PIL instrument(s)

Case number and/or case name

BGH, 1.6.2005 – VIII ZR 256/04

Details of the court

Germany, Third Instance

Articles referred to by the court

Date of the judgement

31 May 2005

Appeal history

CJEU's case law cited by the court

Summary

On the basis of a framework contract, the Belgian defendant sold sports equipment of the plaintiff, a company based in Germany, to Belgium and the Netherlands. The invoices of the plaintiff for the defendant included the phrase 'referring to the plaintiff’s general terms and conditions' that were printed on the backside. These stated that German courts should have jurisdiction and that the place of performance was the seat of the plaintiff. The plaintiff brings an action for payment of an open account. The first instance dismissed the case because of lacking international jurisdiction. The second instance dismissed the appeal stating that there is no valid agreement on the place of jurisdiction and Art. 5(1)(b) Brussels I doesn’t establish international jurisdiction of German courts as the delivery place lies in Belgium or in the Netherlands. The Federal Court of Justice starts to examine the international jurisdiction on the basis of the Brussels I Regulation. It examines if international jurisdiction of German courts was established because the defendant entered an appearance without explicitly contesting international jurisdiction. It then discusses the judgements of the scientific literature and the jurisdiction on this problem and holds that it is sufficient to contest – as the defendant did – the local jurisdiction as it contains the contestation of international jurisdiction. The Federal Court of Justice doesn’t find it necessary to discuss whether a valid agreement of jurisdiction within the meaning of Art. 23(1) Brussels I is given as it bases the international jurisdiction of German courts on Art. 5(1)(a) Brussels I. It holds that Art. 5(1)(b) Brussels I does not apply to the case as the parties have otherwise agreed on a place of performance. On the ground of Art. 5(1)(a) Brussels I it then applies German conflict of law rules to determine the place of performance and states that the terms and conditions were tacitly included into the contract as the parties had a current business relationship and a frame contract. It is noticeable in which structured and clear manner the Court examines the international jurisdiction. The court however regards lit. b merely as an interpretation aid for lit. a and not as an independent element of the rule, as it is accepted in scientific literature. Applying these guidelines in general, the scope of application of Art. 5(1)(b) Brussels I would be very narrow. In consequence, the principle of party autonomy would be unjustly limited to the types of contract named in lit. b. This incorrect reasoning doesn’t have any effect on the outcome of the judgment as under the application of Art. 5(1)(b) Brussels I the inclusion of the agreement on place of performance would have been also judged by the national rules for terms and conditions.