Court of Justice of the European Communities (including Court of First Instance Decisions)

Provisional text

OPINION OF ADVOCATE GENERAL

BOBEK

delivered on 8 May 2018(1)

Case C-304/17

Helga Löber

v

Barclays Bank Plc

(Request for a preliminary ruling from the Oberster Gerichtshof (Supreme Court, Austria))

(Reference for a preliminary ruling - Jurisdiction in civil and commercial matters - Tort, delict or quasi-delict - Investment based on a defective prospectus - Place where the harmful event occurred - Relevance of the bank account)

I.      Introduction

1.        Ms Helga Löber invested in certificates in the form of bearer bonds issued by Barclays Bank Plc. In order to acquire those certificates, the corresponding amounts were transferred from her current (personal) bank account located in Vienna, Austria to two securities accounts in Graz and Salzburg. Payment was then made from those securities accounts for the certificates at issue.

2.        The certificates subsequently lost their value. Ms Löber considered that her investment decision had been induced by a defective (in the sense of misleading) prospectus that was issued in relation to the certificates. She brought a claim against Barclays Bank for payment of EUR 34 459.06, plus interest and costs. That amount corresponds, in her view, to the damage caused to her by the misrepresentation committed by Barclays Bank through the issuance of a defective prospectus.

3.        She brought her claim before a court in Vienna, the place of her domicile. This is also where her current bank account is located, from which she made the first transfer in order to make the investment. The first- and second-instance courts however decided that they did not have jurisdiction to hear the case. The case is now pending before the Oberster Gerichtshof (Supreme Court, Austria). That court is asking, in essence, which of the bank accounts used, if any, is relevant to determine which court has jurisdiction to hear the claim at issue.

II.    Legal framework

4.        As the main proceedings were launched on 16 November 2012, Regulation (EC) No 44/2001 (2) remains applicable ratione temporis. (3)

5.        Recitals 11 and 12 of Regulation No 44/2001 state that:

‘(11)      The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile and jurisdiction must always be available on this ground save in a few well-defined situations in which the subject matter of the litigation or the autonomy of the parties warrants a different linking factor …

(12)      In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close link between the court and the action or in order to facilitate the sound administration of justice.

6.        Article 2(1) of Regulation No 44/2001 provides that ‘subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State’.

7.        Article 3(1) of Regulation No 44/2001 sets out that ‘persons domiciled in a Member State may be sued in the courts of another Member State only by virtue of the rules set out in Sections 2 to 7 of … Chapter [II]’.

8.        Pursuant to Article 5(3), which is part of Section 2 of Chapter II, ‘a person domiciled in a Member State may, in another Member State, be sued: …in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur …’.

III. Facts, national proceedings and questions referred

9.        Barclays Bank (‘the Defendant’) has its seat in London, United Kingdom and a branch in Frankfurt am Main, Germany. The Defendant issued ‘X1 Global EUR Index certificates’ in the form of bearer bonds (‘the certificates’), to which institutional investors subscribed. These institutional investors then sold the certificates on secondary markets to consumers located, among other places, in Austria.

10.      The value of the certificates (and thus the amount repayable) was governed by an index made up of a portfolio of several target funds. This portfolio was established and managed by the company X1 Fund Allocation GmbH, established in Germany.

11.      The certificates were issued on the basis of a (German) ‘base prospectus’ dated 22 September 2005 and on a schedule of conditions dated 20 December 2005. The base prospectus was notified to the competent national authority, Österreichische Kontrollbank AG.

12.      The public offer to subscribe ran from 20 December 2005 to 24 February 2006. The certificates were issued on 31 March 2006. The transacting clearing house for this purchase was a public limited company with its seat in Frankfurt am Main.

13.      In order to make the investment, Ms  Löber, domiciled in Vienna (‘the Applicant’) first transferred the corresponding amounts from her current (personal) bank account located in Vienna to two securities accounts held with two different Austrian banks seated respectively in Salzburg and Graz (‘clearing accounts’). Through those clearing accounts, she then invested EUR 28 648.43 in the certificates (in two tranches: on 8 November 2006 and on 4 August 2007).

14.      It has been stated by the referring court that due to the actions of the trading manager and funds advisor of X1 Fund Allocation (‘X1 Fund Allocation Manager’), the funds invested were lost.

15.      The Applicant brought an action against the Defendant, claiming a payment of EUR 34 459.06 plus interest and costs in return for the transfer of her shares in the certificates. The Applicant based her claim for payment first on contractual grounds, and second on prospectus liability. With regard to the latter ground, she submitted that the Defendant failed to mention relevant risks and information concerning the structure of the investment as well as the funds managed by the X1 Fund Allocation Manager. She also claimed that the statements made in the prospectus were highly misleading.

16.      With regard to jurisdiction in respect of the prospectus liability claim, the Applicant relied on Article 5(3) of Regulation No 44/2001.

17.      The Defendant contested the jurisdiction of the Austrian courts and submitted that the application should be dismissed.

