1 Colloquium “Supernational Trends of Civil and Commercial Law

Colloquium “Supernational Trends of Civil and Commercial Law: Towards a Reunification of Private Law?” Organized by Osservatorio del diritto civile e commerciale Siena – Certosa di Pontignano 8 – 10 oct. 2015 Friday, oct. 9th, 2015 The proposal of a Common European Sales Law Gianni Ballarani Pontificia Università Lateranense The transition from the Proposal of a Common European Sales Law towards the new Online Sales Act [una riflessione di fondo sulla nuova occasione per l’Unione] . 1 Introduction. First of all, a sincere thanks to the organizers of this excellent initiative. When Professor Sirena asked me to take part in the initiative, describing the program, I chose to orient my reflection on the transition from the Proposal of a Common European Sales Law towards the new Online Sales Act, because, in my opinion, it offers the opportunity to reflect on the present and future of European Union. It is, in fact, evident to all of us as the Union is going through one of the most critical moment, in relation, not only to the effectiveness of its action, but above all to its very existence as Institution. But, next to the issues as the Greece case, the migrants problems, etc., there are others, less visible and knowable (to the general public), more tecnichs, demonstrating, in the same way, the limits of the very idea of the Union. Just think, by looking at a few years ago, the failure of the attempt of the European Constitution, then mitigated by the value attributed to the Nice Charter in the Lisbon Treaty. The problems arising in a twenty-­‐eight-­‐States Europe, in which the differences between legal systems and traditions emerge systematically, are evident. But equally evident, if not in some ways even more, the problems with regard to the attempt of codification of a European civil law. The question is paradoxical: in a Union, born as Economic Community because of the need to have a single – and single regulated – market and that is developed on the line of those needs, ensuring the free movement of persons, goods and services, how can be accepted that this Union has just still done few steps to create 2 an unitary and organic framework, at least in matters relating to contracts and obligations, to guarantee these needs1? The space of greater concrete union is precisely the market; and the market, imposes common and reliable rules. In a Union that has brought down its borders with Schengen ensuring the free movement of persons, goods and services, it is paradoxical that the borders will only consider for commercial trade’s rules. Instead, every attempt by the 1980 forward, starting from the works of the Lando Commission, last Common European Sales Law, has not reached the goal2. Moreover, different authoritative Authors, highlighting the strict need for a unitary regulatory policy, shows the limits of the results achieved3. Surely the harmonisation efforts involve objective difficulties, but the works of the Union should lead to efficient and competitive solutions in a reasonable time, otherwise it is the same system not to be efficient. On the specific matter of contract law, next to Regulations on private international law and conflicts, despite the various projects that have occurred in the '80s until today4, the only goals were achieved with the directives. 1
F. GOMEZ, The Debate around a European Contract Law Code and the Proposal of a Common C. CASTRONOVO, La Proposta per un Diritto comune europeo della vendita: alcuni quesiti fondamentali – 1° marzo 2012 (Audizione Pubblica), p. 1 ss., spec. 1 s.; G. PONGELLI, The Proposal for a Regulation on a Common European Sales Law (CESL) and Its Gradual Evolution, in Comparative Law Review, 2013, 4, p. 1 ss., spec. p. 5.; R. SHULZE, The CESL’s Innovative Features – A Brief Overview, in Contr. imp. Eu., 2013, 2, p. 485 ss., spec. p. 494 s. 3
O. LANDO, Comments and Questions Relating to the European Commission’s Proposal for a Regulation on a Common European Sales Law, in European Review of Private Law, 6-­‐2011, p. 717 ss., spec. p. 719; C. CASTRONOVO, La Proposta…, cit., p. 7. 4
A. ZACCARIA, La Commissione sale in cattedra. Basta con i diritti nazionali, sono anticaglie: tutti a scuola di “diritto comune europeo della vendita”, in Contr. imp. Eu., 2012, 1, 173 ss., spec. p. 173; R. MANKO, Contract Law and the Digital Single Market. Towards a new EU online consumers sales law?, EPRS – European Parliamentary Research Service, Sept. 2015, p. 1 ss., spec. p. 13. 2
