Lawlor v Sandvik Mining & Construction Mobile Crushers and Screens Ltd

Under the Rome Convention, an implied choice of law requires a real choice demonstrated with reasonable certainty by the contract or circumstances. The court cannot infer the law the parties might have chosen where they had no clear intention to choose. Subsequent conduct is admissible only insofar as it illuminates intention at the time of contracting.

Where there is no choice, the characteristic performer’s principal place of business ordinarily identifies the closest connection under article 4(2). Article 4(5) permits consideration of all the circumstances, including subsequent events, but the party relying on it bears the burden of proof. The agency agreement was governed by Spanish law.

The claimant acted as the defendant’s commercial agent from about 1994 or 1995 until 2009, principally selling mobile crushing and screening equipment in Spain. The agency was unwritten and contained no express choice-of-law clause. The parties agreed that the claimant was a commercial agent within the meaning of Council Directive 86/653/EEC, implemented in England by the Commercial Agents (Council Directive) Regulations 1993 and also implemented in Spain.

The preliminary issue was whether the agency agreement was governed by English or Spanish law. The question was determined under the Rome Convention, incorporated by the Contracts (Applicable Law) Act 1990.

1. Applicable law. The agency agreement was governed by Spanish law.
2. Implied choice. Article 3 requires a choice to be demonstrated with reasonable certainty. The court cannot infer a choice which the parties might have made where they had no clear intention to make one. Subsequent conduct may be considered only insofar as it sheds light on intention when the agreement was concluded. English-law contracts, later employment negotiations and the defendant’s general contracting practice did not establish an implied choice of English law.
3. Closest connection. The claimant supplied the characteristic performance. Under article 4(2), the relevant presumption concerned his principal place of business, or the place through which performance was effected under the agreement. His agency was performed primarily in Spain. Visits to the defendant’s English factory did not make England a second place of characteristic performance.
4. Article 4(5). Article 4(5) permits the presumptions to be disregarded where the circumstances as a whole show a closer connection with another country. Following Intercontainer Interfrigo, the court could consider relevant factors, including later events and connected contracts, without first having to rebut the article 4(2) presumption. The claimant bore the burden of showing a closer connection with England. The English links were outweighed by the deeper Spanish connection.
5. The court invited corrections and a draft order. It indicated that it might prevent the claimant proceeding with the compensation claim until he demonstrated that the relevant income had been declared to the Spanish and Irish authorities, and sought clarification of the defendant’s payment arrangements.