JUDGMENT OF 17. I CASE 56/79

Transcription

1 JUDGMENT OF 17. I CASE 56/79 2. If the place of performance of a contractual obligation has been specified by the parties in a clause which is valid according to the national law applicable to the contract, the court for that place has jurisdiction to take cognizance of disputes relating to that obligation under Article 5 (1) of the Convention, irrespective of whether the formal conditions provided for under Article 17 have been observed. In Case 56/79 REFERENCE to the Court of Justice under Article 3 of the Protocol of 3 June 1971 on the Interpretation of the Convention of the European Communities on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 September 1968 by the Bundesgerichtshof [Federal Court of Justice] for a preliminary ruling in the proceedings pending before that court between SIEGFRIED ZELGER, merchant, 81 Thalkirchner Straße, Großmarkthalle, Munich 75, and SEBASTIANO SALINITRI, merchant, Cassella Postale 10, Mascali, Italy, on the interpretation of Articles 5 and 17 of the above-mentioned Convention, THE COURT composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (President of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: F. Capatorti Registrar: A. Van Houtte gives the following 90

2 ZELGER v SALINITRI JUDGMENT Facts and Issues The judgment making the reference to the Court and the written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows: I Facts and procedure Siegfried Zeiger, the plaintiff in the main action, is a merchant in Munich, Federal Republic of Germany, and Sebastiano Salitnitri, the defendant in the main action, is a merchant in Mascali, Sicily, Italy. After business dealings over a number of years a lawsuit arose over payment alleged to be outstanding on a loan dating back to 1975 and 1976; the plaintiff commenced proceedings before the Landgericht München I [Regional Court, Munich I] for payment of the alleged debt by the defendant, claiming that the parties had made an express oral agreement that Munich was to be the place of performance for the repayment. The Landgericht München I dismissed the claim on the ground that it did not have international jurisdiction, and the plaintiffs appeal to the Oberlandesgericht München [Regional Court of Appeal, Munich] was also unsuccessful. That court stated that mere oral agreement on the place of performance does not suffice to found international jurisdiction, and the capacity of such an agreement to found jurisdiction depends upon observance of the form laid down in Article 17 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters; the plaintiff lodged an appeal against that judgment in the Bundesgerichtshof, in which he pursued his claim. The Bundesgerichtshof Third Civil Chamber made an order on 15 March 1979 requesting a preliminary ruling from the Court of Justice under Article 3 of the Protocol of 3 June 1971 on the Interpretation of the Convention of 27 September 1968 and Article 2 of the German Law of 7 August 1972 on the following question: Does an informal agreement which is effective under national in this case German law between full-scale merchants (Vollkaufleute) concerning the place of performance of the obligation which is at issue in the proceedings suffice to found jurisdiction in that place under Article 5 (1) of the Convention, or is the capacity of such an agreement to found jurisdiction dependent upon observance of the form laid down in Article 17 of the Convention? II Written observations submitted to the Court In accordance with Article 20 of the Statute of the Court of Justice of the EEC, written observations were submitted by the plaintiff in the main action, represented for the purpose by Dr Nirk, Rechtsanwalt at the Bundesgerichtshof, Karlsruhe, by the Government of the United Kingdom of Great Britain and Northern Ireland, represented for the purpose by R. D. Munrow, Assistant Treasury Solicitor, 91

