The case of Accentuate v Asigra has demonstrated an important point concerning the Commercial Agents (Council Directive) Regulations 1993.

In the case, the High Court determined that it had authority to hear a claim for compensation under the regulations even though the claim in question stemmed from an agreement which was subject to Canadian law and arbitration.

The case of Ingmar v Eaton Leonard technologies had already established that the regulations could not be avoided simply by the choice of a non-EU law. In that case, the agent operated in the UK on behalf of a California-based principle, and California law had been used to govern the contract. The European Court of Justice, however, found that the mandatory provisions of EU law put in place by the regulations could not be evaded “by the simple expedient of a choice-of-law clause”.

In the case against Accentuate, the High Court determined that the previous ruling meant that it had to give effect to the regulations, even if both parties had contractually agreed to use a different system. The Court found that this must apply equally to an arbitration clause as it had to the choice of law clause in the prior case.

Where the regulations are found to apply, the agent concerned gains important benefits, such as the right to a potentially substantial payment when the agency is terminated. Generally, these benefits can not be avoided by an agreement between the agent and the principal. This new judgement means that they also cannot be evaded by a choice of non-EU law and arbitration.

Technorati Tags: Choice of Arbitration, Choice of Law, Commercial Agency Regulations