European Law Review
2002
Article
JURISDICTION IN MATTERS RELATING TO CONTRACT: ARTICLE 5(1) OF THE BRUSSELS
CONVENTION AND REGULATION
Koji Takahashi
Copyright (c) Sweet & Maxwell Limited and Contributors
Legislation: Brussels Convention on Jurisdiction and Enforcement of Judgments
in Civil and Commercial Matters 1968 Art.5(1)
Regulation 44/2001 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial matters
Subject: CONTRACTS
Keywords: Conflict of laws; Contracts; EC law; Jurisdiction
Abstract: Provisions of Regulation 44/2001 relating to jurisdiction in
contractual matters, interpretation of these provisions and whether
amended Art.5(1) is improvement on original version in 1968 Convention.
*530 The Council Regulation on Jurisdiction and the Recognition and Enforcement
of Judgments in Civil and Commercial Matters has replaced the Brussels Convention.
This article will examine the amendment to Article 5(1), which provides for jurisdiction in contractual matters and which, under the Convention, had attracted more
judicial controversy and scholarly comments than any other provisions. After
considering some issues of interpretation, this article will assess the amendment and
conclude that while Article 5(1) of the Regulation is far from perfect, given that
it would be impossible to come up with wholly satisfactory jurisdictional rules for
general contractual matters, the amendment should be welcomed as it has brought about
improvements upon Article 5(1) of the Convention.
Introduction
The Council Regulation on Jurisdiction and the Recognition and Enforcement of
Judgments in Civil and Commercial Matters [FN1] (hereafter "the Regulation") replaced
the Brussels Convention (hereafter "the Convention") on 1 March 2002 for the Member
States [FN2] except Denmark. [FN3] The Regulation keeps the framework of the Convention
but introduced a number of amendments.
The most informative account of the background to the replacement and accompanying
amendments is to be found in the Explanatory Memorandum attached to the Commission's
earlier proposal for a Regulation (hereafter "the Commission's Explanatory Memorandum"). [FN4] Others have also written general commentaries on the final draft. [FN5]
This article will not repeat their exercise but will focus upon the amendment of Article
5(1), which provides for jurisdiction in contractual matters. Under the Convention,
Article 5(1) has attracted more judicial controversy and scholarly comments than any
other provisions. Its amendment is, therefore, expected to have significant im-
plications.
*531 This article will first outline the provisions of Article 5(1), then consider
some issues of interpretation and finally evaluate the amendment.
Article 5(1) of the Regulation reads:
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;
The corresponding part of Article 5(1) of the Convention read:
A person domiciled in a Contracting State may, in another Contracting State,
be sued:
(1) In matters relating to a contract, in the courts for the place of performance
of the obligation in question; ...
This provision was followed by special provisions for individual contracts of
employment, which in the Regulation have been moved to a newly created section (section
5). The present article will touch upon individual contracts of employment only in
so far as it is necessary to analyse jurisdiction in general contractual matters.
As apparent from the provisions, the Regulation has effected the amendment by
inserting subparagraph (b), which only affects contracts for the sale of goods and
the provision of services. Where subparagraph (b) does not apply, subparagraph (c)
says that subparagraph (a) applies. Subparagraph (a), like Article 5(1) of the
Convention, awards jurisdiction to the courts for "the place of performance" of "the
obligation in question." Presumably, these two phrases will carry the same meanings
under the Regulation as under the Convention. Under the Convention, the Court of
Justice held in De Bloos v. Bouyer [FN6] that "the obligation in question" referred
to the obligation which formed the basis of the claim. In Shenavai v. Kreischer, [FN7]
the Court held that where a claim was based upon different obligations under the same
contract, the principal obligation was "the obligation in question." As for "the place
of performance," the Court held in Tessili v. Dunlop [FN8] that it was to be determined
first by applying the choice-of-law rules of the forum to ascertain the governing law
of "the obligation in question" and then by applying that governing law.
*532 Interpretation of subparagraph (b)
What contracts are contracts for "the sale of goods" or "the provision of services"?
In the scheme of the Regulation, contracts may be divided into four categories:
first, those falling within special provisions exclusively laying down jurisdiction
for particular types of contracts such as insurance contracts (section 3), consumer
contracts [FN9] (section 4) and individual contracts of employment (section 5);
secondly, the contracts for "the sale of goods" within the meaning of Article 5(1)(b);
thirdly, the contracts for "the provision of services" within the meaning of Article
5(1)(b); and fourthly, the contracts which belong to none of the above categories and
which are, in accordance with Article 5(1)(c), subject to Article 5(1)(a).
The Regulation does not define the meaning of the expressions "the sale of goods"
and "the provision of services". These expressions are also to be found in another
European instrument on contract law, E.C. Directive 93/13 on Unfair Terms in Consumer
Contracts. [FN10] It does not define these expressions but the contexts in which they
are used suggest that they cover a majority of contracts.
Similar expressions are also contained in the Rome Convention on the Law Applicable
to Contractual Obligations. [FN11] In Article 5, which provides for special
choice-of-law rules for certain consumer contracts, paragraph (1) provides, "This
Article applies to a contract the object of which is the supply of goods or services
to a person ('the consumer') for a purpose which can be regarded as being outside his
trade or profession, or a contract for the provision of credit for that object."
Paragraph (4) provides that this Article does not apply to "(a) a contract of carriage;
(b) a contract for the supply of services where the services are to be supplied to
the consumer exclusively in a country other than that in which he has his habitual
residence." Paragraph (1) might be taken to mean that a contract for the provision
of credit is not a contract of service. But neither the text of the Convention nor
the Report on the Convention by Giuliano and Lagarde [FN12] defines the meaning of
"the supply of goods" or "the supply of services".
Curiously, similar expressions are used in the draft [FN13] Hague Convention on
Jurisdiction and Foreign Judgments in Civil and Commercial Matters, which is being
prepared by the Hague Conference on Private International Law. Draft Article 6 entitled
"Contracts" provides: [FN14]
A plaintiff may bring an action in contract in the courts of a State in which-a) in matters relating to the supply of goods, the goods were supplied in whole
or in part;
b) in matters relating to the provision of services, the services were provided
in whole or in part;
*533 c) in matters relating both to the supply of goods and the provision of
services, performance of the principal obligation took place in whole or in part.
The Report by Nygh and Pocar [FN15] on the Special Commission which devised this
draft says:
[The category of contracts for "the supply of goods"] includes sales and,
possibly, any contract which makes provision for the supply of goods, such as
sub-contracting, lettings, leases, etc. It does not however include contracts for
the supply of objects which cannot be described as goods, such as company shares
or intellectual property rights.... Whether the provision on the contract forum
is applied will ... depend, in some instances, on the definition given by the law
of the court seised or that designated by its conflict of law rules.
Those other legislative provisions and their commentaries are useful in considering
the meaning of the words "sale of goods" and "provision of services" under the
Regulation.
While the Nigh-Pocar Report says that the interpretation of "the provision of
services" under the draft Hague Convention will depend to some extent on the court
seised, it is hoped that under the Regulation, in the interests of uniform application
of Article 5(1), the Court of Justice will come up with autonomous meanings independent
of the domestic law of the Member States.
