Goods delivered under the contract in several places: Article 5(1)(b)
Color Drack GmbH v Lexx International Vertriebs GmbH'bb was a rather odd case; and it may be seen as a stepping stone to a more stable rule. A purchaser sued the seller under a contact for the sale of goods on terms of sale or return. It sued for the money due to it in an Austrian court, as the contract provided for delivery to be made in Austria. But the seller objected that as the contracts had provided for delivery at several different places in Austria, and as the Regulation allocated jurisdiction to the courts of the place, rather than the State as such, it was not open to the claimant to aggregate these and sue, in respect of all the deliveries to places in Austria before a single Austrian court. The defendant’s objection was plainly unmeritorious, for all the deliveries had been into the one State, and it was well aware that special jurisdiction under Article 5(1 )(b) would lie somewhere in Austria. For the seller to say that it was taken by surprise by being sued at St Johann-im-Pongau, as opposed to elsewhere in Austria, may have been true but was unedifying. The Court said that the claim could be brought at the principal place of delivery; but where there was no such place the claimant could sue in respect of all of the delivery in any place of delivery, as it chose. Insofar as the Court applied the ‘centre of gravity’ approach to try and bring order to the jurisdictional issue, the primary part of its judgment was predictable and sensible. The secondary conclusion for those cases in which the ‘centre of gravity’ approach did not work, was less so.
The issue in Color Drack was about deliveries in several places within the one State. On the bigger question, whether its reasoning applied where the places of delivery were in different States, the Court did not decide. But if this was a genuine limitation on the effect of the judgment, it was soon gone. The reasoning in Color Drack was considered to be applicable in Rehder v Air Baltic, which was a case of service provision in several Member States, and it was referred to without any reservation in Car Trim GmbH (which was a sale case) and in Wood Floor Solutions Andreas Domberger GmbH.'™ The
SPECIAL JURISDICTION: LUGANO STATE DOMICILIARY (1) original limitation suggested by the Court seems to have been erased; those cases are examined in the next paragraph.
The result is that, in order to make the first indent of Article 5(1 )(b) work as it was intended, the court seised should try to marshal the places where under the contract the goods were to be delivered into a single place, and if it can do so, that will be the place at which special jurisdiction may lie. Where such a centre of gravity approach simply cannot be made to work on the facts, if the several places of delivery are in a single Lugano State, the claimant may sue in any of them; but where the several places of delivery are in several Lugano States, it is arguable, but not yet clear, that the claimant may sue in any one of those States in relation to the whole of the delivery.
Services provided under the contract in several places: Article 5(1)(b)
Established case law likewise suggests that a national court should try to find a single place as the place for provision of services by looking at the contract and the manner in which the services have been provided. It should generally look for the centre of gravity of the obligation in question, but if that does not yield a solution, an alternative place - or even places - of provision may be found. It may be thought at this point that the ends are being allowed to justify the means, but that is no bad thing if the end is rational and the means are comprehensible.
In Wood Floor Solutions Andreas Domberger GmbH v Silva Trade SA,'1" the contract called for the provision of services in several States. The Court indicated that Article 5( 1 )(b) invited the national court to identify a single place which could exercise special jurisdiction over the entire contract for the provision of services, by looking for the place of main provision of the services. The first thing was to read the contract; if that did not help, the court should look back at where the services had been provided in the past; and if that did not help, a place of single reference might be found in the place where the service provider was domiciled. It is sensible to set out its reasoning in extenso. It said that:
It is necessary to indicate the criteria according to which the place of the main provision of services must be determined, when those services are provided in different Member States. Having regard to the objective of predictability laid down by the legislature in recital 11 in the preamble to the regulation, and taking account of the wording of the second indent of Article 5(l)(b), according to which it is the place in a Member State where, under the contract, the services were provided or should have been provided which is decisive, the place of the main provision of services must be deduced, in so far as possible, from the provisions of the contract itself Thus, in the context of a commercial agency contract, the place where the agent was to carry out his work on behalf of the principal, consisting in particular in preparing, negotiating and, where appropriate, concluding the transactions for which he has authority has to be identified, on the basis of that contract. The determination of the place of the main provision of services according to the contractual choice of the parties meets the objective of proximity, since that place has, by its very nature, a link with the substance of the dispute. If the provisions of a contract do not enable the place of the main provision of services to be determined, either because they provide for several places where services are provided, or because they do not expressly provide for any specific place where services are to be provided, but the agent has already provided such services, it is appropriate, in the alternative, to take account of the place where he has in fact
- 1
- 170 C-19/09, [2010] ECR 1-2121.
