Evasion of Law and Mandatory Rules in Private International Law

Author(s): J. J. Fawcett
Source: The Cambridge Law Journal , Mar., 1990, Vol. 49, No. 1 (Mar., 1990), pp. 44-62
Published by: Cambridge University Press on behalf of Editorial Committee of the
Cambridge Law Journal

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Cambridge Law Journal, 49(1), March 1990, pp. 44-62
Printed in Great Britain

EVASION OF LAW
AND MANDATORY RULES
IN PRIVATE INTERNATIONAL LAW

JJ. Fawcett*

Introduction

It has often been asserted that English private international law

no doctrine of evasion of the law.1 It is true that English law h
never developed a general doctrine, like the French one oifraud
la loi,2 to deal with cases of evasion. Nonetheless, evasion of the l
has been recognised as a problem in at least some areas of privat
international law, and an increasing number of specific anti-evas
measures have been introduced in response to this. The Engl
approach towards evasion is a pragmatic one rather than being bas
on any broad underlying theory. In particular, the fundamenta
questions have not been addressed of what is wrong with evasion
the law and how it can be dealt with most effectively. The purpo
of this article is to examine the present law on evasion, determ
what is wrong with evasion of the law and put forward proposals
a principled approach to deal with the problem.

I The Present Law on Evasion

The most obvious sense in which the law is evaded is when pers
deliberately flout the law, for example a taxpayer fails to declare
his income to the Inland Revenue, or a person smuggles goods i
a country in breach of import controls. In such cases the party seekin
to evade the law wishes no law to apply. The private internation
lawyer may be concerned with this type of case, for instance t
English courts may be asked to enforce a contract the performan
of which involves the illegal export of goods.3 Of more interest

Professor of Law, University of Leicester. This article is based on an inaugural lecture delive
at Leicester in 1988.1 am grateful to Chris Clarkson, Faculty of Law, University of Bristol,
his many helpful comments on the article.
1 Graveson, (1963) II Hague Recueil Ch. 4; Graveson, Private International Law 7th ed. (19
pp. 170-174; Collier, Conflict of Laws p. 147.
1 Audit, La Fraude a la Loi (1974); Graveson, (1963) II Hague Recueil, pp. 53-54.
' See Regazzoni v. K.C. Sethia (1944) Ltd. [195S] A.C. 301.

44

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C.L.J. Evasion of Law in Private International Law 45

the private international lawyer, and the subject of this article, are
those cases where laws are evaded by persons showing a preference
for the application of one country's law rather than that of another.
People can show this preference by going to another country in the
expectation that that country's law will be applied to their affairs.
This has happened in the sphere of family law where evasive
marriages, divorces and abduction of children are well known.
Evasion can also take place in the commercial sphere where the
particular method of evasion takes a different form, i.e. contractual
agreements that a particular law will apply. Those areas in which
evasion has been recognised as being a problem: marriage, divorce,
child abduction and custody, and contract, will now be examined in
detail, after which some conclusions will be drawn on the nature of
the approach towards evasion adopted under the present law.

A. Evasive Marriages
Evasive marriages have been a well known phenomenon since the
earliest days of conflict of laws. Starting with Brook v. Brook* in the
middle of the nineteenth century there has been a spate of reported
cases5 involving English couples going to Denmark or Germany to
marry in order to evade the English law on the prohibited degrees of
marriage. After the marriage the couple would return to live in
England. The English courts strongly objected to the attempt to
evade English law in these cases and refused to recognise the foreign
marriage. The technique for dealing with the evasion was to classify
the issue in the case as being one of essential validity and to apply
the law of the domicile of the parties, England, to the question of
the validity of the foreign marriage.6 In other words, the courts
moulded their private international rule on capacity to enter a
marriage to stop evasion of the law.7 The gradual relaxation in the
prohibited degrees under English law8 has largely meant the end of
such instances of evasion. However, it still remains the case that, for
example, an uncle will be unable to marry his niece in England but
he may be able to do so under some foreign systems of law.9
Better known to laymen than the Danish marriages cases are the

(1858) 3 Sm. and G. 481; affd. (1861) 9 H.L. Cas. 193.

See Cheshire and North, Private International Law 11th ed. (1987), pp. 578-583.
Ibid. Some of the early cases were arguably decided on the basis of the intended matrimonial
home theory.
The present rule was supported, for the same reason, by the Law Commission, in Working
Paper No. 89, para. 3.23. In Law Com. No. 165 it was recommended that there should be no
comprehensive restatement of the choice of law rules for marriage.
; The most recent example of which is the Marriage (Prohibited Degrees of Relationship) Act
1986. See generally Cretney, Principles of Family Law 4th ed. (1984), pp. 47-55.
1 See, e.g., Cheni v. Cheni [1965] P. 85.

