International Subcontracting in EC Private International Law

Abstract. ‘International subcontracting’ (sous-traitance de marché or de services or sous-traité, sous-entreprise, Zulieferwesen or Zuliefervertrag, subappalto or subfornitura) refers to a widespread contractual practice of the modern construction industry, at the very core of the ‘self-made law of building industry’, which has so extensively contributed to the development of the lex mercatoria. As often described in literature, international subcontracting denotes an agreement, entered into by a contractor and a third party that undertakes to perform all or a part of the contractor’s obligations required by an employer under an actual or proposed cross-border construction contract. Reference hereby shall be made to private procurements only, since subcontracts related to public procurements almost exclusively involve administrative concerns, which deserve a separate appreciation. International subcontracts, because of the contractual connection to the construction contract, raise significant issues of private international law that require, subject to certain conditions, a deviation from the classic standard of neutrality and blindness of conflict rules in contracts. Indeed, only conflict rules likely to support the substantial private interests within the contractual connection can properly keep the focus on the functional unity that closely connects international subcontracts and construction contracts, which escape mechanical allocation by means of hard and fast conflict rules. To this purpose, a recent wave of scholarship should be taken into account, which suggests a functional approach to conflict rules, which focuses on the nature of the relationships between the parties, rather than on the territorial scope of the applicable rules, to achieve the application of the law ‘which is presumed to be most concerned with the party in need of protection’.