Making the Case for a Rome V Regulation on the Law Applicable to Companies

A revised version of the paper will be published in the Yearbook of European Law

European Corporate Governance Institute - Law Working Paper No. 549/2020

44 Pages Posted: 28 Oct 2020 Last revised: 31 Oct 2020

See all articles by Carsten Gerner-Beuerle

Carsten Gerner-Beuerle

University College London - Faculty of Laws; European Corporate Governance Institute (ECGI)

Federico M. Mucciarelli

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Dipartimento di Economia Marco Biagi, Modena; European Corporate Governance Institute (ECGI)

Edmund Schuster

London School of Economics - Law Department

Mathias Siems

European University Institute (EUI); University of Cambridge - Centre for Business Research; European Corporate Governance Institute (ECGI)

Date Written: October 20, 2020

Abstract

There is significant legal variation and uncertainty in the conflict of laws rules applicable to companies in the EU. While the case law of the Court of Justice on the freedom of establishment has clarified some questions, it is evident that case law cannot provide for an adequate level of legal certainty. The main recommendation of this paper is that private international company law in the EU should be harmonised. The paper discusses the main challenges that a future regulation to this effect – called here ‘Rome V Regulation on the Law Applicable to Companies’ – would have to overcome. Some of those are of a political nature: for instance, countries may fear that it may become easier for companies to evade domestic company law (eg, rules of employee co-determination), and there are specific considerations that concern companies established in third countries. Another challenge is that a future regulation on the law applicable to companies has to be consistent with existing EU conflict of laws rules as regards, for example, insolvency and tort law, while also complying with the freedom of establishment of the Treaty. It is the aim of this paper to discuss these questions in detail, notably the general considerations for harmonisation in this field, a potential harmonisation based on the ‘incorporation theory’, how it may be possible to overcome some contentious issues such as the definition of the lex societatis or the relationship between the lex societatis and other areas of law, and the prospects of future international harmonisation.

Keywords: freedom of establishment, private international law, lex societatis, harmonisation

JEL Classification: G38, K22, K31, K33, M13

Suggested Citation

Gerner-Beuerle, Carsten and Mucciarelli, Federico M. and Schuster, Edmund-Philipp and Siems, Mathias, Making the Case for a Rome V Regulation on the Law Applicable to Companies (October 20, 2020). A revised version of the paper will be published in the Yearbook of European Law, European Corporate Governance Institute - Law Working Paper No. 549/2020, Available at SSRN: https://ssrn.com/abstract=3720574 or http://dx.doi.org/10.2139/ssrn.3720574

Carsten Gerner-Beuerle

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

HOME PAGE: http://https://www.ucl.ac.uk/laws/people/carsten-gerner-beuerle

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://https://ecgi.global/users/carsten-gerner-beuerle

Federico M. Mucciarelli

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Dipartimento di Economia Marco Biagi, Modena

Viale Berengario 51
Modena, Modena 41121
Italy

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://https://ecgi.global/users/federico-mucciarelli

Edmund-Philipp Schuster

London School of Economics - Law Department ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Mathias Siems (Contact Author)

European University Institute (EUI) ( email )

Via Bolognese 156 (Villa Salviati)
Firenze, 50139
Italy

HOME PAGE: http://www.eui.eu/siems

University of Cambridge - Centre for Business Research ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.cbr.cam.ac.uk/people/research-associates/mathias-m-siems/

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://ecgi.global/users/mathias-siems

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