As suggested by the Nigh-Pocar Report for the draft Hague Convention, contracts
for "the sale of goods" under the Regulation also presumably do not cover contracts
for the supply of objects which cannot be described as goods, such as company shares
and intellectual property rights. However, it must be noted that unlike the Rome
Convention and the draft Hague Convention, which use the expression "the supply of
goods", the expression used in the Regulation is "the sale of goods". Therefore, it
presumably does not cover contracts, other than sale of goods, which involve the supply
of goods, such as leases.
As may be the position under the E.C. Directive on Unfair Terms in Consumer Contracts,
it is possible that under the Regulation, "the provision of services" together with
"the sale of goods" cover a majority of contracts. Unlike what might be the position
under Article 6(1) of the Rome Convention, contracts for the provision of credit are
presumably contracts for "the provision of services" under the Regulation. Contracts
for other financial services such as banking and share brokerage are also most probably
contracts for "the provision of services". So will be contracts for construction,
carriage, distribution of products, as well as other services provided by professionals such as accountants, lawyers, and doctors.
Unlike
which are
suggested
the draft
the draft Hague Convention, the Regulation makes no mention of contracts
at the same time the sale of goods and the provision of services. It is
that the classification into either category should be determined, as under
Hague Convention, in accordance with the principal obligation.
Contracts for "sale of goods" or "provision of services" may involve obligations
other than the obligations to deliver goods or to provide services and to pay for them.
Thus, for *534 example, a contract for the inspection of goods to be imported is a
contract for "the provision of services" of inspection but involves an obligation to
deliver the report. [FN16] In some contracts, the obligation to deliver goods or
provide services is less important than other obligations. Thus where CIF contracts
form a chain of contracts for selling and buying the same goods for speculative purposes,
tender of shipping documents is arguably more important than the delivery of goods.
It is to be wondered whether such contracts are still contracts for "the sale of goods"
or "the provision of services".
Amongst the clearest examples of contracts left to be dealt with under subparagraph
(a) are contracts for the exchange of goods (barter) and contracts for the gift of
goods. [FN17] Contracts to refrain from certain acts presumably also belong to this
category since inaction may not be regarded as "services." Contracts to transfer rights
other than sales of goods, such as sale of company shares and intellectual property
rights will also fall within this category if the transfer does not involve "services."
[FN18] The sale of land is presumably not a "sale of goods" [FN19] and, accordingly,
will also fall within subparagraph (a) but it must be noted that if the proceedings
have as their object rights in rem, these are subject to exclusive jurisdiction
provided in Article 22.
"[T]he obligation in question"
At first sight, subparagraph (b) may be seen as establishing presumptions for
ascertaining "the place of performance" under subparagraph (a). But it is not. That
is because the principle established in the De Bloos case, according to which "the
obligation in question" was the obligation which formed the basis of the claim, has
no application under Article 5(1)(b) of the Regulation. [FN20] Under subparagraph (b),
the delivery of goods or the provision of services, as the case may be, is effectively
deemed to be "the obligation in question". Thus, for example, if a lawyer makes a claim
for fees from his client, his claim is based upon the client's obligation to pay the
fees but the place of performance under subparagraph (b) is the place where the legal
services have been effected.
The delivery of goods and the provision of services are the obligation which
characterise the contract (the characteristic obligation). A similar concept
"characteristic performance" is used in Article 4(2) of the Rome Convention and,
according to the Giuliano-Lagarde Report, [FN21] it refers to the performance for which
payment is due. [FN22] In fact, the concept of characteristic obligation was not
unknown under the Brussels Convention. Article 5(1) of the Convention contained
special provisions on the individual contracts of employment, which were added when
the Convention was amended by the San Sebastian *535 Convention [FN23] to reflect the
case law of the Court of Justice. Before the amendment, the Court held in Ivenel v.
Schwab [FN24] that where proceedings were brought on the basis of different obligations
under the same employment contract, the obligation to be taken into account under
Article 5(1) was the characteristic obligation, namely the employee's obligation to
carry out the work. In Shenavai v. Kreischer, [FN25] the Court confined this principle
to the cases of employment contracts and confirmed that the De Bloos principle would
continue to apply to other contracts. The Regulation has by introducing subparagraph
(b), effectively extended the concept of "characteristic obligation" to contracts for
the sale of goods and the provision of services and to that extent departed from the
De Bloos principle.
"[U]nder the contract"
Under subparagraph (b), jurisdiction is awarded to the courts for the place of
delivery of goods or provision of services "under the contract". The place to be taken
into account is, therefore, the contractually agreed place of performance as
distinguished from the actual place of performance. This will provide the buyer of
goods or the recipient of services with certainty and predictability as to where they
can bring proceedings. When they bring proceedings elsewhere than the actual place
of performance, the onus is upon them to prove that their chosen forum is the
contractually agreed place. The standard of proof for establishing jurisdiction was
held by the Court of Justice in Shevill v. Presse Alliance [FN26] to be determined
by each national court. [FN27] Since that would not promote the uniformity of
application, it is to be wondered whether this case law will be maintained under the
Regulation.
A potentially vexed question is how the contractually agreed place of delivery of
goods or provision of services is to be ascertained. Under the Convention, in
accordance with the Tessili principle, "the place of performance" was to be determined
first by applying the choice-of-law rules of the forum to ascertain the governing law
of "the obligation in question" and then by applying that governing law. The process
was in the words of Advocate General Colomer in Groupe Concorde v. The Master of the
Vessel Suhadiwarno Panjan, [FN28] "a matter of fiendish difficulty" and the national
courts were doing so "very unequally" and "very imperfectly". The applicable
choice-of-law rules in contractual matters are, in most cases, [FN29] contained in
the Rome Convention but their application is not easy especially where the parties
have made no effective choice of law. Where the parties have made express or implied
choice of law, Article 3 provides that contractual issues are governed by the chosen
law. In the absence of an effective choice, Article 4(1) provides that the governing
law is the law of the country with which the contract is most closely connected but
that a severable part of the contract is by way of exception governed by the *536 law
of the country with which that part is most closely connected. However, it is not clear
when a severable part of a contract is to be governed "by way of exception" by a separate
governing law. Article 4 in paragraphs (2) to (4) provides for presumptions for
ascertaining the country with which the contract is most closely connected. Thus under
paragraph (2), that country is presumed to be the country in which the party effecting
the characteristic performance is habitually resident or has central administration
but in the case where the contract is entered into in the course of trade or profession,
that country is presumed to be the country in which the principal place of business
is situated or, if under the terms of the contract the performance is to be effected
through a place of business other than the principal place of business, the country
in which that other place of business is situated. These presumptions are rebuttable
under Article 4(5) if it appears from the circumstances as a whole that the contract
is more closely connected with another country, in which event the contract is governed
by the law of that other country. It is not, however, clear how much weight must be
given to what factors under paragraph (5). Thus, for example, in the case of a
construction contract, in what circumstances must the presumption under paragraph (2),
which will point to the country in which is situated the place of business through
which the construction is carried out, be displaced in favour of the country in which
the construction is actually taking place? Advocate General Colomer in Groupe Concorde
observed [FN30] that the difficulty of applying the Tessili principle had led some
national courts to ignore it or even openly rebel against it [FN31] and to determine
the place of performance "on the basis of the circumstances of the particular case".
