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A Comparative Study of Rome I and Thai Private International Law:

Focus on the Applicable Law Rules in Contract

Soemsit Sirijaroensuk*

1. Introduction a. Statement of the thesis

Due to the international business transactions which can be incurred by someone

or by a company whose nationality is the same or different, there will thereafter be the

fundamental question of which legal system should be used as the applicable law in order to

determine the rights and obligations between the parties. For example, A, a Thai company,

makes a contract with B, an English company, for the purpose that A will send Thai products

to B in England and B will give the monetary consideration for those products. This is an

international contract between the companies among different countries. Consequently, the

problem of which legal system, the Thai legal system or English legal system, should be

used in relation to this contract in governing the rights and obligations between the parties.

Moreover, if A and B are a Thai company and A want to sell its property situated in The US

to B by making the contract in The US., this is also an international contract; even though,

both parties come from the same country because the purpose of the contract is to buy and

sell the property situated abroad and the contract is made outside their country. As a result,

the aforementioned issue arises in the previous example occurs. However, the choice of law,

* Judge of the Central Bankruptcy Court, LL.B. Chulalongkorn University, Thai Barrister-at –Law, LL.M International Commercial Law, University of Aberdeen (Office of the Judiciary Scholarship 2009)

42 Vol.3No.3:2011

an important part of the private international law, can resolve these problems. The problem

can be addressed by determining which law system should be prevail. nonetheless, there

is a choice of law rules among the countries, of which some seem to be accepted by most

countries because they are adapted from the old law with corrections to the drawbacks of

the past while the others have been used for a long time without amendment. Rome I1, for

example, which was developed from the Rome Convention2and is recently used by the

member states of EU, is one of the popular choices of law rules used only for contractual

obligations and gives the freedom of choice for the parties to determine the applicable

law3. It also gives a variety of rules in order to determine the applicable law in contracts

in the absence of choice.4 on the other hand, Thai Private International Law5 has different

rules than those in Rome I which have been in use for more than 70 years. For example, in

contracts in the absence of choice this law still determines the applicable law by using the

nationality of the party and the place where the contract is made, in case the parties have the

different nationalities6. However, these methods seem to be out of date. Thus, the scope of

this dissertation is to compare the rule of both laws by focusing on a few provisions such as

Article 3 and Article 4 in the Rome I and Article 13 in Thai Private International Law which

relate to the applicable law rules in contract, party autonomy in contracts and contracts in

the absence of choice, without discussing the existence and validity of a contract and finally,

evaluate the rule of both laws and considering, whether the Thai Private International Law

should be amended in order to keep pace with Rome I.

1 REGULATION (EC) No 593/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 JUNE 2008 ON THE LAw APPLICABLE TO CONTRACTUAL OBLIGATIONS (Rome I).

2 EC CONVENTION ON THE LAw APPLICABLE TO CONTRACTUAL OBLIGATIONS (Rome 1980)

3 Article 3 of Rome I4 Article4 of Rome I5 Act On Conflict of Law B.E.2481 6 Article13 of Act On Conflict of Law B.E.2481


b. Indication of its important and relevance

Private international law, especially in relation to the choice of law, is very

important due to the growth of international business transactions which are increasing

every year. If the countries of the parties have the same choice of law rules, or the rules

which are most widely accepted, it will be easier for the parties to conclude the contract. It

will make it more certain and predictable for the party to know exactly which applicable

law governs their transactions. In addition, this rule will make the party feel that they will

get the justice, because they know this rule well and are assured that no forum- shopping

has occurred. As a result, the country whose choice of law rule is accepted and also can

correspond to choice of law rule of another country has more opportunity to get increasing

international trade. although in the article 13 of the act on Conflict of Law B.E.2481 it

shows that its choice of law rule supports the freedom of choice among the parties like

those in Rome I7, this provision is not clear in many aspects. Moreover, its rule in contract

in the absence of choice is very different from those in another country. Thus, it is time for

Thailand to amend its private international law if it wants to increase its international trade

and provide reliability for the foreign parties.

c. Outline of the dissertation

this dissertation is divided into six chapters. the first is an introduction which

is divided into three sections, a, b and c. In section a there will be the statement of the

thesis which will show the scope, and the object and purpose of this dissertation. The

former is to compare and evaluate the rules of both laws by focusing especially on

Thai private International Law while the latter is to speculate on whether Thai Private

International Law should be amended in order to keep pace with Rome I. In section b

there will be the indication of its importance and relevance and the last section, c, is an

7 Article3 of Rome I

44 Vol.3No.3:2011

outline of the dissertation. The second and third chapters are Rome I and Thai Private

International Law respectively. Each will have the same structures; which are the history

and the determination of applicable law, party autonomy in contracts and contracts in

the absence of choice without stating the existence and validity of a contract, in order to

extract the similarities and the differences between both laws. The fourth chapter will

have a comparison between both laws by illustrating their similarities and differences

and the fifth chapter will have the evaluation and suggestions. the sixth chapter will be

the conclusion of this dissertation.

2. Rome I Regulation

2.1 History

Rome I Regulation came into force on July 24, 2008 and applied from 17 December

2009 according to article 29 of the Rome I Regulation.8 Every EU member states joined

this regulation except Denmark.9 the United kingdom at first did not take part in

the adoption of this Regulation according to Recital 4510, with the ground that there

were primary anxieties about the Commission’s proposal and the method in which it

had been arranged.11 however, finally it accepted this Regulation on July 24, 2008 and

later got the permission of the European Commission.12 This Regulation converted the

8 Rome I 9 Recital (46) of Rome I 10 Rome I 11 Ministry of Justice, Rome I- should the UK opt in? (consultation Paper CP05/08, Published

on 2 April 2008) < http://www.justice.gov.uk/docs/cp0508.pdf> accessed 10 June 2010.12 Commission Decision of 22 December 2008 on the request from the United Kingdom to

accept Regulation (EC) No 593/2008 of the European Parliament and the Council on the law applicable to contractual obligations (Rome I) (notified under document number C(2008) 8554) (2009/26/EC)< http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:010:0022:0022:EN:PDF>accessed 10 June 2010.


