Contracts in EPIL Klára Drličková

Structure of seminar Alternative jurisdiction – Article 5(1) of Brussels I Regulation Rome I Regulation – law applicable to contractual obligations 2 Klára Drličková

??? 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 The buyer did not pay the price. The seller wants to start the court proceedings. Where the seller may sue the buyer? 3 Klára Drličková

??? 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 4 Klára Drličková

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 5 Klára Drličková

Article 5 Article 5 denominates certain more specific connecting factors – see heads 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 6 Klára Drličková

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 7 Klára Drličková

Article 5(1) Jurisdiction in matters relating to contracts Connecting factor: place of performance Steps of application 1)Contract, matter relating to contract – subjec-matter of a dispute 2)Sale of goods, provision of services => letter b) 3)Other contracts => letter a) b) is lex specialis to a) 8 Klára Drličková

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) 9 Klára Drličková

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 10 Klára Drličková

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 11 Klára Drličková

Sale of goods Contractual exchange of goods against money Transfer of property Goods  Movable and tangible things (x immovables, money, securities, rights,..) 12 Klára Drličková

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, Klára Drličková

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/ Klára Drličková

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 15 Klára Drličková

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 16 Klára Drličková

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) 17 Klára Drličková

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. 18 Klára Drličková

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 19 Klára Drličková

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 20 Klára Drličková

21 Thank you for your attention PROJECT „THEORY – SKILL – EXPERIENCE“ reg. No. CZ.1.07/2.2.00/ , Operational Program Education for Competitiveness