He also noted that in the cases where the Tessili principle was actually followed,
this was often because the governing law was the law of the forum (the lex fori), [FN32]
namely, the law which the courts knew best. Furthermore, according to his observation,
[FN33] the national legal systems usually determine the place of performance of
obligations merely by referring to the will, express or implied, of the parties,
although in the case of payment of money, the national legal systems often provide
where the place of payment is. This means that it was often pointless to ascertain
the governing law in order to identify the place of performance. Furthermore, if the
country with which the contract is most closely connected can be identified under
Article 4(5), one could argue that it would be simpler and more appropriate to give
jurisdiction to the courts of that country rather than to the courts of the place of
performance as determined by the law of that country.
In fact, the Court of Justice has been repeatedly asked to re-consider the Tessili
principle. Thus in Custom Made Commercial v. Stawa Metallbau, [FN34] the Court was
asked whether the Tessili principle also applied where the contract was governed by
an international convention laying down uniform law on the place of performance such
as the 1964 Uniform Law on the International Sale of Goods (ULIS). The Court confirmed
that the Tessili principle did indeed apply also in such cases. In Groupe Concorde,
[FN35] the French *537 Cour de Cassation urged the Court of Justice to depart from
the Tessili principle and to hold that "the place of performance" should be determined
independently of national legal systems by seeking to establish, having regard to the
nature of the relationship creating the obligation and the circumstances of the case,
the place where performance actually took place or should have taken place. Although
the French and Italian Governments submitted that the Tessili principle should be
maintained, the German and United Kingdom Governments and the Commission argued that
the place of performance should be determined independently of national laws for each
type of contract. Despite these submissions, the Court of Justice refused to repudiate
the Tessili principle.
According to the Commission's Explanatory Memorandum, [FN36] the amendment to
Article 5(1) was designed "to remedy the shortcomings of applying the rules of private
international law of the State whose courts are seised". It also says, "The place of
performance of the obligation underlying the claim will now be given an autonomous
definition in two categories of situation: the sale of goods and the provision of
services. This solution obviates the need for reference to the rules of private
international law of the State whose courts are seised". It would, therefore, seem
that under Article 5(1)(b) of the Regulation, the place of delivery of goods and
provision of services are to be determined simply by looking closely at the terms of
the contract and the circumstances of the case. Whether it is always possible and easier
to do so without recourse to the governing law remains to be seen. At any event, where
the defendant alleges that the terms which expressly or impliedly identify the place
of performance are invalid, such allegation could only be tested by ascertaining and
applying the governing law.
"[U]nless otherwise agreed"
It is not clear from the wording of Article 5(1) what agreement is contemplated
by the words "unless otherwise agreed." But the effect of agreement is clear: if
"otherwise agreed", subparagraph (a) applies instead of (b). It must be noted that
whatever the meaning of the words, the existence of the agreement will usually make
no difference where the claim is based on the obligation to deliver goods or provide
services, since subparagraphs (a) and (b) will award jurisdiction to the same courts,
that is, the courts for the place of delivery of goods or provision of services. But
the result would be different where the claim is for payment of price: "unless otherwise
agreed", subparagraph (b) will award jurisdiction to the courts for the place of
delivery of goods or provision of services whereas if "otherwise agreed", subparagraph
(a) will award jurisdiction to the courts for the place of payment.
As will be examined in the section below, a major improvement achieved by the
insertion of subparagraph (b) is that in the case of claims for the price of goods
or services, jurisdiction is given to the forum which is likely to have close
connections with the dispute. This merit of subparagraph (b) will be thwarted if
"otherwise agreed". Therefore, the words "otherwise agreed" should, it is suggested,
be interpreted narrowly.
The Commission's Explanatory Memorandum [FN37] appears to suggest that the
expression "unless otherwise agreed" should be interpreted as meaning "unless the
place of *538 performance of the obligation forming the basis of the claim is agreed."
On this interpretation, in the case of a claim for the price for goods or services,
the courts for the place of payment would have jurisdiction if there is an agreement
on the place of payment. It is, however, unlikely that this effect is intended by the
parties who make such an agreement and, therefore, this interpretation has little to
commend it. It is suggested that the words should instead be interpreted as meaning
"unless the parties have agreed that subparagraph (b) will not apply to their contract".
Since such agreement will not in practice be made unless the parties are sufficiently
attuned to the intricacies of Article 5(1), the merit of subparagraph (b) will not
be thwarted unless the parties are clearly conscious of it.
Multiple places of delivery of goods or provision of services
Complex contracts, as those in elaborate commercial arrangements, often involve
a number of obligations to provide different services in a number of places. Such
obligations may be imposed on one party alone or on both. Even where the contract calls
for the provision of only one kind of services, it is possible that the services are
to be provided in a number of places. Similarly, it is possible that under a contract
of sale, the same goods are to be delivered in a number of places. Then, which place
is referred to by subparagraph (b)?
One possible solution is to interpret subparagraph (b) as awarding jurisdiction
to the courts for each place. Under the draft Hague Convention, the text of Article
6 suggests that this solution was favoured by the draftsmen. The Nygh-Pocar Report
supports this position by saying:
It is ... possible for the plaintiff to apply to the courts of any country in
which part of the goods were supplied (even a tiny part in relation to the whole
of the contract) and to ask the court to decide upon all the issues arising from
the contract. It is equally possible that the plaintiff may have several courts
available to him, if part of the goods were supplied in a number of different
countries.
It this solution were to be adopted under the Regulation, jurisdiction would be
awarded to too many courts regardless of the connection with the dispute. Article 5
must be interpreted restrictively as derogation from the primary rule of jurisdiction
in Article 2 which provides that persons domiciled in a Member State shall be sued
in the courts of that Member State. [FN38] The justification for the assertion of
jurisdiction under Article 5 lies in the existence of close connections between the
forum and the disputes. [FN39]
A second possible solution is to interpret subparagraph (b) as awarding the courts
for each place jurisdiction to adjudicate only on so much of the claim as is related
to the performance occurring in that place. This interpretation will ensure close
factual connections between each segment of the claim and each forum. But this merit
comes at the price of likely fragmentation of jurisdiction. This interpretation also
gives rise to difficulties where the claim is for the payment of price. If close
connections between the *539 claim and the forum are to be ensured, jurisdiction must
be given to the courts for the place of the delivery of goods or the provision of
services which form the basis of the defense to the payment claim. The plaintiff,
however, will not always be able to predict with certainty which goods or services
the defendant will rely upon for his defence and, therefore, would not be able to
predict which courts will have jurisdiction over his claim.
A third possible solution is to interpret subparagraph (b) as awarding jurisdiction
to adjudicate on the entirety of the claim only to the courts for the principal place
of delivery of goods or provision of the principal services. This was the solution
adopted by the Court of Justice under the Convention, holding that where proceedings
were brought on the basis of a number of obligations, jurisdiction was vested in the
courts for the place of performance of the principal obligation [FN40] and that where
there were more than one place of performance, jurisdiction was vested in the courts
for the place having the closest connections with the dispute. [FN41] This solution
does not guarantee close connections between the forum and the dispute since the claim
is not necessarily related to the goods delivered in the principal place or to the
principal services provided in the principal place. But this solution has the merit
of preventing the fragmentation of jurisdiction.