3 But directives, although tend to harmonisation, do not make the unity of the discipline of Private Contract Law, but they fragment it further. Similar issues arise today with regard to the proposal to provide the Online Sales Act5. In February 2014, the European Parliament proposed to limit the CESL to cross-­‐
border business-­‐to-­‐consumer online transactions only (amanded Article 4 and 7 of the proposal CESL)6. In December of the same year, the Commission placed the CESL on the list of proposal to be modified or withdrawn, “in order to fully unleash the potential of e-­‐
commerce in the Digital Single Market”7. At least, in the last May (2015), The European Commission published the Digital Single Market Strategy8, with the aim to ensure a “better access for consumer and business to online goods and sevices across Europe”9, modernising and simplifying consumer rules for online and digital purposes10. This is the substrate of the European Online Sales Act. In this context, the main issues related to: 1. the subject matter; 2. the competence of the Union; 5
R. PELEGGI, Il progetto di Regolamento sul diritto comune europeo della vendita: una breve analisi nell’ottica dell’applicazione ai rapporti tra imprese, in Contr. imp. Eu., 2014, 2, p. 628 ss., spec. p. 629 6
R. MANKO, Contract Law…, cit., p. 17. 7
Annex 2 to the Commission Work programme 2015, COM(2014) 910 final, 16.2.2014, p. 12; R. MANKO, Contract Law…, p. cit., 18, nt. 80. 8
R. MANKO, Contract Law…, cit., p. 1. 9
J.C. JUNKER, A New Start for Europe: MyAgenda for Jobs, Growth and Democratic Change: Political Guidelines for the Next European Commission, 15 July 2015, p. 5; R. MANKO, Contract Law…, cit., p. 3, nt. 3. 10
N. KORNET, The Common European Sales Law and the CISG. Complicating or simplifying the legal environment? (Working Paper No. 2012/4 -­‐ Maastricht European Private Law Insitute), p. 3 ss., spec. p. 3. 4 3. the legal form: regulation or directive; 4. the optional nature; 5. the cross-­‐border and domestic problems; 6. the contents of the law. 1. The subject matter. First of all: it seems positive that the European Parliament opted to limit the CESL to cross-­‐border business-­‐to-­‐consumer online transactions only11. The matter of online consumer sales is still regulated by four different existing Directives – on consumer rights (2011), e-­‐commerce (2000), consumer sales (1999) and unfair terms in consumer contracts (1993) and has non significant lacuna, but the matter is fragmented12 (its hard to determinate, sometimes, the legal regime) and needs to be updated13 and unified14. This kind of transactions – the online ones – and those legal relationships between business and consumers, presents different kind of characteristics and different kind of problems, because the same players (traders and consumers) have different interests that needs different protection rules and different remedies. Just consider, for example, the on-­‐line sale of tangible property (a movie on DVD), and the on-­‐line sale of the same good, but immaterial, (same movie, but in digital format). 11
R. MANKO, Contract Law…, cit., pp. 17 e 20; R. PELEGGI, Il progetto…, cit., p. 635; G. PONGELLI, The Proposal…, cit., p. 12 [Objective (implementation) Criteria]. 12
Sulla complessità delle fonti e l’unitarietà dell’ordinamento e sui problemi della integrazione, cfr. P. PERLINGIERI, Il diritto civile nella legalità costituzionale secondo il sistema italo-­‐comunitario delle rd
fonti, vol. I, 3 ed., Napoli, 2006, p. 159 ss., spec. p. 265 ss. 13
R. MANKO, Contract Law…, cit. p. 8. 14
G. PONGELLI, The Proposal…, cit., p. 13; N. KORNET, The Common…, cit., p. 6 [for Sales Law]. 5 In the first case, the issues of the sale law are the traditional ones and are resolved by various consumers rights: rights to information, to cancel an online contract without giving a reason within 14 days of its conclusion, different remedies in case of non-­‐conformity of goods shipped to them [repair, replacement, termination of the contract], protection against unfair terms in the general terms and conditions imposed upon them by the trader). But in the second case, the problem of transfer of property is completely different. This demonstrates how the interests of palyers are radically different and, consequently, the remedies to set must be different, just becouse the costs of remedies are different (the cost for the replacement of tangible good – product costs, the cost of withdrawal, the cost of delivery – is different than the cost for the replacement of a software or an intangible good). For these reasons, I believe that this is the specific area where, more of others, we feel the need for new uniform rules that could harmonise the matter, avoiding fragmentation. 