Rome Convention into a community instrument13: and as a result, for the interpretation

of the Regulation most case law and explanatory reports which used to be interpreted

the Rome Convention can still involve with this Regulation14, and any reference to that

Convention shall be understood like a reference to this Regulation in accordance with

the article 24 (2) of this Regulation. Moreover, pursuant to Recital (7) of its provision,

it states that the provision and substantive scope of this Regulation should be correspond

with Brussels I15and Rome II.16

only contractual obligation is addressed by Rome I, so in situations which

involve both contractual obligations and non-contractual obligations the rules in Rome

II will be needed to apply so as to deal with the latter problems.17

The principle of party autonomy is still a general rule like those in Rome

Convention; even though, there are some changes in words of this Regulation. Also,

the parties can continually have the freedom of choice to select the applicable law

to only part of the contract.18 however, two helpful clarifications are included in this

Regulation.19 First, without clearing in Rome Convention, this Regulation clarified that

only in express term need not be made by party autonomy but it is now considered

enough for the choice to be undoubtedly expressed by the parties by reference to the

13 Nils willem Vernooij, THE COLUMBIA JOURNAL OF EUROPEAN LAw ONLINE, Rome I : an update on the law applicable to contractual obligations in europe, p.71<http://www.cjel.net/online/15_2-vernooij/>accessed 12 June 2010

14 Zheng Tang, The interrelationship of European Jurisdiction and choice of law in contract, Journal of Private International Law, Volume4 Number1 April2008 , p. 36

15 Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I)

16 REGULATION (EC) No 864/2547OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 July 2007 on the law applicable to non- contractual obligations (Rome II)

17 R.Plender & M. wilderspin, Private International Law of Obligation, 3rd ed., Sweet & Maxwell, London, 2009, p. 94.

18 Vernooij, (n13) p.7219 Ministry of Justice, (n11) p. 3

46 Vol.3No.3:2011

terms of the contract or the circumstances of the case.20 Secondly, according to Recital 1221,

the situation under the contract that the parties agree to confer one or more courts or

tribunals of the Member State exclusive jurisdiction to address disputes should be

taken in to account as one of the factors in determining whether a choice of law was

demonstrated.22

Additionally, there are some major changes in the principle of choice of law

rule in the absence of express or implied choice of law in contracts in this Regulation23.

Due to the fact that the structure of the old rule was not clear, especially the relationship

among three main rule elements which are the general principle, the presumptions and

escape clause 24(Article 4(1), 4(2) and 4(5) respectively25), this led to uncertain results

if the same case is litigated in different countries among the Member State depending

on which approach they use. The outcome of the same case litigated in the Dutch court

using the strong presumption26 will differ from that in the early English court using the

weaker presumption. For example, in Societe Nouvelle des Papeteries de l’ Aa SA v

BV Machinefabrike BOA27 and Definitely Maybe (Touring) Ltd v Marek lieberberg

Konzertegentur GmbH 28 respectively, while litigating in Scottish court or recent English

court using approach between strong and weak presumption29 may get another result,

20 Ibid21 Rome I 22 Ministry of Justice (n13) p. 323 Vernooij, (n13), p7424 Garcimartin Alferez, Francisco J., PRIVATE INTERNATIONAL LAw AND INTER-

NATIONAL CIVIL PROCEDURE, The Rome I Regulation: Much ado about nothing? p I-67<http://www.simons-law.com/library/pdf/e/884.pdf>accessed 12 June 2010

25 Rome Convention26 Ole Lando and Peter Arnt Nielsen, THE ROME ONE PROPERSAL, Journal of Private

International Law, Vol.3 No.1. p36 ; Simon Atrill, Choice of law in contract : The missing pieces of the article 4 jigsaw?. pp 550-551

27 [1996] LMCLQ 1828 [2001] 1 wLR 174529 Atrill, (n26) p. 575


namely in the Caledonia Subsea Ltd. V Microperi SRL30 and Intercontainer Interfrigo

SC (ICF) v Balkenende Oosthuizen BV, MIC Operations BV 31 respectively. Moreover,

there is also the problem about the classification of the characteristic performance of the

contract in intricate relationships which was not simple and really gave rise to dissimilar

understandings between the courts of the Member States.32

As a result, the aim of the provisions of the Rome I Regulation is to address

these problems in order to increase certainty and predictability for the parties.33 First,

it provides hard-and-fast rules, which have eight types of the contracts, to replace the

characteristic performance rule in the Rome Convention according to Article 4(1).34

Secondly, it, however, does not totally discard the characteristic performance rule but

according to article 4(2) this rule can occur in two conditions: first, when the contract

is not covered by one of eight types of Article 4(1) or second, when the contract is

covered by more than one of those types.35 Lastly, it still provides the principle of

closest connection, the basic principle in Article 4 of Rome convention, in Article 4(3)

and 4(4).36 The formal is an escape clause and seems to be similar with those in Rome

Convention37 except the wording “manifestly” while the latter will apply when the

applicable law in paragraph 1 or 2 in the same article cannot be defined.

30 [2003] SC 7031 Case C-133/0832 Alferez, J. , (n24) p I-6733 COMMISSION OF THE EUROPEAN COMMUNITIES PROPOSAL FOR A REGULATION

OF THE EUROPEAN PARLIAMENT AND THE COUNCIL ON THE LAw APPLICABLE TO THE CONTRACTUAL OBLIGATIONS (Dec. 15, 2005) p.5<http://eur-lex.europa.eu/LexUriServ/site/en/com/2005/com2005_0650en01.pdf>accessed 12 June 2010

34 Zheng Tang, Law Applicable in the Absence of Choice-The New Article 4 of the Rome I Regulation, (2008) 71 Modern Law Review, p.787

35 Ibid, p. 79336 Ibid, p.79737 Article 4(5) of Rome Convention

48 Vol.3No.3:2011

2.2 Determination of Applicable Law

2.2.1 Party Autonomy in contract

Article 3(1) of Rome I Regulation, can be divided into three parts, to allow a

better understanding.

First, “A contract shall be governed by the law chosen by the parties”. In this

part, the law chosen by the parties must be the state law which is no need to have the

relationship with the contract.38 Thus, the parties cannot select non-State laws such as

UnIDRoIT or lex mercatoria as an applicable law to address their contracts.39 Shamil

Bank of Bahrain EC v Beximco Pharmaceuticals Ltd40is an example of this. nonetheless,

pursuant to Recital 13 of this Regulation the parties can incorporate a non-State body of

law or an international convention into their contract by reference.41

Secondly, “The choice shall be made expressly or clearly demonstrated by the

terms of the contract or the circumstances of the case”, in the case of express choice, it can

be made in both direct way and indirect way42. The former, for instance, can occur when

the contract is included by a clause which exactly determines the state law, such as English

law or Thai law to govern the contract and such law shall be applied when disputes happen

in relation to the contract.43 However, this Article will not satisfy if a choice of law in a

printed contract is deleted by one of the parties before signing, and this contract is signed by

38 Alferez, J. , (n24) p I-6639 Vernooij, (n13,) p7240 [2004] 1 wLR 178441 Vernooij, (n13), p.7342 Clarkson & Hill, The Conflict of Law, (3rd ed. OUP 2006) p. 17643 Ibid.


the other party without observing.44An example of this event occurred in Samcrete Egypt

