The DRAFT COMMON FRAME OF REFERENCE AND ARBITRATION

By Prof. Tibor Tajti (Thaythy) ©

The lecturer and the author of these slides was NOT involved in the drafting of the Draft Common Frame of Reference by any means so far

The presentation is thus based on the reflections of a professor and scholar – and earlier for about ten years a corporate counsel – primarily interested in international and comparative law, reform of law and the interplay between law and economy

Up to this point in time the only indirect connection to the DCFR is the invitation to critically assess the consumer protection aspects of the CESL to be held in Brussels on 5th December 2012 (EPP Public Hearing on CESL)

CAVEAT

What is the Draft Common Frame of

Reference?

“That is a text serving as a source of inspiration for law making and law

teaching at all levels.”

Christian von Bar, A Common Frame of Reference for European Private Law - Academic Efforts and Political Realities, Electronic

Journal of Comparative Law, at 1 (< www.ejcl.org/121/art121-27.pdf  >).

“We, the academic teams that in 2005 contracted with the European Commission to deliver […] the Academic Common Frame of Reference, hope to

bring about a framework set of annotated rules to which the European and national legislators and the

European and national courts, including arbitral tribunals, can refer to when in search for a commonly acceptable

solution to a given problem. This ‘Common Frame of Reference’ is also drafted with a view to allowing parties

to a contract, whether cross-border or purely domestic, to incorporate its contents into their

agreement.”

Christian von Bar, A Common Frame of Reference for European Private Law – Academic Efforts and Political Realities, 23 Tul. Eur. & Civ. L.F. 37 (2008).

The Broader Perspective: the aims and goals

The Road towards the DCFR

2003: EU Action Plan– for a more coherent contract law

2007: first publications of the cooperating Groups - Von Bar group (2005): focus on what is common - Acquis group (2002-Prof. Ajani): focus exclusively

on the law of the EU - the so-called Principles of European Contract Law

were also integrated (i.e., integration of the work of the (Lando Commission)

2009: Outline edition becomes publicly available

2010: annotated text - COMMENTS (i.e., commentary with examples from national laws of EU Member States) – six volumes (publisher: Oxford University Press)

The EXPERTS BEHIND THE DCFR

COORDINATORS FROM POST-SOCIALIST CEE COUNTRIES

Christian von Bar (Osnabrück)

Guido Alpa (Italy) Hugh Beale (UK,

Warwick) Eric Clive (Edinburgh) Maurits Barendrecht

(Tilburg) Ulrich Drobnig (Hamburg) Ole Lando (Denmark) Verica Trstenjak (Maribor) Lajos Vekas (Budapest)

etc.

Lubos Tichy (Czech Rep.)

Paul Varul (Estonia) Christain Takoff

(Bulgaria)

Valentinas Mikelenas (Lithuania)

Monika Jurčova (Slovakia)

Mircea-Dan Bob (Cluj, Romania)

Etc.

REALITY

“whilst it seems that the European contract law initiative as described in the Commission communication of 11 October 2004 (COM(2004)0651) and reported on in the Commission's First Annual Progress Report (

COM(2005)0456) should be seen primarily as an exercise in better law-making at EU level, it is by no means clear what it will lead to in terms of practical outcomes or on what legal basis any binding instrument or instruments will be adopted […]”

WHAT WOULD BE NEEDED (WISHES)

The European Parliament “… reiterates its conviction, expressed in its resolutions of 26 May 1989, 6 May 1994, 15 November 2001 and 2 September 2003, that a uniform internal market cannot be fully functional without further steps towards the harmonisation of civil law […].”

Is THERE A Future FOR THE European Civil Code?

MAURO BUSSANI:

“The defense of the status quo [that the time … is not ripe to enact whatever Restatement or Civil Code] … fits perfectly with the need

of the professional elite to keep the leadership over national and transnational legal affairs … ”

Mauro Bussani, the Driving Forces behind a European Civil Code, Zbornik Prav. Fak. Sveuč. Rij. Suppl. Br. 3, xx-xx, at 11.