3 JUDGMENT OF CASE 56/79 acting as Agent, and by the Commission, represented for the purpose by its Legal Adviser, Rolf Wägenbaur, acting as Agent, and assisted by Wolf-Dietrich Krause-Ablass, Rechtsanwalt, Düsseldorf. A Observations of the plaintiff in the main action The plaintiff in the main action points out, first, that according to Article 5 (1) of the Convention, "the jurisdiction conferred on the courts for the place of performance gives them international jurisdiction also". He maintains that the Court ruled in the judgment in Case 12/76 Tessili v Dunlop [1976] ECR 1473 that it is for the court before which the matter is brought to establish whether the place of performance "is situated within its territorial jurisdiction", and thus to determine the law applicable to the legal relationship in question and to "define in accordance with that law the place of performance of the contractual obligation in question". The Court also stated that "it does not appear possible to give any more substantial guide to the interpretation of the reference made by Article 5 (1)" of the Convention "to the 'place of performance' of contractual obligations". Since the Court leaves the interpretation of the term "place of performance" to the national courts, the plaintiff in the main action is of the opinion that "the agreement concerning the place of performance effective under national law must even if it is made by word of mouth be held to constitute a proper legal foundation for the special jurisdiction conferred by Article 5 (1) of the Convention". Article 5 of the Convention is not affected by Article 17, the object of vhich is merely to restrict the parties' ireedom of action regarding agreements on which court is generally to have jurisdiction. In the light of those circumstances, since the "Community legislature" leaves it to the national legislature to define and delimit the ambit of the concept of "place of performance", the plaintiff in the main action maintains that the "Community legislature" has likewise left to the national legislature the opportunity of determining the conditions in which a place of performance may be established by agreement between the parties, whereby the courts in that place of performance would have special jurisdiction conferred upon them. Accordingly, the plaintiff suggests that the reply to the question which has been referred to the Court should be as follows : An informal agreement which is effective under national in this case German law between full-scale merchants (Vollkaufleute) concerning place of performance of the obligation which is at issue in the proceedings need only meet the requirements of national law so as to found jurisdiction under Article 5 (1) of the Convention. The effectiveness of such an agreement is not dependent upon observance of the form laid down in Article 17 of the Convention. B Observations of the Commission The Commission, relying on the judgment in Case 12/76, Tessili (cited above), contends that the place of performance of the obligation which is at issue in the proceedings is to be determined in accordance with the law governing the obligation at issue on the basis of the rules of conflict of laws of the national court seised of the case. If 92

4 ZELGER v SALINITRI that law holds an informal agreement between the parties as to the place of performance to be valid, this will suffice to found the jurisdiction of the courts for the place of performance by virtue of Article 5 (1) of the Convention, thereby establishing "a special jurisdiction closely connected : with the contractual obligation at issue". Since the latter must be performed in the place agreed upon, "that place is likewise the place which should determine which courts have jurisdiction for the place of performance". The Commission is of the opinion that the different view taken by the Landgericht München I and the Oberlandesgericht München must be rejected for the following two reasons: 1. It is true that the different view taken by these two courts is in conformity with the provisions in force in the Federal Republic of Germany: the German legislature introduced certain restrictions concerning agreements conferring jurisdiction under Article 38, as amended, of the Zivilprozeßordnung [German code of civil procedure] and endeavoured to ensure that such restrictions could not be circumvented by an agreement of the parties as to the place of performance, in order the Commission says to avoid "the possibility of escaping the formalities required by Article 17 of the Convention on agreements conferring jurisdiction". There is no such restrictive provision in the Convention, however, which shows that the authors of the Convention "did not intend to impose on jurisdiction dependent on an agreement as to the place of performance the same restrictions as those laid down in Article 17 of the Convention for agreements conferring jurisdiction". Likewise, it is not correct to say that the agreements referred to in Article 5 (1) on the place of performance and conferring jurisdiction must observe the requirements of form laid down by Article 17, because if an informal agreement on the place of performance were valid in the light of the clauses permitting the place of performance of the obligation at issue to be determined, there would be no reason "to exclude the competence of. the courts within whose jurisdiction the obligation at issue must be performed by virtue of an informal agreement between the parties". 2. The two courts also state that the concept of "place of performance of the obligation" in Article 5 (1) of the Convention refers only to the place of performance determined by the law, and not to the place of performance determined by the agreement. However, according to the Commission it is of little significance whether the place of performance has been determined in accordance with a provision of law or by agreement between the parties; as far as the jurisdiction envisaged by Article 5 (1) of the Convention is concerned, it is sufficient to determine the place of performance of the obligation at issue on the basis of the relevant clauses in the agreement. Accordingly, the Commission proposes the following reply to the question which has been submitted for a preliminary ruling: "An informal agreement which is effective under the national law applicable in the matter and which concerns the place of performance of the obligation at issue in the proceedings establishes jurisdiction within the meaning of Article 5 (1) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, and it is not necessary for such an agreement to observe the 93

