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Leathertex Divisione Sintetici (Judgments Convention/Enforcement of judgments) [1999] EUECJ C-420/97 (05 October 1999)
URL: http://www.bailii.org/eu/cases/EUECJ/1999/C42097.html
Cite as:
[1999] ECR I-6747,
[2000] ILPr 273,
[1999] CLC 1983,
[1999] 2 All ER (Comm) 769,
[1999] EUECJ C-420/97,
(1999) 18 Tr LR 334
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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.
JUDGMENT OF THE COURT
5 October 1999 (1)
(Brussels Convention - Interpretation of Articles 2 and 5(1) - Commercial
agency agreement - Action founded on separate obligations arising from the
same contract and regarded as equal in rank - Jurisdiction of the court seised to
hear the whole action)
In Case C-420/97,
REFERENCE to the Court under the Protocol of 3 June 1971 on the
interpretation by the Court of Justice of the Convention of 27 September 1968 on
Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters
by the Hof van Cassatie, Belgium, for a preliminary ruling in the proceedings
pending before that court between
Leathertex Divisione Sintetici SpA
and
Bodetex BVBA
on the interpretation of Articles 2 and 5(1) of the abovementioned Convention of
27 September 1968 (OJ 1978 L 304, p. 36), as amended by the Convention of
9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the
United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1 and -
amended text - p. 77),
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, P.J.G. Kapteyn, J.-P. Puissochet,
G. Hirsch and P. Jann (Presidents of Chambers), J.C. Moitinho de Almeida
(Rapporteur), C. Gulmann, J.L. Murray, D.A.O. Edward, H. Ragnemalm, L. Sevón,
M. Wathelet and R. Schintgen, Judges,
Advocate General: P. Léger,
Registrar: H. von Holstein, Deputy Registrar,
after considering the written observations submitted on behalf of:
- Leathertex Divisione Sintetici SpA, by S. Beele and F. Busschaert, of the
Courtrai Bar,
- Bodetex BVBA, by D. van Poucke and B. Demeulenaere, of the Ghent Bar,
- the German Government, by R. Wagner, Regierungsdirektor in the Federal
Ministry of Justice, acting as Agent,
- the Italian Government, by Professor U. Leanza, Head of the Legal
Department of the Ministry of Foreign Affairs, acting as Agent, and
O. Fiumara, Avvocato dello Stato,
- the United Kingdom Government, by J.E. Collins, Assistant Treasury
Solicitor, acting as Agent, and M. Hoskins, Barrister,
- the Commission of the European Communities, by J.L. Iglesias Buhigues,
Legal Adviser, and P. van Nuffel, of its Legal Service, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of the Italian Government, represented by
O. Fiumara, of the United Kingdom Government, represented by L. Persey QC,
and of the Commission, represented by J.L. Iglesias Buhigues and P. van Nuffel,
at the hearing on 15 December 1998,
after hearing the Opinion of the Advocate General at the sitting on 16 March 1999,
gives the following
Judgment
- By judgment of 4 December 1997, received at the Court on 11 December 1997, the
Hof van Cassatie (Court of Cassation) referred to the Court for a preliminary
ruling under the Protocol of 3 June 1971 on the interpretation by the Court of
Justice of the Convention of 27 September 1968 on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters (hereinafter 'the
Protocol') a question on the interpretation of Articles 2 and 5(1) of that
Convention (OJ 1978 L 304, p. 36), as amended by the Convention of
9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the
United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1 and -
amended text - p. 77, hereinafter 'the Convention').
- That question was raised in proceedings between Leathertex Divisione Sintetici
SpA (hereinafter 'Leathertex'), whose registered office is in Montemurlo, Italy,
and Bodetex BVBA (hereinafter 'Bodetex'), whose registered office is in Rekkem-Menen, Belgium, concerning the payment of arrears of commission and of
compensation in lieu of notice, which Bodetex, the commercial agent of Leathertex
in the Belgian and Netherlands markets, is claiming from Leathertex.
The Convention
- The first paragraph of Article 2 of the Convention states:
'Subject to the provisions of this Convention, persons domiciled in a Contracting
State shall, whatever their nationality, be sued in the courts of that State.'