The Seven Possible Avenues of Development

GREEN PAPER FROM THE COMMISSIONon policy options for progress towards a European

Contract Law for consumers and businesses(Brussels, 1.7.2010, COM(2010)348 final)

Option 1: “mere” publication of the DCFR (for legislators, teachers and private parties)

Option 2: an “official toolbox for legislator”Option 3: EU Commission recommendation to Member States to incorporate the DCFR into national laws

Option 4: DCFR as an alternative system to national laws that could be chosen by parties (“optional instrument”)

Option 5: EU Directive with minimum common standardsOption 6: EU Regulation with uniform rules replacing national laws

Option 7: European Civil Code

The Common European Sales Law (CESL)

While the fate of the DCFR is questionable, the EU is about to bless the CESL

Optional instrument for cross-border sales contracts (movables and digital content – as well as related services)

Heavily consumer protective

Register for cases on CESL & review of application (after 4 years, MSs will provide info – after 5 years, the EU Commission will do that to Parliament)

5th of Dec. 2012, Brussels – EPP Group Public Hearing: CESL – A Balanced Proposal between Consumers and Traders?

The Main Features of the DCFR A document made by western-European academic elite

(with simbolic contribution of experts from smaller countries – see the order and the quantity of text in the comments)

Primarily theoretically-based rather than based on input coming from the side of industries and practicing lawyers

Incomplete (e.g., inheritance and family law or real estate property law are not covered)

Non-mandatory source of law (i.e., “soft law”)

Monistic (i.e., the rules equally apply to merchants and non-merchants – though separate consumer protection rules have been added – primarily the law from EU consumer directives)

The text integrates the work of three academic groups (Lando Commission, Acquis Group and the Study Group) what often affects the quality and consistency of the DCFR

The Contents of the DCFR Book I: General provisions Book II: Contracts and other juridical acts Book III: Obligations and corresponding rights Book IV: Specific contracts and the rights and

obligations arising from them Book V: Benevolent intervention in another’s affairs Book VI: Non-contractual liability arising out of

damage caused to another Book VII: Unjustified enrichment Book VIII: Acquisition and loss of ownership of

goods Book IX: Proprietary security rights in movables

assets Book X: Trust Appendix: definictions and index of topics

HOW CAN ARBITRATION

PROFIT FROM THE DCFR?

Arbitrability – business interests – corollary risks – potential for abuses

THREE MAIN QUESTIONS IS THE DCFR FITTING THE INTERESTS OF MAJOR

ARBITRAL CENTERS ? - Or, to what extent matters substantive law in

choosing the place of arbitration?

WHEN AND WHY IS THE DCFR SUITABLE – OR ILL-SUITED – TO SERVE AS LEX ARBITRI?

- Or, how is the DCFR finding the middle-ground (e.g., culpa in contrahendo)

GOING BEYOND THE DCFR: ABUSES - What can we learn from the experiences of non-

Europeans in trying to find the answer to which fields of DCFR are arbitrable and which are not?

- The unhappy US experiences with arbitrating franchise and private debt collection-related disputes.

International Arbitral Centers

and the Law Applicable to the

Substance

Is it in the interest of English, Swiss or other arbitral centers to pay

attention to the DCFR?

the “Business” of International Arbitration

LONDON TORONTO According to estimates

London handles annually international arbitrations with a combined value of USD 40 to 50 billion

Lord Ashborne in the debate on the 1979 English Arbitration Act:

“new arbitration might attract to England as much as £ 500 million per year … in the form of fees for arbitrators, barristers, solicitors, and expert witnesses.”

Charles Rives Associates (2012): Arbitration in Toronto: An Economic Study, at 3:

“we estimate the total impact of arbitration on the economy of the City of Toronto to be $256.3 million in 2012, growing to $273,3 million in 2013.”

Attraction of International Arbitration (1)

Claim 1: Making the weak points of the others visible is a weapon in the global competition of established and less-established arbitral centers

Switzerland: a/ setting aside only by the Swiss Federal Tribunal (awards appr. confirmed in 93% of cases) – limited confidentiality

b/ Geneva: French style – Zurich: German legal thinking

France: the ‘group of companies’ doctrine (not in Switz.) & language

England: a/ Often English lawyers must be consulted to understand the lawb/ Less predictable as court cases are not based on a single opinion of the

court but of the various individual opinions of the judges (same conclusion but different reasoning)

United States: a/ arbitral law is a mixture of federal and State stutory and case law (State where the arbitration’s seat is)

b/ In some States, foreign lawyer might even be charged for unauthorized practice of law.

