{"id":301790,"date":"2023-09-18T15:30:02","date_gmt":"2023-09-18T10:00:02","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=301790"},"modified":"2023-09-18T15:00:26","modified_gmt":"2023-09-18T09:30:26","slug":"provisions-jurisidiction-recognition-enforecement-judgments-civil-commercial-matters-brussles-regulation-cjeu-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/09\/18\/provisions-jurisidiction-recognition-enforecement-judgments-civil-commercial-matters-brussles-regulation-cjeu-legal-news\/","title":{"rendered":"CJEU interprets Art. 7(1)(b) of Brussels I bis Regulation on jurisdiction and recognition and enforcement of judgments in civil and commercial matters"},"content":{"rendered":"
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Court of Justice of the European Union (Seventh Chamber):<\/span> While considering a request for preliminary ruling concerning the interpretation of Art. 7(1)(b) of Regulation (EU) No 1215\/2012 of the European Parliament and of the Council of 12-12-2012 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters (‘the Brussels I bis Regulation’); the Court comprising of M.L. Arastey Sahún (President of the Chamber), F. Biltgen (Rapporteur) and J. Passer, JJ., held that the provisions in question must be interpreted as meaning that, a contract to enter into a future contract, relating to the future conclusion of a franchise agreement, (which provides for an obligation to pay a contractual penalty based on non-performance of that contract to enter into a future contract, the breach of which serves as a basis for a claim), does not fall within the concept of a contract for the ‘provision of services<\/span>’ within the meaning of that provision. In such a case, jurisdiction over a claim is determined (in accordance with Article 7(1)(a) of Regulation (EU) No 1215\/2012 of the European Parliament), by reference to the place of performance of that obligation.<\/p>\n

Background:<\/span> The request for preliminary ruling interpreting the afore-stated provisions was made in proceedings between Extéria s.r.o., established in Ostrava (Czech Republic), and Spravime s.r.o., established in Ivanovice (Slovak Republic), concerning a claim for payment of a contractual penalty based on the non-execution of a contract to enter into a future contract relating to the future conclusion of a franchise agreement.<\/p>\n

On 28-06-2018, the applicant which provides consultancy services in the field of occupational safety and health, and the defendant, concluded a contract to enter into a future contract relating to the future conclusion of a franchise agreement (‘the contract to enter into a future contract’), which would enable the defendant in the main proceedings to operate and manage franchised branches of the applicant in the main proceedings in Slovakia. That contract contained certain terms and conditions and an undertaking on the part of the defendant in the main proceedings to pay an advance amount of EUR 20,400, exclusive of value added tax. In the event of failure to comply with that obligation, a contractual penalty equal to the amount of that advance was also included.<\/p>\n

The purpose of the afore-stated advance was not only to guarantee that obligation but also to preserve the confidentiality of all the information vis-à-vis the applicant’s franchise concept contained in that contract. In addition, the defendant gave the applicant in the main proceedings the right to withdraw if the defendant did not pay the agreed fee within the prescribed period.<\/p>\n

The contract to enter into a future contract provided for the application of Czech law, without any agreement on jurisdiction having been concluded.<\/p>\n

Alleging that the defendant in the main proceedings had failed to fulfil its obligation to pay the advance in question, the applicant withdrew from the contract to enter into a future contract and claimed payment of the contractual penalty.<\/p>\n

Issue for consideration:<\/span> Must Article 7(1)(b) of [the Brussels I bis] Regulation be interpreted as meaning that the concept “contract for the provision of services<\/span>” also includes a contract to enter into a future contract (pactum de contrahendo<\/span>), in which the parties undertook to enter into a future contract that would be a contract for the provision of services, within the meaning of that provision?’<\/p>\n

Court’s Assessment:<\/span> Perusing the afore-stated question, the Court pointed out that Brussels I bis Regulation repealed and replaced Council Regulation (EC) No 44\/2001 of 22-12-2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters which replaced the Convention of 27-09-1968 on jurisdiction and the enforcement of judgments in civil and commercial matters. Therefore, the interpretation given by the Court in relation to Regulation No 44\/2001 also applies to the Brussels I bis Regulation.<\/p>\n

