The Brussels I Regulation (No 44/2001)


Section 2  Special jurisdiction

Article 2 of the Brussels I Regulation takes as a starting point the general principle that legal proceedings can be initiated only in the Member State where the defendant has his domicile. Article 3 BR I points out that this principal rule of jurisdiction may be departed from only as far as this is permitted according to the rules for special jurisdiction set out in Articles 5 up to and including Article 24, whereas Article 4 BR I makes clear that the Brussels I Regulation has no meaning when the defendant is not living in a EU Member State and jurisdiction of the seised court is neither covered by the before mentioned Articles for special jurisdiction.

The first Artices to which Article 3 BR I refers are Article 5 and Article 6 BR I, that list a few situations in which a defendant, in derogation from the general principle of Article 2 BR I, may be sued in a Member State other than that of his domicile. The forums provided for in these Articles supplement those which apply under the principal rule of Article 2 BR I. In the case of proceedings for which a court is specifically recognized as having jurisdiction under these Articles the plaintiff may, at his own option, bring the proceedings either in that court (based on Article 5 or 6 BR I) or in the competent courts of the Member State in which the defendant is domiciled (based on Article 2 BR I) (Jenard OJ 1979 C 59/22).

Section 3 (Jurisdiction in matters relating to insurance; Articles 8-14), Section 4 (Jurisdiction over consumer contracts; Articles 15-17) and Section 5 (Jurisdiction over individual contracts of employment; Articles 18-21) contain rules that intend to protect the weaker party. These provisions offer the weaker party an extra forum where he may file his legal claim against the opposite party, this besides and in addition to the forum assigned under the principle rule of Article 2 (Member State where the defendant is domiciled). Often they also limit the possibilities of the opposite party to bring a claim against the weaker party in court, in the sense that this can be done only in the Member State where the weaker party is domiciled.

While the principal rule of Article 2 BR I clings to a factor connecting the defendant to a court, namely that of the Member State where he is domiciled, the rules for special jurisdiction recognise a link between the dispute itself and the court which may be called upon to hear it. These jurisdictions reflect a principle of the efficacious conduct of proceedings, and will be justified only when there is a sufficient connection in terms of the proceedings between the dispute and the court before which the matter is to be brought, from the point of view of the gathering of evidence or the conduct of the proceedings (ECJ 30 November 1976 ‘Bier v Mines de potasse d'Alsace’, Case 21/76), or in order to secure better protection of the interests of the parties against which the proceedings are directed (Pocar OJ 2009 C 319/10).

One has to be aware that there is a distinct difference between Article 2 BR I and Articles 5 and 6 BR I with regard to the question to what extent the Brussels I Regulation or the internal law of a Member State decides in which town or region a court must be sought to file a legal claim. Article 2 BR I only points out in which Member State a legal action must be brought to court. Once that question has been answered, the Brussels I Regulation retreats. It is up to the internal rules of national jurisdiction of that designated Member State to decide not only which type of court must be addressed (subject-matter jurisdiction), but also in which town or region this must occur (territorial jurisdiction within that Member State). Insofar it concerns the application of Articles 5 and 6 BR I this is different. These Articles not only point out in which Member State a court must be sought, but they indicate as well where this must be done within the territory of that Member State. Any internal rule of law on territorial jurisdiction in conflict with Articles 5 or 6 BR I is set aside by the mandatory rules of the Brussels I Regulation. The Regulation itself determines for these specific cases which court of the assigned Member State has territorial jurisdiction. It was felt necessary, in these situations, that a plaintiff will always be able to sue a defendant in one of the forums provided for by Articles 5 or 6 BR I without having to take the internal law of the State concerned into consideration (Jenard OJ 1979 C 59/22).

Example:
The internal law on jurisdiction of Member State A indicates that a legal claim for compensation of damage caused by a traffic accident must be filed at the court in whose territory the defendant is domiciled. A person domiciled in Member State B, who has caused an accident in the town Y of Member State A may, under the Regulation, be sued either on the basis of Article 2 BR I before a court of his own country, thus of Member State B (the question which type of court the plaintiff has to address and in which town or region he must do so is determined solely by the internal law on subject-matter and territorial jurisdiction of Member State B) or on the basis of Article 5 BR I before the court of Member State A where the accident occurred. In that last situation the Brussels I Regulation orders in addition that this must be done before the appropriate court (as determined by the internal law on subject-matter jurisdiction of Member State A) in town Y, since the accident happend in the judicial territory of that court. This accident cannot give other courts (of the type designated by national law) within the territory of Member State A any jurisdiction over that defendant.


See also:


Initially, individual contracts of employment were completely ignored in the original Brussels Convention, and were consequently subject to the general rules and to the special rule on contractual obligations in Article 5, point (1), without any special restriction on the choice of forum. Now, in the Brussels I Regulation, they are made the subject of special rules in in Section 5 of Chapter II, which comes after the sections on insurance and consumer contracts, completing the rules protecting the weaker party to a contract.

 

 


Article 5 of the Brussels I Regulation

 

 


Additional forum for legal actions relating to a contract [Article 5, point (1) BR I]

Article 5 A person domiciled in a Member State may, in another Member State, be sued:
(1) (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;
(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:
- in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered,
- in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided,
(c) if subparagraph (b) does not apply then subparagraph (a) applies;


Introduction [Article 5, point (1) BR I]

Article 5 of the original Brussels Convention contained five cases of special jurisdiction (points 1 to 5), namely matters relating to contracts, to maintenance obligations, to tort, delict or quasi-delict, to civil claims for damages in criminal courts and to disputes arising out of the operations of a branch. With the accession of Denmark, Ireland and the United Kingdom, two further cases were added, namely disputes relating to trusts and disputes relating to the payment of remuneration in respect of salvage. Article 5 BR I, which continued these provisions, is one of the most important and most frequently applied Articles of the Regulation (Evrigenis OJ 1986 C 298/13). Again, it has to be noticed that the jurisdiction which Article 5, point (1), BR I, confers on a court of a Member State, is additional to the principal rule of Article 2 BR I, which links jurisdiction to the courts of the Member State where the defendant is domiciled. The plaintiff may, at his own choice, provided that the case is suitable for doing so, start legal proceedings either before a court of a Member State designated by Article 5, point (1), or before the courts of the Member State where the defendant has his domicile.

The Brussels I Regulation has, with regard to Article 5, point (1), not brought any changes in comparison to the 1968 Brussels Convention. The rule regarding contractual obligations is maintained. But to remedy the shortcomings of applying the rules of private international law of the State whose courts are seised (ECJ 6 October 1976 Tessili v Dunlop, Case C 12/76), subparagraph (b) of Article 5, point (1) gives an autonomous definition of the place of performance of "the obligation in question" in two specific situations. For the sale of goods, it will be the place where, under the contract, the goods were or should have been delivered. In the case of the provision of services, it will be the place where, under the contract, the services were or should have been provided. This pragmatic determination of the place of performance applies regardless of the obligation in question, even where this obligation is the payment of the financial consideration for the contract. It also applies where the claim relates to several obligations. The rule may, however, be "displaced" by an explicit agreement on the place of performance (Proposal 1999 C 376 E / 1-17).

Where the effect of the autonomous definition is to designate a court in a non-member country, rule (a) will apply rather than rule (b). Jurisdiction will lie with the court designated by the rules of private international law of the State seised as the court for the place of performance of the obligation in question (Article 5, point (1)(c) BR I (Proposal 1999 C 376 E / 1-17).

See also:

 


'Forum contractus' as an alternative for the domicile of the defendant [Article 5, point (1)(a) BR I]

Article 5, point (1) of the Brussels I Regulation provides the plaintiff an alternative forum when his claim against the defendant is based on a contract with that defendant. It establishes, in matters relating to contracts, the jurisdiction of the court of the place of performance of the obligation in question ('forum contractus'). The place of performance is thus recognized as a connecting factor which, for the purposes of jurisdiction, can apply with respect to all matters arising out of the operation of a contract. According to case law of the European Court of Justice this special jurisdiction may be invoked even where the existence of the contract on which the claim is based is in dispute between the parties (ECJ 4 March 1982 ‘Effer v. Kanter’, Case 38/81) (Evrigenis OJ 1986 C 298/13).

This rule enables a party (e.g. from England), who has concluded a contract with a counterparty from another Member State (e.g. from Germany), to start legal proceedings before the court of his own Member State (England), provided that the performance under the contract was or had to be performed in that Member State (England), and on the condition that the claim is filed at the (English) court in whose judicial territory the contract was or had to be performed. Often this will be the same judicial territory as the one where the plaintiff himself is domiciled, but this doesn't have to be the case. It is possible, for instance, that the contract indicates that the goods have to be delivered by the German supplier to the English buyer at the docks of Dover, while the English buyer is seated in London. In that event only the appropriate court with subject-matter jurisdiction in whose judicial territory the town of Dover is located, may consider it has jurisdiction on the basis of Article 5, point (1) BR I. The plaintiff is not able to start proceedings before a London court or any other court in the United Kingdom. If he does anyhow, that seised other court must decline jurisdiction, since the matter falls within the scope of the Brussels I Regulation, while there is no provision in that Regulation which grants any principal or additional jurisdiction to that London court.

