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Universal Services v. Balunan

2009 April 15
by Hein Kernkamp

Court: Netherlands Supreme Court

Date: May 31th, 2002

LJN number: AE0632

Case: Universal Services is a supplier of offshore catering services for the oil and gas drilling industry in the North Sea. It employed Balunan as a stewardess on various drilling installations, mostly located at the Netherlands Continental Shelf. The employment contract contains the following clauses: "This contract shall be construed under the Laws of Scotland. The parties to this Contract agree that the laws of The Netherlands, including laws associated with employment and social security, shall not apply to this Agreement." Universal terminates the contract and Balunan commences proceedings before the Dutch Cantonnal Court. Balunan claims the protection of mandatory rules of Dutch employment law and formulates a claim for wages, holiday allowance and payment in lieu of annual leave remaining. Universal Services maintains that the contract should be construed under the Laws of Scotland only, but fails in two instances, after which it brings the case before the Netherlands Supreme Court.

This case called for an explanation and interpretation of Article 6 of the Convention on the law applicable to contractual obligations (Rome, June 19th 1980). Balunan had argued that she habitually carried out her work in performance of the contract in The Netherlands (Article 6 section 2 (a) of the Rome Convention) and therefore she could claim the benefit of Article 6 section 1 of the Rome Convention, that stipulates that a choice of law made by the parties shall not have the result of depriving the employee of the protection afforded to him by the otherwise applicable mandatory rules of the law. Universal Services argued that work perfomed that the continental shelf should not be regarded as work performed in The Netherlands.

Held: Article 2 of the Dutch North Sea Mining Workers Act formulates a rule of Dutch Private International Law. Under this rule work performed by an offshore worker on the Dutch continental shelf should be regarded as work performed within the territory of The Netherlands. This rule may and should be used to determine the applicability of Article 6 of the Rome Convention.

Balunan also performed her work in the Rotterdam port area at oil platforms under repair flying a foreign flag. According to the Netherlands Supreme Court, the Cantonnal Court was right, where it ruled that the law of the country in which the platforms were registered and whose flags it flied missed relevance in this case, as Balunan could not be regarded as a seafarer.

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