Tag Archive for: overriding mandatory provisions

RabelsZ 90 (2026): New issue alert

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Issue 1 of RabelsZ 90 (2026) has just been released. It contains the following articles which are all available Open Access: CC BY 4.0:

 

Holger Fleischer, Felix Bassier, Samuel Insull und Ivar Kreuger: Finanzskandale als Katalysatoren der US-amerikanischen Wertpapiergesetze von 1933/34 [Samuel Insull and Ivar Kreuger: Financial Scandals as Catalysts of US Securities Law from 1933 and 1934], pp. 1–57, https://doi.org/10.1628/rabelsZ-2026-0008

The US securities laws from 1933 and 1934 remain to this day the international benchmark for modern capital market regulation. Like many other regulations in this area, the legislation was preceded by major scandals. This article reconstructs the two leading scandals surrounding electricity magnate Samuel Insull and »Match King« Ivar Kreuger. After situating them within the spectrum of scandals occurring in the Roaring Twenties, the article considers these incidents in the larger context of research on corporate law scandals.

 

Bero Gebhard, Julian Greth, Dispositive Organhaftung: Perspektiven aus Rechtsvergleichung und Rechtsökonomik [Contracting Around Director Liability: Perspectives from Comparative Law and Law & Economics], pp. 58–91, https://doi.org/10.1628/rabelsz-2025-0070

The business judgment rule is intended to protect managers and board members from personal liability in connection with business decisions, thereby enabling risk-optimized decision-making. However, the requirements of an adequate information base and reasonableness preserve incentives for risk-averse behaviour, and the possibility of erroneous evaluations of business decisions by courts creates further incentives for board members to shy away from risk, yet such risk aversity is inefficient in a diversified shareholder structure. This article examines mechanisms for excluding the personal liability of board members in Delaware (USA) and Switzerland. The policy reference point is the ex ante dispositive liability regime under § 102(b)(7) Delaware General Corporation Law, whereas Swiss corporate law relies on less effective ex post mechanisms. The authors call for the implementation of an opt-out model for liability due to breaches of duty of care, similar – but not identical – to the legal framework in Delaware; such a model could be especially beneficial to high-growth companies. To this end, a policy proposal is developed that should also allow for exemption from liability for gross negligence.

 

Julia Kraft, Pflichtprüfung und Anschlusszwang im Kontext grenzüberschreitender Genossenschaftsmobilität. Wie viel Zwang verträgt die Freiheit? [Mandatory Audits, Membership in Umbrella Organizations, and the Cross-border Mobility of Cooperatives.
How Much Constraint Is Still Freedom?], pp. 92–119, https://doi.org/10.1628/rabelsZ-2026-0003

The cross-border mobility of companies is an expression of the freedom of establishment, which also applies to cooperatives, as emphasized in Art. 54(2) of the TFEU. But German cooperative law doubly constrains the freedom of establishment. First, every registered cooperative (eingetragene Genossenschaft, eG) under German law is subject to mandatory periodic audits. Second, cooperatives must belong to an umbrella organization that the state has authorized to perform the audits. Both obligations – core elements of the German act on cooperatives – may conflict with the freedom of establishment. Considering the German government’s 25 June 2025 draft of an act to »Strengthen the Legal Form of the Cooperative«, this article explores the tension between regulatory constraints and the freedom of establishment and assesses whether the requirements imposed by German cooperative law are compatible with it.

 

Christian Rüsing, Zum Verhältnis von Internationalem Privat- und Verwaltungsrecht.
Eine Untersuchung am Beispiel von Eingriffsnormen im Europäischen Kollisionsrecht [The Relationship between Private International Law and Administrative International Law.  The Example of Overriding Mandatory Provisions in EU Conflict of Laws]m pp. 120–156, https://doi.org/10.1628/rabelsZ-2026-0005

The relationship between private international law and administrative international law is rarely examined in detail. Yet both areas would benefit from considering the other. In the context of private international law, this is particularly pertinent in relation to overriding mandatory provisions. In the HUK-Coburg II case, the CJEU recently established two unwritten requirements for the enforcement of these provisions: Courts may enforce such provisions only if, first, the legal situation in question has sufficiently close links with the Member State of the forum and, second, the public interest cannot be achieved through the application of the lex causae. This article demonstrates that the criterion of a sufficiently close link with the Member State of the forum is viewed differently when considered alongside the principles of administrative international law. The second requirement, the necessity test, has – among other things – a significant influence on approaches to coordinating administrative and private international law through the instrument of overriding mandatory provisions. The article therefore examines how both areas can be better coordinated, at least within the internal market.

