EUPillar C-381/08 Car Trim GmbH v KeySafety Systems Srl (Fourth Chamber) [2010] ECR I-01255

Summary

This case on Art 5(1)(b) of Brussels I was referred to the CJEU in proceedings between two manufacturers in the automobile sector, ie Car Trim (established in Germany) and KeySafety (established in Italy), concerning the contractual obligations of the parties in relation to the supply of components for the manufacture of airbag systems. KeySafety purchased from Car Trim components used in the manufacture of airbag systems, in accordance with five supply contracts under which Car Trim was obliged to manufacture airbags of a certain shape, in the traditional manner of a supplier of equipment for the automobile industry, using products purchased from agreed suppliers, so as to be able to supply them to order, according to the needs of KeySafety’s production process and in conformity with a large number of requirements relating to the organisation of the work, quality control, packaging, labelling, delivery orders and invoices. KeySafety terminated the contracts. Car Trim brought an action for breach of contract in Germany as the place where the components were manufactured. The court held that it had no jurisdiction and the first appeal was dismissed. During the final appeal on a point of law, the referring court considered that it was possible for the German courts to have jurisdiction only if the place of production was to be regarded as the place of performance of ‘the obligation in question’ under Art 5(1) and asked some questions to the CJEU. The first question concerned how ‘contracts for the sale of goods’ are to be distinguished from ‘contracts for the provision of services’, under Art 5(1)(b), in the case of contracts for the supply of goods to be produced or manufactured, where the customer has specified certain requirements with regard to the provision, fabrication and delivery of the components to be produced. The CJEU observed that Art 5(1)(b) is silent as to both the definition of the two types of contract and the distinguishing features of those two types of contract in the context of a sale of goods which at the same time involves the provision of services. Citing C 533/07 Falco, it noted that for the purposes of determining the court with jurisdiction, Art 5(1)(b) identifies as a connecting factor the obligation which characterises the contract in question. It then examined the characteristic obligation of the contracts at issue considering the definitions in Directive 1999/44, CISG and the UN Convention on the Limitation Period in the International Sale of Goods as an indication. It found that the fact that the goods to be delivered are to be manufactured or produced beforehand does not alter the classification of the contract at issue as a sales contract. It recalled that it had reached the same conclusion regarding public procurement contracts in C-300/07 Hans & Christophorus Oymanns. It also took into consideration that KeySafety did not provide Car Trim any raw materials. It thus found that the contract must be classified as a ‘sale of goods’ under Article 5(1)(b). As regards the second question, citing C-386/05 Color Drack, it affirmed that the rule in Art 5(1)(b) establishes the place of delivery as the autonomous linking factor to apply to all claims founded on one and the same contract for the sale of goods rather than merely to the claims founded on the obligation of delivery itself, but it also noted that Brussels I is silent as to the definition of ‘delivery’ and ‘place of delivery’. Considering predictability and proximity, it held that the place of delivery must be determined on the basis of the provisions of the contract; if this is impossible without reference to the substantive law governing the contract, that place is the place where the physical transfer of the goods took place, as a result of which the purchaser obtained, or should have obtained, actual power of disposal over those goods at the final destination of the sales transaction.