18.      By an order dated 18 July 2016, the Handelsgericht Wien (Commercial Court, Vienna, Austria), deciding at first instance, declined international jurisdiction. It held that the Applicant could not base the jurisdiction of the court seised regarding the contractual claim either on Article 15(1) or on Article 5(1)(a) of Regulation No 44/2001. The claims in tort or delict which included prospectus liability claims did satisfy the conditions of Article 5(3) of Regulation No 44/2001. However, the Applicant had not contended that the loss had occurred directly in her bank account located in Vienna. Rather she acquired her certificates through the clearing accounts. The loss was thus suffered in Graz and Salzburg.

19.      Ruling on appeal, the Oberlandesgericht Wien (Higher Regional Court, Vienna) confirmed that decision by an order dated 6 December 2016. Concerning the contractual claim, it held that the place of performance within the meaning of Article 5(1)(a) of Regulation No 44/2001 was Frankfurt am Main. Thus, the Austrian courts did not have international jurisdiction under that heading. As for the prospectus liability claim, the Applicant could not rely on Article 5(3) of Regulation No 44/2001 because that claim in tort or delict was closely connected with the contractual claim.

20.      An appeal on a point of law was brought before the Oberster Gerichtshof (Supreme Court, Austria), the referring court. The latter decided to stay the proceedings and refer the following questions to the Court of Justice:

‘Under Article 5(3) of [Regulation No 44/2001], in non-contractual claims based on prospectus liability where

-      the investor took his investment decision caused by the defective prospectus at the place where he is domiciled,

-      and, on the basis of that decision, he transferred the purchase price for the security acquired on the secondary market from his account held with an Austrian bank to a clearing account held with another Austrian bank, from where the purchase price was subsequently transferred to the seller by order of the applicant,

(a)      does jurisdiction lie with the court within whose area of jurisdiction the investor is domiciled,

(b)      does jurisdiction lie with the court within whose area of jurisdiction the seat/the account-keeping branch of the bank with which the applicant has his bank account from which he transferred the amount invested to the clearing account is located,

(c)      does jurisdiction lie with the court within whose area of jurisdiction the seat/the account-keeping branch of the bank which keeps the clearing account is located,

(d)      does jurisdiction lie with one of those courts at the choice of the applicant,

(e)      does jurisdiction lie with none of those courts?’

21.      Written submissions were made by the Applicant, the Defendant, the Greek Government, and by the European Commission.

IV.    Assessment

22.      The present Opinion is structured as follows. I will first make a few introductory remarks concerning the nature of the claim at issue (A). I will then set out the relevant case-law in which the location of the claimant’s assets or bank account was considered for determination of the jurisdiction relating to delict/tort (B). Finally, I will suggest criteria for assessing jurisdiction in the present case, bearing in mind the specific type of tort alleged (C).

A.      Contract or tort?

23.      The referring court notes that it must be assumed that the alleged prospectus liability of the Defendant does not fall under ‘matters relating to a contract’. It considers that the claim at issue is tortious in nature and that therefore Article 5(3) of Regulation No 44/2001 is the relevant provision.

24.      The Commission agrees with that assessment.

25.      It ought to be recalled that such a classification is for the referring court to make based on the specific circumstances of the case. That also follows from the judgment in Kolassa, (4) in which this Court considered different heads of jurisdiction for a claim arising out of prospectus liability in a context that was factually similar to the present case.

26.      First, the Court concluded that Mr Kolassa as a claimant could not bring his action in the place of his domicile by relying on Article 16(1) of Regulation No 44/2001. This was because his claim could not be considered as relating to a contract concluded by a consumer within the meaning of Article 15(1) of that regulation. There was no contract between him and the defendant bank - the issuer of the prospectus. (5)

27.      Second, the Court excluded the applicability of the head of jurisdiction for matters relating to a contract because it appeared that there was no freely assumed obligation owed by the Defendant to the applicant. (6)

28.      Third, the Court concluded that the claim at issue concerning the liability of the issuer of a certificate on the basis of the prospectus had to be considered as tortious ‘in so far as that liability is not based on a matter relating to a contract’. (7)

29.      I understand from the order for reference that the referring court has already made such a verification and concluded, based on the facts of this case, that the claim brought by the Applicant has no contractual basis and should be considered as tortious. Therefore, I will proceed on that basis.

B.      The relevant case-law

30.      When interpreting Article 5(3) of the Brussels Convention, (8) which corresponds to Article 5(3) of Regulation No 44/2001, the Court noted that the term ‘place where the harmful event occurred’ was to be understood as covering both the place where the damage occurred (consequence) and the place of the event giving rise to it (cause). (9)

31.      The Court further elaborated on those terms in subsequent case-law in different factual contexts.

32.      In the judgment in Dumez France and Tracoba, (10) two French companies sought compensation for damage allegedly suffered due to the insolvency of their subsidiaries established in Germany. That insolvency was caused by the cancellation of loans financing a development project, which led to that project being discontinued. The companies claimed that the place of the damage was, for victims having sustained it as a consequence of the loss suffered by the initial victim, the place where their interests were adversely affected - the place of their registered offices.