2. The competence of the Union. II spot: the approximation of laws (Article 114 TFEU): harmonisation of private law on the basis of Article 114 TFEU. Although Memeber States have not explicity conferred the competence upon the European Union15 to legislate in the field of contract law16, this matter may be 15
R. MANKO, Contract Law…, cit. p. 5, text and nt. 13: H.-­‐W. MICKLITZ, The EU as a Federal Order of Competences and the Private Law, in The Question of Competence in the European Union, ed. L. Azoulai, p. 132; S. WEATHERILL, Reflections on the EC’s Competence do Develop a “European Contract Law”, in European Review of Private Law [ERPL], 13.3 (2005), p. 405 ss., spec. p. 411. Court oj Justice (JCEU) has ruled in several occasions that the mandate to harmonise laws in order to ensure the proper functioning of the internal market does not give the EU legislature carte blanche to harmonise any laws it wishes: ex multis, Case C-­‐376/98 Germany v Parliament and Council (Tobacco advertising I). 6 implicitly encompassed by the European Union’s competence to harmonise Member States’ law whenever their divergence interferes with the smooth functioning of the internal market (Article 114 TFEU)17. The divergence between domestic laws is implicitly demonstrated by the existing directives (where problems of coordination with the Article 114 TFEU have been resolved): but, if the new instrument covers online cross-­‐border transiction only, the operation could be done to the aim of harmonise the legislative provisions in a new and unique ad hoc rules. And harmonising those rules will effectively help such exchanges to take place. In this case, its not hard to show that the rules of private law in question fall within the scope of free movement and obstruct entry to a market18. For online cross-­‐border contracts, each Member State should negotiate with everyone else to get a common framework; so, the Europen Union is in a better position to do so, in compliance with Article 114 TFEU). 3. The legal form: regulation or directive. The Digital Single Market Strategy does not specify whether the Online Sales Act will be implemented by a total harmonisation directive or by a regulation19. In the “Inception Impact Assessment”20, the Commission just states that proposed European Online Sales Act “will create uniform rules for digital products avoiding legal fragmentation”, speaking of “a fully harmonisation targeted set of mandatory 16
Obviously, “harmonisation of contract law always represents an interference with national legal system, with their cultures, traditions, as well as political and ideological choice”: R. MANKO, Contract Law…, cit., p. 5. 17
R. MANKO, Contract Law…, cit., p. 5. 18
R. MANKO, Contract Law…, cit., p. 6, nt. 18 e 19. 19
“The wording of the Digital Single Market Strategy, speaks of “harmonisation”, rather than “unification”, of the rules governing online sales in EU”: R. MANKO, Contract Law…, cit., p. 18. 20
European Commission, DG JUST – Unit A2, Inception Impact Assessment: Proposal on contract rules for online purchase of digital content and tangible goods, 10 July 2015, p. 3 s. 7 rules”. A “fully harmonisation” could be realised by way of a directive, that bring national laws closer to each other, or by way of regulation, that create a new uniform European law21. We have also to consider that, although the actual effects of total harmonisation (by directive) and unification (by regulation) are very similar22, political choice and political effect are very different, demonstrating the strongness of the European action in this matter. Theoretically, a directive is more in line with the principles of subsidiarity and proportionality, because it respect more legal cultures and legal tradition of Member States23 (“which are particularly cherished in the field of contract law” 24), and regulation 25 is the most far-­‐reaching instuments of European law which completely replace previously existing national law26. But, if the Union limits the impact of this Act to the cross-­‐border transcactions only, maybe the problem is more easy to be solved. A reflection on the need to use the instrument of the regulation and not that of the Directive, can be based precisely on the fundamental principles for the Union's legislative action 27 and, in particular, on the principle of subsidiarity (Article 5(3) TEU) and on the principle of proportionality (Article 5(4) TEU)28. 21
