Substantive party autonomy

Substantive or ‘material’ party autonomy refers to the validity and scope of clauses incorporated into the contract for the carriage of goods by sea by the original parties. It includes the possibility available to the parties to establish pacts or clauses in the contract that regulate specific aspects of the contract dynamics, within the limits of a specific legal system. It does not refer to a choice of law but to the specific provisions of such laws that incorporate the contract under the party autonomy (incorporation by reference). Legal norms incorporated by reference ‘are private agreements between the parties’, i.e., ‘material clauses of the contract’.^[1] They are not substantive law in the sense that they are applicable to the contract to the extent that the law of the contract allows it. The distinction between con-flictual party autonomy (choice of law) and substantive (incorporation by reference) party autonomy according to the Rome I Regulation requires a clear and unequivocal choice of law. For example, a legislative change in the law incorporated by reference into a contract does not affect an inter partes agreement. The law chosen by the parties continues to apply to the same extent that the law allows.

The contracting parties can incorporate by reference provisions that are not per se applicable to the contract, such as the Paramount Clause. The parties cannot rule out certain parts of a convention, as some courts have pointed out; these rules are either fully applicable or non-applicable. The validity of the incorporation of these rules depends on the law of the contract. Commercial usage, customs and clauses such as INCOTERMS 2020, or general references to the lex mercatoria (merchant law) such as the UCP 600® are not part of any national law. However, a vague reference to lex mercatoria does not constitute an effective incorporation by reference, since it fails to identify the rule or rules incorporated into the contract.

In order to analyse the limitations on party autonomy, it must be pointed out that a national judge decides the subject matter on the merits according to the substantive law. However, when the parties have made a conflictual choice of law, does the substantive law guarantee that the judge will apply English, Spanish or any other foreign law? It does not. The provisions of a predetermined set of national rules provide for the conflict rule of the domestic law that the judge hearing the case applies. The lex fori (law of the forum) is applied to determine the validity or not of such clause. However, the problem emerges by gathering the procedural party autonomy and the conflictual party autonomy applied to different and non-harmonised legal frameworks: domestic, conventional and EU procedural laws.

The lack of harmonisation of commercial maritime laws in the EU leads to a chaotic situation since legislation varies from country to country. This probably is in accord with the interests of the shipping market, in this author’s opinion.

Conflictual party autonomy

Conflictual party autonomy here refers to the choice of law applicable to contracts for the carriage of goods by sea. The law, ius, must be separated from the forum. The entire maritime transport sector is not governed by dispositive rules: agreements between parties face limitations.^[2] ‘Party autonomy in choice of law for contracts’ is considered by this author to be a missing piece of the puzzle, that is, an international commercial regulation that does not exist globally in the shipping sector - although the Rome I Regulation applies in the EU.

• [1] François Rigaux, ‘Examen des quelques questions laissées ouvertes par la Convention de Rome sur la loi applicable atix obligations contractuelles’ (1988) Cahiers de droit Européen 306. 2 Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations OJ 2008, L177/6 (Rome I Regulation); in force on 17 December 2008, it applies to all EU Member States except Denmark; despite its doubts, the UK eventually opted in, replacing the Contracts (Applicable Law) Act 1990, which remained applicable to contracts signed before the Rome I Regulation came mto force. 3 Recital 13 of the Rome I Regulation: ‘This Regulation does not preclude parties from incorporating by reference mto their contract a non-state body of law or an international convention’. 4 Calvo Caravaca and Carrascosa González, Derecho Internacional Privado (n 54); Carrascosa González (n 54) 164-168. 5 See case RJ 1980/4786 of the Spanish Supreme Court, Banco Vitalicio de España v. Naviera Asón SA, 21 June 1980; Dominique Bureau and Horatia Muir Watt, Droit international privé: Tome //(Presses Universitaires de France 2007) 324-325; Jonatan Echebama Fernández, ‘Paramount Clause and Codification of International Shipping Law’ (2019) 50(1) J Mar L & Com 45. 6 Paul Lagarde, ‘Première Partie - Doctrine et Chroniques - Remarqties sur la proposition de règlement de la Commision européenne sur la loi applicable aux obligations contractuelles (Rome I)’ (2006) 95(2) Revue Critique de Droit International Privé 331,336. 7 International Chamber of Commerce (ICC), ‘Incoterms 2020: ICC Rules for the Use of Domestic and International Trade Terms’ (2020). 8 International Chamber of Commerce (ICC), ‘Uniform Customs and Practice for Documentary Credits (UCP), 2007 Revision, ICC Publication No. 600 (UCP 600)’ (2007). 9 Andrea Giardina, ‘La lex mercatoria e la certezza del dintto nei commerci e negli investimenti intemazi-onali’ 28 Rivista di diritto internationaleprivato e processuale (1992) 461. Specific rules of a concrete state law can be also subject to incorporation, as well as ivies prepared by experts and professors such as the UNIDROIT Principles of International Commercial Contracts or the Principles of Etiropean Contract Law; see Calvo Caravaca and Carrascosa González, Derecho Internacional Privado (n 54); Carrascosa Gonzalez (n 54) 164-168.
• [2] Pierre Mayer and Vincent Henze, Droit international privé (8th edn, Montchrestien 2004) 514-519. 2 Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recogmtion and enforcement of judgments in civil and commercial matters [2012] OJ 2012, L351/1 (Brussels I Recast Regulation). 3 On the analysis of the specific need for harmonisation of a specific normative sector, see Riccardo Luz-zatto, Metodi di unificazione del diritto marittimo e interpretazione uniforme (1999) 1 Dir Marit 148-151. 4 In accordance with Recital 15 of the Brussels I Regulation (recast): The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction; equally. Recital 16 of the Rome I Regulation specifies that to contribute to the general objective of this Regulation, legal certainty in the European judicial area, the conflict-of-law mles should be highly foreseeable. The courts should, however, retain a degree of discretion to determine the law that is most closely connected to the situation. 5 Among others, considerations on uniform law and PIL, as well as the Treaty regime, can be seen in A Mal-intoppi, Diritto uniforme e diritto internazionaleprivato in tema di trasporto (Gniffrè 1955) 38-84.