33.      The Court disagreed. It stated that the term ‘place where the damage occurred’ can be understood ‘only as indicating the place where the event giving rise to the damage, and entailing tortious, delictual or quasi-delictual liability, directly produced its harmful effects upon the person who is the immediate victim of that event’. (11) The direct harm was thus caused in Germany to the German subsidiaries of the applicants. Conversely, the ‘place where the damage occurred’ could not be interpreted as referring to the place where the indirect victims of the damage suffered repercussions on their assets. The Court thus concluded that there was no jurisdiction of French courts on the grounds of tort because the damage alleged by the companies was only indirect, whereas the direct consequences were suffered by its subsidiaries in Germany. (12)

34.      The conclusion that repercussions on one’s assets (the damage) had to be of an initial (or direct) nature as opposed to subsequent adverse (or indirect) effects (13) was confirmed by the judgment in Marinari. (14) Mr Marinari, domiciled in Italy, sued a bank established in the United Kingdom for damage that was allegedly caused to him. The bank had refused to return promissory notes that he had lodged. It suspected that the origin of those notes was circumspect and alerted the police, who arrested Mr Marinari. On his release, Mr Marinari seised the courts of his domicile.

35.      The Court disagreed that the jurisdiction could be attributed to the Italian courts when it stated that the term ‘place where the harmful event occurred’ ‘cannot be construed so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually arising elsewhere’ and ‘does not cover the place where the victim claims to have suffered financial damage following upon initial damage arising and suffered by him in another [Member State]’. (15)

36.      That approach was confirmed yet again by the judgment in Kronhofer. (16) In that case a claimant domiciled in Austria was persuaded (by telephone) by the defendants, domiciled in Germany, to enter into a call option contract relating to shares. Mr Kronhofer transferred the required amount into an account in Germany which was then used for the investment at issue. After losing part of the sum invested, he sued the defendants in Austria.

37.      The Court denied the jurisdiction of the Austrian courts. It noted that the place where the damage occurred and the place of the event giving rise to it were both in Germany. It stated that the ‘expression “place where the harmful event occurred” does not refer to the place where the claimant is domiciled or where “his assets are concentrated” by reason only of the fact that he has suffered financial damage there resulting from the loss of part of his assets which arose and was incurred in another Contracting State’. (17) To recognise the jurisdiction of the Austrian courts in this case ‘would mean that the determination of the court … would depend on matters that were uncertain, such as the place where the victim’s “assets are concentrated” and would thus run counter to the strengthening of the legal protection of persons established in the Community which, by enabling the claimant to identify easily the court in which he may sue and the defendant reasonably to foresee in which court he may be sued, is one of the objectives of the Convention …’. (18) In most cases it would also confer jurisdiction to the courts of the place of the claimant’s domicile. (19)

38.      In the judgment in CDC Hydrogen Peroxide, the Court found, when interpreting the notion of ‘place where the damage occurred’ in the context of competition law, that a loss in the form of additional costs incurred by a victim because of artificially high cartel-induced prices occurs, in general, at that victim’s registered office. (20) As I have observed elsewhere, that conclusion does not sit well with the abovementioned cases in which the Court avoided conferring jurisdiction under Article 5(3) of the Brussels Convention and of Regulation No 44/2001 to the courts of the claimant’s domicile. (21) Indeed, the Court repeatedly stated that that would reverse the general rule that jurisdiction is based on the defendant’s domicile and that Article 5(3) offers no ground for such a reversal. This is because the special jurisdictional rule in Article 5(3) does not pursue the objective of protecting the weaker party but that of the sound administration of justice. (22) It is thus based on the existence of a close link between the dispute and the courts of the place where the damage occurred or may occur. (23)

39.      In the judgment in Kolassa, (24) the Court conferred jurisdiction on the courts of the place where a bank account was located, in which the investor suffered financial damage. As in the present case, Mr Kolassa invested in certificates issued by the defendant in that case (also the Defendant in this case). After the certificates had lost value, Mr Kolassa sued the defendant in the place of his domicile in Vienna. The Court thus examined whether the place of the claimant’s domicile could be a possible forum under Article 5(3) of Regulation No 44/2001 as ‘the place where the loss occurred’.

40.      The Court concluded that it could. It explained that the courts can ascertain jurisdiction on that basis ‘in particular when that loss occurred itself directly in the applicant’s bank account held with a bank established within the area of jurisdiction of those courts’. (25) It also added that ‘the issuer of a certificate [that is, the Defendant] who does not comply with his legal obligations in respect of the prospectus must, when he decides to notify the prospectus relating to that certificate in other Member States, anticipate that inadequately informed operators, domiciled in those Member States, might invest in that certificate and suffer loss’. (26) The Court thus underlined the relevance of the notification of the prospectus to a given Member State that potentially triggers a decision on the part of the concerned investors to invest. (27)

41.      The judgment in Kolassa invited mixed reactions from scholars. Among the points of criticism were the fragmentation of fora that are less predictable for issuers and the ensuing increased litigation costs; the link made in paragraph 55 of the ruling between the domicile of the investor and the place where the loss occurred; and the mention, made in paragraph 56, of the place of notification of the prospectus, otherwise absent in the reasoning of the Court in that case. (28)

42.      Several months after the judgment in Kolassa, the Court delivered judgment in Universal Music. (29) Universal Music, established in the Netherlands, was in the process of acquiring shares in a Czech company. Due to a mistake made by one of the Czech lawyers when drafting the transaction documents, the price of the shares was higher than envisaged. The ensuing dispute between Universal Music and the seller was settled before an arbitration board in the Czech Republic. The settlement amount was paid from Universal Music’s Dutch bank account. That company then sued the responsible lawyers in the Netherlands.

