Conflict Of Laws

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Owusu v Jackson

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The Brussels Convention 1968 (Art. 2) precluded a court of a EU state from declining the jurisdiction conferred on it by Art.2 of that Convention on the ground that a court of a non contracting state would be a more appropriate forum for the trial of the action, even if the jurisdiction of no other contracting state was in issue or the proceedings had no connecting factors to any other EU state. (Transfer of jurisdiction via forum non conveniens not allowed.

Facts:

The claimant (O), a British national, had been seriously injured by a submerged sand bank off a Jamaican beach owned by a Jamaican company (M) during a holiday in a villa which another British national (J) had let to O. O sued J in the English courts for breach of contract, claiming that it was an implied term in a contract which provided access to a private beach that that beach would not contain hidden dangers. O also brought actions in tort against M and other Jamaican companies which used or occupied the beach. J argued that the case would be better heard in the Jamaican courts due to its closer links with that country. The question referred to the ECJ was whether the court of a Member State, in exercising its discretionary power under national law, could lawfully refuse to hear proceedings brought against a person domiciled in that Member State in favour of the courts of a non Member State, where there was no connection in the proceedings with any other Member State and it was claimed that jurisdiction was founded on Art.2.

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Eurocontrol case

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Question: What constitutes civil and commercial matters? (Article 1)

Eurocontrol obtained judgment in Belgium against LTU under which LTU had to pay route charges imposed by Eurocontrol for the use of its air safety services. Eurocontrol sought to enforce this judgment in Germany. The Oberlandesgericht Dusseldorf requested the European Court of Justice to give a preliminary ruling on the question whether, in the interpretation of the concept "civil and commercial matters" within the meaning of the first paragraph of the Convention on Jurisdiction and Enforcement of Civil and Commercial Judgments 1968 Art.1 the law to be applied is the law of the state in which judgment was given or the law of the state in which the order for enforcement is to be issued.

Held, that in the interpretation of the concept "civil and commercial matters," reference must not be made to the law of one of the states concerned but first, to the objectives and scheme of the Convention and, secondly, to the general principles which emerge from the totality of the national legal systems. On the basis of these criteria, a judgment given in an action between a public authority and a person governed by private law, in which a public agency or public authority has acted in the exercise of its powers, is excluded from the application of the Convention.

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Gemeente Steenbergen v. Baten

(GS v Baten)

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Art. 1: Civil and Commercial Matters


The Antwerp Court of Appeal sought a preliminary ruling as to whether an order obtained in the Netherlands by a Dutch public authority, GS, for B to pay maintenance to his former spouse, was a civil matter under the Brussels Convention 1968 Art.1.
B obtained a divorce in Belgium and he and his former spouse agreed that he would only pay maintenance for their child. The former spouse moved to the Netherlands, where she was paid a social assistance allowance by GS.
GS then obtained an order against B in the Netherlands under the Law on General Assistance (Netherlands) s.93 and the Civil Code to recover the amount of such payments.

Held, ruling Art.1 of the Convention inapplicable, that GS was not acting under the civil law rules governing maintenance obligations as s.94 of the Law on General Agreements allowed GS to disregard spousal maintenance agreements.
Further, the definition of social security in Art.1(2)(3) of the Convention was to be interpreted as precluding the recovery of social assistance paid by a public body.
The right of recourse against an individual governed by private law was concerned with recovery of payment, not the conditions under which the benefits were granted.

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'Domicile'

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If the defendant is domiciled in a Member State, the Regulation applies and he or she can only be sued in another Member State according to its rules

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(Art. 2, 3, 4)

Art 59 - see country's own rules for domicile (Civil Jurisdiction and Judgments Order 2001, Schedule 1, para. 9)

Art 60 - Companies and legal entities domicile

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Scope of regulation

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-Does the case concern ‘civil and commercial matters’?
-If not: The Regulation does not apply. Look at the English ‘traditional rules’ on jurisdiction.
-If yes: Continue.

-Does the case concern ‘rights in rem in real property’ (art. 22), e.g. questions of ownership), and is the property located in an EU Member State?
-If yes: The Regulation applies. The courts of the place where the property is situated have exclusive jurisdiction.

-Did the parties conclude a jurisdiction agreement that comes within the scope of art. 23?
-If yes: The Regulation applies. The chosen court has (exclusive) jurisdiction

-Is the defendant domiciled in an EU Member State?
-If not: The Regulation does not apply. Look at the English ‘traditional rules’ on jurisdiction.
-If yes: Continue.

-Does the case concern a ‘consumer contract’ or an ‘employment contract’ within the scope of the Regulation?
-If yes: The Regulation applies. Look for the appropriate rules on jurisdiction in the relevant Section (on consumer contracts or employment contracts)
-If not: Continue.

-The court of the defendant’s domicile has general jurisdiction. Courts in other Member States may have alternative, ‘specific’, jurisdiction.
-Look at art. 2, art. 5(1), 5(3), and art. 6

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art. 5(3)

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Jurisidiction on tort cases; remember if multiple - claimant chooses forum

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Kalfelis v Bankhaus Schröder

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Q: What is a matter of tort?

A: 1. covers all actions which seek to establish the liability of a defendant and which are not related to a "contract" within the meaning of Article 5 ( 1 ).

2. The scope of 5(3) in terms of jurisdiction only with regards to torts - other parts of the case decided on the basis of Brussels I rules

Facts:
Mr. Kalfelis was domiciled in Germany. Bankhaus Schroeder, Muenchmeyer, Hengst & Co. was a bank based in Luxembourg. Kalfelis had concluded a number of contracts for stock-exchange transactions with the Luxembourg bank, through the intermediary of its Frankfurt-based affiliate. For this purpose, he had paid considerable sums of money to the Luxembourg bank. The trades resulted in a total loss. Kalfelis brought an action in tort against the Luxembourg bank in a German court

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'‘The place … where the harmful event occurred’

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Three cases: Bier, Dumez, Marinari.

