested by the fact that Article 57 of the 1995 statute responds to the primary concern of certainty and predictability. The basic purpose of this provision is clearly to bypass the difficulties inherent to the role of the Contracts Convention in the new codification of private international law.

By Article 57, the rules in international agreements are to take precedence over the rules of the Rome Convention to the extent that the former has already become a directly applicable part of domestic law. Of the international conventions that are most relevant to the current contract conflicts of laws, a reference should be made to the 1955 Hague Convention on the law applicable to international sales of goods.¹⁶

However,it seems that the phrase international agreements in Article 57 should be read as encompassing also international conventions of uniform law such as the 1980 Vienna Convention on international sales¹⁷ and the 1988 Ottawa Conventions on international leasing¹⁸ and factoring¹⁹ which contain conditions for the application of conflict of law rules. 

Moreover, it is clear that E.C. Directives such as the Insurance Directives,²⁰ which contain choice of law provisions,are to take precedence over the rules of the Contracts Convention,Article 20 of the Rome Convention clearly states that this convention shall not affect the application of provisions which, in relation to particular matters, lay down choice of law rules relating to contractual obligations and which are or will be contained in acts of the institutions of the European Communities or in national laws harmonized in implementation of such acts.²¹

On the contrary, it is highly questionable if the Treaty of Rome provisions on free movement are to take precedence over the rules of the Rome Convention. The impact of the principles of free movement on private international law rules, in fact, is increasingly being discussed in legal writings. Broadly speaking, one can identify three different views on this subject. 

The first view attempts to demonstrate that the Treaty of Rome provisions on free movement contains a choice of law rule itself, albeit in a disguised manner. Basedow²² argues that this rule should be identified in the principle of the most favorable law to the offeror According to Von Wilmowsky,²³ the conflict of law rule which has to be inferred from the free movement provisions states the freedom of the parties to choose the applicable law.

In sharp contrast to the above view, a good part of the literature opposes the trends favoring the affirmation of a conflict of laws rule in the free movement provision; such authors hold firmly to traditional positions on the nature of the E.C. rules, and maintain that the E.C.Treaty’s free movement provisions are in essence indifferent to private international law rules.²⁴

Lastly,a third approach attempts to reconcile the above two views by sustaining the existence of an interaction between Treaty freedoms and private international law rules. According to the supporters of this thesis, the E.C. Treaty’s provisions on free movement do not lay down a private international law rule, but neither are they completely indifferent to the functioning of E.C. and conflict of laws rules. Writers such as Radicati di Brozolo,²⁵ Roth,²⁶ Sonnenbergand²⁷ and Wouters²⁸ maintain that the E.C. Treaty provisions on free movement subject E.C. and national private international law rules in certain areas to a legitimacy pressure. This pressure,which is the Community-based justification and proportionality test, can in some cases result in the application of a provision other than the one designated by the private international law rule in question.

It is the present author’s opinion that, despite the suggestions which have been made by some writers in order to demonstrate the existence of an impact of free movement provisions on conflict of law rules, the E.C. Treaty provisions on free movement are completely neutral vis-à-vis the functioning of private international law rules for contracts.Restrictions to the law designated pursuant to conflict of law rules can be derived in certain fields such as that of insurance from the limitation of the general good. However, this circumstance does not prove any impact of the freedom of services on the choice of law rules of insurance contracts. It is well known, in fact, that the general good is a concept that finds no explicit legal basis in the E.C. Treaty but has been developed by the Court of Justice.²⁹ The scope of the general good is not to make explicit the limits the E.C. Treaty provisions on free movement impose on the functioning of private international law rules, but to fill up certain lacunae in the Treaty and to allow Member States to maintain certain national measures which constitute obstacles to the freedom of services in the Single Market when these are justified by general interests.Neither can the impact of the E.C.Treaty on choice of law rules for contracts be derived from the most recent Court’s case law. That national courts should carry on a justification and proportionality test in accordance with the case law of the Court of Justice if the operation of private international law provisions is liable to hinder the exercise of the freedom of services proves nothing more than the existence of a duty to interpret choice of law rules for contracts in conformity with Community law.

A word needs to be said also about the power of the European Court of Justice to interpret the Rome Convention, This subject will become actual when the 1988 First Protocol³⁰ on the interpretation by the European Court of Justice of the Rome Convention enters into force.³¹

It is uncertain whether the 1988 First Protocol allows the European Court of Justice to interpret the rules of the Rome Convention which apply to cases beyond the scope of this convention. For both solutions,one will find eminent supporters.³² In analyzing this problem, the starting point must be Article 2, par. 1 of the first of the Brussels Protocols. This provision states that any of the courts referred to below may request the Court of Justice to give any preliminary ruling on a question raised in a case pending before it and concerning interpretation of the provisions contained in the instruments referred to in Article /if that court considers that a decision on the question is necessary to enable it to give judgment. 

It seems arguable from the phrase provisions contained in the instruments that this article allows the European Court of Justice to interpret conventional rules in any case, i.e. even when they apply to cases beyond the scope of the Rome Convention.This conclusion is also supported by the drafting history and circumstances of the conclusion of the First Protocol. Moreover, it is suggested by the judgements of the European Court of Justice in the Dzodzi line of cases on the Court’s jurisdiction to give preliminary rulings on community provisions whose scope has been extended by national law.³³ Finally,it does not conflict with the basic purpose of Article 2, par. I of the First Protocol, It is well known, in fact, that the objective of the drafters of Article 2, par. I of the First Protocol was to allow the German courts to request the Court of Justice an interpretation of the provisions inserted in the preliminary section of the German Civil Code(EGBGB)ag implementation measures of the Rome Convention.³⁴ It is worth noting that these provisions are similar, but not identical to the rules of the Rome Convention.³⁵ Therefore,if the European Court of Justice may interpret provisions that are similar but not identical to the rules of the Rome Convention³⁶ then it can interpret the conventional rules which apply beyond the scope of the Rome Convention. 

The purpose of this article has been to highlight the most relevant questions arising from the choice of law provision for contracts and those connected with that rule in the new Italian statute of private international law. The reader who has been willing to stay with this author till the very end will not be surprised by the present author’s final statement that At. 57 of the 1995 Italian statute of private international law provides little help to the judge in answering the main questions which arise in the conflict of law process. From the above analysis, it is fairly clear, in fact, that, although renvoi to the Rome Convention was included in Article 57 of the new Italian statute of private international law. the outcome of actions requiring determination of the applicable law will be far from straightforward, certain and predictable. This is a great pity due to the present state of confusion about choice of law for contracts in legal writings. The applicable law to international contracts is a matter which will certainly engage the attention of the Law Commission when it returns to the subject. But reform of the conflict of law rules is a problem for another day. 

Yet,considering the sensitivity of the subject matter, it is very much to be hoped that the interpretation of the 1980 Contracts Convention by the European Court of Justice will provide very soon better help to the judge in ascertaining the governing law of contractual obligations than Art, 57 of the 1995 Italian statute of private international law.