43.      The Court stated that the ‘“place where the harmful event occurred” may not be construed as being, failing any other connecting factors, the place in a Member State where the damage occurred, when that damage consists exclusively of financial damage which materialises directly in the claimant’s bank account and is the direct result of an unlawful act committed in another Member State’. (30) While the Court noted that it had accepted in the judgment in Kolassa that the ‘place where the harmful event occurred’ may be the place of the claimant’s bank account, it explained that ‘that finding [was] made within the specific context of the case which gave rise to that judgment, a distinctive feature of which was the existence of circumstances contributing to conferring jurisdiction on those courts’. (31) As noted above, (32) in the judgment in Kolassa the Court indeed stressed the existence of a notification within the given Member State that led the secondary market investors to make the investment.

44.      By distinguishing the judgment in Kolassa in this way, the Court concluded, in line with the ruling in Kronhofer, that financial damage occurring directly in the claimant’s bank account cannot be considered as a relevant connecting factor. The Court explained that such a criterion would not be reliable given that, in the case at hand, the company making the claim may have had the choice of several bank accounts from which to carry out the relevant payment. (33)

45.      It is fair to admit, similar to what the Commission noted in its written submissions, that the combined reading of, in particular, the judgments in Kronhofer, Kolassa and Universal Music leaves some uncertainty about the jurisdictional rule to be applied to prospectus liability claims and about the relevance of financial damage that may eventually materialise in one’s bank account. In the following section, I shall suggest some guidance in that regard, in particular by focusing on the exact nature of the alleged tort/delict. It is only once the exact nature of the alleged tort is clarified that the events that could be said to have caused it and its consequences become clearer.

C.      Criteria for establishing jurisdiction in the present case

46.      Pursuant to established case-law, Regulation No 44/2001 must be interpreted independently by reference to its overall scheme and objectives, (34) and in order to ensure, in particular, a high level of predictability of the jurisdictional rules. (35) Those rules are based on the general rule, set out in Article 2, that persons domiciled in a Member State, are to be sued in the courts of that State. Derogations, such as the one in Article 5(3) at issue in the present case, must be interpreted restrictively. (36)

47.      Article 5(3) is based on the existence of a particularly close linking factor between the dispute and the courts of the place where the harmful event occurred or may occur, justifying the attribution of jurisdiction to those courts for reasons which relate to the objective of the sound administration of justice and the efficacious conduct of proceedings. These courts are usually the most appropriate for deciding the case, in particular on the grounds of proximity and the taking of evidence. (37)

48.      With those objectives in mind, in order to interpret the notion of ‘place where the harmful event occurred’ in the present case, the precise nature of the alleged tort/delict ought to be clarified first (1). That determination is of crucial importance in ascertaining the place of the event giving rise to damage (2) and place where the damage occurred (3).

1.      The exact nature of the alleged wrong

49.      Events come in chains or bundles. The classical problem of tortious liability, both in its substantive dimension (for deciding on the merits of a claim for damages) as well as the procedural one (for deciding on international jurisdiction) is the singling out of the one event that is both necessary and determinant with regard to the harm that ensued. (38)

50.      In the present case, however, the task of singling out an event from a timeline or chain of events that could be relevant to determine international jurisdiction has already been carried out by the national court. The referring court is enquiring about international jurisdiction with regard to one specific event: the investment decision that an investor took based on a potentially defective (in the sense of misleading) prospectus. In other words, it is the tort of misrepresentation that allegedly led the Applicant to make an investment that in turn led to the financial loss in her bank account.

51.      In general, misrepresentation may be understood as giving a false or misleading account of the nature of something, in particular of facts. In the context of financial investment, it means inducing a person by false or misleading information to make an investment that that person would not have made if he had been given accurate information.

52.      It must be recalled that the present case does not in any way prejudge the likelihood of success of the claim on merits. It concerns only the assessment of jurisdiction. Therefore, the defective nature of the prospectus, the existence of the harm and the causal link between them, as well as the responsibility of the Defendant for the notification of the prospectus at issue in Austria, (39) are all elements for the national courts to determine.

53.      The determination of that specific event already carried out by the national court is crucial because it clearly delineates one point in a chain of events and one (potentially) harmful event, which may then, for the purpose of ascertaining international jurisdiction, designate a place other than those of prior or posterior events within the same case. In particular, it ought to be underlined that the alleged tort at issue in the present case does not concern the alleged mismanagement of funds by the X1 Fund Allocation Manager that is mentioned in the order for reference. (40)

54.      Having stressed the exact nature of the event relevant for the decision on international jurisdiction identified in the present case by the referring court, I shall now turn to both of the elements that are contained in the notion of ‘place where the harmful event occurred’: (41) ‘the place of the event giving rise to it’ and ‘the place where the damage occurred’ in the specific context of misrepresentation alleged in the present case.

