Private International Law of Reinsurance and Insurance
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10
REINSURANCE AND INSURANCE OF RISKS OUTSIDE THE EEA - CHOICE OF LAW AND THE ROME CONVENTION
- (1) to contracts of reinsurance, provided such contracts were concluded on or after 1 April 19911; and
- (2) to contracts of insurance, provided (a) that the contract does not cover a risk situated in the territories of the Member States of the European Economic Community2 and (b) that the contract was concluded on or after 1 April 1991.
- (1) As regards contracts of reinsurance, the Rome Convention in the first place respects the parties’ choice of law where it is expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case: Article 3. Absent a choice by the parties, the contract is governed by the law of the country with which it is most closely connected: Article 4. The law selected by these Articles will apply to questions of material validity, formal validity, interpretation, performance, damages, extinction of obligations and limitation (see para. paras 9.28-9.59 above).
- (2) As regards contracts of insurance falling within the scope of the Rome Convention, the regime is the same as for contracts of reinsurance, except where the contract is a “consumer contract” within Article 5, in which case special rules apply. A contract of reinsurance is inherently not going to be a consumer contract. The law selected by these Articles will apply to the matters referred to above in relation to reinsurance contracts.
- (3) The regimes described in (1) and (2) above are both subject to certain limits and exceptions. In particular, the applicable law may be displaced by mandatory rules or on the grounds of public policy (see paras 10.104-10.130 below).
B. PARTIES’ CHOICE OF LAW (ARTICLE 3)
10.3 Article 3 gives effect to any choice made by the parties to the contract as to what law should govern. In other words, the will of the parties is accorded a substantial pre-eminence. Thus, the first sentence of Article 3 provides: “A contract shall be governed by the law chosen by the parties.” Article 3 goes on to provide 3:“The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case.”