The determination of the principal place and the principal services will be a
question of fact for the national court seised. Under the Convention, identifying the
principal obligation was not always easy and the same difficulty would beset the
Regulation. The principal place should be easier to identify as the comparison is
between the places where the same performance was or should have been effected. The
main criteria will be the volume of goods delivered and the frequency of services
provided. However, how much significance should be attributed to the place from which,
as opposed to the place to which, goods or services are to be provided will be a
difficult question.
A mistake in the identification of the principal place could be costly for the
plaintiff. The plaintiff's allegation as to which place is the principal place and
which services are the principal services cannot be conclusive. It is, however,
submitted that the courts should give due weight to the plaintiff's view since the
principal place or principal services cannot be determined in isolation from the way
in which the claim is framed. Thus where goods are delivered in a number of places
but the plaintiff restricts his claim for damages to the defects in the goods delivered
in one particular place, jurisdiction should be given to the courts for that place.
There may, however, still be circumstances where the principal services or the
principal place cannot be identified. Under the Convention, the Court of Justice held
in Leathertex v. Bodetex [FN42] that where a claim was based upon obligations of equal
rank, the courts for the place of performance of each obligation had jurisdiction to
adjudicate only so much of the claim as was related to each obligation. In Besix v.
Wabag, [FN43] the Court held that Article 5(1) had no application, leaving the
plaintiff to rely on other grounds of jurisdiction such as Article 2, where the place
having the closest connections with the dispute could not be identified because the
obligation in question was to refrain from *540 doing certain acts anywhere in the
world. These decisions may be applied, mutates mutandis, under the Regulation.
The place of delivery of goods or provision of services situated outside the Member
States
Subparagraph (b) restricts the place of performance to those within the Member
States.
Where some (but not all) of the goods or services are provided in non-Member States,
which courts have jurisdiction and how far it extends will depend upon which solution
suggested above will be adopted. Thus if jurisdiction to adjudicate on the entirety
of the claim is vested in the courts for the principal place of delivery of goods or
the provision of the principal services, that place will be chosen from among the places
of performance within the Member States.
Where no place of delivery or provision is situated within any Member State, the
Commission's Explanatory Memorandum [FN44] suggests that subparagraph (a) applies via
(c). Since subparagraph (a) gives jurisdiction to the courts, within the Member States,
for the place of performance of the obligation which forms the basis of the claim,
where the claim is based upon obligation to deliver goods or provide services, ex
hypothesi, Article 5(1) has no application. Where, on the other hand, the claim is
for the payment of price to be made within a Member State, jurisdiction will be awarded
to the courts for the place of payment, which, as will be examined in the following
section, often is not closely connected with the dispute. There is then no obvious
reason why Article 5(1) should provide the claimant with an alternative forum to that
available under Article 2. It is, therefore, suggested that where no place of delivery
of goods or provision of services is situated within any Member State, Article 5(1)
should be considered to be inoperative. A literal reading of the English text of Article
5(1) also seems to support this interpretation.
Evaluation
Four tests can be used to assess whether the new version of Article 5(1) is an
improvement on the old version: predictability and certainty as to their application;
the likelihood of the designated forum having close factual connections with the
dispute; the likelihood of the lex fori (the law of the forum) being the governing
law of the dispute (the forum's legal connection with the dispute); and the likelihood
of the fragmentation of jurisdiction. Since the amendment was effected through the
insertion of subparagraph (b) and it only affects contracts for the sale of goods and
the provision of services, we will confine our analysis to those two types of contracts.
Predictability and certainty
A potential defendant should be able to predict with reasonable certainty which
courts may take jurisdiction in actions against him. [FN45] A plaintiff should also
be able to find a *541 court with jurisdiction without having to waste his time and
money. [FN46] We will first assess the predictability and certainty of the application
of Article 5(1) under the Convention by reference to the two key phrases, "the
obligation in question" and "the place of performance." We will then consider the same
question under the Regulation and make comparison.
(1) Under the Convention.
(a) "[T]he obligation in question"
Identifying "the obligation in question", defined by the Court of Justice as the
obligation which formed the basis of the claim, [FN47] was usually easy. In Custom
Made Commercial v. Stawa Metallbau, the Court of Justice said [FN48]:
The place of performance of the obligation was chosen as the criterion of
jurisdiction because, being precise and clear, it fits into the general aim of the
Convention, which is to establish rules guaranteeing certainty as to the allocation
of jurisdiction among the various national courts before which proceedings in
matters relating to a contract may be brought.
However, certainty as to the allocation of jurisdiction had been somewhat undermined by some unresolved issues of interpretation. Thus, for example, in the case
of a claim for liquidated damages, it was not clear whether "the obligation in question"
was the obligation which had been broken and had triggered the liquidated damages
clause or the obligation to pay the liquidated damages. Nor was it clear which
obligation was "the obligation in question" if a claim for restitution of benefits
conferred under a void contract was subject to Article 5(1). [FN49]
While the Court of Justice in Shenavai v. Kreischer [FN50] held that where
proceedings were brought on the basis of different obligations under the same contract,
"the obligation in question" was the principal obligation, the actual identification
of the principal obligation was not always predictable or certain since the Court never
articulated the criteria for identification. Thus in Leathertex v. Bodetex, [FN51]
a commercial agent sued the principal, claiming payment of arrears of commission and
compensation in lieu of notice. In making a reference to the Court of Justice for a
preliminary ruling, the Belgian courts saw these *542 obligations as being of equal
rank. The United Kingdom government, however, submitted an observation to the Court
arguing that, of the two obligations, the obligation to pay commission should be seen
as the principal obligation because compensation in lieu of notice was payable only
if it was established that the disputed commission was in fact due. Despite this
disagreement, the Court of Justice did not devise a test for ascertaining the principal
obligation, being content to hold that it was for the national court to assess the
relative importance of the obligations at issue.
(b) "[T]he place of performance"
In accordance with the principle established in Tessili v. Dunlop, [FN52] the place
of performance was to be determined by applying the governing law of "the obligation
in question" as ascertained by the choice-of-law rules of the forum. Although Advocate
General Colomer in Groupe Concorde pointed out [FN53] that the national legal systems
usually determined the place of performance merely by referring to the will of the
parties, he acknowledged that where the claim was for payment of money, the determination of the place of payment usually depended upon the governing law. [FN54]
Thus under the law of Germany, Belgium, Spain, and France, the place of payment was
at the debtor's place; while it was at the creditor's place under the law of Denmark,
Greece, Ireland, Italy, Netherlands, and the United Kingdom as well as under the 1964
Uniform Law on the International Sale of Goods (ULIS) and the 1980 United Nations
Convention on Contracts for the International Sale of Goods (CISG). Therefore, at least
where the claim was for payment of money, the governing law played the real role in
determining the place of performance.