2.      Event giving rise to damage

55.      As a preliminary contextual remark, it ought to be recalled that the claim at issue relates to a product for capital markets. The possibility for any capital market operator to offer such a product within a given territory is conditional on the applicable EU and national legislation. (42) This fact means, in practical terms, that the lawful marketing of a given capital markets product is, in principle, to be allowed within the territory of a Member State only after the related prospectus has been authorised by or notified to the respective competent national authority. In the present case, the referring court confirmed that the base prospectus was notified to Österreichische Kontrollbank.

56.      It is within such a context that the question arises as to when (or under what conditions) it was possible, under the respective law, for an investor such as the Applicant to be induced to rely on allegedly incorrect information given by the Defendant? What was the decisive event for bringing about the (alleged) harm of being misled into making a problematic investment?

57.      Three options are conceivable in the present context.

58.      First, the relevant moment could be considered as occurring when the information at issue is made publicly available, and thus in general available to potentially mislead (any) investors. In the present case, that would mean the first time the prospectus was released by the Defendant, presumably on any market and in any Member State, including the prospectus published for investors on primary markets.

59.      Second, the relevant moment could be the moment from which the prospectus can, by operation of law, start influencing the investment behaviour of the relevant group of investors. In the present case, and considering the national segmentation of the capital market regulation at issue, that relevant group is made up of investors on secondary markets in Austria.

60.      Third, the relevant moment could be when the prospectus at issue led the individual investor concerned, such as the Applicant, to make the investment decision.

61.      I do not think that it would be reasonable to embrace the first option (the first publication ever), simply because that moment is tooremote from any decision to be reasonably taken by an individual investor operating on a specific secondary market. As a matter offact, such ‘first’ publication is likely to have no direct bearing on the decision made by the individual investor or group of investors. Such secondary market individual investors tend to be presented with a different set of information, in casu also apparently in a different language. As a matter oflaw, it will not be possible for those investors to invest until such a legal possibility is provided for on the respective national market. Moreover, in practical terms, relying on the first publication made to the public in general would mean that the relevant jurisdiction will always be the one of the seat of the issuer irrespective of the possible legal barriers for the victim of the alleged tort to actually make the investment based on the ‘first’ release of the prospectus.

62.      As regards the third option outlined above, I do not think that it provides a reasonable solution either. It would make the jurisdictional rule dependent on highly accidental and uncertain individual circumstances that would be practically impossible to establish as a matter of fact. It effectively means a court having to rely solely on a self-declaration made by the claimant about the time and place where he took his individual decision to invest. To provide an example: an individual investor might very well peruse a leaflet about a new investment opportunity made available at a bank in Vienna, then take it to read on his plane journey to Dubrovnik, considering whether to invest based on the information contained in it, and finally decide to invest while having breakfast at a terrace of his hotel in Florence, having had some encouragement to do so over the phone by a friend calling from Prague.

63.      Thus, the only reasonable option for objectively ascertaining the location of a place of the event giving rise to the damage of misleading the investor appears to me to be the second scenario outlined above: the actual moment from which the prospectus can, in line with the applicable EU and national legislation, start influencing the investment behaviour of the relevant group of investors within the relevant market in question. The competent jurisdiction would then be defined at the national level and not locally. This is because the publication of a prospectus in respect of a given national territory has simultaneous consequences for the whole national territory. Logically therefore, the local jurisdiction within that national territory is then a matter of choice for the Applicant.

64.      The key element from my point of view is that for the prospectus to even have the potential to mislead the Applicant, the prospectus has to have been notified in Austria. Otherwise, it could not have been lawfully subscribed to in Austria by individual investors. (43)

65.      At the same time, and subject to verification by the referring court, once it became possible to offer the certificates on the Austrian secondary market, that possibility was immediately available for the whole territory of Austria. Thus, despite the fact that Article 5(3) of Regulation No 44/2001 provides for local and not only international jurisdiction, I find that the nature of the tort of misrepresentation at issue does not allow for the identification of a location within the national territory because once the author of the tort is allowed to influence the given national territory, that influence immediately covers the whole territory, irrespective of the actual means used for the publication of a specific prospectus. (44)

66.      This is simply because the nature of the tort at issue is quite different from the nature of torts at issue in, for example, the judgment in Bier. (45) That case concerned water pollution caused by a company discharging industrial waste in France and allegedly causing damage to a nursery gardening business in the Netherlands. As a matter of fact, environmental pollution crosses borders without the need for any authorisation to do so. By contrast, it appears impossible for there to be misrepresentation by an issuer of certificates for bearer bonds, leading an investment to be made, until those certificates can be offered on a specific national market in line with the applicable law.

67.      In the light of those considerations, my interim conclusion is that: for a claim concerning a tort of misrepresentation caused by publication of an allegedly defective prospectus relating to bearer bond certificates that can be acquired on a specific national secondary market and resulting in investment loss, the ‘event giving rise to the damage’ is located in, and covers the entirety of, the territory of the Member State where those certificates could have been validly subscribed to, that is, in the present case, Austria.

