EUPillar C-189/08 Zuid-Chemie BV v Philippo's Mineralenfabriek NV/SA (First Chamber) [2009] ECR I-06917

Summary

This case on Art 5(3) of Brussels I was referred to the CJEU in proceedings between Zuid-Chemie (manufacturing fertiliser with its registered office in the Netherlands), and Philippo’s (established in Belgium), concerning the delivery by Philippo’s to Zuid-Chemie of a contaminated product used for the manufacture of fertiliser. Zuid-Chemie purchased two consignments of a product from HCI (established Netherlands). HCI was unable to manufacture the product so ordered it from Philippo’s. In consultation with HCI, Philippo’s purchased the outstanding raw material from Poortershaven (trading in the Netherlands). Philippo’s had manufactured the product in its factory in Belgium and Zuid-Chemie took the delivery. Zuid-Chemie then processed the product in its factory in the Netherlands in order to produce various consignments of fertiliser. It sold and dispatched a number of those consignments to its customers. However, the cadmium content of the material purchased from Poortershaven was too high and it resulted that the fertiliser was rendered unusable or of limited utility. Zuid-Chemie brought proceedings against Philippo’s in the Netherlands to seek a declaration for Philippo’s liability for the damage it sustained and for the payment of compensation. The court declined jurisdiction under Art 5(3) by finding that the initial damage occurred in Belgium where Zuid-Chemie had taken the delivery of the product. During the appeal, none of the parties challenged the fact that Belgian was the place of the event giving rise to the damage, as the contaminated product had been manufactured there. As regards the place where the damage had occurred, the court upheld the judgment at first instance. During an appeal on a point of law, the referring court asked some questions to the CJEU. The first question was on the interpretation of the words ‘place where the harmful event occurred’ under Art 5(3). In its examination, the CJEU took account of its relevant case-law on the Brussels Convention. Citing 21/76 Bier, C-167/00 Henkel, C-18/02 DFDSTorline, and C-168/02 Kronhofer, it reaffirmed that the ‘place where the harmful event occurred’ in Art 5(3) covers both the place where the damage occurred and the place of the event giving rise to it, so that the defendant may be sued, at the option of the claimant, in the courts for either of those places. It observed that, in the present case, the parties agreed that Belgium was the place of the event giving rise to the damage, but they disagreed as regards the place where the damage occurred. Referring to its settled case-law, the CJEU reaffirmed that the place where the damage occurred is the place where the event which may give rise to liability in tort/delict/quasi-delict resulted in damage. Citing Bier and C-68/93 Shevill, it stated that the ‘place where the damage occurred’ is the place where the event which gave rise to the damage produces its harmful effects, ie the place where the damage caused by the defective product actually manifests itself in this case. It observed that the place where the damage occurred was Zuid-Chemie’s factory in the Netherlands where the defective product was processed into fertiliser and caused the substantial damage to that fertiliser. Thus, it held that the words ‘place where the harmful event occurred’ designate the place where the initial damage occurred as a result of the normal use of the product for the purpose for which it was intended. In the light of this answer, there was no need to answer the second question concerning whether jurisdiction can be founded in the place of damage if the loss is purely financial because that was a hypothetical question in this case given the physical damage. This was a straightforward case.