Engineers and Contractors SAE v Land Rover Exports Ltd.45

The latter can happen when the parties do not state the name of state law which

shall be used as an applicable law but try to select the applicable indirectly.46For example,

in Companie Tunisienne de Navigation SA v Compagnie d’ Armement Maritime SA47

one of the clauses of the charterparty form provided the law of the flag of the vessel

which carries the goods will apply this contract.48

In the case that the choice of law is “clearly demonstrated by the terms of the

contract or the circumstances of the case”, even though the wording in this Article is

somewhat different from that of Rome Convention, which are “clearly demonstrated”

and “demonstrated with reasonable certainty”49, it is thought that the intention of the

legislature did not want in order to satisfy this Article’s stronger proof of the intention

of the parties than those in Rome Convention.50 The main reason to change the wording

is just to clarify the doubt which happened in the different language versions, French

and English texts, in the old text.51 Thus, the essential meaning remains the same.52

According to the Giuliano-Lagarde Report53, there are many possible facts,

44 Ibid45 [2002] CLC 372.46 Clarkson & Hill, (n44), p. 17647 [1971] AC 572.48 Clarkson & Hill, (n44), p. 17749 Article 3(1) of Rome Convention50 Plender, (n17) p. 14451 Ibid.52 Ibid.53 Giuliano-Lagarde Report, OJ 1980 C282/17.

50 Vol.3No.3:2011

clearly demonstrated by the terms of the contract or the circumstances of the case,

that make the courts consider the parties make a real choice of law without making it

expressly in the contract.

A. Dispute-resolution clause.54

at common law, in practice, if the parties agree to arbitration or litigation in a specific

country, the court can make a decision that the applicable law governing the contract is the

law of that country.55 Komminos S56 is an example. In this case, P’ cargo was shipped on

a vessel belonging to D under the bill of lading that was written in English and determined

the British courts to govern the dispute between the parties.57The Court of Appeal decided

that the applicable law governing the contract was English law.58 However, pursuant to

Recital 12 of this Regulation, it stated one or more courts or tribunals of the Member State

that is determined by the agreement between the parties to address the dispute under the

contract should be one of the factors that a judge may allow for contemplating whether a

choice of law is clearly demonstrated. And according to the Giuliano-Lagarde Report, it

stated the choice of a specific forum in some cases may illustrate in certain manner that

the parties aim to use the law of that forum to govern the contract, but this must always be

expose to the other terms of the contract and all the circumstances of the case.59 Therefore,

the choice of the particular forum shall be one of the factors that the courts consider with

the other terms of the contract and the circumstances of the case in order to determine the

applicable law. On the contrary, when the parties agree to arbitration in a specific country,

this will make the courts, after the Rome Convention came into force, consider that the

54 Clarkson & Hill, (n44), p. 17855 Ibid.56 [1991] 1 Lloyd’s Rep 370.57 Clarkson & Hill, (n44), p. 17858 Clarkson & Hill, (n44), p. 17959 OJ 1980 C282/17


contract between the parties was addressed by the applicable law of that country. Egon

Oldendorff v Libera Corpn60is an example.

B. Standard forms.61

According to the Giuliano-Lagarde Report,62 the parties can make a real choice

of law without expressly stating in the contract under a standard form of the contract

that is known to be applied by a specific law system. For example, in Amin Rasheed

Shipping Corpn v Kuwait Insurance Co63 , at common law, a marine insurance policy

which its policy was based on a Lloyd’s form described in a list to the English marine

insurance law was used as a standard form of contract between the parties.64The House

of Lords held that by using the English form of policy, which only the English law could

be interpreted, the intention of the parties must have English law to apply the contract.65

C. Previous course of dealing.66

The Giuliano-Lagarde Report recommended that in other cases a previous course

of dealing under contracts which have an express choice of law may give no doubt to the

court that this contract is to be applied by the previous law chosen, in which the choice

of law clause has been excluded in events which do not express a planned change of

policy by the parties.67This means even though the parties, for example, do not conclude

an express choice of law in contract in question, the court may make a decision that the

applicable to be governed this contract is the same law as that of in previous clause of 60 [1995] 2 Lloyd’s Rep 64.61 Clarkson & Hill, (n44), p. 18062 OJ 1980 C282/17.63 [1984] AC 50.64 Clarkson & Hill, (n44), p. 18065 Ibid.66 Ibid.67 OJ 1980 C282/17.

52 Vol.3No.3:2011

dealing. However, each case will depend on its own piece of evidence, so it would be

incorrect if the court decides that the parties had impliedly selected the law of a specific

country easily due to the fact that they had done so in a previous dealing.68

D. Express choice of law in related transactions.69

This is one kind of other matters, according to the Giuliano-Lagarde Report,70

that can make the court conclude that an express choice of law in related transactions

between the same parties might have effect on the real choice of law that has been made

in later contract. nevertheless, like the case of previous course of dealing, whether the

implication can be determined will rely deeply on the facts of the case.71

Reference to particular rules.72

The Giuliano-Lagarde Report advised that even though there is no expressly

mentioned choice of law, similar references in a contract to particular Articles of the

French Civil Code may make no doubt to the court that the parties have intentionally

selected French law.73 Thus, if the parties conclude the contract with no express choice

of law but reference to the law of a specific country, it may make the court decide that

this is an implied choice to apply the law of that country according to the real purpose

of the parties.

E. other considerations.74

Apart from the Giuliano-Lagarde Report, American Motorists Insurance

68 Clarkson & Hill, (n44), p. 18069 Ibid.70 OJ 1980 C282/17.71 James Fawcett and Janeen M. Carruthers, Cheshire, North and Fawcett Private International

Law, (14th ed, OUP 2008) p.70472 Clarkson & Hill, (n44), p. 18173 OJ 1980 C282/17.74 Clarkson & Hill, (n44), p. 182


Co v Cellstar Corporation 75 gave another situation that the court may decide the parties

make an implied choice. In this case the question arose whether English or Texan law

governed the contract of insurance between C, a company in Illinois which performed

insurance business in Texas, and D, a company in Delaware whose principle place of

business was in Texas.76The court held that Texas law was chosen by the parties by

the reason that the place in which the policy was issued was Texas and the terms of

the contract which its clause offering 12 months as a time limit was agree to the law of

Texas.77

In addition, under common law, for example, in Re Missouri Steamship Co78

the court may indicate a choice of validating law as a law to govern the contract if the

contract or its specific provision is invalid under the law of one country to which the

contract is involved but valid under another because the intention of the parties must

have the contract to be valid.79

Lastly, “By their choice the parties can select the law applicable to the whole or

to part only of the contract” in this part which is called dépeçage the parties can select

different law for different parts of the same contract. The parties can express the choice

or it can be deduced by the court.80 nonetheless, according to the Giuliano-Lagarde

Report,81 the choice must be reasonably consistent when the contract is severable. It

must connect with elements in the contract which can be applied by different laws

without causing contradictions.82on the contrary, it is not likely that repudiation of the

contract foe non-performance would be exposed to two distinct laws, one for the seller

75 [2003] ILPr 37076 Clarkson & Hill, (n44), p. 18277 Ibid.78 (1889) 42 CH D 32179 Ibid.80 Fawcett and Carruthers, N71), p. 69181 OJ 1980 C282/1782 Ibid.