 

Mary-Rose McGuire, Das auf Datennutzungsverträge anwendbare Recht.
Eine kritische Analyse der Einordnung von Art. 3 DSGVO und Art. 1 Abs. 3 Data Act als international-privatrechtliche Kollisionsnormen [The Law Applicable to Data Sharing Agreements.  A Critical Analysis of the Classification of Article 3 GDPR and Article 1(3) Data Act as Conflict-of-law Rules under Private International Law], pp. 157–190, https://doi.org/10.1628/rabelsZ-2026-0007

The European legislature has issued a series of legal acts aimed at creating a European data space. Common to these instruments is that they establish a regulatory framework for this data space but leave it to be filled by the relevant actors through a network of contracts. The acts include only isolated requirements for these contracts, and their conclusion, validity, and termination is otherwise governed by national law. With regard to such data use contracts, harmonized private international law does not yet provide any specific rules. The two central legal acts – the GDPR and the Data Act – contain provisions only on the territorial scope of application. Against this background, it is subject to debate whether the general conflict-of-law rules of the Rome I and Rome II Regulations apply or are superseded by conflict-of-law rules “hidden” in the rule on the scope of application. Practical differences arise particularly with regard to the admissibility of choice of law and the applicability of European data law in relation to third countries. The analysis shows that a reliable determination of the applicable law requires distinguishing between the existence of rights to data, contracts relating to data, and breaches of obligations relating to data. The article advocates application of the Rome Regulations on determining the law applicable to contracts and torts with adaptation to the specific characteristics of the digital space.

 

BOOK REVIEWS

This issue also contains several reviews of literature in the fields of comparative private and private international law and on related topics (pp. 191–221).

HUK-COBURG II: A Case on Mandatory Overriding Law or Jurisdiction?

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By Ross Pey, Western University, Canada

1. Introduction

In Case C-86/23 E.N.I. and Y.K.I. v HUK-COBURG-Allgemeine Versicherung AG II (‘HUK-COBURG II’), the principal issue that arose was whether a Bulgarian compensation provision may be interpreted as having mandatory effect. In suggesting that it does not, the Court required the facts to have sufficiently close links with the forum. (Hereinafter the ‘sufficient connexion test’) Ostensibly, a freestanding sufficient connexion test could be viewed as a disguised jurisdictional control of the forum rather than part of a mandatory law analysis. In doing so, parallels to renvoi and forum non conveniens are drawn. Read more

Under the Omnibus: Corporate Sustainability Due Diligence Directive’s rules on civil liability no longer overriding mandatory

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The European Commission’s recent Omnibus proposes a significant change to the Corporate Sustainability Due Diligence Directive (CSDDD). Article 29(7) of the original CSDDD requires Member States to implement its rules on civil liability rules so that these rules apply as overriding mandatory provisions, if the law applicable to the claim is not a law of a Member State. The Omnibus package proposes to delete art. 29(7) CSDDD. As a result, Member States will no longer be obliged to implement CSDDD’s rules on liability as overriding mandatory provisions. Read more

French Supreme Court ruling in the Lafarge case: the private international law side of transnational criminal litigations

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Written by Hadrien Pauchard (assistant researcher at Sciences Po Law School)

In the Lafarge case (Cass. Crim., 16 janvier 2024, n°22-83.681, available here), the French Cour de cassation (chambre criminelle) recently rendered a ruling on some criminal charges against the French major cement manufacturer for its activities in Syria during the civil war. The decision addresses several key aspects of private international law in transnational criminal lawsuits and labour law.

Read more

Covid-19 and overriding mandatory provisions

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By virtue of an ‘Act of Legislative Content’ pursuant to Article 44 Greek Constitution, the Hellenic Republic passed on April 13 a series of urgent measures for the overall protection of the public against the virus. Among the multitude of provisions emanating from various ministries, four articles feature an identical overriding mandatory rule.

In particular, the rule concerns four categories: Cancellation of flights [Article 61]; cancellation of marine transport (carriage of passengers) [Article 65]; package travel and linked travel arrangements [Article 70]; and contracts between tourism industry enterprises [Article 71]. The content of the provisions is common: instead of reimbursement, it offers the option of vouchers by carriers and businesses in the respective branches.

The wording is the following:

Provided that the pertinent rights are regulated by EU law, the above provisions shall additionally apply mandatorily to contracts concluded between the parties, irrespective whether they agreed on the application of Greek or foreign law.

 Understandably, the above provisions raise interesting questions of PIL; Matthias Lehmann provided a first glance of the potential problems here.

This blog has dealt with the topic in respect to Italy here.

CJEU provides guidance as to how to identify an OMP

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In Agostinho da Silva Martins v Dekra Claims Services Portugal SA (C-149/18), between Mr Agostinho da Silva Martins, who suffered damages in a car accident, and the insurance company Dekra Claims Services Portugal SA, the CJEU was called to rule on two different issues of qualification: one related to the interpretation of Article 16 of the Rome II Regulation on overriding mandatory provisions and the other related to interpretation of Article 28 of Directive 2009/103 on protection of victim in case of a motor vehicle accident.

Regarding the overriding mandatory provisons under the Rome II Regulation, the CJEU refers to the definition in Article 9(1) of the Rome I Regulation and reasons that in order to qualify a national rule on statutory limitation period as an overriding mandatory the national court has to be satisfied that there exist “particularly important reasons, such as a manifest infringement of the right to an effective remedy and to effective judicial protection arising from the application of the law designated as applicable”. The relevant part of the CJEU holding uses careful phrasing suggesting restrictive interpretation of overriding mandatory rules: a rule

cannot be considered to be an overriding mandatory provision, […] unless the court hearing the case finds, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it is of such importance in the national legal order that it justifies a departure from the law applicable.

Regarding the conflict of law nature of Article 28 of Directive 2009/103, which regulates the Member States’ obligation to provide measures guaranteeing that the victim of a road traffic accident and the owner of the vehicle involved in that accident are protected, the CJEU states that this is not the conflict-of-law provision and that, consequently, it does not take precedence over the Rome II Regulation under Article 27 of the latter.