Overriding mandatory provisions, Article 9 Rome I

18 January 2023

As Slovenia is a member of the European Union, 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) is directly applicable in its legal order.

The Regulation, among other provisions, also provides for specific rules on the application of law which the parties have not specified in the contract but which will (can) nevertheless be applied in the assessment of specific questions arising out of or in connection with the contract.

Article 9 of the Rome I Regulation regulates mandatory overriding provisions which automatically apply regardless of which law is otherwise referred to by the contract or other legal provisions. Overriding mandatory provisions are provisions that are, in the opinion of the country, essential for the protection of its public interests, such as its political, social or economic order. Individual provisions under antitrust and competition law, e.g. price controls, could be considered as overriding mandatory provisions, as could individual provisions on trade restrictions, regulation of financial markets and so on. In the event of any legal proceedings, the court will apply the prevailing mandatory provisions in force in the country of the court's jurisdiction. This means that, instead of a provision in the law chosen by the parties or referred to in the regulatory norms, the court will apply a provision of domestic law that is of exceptional importance for the country, e.g. overriding mandatory provision.

Any national court in the EU also has the possibility to apply the overriding mandatory provisions of the countries where the contract is being performed (regardless of whether they are in the EU) if according to these provisions the contract is illegal. In deciding whether these provisions have effect, the court must take into account their nature and purpose and the consequences of their application or non-application.

It is difficult to determine in advance which provisions in domestic law would be considered directly applicable, and at the same time it is also difficult to predict when a court would consider it to be appropriate to apply foreign overriding mandatory provisions. In order to avoid legal uncertainties, it is advisable to check in advance whether the contract may be inconsistent with the most important mandatory provisions of the countries where the contract is to be performed.