54 Vol.3No.3:2011

and the other for the buyer.83 The Article 4 must be used to solve the problem if the

selected law cannot be rationally reconciled.84

Pursuant to Article 3(2) of the Regulation which stipulates that “The parties

may at any time agree to subject the contract to a law other than that which previously

governed it, whether as a result of an earlier choice made under this Article or of other

provisions of this Regulation. Any change in the law to be applied that is made after

the conclusion of the contract shall not prejudice its formal validity under Article 11 or

adversely affect the rights of third parties.” This Article gives the parties the liberty to

change their choice at any time before or after the conclusion of the contract. However,

according to the Giuliano-Lagarde Report, it is rather usual that this variation should be

exposed to the similar rules as the early choice.85Moreover, if they change the applicable

law after concluding the contract, it shall not affect its formal validity under Article 11

or badly influence on the third parties’ rights.

according to article 3(3) which specifies that “where all other elements

relevant to the situation at the time of the choice are located in a country other than the

country whose law has been chosen, the choice of the parties shall not prejudice the

application of provisions of the law of that other country which cannot be derogated

from by agreement”, this rule, pursuant to Recital 15 of this Regulation, should use

whether or not the choice of law was came with a choice of court or tribunal. The aim of

this rule is to limit party autonomy by providing that the mandatory rules of the country

must be used although the parties select the law of another country due to the fact that all

the elements relevant to the situation are placed in that country at the time of the choice

other than the country that the parties select its law.86

83 Ibid.84 Ibid.85 OJ 1980 C282/1886 Clarkson & Hill, (n44), p. 196


Pursuant to Article 3(4) which provides that “Where all other elements relevant

to the situation at the time of the choice are located in one or more Member States, the

parties ‘choice of applicable law other than that of a Member State shall not prejudice

the application of the provisions of Community law, where appropriate as implemented

in the Member State of the forum, which cannot be derogated from by agreement”, this

Article aims to shield a mandatory community law application against a choice of law

of a third country in the events that link with Member States only.87This rule thus also

limits the freedom of choice like that of in Article 3(3). nonetheless, many conditions,

unlike those in article 3(3), must be fulfilled in order to satisfy this article. First, all

the relevant elements other than the parties choice must be linked with one or more

Member States.88Secondly, the agreement cannot derogate the provision of Community

law in question on the condition that only if a regulation contains its rule.89 Besides, this

Article uses only in case the law which is chosen by the parties must be the law of the

third country not the law of the Member States.90

Limitations on freedom of choice.

Apart from Article 3(3) and 3(4), mentioned above, there are many limitations

on freedom of choice in this Regulation. First, by virtue of article 5, 6, 7 and 8 there

are many rules limiting party autonomy in a specific contract in an area of contracts

of carriage, consumer contracts, contracts of insurance and contracts of employment

respectively.91Secondly, the provision of article 9, Overriding mandatory provisions,

which aims to protect public interests of a country such as its political, social or economic

organisation, and Article21, Public policy of the forum, which aims to protect public

87 Hulmut Heiss, “Party Aunomy”, in Ferrari Franco & Stefan Leible (Eds.), Rome I Regula-tion: The Law Applicable to Contractual Obligations in European Law, 2009, p. 4

88 Plender, (n17), p. 16189 Ibid.90 Ibid, p. 16391 Ibid, p. 159

56 Vol.3No.3:2011

policy (ordre public), also restrict the freedom of choice. Thirdly, the applicable law

chosen by the parties, according to Article 3(1) cannot be non-States law except national

law and also be logically consistent choice when complying with dépeçage.92Lastly, a

“floating” applicable law which gives the choice to a party to select an applicable law in

the future by choosing the law from a list cannot be selected by the parties.93

2.2.2 In the Absence of Choice

Article 4 of the Regulation provides three law rules, hard-and-fast rules in Article 4(1),94

characteristic performance rule in Article 4(2)95the closest connection principle in Article 4(3)

and (4),96 to determine the applicable law governing contracts in the default of choice.

Hard-and-fast rules

Sale of Goods 97

According to Article 4(1) (a), which provides that “a contract for the sale of goods

shall be governed by the law of the country where the seller has his habitual residence”, the

law to apply this contract shall be the law of the seller’s habitual residence.

The concept of “sale of goods” should be explained in the same way when

using Article 5 of Brussels I Regulation98and also in Article 1CISG99 and in Article 1(1)

1955 hague Convention100 while the meaning of habitual residence can be explained by

92 Fawcett and Carruthers, (n71), p. 69893 Ibid, p. 70094 Tang, (n34), p.787 95 Ibid, p. 79396 Ibid, p. 79797 Plender, (n17), p. 178 98 Recital17 of Rome I Regulation99 Convention of International Sale of Goods100 Heiss, (n87), p. 36


article 19 of this Regulation.

Nonetheless, the meaning of “goods” is defined as only movables, which are

different from immovables and rights, so these two things will be governed by another

law.101 Moreover, this Article does not cover sale of goods by auction and consumer

contracts due to the fact that they are managed by Article 4(1) (G) and Article 5 of this

Regulation respectively.102

Provision of Services103

Like Article 4(1) (a), the term of provision of services in Article 4(1) (b) is

interpreted in the same way as using Article 5 of Brussels I Regulation but though

franchise and distribution contracts are provision of services, they are not covered by

this Article but are managed by particular rules.104This Article provides the law of the

country in which the service provider has his habitual residence addressing the service

contracts.105 The term “services” must be aware of a broad sense and covers many

categories of services such as contracts with medical doctors and lawyers.106However,

this Article does not cover contracts of carriage, consumer contracts, insurance contracts

and employment contracts pursuant to article 6, 7, 8 and 9 respectively.107

Agreements relating to Immovable Property108

The law of the country in which the property is located shall be the law to govern

101 Ibid, p. 37102 Ibid.103 Plender, (n17), p. 178 104 Recital17 of Rome I Regulation 105 Article 4(1) (b)106 Heiss, (n87), p. 38107 Ibid.108 Plender, (n17), p. 180

58 Vol.3No.3:2011

this contract, which is related to a right in rem in immovable property or to a tenancy

of immovable property.109However, the law of the country in which the landlord has

habitual residence shall apply if this contract is concluded for impermanent personal use

for no more than a period of six successive months and the tenant is a natural person and

has his habitual residence in the same country.110Similarly to Articles 4(1) (a) and (b),

the term of rights in rem in immovable property in this article should be clarified as that

of in Article 22 (1) of Brussels I Regulation.111And this Article cannot be replaced by the

rule in consumer contracts112; although, contracts which involve immovable property or

particular tenancies are frequently a consumer contract.113

Franchise Agreements114

The law which governs this contract shall be the law of the country in which

the franchisee has habitual residence.115this Regulation does not give a definition of

the franchise contract but the international comprehension that it is a contract that the

franchisee has a duty to do a business idea that the franchisor has renovated.116