Bier rule:

the court has to consider the expression "the place where the harmful event occurred" in tort cases, and where the locus where the act occurred and the locus of the damage are different, then the Brussels Convention, Art.5(3) must be interpreted as granting an option upon the plaintiff to sue in the courts of either place.

Dumez clarification:

the expression "place where the harmful event occurred" contained in Article 5(3 ) of the Convention may refer to the place where the damage occurred, the latter concept can be understood only as indicating 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 is the immediate victim of that event

Marinari: guy had some dodge notes, gives in to Lloyds, gets arrested, claims for damages in Italy, Lloyds claims that Italy has nothing to do with where damage occured

"place where the harmful event occurred" within the meaning of Article 5(3) of the Convention may cover both the place where the damage occurred and the place of the event giving rise to it, that term cannot be construed so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually arising elsewhere.

Kronhofer v Maier: confirms where financial loss, should be construed restrictively (buying of call options in Germany by guy in Austria)

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Zuid-Chemie v Philippo

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Further clarification on place where damage occured.

Facts: a defective consignment of a fertiliser component. The Dutch claimant (D) took delivery of the product from the Belgian manufacturer (B) at B's factory in Belgium and then used the product in D's own factory in the Netherlands. The end product fertiliser was rendered unusable as a result of the defective component. D brought an action against B in the Netherlands but the Netherlands court declined jurisdiction on the basis of art.5(3) of the Regulation, stating that the harmful event had occurred in Belgium, where the delivery of the contaminated product had taken place.

Answer:

2) The place where the damage occurred was the place where the event potentially giving rise to liability resulted in damage, and was not to be confused with the place where the event which damaged the product itself occurred. There was a clear distinction between the damage and the event causing that damage, and liability arose only where a causal connection could be established between the two, Handelswekerij applied (paras 26-28). On the facts of the instant case, that place was D's factory in the Netherlands where the defective product was processed into fertiliser, causing substantial damage to the end product which went beyond the damage to the defective product itself. Accordingly, in the context of a dispute such as that at issue, the words "place where the harmful event occurred" meant the place where the initial damage occurred as a result of the normal use of the product for the purpose for which it was intended .

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English cases on Art 5(3)

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Domicrest Ltd v Swiss Bank Corporation (Domicrest):

D, an English company, had been told by an employee of SBC, a Swiss bank, that the transmission of a copy payment order to a beneficiary such as D constituted an assurance that payment would be made and that a copy payment order would not be sent unless the customer had sufficient funds in its account to satisfy payment, so that D could safely release goods following the receipt of a payment order. After three copy payment orders sent to D by SBC were not paid, D commenced proceedings against SBC in England, alleging, inter alia, that the assurances given concerning the payment orders amounted to the tort of negligent misstatement. The question for the court was whether the claim fell within the Lugano Convention 1988 Art.5(3), so as to give the English courts jurisdiction over the matter.

Held, that the phrase "the harmful event" in Art.5(3) referred to either the event giving rise to the damage or the damage itself, Handelswekerij GJ Bier BV v Mines de Potasse d'Alsace SA (21/76) [1978] Q.B. 708 followed. In the case of negligent misstatement, the place where the harmful event giving rise to the damage took place was, by analogy with the tort of defamation, the place where the misstatement was made, rather than where the misstatement was received, as that was the place where the negligence, even if not all the constituent parts of the tort, was likely to occur, Minster Investments Ltd v Hyundai Precision & Industry Co Ltd [1988] 2 Lloyd's Rep. 621 not followed. It made no difference whether the misstatement was written or conveyed by an instantaneous method of communication, as it was the representor's negligent words, rather than the representee's receipt of them which most clearly identified the harmful event for the purposes of Art.5(3). Accordingly, in the instant case, the English courts had no jurisdiction over D's claim.

Henderson v Jaouen:
J appealed against a decision that the English courts had jurisdiction to try a claim by H, an English citizen, arising out of a deterioration in his condition following a road accident in France for which J was to blame. Damages had been awarded by the French court and, in awarding damages, the French court had expressly given H the right to seek a further award if his condition were to deteriorate. H contended that since the deterioration had occurred in England, the harmful event for the purposes of the Brussels Convention 1968 Art.5(3) had occurred in England. In refusing J's application to strike out the claim for want of jurisdiction, the master had considered himself bound to apply French law and the ECJ decision in Handelswekerij GJ Bier BV v Mines de Potasse d'Alsace SA (21/76) [1978] Q.B. 708.

Held, allowing the appeal, that the term "harmful event" was an autonomous Convention concept, not to be determined by national law and the master had erred by considering himself bound by French law. The harmful event was the original tort which had given rise to H's injuries. The subsequent deterioration in his condition was not a fresh wrong but derived from the original tort. It was irrelevant that it caused a fresh cause of action in French law. Consequently, the exception in Art.5(3) did not apply, Bier distinguished.

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Jakob Handte v TMCS

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Art 5(1) 'Matters relating to a contract’

TMS, who had bought two metal polishing machines from a Swiss company JH and had fitted to them a suction system manufactured by Handte Germany but sold and installed by Handte France, brought proceedings against all three for compensation for loss arising from the failure of the equipment to conform to health and safety at work regulations and which was therefore not suitable for the use for which it had been intended. The question was one of jurisdiction and whether the Brussels Convention 1968 Art.5(1) applied where a claim under international contracts was involved.