““Harmonsation” or “approximation” is commonly understood as bringing national laws closer to each other (by way of a directive), whilst “unification” is understood as their replacement by a uniform (EU) legal act (by way of a regulation)”: R. MANKO, Contract Law…, cit., p. 18, nt. 83. 22
R. MANKO, Contract Law…, cit., p. 20. 23
B. KURCZ, Harmonisation by means of Directives, in European Business Law Review Issue 12.11-­‐12 (2001): 287-­‐307, p. 288; R. MANKO, Contract Law…, cit., p.18 s., nt. 87.; G. PONGELLI, The Proposal…, cit., p. 17 s. 24
R. MANKO, Contract Law…, cit., p.19, nt. 88. 25
R. MANKO, Contract Law…, cit., p. 18, nt. 85. 26
G. PONGELLI, The Proposal…, cit., pp. 4 and 16; R. MANKO, Contract Law…, cit., p. 18, nt. 86. 27
R. MANKO, Contract Law…, cit., p. 4. 28
G. PONGELLI, The Proposal…, cit., p. 19 8 According to the principle principle of subsidiarity, the European Union may legislate in a given area if Member States are not able to deal with it efficently on their own, and if the European Union is in a better position to do so29: but, as previously stated, this is demonstrated by the fact that in the field, each Member State should have to negotiate with everyone else to get a common framework; and so the European action is justifiable because it is in a better position to do so. According to the principle principle of proportionality, that governs the choice of legal instrument, non-­‐binding instruments should be preferred over bidding ones30 and the preference needs to be given31 to the one less intrusive32. But a regulation apply exclusively to cross-­‐border legal relationship could be less invasive and more proportionate than a directive because this last option is also applicable to domestic transactions33. Moreover, the choice of a regulation would impose a unitary discipline and a final position for a model -­‐ the sale -­‐ that is the main form of contract; This would guide future European intentions about civil contract, determining the main structure of this. Moreover again, the market, which requires certainty, simplification, efficiency speeds, puts us at a crossroads: either we arrive at a uniform regulation or probably any other future intention is likely to fail. 4. The optional nature. With regard to the CESL, the main criticism has been directed at the will to create an “optional instrument”34; a parallel (second35 or 28th36) regime of sales law that governing contracts37 if the parties opt for it (the “blue botton” idea)38. 29
R. MANKO, Contract Law…, cit., p. 6, nt. 21. “Within the remit of Article 114 TFEU, both directives and regulations may be issued”: R. MANKO, Contract Law…, cit., p. 7, nt. 26. 31
R. MANKO, Contract Law…, cit., p. 7, nt. 27. 32
“In principle, to minimum harmosisation directives – which set a minimum common standard – before total harmonisation directives – which do not leave Member States any choice; and in principle, to directives before regulations”: R. MANKO, Contract Law…, cit., p. 7, nt. 28. 33
R. MANKO, Contract Law…, cit., p. 19. 30
9 This not seems the better way to unify or harmonise national laws39. Moreover, the Commission's decision to base the proposal of the CESL on Article 114 TFEU (the legal basis for the approximation of laws -­‐ harmonisation) rather than the flexibility clause of Article 352 TFEU40, collides with those cases law of the European Court of Justice according to which the notion of “measures for harmonisation” (within the meaning of Article 114 TFEU) do not include new (EU) instruments that co-­‐exist with national rules41, as also many Authors argued42. With the new proposal for an European Online Sales Act, the Commission almost certainly will leave the idea of an optional instrument43. 5. The cross-­‐border and domestic problems. The Digital Single Market Strategy explicits that the proposal for an European Online Sales Act will cover all online B2C transactions, cross-­‐border or domestic44. That there is no big differences, in practice, between cross-­‐border and domestic transactions for the specific sector of online sales, it is easy to demonstrate. 34
