Private International Law (PIL) is the area of law that determines which national law applies to a cross-border situation and which court has jurisdiction. At Musch Legal, we begin every international transaction with a PIL analysis: which law governs the contract, which court has jurisdiction, and can a judgment be enforced somewhere. This pillar page provides you with a complete guide through this fundamental area of law — indispensable for every international trader.
What is Private International Law? (Which questions does PIL answer?)
Private International Law (often referred to as conflict of laws in an EU context) answers three fundamental questions that arise when a legal relationship involves more than one state. First: which national law is applicable? Second: which court has jurisdiction? Third: can a judicial decision be recognized and enforced in another country?
Private International Law (PIL) is not a legal code but a collection of rules from various sources. For the Netherlands: EU regulations (Rome I, Rome II, Brussels I Recast), Book 10 of the Dutch Civil Code on Private International Law (since January 1, 2012), international treaties (Hague Conventions, New York Convention 1958, CMR for transport), bilateral treaties.
For businesses, knowledge of Private International Law (PIL) is essential because incorrect choices result in uncertainty, higher costs, and sometimes the inability to enforce rights. A Dutch exporter who wants to sue their German customer before a Dutch court under Dutch law, but whose contract contains a French choice of law and an exclusive Italian choice of forum, will be left empty-handed.
Which law applies? Rome I (How do you determine the applicable law?)
For contractual obligations in the EU, Rome I (Regulation 593/2008) has been in force since December 17, 2009. Main rule: parties are free to choose which law (Article 3). This does not need to have an objective connection — Dutch and German parties may choose French law. The choice can be explicit or implicit (implicit, e.g., through the use of a standard contract form).
In the absence of a choice of law: Article 4 with a cascade of rules. For the sale of goods: the law of the country where the seller has their habitual residence. For the provision of services: the law of the country where the service provider has their habitual residence. For distribution: the law of the country where the distributor has their habitual residence. For franchise: the law of the country where the franchisee has their habitual residence. For real estate: the law of the country where the real estate is located.
Limitations on choice of law: for consumers (Article 6), the choice of law may not circumvent the mandatory protective rules of the country where the consumer resides. For employees (Article 8), the same applies to the country where work is habitually carried out. For insurance contracts (Article 7), specific rules apply. Overriding mandatory provisions (under Article 9) of the forum always apply.
For non-EU contracts: national Private International Law (PIL). Dutch Book 10 of the Civil Code, Title 13, largely follows Rome I for consistent outcomes. For common law jurisdictions (UK, US): the proper law of the contract doctrine.
Contract type
Default law (no choice)
Rome I Article
Sale of goods
Law of the seller
Article 4(1)(a)
Services
Law of the service provider
Article 4(1)(b)
Distribution
Law of the distributor
Article 4(1)(f)
Franchise
Law of the franchisee
Article 4(1)(e)
Real estate
Lex rei sitae
Article 4(1)(c)
Consumer
Law of consumer's habitual residence
Article 6
Employee
Law of habitual place of work
Article 8
Contract type
Default law (no choice)
Rome I Article
Sale of goods
Law of the seller
Article 4(1)(a)
Services
Law of the service provider
Article 4(1)(b)
Distribution
Law of the distributor
Article 4(1)(f)
Franchise
Law of the franchisee
Article 4(1)(e)
Real estate
Lex rei sitae
Article 4(1)(c)
Consumer
Law of the consumer's habitual residence
Article 6
Employee
Law of the habitual place of work
Article 8
Non-contractual obligations: Rome II (Which law applies to torts?)
For non-contractual obligations in the EU, Rome II (Regulation 864/2007) has applied since 11 January 2009. It applies to torts, unjust enrichment, negotiorum gestio (management of another's affairs), and culpa in contrahendo. General rule Article 4: the law of the country where the damage occurs (lex loci damni), unless both parties habitually reside in the same country (Article 4(2)) or there is a manifestly closer connection with another country (Article 4(3)).
For specific types, specific rules apply: product liability (Article 5) with a cascade to the country where the victim habitually resides; unfair competition (Article 6) the law of the country where the market is affected; intellectual property (Article 8) the law of the country where protection is invoked (lex loci protectionis); environmental damage (Article 7) the victim's choice; industrial action (Article 9) the law of the country where the action takes place.