Held: Article 5(1) did not apply to a dispute between a sub- purchaser of equipment and its manufacturer, who was not the vendor, in respect of defects in that equipment. "Matters relating to a contract" within the meaning of Art.5(1) could not be understood to refer to a situation in which the manufacturer had not freely entered into any undertaking of a contractual nature towards the sub-purchaser. Moreover, the purpose of legal protection of persons which the Convention sought to achieve required that rules of jurisdiction which derogated from the general principle laid down in Art.2 of the Convention, that the competent courts were those of the state of the defendant's domicile, should be interpreted in such a way as to enable a defendant with normal vigilance reasonably to foresee the court before which he might be sued. Here the application of the special rule of jurisdiction in Art.5(1) was not foreseeable for the manufacturer.

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Fonderie Tacconi v HWS Maschinenfabrik

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Art 5(1) 'Matters relating to a contract’

Obligation must be freely assumed

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'The obligation in question' - Art 5(1) - the Rule and surrounding cases

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de Bloos v Bouyer

(1)(i) in disputes in which the grantee of an exclusive sales concession alleges that the grantor has infringed the exclusive concession, the word "obligation" contained in Art.5(1) of the Convention refers to the contractual obligation forming the basis of the legal proceedings, viz, the contractual obligation of the grantor which corresponds to the contractual right relied upon by the grantee in support of the application; (ii) in disputes concerning the consequences of the infringement by the grantor of a contract conferring an exclusive concession, eg the payment of damages, the obligation to which reference must be made for the purposes of applying Art.5(1) of the Convention is that which the contract imposes on the grantor and the non-performance of which is relied upon by the grantee in support of the application for damages, etc.; (iii) in actions for the payment of compensation by way of damages, it is for the national court to ascertain whether, under the law applicable to the contract, an independent contractual obligation or an obligation replacing the unperformed contractual obligation is involved; (2) when the grantee of an exclusive sales commission is subject neither to the control nor to the direction of the grantor, he cannot be regarded as being at the head of a branch, agency or other establishment of the grantor within the meaning of Art.5(5) of the Convention.

Shenavai v Kreischer

Held, that in order to determine the place of performance within the meaning of Art.5(1) of the EEC Judgments Convention, the obligation to be taken into account in a claim for architect's fees for building plans is the contractual basis of the legal proceedings. Here, the obligation was the payment of the fees. Thus Mr. Shenavai could sue in the place where the fees were to be paid.

Two obligations: Leathertex
Court does not have jurisidiction to here both obligations neccesarily

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Tessili v Dunlop

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‘the place of performance’ of the obligation in question could not be given an independent meaning. Instead, the Court held, the national court seized of the proceedings would first have to apply their own choice of law rules to determine the applicable law to the relevant contract. That applicable law would then determine where the relevant obligation had to be performed.

Facts:

Dunlop AG ordered a quantity of ski- suits from Tessili Italiana, and Dunlop's conditions of purchase included a provision that the courts in Hanau should have jurisdiction to deal with any disputes arising from the contract. Tessili Italiana's conditions of sale included a provision that the courts in Como should have jurisdiction.

Held, (1) the Convention should be interpreted in the light of its general scope and objectives as well as of its link with the EEC Treaty. (2) In matters of contract, Art.5(1) authorises the plaintiff to sue before the court of the place where the obligation "has been or is to be fulfilled." Under the Convention, it is for the court before which the plaintiff has instituted proceedings to rule whether the place where the obligation has been or is to be fulfilled is within its own territorial jurisdiction.

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Custom Made Commercial

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New rework of old Art 5(1) rules:

S, which had its seat in Germany, contracted to supply windows and doors to C, which had its seat in England, for a building complex in London. Payment was to be in pounds sterling and the contract was concluded orally in London and later confirmed by a letter in English. When C paid only part of the stipulated price, S brought proceedings for recovery of the balance in Germany. The German court asked whether the Brussels Convention Art.5(1) was to be understood as meaning that, in the case of a claim for payment by a supplier against his customer under a contract for manufacture and supply, the place of performance of the obligation to pay must be determined pursuant to the substantive law applicable to the obligation in issue under the conflicts rules of the court seised, even if those rules refer to the application to the contract of provisions such as those of the Uniform Law on the International Sale of Goods annexed to the Hague convention of July 1, 1964. It was argued that the criterion of place of performance of the obligation which specifically formed the basis of the applicant's action and expressly laid down in Art.5(1), may, in certain circumstances, have the effect of conferring jurisdiction on a court which has no connection with the dispute and that in such a case the criterion should be departed from on the ground that the result it yields would be contrary to the aim of the Article.

Held, that the argument proposed could not be accepted. The use of criteria other than that of the place of performance might jeopardise the possibility of foreseeing which court would have jurisdiction and for that reason would be incompatible with the Convention. It followed that under Art.5(1) a defendant may be sued in matters relating to a contract in the courts for the place of performance of the obligation in question, even where the court thus designated was not that which had the closest connection with the dispute. The "obligation" under the Article was that which corresponded to the contractual right on which the plaintiff's action was based. The Court ruled that it was for the court before which the matter was brought to establish under the Convention whether the place of performance was situated within its territorial jurisdiction, and for that purpose it must determine, in accordance with its own rules of conflict of laws, which is the applicable law and define, in accordance with that law, the place of performance of the obligation in question.

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‘autonomous’ concept of ‘place of performance of the obligation in question?