When a seller from Hamburg, Germany, has sold goods to a buyer in Amsterdam, which goods are to be delivered at the port of Rotterdam, the Dutch buyer has two options when he wants to reclaim the already paid purchase price in court. He may start legal proceedings in Germany, where the seller (defendant) is domiciled. This can be done on the basis of Article 2 BR I, so that German internal law decides in which German town a court must be sought to start legal proceedings, for instance in Hamburg, the defendant's domicile. But if the Dutch buyer wants to, he may also choose to file his legal claim in the Netherlands, now on the basis of Article 5, point (1) BR I. Yet, in that case he is not allowed to choose for the court of Amsterdam, his own domicile, but has to select the court of Rotterdam, since the obligation is performed in the Rotterdam area. Article 5, point (1), BR I does not merely distribute jurisdiction on an international claim over Member States. It specifically says that the German defendant, if he is not to be sued in Germany in accordance with the principle rule of Article 2 BR I, can only be sued in the court for the place of performance of the obligation in question. When the German seller wants to sue the buyer from Amsterdam, he may choose either for the court of Amsterdam in accordance with Article 2 BR I and, subsequently, Dutch internal law on territorial jurisdiction, or for the court of Rotterdam in accordance with Article 5, point (1) BR I, being the place where the obligation derived from the sale contract was performed.

One has to observe that the Brussels I Regulation only comes to surface when the legal claim involves an international element within the meaning of that Regulation. As long as no international element is present, it remains inapplicable. When a contract with solely Dutch elements gives rise to a dispute, the question regarding jurisdiction has to be answered, in the event that the case is considered by a Dutch court, on the basis of Dutch national law. According to these national rules in principle only the domicile of the defendant is relevant to establish in which judicial territory a court must be approached. Where the contract was or had to be performed within the Netherlands is of no importance.

Article 2 of the Code of Civil Procedure contains the principal rule of territorial jurisdiction within the Netherlands for legal proceedings that have to be initiated by a writ of summons, which is nearly almost the case when it concerns a civil matter of commercial or merely financial nature. So if a sale agreement between two Dutch parties obliges the seller, seated in Amsterdam, to deliver goods at the address of a buyer, based in Maastricht, Dutch territorial jurisdiction depends on the question who of the involved parties will initiate legal actions (first). If the seller claims, for instance, the payment of the indebted purchase price, he has to file his claim at the Maastricht court. If the buyer, on the other hand, reclaims the already paid purchase price, he has to summon the seller to appear before an Amsterdam court. The fact that the goods were delivered in Maastricht (or in any other place in the Netherlands) plays no part at all, whereas the Brussels I Regulation remains out of the picture, since the claim does not include any international element.

Nonetheless, the place of performance of a contractual obligation is, as a connecting factor for jurisdiction, not totally unknown to Dutch law. Article 6 of the Code of Civil Procedure stipulates that Dutch courts have jurisdiction as well (in addition to situations in which the defendant is domiciled in the Netherlands) in matters concerning obligations from an agreement, if the obligation which forms the basis for the right of action or petition, has been performed or must be performed in the Netherlands and at least one of the parties is not domiciled in the Netherlands, while no other International Convention or European Regulation is applicable. The mere fact that the obligation is or has to be performed in the Netherlands forms a sufficient link with the Dutch legal sphere, even when none of the involved parties is domiciled in the Netherlands, provided, of course, that the Netherlands aren’t bound by a Convention or European Regulation that indicates differently. But Article 6 of the Code of Civil Procedure does not as well point out, like Article 5, point (1) BR I does, in which judicial territory within the Netherlands a Dutch court of the appropriate type has to be sought by the plaintiff. Therefore, it has no meaning when the dispute only involves Dutch parties and the contract is performed within the Netherlands without any link to another country. In such instances only the main rule for national jurisdiction, linking the competent court to the judicial territory within which the defendant is domiciled, is significant. Article 6 of the Code of Civil Procedure neither plays a part in determining territorial jurisdiction within the Dutch judicial order in other situations, for instance when the plaintiff does not live in the Netherlands or when both parties are domiciled elsewhere. It only confirms that the courts of the Netherlands have jurisdiction when the contract is or has to be performed in the Netherlands, provided that no other international or European law indicates otherwise. In view of the fact, however, that under the application of Article 6 of the Code of Civil Procedure the plaintiff or even both parties are domiciled outside the Netherlands, the defendant's domicile cannot determine territorial jurisdiction within the Netherlands, so that it’s conceivable that a claim on the basis of Article 6 of the Code of Civil Procedure (of which the content and implications are tuned to the Brussels I Regulation), must be lodged with the appropriate Dutch court in whose territory the contract was or had to be performed.

A seller from Russia and a buyer from the United States have agreed that the delivery of the sold goods shall take place in the Rotterdam harbour. When the Russian seller wants to initiate legal proceedings against the American buyer, he may file his claim at a court in the Netherlands. Pursuant to Article 6 of the Code of Civil Procedure the dispute has sufficient connection with the Dutch legal sphere to allow a Dutch court to rule on the matter. The same would apply if the seller would have been a Dutch corporation, seated in Amsterdam. Article 6 of the Code of Civil Procedure makes it possible for such a Dutch corporation to sue the American buyer before a Dutch court. Although Article 6 of the Code of Civil Procedure does not specify in which specific town or region a Dutch court has to be addressed, it's assumable that, in both cases, only a court in Rotterdam has territorial jurisdiction to admit the claim, since Article 6 of the Code of Civil Procedure intents to follow the provisions of Article 5 of the Brussels I Regulation and the case law of the European Court in this respect as much as possible.

The examples above show that Article 6 of the Code of Civil Procedure is only relevant when the dispute contains an international element. But in the event of such international element, the seised Dutch court also has to check if the dispute isn't covered by an International Convention or European Regulation that has priority and that supersedes internal rules of jurisdiction, like Article 6 of the Code of Civil Procedure. As soon as the defendant is domiciled in a EU Member State (and the claim involves an international element), the seised court has to turn to the Brussels I Regulation in order to determine whether it has jurisdiction. Only the rules of that Regulation reveal if the seised court is permitted to accept the case. If the court cannot base its jurisdiction on the Brussels I Regulation, it has to turn the claim down, irrespective of whether an internal rule of jurisdiction makes it possible to admit the claim. That internal rule can no longer have any meaning since the matter is dealt with already by the Brussels I Regulation, which expresses in this case that the court has no jurisdiction.

When a Russian seller and a German buyer have agreed that the sold goods have to be delivered in the Rotterdam harbour, the German buyer may initiate legal proceedings before a Rotterdam court, yet not on the basis of Article 5, point (1), of the Brussels I Regulation, but on the basis of Article 6 of the Code of Civil Procedure. Because the defendant is not domiciled in a EU Member State, but in Russia, and no other Articles of the Brussels I Regulation, in particular Articles 22 and 23 BR I, indicate that this matter falls within the scope of that Regulation, Article 4 of the Brussels I Regulation refers the question on jurisdiction back to the internal law of the seised court, in this situation to Dutch law of procedure. Here, Article 5, point (1) BR I remains inapplicable due to the fact that it is only relevant when the defendant has his domicile in a EU Member State ("A person domiciled in a Member State may, in another Member State, be sued ..."). In this example, the German buyer is the plaintiff, whereas the Russian defendant is not domiciled within the European Union, and the claim does not involve a dispute within the meaning of Article 22 or 23 BR I. The case would be different if not the German buyer, but the Russian seller would approach a Dutch court in order to sue the German buyer. Now the dispute has an international element which is covered by the Brussels I Regulation: Article 4 BR I does not leave the question on jurisdiction up to the internal law of the seised court, but indicates, in connection with Article 2 and 3 BR I, that it is covered by the Brussels I Regulation. Therefore, the seised Dutch court may only apply that Regulation (since no other International Conventions of the same kind exist) and Article 2 and Article 6 of the Code of Civil Procedure are definitely set aside, to establish if it has jurisdiction over the claim filed by the Russian plaintiff against the German defendant. It is clear that the Dutch court cannot base its jurisdiction on Article 2 BR I ("Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State"), but there are other Articles in the Brussels I Regulation providing a basis for jurisdiction. Article 3 BR I ("Persons domiciled in a Member State may be sued in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7 of this Chapter"), in connection with Article 5, point (1) BR I, ("A person domiciled in a Member State may, in another Member State, be sued in matters relating to a contract, in the courts for the place of performance of the obligation in question"), spell out that the seised Dutch court has jurisdiction over the claim filed by the Russian plaintiff against the German defendant because the legal claim involves an issue with an international element derived from a contract that is or has to be performed in the Netherlands (while the domicile of the plaintiff in general plays no part for the applicability of the Brussels I Regulation). The seised Dutch court, however, may admit the claim of the Russian plaintiff only if it is the appropriate type of court according to Dutch rules on subject-matter jurisdiction (assuming that the value of the claim exceeds an amount of € 5,000 this has to be a District Court) and that it is located within the judicial territory where the contract is or had to be performed (Rotterdam area). This means that the Russian plantiff shall have to bring his claim to the District Court of Rotterdam.