O. LANDO, Comments and Questions…, p. 717; R. PELEGGI, Il progetto…, p. 631; S. PATTI, Relazione di sintesi, in Contr. imp. Eu., 2013, 2, p. 672 ss., spec. p. 673. 35
N. KORNET, The Common…, p. 9. 36
V. PULJKO, M. ZUPAN, Legal and practical implications of the proposed Common European Sales Law, in [… sito internet], p. 717 ss., spec. p. 719. 37
R. MANKO, Contract Law…, cit., p. 1. 38
R. MANKO, Contract Law…, cit., p. 14. 39
F. GOMEZ, The Debate…, cit., pp. 88 and 93. 40
R. MANKO, Contract Law…, cit., p. 15 s. 41
Opinion 1/94: The Community (…) may use Article 352 TFEU as the basis for creating new rights superimposed on national rights: cfr. R. MANKO, Contract Law…, cit., p. 15, nt. 67, and p. 16. 42
The Article 114 TFEU cannot be the basis for an optional instrument, but that the flexibility clause (Article 352 TFUE) should be used instead: J.W. Rutgers, European Competence…, p. 316 s.; R. MANKO, Contract Law…, cit., p. 15, nt. 66. 43
European Commission, DG JUST – Unit A2, Inception Impact Assessment: Proposal on contract rules for online purchase of digital content and tangible goods, 10 July 2015. 44
R. MANKO, Contract Law…, cit., p. 20. 10 Just think of how, for a buyer in Rome that buying online a material good, nothing changes if he buys it from a trader in Rome, in London or in Paris. Do not change the interest of the buyer; do not change the protections this part would like to have (delivery, product conformity, replacement costs, right of withdrawal, etc.). But, despite this, the will to limit the applicability of the regulation only to online cross-­‐border transaction, leaving domestic transactions ruled by national contract law systems, would be preferable for three different reasons45: 1. the risk of systematic incoherence46; 2. the risk of raising a problem of European competence, in relation to the principle of subsidiarity and proportionality; 3. the difficulties of coordination between the Online Sales Act and the different domestic rules of the Member States. Moreover, cannot be imposed in Countries like Italy that the sale will realized with the delivery, without asking to our Country to deny its legal tradition; [at the same time, we cannot ask other countries to consider the sale as a consensual contract, for the same reasons47]. And even if it were accepted, it would lead to complex conflicts of intertemporal law not easily solved. Of course, it remains to resolve the issue of a second regime governing sales contracts and, consequently, the problem of possible conflicts; but the examples of ad hoc rules laid down in specific subjects are not lacking; just consider the Vienna Convention48 and the Rome I Regulation49, in which the future Online Sales Act will still relate 50. 45
O. LANDO, Comments and Questions…, p. 721. R. MANKO, Contract Law…, cit., p. 22. 47
P. STANZIONE, Il regolamento di Diritto comune europeo della vendita, in Contr., 2012, 7, p. 624 ss., spec. p. 628. 48
Confronta la CISG e la CESL R. SHULZE, The CESL’s…, cit., p. 510 s; cfr., inoltre, R. PELEGGI, Il progetto…, p. 632; L. DIMATTEO, How innovative is the Common European Sales Law? Using the CISG as a Benchmark, in Contr. imp. Eu., 2013, 2, p. 512 ss. 46
11 In the specific context of the Online Sales Act, given the different rules on the sale of State and State, I believe that the Union could choose the discipline of the sale on the basis of a simple and basic principle of democratic majority, adopting, at the European level, the model of discipline common to the majority of the Member States, with specific adaptations; and then proceeding, if necessary, to a progressive harmonisation with the Directives. And this, in terms of efficiency, could be accomplished in a very short time, with the political will to implement it. 6. The contents of the law. Finally, I think it is to be welcomed the hypothesis, firstly gained with the proposal of the CESL51, to support the specific sales rules with a substantial part of the general contract provisions 52 , without taking a position on the rules more representative of the specific interest of the Member States (legal capacity to enter into a contract, illegality if the contract, immorality of the contract, representation to enter into the contract, plurality of contracting parties, change of parties, etc.), leaving these parts governed by the laws of the individual Member States and solving the conflicts on the basis of Regulation Rome I53. 49