Distribution Contracts117

The law of the country in which the distributor has habitual residence shall

apply this contract.118The motivation of this Article, like that in franchise contracts, is

109 Article 4 (1) (c) of Rome I Regulation110 Article 4 (1) (d) of Rome I Regulation111 Heiss, (n87), p. 39112 Article 6 of Rome I Regulation113 Heiss, (n87), p. 39114 Plender, (n17), p. 182115 Article 4 (1) (e) of Rome I Regulation116 Heiss, (n87), p. 41117 Plender, (n17), p. 183118 Article 4 (1) (f) of Rome I Regulation


to protect the weaker party as the distributor trades in his own name and his own risk in

economic.119

Auctions120

In this type of contract the law which applies to these sales shall be the law of

the place, if it can be defined, where these sales happen.121The purpose of this Article is

to defend an impartial situation at auction owing to the fact that the sales of this type are

commonly controlled by particular provisions on auctions.122However, this rule cannot

cope with the internet auctions which have to apply by another rule.123

Financial Instruments124

According to Article 4 (1) (h) which stipulates that “a contract concluded

within a multilateral system which brings together or facilitates the bringing together of

multiple third-party buying and selling interests in financial instruments, as defined by

article 4(1), point (17) of Directive 2004/39/EC, in accordance with non-discretionary

rules and governed by a single law, shall be governed by that law”, this contract shall be

managed by a single law that ever applied with it.

article 4(1), point (17) of Directive 2004/39/EC concerns only the concept

“financial instrument” and interprets it by a listing of various singer transactions125 while

the meaning of multilateral system is explained by the Recital 18 of this Regulation.126

119 Heiss, (n87), p. 42120 Plender, (n17), p. 184121 Article 4 (1) (g) of Rome I Regulation122 Heiss, (n87), p. 43123 Ibid.124 Plender, (n17), p. 185125 Heiss, (n87), p. 44126 Plender, (n17), p. 186

60 Vol.3No.3:2011

Characteristic performance rule

The wording of “characteristic performance” came from the Swiss literature

and grew in the practice of the Swiss Federal Tribunal. 127By virtue of Article 4 (2) of

the Regulation characteristic performance rule shall be used in two conditions which are

where the contract does not fall within the list of paragraph 1 of this Article and where

the factors of the contract covered more than one types of that paragraph. In these cases,

the law to govern the contract shall be “the law of the country where the party required

to effect the characteristic performance of the contract has his habitual residence”.128

In case of the latter condition the characteristic performance of the contract shall be

“determined having regard to its centre of gravity”.129as a result, due to the Recital 19

and article 4 (2), it is recommended the characteristic performer can be defined by two

stages: first to discover the characteristic performance owing to the contract’s centre

gravity, and second to detect the party affecting the performance.130

The concept of characteristic performance of this Regulation is the same as that

in Article 4(2) of Rome Convention.131 In unilateral contracts the fact will be concluded in

the line that a legal responsibility that it is the performance of that responsibility which is

characteristic of the contract will be with only one party.132 Ark Therapeutics plc v True

North Capital Ltd 133 is an example. While in bilateral contracts, according to the Giuliano-

Lagarde Report, such as insurance contracts, banking contracts or contracts of services the

characteristic performance is the provision of these contracts, which commonly establishes 127 K Lipstein, “Characteristic Performance- A new concept in the Conflict of Laws in Matters of

Contract for the EEC”, [1981] 3 Northwestern Journal of International Law and Business 402, p. 405 128 Article 4 (2) of Rome I Regulation129 Recital 19 of Rome I Regulation130 Tang, (n26), p.795131 Ibid, Plender,(n17), p. 188, Fawcett and Carruthers, (n71),p. 724132 Clarkson &Hill, (n44), p. 186133 [2006] 1 ALL ER (Comm) 138


the centre of gravity and the socio-economic task of the contractual transaction.134Therefore,

in a banking contract, for example, the law to govern this contract shall be the law of the

country of the banking establishment where the transaction is made.135

The closet connection principle

Pursuant to Article 4 (3) and (4) of this Regulation, they stipulate a remaining

function for the connecting factor of this rule in two different groups of the situations.136The

former which provides for an escape clause137 determines the law of the country with

which the contract is manifestly more closely connected to govern the contract although

that can be indicated in paragraph 1 or 2. The important point of this Article concerns

the query what composes of the manifestly closer connection.138Moreover, in order

to determine that country, according to Recital 20, it states that “account should be

taken, inter alia, of whether the contract in question has a very close relationship with

another contract or contracts”.139 Definitely Maybe (Touring) Ltd v Marek lieberberg

Konzertegentur GmbH140 and Samcrete Egypt Engineers and Contractors SAE v Land

Rover Exports Ltd141are good examples.

While the latter that provides for a default rule142defines the law to govern the

contract is the law of the country with which the contract is most closely connected in

case paragraph 1 or 2 cannot determine the applicable. In order to determine that country,

134 OJ 1980 C282/20135 OJ 1980 C282/21136 Plender, (n17), p. 194137 Ibid.138 Heiss, (n87), p. 49139 Recital 20 of Rome I 140 (n28)141 (n45)142 Plender, (n17), p. 194

62 Vol.3No.3:2011

pursuant to Recital 21, it provides the same method like that in Recital 20. The case examples

that characteristic performance cannot be defined are exchanged contracts, joint ventures,

complex contracts, or any contract relating to several parties performing interconnected

obligations.143 Apple Corps Ltd v Apple Computer Inc144 is an example. Apart from the

determining of the country in Recital 21, the setting and weighing of all pertinent contracts

of the case must be defined by this law, especially the place of negotiation, conclusion and

performance of the contract, the language of the contract, the place of business or habitual

residence of the parties or the currency (if any).145

3. Thai Private International Law

3.1 History

thai Private International Law or act on Conflict of Laws B.E. 2481 was enacted

on March 10, B.E. 2481 and came into force on March 20, B.E. 2481 according to Article 2

of this act. at first, thailand did not have its own conflict of law rules. the principle of these

rules used in Thai courts came from that in England.146 However, after making a new treaty

with some countries, this forced Thailand to enact these rules as written law in the form of the

above Act.147This Act can be divided into six titles which are general provisions, status and

capacity of persons, obligations (including contract and tort), things, family and succession.148It

can be interpreted by the judgments of Thai Supreme Court in case of having legal problems.