- The first paragraph of Article 3 provides:
'Persons domiciled in a Contracting State may be sued in the courts of another
Contracting State only by virtue of the rules set out in Sections 2 to 6 of this Title.'
- Article 5 provides:
'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;
...'
- Article 6(1) adds that where such a person is one of a number of defendants, he
may be sued in the courts for the place where any one of them is domiciled.
- Finally, the first paragraph of Article 22 provides:
'Where related actions are brought in the courts of different Contracting States,
any court other than the court first seised may, while the actions are pending at
first instance, stay its proceedings.'
The main proceedings
- For a number of years Bodetex acted as commercial agent for Leathertex in the
Belgian and Netherlands markets under a long-term arrangement. It received 5%
commission by way of remuneration.
- After asking Leathertex to no avail during 1987 for payment of commission which
it considered to be owing to it, Bodetex regarded its commercial agency agreement
as terminated and, by letter of 9 March 1988, took formal note of the termination
and demanded from Leathertex payment of arrears of commission and
compensation in lieu of notice.
- Since Leathertex did not reply to that letter, on 2 November 1988 Bodetex sued it
for payment in the Rechtbank van Koophandel (Commercial Court), Courtrai.
- By judgment of 1 October 1991, the Rechtbank van Koophandel found that two
separate obligations formed the basis of the action. It held that the first, namely
the obligation to give a reasonable period of notice on termination of a commercial
agency agreement and, in the event of failure to give such notice, to pay
compensation in lieu, was to be performed in Belgium, whereas the second, namely
the obligation to pay commission, was to be performed in Italy under the principle
that debts are payable where the debtor is resident. The Rechtbank van
Koophandel accordingly found that it had jurisdiction in respect of the obligation
to pay compensation in lieu of notice, by virtue of Article 5(1) of the Convention,
and then declared that it had jurisdiction over the whole proceedings given the
connection between that obligation and the obligation to pay commission. It
ordered Leathertex to pay Bodetex arrears of commission and compensation in lieu
of notice.
- Leathertex appealed against that judgment to the Hof van Beroep (Court of
Appeal), Ghent, which, by judgment of 29 October 1993, confirmed that the
Rechtbank van Koophandel had jurisdiction to hear the action brought by Bodetex.
The Hof van Beroep held that two separate obligations arising from the agency
agreement formed the basis of the action, that the obligation to pay commission
could not be regarded as the principal obligation and that the two obligations had
to be regarded as equal in rank, so that there was nothing to prevent Bodetex from
bringing its action before the courts for the place of performance of either of those
two obligations. It therefore ruled that the Rechtbank van Koophandel had
jurisdiction to hear the main proceedings as the court for the place where the
obligation to give a reasonable period of notice was to be performed.
- Leathertex appealed on a point of law to the Hof van Cassatie. It submitted, first,
that the Hof van Beroep had misconstrued Article 5(1) of the Convention in
holding that it had jurisdiction to deal with the head of claim concerning payment
of the arrears of commission when the obligation to pay that commission was to be
performed in Italy. According to Leathertex, if a court is unable to identify the
principal obligation and the ancillary obligations from among the various obligations
forming the basis of an action, it is competent to rule only on the obligations for
which the place of performance is located, in accordance with its own conflict rules,
in its jurisdiction. Leathertex maintained, secondly, that the Hof van Beroep had
misinterpreted Article 22 of the Convention in holding that it had jurisdiction to
hear the whole of the dispute, since that provision can apply only where related
actions have been brought in the courts of two or more Contracting States.
- In its order for reference, the Hof van Cassatie states first of all that Article 22 of
the Convention was not applied in the judgment under appeal and rejects on this
ground Leathertex's plea based on the misinterpretation of that provision.
- So far as concerns the alleged infringement of Article 5(1) of the Convention, the
Hof van Cassatie notes that, in Case 266/85 Shenavai v Kreischer [1987] ECR 239,
at paragraph 19, the Court held that, in the particular case of a dispute concerned
with a number of obligations arising under the same contract and forming the basis
of the proceedings brought by the plaintiff, the court before which the matter is
brought should, when determining whether it has jurisdiction, be guided by the
maxim accessorium sequitur principale so that, where a number of obligations are
at issue, it will be the principal obligation which will determine its jurisdiction.