The influence of the Brussels I Regulation is even visible if two parties, domiciled in the same Member State, have an argument about a contract that was or had to be performed in another Member State. If one of these parties initiates legal proceedings in the Member State where the contract was or had to be performed, the court of that Member State, although non of the involved parties is domiciled there, has jurisdiction on the basis of Article 5, point (1) BR I and must accept the case, with the result that pursuant to Article 27 BR I the claim can no longer be brought to a court of the home country of both parties, not even on the ground that the defendant is domiciled there. But this means as well that in such matters one has to acknowledge, because international element within the meaning of the Brussels I Regulation is present, that the courts of the home country of the two parties cannot base any jurisdiction on its internal rules of jurisdiction, but have to apply that Regulation.

If a seller from Amsterdam would have been obliged under a sale agreement with a buyer from Maastricht to deliver goods in Germany or any other EU Member State, a dispute resulting from that contract always falls within the scope of the Brussels I Regulation because it has an international element (ECJ 1 March 2005 ‘Owusu v Jackson c.s.’ C-281/02). The result would be that the seised Dutch court is not allowed anymore to apply Article 2, Article 6 or any other provision of the Code of Civil Procedure or of Dutch national law to establish whether it has jurisdiction, but is confined to apply the rules of the Brussels I Regulation. Pursuant to these rules, in particular pursuant to Article 2 BR I, both, the Amsterdam seller and the Maastricht buyer, are allowed to initiate proceedings within the Netherlands, since the defendant is always domiciled in this Member State. Article 2 BR I leaves it up to the internal rules of subject-matter and territorial jurisdiction of the designated Member State to regulate where the claim has to be filed. According to Article 2 of the Code of Civil Procedure this has to take place at the court in whose judicial territory the defendant has his domicile. So when the Amsterdam seller wants to sue the Maastricht buyer he may refer to Article 2 BR I to indicate that the courts of the Netherlands have jurisdiction, and, after that, to Article 2 of the Code of Civil Procedure in order to file the claim at the Maastricht court in whose judicial territory the defendant is domiciled. In the end, this is the same result as would be achieved under an immediate application of Article 2 and/or Article 6 of the Code of Civil Procedure. But the conception that such a case is covered by the Brussels I Regulation, instead of by the internal law of the home country of both parties, means too that the Amsterdam seller or Maastricht buyer is permitted to bring the case to a German court, namely to the German court in whose judicial territory their contract has or ought to have been performed, and that this German court is allowed and even compelled to accept the case pursuant to Article 5, point (1) BR I, meaning that, for instance, the Maastricht defendant has to appear before a German court to defend himself against the claim of the Amsterdam plaintiff. After that, neither of them is able to address a Dutch court on this matter, because Article 27 BR I specifies that, where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States (e.g. a court of Germany, respectively, a court of the Netherlands), any court other than the court first seised (in this example a German court was firstly seised so that this provision refers to a possibly later seised Dutch court) shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised (e.g. the German court) is established. Where the jurisdiction of the court first seised (e.g. the German court founding its jurisdiction on Article 5, point (1) BR I) is established, any court other than the court first seised (e.g. the Dutch court) shall decline jurisdiction in favour of that court (e.g. in favour of the first seised German court).

Article 5, point (1), of the Brussels I Regulation has been the source of a number of problems of interpretation, regarding the definition of ‘matters relating to a contract’, the determination of ‘the obligation in question’ and the determination of the ‘place of performance’. These problems have generated a large body of case law of the European Court of Justice, which has arrived at independent solutions or referred the matter back to national law as appropriate, without overcoming all the difficulties generated by the Regulation (Pocar OJ 2009 C 319/10). One reason for these problems is the case law of the European Court of Justice, in particular ECJ 1 March 2005 ‘Owusu v Jackson c.s.’ C-281/02, which interpreted the territorial scope of the Brussels I Regulation broadly. According to this judgment, the Brussels I Regulation is applicable if the defendant is domiciled in a Member State of the European Community and there is an international link to another EU Member State or even a third State. However, in the published case law of many Member States, several judgments can be found where such applicability of the Regulation has been disregarded by the parties and the courts (Heidelberg Report nr. 49, p. 19).


'Matters relating to a contract' [Article 5, point (1)(a) BR I]

On the definition of ‘matters relating to a contract’, the national laws of the Member States differ, and the European Court of Justice has taken the approach that the concept is an independent one. This means that this term cannot be interpreted by the court of a Member State on the basis of the national law of that State. The European Court, however, has not provided any general or abstract definition, but in individual cases has given pointers indicating when there is a contractual obligation and when there is not (ECJ 22 March 1983 ‘Martin Peters v. ZNAV’, Case 34/82 and ECJ 17 June 1992 ‘Jacob Handte v Mécano', Case C-26/91). In the light of the fact that the wording of Article 5, point (1)(a), of the Brussels I Regulation is identical in every respect to that of the first sentence of Article 5, point (1), of the 1968 Brussels Convention, and the aim to ensure true continuity, it must be considered that the Community legislature intended, in relation to the Brussels I Regulation, to maintain, for all contracts other than those concerning the sale of goods and the provision of services, the principles established by the Court in relation to the 1968 Brussels Convention, regarding, in particular, the obligation to take into consideration, and the determination of, the place of its execution (ECJ 23 April 2009 'Falco v Weller-Lindhorst', Case C-533/07)

The existence or validity of a contract is a matter relating to a contract (ECJ 4 March 1982 ‘Effer v Kanter, Case 38/81), at least when the challenge is put forward in objection to an action for breach of contract. If an action relates both to breach of a contractual obligation and to non-contractual liability, there is no accessory jurisdiction: for the first claim jurisdiction is to be determined in accordance with Article 5, point (1) BR I, and for the second it is to be determined in accordance with Article 5, point (3) BR I, on liability arising out of a tort or delict, even if that might face the plaintiff with the prospect of separate actions before different courts (ECJ 27 September 1988 ‘Kalfelis v Bankhaus Schröder’, Case 189/87), a prospect that can always be avoided by falling back on the general rule of the domicile of the defendant of Article 2 BR I (Pocar OJ 2009 C 319/10).

‘Matters relating to a contract’ can also include obligations in regard to the payment of a sum of money which have their basis in the relationship existing between an association and its members, irrespective of whether the obligations in question arise simply from the act of becoming a member or from that act in conjunction with one or more decisions made by organs of the association (ECJ 22 March 1983 ‘Martin Peters v. ZNAV’, Case 34/82).

Yet, Article 5, point (1) BR I does not apply to disputes where the involved parties to the legal claim have not freely entered into a contract with each other, whereas the claimant cannot base its claim against the other party to the lawsuit on subrogation or any other similar action which he has acquired, together with the product itself, from his successor in title and which he may invoke against the original counterparty of his successor instead of that successor himself, because that counterparty has freely accepted this upfront. This is, for instance, the case with regard to a dispute between, on the one hand, a party who has acquired a product afterwards from the first buyer and, on the other hand, the manufacturer of that product, who is not the seller thereof to the first buyer, as far as the dispute concerns defects in the product or to its unsuitability for its intended purpose (ECJ 17 June 1992 'Jakob Handte v Traitements Mécano', Case C-26/91, ECR 1992 p. I-03967). Another example can be found in a dispute involving a claim, derived from a bill of lading, of a consignee of goods against the actual transporter and not against the person who issued the bill of lading. Such a claim does not fall within the scope of matters relating to a contract within the meaning of Article 5, point (1), BR I since the bill of lading in question does not disclose any contractual relationship freely entered into between the consignee and the actual transporter he wants to sue (ECJ 27 October 1998 'Réunion v Spliethoff's', Case C-51/97, ECR 1998 p. I-06511). Also matters relating to a contract do not cover the obligation which a guarantor who paid customs duties under a guarantee obtained by the forwarding agent seeks to enforce in legal proceedings by way of subrogation to the rights of the customs authorities and by way of recourse against the owner of the goods, if the latter, who was not a party to the contract of guarantee, did not authorise the conclusion of that contract (ECJ 5 February 2004 'Frahuil SA v Assitalia SpA', Case C-265/02, ECR 2004 p. I-01543).


'The obligation in question' [Article 5, point (1)(a) BR I]

Article 5, point (1) BR I links jurisdiction to the place where the obligation in question is or should have been performed. Concerning the determination of ‘the obligation in question’, Article 5, point (1) BR I expressly allows a number of jurisdictions in respect of one and the same contract, preferring a genuine connection between the court and the specific dispute over a single method of treatment of the contract. Usually, one single contract produces at least two different obligations, for instance, one to deliver a good or to provide a service and one to pay a counter performance in money. The search for a fair balance between the two requirements – a genuine link with the dispute and the unity of the contract – has led the European Court of Justice to hold that the expression ‘the obligation in question’ refers to the contractual obligation on which the action is based, therefore the obligation on whose non-performance the plaintiff’s action relies. So when the buyer or service provider demands payment of the agreed price, decisive will be the place of performance of the obligation to pay money. When his counterparty claims proper and/or full compliance, decisive will be the place of performance of the delivery of the sold goods or the place where the service is or should have been provided or the remaining part is or still has to be provided. Therefore, the same contract may point out two different places of performance within the meaning of Article 5, point (1) BR I, depending on the obligation for which compliance is sought or from which the legal action of the plaintiff results.