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sale of goods, provision of services - commentary about problem of non-autonmous in Leathertex, Concorde

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Multiple places of performance

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Art.5(1) did not apply since that the jurisdictional rule of Art.5(1) could only be applied where a single place of performance was identifiable. In the instant case, the exclusivity clause prohibited the doing of an act on a world wide basis. While the place of performance was to be determined in accordance with the conflict rules in Belgium, Community law also had to be taken into account. The Brussels Convention was intended to provide certainty in the allocation of jurisdiction, thereby avoiding the risk of irreconcilable decisions or forum shopping. Further, it was not possible to give an autonomous interpretation of Art.5(1) without calling into question the line of authority relied on by the Belgian court. In this context, Art.5(1) was only concerned with a single place of performance, with the result that jurisdiction fell to be determined only in accordance with Art.2 of the Brussels Convention, which provided a certain and reliable criterion in the instant case

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Color Drack case - commentary on move from convention to brussels I

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Advocate General Bot in Case C-386/05, Color Drack v Lexx

The system established by Art.5(1) of Regulation 44/2001 and the objectives pursued by that regulation
[
[46] The aim of the Brussels Convention is … to avoid the multiplication of the bases of jurisdiction in relation to one and the same legal relationship by unifying the Member States' rules on international jurisdiction by means of simple provisions that allow the parties easily to identify the court having jurisdiction.
[47] These objectives are implemented in Art.2 of the convention, which establishes the principle that the court having jurisdiction is the court of the defendant's domicile.
[48] The contracting parties to the convention made provision for derogation from that principle regarding jurisdiction. They laid down several rules on special jurisdiction, some obligatory, as in the case of immovable property, insurance or consumer contracts, and others optional, in Art.5 of the Brussels Convention , in particular in matters relating to a contract, maintenance or claims for damages.
[49] These special rules of jurisdiction were adopted to serve a precise objective. As regards the rules laid down in Art.5 , the contracting parties wished to enable the plaintiff to bring his action before the court that was physically closest to the facts in the dispute and was thus best placed to assess those facts. The rules are justified, according to the Jenard Report, by the “fact that there must be a close connecting factor between the dispute and the court with jurisdiction to resolve it”.
[50] Article 5 of the Brussels Convention therefore provided, in its original version, that the defendant could be sued, in matters relating to a contract, in the courts for the “place of performance of the obligation in question”.
[51] The court has specified first the obligation that is to be taken into account and secondly how the place of performance of that obligation is to be determined.
[52] Thus in the De Bloos judgment, it held that the obligation to be taken into account is that which corresponds to the contractual right on which the plaintiff's action is based. This is thus the contractual obligation that is the actual basis of the legal action or, in other words, the obligation whose non-performance is claimed.
[53] In the Tessili judgment of the same date, the court ruled that the place where the obligation on which the application is based was or should be performed must be determined under the law governing the contested obligation in accordance with the rules of conflict of laws of the court before which the matter is brought.

The problems raised by Art.5(1) of the Brussels Convention

[54] Article 5(1) of the Brussels Convention , as it has been interpreted in case law, has given rise to numerous criticisms. Among the difficulties posed by this provision, there are three shortcomings, by comparison with the objectives of the convention, that seem relevant to the present dispute.

[55] The first relates to the risk of a multiplication of the courts with jurisdiction to hear disputes relating to one and the same contract.
[56] As we have seen, the aim of the Brussels Convention is to avoid, so far as possible, creating a situation in which a number of courts have jurisdiction in respect of one and the same contract, in order to preclude the risk of irreconcilable decisions and to facilitate the recognition and enforcement of judgments in states other than those in which they were delivered.
[57] However, the combined application of the De Bloos and Tessili judgments may lead to a situation in which actions based on discrete obligations but relating to the same contract fall under the jurisdiction of courts in different Member States. That case law indeed separates the obligations deriving from one and the same contract and determines the place of performance of the obligation forming the basis of the plaintiff's action in accordance with the law governing the contested obligation, under the conflict rules of the court seised.
[58] The Leathertex case provides a good illustration of the consequences of that case law. In that case a Belgian company that had acted as commercial agent of the company Leathertex, established in Italy, sued the latter in Belgium for the payment of arrears of commission and compensation in lieu of notice for breach of contract. Under Belgian conflict rules, the obligation to pay compensation in lieu of notice had to be performed in Belgium, whereas the obligation to pay commission had to be performed in Italy. In that judgment the court held that, in application of the case law established in the De Bloos and Tessili judgments, the Belgian court could hear only the action for payment of compensation in lieu of notice, the other action falling under the jurisdiction of the Italian courts.
[59] The court has attempted to limit the effects of this case law. In the Shenavai v Kreischer judgment, it ruled that in the specific case of a dispute concerned with a number of obligations arising under the same contract and forming the basis of the proceedings commenced by the plaintiff, the court before which the matter is brought could, when determining whether it had jurisdiction, apply the maxim accessorium sequitur principale.
[60] Nevertheless, the risk of a multiplication of the courts with jurisdiction remains if, as in the Leathertex case, the obligations in question are considered to be equivalent. In that situation, the same court does not have jurisdiction, under Art.5(1) of the Brussels Convention , to hear all of an action based on two equivalent obligations arising under the same contract if, under the conflict rules of the state of that court, one of these obligations must be performed in that state and the other in another Contracting State.