In Groupe Concorde, the Court of Justice said that there was no risk that the
governing law would vary depending upon the court seised, since the applicable
choice-of-law rules were, in most cases, the rules harmonized by the Rome Convention.
This view, however, overlooks the difficulty of predicting how exactly the
choice-of-law rules of the Rome Convention will be applied to individual cases,
especially where the parties to the contract have made no effective choice of law.
Thus Article 4(5) provides that the presumptions established by Article 4(2), (3) and
(4) are rebuttable in the cases where the contract is in fact more closely connected
with a country other than that designated by the presumptions. According to Plender
and Wilderspin, [FN55] in some cases the national courts disregarded the presumption
with no explanation as to what factors connected the dispute more closely with another
country and in some other cases, the national courts identified such factors but did
not explain why those factors were considered to outweigh the presumption. This means
that it was often difficult to predict with certainty which place would be chosen as
"the place of performance" in accordance with the Tessili principle at least where
the claim was for payment of price.
*543 (2) Under the Regulation
Under the Regulation, since the place of delivery of goods or provision of services
is deemed to be "the place of performance of the obligation in question," certainty
and predictability have been enhanced to the extent it is no longer necessary to
identify "the obligation in question" in the sense of the obligation forming the basis
of the claim. Thus, for example, in the case of a claim for liquidated damages, the
place of delivery of goods or provision of services is deemed to be "the place of
performance of the obligation in question". Also, if a claim for restitution of
benefits conferred under a void contract is subject to Article 5(1) of the Regulation,
the place which would be the place of delivery of goods or provision of services if
the contract were valid would be deemed to be "the place of performance of the
obligation in question".
In the case of a claim for payment of price, "the place of performance" under
subparagraph (b) is the place of delivery of goods or provision of services, which,
as noted above, it would seem will be ascertained without recourse to the governing
law. This would remove uncertainty and unpredictability arising from the identification of the governing law, although whether the identification of "the place of
performance" itself is easier without recourse to the governing law remains to be seen.
Article 5(1)(b) of the Regulation contains a number of points of interpretation
which need to be clarified. Those include, as examined in the section above, what
contracts are contracts for "provision of services", what is meant by "under the
contract", what is meant by "unless otherwise agreed", and how Article 5(1) is to be
applied if the place of delivery of goods or provision of services is not situated
within the Member States. Until those points have been clarified by the Court of Justice,
certainty and predictability remain considerably qualified.
Where the contract involves a number of obligations to provide different services,
if subparagraph (b) is interpreted as referring to the principal service, its
identification will be as uncertain and unpredictable as the identification of the
principal obligation under the Convention.
(3) Summary of comparison
The application of the new version of Article 5(1) is currently less predictable
and certain than the old version. But the main source of uncertainty and unpredictability lies in its interpretation, which will be gradually clarified by the Court
of Justice in the years to come.
Factual connection with the dispute
If the forum is near the location of evidence and witnesses, the court and parties
have the benefit of saving of time and costs. As derogation from the primary rule of
jurisdiction under Article 2, Article 5(1) is justified by the assumption that close
connections exist between the forum and the disputes. This assumption will be tested
below under the old and new versions of Article 5(1) by reference to different types
of contractual disputes.
*544 (1) Under the Convention
The Court of Justice in Shenavai v. Kreischer said [FN56]:
[t]he place in which [the obligation which forms the basis of the claim] is to
be performed usually constitutes the closest connecting factor between the dispute
and the court having jurisdiction over it.
However, in a later case, Custom Made Commercial Ltd v. Stawa Metallbau GmbH, [FN57]
the Court acknowledged that:
the criterion of the place of performance of the obligation which specifically
forms the basis of the applicant's action ... may in certain cases have the effect
of conferring jurisdiction on a court which has no connection with the dispute.
(a) Where the claim was for damages for defective goods or services
Since "the obligation in question" under the Convention was the obligation which
formed the basis of the claim, [FN58] where the claim was for damages for defective
goods or services, "the obligation in question" was the obligation to deliver goods
or provide services. Therefore, under Article 5(1) of the Convention, the courts for
the place of delivery of goods or provision of services had jurisdiction.
Where the claim is for damages for defective goods or services, the substance of
the dispute is frequently whether the goods or the services are in fact defective and
the factual centre of the dispute is, therefore, likely to be the place of delivery
of goods or provision of services since that is the place where the relevant evidence
and witnesses are likely to be located.
This means that Article 5(1) of the Convention pointed to the forum which was likely
to have close factual connections with the dispute.
(b) Where the claim was for the enforcement of obligation to deliver goods or provide
services
Where the claim was for the enforcement of obligation to deliver goods or provide
services, "the obligation in question" under the Convention was the obligation to
deliver goods or provide services. Therefore, the courts for the place of delivery
of goods or provision of services had jurisdiction. To consider whether such places
are closely connected with the dispute, two types of cases must be distinguished: first,
where the claim is for the cure of defective goods or services; and secondly where
the claim is for a decree of performance of the obligation which has yet to be performed.
First, where the claim is for the cure of defective goods or services, the substance
of the dispute is frequently whether the goods or services are in fact defective and
the factual centre of the dispute is, therefore, likely to be the place of delivery
of goods or provision *545 of services. This means that Article 5(1) of the Convention
pointed to the forum which was likely to have close factual connections with the
dispute.
On the other hand, where the claim is for a decree of performance of the obligation
to deliver goods or provide services which has yet to be performed, the place of
delivery of goods or provision of services may not be closely connected with the dispute.
Thus if, for example, the substance of the dispute is the existence of a valid contract
[FN59] and if the dispute is of factual nature, [FN60] the factual centre of the dispute
is likely to be the place where the contract is alleged to have been concluded since
that is the place where the relevant evidence and witnesses are likely to be located.
This means that Article 5(1) of the Convention pointed to the forum which was not
particularly likely to have close factual connections with the dispute.
(c) Where the claim was for the payment of price for goods or services
Where the claim was for the payment of price, "the obligation in question" under
the Convention was the obligation to pay the price. Therefore, the courts for the place
of payment had jurisdiction.
Where the claim is for the payment of price, the substance of the dispute is
frequently whether the goods delivered or services provided are in conformity with
the contract and the factual centre of the dispute is, therefore, likely to be the
place of delivery of goods or provision of services. [FN61] This means that Article
5(1) of the Convention pointed to the forum which was not particularly likely to have
close factual connections with the dispute. In Custom Made Commercial Ltd v. Stawa
Metallbau GmbH, Advocate General Lenz urged the Court of Justice to treat the place
of delivery of goods as "the place of performance" in the case of a claim for payment
under a contract for manufacture and supply in order to ensure close connections
between the forum and the dispute. The Court of Justice, however, rejected this
suggestion, holding that "a defendant may be sued in the court for the place of
performance of the obligation in question, even where the court thus designated is
not that which has the closest connection with the dispute."
Where the claim is for the payment of price, the substance of the dispute may instead
be the existence of a valid contract. Then, if the dispute is of factual nature, the
factual centre of the dispute is likely to be the place where the contract is alleged
to have been concluded. This again means that Article 5(1) of the Convention pointed
to the forum which was not particularly likely to have close factual connections with
the dispute.