For IP cases, Article 8 of Rome II is crucial: for infringement of national IP law (Dutch patent, German trademark), the law of the country where protection is invoked applies. For infringement of unitary EU IP rights (EU trademark, EU design, unitary patent): the law of the country where the infringement occurs or is likely to occur. Parties can often make a choice of law retrospectively (Article 14).
For non-EU: Dutch Book 10 Civil Code Title 14 for non-contractual obligations. For common law jurisdictions: lex loci delicti commissi traditionally, with more modern flexible tests.
Which court has jurisdiction? Brussels I-bis (How to determine the competent court in the EU?)
For judicial jurisdiction in the EU, Brussels I-bis (Regulation 1215/2012) has applied since January 10, 2015. It applies to B2B and B2C civil and commercial matters in all 27 EU member states (after Brexit, no longer the UK).
Main rule Article 4: the court of the country where the defendant is domiciled has jurisdiction (actor sequitur forum rei). Plus alternative forums (Article 7): for contractual claims, the law of the place of performance; for torts, the law of the place where the damage occurred; for consumers, the law of the consumer's habitual residence.
Exclusive forums (Article 24, cannot be opted out of): immovable property lex rei sitae, company law law of establishment, IP registration law of country of registration, enforcement law of country of enforcement. For insurance, consumers, employees: protective forums that cannot be opted out of.
Parties can agree on a choice-of-court clause (Article 25): the court of the chosen country has exclusive jurisdiction, unless otherwise specified. Under Brussels I-bis (recast 2012), a choice of court between parties from third countries is also valid. For non-EU: the Hague Choice of Court Convention 2005 (in force October 1, 2015) governs the recognition of choice-of-court agreements for exclusively chosen courts in 35 contracting states (including EU, UK since 2021, Mexico, Singapore — not US or China).
English law versus Dutch law (Which law better suits your contract?)
English law is globally popular for international contracts — known, predictable, flexible, supported by extensive case law. It's virtually standard for financial services and banking. Widespread for M&A and private equity. For international commerce since Brexit, with some considerations (no more automatic enforcement in the EU).
Dutch law offers its own strengths: a good balance between party autonomy and reasonableness and fairness (Article 6:248 Dutch Civil Code), efficient and cost-effective litigation, a strong position within the EU for enforcement, a strong position for IP (The Hague District Court has exclusive jurisdiction for the Trade Secrets Protection Act under Article 1019d of the Dutch Code of Civil Procedure, and for the UPC Local Division), tax-efficient for holding structures.
For clients with a Dutch establishment: Dutch law is often a good default because local lawyers are nearby, legal costs are lower, and enforcement within the EU is efficient. For clients with international stakeholders: English law is familiar, especially for financial documentation. For global scaling: English law is the most universal option.
Cost comparison: top-tier English lawyers 800-2,500 GBP/hour (partner); top Dutch lawyers 500-1,000 EUR/hour. For a medium-sized international deal (300-1,500 hours of legal work): cost difference 200,000-1,000,000 euros.
Aspect
English law
Dutch law
Doctrine
Common law
Civil law
Contractual freedom
Very broad
Limited by Article 6:248 Dutch Civil Code
Predictability
High (precedent)
High (codified)
Litigation costs
Very high
Medium
Force majeure
Limited (frustration only)
Art. 6:75 BW + hardship 6:258
Liquidated damages
Genuine pre-estimate only
Subject to reduction under Art. 6:94 BW
Good faith doctrine
Limited
Strong (Art. 6:248)
EU enforcement post-Brexit
Via Hague Choice of Court Convention 2005
Brussels I-bis automatically
Aspect
English law
Dutch law
Doctrine
Common law
Civil law
Contractual freedom
Very broad
Limited by Article 6:248 Dutch Civil Code
Predictability
High (precedent)
High (codified)
Litigation costs
Very high
Medium
Force majeure
Limited (frustration only)
Article 6:75 Dutch Civil Code + hardship 6:258
Liquidated damages
Genuine pre-estimate only
Can be mitigated under Article 6:94 Dutch Civil Code
Good faith doctrine
Limited
Binding (Art 6:248)
EU Enforcement Post-Brexit
Via Hague Choice of Court Convention 2005
Brussels I-bis Automatically
Local Law and Lex Mercatoria (When do you choose local law?)