[61] The second shortcoming of Art.5(1) of the Brussels Convention stems from the difficulty of implementing it and, hence, the lack of predictability of its outcome for the parties to the contract.
[62] As we have seen, the aim of the Brussels Convention is to enable a normally well-informed defendant reasonably to foresee before which courts, other than those of the state in which he is domiciled, he may be sued. That convention is thus intended to strengthen in the Community the legal protection of natural and legal persons established there, by laying down common rules on jurisdiction to guarantee certainty as to the allocation of jurisdiction among the various national courts before which proceedings in a particular case may be brought.
[63] For the application of these rules to produce a predicable outcome for economic operators, they must be extremely simple. However, the method for determining the court with jurisdiction, as defined by the De Bloos and Tessili line of case law, requires the national court before which the action is brought to make several complex assessments, the result of which cannot easily be foreseen by the parties to a contract.
[64] Thus the court hearing the case must first determine the character of the contractual obligation forming the basis of the action. If the plaintiff bases his action on several obligations, the court will have to establish whether there is a ranking among them, enabling it to hear the case in its entirety, in accordance with the Shenavai judgment.
[65] The court seised must then find the law which, in accordance with its rules on the conflict of laws, is applicable to the obligation forming the basis of the action. For example, where applicable, it will have to refer to the Convention on the Law applicable to contractual obligations opened for signature in Rome on June 19, 1980.
[66] Under the system established by that convention, the law applicable to the contract is the law chosen by the parties. Where no choice has been made, the convention lays down the principle that the contract is to be governed by the law of the state with which it is most closely connected and presumes that, subject to certain exceptions, that state is the one where the party who is to effect the performance which is characteristic of the contract has his habitual residence at the time of conclusion of the contract.
[67] The substantive law that is thus selected may also take the form of an international convention signed and ratified by the Member State concerned, such as the United Nations Convention on contracts for the international sale of goods, signed in Vienna on April 11, 1980.
[68] Finally, on the basis of the substantive law applicable, the court must determine the place of performance of the contested contractual obligation. It can rule that it has jurisdiction only if that place is within its territorial jurisdiction.
[69] This method is therefore complicated and involves the application of international conventions, each of which may raise serious difficulties of interpretation.

[70] The third shortcoming of Art.5(1) of the Brussels Convention stems from the fact that the rules taken into account to determine the court with jurisdiction are not best suited for designating the court with the closest link with the dispute to be resolved.
[71] We have seen that the purpose of the option which this provision gives the plaintiff to derogate from the general principle that the courts of the domicile of the defendant have jurisdiction is to enable him to bring his action before the court closest to the facts in the dispute.
[72] Admittedly, this objective must be reconciled with the objective of legal certainty, and more especially that of foreseeability, which are also pursued by the Brussels Convention and which the court has recognised as having primacy over the objective of closeness. Moreover, the existence of a connecting factor between the court and the dispute is not of itself the criterion for jurisdiction provided for in Art.5(1) of the Brussels Convention , since the jurisdictional criterion expressly laid down in that provision is the place of performance of the obligation.
[73] The primacy of the objective of legal certainty over that of closeness may therefore justify the fact that, in a particular situation, the court in which the plaintiff brings his action in accordance with Art.5(1) of the Brussels Convention may not be the one with the closest link with the dispute.
[74] The problem that arises in the implementation of this provision is more general, however. It has to do with the fact that the criteria to be applied pursuant to the De Bloos and Tessili line of case law have not been set on the basis of the objective of closeness.
[75] In accordance with the method defined by the case law of the court, the place of performance must be determined by applying the substantive law of the Member States or an international convention unifying that substantive law, and the purpose of such laws and conventions is not to determine court jurisdiction. It follows that with regard to the payment of a sum of money the court whose jurisdiction is recognised in accordance with this method is the court where the debtor or the creditor has his domicile, depending on whether, under the national law applicable, the payment is considered to be payable at the domicile of the debtor or at that of the creditor.
[76] It is legitimate to consider that, in all of these scenarios, the objective of closeness has true meaning and can be properly satisfied only if the court with jurisdiction is the one of the place of contractual or actual performance of the contract. The jurisdiction of that court is thus justified because, by reason of its close link with the place of performance of the obligation that is characteristic of the contract, it is best placed to assess the material evidence or testimony adduced by the parties and, where applicable, itself to establish the facts.


[83] (…) Art.5(1)(b) of Regulation 44/2001 sets an autonomous criterion of jurisdiction for the two most common types of contract in international commercial relations, namely contracts for the sale of goods and the provision of services.
[84] Furthermore, in these two cases, this autonomous criterion of jurisdiction is the place of performance of the obligation that is characteristic of the contract, in other words the place of delivery of the goods in the case of a contract of sale and the place of provision of the services in that of a contract for the performance of services.

[85] At this stage in my analysis we can draw the following lessons from the system established by Art.5(1) of Regulation 44/2001 and the objectives pursued by that regulation.

[86] First, with regard to contracts for the sale of goods and the provision of services, the provisions of Art.5(1)(b) of Regulation 44/2001 constitute, as it were, the rule of “principle” on special jurisdiction. The provision of Art.5(1)(a) of that regulation, which reiterates the old rule of the Brussels Convention, now has a purely subsidiary role for these two types of agreement. As Art.5(1)(c) of the regulation explicitly states, sub-para.(a) of that provision applies only if sub-para.(b) does not apply.
[87] Secondly, the rule on special jurisdiction contained in Art.5(1)(b) of Regulation 44/2001 is intended to apply to all actions based on a contract. In other words, as demonstrated by the statement of the Commission's reasons for proposing this text to the Council of the European Union on July 14, 1999, the Community legislature wished to put an end to the multiplication of courts able to hear actions based on one and the same contract.
[88] The place of delivery of goods and the place of provision of services now constitute the criterion of jurisdiction for all actions that may be brought on the basis of a contract for the sale of goods or a contract for the provision of services. It applies irrespective of the obligation forming the basis of the action and it also applies where the action relates to several obligations.
[90] Thirdly, as in the system established by the Brussels Convention , the existence of a link between the court and the action is not, of itself, the criterion of jurisdiction laid down in Art.5(1)(b) of Regulation 44/2001 . That link is only the ground that forms the basis of that special jurisdiction. The criterion of jurisdiction is the place of delivery of the goods or provision of the services.
[91] It follows that the main objective of this provision is legal certainty, by reason of which the common rules on jurisdiction must be highly predictable. By using an autonomous criterion as the criterion of jurisdiction, the Community legislature has abandoned the complex system for determining the place of performance of the contract set out in the Tessili line of case law cited above. Similarly, by taking as an autonomous criterion a factor which more often than not will be purely factual, and hence easily identifiable by the parties, it enables the parties to predict reasonably which court other than that of the state in which the defendant is domiciled may hear an action deriving from a contract.
[92] In the system established by Art.5(1)(b) of Regulation 44/2001 , legal certainty is thus ensured, because the parties to the contract know that all actions deriving from that contract may be brought before the court of the place of delivery of the goods or provision of the services.
[93] Furthermore, in this system the ground that forms the basis of this special jurisdiction is taken into account better because the court with jurisdiction is the one in whose territory the obligation that is characteristic of the contract is to be performed. Consequently, if the contract has been performed, or if actual performance of the contract has commenced, the court designated will, in the majority of cases, be the one physically closest to the evidence that may be relevant for resolving the dispute.

