It should be noted that in legal systems where it is customary to take foreign laws into account at the substantive level, it is generally unclear whether a foreign overriding mandatory provision can be taken into account in a case where the applicable law is another foreign law. In German literature, several authors argue that foreign mandatory provisions are taken into account if possible under the lex causae.  In the legal systems examined, scientific and legal definitions limit overriding mandatory provisions, particularly with the following – often overlapping – characteristics: The application of overriding mandatory provisions of the lex causae and other States generally depends on the existence of a link between the law in question and the factual situation. The close link may result from the nationality, domicile, habitual residence of the parties or the place of performance of an act of the party or parties. Overriding mandatory provisions of third countries shall be applied or taken into account to the extent that the law of the issuing State gives priority to rules and this results from foreign legislation or judicial practice.  The public policy exception serves as a shield to protect fundamental national values in the event of a conflict between applicable foreign law and the Forum`s fundamental principles of justice. In addition to the public policy exception, the instrument of “overriding mandatory provisions” – or “rules of public order” – was established in the mid-20th century and is now codified in numerous legal acts of European private international law (see for example Article 9 of the Rome I Regulation). Overriding mandatory provisions are provisions of paramount importance for public policy, respect for which the legislator intends to respect even if a case falls within the scope of foreign law by virtue of simple conflict-of-law rules. Even in Member States where there is no express provision on the application of overriding mandatory provisions, the application of overriding mandatory provisions of foreign States is not prima facie excluded (Slovenia).  However, this is generally only a scientific position and there is no case law to confirm it. For financial institutions, this means listing all jurisdictions in which performance of part of a contract is required and determine whether mandatory obligations affect contract obligations.
At least until this is clarified by the courts, this ambiguity adds additional due diligence. The Greek-American scholar Symeon Symeonides distinguishes four types of rules for the protection of the interests and values of the forum State: (1) location rules, which are contained in substantive law and expressly delimit the territorial scope of a particular law; (2) overriding mandatory provisions which do not expressly delimit the territorial scope of a law, but which have the same effect as location provisions; (3) the COL`s unilateral rules in POL codifications; and (4) multilateral rules applicable to the application of lex fori.61xS.C. should lead. Symeonides, Codifying Choice of Law Around the World (2014), p. 294. The rules belonging to the first three categories are examples of genuine unilateralism, since they lead to the application of the lex fori and exclude foreign law. The main difference between the first and second categories is that location rules explicitly determine the applicability of a law in an international case and replace a COL rule “without it being necessary to examine whether the provision reflects an important public interest”.62xIbid., 300. However, in order for the provision to be considered a mandatory rule, the Forum should consider whether it represents an important public interest.63xIbid., 300. Symeonides defines localization rules as more specific and thus replaces COL.64xIbid. rules, at 295. Location rules can be found in several EU directives aimed at protecting weaker parties, such as: the Distance Contracts Directive, which states that `Member States shall take the necessary measures to ensure that the consumer does not lose the protection afforded by this Directive where the law of a third country is chosen as the law applicable to the contract where the contract is closely connected with the territory from a third country.
65xSee Article 12(2) of Directive 97/7/EC. 1997 L 144/19. Another example of a localisation rule is Article 12(2) of Directive 2008/122/EC. 2009, L 33/10 (Timeshare Directive), which reads as follows: `Where the law of a third country is applicable, consumers shall not be deprived of the protection afforded by this Directive, as implemented in the Member State of the court seised, where one of the immovable property in question is situated in the territory of a Member State or, in the case of a contract not directly linked to immovable property: the trader pursues a professional activity in a Member State or directs those activities in any way to a Member State and the contract falls within the scope of those activities. Contra: Kuipers, paragraph 11 above, p. 212, which submits that the Timeshare Directive confirms the central role of the Rome I Regulation. Another example is Article 3(1) of the Posting of Workers Directive, 66xDirective 96/71/EC, OJ No. 1997 L 18/1. which provides that Member States must ensure the protection of workers posted to their territory, irrespective of the law applicable to the employment relationship. The level of protection offered by those Directives is therefore guaranteed and does not depend on the general provisions of the Rome I Regulation, including recital 34 of Article 9 of the Rome I.67x Regulation of the Rome I Regulation, according to which Article 8 of that Regulation should be without prejudice to the application of overriding mandatory provisions of the country to which a worker is posted under the Posting of Workers Directive. However, in my view, Article 3(1) of that directive must be regarded as a location rule and must be seen in the context of Article 23 and not Article 9. See also Plender and Wilderspin, paragraph 13 above, p. 331, who argue that `the Directive provides for a completely separate and complementary conflict-of-law rule in favour of the employee`.
This is also in line with the Commission`s proposal for Rome I, which refers to this directive as an instrument containing a COL rule within the meaning of the current Article 23; see COM2005 (650 final, p. 23). However, Kuipers, cited in paragraph 11 above, pp. 237 and 38, submits that the applicability of the provisions of the Posting of Workers Directive should be decided on the basis of Article 9 of the Rome I Regulation. The localisation rules of directives are generally regarded as `provisions of Community law establishing, in specific areas, COL rules relating to contractual obligations` within the meaning of Article 23 of the Rome I Regulation, according to which those provisions take precedence over the Regulation.68xStone, cited in paragraph 26 above, pp. 293-94; Ragno, paragraph 48 above, p. 159.Recital 58 of the new Consumer Rights Directive69xDirective 2011/83/EU, OJ No. 2011 L 304/64. It replaces Directive 97/7/EC on distance contracts and Directive 85/577/EEC on doorstep selling; In addition, Directive 1999/44/EC on the sale of consumer goods and associated guarantees and Directive 93/13/EEC on unfair terms in consumer contracts will be amended. provides that, where the law applicable to the consumer contract is that of a third country, the Rome I Regulation should be applied in order to determine whether the consumer enjoys protection on the basis of the Directive. Therefore, unlike many old-fashioned consumer protection directives, the Consumer Rights Directive does not contain a location rule, so Article 23 of the Rome I Regulation does not apply. Nevertheless, it is not clear whether the request was made totally impossible by Article 9 of the Rome I Regulation.
Does the fact that the Consumer Rights Directive refers the matter to the Rome I Regulation mean that a Member State cannot consider that a national provision transposing the Directive protects a fundamental interest of the Member State concerned? The CJEU will have the last word, but given the discretion of the Member States, it is not excluded that the answer will be negative. In most countries, overriding mandatory provisions differ from simple overriding mandatory provisions and it is generally accepted that overriding mandatory provisions are a narrower category than the latter.