Attraction of International Arbitration (2)

Claim 2: Substantive law plays a role in promoting of a jurisdiction as an international arbitration center

“The selection of the place of arbitration has impact on the pool of arbitrators, the parties’ choice of law, procedural law and enforceability of the award.” Wilske & Fox: at 384.

“[The] chairperson might have a strong tendency to follow his or her local practice and – in situations where the parties have not made a clear choice of law – even convince his or her co-arbitrators that the substantive law of the place of arbitration is applicable for the dispute.” Id. at 385.

Self-Promotion and Substantive Law

ENGLAND GERMANY

2007 Law Society campaign- Booklet: Exporting

Excellence – A Guide to Legal Services

Press release: “The brochure includes the promotion of draft clauses for insertion in to commercial contracts at the contract agreement stage to recognise the application of English law to that contract..”

2008: German counter-campaign

“Codification enables swift and straightforward access to law. […]. Codification provides legal certainty, as legislation contains general principles and guidelines, and defines the terminology used. […]. [N]ot only are contracts under German law more concise, they are also more cost-effective and reliable than contractual agreements under English or US law.”

Legitimate Questions?

If substantive law matters (is one of the factors) in choosing the international arbitral center –

Could jurisdictions aspiring to become arbitral centers benefit from offering expertise in DCFR?

The DCFR, a soft law (i.e., optional) instrument that manages – in certain fields – to find the middle-ground between conflicting, or substantially differing, national laws?

The Tougher Question:

The DCFR as lex mercatoria or rules applicable to the

substance

THE DCFR AND THE INDUSTRY- The DCFR is an EU – soft – law instrument that may be exploited

in the context of ADR:

a/ as lex mercatoria or rules applicable to the substance

b/ as a tool to find or understand national private laws

- The DCFR is a pan-European instrument, which with its corollary documents present so far unimaginable vistas (though risks as well):

a/ teaching law

b/ for researching, comparing and thus applying various European national laws – and better understanding one’s own law

- The DCFR may (?) breake the monopoly of the few major western European jurisdictions also in the context of ADR

- arbitral law is procedural but substantive law is a sine qua non

- it is always the local lawyers that known local substantive & procedural law the best and profit from that

The DCFR as Lex Mercatoria

“The conventional method of ascertaining the law applicable to the merits of a dispute is to select a national system of law [...]. The law so chosen is then regarded as the proper law of the contract.

It is sometimes suggested, however, that this search for the proper law is out of touch with the realities of modern international trade; and that what is needed is not a particular national system of law, but a modern law of merchant. [...].

This modern law merchant goes under various descriptions, including 'transnational law', 'the international law of contracts,' ' international lex mercatoria' and 'international trade law.”

Why is the DCFR appropriate to serve as lex mercatoria?

LEX MERCATORIA IN GENERAL

DCFR AS LEX MERCATORIA

Problem 1: determining the content of law

E.g., if the meaning of a trade usage is unknown to arbitrators, the content might be proven (question: how? With what?)

Problem 2: confliuct with public policy rules of a national law(ordre public)

Problem 1: The DCFR is exact and hence easier to determine content

Problem 2: - As there is no closed list

of what qualifies as public policy, conflict can never be excluded

- Yet the risk is much smaller as the DCFR took into account what is normally in Europe in conflict with public policy

The first-comers…

Moot court competition on the DCFR organized under the auspices of the Warsaw Arbitral Tribunal attached to the Polish Chamber of Commerce (8th March 2012) < http://sakig.pl/en/news/events/draft-common-frame-of-reference-warsaw-international-arbitration-moot-at-the-court-of-arbitration-at-the-pcc >

--------------------------------------------------------------------------------------“The Court of Arbitration at the Polish Chamber of Commerce together with the

European Legal Studies Institute is pleased to invite all interested students and their professors to join the International Arbitration Moot in Warsaw - a competition touching on problems concerning the Draft Common Frame of Reference (DCFR) and procedural issues in arbitration.

The Moot is intended to popularize and disseminate knowledge regarding the legal texts of the Draft Common Frame of Reference prepared by the Study Group on a European Civil Code and the Research Group on EC Private Law (Acquis Group), and to promote the use of international commercial arbitration to resolve international commercial disputes in accordance with the DCFR. The competition will promote knowledge of the process of European Private Law unification, and show the vital importance of the DCFR as a complete set of rules which will significantly facilitate the settlement of disputes, especially in international arbitration.”