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46 The Cambridge Law Journal [1990]

Gretna Green marriage cases.10 At one time young

would elope to Scotland in order to evade the Engl
of parental consent for the marriage of a child bet
16 and 21. Such a child could marry in Scotland wi
consent, there being very much less formality for
Scots law. The reduction of the age of majority to
has meant that in most cases there is no longer any
couples to go to Scotland to enter into a valid mar
the attitude of the English courts towards Gretna G
instructive and contrasts strongly with their attit
Danish marriages. No objection was made to the pa
English requirement of parental consent by going to m
and these Scots marriages were recognised as being
was classified as one of formal validity and the law
celebration was applied to the marriage, i.e. Scots l
international law rule was not moulded to stop evas
The traffic in evasive marriage was not all one w
well known instances12 of French couples coming to
to evade stringent French requirements of parenta
marriage of children up to the age of 25. Not surprisin
of the Gretna Green marriages, these English
regarded as being valid, despite the clear evasion o
the parties.

B. Evasive Divorces

In 1868 in Shaw v. Gould13 Lord Westbury, speaking in the co

of a Scots divorce obtained by an English domiciliary said that
No nation can be required to admit that its domiciled sub
may lawfully resort to another country for the purpose of ev
the laws under which they live. When they return to the coun
of their domicile, bringing back with them a foreign judg
so obtained, the tribunals of the domicile are entitled or
bound, to reject such judgment, as having no extra-territ
force or validity.14

A hundred years later there was considerable judicial concern

whilst the rules on recognition of foreign divorces should be liber
and made more flexible, "quickie" divorces obtained abroad af
short period of residence should not be recognised. The techn
for achieving this was to introduce at common law a re

10 See Compton v. Bearcroft (1769) 2 Hagg. Con. 83.

11 Family Law Reform Act 1969, s. 1.
12 See Simonin v. Mallac (1860) 2 Sw. and Tr. 67; Ogden v. Ogden [1908] P. 46.
13 (1868) L.R. 3 H.L. 55.
14 At p. 82.

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C.L.J. Evasion of Law in Private International Law 47

substantial connection test as a basis for the recognition of foreign

divorces.15 A petitioner who was merely temporarily in, for example,
Nevada when he obtained his divorce, would not be able to satisfy
this test and the foreign divorce would not be recognised. The attitude
subsequently changed and the Recognition of Divorces and Legal
Separations Act 1971 enshrined the Law Commission's philosophy
that, if there had been forum shopping, the harm had already been
done, and in order to prevent a limping marriage the foreign divorce
should still be recognised in England.L6
This still remains the general view to this day. However, there
are two specific statutory anti-evasion provisions which constitute
exceptions to this general rule. Both provisions are concerned with
extra-judicial divorces. There was a concern shown by the judiciary'7
and then by Parliament that parties should not be able to evade the
English system of divorces granted by courts and the English law on
financial provision on divorce by obtaining in England an extra-
judicial divorce. Since 1974 such extra-judicial divorces have therefore
been denied recognition.18 There was then a concern that the
particular statutory provision denying recognition to this type of
divorce could itself be evaded by English residents going abroad, for
example on a day trip to France, to obtain an extra-judicial divorce
which, because it would be recognised in their foreign domicile,
would be recognised in England. The latest version of the relevant
statutory anti-evasion provisionl9 seeks to prevent this by denying
recognition to extra-judicial divorces obtained, without proceedings,
outside the British Islands if either spouse had for a period of
one year immediately preceding the institution of the proceedings
habitually been resident in the United Kingdom. The latter provision
does nothing to prevent an English domiciliary from evading his
financial responsibilities to his spouse by obtaining an extra-judicial
divorce in the state of his nationality, and then having this recognised
in England. However, the Court of Appeal in Chaudhary v. Chaud-
hary20 held that, in such circumstances, recognition of the divorce
would be contrary to public policy, thereby preventing the evasion.

I5 See Indyka v. Indyka [1969] 1 A.C. 33.

16 Law Cor No. 34, para. 29.
17 Qureshi v. Qureshi [1972] Fam. 173; see also R. v. Secretary of State for the Home Department,
ex.p. Ghulam Fatima [1985] 1 Q.B. 190,199.
18 Originally by section 16(1), Domicile and Matrimonial Proceedings Act 1973-see Hansard
(H.L.) 8 June 1973 vol. 343 cols. 319-321; (H.C.) 20 July 1973 vol. 860 cols. 1086-1088;
replaced by section 44(1), Family Law Act 1986, which applies to divorces or annulments
obtained in any part of the British Islands.
19 Section 46(2)(c) Family Law Act 1986; formerly section 16(2)(c), Domicile and Matrimonial
Proceedings Act 1973. If the Law Commissions' proposals had been followed this provision
would have been done away with: Law Cor No. 137, para. 6.30.
20 [1985] Fam. 19. There is now power to grant financial relief after a foreign divorce has been
obtained: Part III, Matrimonial and Family Proceedings Act 1984.