Worse still, Article 5(1) of the Convention often allowed the plaintiff to sue in
his own domicile since payment was often due at the creditor's place under the governing
law. The Brussels Convention's primary rule of jurisdiction in Article 2 was based
upon the notion of allowing the defendant to defend a case against him in his own
domicile. Awarding *546 jurisdiction to the courts for the plaintiff's domicile could
be justified only if that place is closely connected with the dispute.
(2) Under the Regulation
(a) Where the claim is for damages for defective goods or services
Where the claim is for damages for defective goods or services, under Article 5(1)
of the Regulation, jurisdiction is vested in the courts for the place of delivery of
goods or provision of services. Since the relevant evidence and witnesses are likely
to be situated in that place, Article 5(1) of the Regulation, like Article 5(1) of
the Convention, points to the forum which is likely to have close factual connections
with the dispute.
(b) Where the claim is for the enforcement of obligation to deliver goods or provide
services
Where the claim is for the enforcement of obligation to deliver goods or provide
services, under Article 5(1) of the Regulation, jurisdiction is again vested in the
courts for the place of delivery of goods or provision of services.
Where the claim is for the cure of defective goods or services, since the place
of delivery of goods or provision of services is likely to be the factual centre of
dispute, Article 5(1) of the Regulation, like Article 5(1) of the Convention, points
to the forum which is likely to have close factual connections with the dispute.
But where the claim is for a decree of performance of the obligation to deliver
goods or provide services which has yet to be performed, [FN62] since the place of
delivery of goods or provision of services may not be closely connected with the dispute,
Article 5(1) of the Regulation, like Article 5(1) of the Convention, points to the
forum which is not particularly likely to have close factual connections with the
dispute.
It follows that Article 5(1) of the Regulation is no more likely than the Convention
to point to the forum which has close factual connections with the dispute.
(c) Where the claim is for the payment of price for goods or services
Where the claim is for the payment of price, under Article 5(1) of the Regulation,
jurisdiction is again vested in the courts for the place of delivery of goods or
provision of services.
If the substance of the dispute is the existence of a valid contract, Article 5(1)
of the Regulation, like Article 5(1) of the Convention, points to the forum which is
not particularly likely to have close factual connections with the dispute.
*547 However, if, as will often be the case, the substance of the dispute is whether
the goods delivered or the services provided are in conformity with the contract,
Article 5(1) of the Regulation, unlike Article 5(1) of the Convention, points to the
forum which is likely to have close factual connections with the dispute.
(3) Summary of comparison
In many cases the new version of Article 5(1) is no more likely than the old version
to point to the forum which has close factual connections with the dispute. However,
where the claim is for the payment of price and if, as will often be the case, the
substance of the dispute is whether the goods delivered or the services provided are
in conformity with the contract, the new version, unlike the old version, points to
the forum which is likely to have close factual connections with the dispute. This
is a significant improvement.
Legal connection with the dispute
A contractual dispute is of legal nature if it concerns such issues as the valid
formation of contract, interpretation of contract and valid termination of contract.
The claim may take various forms: it may be for the payment of price or for the
enforcement of other contractual obligations or may be for damages for breach of the
contract.
Where the dispute is predominantly of legal nature, there is a lot to be said for
awarding jurisdiction to the courts whose own domestic law (the lex fori) is the
governing law or the putative governing law. After all, the courts of each country
are best equipped to interpret and apply the lex fori. If a foreign law must be applied,
the need to rely on the expert evidence on the foreign law often results in expenses
and inconvenience.
Under the Rome Convention, the lex fori becomes the governing law if the parties
have expressly or impliedly chosen the lex fori as the governing law ("Scenario 1")
[FN63] or in the absence of the parties' effective choice of law, if the obligation
on which the claim is based is a severable part of the contract and it is most closely
connected with the forum country ("Scenario 2") [FN64] or where the obligation on which
the claim is based is not a severable part of the contract, if the contract as a whole
is most closely connected with the forum country, ("Scenario 3") [FN65] which is likely
if the party effecting the characteristic performance is habitually resident or has
central administration in the forum country or, where the contract is entered into
in the course of trade or profession, if the characteristic performance is to be
effected through a place of business situated in the forum country. [FN66]
To evaluate the forum's legal connection with the dispute, it is, therefore,
necessary to examine how likely the incidents described above will take place under
Article 5(1).
Under Article 5(1) of the Convention, the forum was the place of performance of
the obligation forming the basis of the claim. [FN67] As for Scenario 1, the parties
were not *548 particularly likely to have chosen as the governing law the law of the
place of performance of the obligation which formed the basis of the claim. In the
absence of parties' effective choice of law, if the obligation forming the basis of
the claim was a severable part of the contract, (Scenario 2) it was likely to be most
closely connected with the forum, that is, the place of performance of that obligation.
Where the obligation forming the basis of the claim was not a severable part of the
contract, (Scenario 3) the contract as a whole was not particularly likely to be most
closely connected with the forum country, since the party effecting the characteristic
performance was not particularly likely to be habitually resident or have central
administration in the forum country, that is, the country in which the obligation
forming the basis of the claim was to be performed, nor was it particularly likely
that the characteristic performance was to be effected through a place of business
situated in the forum country.
Under Article 5(1) of the Regulation, by virtue of subparagraph (b), the forum is
the place of performance of the characteristic obligation (that is, the place of
delivery of goods or provision of services). As for Scenario 1, it is not particularly
likely that the parties have chosen as the governing law the law of the country in
which the characteristic obligation is to be performed. In fact, parties to a contract
are more likely to choose the law of the country where the party effecting the
characteristic performance (that is, the seller or the provider of services) is
habitually resident or has central administration, which is often different from the
country in which the characteristic obligation is to be performed. [FN68] For example,
a seller habitually resident in one country is often required to deliver goods to the
buyer in another country. In the absence of the parties' effective choice of law,
(Scenario 2) it is not particularly likely that the obligation forming the basis of
the claim is most closely connected with the forum, that is, the place of performance
of the characteristic obligation. Where the obligation forming the basis of the claim
is not a severable part of the contract, (Scenario 3) it is not particularly likely
that the contract as a whole is most closely connected with the forum country since,
as just noted, the party effecting the characteristic performance is not particularly
likely to be habitually resident or have central administration in the forum, that
is, the place of performance of the characteristic obligation. However, where the
contract is entered into in the course of trade or profession, the contract is likely
to be most closely connected with the forum, that is, the place of performance of the
characteristic obligation, since that place is often situated in the country in which
is situated the place of business through which the characteristic performance is
effected.
In summary, for Scenario 1, neither under the Convention nor under the Regulation,
is it particularly likely that the parties have chosen the law of the forum. In the
absence of parties' effective choice of law, if the obligation forming the basis of
the claim is a severable part of the contract, (Scenario 2) it is likely to be most
closely connected with the forum under the Convention. Where the obligation forming
the basis the claim is not a severable part of the contract, (Scenario 3) if the contract
is entered into in the course of trade or profession, the contract is likely to be
most closely connected with the forum under the Regulation. Given that the Rome
Convention permits the severance of a contract *549 only "by way of exception", it
can be concluded that the lex fori is more likely to be the governing law under the
new version of Article 5(1) than the old version.