5 JUDGMENT OF 17. I CASE 56/79 requirements of form prescribed by Article 17 of the Convention". C Observations of the Government of the United Kingdom The Government of the United Kingdom considers that Article 5 is concerned with special jurisdictions to be exercised by courts other than those of the defendant's domicile on account of the connexion which the subject-matter of the proceedings has with a particular place within the venue of the court: in the case of contracts the close factual link is provided by the place of performance; in the other cases referred to by Article 5, the jurisdiction of the relevant courts depends on the place of the occurrence of a particular event. Consequently the United Kingdom maintains that "the only criterion, therefore, must be whether the appropriate factual tests are satisfied". In the case of Article 5 (1), the sole test is whether the place where the contractual obligation in question is to be performed falls within the territory of a particular court. Any other considerations especially those relating to whether the parties' agreement on a place of performance was express, written or oral are irrelevant. The United Kingdom observes, furthermore, that "if only observance of formal requirements, like those laid down in Article 17 for agreements on jurisdiction, could satisfy the determination of the place of performance for the purpose of attributing jurisdiction under Article 5 (1), no oral contract could ever fall under that article". Even if the article were to apply only to a designation of the place of performance by the parties, "the consequences would still be arbitrary and unsatisfactory" in the United Kingdom's submission. The United Kingdom also recalls that in the Tessili judgment the Court ruled that the place of performance of the obligation is to be determined in accordance with the law which governs the obligation in question according to the rules of conflict of laws of the court before which the matter is brought. The United Kingdom is also of the opinion that "whatever place of performance is arrived at by the application of the appropriate processes of the national law must also determine the special jurisdiction exercisable under Article 5 (1)". For that reason, the criteria for the formulation of agreements conferring jurisdiction laid down in Article 17 of the Convention are irrelevant to the determination of a "place of performance" because Article 17 only creates an exclusive jurisdiction resulting solely from the decision of the parties and overriding and extinguishing the normal bases of jurisdiction available under the Convention, whereas Article 5 covers "rather a factual situation which brings about... a close connexion with another court" which ought, because of that connexion, to be considered "as an alternative jurisdiction". Regarding Article 17, the United Kingdom draws the attention of the Court to Article 11 of the Convention of 9 October 1978 on the Accession of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the 1968 Convention on the Enforcement of Judgments and the 1971 Protocol on interpretation. That article shows that the present wording of Article 17 "is too rigid"; on ratification of the Convention on accession that wording will be amended, so that "it would be most unsatisfactory to adopt the present criteria of Article 17 for agreements on 94

6 ZELGER v SALINITRI the place of performance of a contractual obligation". The United Kingdom therefore submits that the question which has been referred to the Court for a preliminary ruling should be answered to the effect that "the courts for the place of performance of the obligation which is at issue in any particular proceedings will have jurisdiction over that obligation by whatever means the place of performance has been designated, be it formal or informal agreement, implication from the other terms of a contract which is silent on the place of performance, or direct derivation from rules of national law". Ill Oral procedure At the sitting on 15 November 1979 the Commission, represented for the purposes of the oral procedure by its Legal Adviser, Rolf Wägenbaur, assisted by Wolf-Dietrich Krause-Ablass, of the Düsseldorf Bar, submitted oral argument. The Advocate General delivered his opinion at the sitting on 11 December Decision 1 By order of 15 March 1979, received at the Court Registry on 11 April 1979, the Bundesgerichtshof [Federal Court of Justice] referred to the Court, under Article 3 of the Protocol of 3 June 1971 on the Interpretation of the Convention of Brussels of 27 September 1968 (hereinafter referred to as "the Convention"), a question concerning the interpretation of Article 5 (1) and 17 of the said Convention. This question has been raised in the course of litigation between two merchants, one domiciled in Munich, in the Federal Republic of Germany, and the other in Mascari, in Italy, relating to the repayment by the defendant in the main action of a loan said to have been made to him by the plaintiff in the main action. The latter, relying upon an oral agreement under which Munich is said to have been fixed as the place of repayment, instituted proceedings before the Landgericht München [Munich Regional Court] which held that it had no jurisdiction on the grounds that, on the one hand, a mere oral agreement on the place of performance was not sufficient to establish international jurisdiction and, on the other hand, that that agreement could only have the effect of conferring jurisdiction if the form prescribed by Article 17 of the Convention had been observed. That decision 95