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48 The Cambridge Lmw Journal [1990]

C. Child Abduction and Custody

The most recent problem of evasion to arise in the
involves cases of child abduction and custody. If the
child are in dispute over the custody of a child and t
has not been granted custody by the English courts s
and removes it abroad, there is a deliberate flouting
law in that the English custody order has been disre
regarded as a very serious matter and Parliament has
introduce new criminal offences concerned with takin
the age of 16 out of the jurisdiction without consent
also be an element of the errant parent preferring th
a foreign law in that this parent may seek and obtain a c
abroad. The problem is essentially one of getting a fo
recognise the English custody order or the custody right
has been made) and return the child to England. T
international conventions on child abduction and cust
child is removed to a country which is a party to the
that country may be obliged to recognise the En
order and rights. As far as the United Kingdom is c
international conventions were brought into effect
Abduction and Custody Act 1985, which requires En
recognise foreign custody orders and rights in certain ci

D. Evasive Contracts

In contract cases the judiciary appear on the face of it to hav

strong objection to evasion of the law. In theory the requiremen
laid down in Vita Food Products v. Unus Shipping22 that the part
choice of the applicable law must be made in good faith, will stop
cases of evasion of the law. Even if the case involves an issue of
formal validity of the contract the bona fides doctrine can still come
into play.23 This contrasts with marriage cases where, as has been
seen, the evasion of formal requirements is not objected to. However
in practice the requirement of a bona fide choice does not appear to
restrict the parties' freedom to choose the applicable law. There is
no reported English case in which the parties' choice has been struck
out on this ground. It is important to notice that, although the Vita
Foods Case introduced a restriction on party autonomy, this restriction
did not apply on the facts of the case and the result was to allow
parties to evade the Hague Rules.
Much more important than the common law doctrine of bona

21 Child Abduction Act 1984; amended by Family Law Act 1986, s. 65.
22 (1939] A.C. 277.
23 See e.g. the Canadian case of Greenshields v. Johnston (1981) 119 D.L.R. (3d) 714; affd. (1982
131 D.L.R. (3d) 234 (C.A.).

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C.L.J. Evasion of Law in Private International Law 49

fides are the specific statutory anti-evasion provisions that have been
introduced into the area of contract. The most famous of these is
contained in section 27 of the Unfair Contract Terms Act 1977. This
section prevents evasion of English law, or the law of any other part
of the United Kingdom, by restricting the parties' freedom to choose
a foreign law. It provides that the Act and the protection it gives to
consumers still has effect if the choice of law appears "to have been
imposed wholly or mainly for the purpose of enabling the party
imposing it to evade the operation of this Act".24 The section goes
on to provide as an alternative that the Act will apply, despite the
parties' choice, if "in the making of the contract one of the parties
dealt as consumer, and he was then habitually resident in the United
Kingdom, and the essential steps necessary for the making of the
contract were taken there, whether by him or by others on his
behalf". The section, more controversially, also prevents parties from
evading foreign law. It restricts the right of parties, whose contract
has a foreign objective proper law, to choose the law of part of the
United Kingdom by providing that, in such a case, certain sections
of the Act will not apply as part of the proper law.25
Another example of a statutory anti-evasion provision is to be
found in the Carriage of Goods by Sea Act 1971, implementing the
Hague-Visby Rules. Under the old Hague Rules there was a problem
of people evading those Rules by the insertion of a choice of law
clause in their contract.26 This gap was closed by the insertion in the
Hague-Visby Rules of a new Article X to replace the original Article
X in the Hague Rules. This lays down the territorial scope of the
new Rules, and is coupled with a provision in the implementing
legislation which states that the Rules, as set out in the Schedule to
the Carriage of Goods by Sea Act 1971, shall have the force of law.27
According to the House of Lords in The Hollandid28 the intention of
Parliament was for the new Rules to apply whenever the case comes
within Article X, regardless of whether there is a foreign proper law.
Their Lordships were concerned to interpret the Act and the Hague-
Visby Rules in such a way as to prevent the possibility of their being
evaded. As Lord Diplock said:

[the Hague-Visby Rules]

should be given a purposive rather than a narrow literalistic
construction, particularly wherever the adoption of a literalist
construction would enable the stated purpose ofthe international

24 Section 27(2)(a).
23 Section 27(1).
26 See Morris, (1979) 95 L.Q.R. 59,62.
27 Section 1(2), Carriage of Goods by Sea Act 1971.
28 [1983] A.C. 565.

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50 The Cambridge Law Journal [1990]

convention, viz., the unification of domestic laws

ting states relating to bills of lading, to be evade
colourable devices that, not being expressly ref
rules, are not specifically prohibited.29

An Ad Hoc Approach
What is noticeable about the present law on evasion i
principle has been developed to explain why evasion
objectionable in some cases but not in others. The l
inconsistent, with evasive Gretna Green marriages b
perfectly acceptable but evasive Danish marriages be
beyond the pale. The whole approach towards evasi
an ad hoc one; not only are different types of e
treated differently, but also evasive marriages are tr
from evasive divorces or evasive contracts. This
extends to the technique for dealing with those case
is regarded as objectionable. In some cases specific
evasion provisions have been adopted to deal with e
cases the technique has been to mould common l
with the problem. The result is that the present law
be seen to be unduly complex, uncertain and incon
principled approach is needed but before this can b
answer is required to the fundamental question, w
been ignored under English law: what is wrong wi
law?

II What is Wrong wtth Evasion of the Law?