The before mentioned intention to get a fair balance means as well that one has to look at the original obligation, arising directly from the contract, which is performed inadequately, rather than at the obligation whose performance is expressly sought by the plaintiff within the proceedings, for example in the form of claiming damages or the rescission of the contract. Therefore, in a case regarding a claim for damages on account of a breach of contract, the European Court found that the obligation to be taken into account was not the payment of damages (thus where this obligation should be performed), but rather the obligation whose breach the plaintiff relied upon in support of the claim for damages (ECJ 6 October 1976, ‘De Bloos v. Bouyer’, Case 14/76, par. 13).

In the same way the Court has held that where several obligations arising out of one contract are relied upon in the lawsuit, the court before which the matter is brought can determine whether it has jurisdiction by referring to the principal obligation and the place where it is or has to be performed (ECJ 15 January 1987 ‘Shenavi v. Kreischer’, Case 266/85). The question whether obligations are accessory or equivalent is a question to be determined by the court hearing the case, ordinarily on the basis of the law applicable to the contract (ECJ 28 September 1999 ‘Group Concorde’, Case C-440/97, par. 26).

Despite these judgments, it is still regularly the case that one contract will be subject to more than one jurisdiction, particularly when claims are based on obligations arising out of the same contract that are equal in rank (ECJ 5 October 1999 ‘Leathertex v Bodetex, Case C-420/97, ECR 1999 I-6747), as seen before in the example of a contract producing two different obligations, one the deliver goods and one to pay a counter performance in money. This situation is not always satisfactory, especially since an obligation to pay can be severed from the rest of the contract and the matter brought before the court of the place where that obligation is to be performed, which is often the forum of the plaintiff (Pocar OJ 2009 C 319/11).


'Place of performance of the obligation' [Article 5, point (1)(a)(b) BR I]

Regarding the determination of the ‘place of performance of the obligation’, though other solutions might have been possible – an independent solution, or a reference to the lex fori – the Court of Justice has opted for reference to the lex causae of the disputed obligation, determined according to the rules of conflict of laws of the court before which the matter is brought (ECJ 6 October 1976 ‘Tessili v. Dunlop’, Case 12/76). The seised court, therefore, has to apply the law which is governing the contract and decide on the basis thereof where the obligation has to be performed according to that law.

When the seised court thinks that the contract is subject to Dutch law, it first has to apply Dutch civil law to establish where the involved obligation is or has to be performed in order to be able to apply Article 5, point (1) BR I. The Dutch Civil Code (DCC) specifies that, if no place of performance has been stipulated by parties themselves, the delivery of an individually specified asset (good) has to occur at the place where it was at the moment that the obligation came into existence, while the delivery of a fungible asset (fungible goods) has to be performed at the place where the debtor practises his profession or has his business or, if such place does not exist, at the place where he has his domicile (Article 6:41 DCC), always according to Dutch national law (see Articles 1:10 - 1:15 DCC). The place where an indebted sum of money must be paid (performed), has to be determined in accordance with the provisions of Articles 6:116, 6:117 and 6:118 DCC. These Articles indicate that the payment of a sum of money must be made at the place where the creditor (who is entitled to receive the sum of money) is domiciled (according to Dutch civil law: see Articles 1:10 - 1:15 DCC) at the time of the payment, unless the creditor has pointed out another place of payment (for instance a bank when the debtor shall transfer a sum to a bank account of the creditor), provided that this place is located in the same country as where his domicile is located at the time of payment or as where his domicile was located at the time that the obligation came to existence. When the case is brought to a Dutch court, but this court is of the opinion that the contract itself is governed by the law of another country, for instance that of Germany, it must establish on the basis of German civil law where the obligations, arisen from this contract, have to be performed. Nevertheless, one has to remember that these national rules are of no meaning when the contract concerns a sale agreement or a service provision agreement, since Article 5, point (1), under (b), BR I, itself describes in such events where the goods are regarded to be delivered and where the service is regarded to have been provided. They remain, however, import when goods are to be delivered on another legal basis than a sale agreement, like a donation or exchange agreement.

The applicable law, governing the contract, may include or refer to an International Convention, for instance when the State whose law is applicable to the contract is a Contracting Party to that Convention and this Convention covers that contract as well meaning that the law applicable to the contract has to obey that Convention. The place of performance of the obligation then has to be determined in accordance with the rules set for this purpose in the relevant International Convention in order to be able to establish whether the seised court has jurisdiction on the basis of Article 5, point (1) BR I (ECJ 29 June 1994 ‘Custom Made Commercial v Stawa Metallbau’, Case C-288/92, par. 26), again on the understanding that this way may not be followed when the contract is a sale agreement or a service provision agreement, in which case Article 5, point (1), under (b) BR I defines where the place of performance of the obligation is located for the application of Article 5 BR I (of course the International Convention, that in itself does not provide rules for jurisdiction, shall in such event remain relevant for other issues regarding the contract between parties, yet not for questions in respect of jurisdiction of the court).

Most civil law systems, like that of the Netherlands, respect agreements, laid down by parties in a contract, that define the place of the performance of the involved obligations. Such agreements may be made explicitly in a separate clause, but also by stipulating for example that the price has to be paid on a bank account at a specific bank. When the contract contains such a clause, parties themselves have not only pointed out where the obligation has to be performed, but additionally also, indirectly, may have influenced the way in which courts of Member State may base their jurisdiction on Article 5, point (1), BR I (ECJ 28 September 1999 ‘Group Concorde’, Case C-440/97, par. 26). Provided that such clauses are valid according to the law applicable to the contract, the seised court, examining its jurisdiction, must pay attention to them. This has been confirmed by the European Court. If the national law applicable to the contract so permits, the ‘place of performance’ may be specified by the parties without it being necessary for their agreement to fulfil the formal conditions required under Article 23 of the Regulation for prorogation of jurisdiction (ECJ 17 January1980 ‘Zeiger v. Salinitri’, Case 56/79).

Although the European Court previously linked the place of performance of the obligation to the contractual obligation (of any kind) forming the basis of the legal proceedings (ECJ 6 October 1976, ‘De Bloos v. Bouyer’, Case 14/76), it afterwards appears to have limited it, in the case of proceedings based on a number of obligations possibly to be performed in a number of places, to the obligation which characterizes the contract (ECJ 26 May 1982 ‘Ivenell v. Schwab’, Case 133/81). So the seised court, confronted with multiple actions arising from several obligations produced by the same contract, is only allowed to admit the case pursuant to Article 5, point (1), under (a) BR I, if the characteristic obligation is one of the obligations from that contract that has lead to an action in the proceedings and at least this characteristic obligation is or must be performed in the judicial territory of the seised court. The fact that one or more of the minor obligations, which are or have to be performed in its judicial territory, gave rise to a legal action, is not enough to provide jurisdiction if the principal obligation, which has lead to an action in those proceedings as well, is not performed nor had to be performed in the judicial territory of the seised court. However, when the obligation which characterises the contract does not form the subject of the dispute, so that no action within the proceedings is derived from it, all still depends on the obligation which provides the basis for the action (ECJ 15 January 1987 ‘Shenavi v. Kreischer’, Case 266/85).

This interpretation, which did not initially offer any uniform solution to the lack of harmonisation of the rules of conflict of laws of the Member States, and which left open the possibility of forum shopping, was subsequently underpinned by the Rome Convention of 19 June 1980 on the law applicable to contractual obligations: although the Rome Convention used a flexible, objective connecting factor, nevertheless the law applicable to the contract, and hence the place of performance of the obligations arising under it, can as a rule be foreseen by the parties. But reference to the applicable law, as a means of determining the place of performance of the obligation, leaves intact the considerable disparity between national laws on financial obligations, and does not solve the problem that when the obligation relied on before the court is the obligation of payment, the place of performance frequently coincides with the forum of the plaintiff, thus providing scope for forum shopping.

Notwithstanding the interpretation provided by case law of the European Court, which has smoothed out some of the difficulties, the rules described above have been judged unsatisfactory by many, and numerous proposals have been put forward for their amendment by the Commission and by the Member States. The proposals are varied, but all move in the direction of reducing the role of the reference to the place of performance of the obligation, safeguarding the unity of jurisdiction over the contract at least to some extent, and making it easier to ascertain and foresee the place of performance which is to serve as the basis of jurisdiction in the case. The proposals and the debate to which they gave rise in the ad hoc working party are described below to the extent that may be useful for an understanding of the origins of the present text (Pocar OJ 2009 C 319/12-13).