Nonetheless, this act has been in use foe the past 70 years without amendment.143 Ibid , p. 201144 [2004] EwHC 768 (Ch)145 Heiss, (n87), p. 49146 Saengauthai Youd, Conflict of law in Nationality with the explanation of Nationality Act

B.E.2495 and Act on Conflict of B.E. Law 2481, 7th ed, ratchadarompublishing, Bangkok, 1963, p. 13

147 Ibid.148 Act on Conflict of Law B.E. 2481



3.2.1 Party Autonomy in Contract

According to Section 13 of this Act, it stipulates that “The question as to what law

is applicable in regard to the essential elements or effects of a contract is determined by the

intention of the parties thereto...”,149the principle of this Section supports the party autonomy

in contract. In addition, both of them can be covered by express or implied choice as part

of this Section.150 For example, the former is the case151 between P, an English man, who

made a contract of employment as an employee with D, an American company employer,

who registered and had a head office at New Jersey in the United States. however, in the

clause of this contract in Article 21 it provided that the law to govern this contract is the law

of the United States. As a result, after the dispute happened and the case was brought before

the court in Thailand, the court held that the law to govern the contract was the law of the

United States as the choice of the parties. While the latter is in the case152between P and D

who made a charterparty which the clause of this contract in Article 38 provided Arbitrators

in the UK to govern the dispute between the parties, so the court held that the parties made

an implied choice pointing to the law of the UK to govern this contract. In addition, in the

case153about a marinetime insurance contract both P and D made this contract in English

language. This resulted to the judgment of the court that the parties agreed to apply English

law as an implied choice.

149 Translated in Professor Saengauthai , (n146), p. 14150 Ninnart Sunchai, Private International Law on the Matter of Person, winyuchon, Bangkok,

2009, p. 117: r Piwavattanapanich Pasit, Private International Law, Tammasart, Bang-kok,2008, p. 243; Sontikasatalin Kamon, Private International Law, 7th ed, Chulalongkorn, Bangkok, 1996, pp.266-267

151 The judgment of Thai Supreme Court No. 1958/2548 (B.E.)152 The judgment of Thai Supreme Court No. 1645/2538 (B.E.)153 The judgment of Thai Supreme Court No. 996/2496 (B.E.)

64 Vol.3No.3:2011

nevertheless, there are some situations that some Thai scholars think may make

the court consider the parties make an implied choice such as the place to govern the

contract, the content of the contract, the currency used in the contract, the traditional

trade and the nationality of the parties.154

Moreover, it is not clear about the law chosen by the parties which can be only

State law or can be both State law and non State law. It is because even though this

Act does not prohibit using non State law, it does not indicate that non State law can

be used as well as no explanation from judgment of the Thai Supreme Court. Besides,

owing to the same reason whether the applicable law should have a relationship with the

contracts or not is also ambiguous.

In addition, in the case of dépeçage, without the interpretation of the Thai Supreme

Court, there are some different opinions from the Thai scholars. Assistant Professor

Chonhaaurai155 stated that the contract may have several important parts which that each part

may be governed by the law of different countries according to the intention of the parties. This

seems that the rule under Section13 could cover the concept of dépeçage. While according

to Associate Professor Piwayattanaparich,156he stated that both act on Conflict of Laws B.E.

2481 and the judgment of the court as well as the writing of the lawyer did not mention about

the separation of the contract due to the fact that this may be pretty new for intelligentsia in

Thailand and especially the overview in Thailand the lawyers and the courts did not pay a

serious attention to conflict of law. this seems that dépeçage might not be covered under

Section 13. As a result, whether Section 13 covers dépeçage or not is still unclear.

154 Chonhaaurai Patsakorn, Private International Law, Nitibannakarn, Bangkok, 1968, p. 76: Sontikasatalin Kamon, (n150), p. 267

155 Chonhaaurai, (n154), p. 76156 Piwavattanapanich, (n150), p. 250


Limitations on freedom of choice.

There are only two limitations on freedom of choice in this Act. First, pursuant

to Section 5, it provides that “Whenever the law of a foreign country is to govern, it

shall apply in so far as it is not contrary to the public order or good morals of Siam

(Thailand)”,157the foreign law cannot be applied if it affects the public order or good

morals of Thailand. The meaning of “public order or good morals” can be occurred in

two situations according to Sumavong158. Firstly, the meaning of “public order” is the

matter involved in the benefit of the country or the majority of the population which

affect on the national security, economy and family institution. Secondly, the meaning

of “good morals” is the great tradition of society which can be changed in generation that

one society assumes that it is good morals while another might not. Thus, the meaning

of these words can be separated into two parts. The former is public order which can

be happened in all ages whereas the latter can be occurred and changed in generation

depending on each society.

In addition, according to Article 4159, it stipulates that the applicable law to

govern the contract of the carriage of goods by sea shall be the law stated in the bill of

lading; however, although such an event happens if the nationality of one of the parties

is Thai or a company registering in Thailand, Thai law160 shall govern this contract.


157 Translated in Saengauthai, (n146), p. 11158 The former president of the Supreme Administrative Court who gave the lecture at the Insti-

tute of Legal Education of The Thai Bar; sited by Kumanachai Supot, Private International Law, 4th ed., Nitithum, Bangkok, 2006, p. 23

159 The Act on The Carriage of Goods by Sea B.E.2534 160 Ibid.

66 Vol.3No.3:2011

Section 13 of this Act provides two law rules which are lex patriae161 and lex

loci contractus,162 to determine the applicable law to govern the contract in the absence

of choice.

Lex Patriae

Pursuant to Section 13 which specifies that “... If such intention, express or

implied, cannot be ascertained, the law applicable is the law common to the parties when

they are of the same nationality,..”,163 in case both parties have the same nationality the

law to govern the contract in the default of choice shall be the law of the country of their

nationality. For example, P and D have the same nationality which is English. P buys

the land in Thailand from D and also the contract is made in Thailand without express

or implied choice. Therefore, the law to govern this contract shall be the law of England

which is the law of the parties’ nationality.

Lex loci contractus

By virtue of Section 13 which provides that “..., or, if they are not of the same

nationality, the law of the place where the contract has been made.”164, the law to

govern the contract in case of the parties having different nationalities shall be the law

of the country where the contract is made. For instance, P and D who have different

nationalities make a contract of sale in the United States without express or implied

choice. Thus, the law of the United States shall address this contract.

