EUPillar Scottish & Newcastle International v Othon Ghalanos [2006] EWCA Civ 1750

Summary

The dispute arose out of a contract for sale of goods (CFR, Limassol). The goods were shipped from Liverpool to Limasol. The claimant/seller was a company which had its main office in Scotland. The defendant/buyer was a Cypriot company. The contract was found to be governed by English law. The seller commenced legal proceedings in England on the basis of Article 5(1)(b), submitting that the goods were delivered, for the purposes of Article 5, in Liverpool where they were shipped. The defendant challenged the jurisdiction of the English court, and argued that the place of delivery was Limassol as being the contractual agreed place of delivery. The English court established jurisdiction, holding that the delivery of goods took place upon shipment. On 20 December 2006, the Court of Appeal affirmed the decision of Andrew Smith J [2006] EWHC 1039 (Comm). On 20 February 2008, the defendant’s appeal was further dismissed by the UK House of Lords. In the latter context, Lord Bingham clearly stated: “3 Article 5(1)(a), applying to matters of contract quite generally and therefore very broad in its scope, focuses attention on the particular obligation in question in the particular action and permits a claimant to sue in a member state other than that of the defendant's domicile if the particular obligation in question was or should have been performed in that other member state. But in subparagraph (b) a more specific rule is laid down, not applicable to the whole field of contract, but only to contracts for the sale of goods or the provision of services. In each of these cases, in the absence of contrary agreement, the place of performance of the obligation in question must be taken to be the place where, under the particular contract between the parties, the goods were or should have been delivered or the services were or should have been provided, as the case may be. If subparagraph (b) does not apply, whether because the contract is not one for the sale of goods or the provision of services or because a contract of that character contains no term as to the place of delivery of goods or the place of provision of services, subparagraph (a) applies. 4 The sale of goods contract made between S&N and Ghalanos is, as they agree, governed by English law. Thus it is to that contract, interpreted according to the principles of English law, that we must look to ascertain whether, under the contract, the goods were or should have been delivered in England. This is made clear by the decision of the European Court of Justice in (Case 12/76) Industrie Tessili Italiana Como v Dunlop AG [1976] ECR 1473, paras 13-15. Thus (as the parties rightly agree) the Regulation does not purport to impose a uniform concept of delivery on all member states but leaves member states to apply whatever, under their rules of private international law, is the law properly applicable to the particular contract, in this case English law.” 2008] UKHL 11 [3-4]. That said, it appears that Lord Bingham’s approach was not entirely in line with the purposes of Brussels I. This is indeed clear in the light of the subsequent judgment of the Court of Justice in Case C-381/08, Car Trim GmbH v KeySafety Systems Srl. In this case, the Court of Justice, following a reference from the German court, stated: “it should be noted that the autonomy of the linking factors provided for in Article 5(1)(b) of Regulation No 44/2001 precludes application of the rules of private international law of the Member State with jurisdiction and the substantive law which would be applicable thereunder. […] In those circumstances, it is for the referring court to determine first whether the place of delivery is apparent from the provisions of the contract.” Case C-381/08 [53-54]