The text of Article 5, point (1), of the Brussels I Regulation has been adjusted slightly to deal with this matter in order to limit the freedom of parties at this point. Article 5, point (1)(b) gives an autonomous definition of the place of performance of "the obligation in question" in two specific situations, with that providing a basis for a jurisdiction alternative to the forum of the defendant of Article 2 BR I and excluding any reference to the place of payment under such contracts, while leaving the existing provision unchanged for all other contracts and for cases in which the specific rules described proved inapplicable. For the sale of goods, the place of performance will be the place where, under the contract, the goods were or should have been delivered. In the case of the provision of services, it will be the place where, still under the contract, the services were or should have been provided. This pragmatic determination of the place of performance applies regardless of the obligation in question, even where this obligation is the payment of the financial consideration for the contract. It also applies where the claim relates to several obligations arising from the same contract for the sale of goods or the provision of services . The rule may, however, be "displaced" by an explicit agreement on the place of performance (Proposal 1999 C 376 E / 1-17).


'Place of performance': sale of goods or provision of services [Article 5, point (1)(b) BR I]

Because of the before mentioned adjustment of Article 5, point (1) BR I, the scope of the rule on the ‘forum contractus’ is not left entirely to the interpretation of whoever is called upon to apply it, nor the the law applicable to the contract, as it was before. For the application of Article 5, point (1)(a), BR I, point (1), under (b) of that Artice specifies that in the case of contracts for the sale of goods or the provision of services the place of performance of the obligation in question is to be the place - in a Member State bound by the Regulation – where, under the contract, the goods were delivered or should have been delivered, or the services were provided or should have been provided. Thus Article 5, point (1)(b) BR I identifies the obligation whose place of performance serves as a basis for establishing jurisdiction in respect of such contracts independently, irrespective of the obligation whose performance is the subject of the dispute. Without using the word, it adopts the principle of the characteristic obligation, and consequently excludes a reference to the obligation to make payment, even when that obligation is relied upon in the application.

The ad hoc working party did not incorporate into the text the Commission’s initial proposal that subparagraph (b) of Article 5, point (1), BR I should expressly exclude cases where under a contract of sale the goods were delivered, or deliverable, to more than one place. In such a case, if all the obligations to deliver are relied upon in the lawsuit at the same time, various solutions may be suggested in appropriate cases, without prejudice to any future interpretation this provision will be given by the Court of Justice, such as a reference to the principal place of delivery, a plaintiff’s choice as to the place of delivery where to bring his action entirely or limited to the partial delivery in that place, or even a reference to the place of performance of the monetary obligation, if that obligation is relied upon in the lawsuit. The Court of Justice has already pronounced on the parallel provision enshrined in Article 5, point (1)(b), of the Brussels I Regulation, and has ruled that, ‘where there are several places of delivery within a single Member State’, ‘the court having jurisdiction to hear all the actions based on the contract for the sale of goods is that in the area of the principal place of delivery, which must be determined on the basis of economic criteria. In the absence of determining factors for establishing the principal place of delivery, the plaintiff may sue the defendant in the court for the place of delivery of his choice’ (ECJ 3 May 2007 ‘Color Drack v Lexx; Case C-386/05). The questions that arise, and the solutions that may be the more appropriate ones, where there are several places of delivery in different Member States have been deliberately left open by the Court of Justice (ECJ 3 May 2007 ‘Color Drack v Lexx; Case C-386/05, par. 16). It goes without saying that similar problems will also arise where there are several places of provision of services in different States.

For determination of the place of performance, Article 5, point (1)(b) BR I adopts a factual test intended to avoid recourse to private international law, stating that - unless the parties have agreed otherwise - the place of delivery of the goods or of provision of the services must be identified ‘under the contract’. It has to be pointed out that this provision applies ‘unless otherwise agreed’ by the parties; under these terms, party autonomy is explicitly preserved also as concerns the determination of the place of performance. The question remains open whether this provision may entirely prevent the rules of conflict of laws of the court hearing the dispute from coming into play where the parties have not indicated with sufficient precision the place of delivery or of provision of the service, and this may be established with the help of the law applicable to the contract, or where the subject of the dispute is in fact the place where the goods were delivered or should have been delivered, or the place where the services were provided or should have been provided. Article 5, point (1)(b) BR I then acts as a special rule, limited to contracts of sale and contracts for the provision of services, for the application of the general principle of the place of performance of the obligation in question laid down in point(1)(a) of that Article. It does not apply to contracts that do not fall into either of those categories, and it does not apply even to those categories when the place of performance of the contract is in a Member State not bound by the Regulation (Pocar OJ 2009 319/12-13).


Place of performance of the obligation assessed in accordance with Article 5, point (1)(b) is not situated in a Member State [Article 5, point (1)(c) BR I]

Whenever Article 5, point (1)(b), BR I is found to be inapplicable, point (1)(a) of that Article applies; this is in fact stated in Article 5, point (1), under (c) BR I, which clarifies and confirms a conclusion that could be drawn from points (1)(a) and (1)(b) even without it. In the case, for example, of a sales contract where the obligation to deliver the goods is to be performed in a Member State bound by the Regulation, the place of performance of an obligation to make payment cannot be made the basis for establishing jurisdiction, since the situation is covered by Article 5, point (1)(b) BR I. But if the obligation of delivery is to be performed in a third State not bound by the Regulation, the plaintiff may invoke the place where payment has to be made, always supposing that that place is located in a Member State bound by the Regulation, because point (1)(a) is now being applicable, and it allows the specific obligation relied upon to be taken into account (Pocar OJ 2009 319/13). Again it has to be mentioned that, in addition and independently, Article 2 BR I may always designate the Member State of the domicile of the defendant as the State whose courts have jurisdiction

 


Maintenance obligations [Article 5, point (2) BR I]

Article 5 (A person domiciled in a Member State may, in another Member State, be sued:)
(2) in matters relating to maintenance, in the courts for the place where the maintenance creditor is domiciled or habitually resident or, if the matter is ancillary to proceedings concerning the status of a person, in the court which, according to its own law, has jurisdiction to entertain those proceedings, unless that jurisdiction is based solely on the nationality of one of the parties;


Definition 'maintenance obligation'

Article 5, point (2) BR I provides that jurisdiction in respect of maintenance claims, whatever their legal origin or content, can also be exercised by the courts for the place where the maintenance creditor - being the plaintiff - is domiciled or habitually resident. This affords the latter a degree of legal protection since he is thus not obliged to call upon a court some distance away from the place where he is established. The principal rule of Article 2 BR I (Member State in which the defendant is domiciled) remains, however, effective for maintenance claims, so that the maintenance creditor at all times is entitled to start legal proceedings in de Member State where the maintenance debtor is domiciled. Article 5, point (2) BR I merely provides an alternative possibility in order to prevent that the maintenance creditor has to bring the claim before a far away court having jurisdiction over the defendant. The maintenance creditor may therefore start proceedings also in the Member State where he himself has his domicile or his habitual residence. This last alternative, that also confers jurisdiction on the courts for the place of habitual residence of the maintenance creditor, has been added to align the Regulation with the Hague Convention. This is justified in relation to maintenance obligations since it enables in particular a wife deserted by her husband to sue him for payment of maintenance in the courts for the place where she herself is habitually resident, rather than the place of her legal domicile.

The European Court has held that the concept of a maintenance obligation is to be interpreted broadly, to include any obligation designed to enable a person to provide for himself or herself, whether or not payments are periodic and whether or not the obligation is determined on the basis of resources and need. It may, therefore, consist of the payment of a lump sum, if the amount of the capital has been arrived at in order to guarantee a predetermined level of income, or the transfer of ownership of property intended to enable a person to provide for himself or herself. Where such a provision is designed to enable one spouse to provide for himself or herself, or if the needs and resources of each of the spouses are taken into consideration in the determination of its amount, the payment relates to a maintenance obligation, and not to rights in property arising out of a matrimonial relationship, which would be outside the scope of the Regulation (ECJ 7 February 1997 ‘Van den Boogaard v Laumen, Case C-220/95, paragraph 22 and ECJ 6 March 1980 ‘de Cavel v de Cavel’, Case 120/79). The term ‘maintenance obligation’ includes a claim, brought to court by a parent against the other parent, to obtain maintenance on behalf of their child (‘child support’).

It was suggested that, in order to avoid conflicting judgments, it might be desirable to provide that the court which had fixed the amount of a maintenance payment should be the only court to have jurisdiction to vary it. This solution was rejected, since it would have obliged parties neither of whom had any further connection with the original court, to bring proceedings before courts which could be very far away. Moreover, any judgment by a second court, in order to vary that of the first court would have to be based on changed facts, and in those circumstances it could not be maintained that the judgments were in conflict (Jenard OJ 1979, C 59/24).


'Maintenance creditor'

The concept of ‘maintenance creditor’ is an independent concept that has to be determined in the light of the purpose of the rules of the Regulation, without reference to the national law of the court seised. Article 5, point (2) BR I does not make it possible to distinguish between a person whose right to maintenance payments has been recognised and a person whose right has not yet been established, and the concept consequently covers not only a person whose right to maintenance has already been established by a previous judgment, but also a person who is applying for maintenance for the first time, irrespective of whether national law restricts the notion of maintenance creditor to persons in the first category (ECJ 20 March 1997 ‘Farrell v Long’ C-295/95) (Pocar OJ 2009, C 319/13).