161 Piwavattanapanich, (n150), p. 252162 Ibid, p.253163 Translated in Saengauthai,(n146), p. 14164 Ibid


4. The Comparison


4.1.1 Party Autonomy in Contract

Similarities

Both law rules are the same concept that supports the freedom of choice which

can be both explicit and implied choice. Furthermore, although the events that make the

Thai court consider being an implied choice are not much but it appears that one notion

of these things are quite similar. For example, in In Egon Oldendorff v Libera Corpn 165

and in the judgment of Thai Supreme Court no. 1645/2538 (B.E.) this shows that the

dispute resolution clause especially with the agreement to arbitration in a particular

country will make the court in both law rules consider that the applicable law of that

country shall apply the contract. Moreover, to restrict the freedom of choice the aim of

“overriding mandatory provisions” that are to protect public interests of a country such

as its political, social or economic organisation and “public policy” ,which is to protect

public policy (ordre public), in Rome I are similar to the aim of “public order” ,which is

to protect the benefit of the country or the majority of the population that affect on the

national security, economy and family institution, or “good morals” ,which is to protect

the great tradition of society, in act on Conflict of Law B.E. 2481.

Differences

Unlike Rome I, there are some aspects that act on Conflict of law B.E. 2481

does not state clearly such as the choice of non State law, the using of dépeçage in

the contract and the relationship between the law and the contract. Additionally, even

though there is one concept of the situations that make the court in both law rules

consider the parties make an implied choice, the other notion between these two rules

165 (n60)

68 Vol.3No.3:2011

seem to be different. For instance, the rule in Rome I concerns about standard form,

previous course of dealing, express choice of law in related transactions, reference to

particular rules and other considerations such as a choice of a validating law as a law to

govern the contract whereas the rule in act on Conflict of Law B.E. 2481, according to

the opinion of Thai scholars, focuses on the place to govern the contract, the content of

the contract, the currency using in the contract, the traditional trade and the nationality

of the parties. Moreover, the rule in act on Conflict of Law B.E. 2481 does not state

about the change of choice like that in Article 3 (2) of Rome I; as a result, the parties

cannot change the choice after the conclusion of the contract with the reason that this

law does not give the power to do so. In the limitations on freedom of choice

Rome I has more limit rules than those in act on Conflict of Law B.E. 2481. apart

from Article 3 (3), a domestic mandatory rule, and (4), community mandatory rules, the

limitations on the choice of Rome I also occur in article 5,6,7,8,9 and 21 which are contracts

of carriage, consumer contracts, insurance contracts, individual employment contracts,

overriding mandatory provisions and public policy of the forum respectively. In addition,

a “floating” applicable law and non State law cannot be a choice of the parties and the

applicable law must also logically consistent choice when applying with dépeçage. While

the choice of law rule in act on Conflict of Law B.E. 2481 is only restricted by the Section

5, public order or good morals of Thailand, and according to the Article 4, contract of the

carriage of goods by sea, of the Act on The Carriage of Goods by Sea B.E. 2534.


Similarities

There is no similar law rule in contracts in the default of choice between Rome

I and act on Conflict of Law B.E. 2481.


Differences

Both law rules in Rome I and in act on Conflict of Law B.E. 2481 are totally

different. This is because in the absence of choice Rome I provides three law rules

which are Hard-and-fast rules, Characteristic performance rule and the closet connection

principle. The Hard-and fast rules is a rule giving a rigid connection that applies with

eight types of contracts, a contract for the sale of goods, a contract for the provision of

services, a contract relating to immovable property, a franchise contract, a distribution

contract, a contract for the sale of goods by auction and a contract concluded within

a multilateral system. For example, a sale of goods contract shall be addressed by the

law of habitual residence of the seller (characteristic performance)166 while the other

such as a contract relating to immovable property shall be applied by the law where the

property is located but if in case of a impermanent private use and the maximum of the

period not less than six successive months including that the renter is a normal person

and the habitual residence of both parties are the same the law of the habitual residence

of the property-owner shall operate. Apart from these contracts or more than one aspect

of these contracts cover the parts of the contract, the characteristic performance rule, as

explained above, however, shall be used as the factor that the party is needed to effect

and the law of the habitual residence of that party shall apply. nonetheless, the closet

connection principle, as explained above, shall be utilized in case that no matter that

previous conditions causing to use both the Hard-and fast rules and the characteristic

performance happen or not if it is satisfied that the country where using its law is

manifestly connected with the contract than that country in case of the former or most

closely connected than that country in case of the latter.

while act on Conflict of Law B.E. 2481 provides only two law rules which

are lex patriae and lex loci contractus. The former shall apply the law of the country

166 Giuliano-Lagarde Report, OJ 1980 C282/20

70 Vol.3No.3:2011

where both parties have the same nationality whereas the latter shall apply the law of the

country where the contract is made in case that both parties have the different nationality.

these two rules shall apply with every contract if the situation fulfils its restrictions.

this means all the contracts defined in the hard-and fast rules, in the characteristic

performance rule and in the closet connection principle According to Article 4 (1) to (4)

shall be apply with these rule when the case is brought before the court in Thailand.

For example, P, who has Thai nationality but his habitual residence is in the

United States, sells the goods in the United States to D, who has English nationality, and

the contract is made in England. In this case if Rome I is applied, the Hard-and fast rules

pursuant to Article 4 (1) (a) shall determine the law of the United States to govern the

contract as the law of the seller’s habitual residence whereas if act on Conflict of Law

B.E. 2481 is applied, lex loci contractus according to Section 13 shall define the law of

England to govern the contract due to the fact that English law is the law of the country

where the contract is made.

Another example is that P, a company registered in England but has a branch in

Thailand, hires D, a company registered in England but also has a branch in Thailand, to build a

new office building in thailand. the parties realise that the branch of D in thailand will builds

that building. In this case if Rome I is applied, the characteristic performance rule according

to Article 4 (2) shall stipulate Thai law to govern this contract owing to the fact that the branch

of D in thailand where is treated as the place of habitual residence according to article 19

(2)167 of Rome I performs the characteristic performance by constructing that office whereas if

act on Conflict of Law B.E. 2481 is applied, lex patriae will define English law to address the

contract because the nationality of both parties are the same.

167 Article 19 states that “..., performance is the responsibility of such a branch..., the place where the branch...is located shall be treated as the place of habitual residence.”


The last example is that P, a company registered in Thailand, makes a contract

with D, a company registered in England, in order to hire D to build the apartment in

England. The contract is negotiated in England but is made in Thailand. However, the

payment will be done in England in the national currency of pounds sterling. If Rome I

is applied, the closet connection principle shall determine the law of England to govern

the contract because one of the parties is English and the negotiation and performance

happened in England as well as the currency is the English currency. Thus, this contract

is most closely connected with England. But if use of act on Conflict of Law B.E. 2481,

then lex loci contractus shall define the law of thailand to address the contract because

Thailand is the place where the contract is made as a consequence of the different

nationalities of the parties.