A. Moral Guilt

The term evasion is a loaded one, with connotations of shif

underhand behaviour.30 It is easy to fall into the trap of automatical
assuming that a desire to evade the law is in itself morally repreh
sible. This is what has happened in the area of contract choice o
law. The requirement that the choice of the applicable law mus
made in good faith concentrates on the motives of the parties, an
these are impure the choice is necessarily regarded as a bad one
to be struck out. Yet there is nothing wrong in principle with pa
choosing the law to govern their transactions. Indeed, it is v
desirable that they should make such a choice. Party autono
produces certainty in the law and upholds the expectations of t
parties.31 In some cases this choice may be made on the basis th

29 At pp. 572-573.
30 Mann, (1978) 27 I.C.L.Q. 661, 662-663.
31 Lando, International Encyclopaedia of Comparative Law, vol. III, Private International
Ch. 21, p. 33.

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C.L.J. Evasion of Law in Private International Law 51

the application of one law is more convenient than that of another.

In other cases the choice may be made on the basis that the content
of one law is preferred by the parties to that of another. For example,
the parties to an international insurance or shipping contract may
choose the law of England to apply, despite the fact that there is no
connection with this country, because they regard English law as
being well developed in this area. No one would stigmatise this type
of conduct. Is it any worse if the parties choose a law to apply because
they prefer some specific provisions of that law to that of some other
country? What the parties are usually trying to do in such a case is
to ensure that a law is applied which provides that their transaction,
whether it is a commercial contract or a marriage, is valid. This
should not be a cause for concern, nor should it be condemned on
the mistaken basis that the parties' motives are impure.32 Moreover,
there is something slightly hypocritical in the judiciary making this
type of moral judgment when they themselves are quite prepared to
escape from applying a law the content of which is not to their liking
by using such devices as public policy and renvoi.
Whilst there is nothing wrong with the parties' motives in cases
of evasion, this does not mean that the practice is unobjectionable.
In some cases the evasion may involve unfairness to someone else;
the evasion may even be against the national interest.

B. Unfairness
The obvious instance of this is the situation where only one of the
parties is seeking to evade the law. This is one of the objections that
can be made to evasive divorces. Typically, it will be the husband
who seeks a "quickie" divorce abroad. The wife may be placed at a
disadvantage by this, both procedurally, because she may have no
proper opportunity to defend the petition, and substantively, because
the basis of divorce abroad may be wider than that in England. Even
more seriously, the granting of the divorce may have implications
when it comes to financial provision for the wife. The element of
unfairness is even more apparent in cases of child abduction. If a
child is kidnapped by one of its parents and taken abroad in defiance
of a local custody order this will cause great anguish to the other
parent. Indeed, there can be said to be unfairness to the child as
well, since the custody order which has been evaded may have been
made on the basis of the interests of the child.
Even when it appears that both parties are seeking to evade the
law, the reality may be otherwise. Whenever one contracting party

32 See generally Paalson, International Encyclopaedia of Comparative Law, vol. III, Privat
International Law, Ch. 18, p. 65.

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52 The Cambridge Law Journal [1990]

is in a stronger economic position than the other there is a risk of a

lack of genuine agreement on the choice of the applicable law.
Consumers and employees are obviously vulnerable in their dealings
with large companies.33 But even in contracts between two large
commercial undertakings one party may have the whip hand. The
Carriage of Goods by Sea Act 1971 can be seen as a response to the
problem posed by shipowners imposing terms on weaker cargo-
owners limiting the shipowners' liability and applying a foreign law,
thereby evading the protection given to cargo-owners under the old
Hague Rules.34
These examples contrast markedly with cases where both parties
freely agree on the evasion as, for example, in the Danish marriage
cases. There is manifestly no unfairness by one party to the other in
such cases. However, it is arguable that there is unfairness vis a vis
other couples who are not as rich and mobile and are therefore
unable to go to Denmark to evade English law. In days when travel
was more difficult and the population was generally less mobile, this
argument may have had some force. It was regarded as persuasive in
France35 where a general doctrine of fraude d la loi was introduced
to combat the problem of evasion of the law. However, the argument
is of considerably less force nowadays and is insufficiently strong to
justify a blanket condemnation of evasion as has happened in France.
Indeed, the Law Commission when reporting on the reform of divorce
jurisdiction took the view that the rich would never be deterred from
using their financial strength to gain an advantage-in that context
by forum shopping.36 The upshot is that in cases of consensual
evasion, instead of considering the question of unfairness, it is
preferable to concentrate on the content of the law that is being
evaded and on the question of whether the thwarting of this law is
against the national interest.

C. The National Interest

Evasion of the law is also objectionable in cases where it operates

against the national interest. The most obvious sense in which a state
can be said to have an interest in preventing evasion of the law is in
the situation where the effect of the evasion is to impose a financial
burden on that state. One such situation, until a recent change in the
law, was that where an evasive foreign divorce was recognised in
England. The effect of this was to deprive the English courts of their

3 Lando, op. cit., p. 37.

4 See The HoUandia [1982] Q.B. 872 (C.A.), 881, 882; affd. [1983] A.C. 565 (H.L.). See also
The Torni [19321 P.78, 84.
35 See Graveson, (1963) II Hague Recueil pp. 53-54.
36 Law Cor No. 48, para. 10.