3.      Place where the damage occurred

68.      The damage that is claimed by the Applicant in the present case is a pecuniary loss. The question that arises is whether the loss suffered directly in the Applicant’s bank account is the relevant connecting factor that would make the place where Applicant’s bank account is located the ‘place where the damage occurred’. If yes, then the referring court enquires which of the accounts involved in the transaction would in fact be the relevant one.

69.      It might be useful to recall at the outset that the notion of ‘damage’ in the phrase ‘place where the damage occurred’, refers to the harm caused in the sense of direct adverse consequences on the legally protected interests of a specific claimant. That is why in the case-law cited above, (46) the Court continues to refer to ‘initial damage’ in the sense of ‘initial harm’, excluding places of (later) ‘indirect financial damage’ that results and follows from that initial harm.

70.      What specific harm the potential claimant is being protected from and when that type of harm might occur depends on the specific type of tort invoked. In the case of tort of misrepresentation by an allegedly defective prospectus, harm in the sense of direct damage that a person is being protected from consists in making an investment decision based on misleading information that the person would not have taken had he been in possession of the correct information.

71.      The pecuniary expression of the consequences of such harm in terms of financial loss then logically follows from the harmful event. Regardless of its economic importance, for jurisdictional purposes, such a financial loss is a mere monetary expression of the damage that has already occurred, namely of being led to make a detrimental investment decision. In other words, I consider that the loss calculated against the claimant’s assets or financial means available in the bank account does not constitute the precise type of damage against which the tort of misrepresentation provides protection.

72.      What then is such direct damage in the sense of the immediate adverse consequences on the individual claimant? It would appear to me that in situations such as those described in the present proceedings, the direct damage appears at the moment (and in the place) when, based on misleading information in the prospectus, the investor enters into a legally binding and enforceable obligation to invest in the financial instrument in question.

73.      That corresponds to the line consistently taken in the case-law described above (47) in which the Court considered that financial damage shown by the effect on one’s bank account or assets is located ‘too far downstream’ to be considered as the relevant connecting factor determining ‘the place when the damage occurred’.

74.      Most recently, the same conclusion was reached in the judgment in Universal Music when the Court observed that the relevant damage occurred in the Czech Republic because it became a certainty once the settlement was agreed before the arbitration board in the Czech Republic. At that moment the actual sale price and the corresponding obligation (and ‘irreversible burden’) to pay were fixed. The fact that, to implement the settlement, a transfer was made from a bank account held in the Netherlands was irrelevant. (48) I add that the fact that Universal Music chose to make the payment from a Dutch account was perhaps unsurprising given that it was a Dutch company, but it could have just as easily chosen a bank account of a subsidiary in a different Member State. Moreover, the rule under Article 5(3) of Regulation No 44/2001 determines, in principle, local jurisdiction, and not just international jurisdiction. Therefore, the exact location of Universal Music’s bank account in the Netherlands was hardly a matter known to and foreseeable by the Defendant, nor did it have any close link to the action at issue in that case.

75.      The irrelevance of such subsequent financial loss as a connecting factor was also acknowledged in the judgment in Kolassa where the Court stated that ‘the mere fact that the applicant has suffered financial consequences does not justify the attribution of jurisdiction to the courts of the applicant’s domicile if, as was the situation in the case giving rise to the judgment in Kronhofer …, both the events causing loss and the loss itself occurred in the territory of another Member State’. (49)

76.      It is true that the Court found the place of the location of the bank account to be relevant for the attribution of jurisdiction, but that finding was supported by the verification by the Court that the Defendant had indeed notified the allegedly defective information in Austria. Only after such a step was it possible for an investor such as Mr Kolassa to enter into a legally binding obligation to invest the specific amount of money, which presumably happened at the place of his bank account.

77.      When and where such an obligation becomes binding and enforceable is a matter of national law and verification by the national court, depending on the nature of the transaction in question. In most cases, it is likely to be the moment at which the investor signed a sales contract for the certificates in question. In such a situation, the ensuing decrease in the available funds in his bank account will constitute a ‘mere’ adverse effect flowing from the damage that has already occurred.

78.      The place where such a legally binding investment obligation is factually assumed will, in my view, be the place where the damage occurred. The exact location of such a place is a matter for the national law considered in the light of available factual evidence. It is likely to be the premises of a branch of the bank where the respective investment contract was signed, which may correspond, as in the Kolassa case, to the place where the bank account is held.

79.      That result complies, in my view, with the objectives of sound administration of justice and the efficacious conduct of proceedings (50) because the court of the place where the applicant enters into the respective investment obligation is most likely to be well placed to collect evidence, hear witnesses, assess the circumstances under which the tort of misrepresentation was committed and evaluate the resulting loss. Moreover, the result also complies with the objective of the predictability of jurisdictional rules: as the Court noted in the judgment in Kolassa, (51) the defendant, by notifying the prospectus to a specific Member State, must anticipate that secondary market investors, domiciled in that Member State, might invest in that certificate and suffer loss.

