Thorn on Small and Medium-Sized Enterprises in Private International Law

The recently published Volume 433 of the Collected Courses of the Hague Academy of International Law includes the course by Kartsten Thorn (Bucerius Law School) on The Protection of Small and Medium-sized Enterprises in Private International Law.

Speaking about the protection of structurally weaker parties in private international law, this normally refers to non-business parties as consumers or employees. However, in many cases also entrepreneurs are protected. Well-known examples are the commercial agent under European law, the subcontractor in France and the franchisee in many US jurisdictions.

This paper systematizes these cases, looks for underlying policies and develops a proposal for future private international law rules with regard to small and medium sized enterprises (SMEs). It understands private international law in the broad French sense encompassing jurisdiction rules and even international commercial arbitration.

Methodologically, the interplay between substantive law, conflict of laws rules and jurisdiction rules for the protection of weaker parties in the context of different legal systems is shown and evaluated with special consideration of their internationally mandatory rules. Legal gaps to European Private International law are identified in comparison to foreign jurisdictions. Following an economic analysis, a new approach to the protection of SMEs is presented which also encompasses international commercial arbitration as an alternative method of dispute resolution.