for the most part carried out his activities in the performance of the contract, provided that the provision of services in that place is not contrary to the parties’ intentions as it appears from the provisions of the contract. For that purpose, the factual aspects of the case may be taken into consideration, in particular, the time spent in those places and the importance of the activities carried out there. It is for the national court seised to determine whether it has jurisdiction in the light of the evidence submitted to it. Fourth, if the place of the main provision of services cannot be determined on the basis of the provisions of the contract itself or its actual performance, the place must be identified by another means which respects the objectives of predictability and proximity pursued by the legislature. For that purpose, it will be necessary for the purposes of the application of the second indent of Article 5(l)(b) to consider, as the place of the main provision of the services provided by a commercial agent, the place where that agent is domiciled. That place can always be identified with certainty and is therefore predictable. Moreover, it has a link of proximity with the dispute since the agent will in all likelihood provide a substantial part of his services there.'
The case therefore stands for a number of propositions. First, the search for the place of performance of the obligation in a contract for the provision of service is designed to find, if at all possible, a single place of provision. Second, the default rule of the place of domicile of the service provider probably depends on this being a realistic reading of the facts. A commercial agent does, after all, have a home base which could be regarded as the centre of his professional operations; and though it is not only pedantry which would point out that he may not provide (as distinct from prepare to provide) his professional services there, the court at that place has a reasonable connection with the contract. Third, the decision at this point reflects that used in locating the place of performance of the duties of an employment, where it has been seen that a centre of gravity test is perfectly satisfactory. Fourth, the material question may be where the service provider does the bulk of the work which constitutes the service, as distinct from asking about the place or places at which the finished workproduct is provided in the sense of being delivered to the recipient: the structure of the analysis is, in this respect, different from that applied to contracts for the supply of goods where the place of the end-point is the critical thing. The analysis in Wood Floor Solutions was approved, and the national court directed to apply it, in Saey Home & Garden NV/SA v Lusavouga-Máquinas e Acessórios Industrials SA.[1]
The ‘centre of gravity’ approach will often allow the obligation to provide services to be corralled into a single place, but sometimes it cannot. In Rehder v Air Baltic Corp,m a claim against a passenger airline was subject to special jurisdiction under Article 5(1 )(b) at the place of departure or arrival, the passenger being free to select. The case was one in which a centre of gravity approach could not work: neither the place of embarkation nor of disembarkation can be seen as the place where, under the contract, the services are provided. The reality is that the service is provided in, and at all points in between, the two of them. If the centre of gravity were to be located at the place where the airline is established it would fail the general test of proximity and predictability. An answer that there was no court with special jurisdiction would have defeated the purpose of Article 5(1); and in the end the solution adopted represented the triumph of pragmatism. Likewise, a contract for the multi-modal carriage ofgoods from A to B will be held to involve the provision of services at A and at B, and the principle in Rehder will allow special jurisdiction to be asserted in either Lugano State.[2]
- [1] C-64/17, EU:C:2018:173, [2018] ILPr 253. See also JEB Recoveries LLP v Binstock [2016] EWCA Civ 1008. 2 C-204/08, [2009] ECR 1-6073. Followed on this point by C-213/18 Guaitoli v easyJet Airline Co Ltd EU:C:2019:927, [2019] 2 Lloyd’s Rep 591.
- [2] C-88/17 Zurich Insurance Pic v Abnormal Load Services (International) Lii/EU:C:2018:558, [2019] 1 All ER (Comm) 772. The methodology which suggests that if neither place is sufficient to exclude the special jurisdiction of the other, the claimant may choose between them, is reflected in 21/76 Handelskwekerij GJ Bier NV v SA Mines de Potasse d'Alsace [1976] ECR 1735 (a case on Article 5(3)). 2 C-265/00, [2002] ECR 1-1699. 3 Mora Shipping Inc v Axa Corporate Solutions Assurance SA [2005] EWCA Civ 1069, [2005] 2 Lloyd’s Rep 769 (payment of sums found due as general average; the court suggested that the solution was to employ a jurisdiction clause where the place of payment was not fixed). In fact, in Mora Shipping Inc the two States were the United Kingdom and Liberia (or possibly Norway), but the case was not regarded as one in which only the United Kingdom counted for the purposes of Art. 5(1). 4 Contrast the case where the obligation in question is to (re)pay money on demand and therefore to pay it, as a matter of English law, at the place where the creditor resides on the date of the demand: the contract is one in which there is only one place of payment, even though it may not be known, prior to the making of the demand, which place that is: Tavoulareas v Tsavliris [2005] EWHC 2140 (Comm), [2006] 1 All ER (Comm) 109, [48] et seq. 5 C-204/08, [2009] ECR 1-6073. 6 32/88,(1989] ECR 341.