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C.L.J. Evasion of Law in Private International Law 53

powers to make financial provision on the ending of the marriage,

since these powers were dependent on there being a divorce granted
by an English court. This would be unjust to the former spouse, who
would be denied the financial protection given by English law.
Moreover, if a husband did not maintain his former wife, the state
could end up having to do so. The evasive divorce could therefore
be said to be against the national interest. However, a pragmatic
solution to this particular problem has been found by extending the
English courts' powers to make financial provision to cases where a
foreign divorce has been granted which is recognised in England.37
The same problem of the potential burden on the state resulting from
the recognition of foreign judicial divorces also arose with extra-
judicial divorces granted in England or abroad, thereby evading an
English divorce and the English rules on financial provision.38 As has
already been mentioned,39 the solution here was the very different
one of refusing to recognise the divorce, thereby leaving it open to
an English court to grant a divorce, and with it the power to make
financial provision.
Quite apart from any question of financial burden it is arguable
that the state is always interested whenever the application of its law
is thwarted by an evasive transaction. However, the interest of the
state has to be balanced against the parties' interest, Le. the parties'
freedom to choose their place of marriage, divorce, or the law
governing their contractual arrangements. The parties should not be
lightly denied this right to choose. The balance only tips in favour of
the interest of the state when the law which is being thwarted
expresses a strong social or economic policy. Evasion can then be
said to be against the national interest. Usually it will be the thwarting
of forum law which is against the national interest but, less commonly,
the national interest may dictate that a foreign law should not be
thwarted.
Much of the present law on evasion can be explained by looking
at the content of the law that is being thwarted and at the strength
of the policy underlying this law. Recent statutory anti-evasion
provisions in the area of contract are concerned to uphold laws based
on strongly held policies. Section 27 of the Unfair Contract Terms
Act 1977 is an obvious example. The rules contained in the Act
protecting consumers from exemption clauses were described by the
Law Commission as being equivalent to rules of public policy.40 This

37 Part III, Matrimonial and Family Proceedings Act 1984. On the need for this legislation see:
Torok v. Torok (1973] 1 W.L.R. 1066; Quazi v. Quazi [1979] 3 W.L.R. 402 (C.A.).
38 Hansard (H.C) 20 July 1973 vol. 860 cols. 1086-1088. See also Chaudhary v. Chaudhary [1985]
Fam. 19.
39 Supra.
40 Law Com No. 69, para. 211.

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54 The Cambridge Law Journal [1990]

protection could easily have been thwarted by the p

foreign law to apply, hence the need for an anti-ev
limiting the parties freedom to choose the applicabl
enshrined in the Carriage of Goods by Sea Act 1971
Visby Rules is that "in international trade, all good
should be subject to uniform rules governing the right
and the limitation of liability of the parties".41 The
policy is evidenced by the fact that there is interna
on the need for uniformity in this area. There is likew
agreement on the need to prevent evasion of the Ha
It is possible to reconcile the evasive marriage ca
at the strength of the social policy underlying the law
In the Danish marriage cases the English law wh
expressed a very strong social policy which was desig
family stability and prevent social evils".42 A m
persons who are too closely related was absolutely
couples who married abroad in defiance of this were
in a state of incestuous intercourse and acting agai
God.43 People who belong in England, i.e. are domi
marry abroad can reasonably be expected to comply
expresses such a strong policy, and should not be a
that law. The issue was therefore classified as being
validity and the law of the domicile applied to it.
On the other hand, in the Gretna Green mar
underlying policy involved was not as strongly held. Ch
parental consent for marriage are in an in-between
are not so young that a marriage is absolutely proh
enough to go ahead and marry freely of their own
comparative weakness of the policy of protecting
this age group is shown by the fact that if, for exa
17 manages to marry in England without paren
marriage will nonetheless be valid.44 It is noticeable
involving French couples evading the French requireme
consent by coming to England to marry, very diffe
used by the courts from that used in the Danish m
Simonin v. Mallac45 it was stated that there was n
absolutely prohibiting the union, and in Ogden v.
pointed out that the marriage was not like an ince

41 See The Hollandia [1982] Q.B. 782 (C.A.), 884; affd. [1983] A.C. 565.
42 North (1980) I Hague Recueil 9, 54; See also Law Commission W
para. 3.41, quoting Hartley, (1972) 35 M.L.R. 571, 576-577.
43 Brook v. Brook (1858) 3 Sm. and G. 481; affd. (1861) 9 H.L. Cas. 193,
44 Section 48(l)(b), Marriage Act 1949.
45 (1860) 2 Sw. and Tr. 67, 76.
46 [1908] P.46, 53.

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C.L.J. Evasion ofLaw in Private International Law 55