7 JUDGMENT OF 17. I CASE 56/79 was upheld by the Oberlandesgericht München [Munich Higher Regional Court] and the plaintiff in the main action appealed on a point of law to the Bundesgerichtshof which posed the followning question: "Does an informal agreement which is effective under national in this case German law between full-scale merchants (Vollkaufleute) concerning the place of performance of the obligation which is at issue in the proceedings suffice to found jurisdiction in that place under Article 5 (1) of the Convention, or is the capacity of such an agreement to found jurisdiction dependent upon observance of the form laid down in Article 17 of the Convention?" 2 It follows from the wording of this question that the national court is asking whether an agreement such as that described, in order to found jurisdiction under Article 5 (1) of the Convention, is dependent upon observance of the form prescribed by Article 17 of the Convention, according to which provision the court of the Contracting State specified by the parties of whom at least one must have his domicile in the territory of a Contracting State as having jurisdiction to settle any disputes which have arisen or may arise in connexion with a particular legal relationship shall have exclusive jurisdiction, provided that it has been specified by an agreement in writing or an oral agreement evidenced in writing. 3 It is appropriate to point out that Article 5 (1), which occurs in Section 2 of Title II of the Convention intitled "special jurisdiction", creates a ground of jurisdiction which is an exception to the general rule of jurisdiction provided for in Article 2 of the Convention; the provisions of Article 5, which provide that in matters relating to a contract a defendant domiciled in a Contracting State may be sued in the courts for the place of performance of the obligation in question, introduce a criterion for jurisdiction, the selection of which is at the option of the plaintiff and which is justified by the existence of a direct link between the dispute and the court called upon to take cognizance of it. 4 By contrast, Article 17, which occurs in Section 6 of the Convention intitled "Prorogation of jurisdiction" and which provides for the exclusive jurisdiction of the court designated by the parties in accordance with the 96

8 ZELGER v SALINITRI prescribed form, puts aside both the rule of general jurisdiction provided for in Article 2 and the rules of special jurisdiction provided for in Article 5 and dispenses with any objective connexion between the legal relationship in dispute and the court designated. It thus appears that the jurisdiction of the court for the place of performance (provided for in Article 5(1)) and that of the selected court (provided for in Article 17) are two distinct concepts and only agreements selecting a court are subject to the requirements of form prescribed by Anicie 17 of the Convention. 5 Consequently, if the parties to the contract are permitted by the law applicable to the contract, subject to any conditions imposed by that law, to specify the place of performance of an obligation without satisfying any special condition of form, an agreement on the place of performance of the obligation is sufficient to found jurisdiction in that place within the meaning of Article 5 (1) of the Convention. 6 The answer to the question put by the Bundesgerichtshof must therefore be that if the place of performance of a contractual obligation has been specified by the parties in a clause which is valid according to the national law applicable to the contract, the court for that place has jurisdiction to take cognizance of disputes relating to that obligation under Article 5 (1) of the Convention of Brussels of 27 September 1968, irrespective of whether the formal conditions provided for under Article 17 have been observed. Costs 7 The costs incurred by the Government of the United Kingdom and the Commission of the European Communities which have submitted observations to the Court are not recoverable. s As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court. 97

9 OPINION OF MR CAPOTORTI CASE 56/79 On those grounds, THE COURT, in answer to the question referred to it by the Bundesgerichtshof by order of 15 March 1979, hereby rules: If the place of performance of a contractual obligation has been specified by the parties in a clause which is valid according to the national law applicable to the contract, the court for that place has jurisdiction to take cognizance of disputes relating to that obligation under Article 5 (1) of the Convention of Brussels of 27 September 1968, irrespective of whether the formal conditions provided for under Article 17 have been observed. Kutscher O'Keeffe Touffait Mertens de Wilmars Pescatore Mackenzie Stuart Bosco Koopmans Due Delivered in open court in Luxembourg on 17 January A. Van Houtte Registrar H. Kutscher President OPINION OF MR ADVOCATE GENERAL CAPOTORTI DELIVERED ON 11 DECEMBER 1979 * Mr President, Members of the Court, 1. The Convention of Brussels of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters provides, as the Court is aware, that in the field of contracts the "courts for the place of performance of the obligation in I Translated from the Italian. 98