- The Hof van Cassatie states that, in the present case, it is common ground that the
obligation to pay commission cannot be regarded as the principal obligation in the
context of the action brought by Bodetex, that the Belgian courts have jurisdiction
to rule on the obligation to pay compensation in lieu of notice since that obligation
is contractual in nature and is to be performed in Belgium, and that the two
abovementioned obligations are of equal rank.
- The Hof van Cassatie inquires whether it is possible to disapply the general rule
set out in Article 2 of the Convention in the case of a dispute concerning various
obligations arising under the same agency agreement where none of the obligations
is subordinate to the others and only one, having regard to its place of
performance, supports the jurisdiction of the court before which the matter has
been brought.
- In those circumstances, the Hof van Cassatie decided to stay proceedings and to
refer the following question to the Court for a preliminary ruling:
'Are Articles 5(1) and 2 of the Brussels Convention, in the version applicable to
the present case, to be interpreted as meaning that a composite claim founded on
different obligations arising from the same contract may be brought before the
same court, even though, according to the jurisdictional rules of the State in which
the proceedings are brought, one of the contractual obligations on which the claim
is based is to be performed in that State and the other is to be performed in
another EC Member State, having regard to the fact that the court before which
the proceedings are brought decides, on the basis of the claim brought before it,
that neither of the two obligations forming the subject-matter of the claim is
subordinate to the other and that they are of equal rank?'
Consideration of the question submitted
- By its question, the national court is essentially asking whether, on a proper
construction of Articles 2 and 5(1) of the Convention, the same court has
jurisdiction to hear the whole of an action founded on two obligations of equal rank
arising from the same contract even though, according to the conflict rules of the
State where that court is situated, one of those obligations is to be performed in
that State and the other in another Contracting State.
- The United Kingdom Government submits that, of the two obligations upon which
the main action is founded, the obligation to pay commission forms its principal
basis. According to the order for reference, the sole reason why Bodetex regarded
the contract as having been terminated without notice was the failure to pay the
disputed commission. So compensation in lieu of notice is to be paid only if it is
established that the disputed commission is in fact due. The United Kingdom
Government therefore proposes that the question referred for a preliminary ruling
should be reformulated and the answer given that, in a situation such as that in the
main proceedings, the contractual obligation which forms the principal basis of the
legal proceedings and upon which jurisdiction may be founded under Article 5(1)
of the Convention is the obligation to pay commission.
- As to that, in view of the allocation of jurisdiction under the preliminary ruling
procedure provided for by the Protocol, it is for the national court to assess the
relative importance of the contractual obligations at issue in the main proceedings
and for the Court of Justice to interpret the Convention in the light of the findings
made by the national court.
- Moreover, to alter the substance of the question referred for a preliminary ruling
would be incompatible with the Court's function under the Protocol and with its
duty to ensure that the Governments of the Member States and the parties
concerned are given the opportunity to submit observations pursuant to Article 5
of the Protocol and Article 20 of the EC Statute of the Court, bearing in mind that,
under Article 20, only the order of the referring court is notified to the interested
parties (see, in relation to the procedure under Article 177 of the EC Treaty (now
Article 234 EC), Case C-352/95 Pytheron International v Bourdon [1997] ECR I-1729, paragraph 14, and Case C-235/95 AGS Assedic v Dumon and Froment
[1998] ECR I-4531, paragraph 26).
- The question referred for a preliminary ruling must therefore be answered on the
basis that, as stated in the order for reference, the two contractual obligations on
which the action is founded are of equal rank.
- Leathertex, the German Government and the United Kingdom Government, in an
alternative submission, submit that a court of a Contracting State does not have
jurisdiction under Article 5(1) of the Convention to hear the whole of an action
founded on several obligations of equal rank arising from the same contract when
the place of performance of one or a number of those obligations is in another
Member State.
- In their view, Article 5(1) of the Convention must be interpreted strictly. Where
the two obligations which form the basis of an action are regarded as equal in rank
by the court before which the action has been brought, jurisdiction to deal with
each of them should lie with the court of the place where each is to be performed
and any resultant fragmenting of jurisdiction should be accepted. Such an
interpretation of Article 5(1) of the Convention is, they argue, consistent with the
rationale for that provision, which is to guarantee to each party in matters relating
to a contract that claims will be considered by the courts for the place where the
obligation in dispute is to be performed.