The policy in respect of parental consent is now so weak that Scots

domiciliaries aged under 18 are actually permitted to marry in
England without parental consent,47 because this is not required
under Scots law. In weighing up the strength of the policy underlying
a law it needs therefore to be remembered that this can change over
the years. People who belong in one state but marry abroad in
another state cannot reasonably be required to comply with a law of
their home state which expresses such a weak policy, and should not
be prevented from evading that law. The issue can therefore be
classified as one of formal validity rather than of essential validity.
Not all of the present law on evasion can be explained in these
terms. The requirement that a choice of the applicable law in contract
cases must be made in good faith ignores the content of the law that
is being thwarted. But this is a vital consideration. There can be no
real objection to the parties evading a law in the situation where this
does not express a strong socio-economic policy. The bona fides
doctrine is a good example of how the law on evasion has developed
badly because the question of what is wrong with the practice was
not addressed by the Privy Council in the Vita Foods Case.48 Even
under the Unfair Contract Terms Act 1977 there is, in one instance,
a lack of attention to the question of what is wrong with evasion of
the law. It has already been mentioned49 that section 27(1) prevents
people from choosing the application of the English law on exemption
clauses and thereby evading the otherwise applicable foreign law.
But the real question is surely whether England has an interest in
upholding foreign rules on exemption clauses. In cases where less
protection is given to consumers than under English law, these foreign
rules may not even be based on a strong socio-economic policy. In
cases where more protection is given to consumers than under English
law, it may be easier to show that the foreign rules are based on a
strong socio-economic policy, but that is not the end of the matter.
The more general question is raised of the extent to which there
can be said to be an English national interest in upholding a foreign
law, even one that does express a strong socio-economic policy.
The only basis for a national interest in this situation is that of
considerations of comity of nations. As is well known, the English
courts in a number of cases50 have refused to enforce contracts, the
performance of which would involve parties in breaking the law of a
foreign friendly country. But these were fairly extreme cases involving
illegality by a foreign law. It would be a considerable extension to

47 Section 2, Foreign Marriage (Amendment) Act 1988.

48 Vita Food Products Inc. v. Unus Shipping Co. Ltd. [1939] A.C 277.
49 Supra, p. 49.
50 Foster v. Driscoll [1929] 1 K.B. 470; Regazzoni v. K.C. Sethia [1958] A.C. 301.

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56 The Cambridge Law Journal [1990]

apply the doctrine of comity of nations to a cas

example, foreign rules on exemption clauses. Given
rules on exemption clauses give adequate protection
is hard to believe that considerations of comity di
stringent foreign rules must be upheld. It is quest
there is any English national interest in such a case,
it cannot be regarded as being sufficiently strong
parties' freedom to choose the applicable law.

III How Evasion Should be Stopped

A. The Problem

It can be seen from what has been said above that evasion is
objectionable and should be stopped whenever it involves unfai
or is against the national interest. However, this leaves the pro
of how evasion should be stopped. The adoption of a metho
stopping evasion of the law inevitably reflects what is regard
being wrong with the practice. Thus in France a blanket condemna
of all cases of evasion led to a wide general principle preventi
under the doctrine oifraude a la loi. In England, by way of con
a narrow concern that specific statutory protectionist provisions u
the Unfair Contract Terms Act 1977 should not be thwarted has led
to specific statutory anti-evasion provisions which have the effect of
ensuring that the protection given to consumers under the Act will
still apply regardless of the parties' choice. What is needed is an
approach towards stopping evasion which reflects the fact that evasion
is objectionable in cases where there is unfairness and in cases where
the national interest is affected.
The problem areas where this new principled approach is needed
are those of contract and marriage choice of law. The position with
regard to evasive divorces and abduction cases can be regarded as
being satisfactorily settled under the present law. As far as divorces
are concerned, although the evasion may be objectionable on the
grounds of unfairness, other considerations have dictated that the
divorce should nonetheless be recognised, and this has been the
position taken by statute.51 If a child is abducted, the abduction will
not be recognised. The practical problem in this particular area is
actually preventing the r^moval of the child abroad and the return
of the child if it has been taken abroad. It is an international
problem and obviously needs an international solution. It is ther
appropriate to have the sort of statutory arrangements and in

51 Supra, p. 47.

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C.L.J. Evasion of Law in Private International Law 57

national agreements that exist at the moment to deal with child

abduction.

B. The Solution: Mandatory Rules

The best way to take account of unfairness and the national interest
in evasion cases involving contracts and marriages is to adopt and
develop the continental concept of mandatory rules. These are rules
which express such a strong socio-economic interest that they "cannot
be derogated from by contract."52 The concept is extensively used in
the Rome Convention on the law applicable to contractual obligations
of 1980,53 which is in the process of being implemented in the United
Kingdom.53(a) No less than five separate articles refer to mandatory
rules.54 There is a clear anti-evasion provision in Article 3(3). The
effect of this is that if there is, for example, an English contract, but
the parties choose French law to govern, the mandatory rules of
English law will still apply. There are more general provisions on
mandatory rules in Article 7, paragraph (1) of which provides that
"effect may be given to the mandatory rules of the law of another
country with which the situation has a close connection." Article 7(2)
goes on to provide that effect must be given to the mandatory rules
of the forum. The concept is also used in Articles 5 and 6, which
are concerned with consumer contracts and individual employment
contracts, both areas where there is a special need for protection of
certain groups of persons.
The concept of mandatory rules is not confined to across the
channel. It was used in the Scots case of English v. Donnelly55 where
the Scots statutory hire-purchase requirements designed to protect
hirers of goods were described as being "mandatory",5 with the
result that the proper law of the contract did not apply. The parties
were not allowed to contract out of the Act by an express choice of
law clause. The concept was also used by the High Court of Australia
in Kays Leasing v. Fletcher,57 although the term "mandatory rules"
was not actually employed in that case. The case again concerned a
hire-purchase agreement and it was decided that, where the forum
has requirements which "embody a specific policy directed against
practices which the legislature has deemed oppressive or unjust",58 it
was inappropriate to allow the parties to choose the governing law.

