contracts in epil klára drličková. structure of seminar alternative jurisdiction – article 5(1)...

Contracts in EPILKlára Drličková

Structure of seminar• Alternative jurisdiction – Article 5(1) of Brussels I Regulation• Rome I Regulation – law applicable to contractual obligations

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???• Company GSP with its seat in Amsterdam concluded a sales contract with

company Sky with its seat in Brno. Sky is the seller. The contract contained among others this clause: EXW Brno, INCOTERMS 2000 15.9.2010.

• The buyer did not pay the price.• The seller wants to start the court proceedings. Where the seller may sue

the buyer?

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???• A person domiciled in a Member State shall be sued in the courts of that

Member State (Article 2)• Domicile of natural person – Article 59 – national law• Domicile of legal person – Article 60 – seat/central administration/

principal place of business

• Article 5(1) – another option for the plaintiff where to sue in a matter concerning contract

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Article 5 • Article 5 confers jurisdiction on other courts than those of the state where

the defendant has his domicile• It is for the plaintiff to choose• This freedom was introduced in view of the existence of certain well-

defined cases that involved a paticulary close relationship between the dispute and the court

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Article 5 • Article 5 denominates certain more specific connecting factors – see heads

1 - 7• All heads of jurisdiction contained in Art. 5 vest jurisdiction in a certain

court -> Art. 5 does not regulate only international jurisdiction (as Article 2) but also local jurisdiction

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Article 5 – relation to Article 2 • Article 5 presupposes as a prerequisite that there is general jurisdiction

within the EU – it comes only into operation if the defendant has his domicile within the EU (see the opening words of Article 5)

• Alternative jurisdiction can only be established in a MS different from the MS where the defendant is domiciled

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Article 5(1)• Jurisdiction in matters relating to contracts• Connecting factor: place of performance • Steps of application1) Contract, matter relating to contract – subjec-matter of a dispute2) Sale of goods, provision of services => letter b)3) Other contracts => letter a)

b) is lex specialis to a)

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Matters relating to contract • An autonomous and independent definition without reference to any

national law is required (Case 34/82 - Martin Peters Bauunternehmung GmbH v Zuid Nederlandse Aannemers Vereniging)

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Case C-26/91 – Jakob Handte • Confirmation of autonomous definition• Existence of obligation freely assumed by one party towards another is

necessary• Normally well-informed defendant has to reasonably predict before which

courts he may be sued • Manufacturer has no contractual relationship with the sub-buyer and

undertakes no contractual obligation towards that buyer• In the great majority of MS the liability of a manufacturer towards a sub-

buyer for defects in the goods sold is not regarded as being of a contractual nature

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Matters relating to contract• Article 5(1) applies even if there is a dispute as to the existence of a

contract (Case 38/81 – Effer SpA v Hans-Joachim Kanter)• A claim for compensation for the breach of a contract (Case 9/87 - SPRL

Arcado v SA Haviland)• Claims arising out of an invalid contract• Claims founded in company law (Case 34/82 - Martin Peters

Bauunternehmung GmbH v Zuid Nederlandse Aannemers Vereniging)• Bill of exchange, cheque• Letter of intent


Sale of goods• Contractual exchange of goods against money• Transfer of property• Goods Movable and tangible things (x immovables, money, securities, rights, ..)


Provision of services • Services – autonomous meaning – Article 57 TFEU • Every activity rendered in the interest of another person • Classical examples: commercial agents, distributors, franchisees,

researchers, architects, lawyers, accountants, carriers, travel agencies, hotels, ...


C-381/08 Car Trim• Sale of goods which must first be manufactured or produced by the seller • Obligation which characterises the contract at issue • Article 3(1) CISG• Origin of the raw materials • Supplier’s responsibility • Where the purpose of contracts is the supply of goods to be manufactured

or produced and, even though the purchaser has specified certain requirements with regard to the provision, fabrication and delivery of the components to be produced, the purchaser has not supplied the materials and the supplier is responsible for the quality of the goods and their compliance with the contract, those contracts must be classified as a ‘sale of goods’ within the meaning of the first indent of Article 5(1)(b) of Regulation No 44/2001.


Place of performance – letter b)• Autonomous definition• Sale of goods = place of delivery of the goods Place of delivery agreed in the contract (no reference to law applicable to

the contract) 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 at the final destination of the sales transaction (Car Trim)

• Provision of sevices = place of provision of sevices


C-386/05 Color Drack• Sale of goods involving several places of delivery within a single Member

State• Article 5(1)(b) must be regarded as applying whether there is one place of

delivery or several• The place of the principal delivery, which must be determined on the basis

of economic criteria• If it is not possible to determine the principal place of delivery, each of the

places of delivery has a sufficiently close link of proximity to the material elements of the dispute and =>

• Plaintiff may sue the defendant in the court for the place of delivery of its choice


Place of performance under letter a)• Other contracts• The relevant obligation at stake has to be identified - the obligation

forming the basis of the legal proceedings (Case 14/76 - A. De Bloos, SPRL v Société en commandite par actions Bouyer)

• Place of performance (Tessili)


12/76 Tessili v Dunlop• THE PLACE OF PERFORMANCE OF CONTRACTUAL OBLIGATIONS CANNOT

BE UNDERSTOOD OTHERWISE THAN BY REFERENCE TO THE SUBSTANTIVE LAW APPLICABLE UNDER THE RULES OF CONFLICT OF LAWS OF THE COURT BEFORE WHICH THE MATTER IS BROUGHT.


Rome I Regulation • Rome I applies, in situations involving a conflict of laws, to contractual

obligations in civil and commercial matters• The concept contract should have the same meaning as in Article 5(1) of

Brussels I (x contractual obligations expressly excluded from Rome I)• Rome I Regulation determines applicable law for contracts


Rome I Regulation - rules• Freedom of choice (Article 3)• Applicable law in the absence of choice (Article 4)• Specific rules Contracts of carriage Consumer contracts Insurance contracts Individual employment contracts


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Thank you for your attention

PROJECT „THEORY – SKILL – EXPERIENCE“reg. No. CZ.1.07/2.2.00/15.0198, Operational Program Education for Competitiveness

contracts in epil klára drličková. structure of seminar alternative jurisdiction – article 5(1)...

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