5. Evaluation and Suggestion

although both law rules sustain the party autonomy in contract, act on Conflict

of Law B.E. 2481 seems to be much more defective. It is because there is not clear in

many aspects in this law. First, this law rule does not clearly state about the choice of

non State law whether the parties can choose this law as their choice or not. This brings

about an uncertainty of their choice. As a result, if the parties choose non State law to

apply their contract, this choice may be allow or reject by the court. Secondly, this law

also does not address about the term and condition that can consider being an implied

choice. Therefore, only two condition which are a dispute resolution clause particularly

with the agreement to arbitration in a specific country and the language of a particular

country using in the contract can exactly be determined that these are parties’ implied

choice according to the judgment of Thai Supreme Court no. 1645/2538 B.E. and

72 Vol.3No.3:2011

No.996/2549 B.E. respectively while all the rest concepts such as the place to govern

the contract that come from Thai scholars are uncertain. In addition, due to the same

grounds, whether the contract should have the relationship and with the choice or not is

ambiguous. Furthermore, the use of dépeçage is still controversial because of its unclear

provision. Fifthly, unlike Rome I, this law rule does not permit the parties to change

their choice. Finally, this law determines only two limitations on freedom of choice

which are the Section 5, public order or good morals of Thailand, and according to the

Article 4, contract of the carriage of goods by sea, of goods by the Act on the Carriage

of Goods by Sea B.E. 2534.

While the law rules in Rome I have the provisions which can address all of these

drawbacks. In case of limitations on freedom of choice, apart from a mandatory rule

and public policy, it also provides the rule in order to protect the weaker party pursuant

to Article 5 to 8,contracts of carriage, consumer contracts, contracts of insurance and

contracts of employment respectively,168 of this Regulation. The reason that Act on

Conflict of Law B.E. 2481 is more inferior than Rome I is that the former has been in

use for about seventy years without amendment and only the judgment of Thai Supreme

Court which have not much can obviously interpret this Act while the Thai scholars’

opinions do not tie the consideration of the Thai judges. Whereas the rules in Rome I

have been developed for a long time. Moreover, most case in Rome Convention and

explanation report of the Giuliano-Lagarde can also interpret this rule.

In order to keep up with Rome I and to make the conflict of law rules in this

Act more highly foreseeable like that of the general objective in Rome I169 as well as

168 Dicey Albert Venn, Morris & Collins, The Conflict of Law, 14th ed. ,Sweet & Maxwell, London, 2008

169 Recital 16 of Rome I Regulation


also make its rule more certain and flexible this act, therefore, should be amended in

the area of party autonomy in contracts in many features. First, this Act should have

the provision to determine exactly whether non State law can be chosen as the parties’

choice or not or this law can only be incorporating by reference in the contract like

that in Rome I. Secondly, the term and condition to consider an implied choice should

be determined clearly. Thirdly, like Rome I, whether the contract should have the

relationship with the choice or not should be clarified. Fourthly, the using of dépeçage

should be provided by this Act owing to the fact that dépeçage give more choices for

the parties but the choice must be logically consistent when the contract is severable like

the rule using in Rome I.170Fifthly, this Act should stipulate about the changing of the

choice by allowing the parties to change their choice after concluding the contract in the

condition that it will not cause a bad consequence to the right of the third parties and its

formal validity of the contract like that in Rome I. Lastly, this Act does not seem to be

concerned about the weaker parties such as the consumer in the consumer contracts or

the employee in the contracts of employment because there is no provision in this Act

to protect these parties, so it should take more concern about these parties as they may

get unfair contract, according to a small power to negotiate, by defining these contracts

as a specific provision in order to limit the freedom of choice.

In case of the contracts in the default of choice although Article 4 of Rome I

that uses the rules, Hard-and-fast rules, Characteristic performance rule and the closet

connection principle, to determine an applicable law has some problems171, it is fashionable

and is accepted by other countries. While the rules, lex patriae and lex loci contractus

, in Section 13 of act on Conflict of Law B.E. 2481 seems to be out of date owing to

the fact that these rules are the same as those in the Italian Private International Law in

170 Giuliano-Lagarde Report, OJ 1980 C282/17171 Tang, (n34), p. 785-800

74 Vol.3No.3:2011

1942 lex patriae and lex loci contractus 172 that they already cancelled.173As a result, so

as to be accepted by other countries these rules should be cancelled and this Act should

apply the rules like those in Rome I. nonetheless, according to some problems occurring

in using Article 4 of Rome I, before applying the Hard-and-fast rules, which are rigid, this

rule should be changed in many aspects. First, it should clarify the meaning of technical

terms in this rule such as “habitual residence” of both a legal person and a natural person,

including the exact meaning of a specific contract. In addition, this rule should not cover

some contracts that can easily identified by the characteristic performance rule such as the

contracts of sales or the contracts of services. Thirdly, each type of the contracts should be

classified exclusively.174In case of the characteristic performance rule this rule should also

be used when the classification of any specific contract is impossible by considering the

main obligation, the major purpose and the centre of gravity of the contract.175Moreover,

this rule should state which contracts it cannot manage such as the contract of exchange or

the contract of a joint venture176in order to clarify the restriction of its rule. In case of the

closet connection principle, the escape clause should be clearly stated that when this clause

shall be used. Furthermore, this principle should give the clear conditions which apply to

consider the “manifestly closer connection”

6. Conclusion

The applicable law rules in contracts between Rome I and Thai private

172 Piwavattanapanich, (n150), p. 253 173 Piwavattanapanich, (n150), p. 252, citing Andrea Bonomi, The Italian Statute on Private

International Law, 27 International Journal of Legal Information 347, 262 (1999)174 Ibid, p. 800175 Ibid.176 Ibid, p. 792


International Law, act on Conflict of Law B.E. 2481, are quite different. It is because

although both of them support the party autonomy in contracts, the rules in contracts in

the default of choice are totally different. In case of the rules in contracts in the default

of choice, Rome I provides three law rules which are Hard-and-fast rules, Characteristic

performance rule and the closet connection principle, to determine an applicable law

while act on Conflict of Law B.E. 2481 provides two law rules which are lex patriae

and lex loci contractus. In addition, the rules of party autonomy in contracts in Act on

Conflict of Law B.E. 2481 seems to be more inferior than those law rules in Rome I

due to the fact that there is not clear in many aspects in this law. The reason why Act

on Conflict of Law B.E. 2481 has a lot of drawbacks is that this law is too old owing

to the fact that it has been in use for about seventy years whereas Rome I has just

been developed from Rome Convention. So, the law rules in Rome I are much more

modern than those law rules in act on Conflict of Law B.E. 2481. therefore, In order

to modernise its law rules act on Conflict of Law B.E. 2481 should be amended in the

aspects of both the law rules applying to party autonomy and the law rules applying to

contracts in the absence of choice. Many aspects of the former should be clarified, as

mentioned above, while the latter should be cancelled and the rules like those in Rome

I that have already developed some features, as mentioned above, should be applied

instead in order to seal the loopholes occurring in Rome I.

a comparative study of rome i and thai private …elib.coj.go.th/article/cpt2011_3_2.pdfa...

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