52 Article 3(3), Rome Convention on the law applicable to contractual obligations of 1980.
3 [1980] O.J.L. 266 of 9th October.
S3() See the Contracts (Applicable Law) Bill 1989.
'4 Articles 3(3); 5(2); 6(1); 7(1) and (2); 9(6).
55 1958 S.C. 494.
56 At p. 499.
s7 (1964) 116 C.L.R. 124.
58 At p. 143.

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58 The Cambridge Law Journal [1990]

Even more significant from an English point of v

adopting the concept of mandatory rules is the fact
is at the moment to be found in an English statute.
of Trusts Act 1987 gives effect to the Hague Conve
Applicable to Trusts and on their Recognition. Under
the parties are given the freedom to choose the law
trust,59 subject to restrictions contained in Articles
Convention. The latter article is concerned with the
of the forum and the former with the mandatory
countries. The term mandatory rules is not used bu
this is what is being referred to. Thus Article 16 pr
Convention does not prevent the application of th
the law of the forum which must be applied even
situations, irrespective of rules of conflict of laws
concept of mandatory rules beyond the area of contrac
the trusts area is similar in so far as the parties are
their preference for a particular law by putting a claus
document. If mandatory rules are to deal effective
marriages, it is necessary to extend the use of t
situation where the parties have expressed their pre
abroad. But this is no different in principle from a
parties should no more be able to evade the man
English law by marrying abroad than by insert
contract.

C. The Merits of the Concept

The use of the concept of mandatory rules goes to the root o
problem of evasion, and makes it possible to stop the practice
those cases where it should be stopped. Evasion of the law sho
be stopped whenever the law which is being thwarted express
strong socio-economic policy. If a rule is classified as a manda
one it will still apply regardless of the choice of the parties. A
same time it is important to notice that the concept of mand
rules deals with a wider problem than that of evasion. There c
cases where the parties have not chosen the law governing
contract; accordingly there will be no question of the parties se
to evade the law. Nonetheless, under the Rome Convention w
the court is deciding on the proper law it will do so in the light of
mandatory rules of both the forum and of other states. Similar
the parties choose as the governing law the law of a state with
the parties and the contract have a strong connection there w
no question of evasion but mandatory rules may still apply

59 Article 6.

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C.L.J. Evasion of Law in Private International Law 59

result is that by adopting the concept of mandatory rules it is possible

to deal with the real evils of evasion of the law without actually
having to identify formally the particular case as being one where
evasion has been attempted. There is accordingly no need to go into
the motives of the parties, which has to be done if one is looking for
evasion. This is a distinct improvement in the law. Not only are
motives irrelevant, since there is nothing morally wrong in seeking
to evade the law, but also they are often difficult to gauge, if not
impossible. As has already been seen,60 there can be numerous
reasons, apart from evasive ones, why parties decide to choose one
particular law to govern their contract in preference to another.
The facts of the Australian case of Golden Acres Ltd. v.
Queensland Estates Pty Ltd.61 are a good example of how th
would be improved by the introduction of the concept of man
rules. The case was decided on the basis that the parties' cho
Hong Kong law to govern what was essentially a Queensland co
was not bona fide and should be struck out. However, the co
clearly faced difficulties when using the doctrine of good f
proving the evasive intent since there were substantial conne
with Hong Kong, i.e. many of the prospective buyers o
Queensland land would be from Hong Kong and the plaintiff comp
was incorporated in Hong Kong. Whenever there are subs
connections with the state whose law is chosen it raises the possib
that this state's law was chosen, for example, because it
convenient one to apply. The real objection in the case was n
parties' intentions but that Queensland law was being thw
Hoare J. said62 that:

The Queensland legislature has seen fit to enact legislation clos

regulating the operation of real estate agents in Queenslan
it certainly could be contrary to the public interest if the oper
of the statute as a whole could be circumvented by the s
device of agreeing that some other law will apply to a con
which would otherwise be subject to the restrictions impos
the Act.

If the court had the doctrine of mandatory rules available to it, it

could have tackled the problem in a direct way and decided that the
Queensland Act was of such importance that it should still apply
regardless of the wishes of the parties. The result in that particular
case would have been the same, but the method of reaching it would
have been a more appropriate one. However, in other cases the only
way to achieve the right result would be to use the concept of

60 Supra, p. 51.
61 [1969] St.R.Qd. 378.
62 At pp. 384-385.

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 60 The Cambridge Law Journal [1990]

mandatory rules. The bona fides doctrine with its m

on motivation may fail to prevent the thwartin
increasing list of laws which express a strong policy63
cannot be proved) or, conversely (in cases wher
proved) may stop the parties' choice of a law even
does not express a strong policy.