Sometimes local law is unavoidable or even desirable. For real estate: lex rei sitae is mandatory under Rome I Article 4(1)(c) and Brussels I-bis Article 24(1) — the law of the country where the real estate is located. For consumers in their own country: protective rules cannot be opted out of. For specific sectoral rules (banking, insurance, healthcare): local supervisory law applies.
For company establishment: typically local company law for a local subsidiary. For local employees: local labor law is often mandatory under Rome I Article 8 (habitual place of work). For local licenses and permits: local administrative law.
Lex mercatoria (transnational commercial law) is an alternative: UNIDROIT Principles of International Commercial Contracts 2016 (updated), ICC Rules, ICC Force Majeure Clause 2020, Incoterms 2020, UCP 600 for letters of credit, URDG 758 for bank guarantees. Not independent law but can be incorporated contractually. For arbitration: a tribunal can apply UNIDROIT Principles as 'rules of law' under Article 21(1) ICC Rules.
For 'split choice of law' (dépeçage): parties can subject different parts of a contract to different laws under Rome I Article 3(1). In practice: rarely favorable — leads to complications. Better: one choice of law with specific exceptions where necessary.
Recognition and Enforcement Worldwide (Where can your judgment be enforced?)
Recognition and enforcement is the third private international law (PIL) question, often forgotten at the contract stage. For court judgments within the EU: automatic recognition under Brussels I-bis (Regulation 1215/2012) Article 39. No exequatur procedure. Fast and effective.
For court judgments outside the EU: separate rules per jurisdiction. UK post-Brexit: via the Hague Choice of Court Convention 2005 (UK acceded 1 January 2021) for exclusively chosen courts; for other matters, common law. US: state-level Uniform Foreign Money-Judgments Recognition Act or common law per state. Switzerland: Swiss Private International Law Act. China: reciprocity principle (virtually impossible). For the Hague Judgments Convention 2019: entered into force 1 September 2023 but still a limited number of contracting states (EU since 1 September 2023, Ukraine, Uruguay).
For arbitral awards worldwide: New York Convention 1958 (170+ contracting states). Grounds for refusal are very limited under Article V. In practice: 90%+ recognition. For Dutch clients with disputes against American, Asian, or Latin American parties: arbitration is absolutely preferable over court proceedings.
For cross-border asset tracing: specialist agencies (Kroll, Control Risks, Aviator Group) trace bank accounts, real estate, shares worldwide. Costs €50,000-€500,000 for a medium-sized case. Often profitable for claims above €5 million.
PIL for Consumers and Employees (What mandatory protection exists?)
For B2C and employment relationships, PIL offers special protective rules that partly override choice of law. For consumers, under Rome I Article 6: choice of law may not override mandatory protective rules of the country where the consumer resides. For jurisdiction: a consumer can choose between the court of their own country or where the company is established (Brussels I-bis Article 18); a company can only sue the consumer in the consumer's country.
For B2C E-commerce: directed business doctrine under Brussels I-bis. A company that targets consumers in another Member State (via website, translation, currency, payment options) is subject to the jurisdiction and consumer protection rules of the consumer's country. For Dutch webshops active in Germany: German consumer protection is mandatory.
For employees, under Rome I Article 8: choice of law may not override mandatory protective rules of the country where work is habitually carried out. For posting of workers within the EU: Posting of Workers Directive 96/71/EC (amended 2018/957) applies host country labor law to core terms and conditions (minimum wage, holidays, safety).
For employee jurisdiction (Brussels I-bis Article 21): an employee can choose between the court of the place where they habitually carry out their work, or where the employer is established, or where the business was located when the employee was hired. An employer can only sue the employee in the employee's country.
id="" href="https://muschlegal.nl/internationale-geschissen">Pillar: International Disputes
Pillar: EU Law for International Business
Which Law Applies to Your Contract?
Choice of Law Clause Essential for Export
Rome I and International Contracts
Brussels I-bis Regulation Explained