1.3.1. Obstacles to Trade through Private International [.aw

Restrictions on the conflicts autonomy of the Member States by the economic freedoms

of Community law presuppose that (the application of) rules of national private

international law may result in obstacles to trade - or at least that such obstacles can

be attributed to them - so that they are subject to a need for justification. There has

been some hesitation before accepting this possibility. This may in part have been due

the fact that historically private international law has been seen as the means to

accommodate and promote cross-border (commercial) activity rather than to obstruct

it.1 The (co-)existence of different legal systems makes private international law a

necessity for there to be any activity involving two or more of those systems. This also

remains true for the internal market. Without the comprehensive unification of the

substantive laws of the Member States, the accommodation and regulation of the crossborder

activity envisaged by the freedoms falls to private international law. Consequently,

private international law has a crucial task in supporting the process of

market-integration and the functioning of the internal market. ' h However, it does not

of course follow that private international law does not have to take account of the

requirements of Community law as to the manner in which it performs that task.

A possible impact of the freedoms has further been obscured by the structure ol private

international law. Private international law determines whether a particular norm

should be applied to an international transaction (substantive approach) or allocates

an international legal relationship to the legal system where it has its 'Seat' (abstract

approach). It does not however address the substantive issues itself. Kohler, for

instance, has therefore argued that the rules of private international law are structurally

incapable of resulting in obstacles to trade in the sense of the freedoms. Community

law would not at all be interested in rules of" private international law but would

concern itself only with the rules of substantive law held to be applicable by them.

Ce n'est done pas le choixopere par la regie de contlit, mais uniquement le con term

de la regie materielle qui forme 1'objet de l'examen et de la censure eventuclle de

la Cour. La regie de conflit avec son critere de rattachement, a savoir le lieu de

rencontre des interets en concurrence, teste par consequent intact; le droit comnmnautaire

s'en desinteresse/''

However, contrary to Kohler1 s suggestion, the object of"the Court's examination under

the freedoms does not merely concern the substance of a national norm. Rather, the

Court examines the effects of t he application of" a substantive norm and, ifthose effects

amount to an obstacle to trade, prohibits its application but not the substantive norm

itself".1" The applicability of a substantive norm, however, will frequently be the

outcome ot a conflicts decision; all the more so because of the cross-border context

of t he economic freedoms.1 ] More correct, therefore, would be Sonnenberger's position.

He too argues that the rules of private international law cannot by themselves

result in obstacles to trade, but adds that

[d]a Kollisionsnormen die Anwendung von Sachnormen bestimmen, sind aus

diesen resultierende Einschrankungen von Freiheiten aber auch auf Kollisionsnormen

zuriick zu fuhren.1

Section T w o . Community Law and Cross-Border Insolvency Regulation

Thus, because the applicability of a norm of substantive law is given by a Member

State's conflicts (if law, an obstacle to trade resulting from that application can be

traced back to the conflicts rule underlying that applicability. If the substantive

norm may not lawfully be applied under Community law, it follows that the rule of

private international law is likewise rendered ineffective and cannot be applied without

offending Community law.