D. Problems in Using the Concept64

The first major problem with the concept of mand
working out when a rule should be so classified. The
the development of mandatory rules in contract
increasing state interference in contracts. A new sp
rules has grown up which are not so much concern
disputes between the parties but with protecting
persons or the national economic system.65 Rules de
consumers or employees are good examples of the f
contained in the Unfair Contract Terms Act 1977 can therefore be
said to be mandatory rules, as can certain hire purchase requirements
designed to protect the consumer, which have already been identified
as mandatory rules in common law decisions. Rules concerned with
monopolies, anti-trust, import and export prohibitions, price controls,
and exchange control legislation should similarly be classified as being
mandatory, but in this case because they are designed to protect the
national economic system.66 The Hague-Visby Rules come within
both categories since they not only protect cargo-owners, but also
the broader interest of the state in ensuring that uniform conditions
exist for international carriage.
When it comes to mandatory rules outside the contract area the
process of identifying such rules is that much harder because the
concept has not been articulated in other areas. Nevertheless, the
task is not impossible. The experience gained in evasion cases is of
some help in identifying mandatory rules. A marriage law which is
one that the courts have been keen to uphold, such as one which
actually prohibits marriage in a certain situation, as in the Danish
marriage cases, can easily be identified as a mandatory one. This still
leaves the problem though of identifying a law as being one which
the courts have been keen to uphold, since this concern may be
hidden within what appears to be a straightforward process of
classifying the issue and adopting the appropriate choice of law rule
for that issue.

63 Infra.
64 See generally North, Contract Conflicts (1982), pp. 18-20, 59-76.
65 See Vischer, (1974) II Hague Recueil Ch. 2.
66 See Hartley, (1979) 4 E.L.Rev. 236.

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C.L.J. Evasion of Law in Private International Law 61

The second major problem is identifying which state's mandatory

rules are to be considered. The Rome Convention makes it clear that
nothing in the Convention restricts the application of the forum'
mandatory rules.67 The forum obviously has an interest in the
application of its own mandatory rules and should be able to identify
such rules. When it comes to the forum applying other country's
mandatory rules there are immediate difficulties. Which country's
mandatory rules are you talking about-the country whose law is the
otherwise applicable law, a country with which there is a strong
connection, a country with which there is some connection? The
Rome Convention in Article 7(1) uses the formula of a "country with
which the situation has a close connection"68 but this undoubtedly
involves some uncertainty. In marriage cases what in effect ha
happened is that the mandatory rules of the country to which th
parties belong, i.e. in which they are domiciled, are the ones that ar
considered. The next question is whether foreign mandatory rules
have to be applied or are merely to be taken into account-the Rome
Convention prefers the latter formulation by stating that "effect may
be given". This too creates uncertainty. But the alternative of
requiring the forum to apply the foreign mandatory rule could result
in the forum being forced to apply a foreign rule of which it strongly
disapproves. The next question is how you identify foreign mandatory
rules, a process which is obviously much more difficult than identifyin
the forum's mandatory rules. The final question is whether the forum
has an interest in upholding a foreign country's mandatory rules a
opposed to its own mandatory rules. As has already been seen,6
cases where the national interest dictates that a foreign law shoul
not be thwarted are likely to be rare.

E. The Mandatory Rules of the Forum

Given these serious difficulties with the concept of foreign mandatory
rules, it is not surprising to find that the United Kingdom has entered
a reservation, as it is entitled to do,70 in respect of Article 7(1) which
deals with foreign mandatory rules. The result is that when the Rome
Convention is ratified and brought into effect in the United Kingdom,
Article 7(1) will not be included.70(a) If, as is suggested in this article,
the concept of mandatory rules is to be extended to choice of law fo
marriage then the same principle should apply. The result would be
that the parties could not evade the mandatory marriage rules of th

67 Article 7(2).
8 Article 7(1).
6 Supra, p. 55.
' Article 22.
7(') See clause 2(2), Contracts (Applicable Law) Bill 1989.

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62 The Cambridge Law Journal [1990]

forum. There would be nothing under the pres

prevent them from evading the mandatory rule
country. This would be largely consistent with the
evasion in relation to contracts71 and marriages; mos
of anti-evasion measures, whether at common law
involve the evasion of forum law. The most famous instance of a
measure designed to prevent evasion of a foreign law is section 27(1
of the Unfair Contract Terms Act 1977, but this has come in for
considerable criticism.72 Of course, the courts will not be left powerless
to deal with cases of evasion of foreign law. They will still have we
established principles of comity/public policy to deal with those rar
cases, like Regazzoni v. Sethia,13 where there is a concern that foreign
law should not be thwarted.

Conclusion

English law has long been concerned with evasion of the law in
of contract, marriage, divorce, and more recently in cases of c
abduction and custody. But no principles have been develope
explain what is wrong with evasion of the law or how it can be
with effectively. There is nothing wrong with the parties' motiv
seeking to evade the application of a particular law. Nonethe
evasion is objectionable and should be stopped in cases where
effect of the evasion is to thwart English laws which express a st
socio-economic policy. The most effective way to stop evasion
introduce the concept of mandatory rules into English law
only in the area of contract, which will now happen with
implementation of the Rome Convention, but also in the ar
marriage. The application of a foreign law would be subject to
proviso that this is without prejudice to the application of rul
English law which are mandatory, Le. rules of such socio-econo
importance that they should apply regardless of the wishes or ac
of the parties. In this way, evasion of the law can be prevente
those cases in which it is objectionable, but disregarded in those
in which it is not.

71 See generally: Keliy, (1977) 26I.C.L.Q. 857, 870-871.

72 See Mann, (1977) 261.C.L.Q. 903, 911.
73 [1958] A.C. 301.

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