80.      In the light of the analysis above there is thus no need to consider, in order to attribute jurisdiction, the specific bank accounts mentioned by the referring court and used by the Applicant to make the investment. I am of the view that the location of the bank account can hardly be, in itself, conclusive to determine jurisdiction under Article 5(3) of Regulation No 44/2001. As the Court ruled in the judgment in Universal Music (as well as in the Kronhofer case) the bank account considered on its own does not constitute a reliable connecting factor. (52) A bank account is a neutral tool - it can be opened anywhere and, in today’s e-banking reality, administered from anywhere. The question posed in the present case, as well as the multiplicity of the bank accounts used in the context of the investment made by the Applicant, only underline the fact that considering the bank account as the connecting factor would make the jurisdiction under Article 5(3) of Regulation No 44/2001 dependent on the transacting methods in each case and, at the end of the day, anything but predictable.

81.      My second interim conclusion is thus that the expression ‘the place where the damage occurred’ must be interpreted as referring to the place where the secondary market investor, such as the Applicant in the main proceedings, entered into a legally binding and enforceable obligation to invest in certificates on the basis of an allegedly defective prospectus.

V.      Conclusion

82.      In the light of the above I suggest that the Court respond to the questions raised by Oberster Gerichtshof (Supreme Court, Austria), as follows:

With regard to a claim concerning a tort of misrepresentation caused by publication of an allegedly defective prospectus relating to bearer bond certificates that can be acquired on a specific national secondary market and resulting in investment loss, the notion of the ‘place where the harmful event occurred or may occur’ in Article 5(3) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters shall be interpreted as being located in, and covering the entirety of, the territory of the Member State where those certificates could have been validly subscribed to, as well as the place where the secondary market investor, such as the Applicant, entered into a legally binding and enforceable obligation to invest on the basis of that prospectus.

1      Original language: English.

2      Council Regulation of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1).

3      Article 66(1) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2012 L 351, p. 1).

4      Judgment of 28 January 2015 (C-375/13, EU:C:2015:37).

5      Judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:37, paragraphs 28 to 35).

6      Judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:37, paragraph 40).

7      Judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:37, paragraph 57).

8      Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (‘Brussels Convention’) (OJ 1978 L 304, p. 36).

9      First set out in the judgment of 30 November 1976, Bier (21/76, EU:C:1976:166). See, for example, judgments of 11 January 1990, Dumez France and Tracoba (C-220/88, EU:C:1990:8, paragraph 10); of 19 September 1995, Marinari (C-364/93, EU:C:1995:289, paragraph 11); of 10 June 2004, Kronhofer (C-168/02, EU:C:2004:364, paragraph 16); of 22 January 2015, Hejduk (C-441/13, EU:C:2015:28, paragraph 18); of 28 January 2015, Kolassa (C-375/13, EU:C:2015:37, paragraph 45); of 21 May 2015, CDC Hydrogen Peroxide (C-352/13, EU:C:2015:335, paragraph 38); of 16 June 2016, Universal Music International Holding(C-12/15, EU:C:2016:449, paragraph 28); and of 17 October 2017, Bolagsupplysningen and Ilsjan (C-194/16, EU:C:2017:766, paragraph 29 and the case-law cited).

10      Judgment of 11 January 1990(C-220/88, EU:C:1990:8, paragraph 13).

11      Judgment of 11 January 1990, Dumez France and Tracoba (C-220/88, EU:C:1990:8, paragraph 20). Emphasis added.

12      Judgment of 11 January 1990, Dumez France and Tracoba (C-220/88, EU:C:1990:8, especially paragraphs 18 and 20). Emphasis added.

13      In detail on this distinction, see also my Opinion in flyLAL-Lithuanian Airlines (C-27/17, EU:C:2018:136, point 37).

14      Judgment of 19 September 1995, Marinari (C-364/93, EU:C:1995:289).

15      Judgment of 19 September 1995, Marinari (C-364/93, EU:C:1995:289, paragraphs 14 and 21).

16      Judgment of 10 June 2004 (C-168/02, EU:C:2004:364).

17      Judgment of 10 June 2004, Kronhofer (C-168/02, EU:C:2004:364, paragraph 21). Emphasis added.

18      Judgment of 10 June 2004, Kronhofer (C-168/02, EU:C:2004:364, paragraph 20).

19      Ibidem.

20      Judgment of 21 May 2015 (C-352/13, EU:C:2015:335, paragraph 52).

21      See my Opinion in flyLAL-Lithuanian Airlines (C-27/17, EU:C:2018:136, point 75).

22      See, for example, judgment of 17 October 2017, Bolagsupplysningen and Ilsjan (C-194/16, EU:C:2017:766, paragraph 39).

23      Recitals 11 and 12 of Regulations 44/2001.

24      Judgment of 28 January 2015 (C-375/13, EU:C:2015:37).

25      Judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:37, paragraph 55).

26      Judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:375, paragraph 56).

27      For an example of a similar approach at the national level, the ruling of the Bundesgerichtshof (Federal Court, Germany), judgment of 13 July 2010, XI ZR 28/09, might be referred to. The case concerned a claim brought by an applicant domiciled in Germany against a British entity offering capital market products through an intermediary acting in Germany. The applicant and the intermediary concluded a contract of investment that, apparently, could not (ever) be profitable due to high fees. The Bundesgerichtshof (Federal Court) concluded that the German courts of the place of the location of the bank account, from which the respective payment was made, can establish their jurisdiction as ‘the place where the damage occurred’ when the transfer of funds is the direct consequence of a tortious act, namely inciting the applicant through the intermediary to invest in products which could never be profitable. The Bundesgerichtshof (Federal Court) left the question open as to whether the jurisdiction of German courts could also be based on the place of the event giving rise to the damage.