P. SIRENA, Diritto comune europeo della vendita vs. Regolaamento di Roma I: quale futuro per il diritto europeo dei contratti?, in Contr., 2012, 7, p.634 ss., spec. p. 637. 50
N. KORNET, The Common…, p. 9. Al riguardo, the Commission is still working on the Country of orignine principle (that will allow sellers to “rely on their national laws” which are to be “based on a focused set of key mandatory EU contractual rights”), to govern the existing risk of a “legal surprise” of rules from autside the scope of a harmonisation or unification measure: R. MANKO, Contract Law…, p. 22. -­‐ Even if the new law were a total harmonisation directive or a directly applicable regulation, the issue of overriding mandatory rules would still be relevant for all aspect outside the scope of the EU Online Sales Act, such as (for instance) capacity to enter into a contract, immorality of the transaction or representation: R. MANKO, Contract Law…, cit., p. 25. 51
R. PELEGGI, Il progetto…, p. 637. 52
O. LANDO, Comments and Questions…, p. 718: strange combination…; C. CASTRONOVO, La Proposta…, p. 2 s.. 53
Cfr. G. D’AMICO, Il Diritto comune europeo della vendita, in Contr., 2012, 7, p. 611 ss., spec. p. 623. 12 This could be the most efficient solution; it seems to be reflected in the fact that the contract of sale is the fundamental model contract54. Thus, to regulate the sale, dictating the fundamental principles of the future European contract law, would mean draw the basic structure for each additional type of contract 55. 54
F. GOMEZ, The Debate…, cit., p. 95. P. SIRENA, Diritto comune…, p. 634. 55
13 Bibliography C. CASTRONOVO, La Proposta per un Diritto comune europeo della vendita: alcuni quesiti fondamentali – 1° marzo 2012 (Audizione Pubblica), p. 1 ss.; ID., L’utopia della codificazione europea e l’oscura Realpolitik di Bruxelles dal DCFR alla proposta di Regolamento di un diritto comune europeo della vendita, in Eu. dir. priv., 2011, 4, p. 837 ss., passim. G. D’AMICO, Il Diritto comune europeo della vendita, in Contr., 2012, 7, p. 611 ss., spec. p. 623. L. DIMATTEO, How innovative is the Common European Sales Law? Using the CISG as a Benchmark, in Contr. imp. Eu., 2013, 2, p. 512 ss. F. GOMEZ, The Debate around a European Contract Law Code and the Proposal of a Common European Sales Law, in Contr. imp. Eu., 2012, 1, 87 ss. N. KORNET, The Common European Sales Law and the CISG. Complicating or simplifying the legal environment? (Working Paper No. 2012/4 -­‐ Maastricht European Private Law Insitute), p. 3 ss. B. KURCZ, Harmonisation by means of Directives, in European Business Law Review Issue 12.11-­‐12 (2001): 287-­‐307, p. 288; R. MANKO, Contract Law…, p.18 s., nt. 87. O. LANDO, Comments and Questions Relating to the European Commission’s Proposal for a Regulation on a Common European Sales Law, in European Review of Private Law, 6-­‐2011, p. 717 ss. R. MANKO, Contract Law and the Digital Single Market. Towards a new EU online consumers sales law?, EPRS – European Parliamentary Research Service, Sept. 2015, p. 1 ss. H.-­‐W. MICKLITZ, The EU as a Federal Order of Competences and the Private Law, in The Question of Competence in the European Union, ed. L. Azoulai, p. 132. S. PATTI, Relazione di sintesi, in Contr. imp. Eu., 2013, 2, p. 672 ss., spec. p. 673. R. PELEGGI, Il progetto di Regolamento sul diritto comune europeo della vendita: una breve analisi nell’ottica dell’applicazione ai rapporti tra imprese, in Contr. imp. Eu., 2014, 2, p. 628 ss. G. PONGELLI, The Proposal for a Regulation on a Common European Sales Law (CESL) and Its Gradual Evolution, in Comparative Law Review, 2013, 4, p. 1 ss. V. PULJKO, M. ZUPAN, Legal and practical implications of the proposed Common European Sales Law, in […sito internet], p. 717 ss., spec. p. 719. R. SHULZE, The CESL’s Innovative Features – A Brief Overview, in Contr. imp. Eu., 2013, 2, p. 485 ss. P. SIRENA, Diritto comune europeo della vendita vs. Regolaamento di Roma I: quale futuro per il diritto europeo dei contratti?, in Contr., 2012, 7, p.634 ss. P. STANZIONE, Il regolamento di Diritto comune europeo della vendita, in Contr., 2012, 7, p. 624 ss., spec. p. 628. S. WEATHERILL, Reflections on the EC’s Competence do Develop a “European Contract Law”, in European Review of Private Law [ERPL], 13.3 (2005), p. 405 ss. A. ZACCARIA, La Commissione sale in cattedra. Basta con i diritti nazionali, sono anticaglie: tutti a scuola di “diritto comune europeo della vendita”, in Contr. imp. Eu., 2012, 1, 173 ss. 14