THE REPERCUSSIONS OF THE DIFFERING NATURE OF

VARIOUS PARTS OF THE DCFR

Are they equally appropriate to serve as the lex mercatoria in arbitration?

Do the Numbers Mean Something?

SALES:- 45 sections (plus a number of section from

general chapters)

FRANCHISE:a. Sections common to commercial agency, franchise and

distributorship – which apply only is not provided otherwise by contract: 13 section (plus 2 on the relationship of the chapters on these three contract types)

b. Sections specifically on franchise: 14 sections

SECURED TRANSACTIONS LAW: 122 sections (though: 12 on registration and 28 on

enforcement of security interests – additionally the procedural law of Member States regulates court enforcement of these)

Main Features of Three Fields of the DCFR

SALES FRANCHISESECURED

TRANSACTIONS

•Traditional nominated contract

•Stable law

• Differences among jurisdictions the smallest

• Main legal problems are known

• New type of contract •Hybrid

• Innominate (often)

• Often not regulated

• Variations though basic forms are known

• Legal dilemmas exist

• A new SYSTEM promoted (also) by the DCFR• A system of various contracts (not a single type)• Crucial differences exist among European laws• Some of the differences may qualify as ‘public policy’ (ordre public)

SALES FRANCHISE SECURED TRANSACTIONS

- A compromise among differing European systems similar to the CISG

- Most of the rules are default rules

THE LEAST DILEMMAS ON

WHETHER ARBITRABLE

- Offers a comprehensive law on franchise for Europe

THE LAW IS VERY FLUID,

LITTLE IS KNOWN ON

ARBITRATION OF FRANCHISE

DISPUTES

“The goal of harminising proprietary security in novable assets in Europe”

Crucial novelties & huge differences on national level

MOST DILEMMAS ON ARBITRABILITY

The Different “Missions”

HOW IS THE DCFR RESOLVING TENSIONS?

THE CASE OF THE DOCTRINE OF CULPA IN CONTRAHENDO

(“FAULT IN CONTRACTING”)

Black’s Law Dictionary

“The principle that parties must act in good faith during preliminary contract negotiations.”

A Difference that Matters

GERMAN LAW“… contracting parties are under a duty, classified as contractual, to deal in good faith with each other during the negotiation stage, or else face liability, customarily to the extent of the wronged party’s reliance.”

ENGLISH & US LAWa/ Generally accepted view: - common law does not have a counterpart

b/ Kessler & Fine: “… the doctrines of negligence, estoppel, and implied contract, among others, have … served many of the doctrinal functions of culpa in contrahendo.”

The AMERICAN POSITION ON NEGOTIATIONS AND PRE-CONTRACTURAL LIABILITY

“In contrast [to Europe], the [U.S.] Uniform Commercial Code mandates good faith

only during the performance and enforcement of contracts. Good faith under the civil law system means more than not

breaking off negotiations in bad faith. […].”

Larry A. Dimatteo, The Law of International Business Transactions (Thomson/West, 2003).

DCFR AND THE ARBITRABILITY OF

FRANCHISE CONTRACTS

“[Part E] of Book IV apply primarily to contracts for the establishment and regulation of a commercial agency, franchise or distributorship. These contracts have many characteristics in common , especially their

economic function – the establishment and regulation of a marketing relationship.”

DCFR Comments, vol. 3, Point A of the comment to section IV.E. – 1:101: Contracts covered, at 2281.

1

A Paradigm Franchise System

1. Transfer of IP & know-how (business package)

2. Training, assistance and advising FRAN

CHISEE1. Payment of royalty & fees

2. Duty to strictly follow instructions

UNIFORMITY

ASYMMETRY

FRANCHISOR

Franchising in Europe

UNREGULATED REGULATED

EU:: some franchises are caught by competition law

Pronuptia case1986: – division of territory problematic

Most of national laws have nothing specifically on franchise

DCFR: Chapter 4 – nominated contract

Italy: Law No.129/2004 Spain: s. 62 Retail Trade

Act and a special law France: Loi Doubin (1989)

& Decree No. 91-337. 2006: Belgium 2006: Sweden Romania: Decree No. 52-

1997 (amended by 79-1998) plus the new Civil Code of 2011

Ukraine: defined in two codes (2003) but the act on registration of franchise not passed yet

How is the Weaker Party (Franchisee) Protected in

Europe?