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Rehder

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Multiple places of performance - criticism of Besex!

Where there were several places at which services were provided in different Member States, it was necessary to identify the place with the closest linking factor between the contract in question and the court having jurisdiction: in particular, the place where, pursuant to that contract, the main provision of services was to be carried out, Color Drack GmbH v Lexx International Vertriebs GmbH (C-386/05) [2010] 1 W.L.R. 1909 applied. The only places which had a direct link to those services were those of the departure and arrival of the aircraft. Accordingly, a person claiming compensation on the basis of the 2004 Regulation could choose to sue the defendant in the court in whose jurisdiction one of those places was found.

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Wood Floor Solutions

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f Regulation 44/2001 art.5(1)(b) was applicable where services were provided in several Member States and on the criteria for establishing the place of performance of the contract. The respondent in the main proceedings (W), an Austrian company, had been the commercial agent for the appellant (S), a Luxembourgeois company. Relying on art.5(1)(b), W brought proceedings in an Austrian court to claim damages for the termination of its contract. S challenged the Austrian court's jurisdiction, arguing that more than three-quarters of W's turnover was generated in countries other than Austria. The first instance court rejected S's plea that it lacked jurisdiction, and S appealed. The appeal court asked the ECJ (i) whether the second indent of art.5(1)(b) was applicable where services were provided in several Member States; (ii) if it was, what the criteria were for establishing the place of performance of the obligation that was characteristic of the contract.

Preliminary ruling given. (1) The second indent of art.5(1)(b) was applicable where services were provided in several Member States. The Court had previously decided that the first indent relating to contracts for the sale of goods was applicable where there were several places of delivery of goods within a single Member State, since one court had to have jurisdiction to hear all the claims arising out of the contract, Color Drack GmbH v Lexx International Vertriebs GmbH (C-386/05) [2010] 1 W.L.R. 1909 applied. The Court had also held that the factors of proximity and predictability which it had taken as a basis in Color Drack were also valid with regard to contracts for the provision of services, including the cases where such provision was not effected in a single Member State, Rehder v Air Baltic Corp (C-204/08) [2010] Bus. L.R. 549 applied. (2) Where services were provided in several Member States, the court having jurisdiction to hear and determine all the claims based on the contract was the court within whose jurisdiction the place of the main provision of services was situated. For a commercial agency contract, that place was the place of the main provision of services by the agent, as it appeared from the provisions of the contract; or, in the absence of such provisions, the actual performance of that contract; or, where it could not be determined on that basis, the place where the agent was domiciled.

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Car Trim v Key Safety Systems

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Distinguish between sale of goods and provision of services:

Also place of performance:

The European Court of Justice was asked for a preliminary ruling on the difference between contracts for the sale of goods and contracts for the provision of services, and on the determination of the place of performance of contracts involving carriage of goods, for the purposes of Regulation 44/2001 art.5(1)(b). The respondent (K) in the main proceedings was an Italian company which supplied Italian car manufacturers with airbag systems. K purchased from the appellant (C) components used in the manufacture of those systems in accordance with a number of supply contracts. Under the contracts, C was obliged to manufacture airbags of a certain shape using products purchased from agreed suppliers, so as to be able to supply them to order in accordance with K's production process and in conformity with quality requirements. K subsequently terminated those contracts. Arguing that the termination was in breach of contract, C brought an action for damages in Germany. The German court held that it lacked jurisdiction. C's appeal was dismissed but when it appealed on a point of law, the referring court asked the ECJ to determine (i) the difference between contracts for the sale of goods and contracts for the provision of services, within the meaning of art.5(1)(b), where goods were to be produced or manufactured in accordance with specific customer requirements as regards the provision, fabrication and delivery of the components, including quality guarantees; (ii) whether, in the case of a sales contract involving carriage of goods, the place where the goods were delivered or should have been delivered under the contract was to be determined by reference to the place of physical transfer to the buyer, or according to the place where the goods were handed over to the first carrier for transmission to the buyer.