Fragmentation of jurisdiction
To promote effective administration of proceedings and to prevent inconsistent
decisions, related claims should, so far as possible, be determined in a single forum.
The Court of Justice acknowledged this in the context of Article 5(1) of the Convention
in the following terms in Peters v. Zuid Nederlandse Aanemers Vereniging [FN69]:
The provisions of the Convention should ... be interpreted in such a way that
the court seised is not required to declare that it has jurisdiction to adjudicate
upon certain applications but has no jurisdiction to hear certain other applications, even though they are closely related.
It is, however, important to note that the need to avoid the fragmentation of
jurisdiction under Article 5(1) is not absolute. This is because the plaintiff can
always bring all related claims before the courts of the defendant's domicile under
Article 2. The defendant could also give the court jurisdiction to adjudicate all
claims by submitting to its jurisdiction under Article 24 of the Regulation (Article
18 under the Convention).
Under Article 5(1) of the Convention, where claims were made on the basis of
different obligations under the same contract, the fragmentation of jurisdiction did
not usually happen since jurisdiction to rule on all claims was awarded to the courts
for the place of performance of the principal obligation. [FN70] However, if the
obligations were of equal rank, the courts for the place of performance of each
obligation were awarded jurisdiction to rule only on the claim based on each obligation,
[FN71] resulting in the fragmentation of jurisdiction. Thus, for example, where a
French distributor brought claims against the English manufacturer for the payment
of the January commission payable in England and for the February commission payable
in France, under Article 5(1) of the Convention, jurisdiction would have been vested
in English courts to rule on the claim for the January commission and in the French
courts to rule on the claim for the February commission.
Under Article 5(1) of the Regulation, the fragmentation of jurisdiction is less
likely to happen since the courts for the place of delivery of goods or the provision
of services have jurisdiction to rule on all claims arising from the same contract.
Thus, in the above example, the courts of France where the products have been
distributed will have jurisdiction over both claims.
Summary of comparison
Until many of the points of interpretation involved in Article 5(1) of the
Regulation have been clarified by the Court of Justice, its application will remain
less predictable and *550 certain than Article 5(1) of the Convention. And until then,
any comparison between the Regulation and the Convention involves some speculation.
It is, however, possible to identify some likely improvements which the Regulation
has brought about. First, where the claim is for the payment of price, the forum is
more likely to have close factual connections with the dispute. Secondly, the lex fori
is more likely to be the governing law. And thirdly, the fragmentation of jurisdiction
is less likely. On the whole, therefore, the amendment should be welcomed.
Conclusion
Article 5(1) of the Regulation is far from perfect. In the worst case scenario,
it is possible that it will divide jurisdiction over related claims between different
courts, before which the defendant did not expect to be hailed and many of which do
not have close factual or legal connections with the dispute.
It would, however, be impossible to come up with jurisdictional rules for general
contractual matters which fully satisfy all four tests used in the previous section.
Thus, to take an example, the June 2001 Hague conference added in Article 6 of the
draft Hague Convention an alternative rule to that quoted earlier. [FN72] It determines
jurisdiction by reference to the defendant's activity related to the contract, instead
of focusing narrowly upon the performance of particular obligations. This rule ensures
the forum's sufficient connections with the defendant and the contract, albeit not
necessarily with particular claims. There is, however, uncertainty as to the frequency
and significance of the activity required.
A possible alternative solution is to get rid of any jurisdictional rule for general
contractual matters. This would not be an extreme idea under the scheme of the
Regulation, given that many contracts contain jurisdiction agreement which will be
given effect if it meets the formal requirements laid down in Article 23 and that
Article 2 ensures that, as against defendants domiciled in a Member State, there is
always a forum in which proceedings may be brought.
It nevertheless seems more sensible for the Regulation to have some form of a
jurisdictional rule for general contractual matters. The amendment to Article 5(1)
effected by the Regulation should, therefore, be welcomed as it has brought about
improvements upon the Convention.
FN Lecturer in Law, University of Birmingham.
FN1. Council Regulation (E.C.) No. 44/2001 on Jurisdiction and the Recognition and
Enforcement of Judgments in Civil and Commercial Matters [2001] O.J. L12/1.
FN2. The references to Contracting States in the Convention have been amended to
references to Member States in the Regulation.
FN3. Denmark has decided not to participate under the special arrangements in relation
to Title IV of the E.C. Treaty.
FN4. COM (1999) 348 final 99/154.
FN5. e.g. W. Kennet, "Private International Law: the Brussels I Regulation" (2001)
50(3) I.C.L.Q. 725; L. J. Harris, "The Brussels Regulation" (2001) 20(Jul) C.J.Q. 218;
Roger, "The Communitarisation of International Private Law: Reform of the Brussels
Convention by Regulation" (2001) 1 Jur. Rev. 59; (2001) 2 Jur. Rev. 69.
FN6. Case 14/76, Etablissements A. De Bloos Sprl v. Etablissements Bouyer SA [1976]
E.C.R. 1497; [1977] 1 C.M.L.R. 60.
FN7. Case 266/85, Shenavai v. Kreischer [1987] E.C.R. 239; [1987] 3 C.M.L.R. 782.
FN8. Case 12/76, Industrie Tessili Haliana Como v. Dunlop AG [1976] E.C.R. 1473; [1977]
1 C.M.L.R. 26.
FN9. e.g. a contract for sale of goods concluded by consumers on instalment credit
terms.
FN10. Council Directive 93/13/EEC of 5 April 1993 on infair terms in consumer contracts
[1993] O.J. L95/29.
FN11. [1980] O.J. L266/1.
FN12. Giuliano and Lagarde, Report on the Convention on the law applicable to
contractual obligations [1980] O.J. C282/1, comment on Art. 4.
FN13. The draft adopted on 30 October 1999, http://
www.hcch.net/e/conventions/draft36e.html.
FN14. In the June 2001 conference, an alternative rule has been added to the draft,
which will be discussed in the conclusion below.
FN15. ftp/hcch.net/doc/jdgmpd11.doc.
FN16. In an English case, Source Ltd v. TUV Rheinland Holding [1998] Q.B. 54; [1998]
I.L.Pr. 432, which was decided under the Convention, the Court of Appeal held that
the principal obligation was the inspection of goods rather than the delivery of the
report.
FN17. The question whether a gratuitous promise amounts to a valid contract is
immaterial at the stage of jurisdictional inquiry.
FN18. Sale of business, for example, may be seen as involving "services".
FN19. This view is supported by the French text which uses the words "vente de
merchandises" rather than "vente de biens". It can be contrasted with the use of the
words "vendeur de bien" in the E.C. Directive on Unfair Terms in Consumer Contracts.
FN20. See also the Commission's Explanatory Memorandum COM (1999) 348 final 99/154.
FN21. [1980] O.J. C282/1.
FN22. Comment on Art. 4.
FN23. The 1989 Convention on the Accession of Spain and Portugal to the Brussels
Convention [1989] O.J. L285/1.
FN24. Case 133/81, Ivenel v. Schwab [1982] E.C.R. 1891; [1983] 1 C.M.L.R. 538.