- Bodetex maintains, first, that the agreement giving rise to the two obligations at
issue in the main proceedings is analogous to a commercial representative's
contract of employment. Thus, when Article 5(1) of the Convention is applied in
the case of an action founded on different obligations resulting from the same
agency agreement, it is appropriate, as in the case of contracts of employment, to
take account of the obligation which characterises that contract, namely, in the
present case, the obligation to find new customers and to distribute Leathertex's
products, in particular in Belgium. In a number of Contracting States, case-law and
academic legal writing have extended that solution to concession agreements, with
which commercial agency agreements likewise have similarities.
- Bodetex argues, second, that the obligation to pay commission is linked to the
obligation to pay compensation in lieu of notice. Both result from the agency
agreement. In addition, failure to perform the obligation to pay commission was
the reason why the agreement was terminated, thereby giving rise to the obligation
to pay compensation in lieu of notice. That link provides the justification for the
court with jurisdiction to rule on the obligation to pay compensation in lieu of
notice to have jurisdiction to rule on the obligation to pay commission as well.
- According to Bodetex, such an interpretation of Article 5(1) of the Convention
allows proceedings to be conducted effectively while avoiding a fragmenting of
jurisdiction.
- Finally, the Commission submits that, where a plaintiff brings two claims based on
two obligations of equal rank, a court which has jurisdiction to hear one of the
claims under Article 5(1) of the Convention also has jurisdiction to hear the other
claim if there is such a close relationship between the claims that it is advantageous
to hear and decide them at the same time in order to avoid the possibility of
irreconcilable decisions if the cases were decided separately.
- According to the Commission, such a solution corresponds most closely to the
scheme of the Convention. First, it is comparable, mutatis mutandis, with the
solution for which Article 6(1) of the Convention provides where there are a
number of defendants. Second, it is called for by Article 22 of the Convention. In
a dispute such as that before the national court, if the plaintiff decided, in
accordance with Article 5(1) of the Convention, to bring the action for payment of
compensation in one Contracting State and that for payment of the arrears of
commission in another Contracting State, Article 22 of the Convention would apply
because of the relation between the two actions. Article 5(1) of the Convention
should therefore be interpreted in such a way as to avoid in advance situations to
which Article 22 of the Convention would be applicable.
- It should be noted first of all that, in paragraphs 8, 9 and 10 of the judgment in
Case 14/76 De Bloos v Bouyer [1976] ECR 1497, after observing that the
Convention was intended to determine the international jurisdiction of the courts
of the Contracting States, to facilitate the recognition of judgments and to introduce
an expeditious procedure for securing their enforcement, the Court held that those
objectives implied the need to avoid, so far as possible, creating a situation in which
a number of courts had jurisdiction in respect of one and the same contract and
that Article 5(1) of the Convention could not therefore be interpreted as referring
to any obligation whatsoever arising under the contract in question. The Court
concluded, in paragraphs 11 and 13 of the same judgment, that, for the purposes
of determining the place of performance within the meaning of Article 5(1), the
obligation to be taken into account was that which corresponded to the contractual
right on which the plaintiff's action was based. It stated in paragraph 14 that, in a
case where the plaintiff asserted the right to be paid damages or sought dissolution
of the contract on the ground of the wrongful conduct of the other party, that
obligation was still that which arose under the contract and the non-performance
of which was relied upon to support such claims.
- This interpretation was corroborated by the Convention of 9 October 1978 on the
Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great
Britain and Northern Ireland, which amended certain language versions of
Article 5(1) of the Convention in order to specify that the obligation whose place
of performance determines which court has jurisdiction in matters relating to a
contract is the obligation which forms the basis of the claim (in the English version
'the obligation in question').
- Also, the Court has held on several occasions that the place of performance of the
obligation in question is to be determined by the law governing that obligation
according to the conflict rules of the court seised (Case 12/76 Tessili v Dunlop
[1976] ECR 1473, paragraph 13, Case C-288/92 Custom Made Commercial v Stawa
Metallbau [1994] ECR I-2913, paragraph 26, and Case C-440/97 Groupe Concorde
and Others v The Master of the Vessel Suhadiwarno Panjan and Others [1999] ECR
I-0000, paragraph 32).