Preliminary ruling given. (1) For the purposes of identifying the court with jurisdiction in relation to contracts for the sale of goods or the provision of services, art.5(1)(b) identified as a connecting factor the obligation which characterised the contract in question, Falco Privatstiftung v Weller-Lindhorst (C-533/07) [2010] Bus. L.R. 210 applied. On the basis of that connecting factor in the contracts at issue, a contract which had as its characteristic obligation the supply of goods would be classified as a sale of goods, within the meaning of the first indent of art.5(1)(b), and one which had as its characteristic obligation the provision of services would be classified as a provision of services, within the meaning of the second indent of that provision (see paras 31-32 of judgment). When determining the characteristic obligations of the contracts at issue, the fact that the goods to be delivered were to be manufactured or produced in advance did not alter the classification of the contract at issue as a sales contract. Where all the materials from which the goods were manufactured had been supplied by the buyer, that could be an indication that the contract was one for the provision of services. Conversely, where the material had not been supplied by the buyer, that was a strong indication that the contract was one for the sale of goods. In the instant case, even though K determined the suppliers from which C had to obtain certain parts, it did not provide C with any materials (paras 38, 40-41). Finally, the seller's responsibility for the quality of the goods and their compliance with the contract would favour a classification of the contract as one for the sale of goods. On the other hand, if the seller was responsible only for correct implementation in accordance with the buyer's instructions, that would indicate that the contract was one for the provision of services (para. 42) (2) It was a matter for the referring court to determine firstly whether the place of delivery was apparent from the provisions of the contract. If it was able to do so, then that was the place where the goods were delivered or should have been delivered for the purposes of the first indent of art.5(1)(b). Where the contract did not indicate the parties' intentions concerning the place of delivery, it was necessary to determine that place in accordance with another criterion which was consistent with the origins, objectives and scheme of the Regulation. The place where the goods were or should have been physically transferred to the purchaser was the most consistent with those requirements, given that it was highly predictable and met the objective of proximity in so far as it ensured the existence of a close link between the contract and the court called upon to determine the case, Color Drack GmbH v Lexx International Vertriebs GmbH (C-386/05) [2010] 1 W.L.R. 1909 and Rehder v Air Baltic Corp (C-204/08) [2010] Bus. L.R. 549 applied. In principle, the goods which formed the subject matter of the contract had to be in that place after performance of the contract. Moreover, the main purpose of a contract for the sale of goods was the transfer of those goods from the seller to the buyer, which transaction was not completed until the goods had arrived at their final destination (paras 54-57, 60-61).

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Electrosteel Europe

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Place of performance:

r the instant reference had been lodged, the Court held in Car Trim GmbH v KeySafety Systems Srl (C-381/08) [2010] Bus. L.R. 1648 that art.5(1)(b) of the Regulation had to be interpreted as meaning that, in the case of a sale involving the carriage of goods, the place where, under the contract, the goods were delivered had to be determined on the basis of the provisions of that contract. Where that was impossible without reference to the substantive law applicable to the contract, the place of delivery was the place where the physical transfer of the goods took place, as a result of which the purchaser obtained actual power of disposal over them. That provided an almost complete answer to the question referred in the instant case, Car Trim followed. However, the issue still to be clarified was how the words "under the contract" in art.5(1)(b) were to be interpreted and to what extent it was possible to take into consideration terms and clauses in the contract which did not explicitly identify the place of delivery. There was no reason to believe that the EU legislature wished no consideration to be taken of established practice and commercial usage for the purposes of determining the court with jurisdiction in accordance with art.5(1)(b). Usages played an important role in the non-governmental regulation of international trade or commerce, and the Incoterms were widely recognised and used. Thus, in order to determine the place of delivery for the purposes of art.5(1)(b), the referring court had to take into account all the relevant terms in the contract, including those generally recognised and applied in international commercial usage, such as the Incoterms, in so far as they enabled that place to be clearly identified. It might be necessary to examine whether such terms were merely stipulations concerning the allocation of risks or the division of costs between the contracting parties, or whether they also identified the place of delivery. The "ex works" Incoterm incorporated rules concerning delivery. It was for the national court to determine whether the "delivered free ex our business premises" clause corresponded to the "ex works" Incoterm or to another clause habitually used in trade or commerce and which was an appropriate means of clearly identifying the place of delivery. The answer to the question referred was that art.5(1)(b) had to be interpreted as meaning that, in the case of distance selling, the place where the goods were, or should have been, delivered pursuant to the contract had to be determined on the basis of the provisions of that contract. In order to verify whether the place of delivery was determined "under the contract", the national court had to take account of all the relevant terms and clauses of the contract that were capable of clearly identifying that place, including terms that were generally recognised and applied through the usages of international trade or commerce, such as the Incoterms. If it was impossible to determine the place of delivery on that basis, without referring to the substantive law applicable to the contract, the place of delivery was the place where the physical transfer of the goods took place, as a result of which the purchaser obtained, or should have obtained, actual power of disposal over those goods (see paras 16-26 of judgment).

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Maharanee of Baroda

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Personal service - traditional rules

Where a defendant has been properly served within the jurisdiction he can only justify a stay of the action if he can satisfy the court positively that to continue it would be oppressive of him or an abuse of the process of the court. The parties were both resident in France, though both spoke perfect English, and occasionally visited England. The subject of the action was a French painting by a French artist, sold by the defendant to the plaintiff by a transaction governed by French law. The defendant gave the plaintiff a certificate as to its value and authenticity, both of which were subsequently placed in doubt by English experts. The plaintiff served proceedings on the defendant whilst the defendant was on a visit to England, for Ascot. The defendant contended that the proceedings would be oppressive of him and his witnesses if the action were tried in England, and the judge ordered that the action be stayed on the basis that where a defendant was served with proceedings on a short visit to England, a presumption arose that the proceedings were oppressive. On appeal by the plaintiff, held, that there was no basis in law for that proposition. The issue was one of fact and was supra-national in character. The parties were to an extent citizens of the world and there was no reason why the plaintiff should not bring the action in this country.