28      See, for example, Gargantini, M., ‘Capital markets and the market for judicial decisions: in search of consistency’, MPILux Working Paper 1, 2016, p. 18; Lehmann, M., ‘Prospectus liability and private international law - assessing the landscape after the CJEU Kolassa ruling (Case C-375/13)’, Journal of Private International Law, 2016, p. 318, at p. 331; Cotiga, A.,‘C.J.U.E., 28 janvier 2015, Harald Kolassa c. Barclays Bank PLC, Aff. C-375-13’, Revue internationale des services financiers,2015, p. 40, at pp. 48 to 49.

29      Judgment of 16 June 2016, Universal Music International Holding (C-12/15, EU:C:2016:449).

30      Judgment of 16 June 2016, Universal Music International Holding (C-12/15, EU:C:2016:449, paragraph 40). Emphasis added.

31      Judgment of 16 June 2016, Universal Music International Holding (C-12/15, EU:C:2016:449, paragraphs 36 and 37).

32      See above, point 40 in fine of this Opinion.

33      Judgment of 16 June 2016, Universal Music International Holding(C-12/15, EU:C:2016:449, paragraphs 36 to 39).

34      See for example, judgment of 25 October 2011, eDate Advertising and Others (C-509/09 and C-161/10, EU:C:2011:685, paragraph 38 and the case-law cited).

35      As is apparent from recital 11 to Regulation No 44/2001.

36      See, for example, judgment of 10 June 2004, Kronhofer (C-168/02, EU:C:2004:364, paragraph 14), or of 16 June 2016, Universal Music International Holding (C-12/15, EU:C:2016:449, paragraph 25).

37      See for a recent statement, judgment of 17 October 2017, Bolagsupplysningen and Ilsjan (C-194/16, EU:C:2017:766, paragraphs 26 to 27).

38      In general, see my Opinion in flyLAL-Lithuanian Airlines (C-27/17, EU:C:2018:136, points 94 to 99).

39      It might be added that it would appear from the order for reference that the author of the German version of the prospectus at issue is the Defendant and that the distribution in Austria of the prospectus, and its relevant communication to the Applicant, is attributable to the same Defendant, which is nonetheless ultimately for the referring court to verify. That corresponds also to the finding made by the Court in its judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:375) relating, subject to verification by the referring court, to the same defendant and the same capital market product. See also point 76 of the present Opinion.

40      Whether, and if at all, the alleged mismanagement of the funds in Frankfurt caused the certificates to become worthless, the extent to which this was an unavoidable consequence of the information contained in the base prospectus is a matter of fact and (substantive) causation for the national courts to ascertain.

41      See references above in footnote 9.

42      See, in this context, in particular Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (OJ 2003 L 345, p. 64).

43      By contrast, when the Court analysed the notion of the ‘event giving rise to the damage’ in the Kolassa case (in so far as the claim concerned the breach of ‘legal obligations relating to the prospectus and information for investors’), the Court noted that there was no information ‘to show that the decisions regarding the arrangements for the investments proposed by Barclays Bank and the contents of the relevant prospectuses were taken in the Member State in which the investor is domiciled or that those prospectuses were originally drafted and distributed anywhere other than the Member State in which Barclays Bank has its seat’. See judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:375, paragraph 53).

44      It might be recalled that the same logic was also embraced by the Court in the judgment in Kolassa, albeit in relation to the place where the loss occurred: ‘the issuer of a certificate who does not comply with his legal obligations in respect of the prospectus must, when he decides to notify the prospectus relating to that certificate in other Member States, anticipate that inadequately informed operators, domiciled in those Member States, might invest in that certificate and suffer loss’ - judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:375, paragraph 56).

45      Judgment of 30 November 1976 (21/76, EU:C:1976:166).

46      Above, points 32 to 37 and 43 of this Opinion. For a more detailed discussion of this point, see my Opinion in flyLAL-Lithuanian Airlines (C-27/17, EU:C:2018:136, points 29 to 42 and 64 to 67).

47      Above, points 32 to 37 and 43 of this Opinion.

48      Judgment of 16 June 2016, Universal Music International Holding (C-12/15, EU:C:2016:449, paragraphs 31 to 32).

49      Judgment of 28 January 2015 (C-375/13, EU:C:2015:37, paragraph 49).

50      Judgment of 28 January 2015, Kolassa (C-375/13, EU:C:2015:37, paragraph 46 and the case-law cited).

51      Judgment of 28 January 2015 (C-375/13, EU:C:2015:37, paragraph 56).

52      See in this sense, judgments of 10 June 2004, Kronhofer (C-168/02, EU:C:2004:364, paragraph 20), and of 16 June 2016, Universal Music International Holding (C-12/15, EU:C:2016:449, paragraph 38).