The Court noted that the wording of Article 7(1)(b) of the Brussels I bis Regulation does not, on its own, provide an answer to the question referred, since that provision does not define the concept of a contract for the provision of services.<\/span> Therefore, the terms ‘matters relating to a contract<\/span>’ and ‘provision of services’<\/span>, referred to respectively in Article 7(1)(a) and the second indent of Article 7(1)(b) of the Brussels I bis Regulation, must be interpreted independently, with reference to the system and objectives of that regulation and with a view to ensuring its uniform application in all the Member States. “The provisions cannot be understood as referring to the characterisation which the applicable national law gives to the legal relationship at issue before the national court<\/span>”.<\/p>\n

It was further noted that the Brussels I bis Regulation seeks to unify the rules on conflict of jurisdiction in civil and commercial matters by way of rules of jurisdiction which are highly predictable and thus pursues an objective of legal certainty.<\/p>\n

It was further noted that the special rules of jurisdiction laid down by the Brussels I bis Regulation are to be interpreted strictly and do not permit an interpretation which goes beyond the cases expressly envisaged by that regulation.<\/p>\n

It was pointed out that the rule of special jurisdiction in matters relating to a contract, laid down in Article 7(1) of the Brussels I bis Regulation, reflects a concern for proximity and is motivated by the existence of a close link between the contract concerned. As regards the place of performance of contractual obligations arising under a contract for the provision of services, the second indent of Article 7(1)(b) of the Brussels I bis Regulation autonomously defines the linking factor in respect of that contract as being the place in a Member State where, under that contract, the services were provided or should have been provided, in order to reinforce the objectives of unification and foreseeability of the rules of jurisdiction and, consequently, of legal certainty. “It is in the light of those considerations that it must be determined whether an obligation to pay a contractual penalty on account of non-performance of a contract to enter into a future contract, such as that at issue in the main proceedings, falls within the concept of ‘provision of services’ within the meaning of the second indent of Article 7(1)(b) of the Brussels I bis Regulation<\/span>”.<\/p>\n

The Court pointed out that the obligations binding the parties and arising from the terms of a contract to enter into a future contract, fall within the concept of ‘matters relating to a contract’ within the meaning of Article 7(1)(a) of the Brussels I bis Regulation<\/span>. While Article 7(1)(a) of the Brussels I bis Regulation determines jurisdiction in matters relating to a contract by reference to the place of performance of the obligation in question, Article 7(1)(b) lays down, in relation to the sale of goods and the provision of services particular linking factors, fixing that place of performance respectively at the place in a Member State where, under the contract, the goods were delivered or should have been delivered and at the place in a Member State where, under the contract, the services were provided or should have been provided.<\/p>\n

The Court noted that in so far as the contract to enter into a future contract does not require the performance of any positive act or the payment of any remuneration, the obligations arising from that contract to enter into a future contract — in particular the obligation to pay the contractual penalty — cannot fall within the concept of ‘provision of services<\/span>’ within the meaning of the second indent of Article 7(1)(b) of the Brussels I bis Regulation. “It should be noted that it is apparent from the system set out in Article 7(1) of the Brussels I bis Regulation that the EU legislature has adopted separate rules of jurisdiction for contracts for the sale of goods and for contracts for the provision of services, on the one hand, and for any other type of contract not covered by specific provisions in that regulation, on the other hand<\/span>”.<\/p>\n

It was pointed out that to broaden the scope of the second indent of Article 7(1)(b) of the Brussels I bis Regulation so as to include any contract to enter into a future contract relating to the future conclusion of a contract for the provision of services would be to circumvent the intention of the EU legislature in that regard and would affect the effectiveness of Article 7(1)(c) and (a) thereof<\/span>.<\/p>\n

[Exteria v. Spravime, Case C-393\/22, decided on 14-09-2023<\/span>]<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Special rules of jurisdiction laid down by the Brussels I bis Regulation are to be interpreted strictly and do not permit an interpretation which goes beyond the cases expressly envisaged by that regulation.”<\/p>\n","protected":false},"author":3,"featured_media":301792,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,12],"tags":[45375,40056,41772,13481,61138,33443,2526,3686],"class_list":["post-301790","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-foreigncourts","tag-commercial-law","tag-consideration","tag-contract-law","tag-european-union","tag-future-contract","tag-international-law","tag-Interpretation","tag-Jurisdiction"],"yoast_head":"\nCJEU interprets provisions on jurisdiction and recognition and enforcement of judgments in civil and commercial matters<\/title>\n<meta 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