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EWCA City & County Properties v Kamali

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Service at a specific place

It doesn't matter if the person is out of the country if address given. MAY LJ

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Sharab v Prince Al-Waleed Al-Saud

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On contracts, claims served outside of jurisdiction:

he appellant prince (P) appealed against a decision to refuse his application for a declaration that the English court had no jurisdiction to hear the claim of the respondent agent (S). S lived in Jordan, Libya and London, spending some three months a year in London. She ran a consultancy company, a major part of whose business was to effect introductions for clients in Libya. P, a Saudi royal, told S that he wished to sell a private aircraft to the President of Libya. S had a meeting in London with a man (X) whom she understood to be P's representative. S said that they orally agreed that she would sell the aircraft to the president and that P would pay her $2 million commission. She said that P later called her in London, instructing her to proceed with negotiations. S claimed that during negotiations in Libya for the sale she and P orally agreed that if the aircraft sold for over $110 million, S's commission would be all sums over $110 million. The aircraft was sold for $120 million. P did not pay the commission, denying that X was his representative or that he was party to any relevant contract with S, and S brought proceedings in England, having been granted permission for service outside the jurisdiction. Dismissing P's application, the judge found that S had a good arguable case that the case fell within CPR r.6.20(5)(a) and (6) and that the appropriate forum for the trial was England. P argued that (1) the judge was wrong to find that the contract had been made in the jurisdiction; (2) the judge was wrong to find that London was the agreed place of payment and that therefore the contract had been breached in England; (3) the appropriate forum was Libya rather than England; (4) although he had not been prepared to give an undertaking before the judge to submit to the Libyan courts' jurisdiction, he was now prepared to do so.

Appeal dismissed. (1) Sufficient had been agreed at the London meeting to create a binding contract, and there was a good arguable case that X had had authority to act on P's behalf. The later telephone conversation between P and S provided further evidence of that authority. The discussions in Libya gave rise to a variation rather than a new agreement. By that time, S had already carried out work under the London agreement, getting things to the point where P had taken the aircraft to Libya. In Libya, P and S had agreed a change to the previously agreed commission. The claim was in respect of a contract made in England even though it was subsequently amended in Libya, BP Exploration Co (Libya) Ltd v Hunt (No.1) [1976] 1 W.L.R. 788 applied. (2) There was insufficient evidence to establish that London was agreed as the place of payment: the parties had discussed payment but P had not accepted an obligation to pay in London and not elsewhere. However, that was not fatal to S's overall case: the fact that the contract had been made within the jurisdiction was sufficient. (3) The links between the claim and England were not tenuous or accidental. It was more than chance that the agreement was made in London: S spent three months a year and had had several meetings with X there, and P had substantial business interests there. The judge had also been entitled to find that London was a convenient venue for S, P and X; he had also given valid reasons for rejecting as unconvincing the submission that a trial in Libya was favoured by considerations of language and witnesses' location. He had also been entitled to take into account the absence of an agreement by P to submit to the jurisdiction of the Libyan courts: it was P's case that Libya was the appropriate forum, so it was for him to show that the Libyan courts would be able to exercise jurisdiction against him. Moreover, unless P gave the undertaking, there could be no assurance that a Libyan judgment would be enforceable in England: the judge was entitled to treat the enforceability of an English judgment as favouring England as the appropriate forum, International Credit & Investment Co (Overseas) Ltd v Adham (Share Ownership) [1999] I.L.Pr. 302 applied. (4) P's undertaking was declined. Although the court's discretion to receive fresh evidence applied to the acceptance of an undertaking, P had had a clear opportunity to give the undertaking before the judge and had taken a considered decision not to do so; it was open to him to take that position, but he must have appreciated the risk that he might have no subsequent opportunity. Moreover, his position had had an important effect on the arguments before the judge and on appeal. To allow an undertaking to be given now would produce a different situation from that considered by the judge and would make it necessary to give the parties an opportunity to address fresh argument to the court. The court would then effectively be exercising the discretion afresh, and that departure from the normal approach was inappropriate in the instant case.

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Tort under CPR

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Booth v Phillips and Cooley v Ramsay

P, the first defendant, applied for an order to stay proceedings brought by B on the ground that the UK was not the most appropriate forum. B's husband had died on board a vessel owned and/or managed by the second, third and fourth defendants and in respect of which P had been the master. B claimed that her husband's death had been caused by the defendants' negligence. The second, third and fourth defendants applied to set aside orders granting permission to B to serve proceedings out of the jurisdiction. B contended that (1) there was a real issue between her and the defendants which it was reasonable for the court to try for the purposes of the Civil Procedure Rules 1998 Part 6. r.6.20(3); (2) it was arguable that her husband's contract of employment as chief engineer on board the vessel was governed by English law. The applicable law of the contract was Jordan but B, in reliance on the proviso to the Rome Convention 1980 Art.6, submitted that the contract was actually more closely connected with the UK so that English law applied, and (3) she had sustained damage within the jurisdiction, namely the loss of dependency upon her husband, and also as executrix in respect of the funeral expenses. The defendants argued that "damage" for the purposes of Part 6 r.6.20(8) of the 1998 Rules meant the damage completing the cause of action and that that damage was the death of B's husband, which had occurred outside the jurisdiction.

Held, refusing the applications, that (1) B's claim did raise real issues against the defendants which it was reasonable for the court to try. Accordingly, B had established a ground for exercising jurisdiction against the defendants; (2) the proviso to Art.6 did not apply. The vessel was not registered in the UK and did not trade to the UK. An "officious hacker" of the email exchanges forming the contract of employment might well consider that the owners and operators of the vessel did not wish the contract of employment to be governed by English law, and (3) having regard to the wording of r.6.20(8), it was not appropriate to give "damage" the restricted meaning suggested by the defendants. It was sufficient that some, not necessarily all, of the damage be sustained within the jurisdiction. Loss of financial dependency and funeral expenses were damage within the meaning of r.6.20(8). For the purposes of considering whether England was the most appropriate place to bring the claim, the most important factor was that all the claims should be heard together. The claims against all the defendants could be brought within the jurisdiction of the UK courts. That would definitely not be the case if the claims were brought in Jordan. It was therefore appropriate to order service out of the jurisdiction.