engleski

Jurisdiction and applicable law in crowdfunding

As a process of raising monetary contributions from a large number of persons, crowdfunding may take many forms: from traditional benefit events and television fundraising campaigns to increasingly popular internet platform fundraising. The online environment in which the newest forms of CF emerge facilitates its unprecedented ability to cross borders and attract persons from various countries. This having been said, the same environment complicates legal assessment. The issues that inevitably arise in cross-border dealing are particularly intricate: which court decides and which law applies? At the outset, one must differentiate between various types of CF models. Furthermore, the tripartite structure of the CF model involving the specialised internet platforms adds another layer of complexity because the conflict of laws analysis demands the preliminary identification of legal relationships and their legal characterisation. Finally, there is a constant debate about whether investors may be legally characterised as consumers or not, which may significantly affect conclusions on jurisdiction and applicable law. In answering these questions, the author considers national and supranational legal instruments containing provisions on international jurisdiction and applicable law, with the focus on the EU ones. In the course of legal analysis, the interpretational principles set by the Court of Justice of the European Union will be taken into account. Since no such principle is directly related to the internet-based CF, they need to be assessed in terms of their relevancy and potential to be used as starting points in analogical reasoning. Besides drawing a clearer image about the conflict of laws issues for participants in CF, the aim of this article is also to assess the validity of some of the legal terms under which these participants join the CF process.

alternative financing, applicable law, crowdfunding, conflict of laws, European law, international jurisdiction, internet, legal characterisation

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