Through Regulation

- Mandatory norms- Lists on what to disclose - US: a. Agency oversight

(FTC)b. Some franchise

systems: SEC- In Europe:

Belgium, France, Italy, Romania, Spain and Sweden.

Industrial Standards

- Code of Ethics

- voluntary disclosure and fair dealing

- Austria, Lithuania, Germany and Portugal

(good faith law systems)

Private law remedies

- Two variants:a. Countries in

which it is a nominated contract (Lithuania)

b. Not nominated: where general rules may be exploited

(Hungary, Poland, ex-YU)

Examples from CEE: Hungary (1)

More than 500 businesses claim to be a franchise systems on the website of the Hungarian Franchise Association

e.g., “FORNETI” – autochtonous Hungarian franchise system (frozen pastry products)

Yet franchise is not regulated in Hungary – the drafters of the new Civil Code decided not to make a nominated contracts out of it (allegedly to vague & hybrid transaction)

- as a result, courts have to apply by analogy to provisions on most similar contracts; concretely to:

1. sales (“adásvétel”) or 2. agency (“megbízási szerződés”) or 3. enterprise contract (“vállalkozási szerződés”) or 4. licencing contract.

RESULT: UNPREDICTABILITY AS TO THE RIGHTS AND OBLIGATIONS OF THE PARTIES

Franchise in Hungary

Problem of determining the legal nature of franchise:- Unwritten rule is that in case of non-nominated contracts that

law should be applied the elements of which DOMINATE in the given franchise contract (Discretion or subjectivity?)

- E.g., the obligaitons of the franchisee are not the same depending on the rules of which nominated contract are applied by analogy:

a/ If the rules on agency are applied: - acting with due diligence is requested but NO

PARTICULAR RESULT must be achieved

b/ If the rules on entrepreneurship contracts are applied: - due diligence is INSUFFICIENT – some concrete result

must be achieved (e.g., gathering of a predefined number of clients)

QUESTION ON WHAT THE DCFR GIVES NO ANSWER

Is this Case from Poland Instructive to the Entire CEE?

(Court of Appeals, Katowice, 1998)

The Unresolved Question to Arbitrators

Is asymmetry a natural corrolary (sine qua non) of franchise contracts?

A. If not: how to determine which contract is voidable? Which clauses to take into account in determining that?

E.g., given that normally franchisors draft the contract – is the mandatory arbitration clause automatically void? Or, the abuse must be proven?

B. If YES: 1. Can the DCFR model taken as the European model of

franchise asymmetry? Especially as most European countries has no franchise regulation.

2. What to do with clauses that were dictated by the franchisor but are not listed in the DCFR? Are they per se void?

E.g., the DCFR does not contain a clause on arbitration of franchise disputes.

Assymetry TestDCFR GLICKMAN MODEL CONTRACT

Audit and inspection limited by reasonableness

(Comments: in reasonable time of the day and with reasonable frequency)

Nothing on mandatory insurance

Nothing on the franchisee’s duty to pay all taxes and other encumbrances

Nothing on the prohibition of the transfer of the contract

Nothing on arbitration Art 2:302 – equal right to

termination the contract

No such limitation on audit and inspection

Franchisee must pay such insurance and to indicate the franchisor as the beneficiary

Franchisee must pay all taxes without delay – if breached: franchisor has the right to terminate

Prohibition of contract transfer: standard

Arbitration: standard Franchisor has bigger

termination rights

Franchisor Superiority STRATEGIC ADVANTAGES STRONGER CONTRACTUAL

POSITION

Financially stronger Bigger expertise Dictates the tempo:a. Entry fee: $ 10,000b. Only duty to disclose

on risks (duty to deliver the manual 14 days before)

Drafts all legal acts Dictates applicable

law, place of arbitration or court procedure

a. Right to dictate the terms of the IP license

b. Right to auditc. Right to monitor the

operations of the franchisee

d. More favorable rights for termination

The Polish Decision- 4 March 1998, 1 Aca 636/98 -

- Franchisee wanted to terminate because his outlet was non-profitable ;

- His arguments: a. The contract was asymmetric – to wit, the outlet

bankrupted because everything was dictated by the franchisor

b. Franchise contracts as asymmetric contracts are contrary to the principle of freedom of contract and good faith.