The concept of ‘maintenance creditor’ does not include, however, a public body that brings an action to recover sums it has paid to the maintenance creditor, to whose rights it is subrogated against the maintenance debtor, since in that case there is no need to deny the maintenance debtor the protection offered by the general rule in Article 2 of the Regulation (ECJ 15 January 2004 ‘Freistaat Bayern v Jan Blijdenstein’ (Case C-433/01, paragraphs 31 and 34) (Pocar OJ 2009, C 319/13).


Jurisdiction when maintenance claim is ancillary to action regarding divorce or parental responsibility [Article 5, point (2)(b)(c) BR I]

Often maintenance claims are just a supplementary (secondary) matter in comparison to the main proceedings that concern the status of a person, like divorce proceedings or a claim for parental authority, which in itself are not governed by the Brussels I Regulation 2000, but by the Brussels II Regulation 2003 or other Conventions. Article 5, point (2)(b)(c), BR I confirms that the court which, according to its own law (including the Brussels I Regulation or other applicable Conventions), has jurisdiction to rule on the main action (divorce, parental authority), also has jurisdiction with regard to ancillary maintenance claims that are dealt with in that same proceedings. In such event the subject of maintenance obligations falls within the scope of the Regulation even if the claim in question is ancillary to, for example, divorce proceedings (ECJ 6 March 1980 ‘de Cavel v. de Cavel’ C- 120/79). Yet, the court hearing the main action only has extended jurisdiction over ancillary maintenance proceedings if its jurisdiction over the main action is not solely based on the nationality of one of the parties. The dependence of the maintenance claim on the main action concerning the status of a person will therefore extend jurisdiction in every case where the latter is not construed solely on the basis of the nationality of one of the parties.

If, for instance, Greek law provides by way of exception that in matrimonial disputes, and disputes between parents and children, international jurisdiction can be based simply on the nationality of any one of the parties, the combining, or joint hearing, of such proceedings with maintenance proceedings is not an option which can be exercised under the Brussels I Regulation, unless there is a further criterion other than nationality on which international jurisdiction can be based (Evrigenis OJ 1986 C 298/13)

See also:

 


Tort, delict or quasi-delict [Article 5, point (3) BR I]

Article 5 (A person domiciled in a Member State may, in another Member State, be sued:)
(3) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;


Introduction

Article 5, point (3) BR I provides for the special jurisdiction of the forum delicti commissi (place where the tortious act actually happened). This covers all obligations, pecuniary or otherwise, resulting from torts, delicts or quasi-delicts, and refers them to the courts for the place where the harmful event occurred or may occur. Again, it is to be said that this rule does not set aside the principle rule for jurisdiction, laid down in Article 2 BR I, so that the plaintiff at all times is also able to start legal proceedings in the Member State where the defendant has his domicile. Article 5, point (3) BR I only offers an alternative (additional) forum.


‘Place where the harmful event occurred’

Article 5, point (3) BR I merely uses the expression ‘the place where the harmful event occurred or may occur’. It doesn’t specify whether that place is the place where the event, which resulted in damage or injury, occurred or whether it is the place where the damage or injury was sustained (Jenard OJ 1979 No C 59/26). This has given rise to a large body of Court of Justice case-law. The Court of Justice held that the wording of Article 5, point (3), BR I must be understood as being intended to cover both, the place where the damage occurred and the place of the event giving rise to it, and that the defendant could be sued on the basis of Article 5, point (3), at the option of the plaintiff, in the courts of either of the two (ECJ 30 November 1976 'Bier v Mines de potasse', Case 21-76). This wording, however, has not been integrated in the text of Article 5, point (3) BR I.

The Court has made clear that the ‘place of the damage’ is the place where the event giving rise to the damage, and entailing tortious, delictual or quasi-delictual liability, directly produced its harmful effects upon the person who was the immediate victim of that event (ECJ 11 January 1990 ‘Dumez v Hessische Landesbank’, C-220/88), and did not cover the place where the victim claimed to have suffered financial damage following upon initial damage arising and suffered by him in another Member State. Therefore it cannot be construed so extensively as to encompass any place where the adverse consequences could be felt of an event which had already caused damage actually arising elsewhere (ECJ 19 September 1995 ‘Marinari v Lloyds Bank ’, C-364/93 and ECJ 10 June 2004 ‘Kronhofer v Maier c.s.’, C-168/02) (Pocar OJ 2009 C 319/14).

It is true that the solutions offered by the Court of Justice oblige plaintiffs who suffer damage in several States to bring multiple proceedings, and given the different laws that are applicable this may lead to contradictory rulings regarding the same causal act. Only a partial solution is provided by Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II, OJ 2007, L 199). Conferring jurisdiction over the entire damage on the court in each place where part of the damage occurred, on the other hand, would increase the scope for forum shopping and favour the plaintiff excessively. Neither a proper solution was the possible alternative that jurisdiction should be attributed to the court of the State in which the major part or a decisive part of the damage occurred. However, this solution was eventually rejected, in view of the risk that a test of this nature might lead to frequent disputes regarding the determination of the major or decisive part of the damage, obliging the parties and the court to resolve questions of substance at the stage at which jurisdiction was being determined (Pocar OJ 2009 C 319/14).


Harmful event which ‘may occur’

Article 5, point (3), BR I not only covers cases where the harmful event has occurred, but also those where it ‘may occur’. This additional text removes an ambiguity in the interpretation of Article 5, point (3), of the Regulation. It offers litigants a clear ground of jurisdiction for preventive measures. And since the Protocol annexed to the Brussels Convention is deleted, Article II of the Protocol (proceedings for involuntary offences before criminal courts) is incorporated here (Proposal 2001 C 376E / 1-17).

The adding ‘or may occur’ clarifies that the scope of Article 5, point (3) BR I not only covers claims for injury that has already occurred, but also claims based on the threat of injury in the future. This was felt desirable in particular with regard to those cases in which an action brought by a public or private consumers’ organisation led to an injunction protecting the collective interests of consumers, since such an action concerned behaviour likely to cause harm, and would otherwise be outside the objective scope of Article 5, point (3) BR I.

Although such a situation is covered by Article 31 BR I, which allows application to be made to a court for provisional or protective measures available under national law, because that rule applies even where the measures in practice had final effect, and although various European Directives extend the protection of consumers in a similar way, it was felt necessary to make clear that also future damage which may occur falls within the scope of Article 5, point (3) BR I. The before-meant European Directives contain no rules of jurisdiction and their application in the various Member States might not be uniform. As a consequence doubts may arise as to whether certain actions for cessation under national law are covered. Furthermore, such actions might be brought in cases that do not concern consumer protection, for example where a plaintiff seeks to prevent a defendant from infringing the plaintiff’s intellectual property rights. These considerations led to the incorporation of a specific provision in Article 5, point (3) BR I conferring jurisdiction on the courts of the place of the harmful event in respect of threatened future harm as well.

This extension is intended to clarify the scope of the law, and not to change its substance, as the inclusion of actions for cessation can clearly be derived by interpretation from the previous wording. It should be remembered in this regard that the rationale for the special jurisdiction of the court of the place of a harmful event lies in the fact that that court is usually best placed to decide the case, owing to its proximity to the dispute and the ease with which evidence can be produced, and that this rationale applies not only to claims for compensation for damage already sustained but also to actions aimed at preventing damage from occurring. The Court of Justice subsequently took this view with regard to the Brussels Convention (ECJ 1 October 2002 ‘Konsumenteninformation v Henkel’, C-167/00, para. 49-50).

The provision conferring jurisdiction in respect of harmful events that may occur in future means that they are governed by the findings of the Court of Justice allowing the plaintiff to bring proceedings either in the place where the action generating the harm is to be avoided or in the place where the harmful event itself is to be prevented. Determining the place where the harm ‘may occur’ is essentially a matter of fact, and thus a matter for the court hearing the case. In line with the approach taken by the Court of Justice, however, it must be the place where there is a danger of immediate damage, and not a place where there may be indirect financial damage. The existence of a danger that may justify the grant of an injunction depends on the law of the State in which the injunction is sought: the rule here merely regulates jurisdiction, and does not specify the injunctions that may be issued, so that their character and content, the conditions on which they may be granted, and the persons entitled to seek them are to be determined by the law of the court seised or by Community provisions aimed at harmonising the relevant national laws.

The special jurisdiction to issue injunctions that is under consideration here is concerned only with claims relating to conduct likely to cause damage, which is not a breach of a contractual obligation. In the case of a breach of a contractual obligation, a remedy may be sought, as an alternative to the forum of the defendant, in the forum of the contract, as provided in Article 5, point (1) BR I. It should be borne in mind that the concept of ‘tort, delict or quasi-delict’, like that of ‘matters relating to a contract’, is to be interpreted independently, primarily by looking at the system and scope of the Regulation, and is not a question that is referred to national law. In particular, the Court of Justice has held that the concept of ‘matters relating to tort, delict or quasi-delict’ covers all actions which seek to establish the liability of a defendant and which are not related to a contract with an obligation freely assumed by one party towards another, with reference to the Brussels Convention, in a case of pre-contractual liability (ECJ 17 September 2002 ‘Tacconi v HWS’, V-334/00, para. 21-23) (Pocar OJ 2009 C 319/16).

