"If it's not broken, don't fix it" was the business message sent today to the European Commission in response to the proposed revision of the Rome Convention of 1980, which deals with disputes over international contracts.

"Rome I", as it is known, regulates which law should apply when a dispute arises over a contract. The International Chamber of Commerce (ICC) fears that if the European Commission revises the Rome Convention, existing global commercial law instruments could be undermined. This could lead to a fragmented legal system obstructing international trade.

"International trade and increasing economic integration are based on business contracts concluded and performed across country borders. Thus, the rules concerning choice of law for international contractual relationships have a significant impact on the global economy", said Dr Georges Affaki, Head of Energy, Commodities and Project Legal Affairs, BNP Paribas.

"ICC believes that the European Commission's best choice would be to seek a mandate for collective ratification of the Assignment Convention, which is an international treaty, by all EU countries," added Dr Affaki, who is also the Vice-Chair of the ICC Banking Commission. The Assignment Convention is an instrument of the UN Commission on International Trade Law (UNCITRAL).

Dr Affaki added: "This would allow the European Commission to confine their revision of Rome I, to removing Article 12, which would then be redundant because it covers the same issues."

However, ICC experts question whether Rome I needs revising at all. "Companies base their decisions and business models on current laws and regulations. Tampering with the text of legal instruments therefore necessarily has a negative side effect that must be balanced against the expected benefits." said Michael Hancock of Salans in Paris, the international business lawyer who co-heads ICC's work on jurisdiction and applicable law issues.

Another ICC concern is that the European Commission may be taking a one-size-fits all approach by failing to make a clear distinction between B2B contracts (contracts between two businesses) and B2C contracts (contracts between a business and a consumer) when employing the term 'weaker party'. While the term is applicable to B2C agreements, it is inappropriate in the context of B2B contracts.

"The economic strength of two businesses will always be different", Mr Hancock added, "There is no need for this to be specifically addressed in the wording of a regulation. Any business retains the option of seeking the best business terms available from potential partners, except in the relatively rare case of abuse of a dominant position."

Earlier this year an ICC survey of 100 leading companies underlined the importance of jurisdiction and applicable law issues in international contracts. Forty percent of the companies consulted said that there had been occasions when a significant business decision had been determined by jurisdictional uncertainty.

"We are currently conducting a new and more comprehensive survey on international jurisdiction issues, and we look forward to presenting the European Commission with the results of this survey later this year", said Jonas Astrup, Policy Manager for ICC's Commission on Commercial Law and Practice.

Rome I will be on the agenda when ICC's Commercial Law experts from all over the world meet on 26 November in London to discuss legal issues affecting international business. Other topics include electronic contracting, mergers and acquisitions, international legal harmonization, software licensing, and jurisdiction and applicable law issues.

For further information or interviews contact Jonas Astrup, ICC Policy Manager Click here to send a mail. +33 1 49 53 28 26 .

Commission on Commercial Law and Practice