- In the present case, the Belgian courts have held, in accordance with the case-law
cited above, that the obligation to pay compensation in lieu of notice was to be
performed in Belgium while the obligation to pay commission was to be performed
in Italy.
- Furthermore, it is apparent from the order for reference and the file forwarded by
the national court that the contract at issue in the main proceedings, under which
the claims for payment of commission and of compensation in lieu of notice have
been brought, does not constitute a contract of employment.
- When the specific features of a contract of employment do not exist, it is neither
necessary nor appropriate to identify the obligation which characterises the contract
and to centralise at its place of performance all jurisdiction, based on place of
performance, over disputes concerning all the obligations under the contract
(Shenavai, cited above, paragraph 17).
- Therefore, the obligation which characterises the agency agreement is not to be
taken into account in the main proceedings in order to determine jurisdiction based
on place of performance.
- Nor can the court which has jurisdiction to hear the claim for payment of
compensation in lieu of notice found its jurisdiction in respect of the claim for
payment of commission on any relation between those two claims. As the Court
has made clear, Article 22 of the Convention is intended to establish how related
actions which have been brought before courts of different Contracting States are
to be dealt with. It does not confer jurisdiction. In particular, it does not accord
jurisdiction to a court of a Contracting State to try an action which is related to
another action of which that court is seised pursuant to the rules of the Convention
(see Case 150/80 Elefanten Schuh v Jacqmain [1981] ECR 1671, paragraph 19, and
Case C-51/97 Réunion Européenne and Others v Spliethoff's Bevrachtingskantor and
Another [1998] ECR I-6511, paragraph 39).
- Finally, when a dispute relates to a number of obligations of equal rank arising
from the same contract, the court before which the matter is brought cannot, when
determining whether it has jurisdiction, be guided by the maxim accessorium
sequitur principale referred to by the Court in paragraph 19 of the judgment in
Shenavai, cited above.
- The same court does not therefore have jurisdiction to hear the whole of an action
founded on two obligations of equal rank arising from the same contract when,
according to the conflict rules of the State where that court is situated, one of those
obligations is to be performed in that State and the other in another Contracting
State.
- It should be remembered that, while there are disadvantages in having different
courts ruling on different aspects of the same dispute, the plaintiff always has the
option, under Article 2 of the Convention, of bringing his entire claim before the
courts for the place where the defendant is domiciled.
- The answer to be given to the question referred for a preliminary ruling must
therefore be that, on a proper construction of Article 5(1) of the Convention, the
same court does not have jurisdiction to hear the whole of an action founded on
two obligations of equal rank arising from the same contract when, according to the
conflict rules of the State where that court is situated, one of those obligations is
to be performed in that State and the other in another Contracting State.
Costs
43. The costs incurred by the German, Italian and United Kingdom Governments and
by the Commission, which have submitted observations to the Court, are not
recoverable. Since these proceedings are, for the parties to the main proceedings,
a step in the action pending before the national court, the decision on costs is a
matter for that court.
On those grounds,
THE COURT,
in answer to the question referred to it by the Hof van Cassatie by judgment of
4 December 1997, hereby rules:
On a proper construction of Article 5(1) of the Convention of 27 September 1968
on Jurisdiction and the Enforcement of Judgments in Civil and Commercial
Matters, as amended by the Convention of 9 October 1978 on the Accession of the
Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and
Northern Ireland, the same court does not have jurisdiction to hear the whole of
an action founded on two obligations of equal rank arising from the same contract
when, according to the conflict rules of the State where that court is situated, one
of those obligations is to be performed in that State and the other in another
Contracting State.
Rodríguez Iglesias KapteynPuissochet
Hirsch JannMoitinho de Almeida
Gulmann Murray EdwardRagnemalm
Sevón Wathelet Schintgen
|
Delivered in open court in Luxembourg on 5 October 1999.
R. Grass
G.C. Rodríguez Iglesias
Registrar
President
1: Language of the case: Dutch.