knowledge 10 April 2019 |

Litigating in the EU: Limitation Periods Across Borders

This was the question for decision in the recent case of Da Silva v Dekra.¹ The proceedings arose out of a car accident in Spain. The Portuguese plaintiff brought personal injuries proceedings in Portugal against a Spanish defendant. In Portugal, a three year limitation period applied for the commencement of these proceedings and the plaintiff was in time under Portuguese law. However, the defendant argued that a one year limitation period under Spanish law applied and so the plaintiff was out of time. The issue for the CJEU was whether the Portuguese provision could prevail as “an overriding, mandatory provision” within the meaning of Article 16 of the Rome II Regulation?

Applicable law under Rome II Regulation

As a general rule, Article 4(1) of the Rome II Regulation provides that the law applicable to a non-contractual obligation arising out of a tort/delict is the law of the country in which the damage occurs, irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country in which the indirect consequences of that event occur. Article 15 goes on to say that the applicable law here also encompasses the rules on limitation of actions. As the damage here occurred in Spain, as a general rule, Spanish law should apply.

However, Article 16 which deals with “overriding mandatory provisions” permits the application of the law of the forum of a dispute where the particular law is mandatory. This allows the general rule to be overridden. On this basis, the plaintiff contended that the Portuguese limitation provision applied.

What is an overriding mandatory provision?

Article 16 does not define the concept of “overriding mandatory provisions”. However, Article 9(1) of the Rome I Regulation, which deals with the law applicable to contractual obligations, does do so. It provides that:

“Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under this Regulation.”

Decision of the court

The CJEU pointed to the recognised requirement for consistency in the application of the Rome I and Rome II Regulations. It said that this supported, wherever possible, a harmonised interpretation of concepts used by those two regulations which were identical in functional terms. This was so notwithstanding the use of different terminology in certain language versions of the two instruments.

The Rome I Regulation replaced the Rome Convention. Under that convention, any plea as to the existence of a “mandatory rule” in the legislation of a Member State was interpreted strictly. The national court concerned had to take account not only of the exact terms of the law, but also of its general structure and of the circumstances in which it was adopted. This would enable it to determine whether it was mandatory in nature in so far as it appeared that it was adopted to protect an interest judged to be essential by the Member State concerned.

The same principles should apply by analogy to Article 16 of the Rome II Regulation. A national provision could not be an “overriding mandatory provision”, unless the national court hearing the case found, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it was of such importance in the national legal order that it justified a departure from the applicable law, designated by Article 4 of that regulation.

In an action for compensation for damage resulting from accident, the application of a limitation period, other than that designated as applicable, would require the identification of particularly important reasons, such as a manifest infringement of the right to an effective remedy and to effective judicial protection.

Although this was a matter ultimately for the national court to decide, the CJEU pointed out that notwithstanding the variety of national rules on limitation of actions across the Member States, Article 15 of the Rome II Regulation expressly made such rules subject to the general rule on determination of the applicable law, and that no other provision of EU law established specific requirements with regard to the limitation periods for cross-border disputes such as that here.