See also:

 


Civil claims brought to court in criminal proceedings [Article 5, point (4) BR I]

Article 5 (A person domiciled in a Member State may, in another Member State, be sued:)
(4) as regards a civil claim for damages or restitution which is based on an act giving rise to criminal proceedings, in the court seised of those proceedings, to the extent that that court has jurisdiction under its own law to entertain civil proceedings;

Article 5, point (4) BR I provides that a civil claim may be brought before a court seised of criminal proceedings. This is in order to take into account the rules of jurisdiction laid down by the various codes of criminal procedure. A civil claim can thus always be brought, whatever the domicile of the defendant (principle rule of Article 2 BR I which remains applicable besides Article 5, point (4) BR I in the criminal court having jurisdiction to entertain the criminal proceedings even if the place where the court sits (place of arrest, for example) is not the same as that where the harmful event occurred or may occur (Article 5, point (3) BR I) (Jenard OJ 1979 C 59/26). With that, Article 5, point 4 BR I constitutes an independent basis for jurisdiction. The criminal court has jurisdiction to rule on the civil claim connected with the crime, yet only to the extent that its internal law so permits.

While national legal systems thus remain free to determine whether civil actions in such circumstances are permissible and how criminal courts should proceed with respect to such actions, national codes of criminal procedure are directly affected by Article 61 of the Brussels I Regulation (formerly Article 11 of the 1968 Protocol). In particular, this Article provides for the possibility of representation ('by persons qualified to do so') for defendants domiciled in a Member State who are being prosecuted in the criminal courts of another Member State of which they are not nationals for an offence which was not intentionally committed. Such persons are allowed to be defended by a lawyer without having to appear in person before the court of that other Member State. According to the Court of Justice of the European Communities, this provision applies as well if subsequent civil proceedings have been, or may be, brought (ECJ 26 May 1981 ‘Rinkau’, Case 157/80) (Evrigenis OJ 1986 C 298/14).

If the court of the other Member State nevertheless orders the appearance of de defendant, and he fails to appear, a judgment in the civil action given in the criminal trial need not be recognised in the other States bound by the Regulation. It was proposed, on the one hand, that this rule should be extended to include intentional offences, and on the other hand that it should be restricted, so that it would say only that if the criminal court was also hearing the civil action, the defendant was entitled to be represented with respect to the civil action without appearing in person, without the provision specifying the implications of this provision for the recognition of the judgment. These proposals were rejected, partly in order to avoid forceful interference in the criminal law of the States in a Convention dealing with civil and commercial matters.

Article II of the Protocol, that has now becoming Article 61 of the Brussels I Regulation, thus remained unchanged. However, it should be noted that the decision not to extend the rule to intentional offences has been tempered by the Court of Justice, which has held that Article II of the Protocol is not to be interpreted as preventing the court of the State in which enforcement is sought from taking account, in relation to the public policy clause in Article 34, point (1), BR I of the fact that in an action for compensation founded on an intentional criminal offence the court of the State of origin refused to allow that person to have his defence presented unless he appeared in person (ECJ 28 March 2000 ‘Krombach v Bamberski’, C-7/98, para. 44-45). Which is the equivalent of saying that the provision in the present Article 61 BR I, which expressly refers to unintentional offences, applies to intentional ones as well, failing which recognition of judgments may be refused on the ground that they are contrary to public policy. This is in contrast to the findings of the Court of Justice in an earlier judgment, (ECJ 26 May 1981 ‘Rinkau’, Case 157/80, par. 12) (Pocar OJ 2009 C 319/16).

See also:

 


Disputes connected to a branch, agency or other establishment in a Member State [Article 5, point (5) BR I]

Article 5 (A person domiciled in a Member State may, in another Member State, be sued:)
(5) as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place in which the branch, agency or other establishment is situated;


A 'branch, agency or other establishment' [Article 5, point (5)]

Article 5, point (5) BR I regulates the forum of a branch, agency or other establishment for disputes arising out of their operations. It confers special and territorial jurisdiction on the courts of the place where the involved branch, agency or other establishment is situated, with the aim of avoiding reference to national law. The principle rule for jurisdiction of Article 2 BR I remains applicable besides Article 5, point (5) BR I so that it's always possible to start legal proceedings in the Member State where the defendant (legal person, entrepreneur) is domiciled.

This provision concerns only defendants domiciled in a Member State (see the beginning of Article 5 BR I), that is, companies or firms having their seat in one Member State and having a branch, agency or other establishment in another Member State. Companies or firms which have their seat outside the European Community, but have a branch, agency etc. in a Member State are governed by Article 4 of the Brussels I Regulation, even as regards disputes relating to the activities of their branches, but without prejudice to the provisions of Article 9 BR I of relating to insurance (Jenard OJ 1979 C 59/26).

The concept of a branch, agency or other establishment within the meaning of Article 5, point (5) BR I is an independent one, which is common to the States bound by the Regulation and ensures legal certainty. The Court of Justice has indicated that the concept of a branch, agency or other establishment implies a place of business which presents itself as the extension of a parent body, and has a management and is materially equipped to negotiate business with third parties, so that the latter know that they can establish a legal relationship with the parent body abroad without having to deal directly with it (ECJ 22 November 1978 'Somafer v Saar-Ferngas', Case 33/78).

These characteristics are present even where the place of business is run by a company independent of the parent from the point of view of national company law, which has the same name and identical management, and which negotiates and conducts business as an extension of the parent, because third parties must be able to rely on the appearance thus created (ECJ 9 December 1987 'SAR v Parfums Rothschild ', Case 218/86, par. 17). Protection of third parties in such a case requires that the appearance be deemed equivalent to the existence of a branch without legal independence. Of course, in such a case the plaintiff may also put forward that such a kind of ‘branch’ in itself is an independent legal person according to the internal law of the Member State where it is established and argue that the courts of that State have jurisdiction on account of the principle rule of Article 2 of the Brussels I Regulation.

On the basis of the concept described, it falls to the court to verify the evidence for the existence of a genuine secondary establishment in the case before it (Pocar OJ 2007C 319/17). The Court of Justice has indicated that Article 5, point (5) BR I is not applicable in case of a sole agent who is not subject either to the control or to the direction of the principal (ECJ 6 October 1976 ‘De Bloos v Bouyer’, 14-76). It neiter applied the provision in the case of an independent commercial agent entitled to represent several undertakings at the same time and who being free to arrange his own time and work did no more than transmit orders to the parent undertaking (ECJ 18 March 1981 'Blanckaert v Trost', Case 139/80) (Evrigenis OJ 1986 C 298/14).


'Dispute arising out of the operations' of a branch, agency or other establishment [Article 5, point (5)]

The disputes that have arisen regarding branches, agencies and other establishments, for which this Article provides a special jurisdiction that may replace, as an addition, the ordinary forum of the defendant according to Article 2 BR I, have been concerned with contractual and extra-contractual rights and obligations related to the management of the establishment (rent, relationships with staff, etc.), contractual obligations which have been entered into by the establishment in the name of the parent company and which are to be performed in the State in which the place of business is situated, and non-contractual obligations arising out of the activities engaged in by the establishment in the place in which it is situated on behalf of the parent (ECJ 22 November 1978 'Somafer v Saar-Ferngas', Case 33/78)( Pocar OJ 2007C 319/17). Article 5, point (5) BR I, however, does not presuppose that the undertakings giving rise to the dispute, entered into by a branch in the name of its parent body, are to be performed in the Member State in which the branch is established (ECJ 6 April 1995 ‘Lloyd's v Bernard’, C-439/93).

Here too it is for the court before which the matter is brought to verify and classify the relationship relied upon, in the light of the concept of a dispute arising out of the operations of a branch, agency or other establishment as described here (Pocar OJ 2007C 319/17).

See also:

 


Trusts [Article 5, point (6) BR I]

Article 5 (A person domiciled in a Member State may, in another Member State, be sued:)
(6) as settlor, trustee or beneficiary of a trust created by the operation of a statute, or by a written instrument, or created orally and evidenced in writing, in the courts of the Member State in which the trust is domiciled;

The provision contained in Article 5, point (6) BR I is foreign to the most Member States of the European Union, that do not recognize trusts as such. This provision was added under the 1978 Accession Convention, in view of the special position of Great-Britain and Ireland, and stipulates that the disputes to which it refers and which concern the creation or operation of a trust are subject to the jurisdiction of the Member State in which the trust is domiciled. It should be noted that Article 5, point (6) BR I is not exclusive. It merely establishes an additional jurisdiction, next to that of Article 2 BR I. The trustee who has gone to Corsica may be sued also in the courts there. However, a settlor would be free to stipulate an exclusive jurisdiction.