- First instance: for the franchisee- Appeal court: for the franchisor as the first instance

decision was based on “from the past inherinted conceptions of what is moral and fair in business life.”

WHAT TO DO WITH MANDATORY

ARBITRATION OF FRANCHISE DISPUTES

Are the unhappy experiences with arbitrating franchise

disputes from the US instructive to Europeans?

2007 Bill: Arbitration Fairness Act

The bill wanted to PROHIBIT arbitration of:

1. disputes with consumers2. employment disputes,

and3. franchise disputes.

Reason: these categories of parties have no real possibility of freely deciding on whether to arbitrate

What is the legal nature of franchise and is that of relevance in deciding?

Is the DCFR’s system a properly balanced system or rather a too-franchisee tilted one?

Is asymmetry a sine qua non of franchise contracts?

If yes, what level of asymmetry should be accepted?

Dilemmas on Arbitrating Franchise Disputes

US Experiences GENERAL QUESTIONS

The ASPIRATIONS IN THE DRAFT

COMMON FRAME OF REFERENCE

“Rules on the substantive aspects of security in movables would be toothless, or would fail to

achieve the goal of harmonising proprietary security in movable assets in Europe, if they left

enforcement of those rights entirely to the – diverging – procedural laws and rules of the Member

States.”

DCFR Comments to Article IX.- 7:101: Secured Creditor’s Rights after Default, at 5613.

Is Secured Transactions Law Arbitrable?

Philip R Wood, Law and Practice of International Finance (Sweet & Maxwell, Thomson, 2008, University Edition), point 32-28.

“Unlike ordinary commercial contracts, arbitration is almost never used in financial contracts, especially bank loan agreements or bond issues.

The main objections are: having nothing to arbitrate; very limited appeals; time and delays involved in setting up the arbitration tribunal; not necessarily less expensive; looser procedures, and sometimes decisions are made on the merits otherwise than in accordance with the strict principles of law ”

Counter Arguments or Who Does Business based on Secured

Transactions Law?

BANKS NON-BANKING FINANCIAL ORGANIZATIONS

Philip R Wood is right that banks are hesitant to resort to ADR

BUT in CEE disputes of banks and consumers IS being directed to arbitration and mediation

Hungary: there is a PANEL FOR MEDIATION attached to the Agency on Financial Supervision (FSA – Pszaf)

Contracts with RETAINED OWNERSHIP

a. consignmentb. leasing (operational and

financial)c. sales contracts (esp.

cross-border ) of suppliers Factoring Pawnshops Pledging investment

property controlled by brokers

THE DCFR, SELF-HELP AND ARBITRATION

“It appears that in many European countries there is an increasing movement seeking an alternative to the traditional method of enforcing security rights because of [the] delays, costs and often disappointing results

[of enforcement through courts] ...”

Von Bar i Eric Clive, Komentar Nacrta (Oxford, 2010), tom šesti, strana 5614.

Can Repossession-Related Claims be Arbitrated?

See, e.g., Alabama Title Loans, Inc. v. White, 80 So.3d 887(Ala. 2011). The clause in a car loan agreement provided that the arbitration clause (agreement) “shall survive the repayment of all amounts owed” and that it extended to all claims, including tort claims, that “relate[d] to this Agreement or the Vehicle;” (i.e., not only those arising directly from the loan agreement). Based on such formulation of the arbitration clause, the court ordered arbitration of the debtor’s claims against the repossession agency that had repossessed after the loan had already been paid.

The Repo Industry and the Abuse of Arbitration

See the FTC document Repairing a Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration (2010); (http://www.ftc.gov/os/2010/07/debtcollectionreport.pdf>;

The document concludes that “[…] the current [US] system for resolving consumer debts is broken, […] because consumers are not adequately protected in either debt collection litigation or arbitration.”

Id., Executive Summary, at i.

Not a Threat in Europe?

WHAT ALREADY IS EVIDENT

NO EVIDENCE ON …

Presence of private collection industries

Growing number of countries regulates them

Indirect evidences on abuses

Whether arbitration is resorted to?

Yet private collection agencies – often ‘factoring’ companies – qualify as financial organizations, hence, should resort to mediation panels (e.g., Hungary)