FN25. Case 266/85 [1987] E.C.R. 239; [1987] 3 C.M.L.R. 782.
FN26. Case C-68/93, Shevill v. Presse Alliance [1995] E.C.R. I-415; [1995] I.L.Pr.
267.
FN27. In England, for example, a good arguable case must be made out: See, e.g. Canada
Trust Co. v. Stolzenberg (No. 2) [1998] 1 W.L.R. 547 (CA); [1998] I.L.Pr. 290.
FN28. Case C-440/97, Groupe Concorde and Others v. The Master of the Vessel Suhadiwarno
Panjan [1999] E.C.R. I-6307; [2000] I.L.Pr. 626, para. 95.
FN29. Certain issues are excluded from the Convention's material scope by Art.
1(2)-(4).
FN30. paras 46-48.
FN31. Advocate General Colomer cited as an example the decision of the French Cour
de Cassation in SA Comptoir Commercial d'Orient v. Societe Medtrafina (11 March 1997).
FN32. Advocate General Colomer cited as an example the decision of the French Cour
de Cassation in San Carlo Gruppo Limentare SP v. SBC Vito (6 February 1996, [1996]
Revue Critique de Droit International Privé 504).
FN33. para. 30.
FN34. Case C-288/92, Custom Made Commercial v. Stawa Metallbau [1994] E.C.R. I-2913;
[1994] I.L.Pr. 516.
FN35. Case C-440/97 [1999] E.C.R. I-6307; [2000] I.L.Pr. 240.
FN36. COM (1999) 348 final 99/54.
FN37. Ibid.
FN38. Case 189/97, Kalfelis v. Schroder [1988] E.C.R. 5565; [1989] E.C.C. 407 (decided
under the Convention).
FN39. Case 21/76, Handelsweskerij G.J. Bier BV und Stichting Reinwater v. Mines de
Potasse d'Alsace [1976] E.C.R. 1735; [1977] 1 C.M.L.R. 284 (decided under the
Convention), para. 11.
FN40. Case 266/85, Shenavai v. Kreischer [1987] E.C.R. 239; [1987] 3 C.M.L.R. 782.
FN41. Case C-256/00, Besix v. Wabag 19 February 2002, unreported, paras 28 and 32.
FN42. Case C-420/97, Leathertex Divisione Sintetici SpA v. Bodetex BVBA [1999] E.C.R.
I-6747.
FN43. Case C-256/00 19 February 2002, unreported.
FN44. COM (1999) 348 final 99/154.
FN45. Case C-26/91, Jakob Handte & Co. GmbH v. Societe Trairements Mecanochimiques
des Surfaces [1992] E.C.R. I-3967, para. 18; [1993] I.L.Pr. 5.
FN46. Schlosser, "Report on the Convention on the Association of the Kingdom of Denmark,
Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention
on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters and
to the Protocol on its Interpretation by the Court of Justice" [1979] O.J. C59/71,
para. 78.
FN47. Case 14/76, De Bloos v. Bouyer [1976] E.C.R. 1497; [1977] 1 C.M.L.R. 60.
FN48. Case C-288/92 [1994] E.C.R. I-2913, para. 15; [1994] I.L.Pr. 516.
FN49. In Kleinwort Benson Ltd v. Glasgow City Council [1999] 1 A.C. 153; [1998] I.L.Pr.
350, a case which arose under Sched. 4 to the United Kingdom Civil Jurisdiction and
Judgments Act 1982, which laid down rules for the allocation of jurisdiction within
the United Kingdom by substantially copying the provisions of the Brussels Convention,
the House of Lords held that a claim for restitution of benefits conferred under a
void contract did not fall within Article 5(1). This question, however, remained
unsettled by the Court of Justice. For a detailed discussion, see, e.g. K. Takahashi,
"Jurisdiction over a Claim for Restitution of Benefits Conferred under a Void Contract:
under the Brussels Convention" in E.J.H. Schrage (ed.) UnjustEnrichment and the Law
of Contract (2001, Kluwer) pp. 397-404.
FN50. Case 266/85 [1987] E.C.R. 239; [1987] 3 C.M.L.R. 782.
FN51. Case C-420/97 [1999] E.C.R. I-6747.
FN52. Case 12/76 [1976] E.C.R. 1473; [1977] 1 C.M.L.R. 26.
FN53. Case C-440/97 [1999] E.C.R. I-6307; [2000] I.L.Pr. 626, para. 30.
FN54. Case C-440/97 [1999] E.C.R. I-6307, para. 52.
FN55. See Plender and Wilderspin, The European Contracts Convention (2nd ed, 2001)
paras 6-17 and the cases cited therein.
FN56. Case 266/85 [1987] E.C.R. 239, para. 18; [1987] 3 C.M.L.R. 782.
FN57. Case C-288/92 [1994] E.C.R. I-2913; [1994] I.L.Pr. 516.
FN58. Case 14/76, De Bloos v. Bouyer [1976] E.C.R. 1497; [1977] 1 C.M.L.R. 60.
FN59. The mere fact that the defendant is disputing the existence of the alleged
contract does not preclude the application of Art. 5(1), see Case 38/81, Effer v.
Kantner [1982] E.C.R. 825; [1984] 2 C.M.L.R. 667.
FN60. Where the defendant is refusing to perform alleged obligations, the dispute may
well be of legal nature, as to which see below for the assessment of the forum's legal
connection.
FN61. As recognised by Advocate General Lenz in Case C-288/92, Custom Made Commercial
Ltd v. Stawa Metallbau GmbH [1994] E.C.R. I-2913 [1994] I.L.Pr. 516.
FN62. Such a claim also comes under subparagraph (b) as it says, "the goods ... should
have been delivered" and "the services should have been provided". This can be
contrasted with Art. 6 of the draft Hague Convention, which only says "the goods were
supplied" and "the services were provided". The Nygh and Pocar Report on the draft
also states that draft Art. 6 does not apply where there has been no performance and
no services have been provided.
FN63. See Art. 3.
FN64. See Art. 4(1).
FN65. See Art. 4(1).
FN66. See Art. 4(2).
FN67. Case 14/76, De Bloos v. Bouyer [1976] E.C.R. 1497; [1977] 1 C.M.L.R. 60.
FN68. The Giuliano-Lagarde Report says that as the result of choosing the place of
habitual residence, etc., rather than the place of performance as the connecting factor,
it has become unnecessary to ascertain the place of performance or to classify
different places of performance, contributing to the simplification of the determination of the governing law.
FN69. Case 34/82, Peters Bauunternehmung v. Zuid Nederlandse Aanemers Vereniging
[1983] E.C.R. 987, para. 17; [1984] 2 C.M.L.R. 605.
FN70. Case 266/85, Shenavai v. Kreischer [1987] E.C.R. 239; [1987] 3 C.M.L.R. 782.
FN71. Case C-420/97, Leathertex v. Bodetex [1999] E.C.R. I-6747.
FN72. See Summary of the Outcome of the Discussion in Commission II of the First Part
of the Diplomatic Conference 6-20 June 2001 at ftp/hcch.net/doc/jdgm2001draft_e.doc.