The solution enclosed in Article 5, point (6) BR I is based on the argument that trusts, even though they have no legal personality, may be said to have a geographical centre of operation. This would fulfil functions similar to those fulfilled by the 'seat' of business associations without legal personality. What is to be seen as the ‘domicile’ of the trust is basically a matter depending upon the wishes of a trustee and his expressed intentions will usually be conclusive. In their absence the trustee’s intentions will be inferred from such circumstances as the administrative centre of the trust, the place of residence of the trustees, the situs of the assets of the trust, the nature of the trust purposes and the place where these are to be fulfilled.

If proceedings are brought in a Member State relating to a trust which is subject to a foreign legal system, the question arises as to which law determines the domicile of that trust. Article 60 of the Brussels I Regulation provides rules for ascertaining the 'seat' of a company. As far as the legal systems of England and Wales, Scotland, Northern Ireland and Ireland are concerned, application of this provision should present no serious difficulty. There are at present no rules of private international law in the legal systems of the Continental Member States of the Community for determining the domicile of a trust. The courts of those States will have to evolve such rules to enable them to apply the trust provisions of the Brussels I Regulation. Two possibilities exist. It could be contended that the domicile of a trust should be determined by the legal system to which the trust is subject. One could, however, also contend that the court concerned should decide the issue in accordance with its own lex fori which would have to evolve its own appropriate criteria.

The phrase 'created by the operation of a statute or by a written instrument, or created orally and evidenced in writing' is intended to indicate clearly that the rules on jurisdiction apply only to cases in which under United Kingdom or Irish law a trust has been expressly constituted or for which provision is made by Statute. This is important, because these legal systems solve many problems with which Continental systems have to deal in a completely different way, by means of so-called 'constructive 'or 'implied' trusts. Where the latter are involved, Article 5, point (6) BR I is not applicable, as for instance where, after conclusion of a contract of sale, but prior to the transfer of title, the vendor is treated as holding the property on trust for the purchaser. Trusts resulting from the operation of a statutory provision are unlikely to fall within the scope of the Regulation. Since in the United Kingdom, for example, children cannot own real property, a trust in their favour arises by operation of statute, if the circumstances are such that adult persons would have acquired ownership.

In principle, the exclusive jurisdictions provided for by Article 22 of the Brussels I Regulation take priority over the Article 5, point (6) BR I. However, it is not easy to establish the precise extent of that priority.

In legal disputes arising from internal trust relationships, the legal relations referred to in the provisions in question usually play only incidental role, if any. The trustee requires court approval for certain acts of management. Even where the management of immovable property is concerned, any such applications to the court do not affect the proprietary rights of the trustee, but only his fiduciary obligations under the trust. Article 22, point (1) BR I does not apply. One could however, envisage a dispute arising between two people as to which of them was trustee of certain property. If one of them instituted proceedings against the other in a German court claiming the cancellation of the entry in the land register showing the defendant as the owner of the property and the substitution of an entry showing the plaintiff as the true owner, there can be no doubt that, under Article 22, point (1) or (3) BR I, the German court would have exclusive jurisdiction. However, if a declaration is sought that particular person is a trustee of a particular trust which includes certain property, Article 22, point (1) BR I does not become applicable merely because that property includes immovable property (Schlosser OJ 1979 C 59/107-108).

See also:

 

 


Salvage claims for which cargo or freight has been arrested [Article 5, point (7) BR I]

Article 5 (A person domiciled in a Member State may, in another Member State, be sued:)
(7) as regards a dispute concerning the payment of remuneration claimed in respect of the salvage of a cargo or freight, in the court under the authority of which the cargo or freight in question:
(a) has been arrested to secure such payment, or
(b) could have been so arrested, but bail or other security has been given;
provided that this provision shall apply only if it is claimed that the defendant has an interest in the cargo or freight or had such an interest at the time of salvage.

Salvage claims may arise when a ship, its crew or its cargo is rescued from fire or shipwreck by other persons, either voluntarily or on the basis of a contract concluded to this end. If no salvage contract is available, then the internal law of a country often specifies that the persons who have voluntarily rescued another persons ship or cargo are entitled to demand compensation for the costs made for the rescue operation and sometimes even an extra reward. Usually, the persons having a salvage claim, may seize and hold the ship or cargo (‘arrestment’) until their claim is satisfied.

As far as it concerned the arrest of ships for salvage claims, a regulation had already been provided for by the International Convention Relating to the Arrest of Sea-Going Ships (Brussels, May 10, 1952). Article 7 of this Convention stipulates that the Courts of the country in which the arrest was made, have jurisdiction to determine the case upon its merits. This Convention, however, does not contain a rule for the arrest of cargo or freight, like Article 5, point (7) BR I does. Article 5, point (7), of the Brussels I Regulation provides a basis of special jurisdiction with regard to the arrestment of cargo or freight in disputes concerning remuneration in respect of salvage at sea.

Article 5, point (7) BR I was especially introduced in view of the maritime law of the United Kingdom. A claim to remuneration for salvage entitles the salvage firm that rescued the ship (or its crew or cargo), according to British law, to a maritime lien, not only on the saved ship, but also on the cargo. This can be of some economic importance, if it is the cargo rather than the ship which was salvaged, or if the salvaged ship is so badly damaged that its value is less than the cost of the salvage operation. The value of the cargo of a modern super tanker can amount to a considerable sum. Finally, prior rights can also arise in regard to freight. Freight means, in Article 5, point (7) BR I the ‘freight claim’, thus the transportation charge which is paid when the goods are received from the supplier. It is a separate account that is added to purchases in determining the cost of goods and ending inventory. It may be seized (arrested) as well. If freight is payable solely in the event of the safe arrival of the cargo at the place of destination, it is appropriate that the salvage firm should have a prior right to be satisfied out of the claim to freight which was preserved due to the salvage of the cargo.

Accordingly, United Kingdom law provides that a salvage firm may apply for the arrest of the salvaged cargo of the freight claim preserved due to its intervention and may also apply to the court concerned for a final decision on its claims to remuneration for salvage. If Article 5, point (7) BR I would not have been introduced to the 1968 Brussels Convention when the United Kingdom acceded to it, the United Kingdom would have suffered an unacceptable loss of jurisdiction.

One has to regard, however, that the scope of Article 5, point (7), BR I is limited. It only applies as regards a dispute concerning the payment of remuneration claimed in respect of the salvage of a cargo or freight that has been arrested to secure such payment or that could have been so arrested if, instead thereof, no bail or other security was given. Its scope is strictly limited to these issues. So it doesn’t apply when there is only a dispute about the salvage claim itself, even if it results from the rescuing of the cargo or freight, that has not been followed by any arrest of cargo or freight or the granting of alternative security. Therefore, the person who claims a remuneration for salvage must have arrested the cargo or freight on the basis of a court decision or his opposite party must have given him security in order to prevent such measure. Only then the dispute regarding the to be pad remuneration comes within the scope of Article 5, point (7), BR I. In that event it distributes jurisdiction where it concerns the main proceedings with regard to the salvage claim itself, arisen as a result of the rescue of the cargo or freight.

The question in which State cargo or freight can be arrested, therefore which court has jurisdiction to award a claim to arrest (seize) such cargo or freight, is not decided by Article 5, point (7) BR I, but by national law. See Article 31 of the Brussels I Regulation with respect to jurisdiction for taking provisional and protective measures. In States that are a Contracting Party to the International Convention Relating to the Arrest of Sea-Going Ships 1952 the answer which State is allowed to grant an arrest order will be found in Article 7 of that Convention.

In the situations falling within the scope of Article 5, point (7), BR I, jurisdiction over the main proceedings are distributed to the court under the authority of which the cargo or freight in question has been arrested to secure such payment or could have been so arrested, but bail or other security has been given. This last adding, laid down in Article 5, point (7) (b) BR I, extends jurisdiction as a result of practical experience. After salvage operations - whether involving a ship, cargo or freight - arrest is sometimes ordered, but not actually carried into effect, because bail or other security has been provided. This must be sufficient to confer jurisdiction on the arresting court to decide also on the substance of the matter (salvage claim itself).

The object of Article 5, point (7) BR I is to confer jurisdiction only with regard to those claims which are secured by a maritime lien. If the owner of a ship in difficulties has concluded a contract for its salvage, as his contract with the cargo owner frequently obliges him to do, any disputes arising from the former contract will not be governed by this provision, but by Article 5, point (1) BR I. This means that the relevance of Article 5, point (7) BR I is restricted to non-contractual salvage claims. In most situations professional salvage firms only provide assistance after having concluded a contract with the owner of the ship or the proprietor of the cargo to do so. Because these contracts usually subject possible disputes to arbitration, being a way of settling disputes falling outside the scope of the Brussels I Regulation (see Article 1(2)(d) BR I, in practice neither Article 5, point (1) BR I nor Article 5, point (7) BR I plays an important part. Yet, it may come to surface if the salvage firm, for instance, has entered into an agreement with the ship owner, whereas a third party has an interest or even a real property right in the saved cargo that is arrested by the salvage firm.

See also: