Workshop 3 IDI VENICE 2012

The notion of commercial agency and its borderlines Magnus Nedström Sigeman & Co, Sweden

“There are worse things in life than death. Have you ever spent an evening with an insurance agent?”

What and who is an agent? What distinguishes an agent from other intermediaries such as for example: - commission agents - proxy holders - distributors - franchisees - brokers (and, for that matter, insurance agents)

COUNCIL DIRECTIVE of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents 85/653/EEC

Article 1 (2) For the purposes of this Directive, 'commercial agent' shall mean a self-employed intermediary who has continuing authority to negotiate the sale or the purchase of goods on behalf of another person, hereinafter called the 'principal', or to negotiate and conclude such transactions on behalf of and in the name of that principal.

Explicitly excluded from the directive: Officers/employees empowered to bind an entity Partner authorized to bind his partners Receiver, liquidator or trustee in bankruptcy Agents whose activities are unpaid Agents operating on commodity exchanges or in the commodity market Article 1 (3) and Article 2

DEFINING CRITERIA Self-employed Continuing… … authority to… … negotiate/conclude transactions Goods

A GLANCE AT THREE ECJ RULINGS Bellone vs. Yokohama, C-215/97 Poseidon Chartering, C-3/04 Mavrone vs. Delta, C-85/03

Bellone vs. Yokohama (C-215/97) Italian law required commercial agents to be entered in a register kept by local chambers of commerce Validity of contract conditional upon registration Ms Bellone was not registered. Italian court at first instance: Ms Bellone not entitled to protection Higher court asked ECJ if this was compatible with the Directive

Bellone vs. Yokohama (C-215/97) ECJ cited Article 1 (2) of the Directive and concluded: ”Since entry in a register is not referred to as a condition for protection under the Directive, it follows that protection under the Directive is not conditional upon entry in a register.”

Poseidon Chartering (C-3/04) Poseidon acted as intermediary in a charter of a ship. The charter was extended annually from 1994 to Poseidon recorded i.a. outcome of annual negotiations. Between 1994 and 2000 Poseidon received commission of 2.5 % of the charter price.

Poseidon Chartering (C-3/04) = ”continuing authority to negotiate”?

Poseidon Chartering (C-3/04) Number of transactions normally an indicator of continuing authority Directive refers to “customers” in the plural Number of transactions not the sole determining factor

Poseidon Chartering (C-3/04) “Where an intermediary has authority to conclude, for and on behalf of the principal, a single contract which is subsequently extended over several years, the condition laid down by Article 1(2) of the Directive that the authority be continuing requires that the principal confer continuing authority on the intermediary to negotiate successive extensions to that contract, unless there are other factors indicating that there is continuing authority to negotiate. […] The mere fact that the intermediary maintained relations with the principal throughout the contractual period is, in itself, insufficient to demonstrate such authority.”

Mavrone vs Delta (C-85/03) Mavrona purchased Delta’s products on its own behalf, and sold them to third parties, acting on behalf of Delta (?) but in its own name. Mavrona deducted its ”commission” from the price paid to Delta. Is Mavrona a commercial agent by definition, by analogy, or not at all?

Mavrone vs Delta (C-85/03) The Court noted: that the Directive contains no reference to persons acting in their own name, that the Directive contains no indication that it applies to ”commission agents”, and that the interests and need for protection of the two occupations are not the same.

Mavrone vs Delta (C-85/03) … and thus concluded: ”… the Directive 86/653 is to be interpreted as meaning that persons who act on behalf of a principal but in their own name do not come within the scope of that Directive.”

“Still alive?”