EUPillar C-87/10 Electrosteel Europe SA v Edil Centro SpA (Third Chamber) [2011] ECR I-04987

Summary

This case on Art 5(1)(b) of Brussels I was referred to the CJEU in proceedings between Electrosteel (established in France), and Edil Centro (established in Italy), concerning the performance of a sale of goods contract between them. Edil Centro (the seller) applied to the referring court in Italy for an order directing Electrosteel (the buyer) to pay EUR 36 588.26 in payment for the goods purchased. Electrosteel argued that the Italian courts lacked jurisdiction under Brussels I since it had its seat in France. Relying on Incoterms, Edil Centro claimed that the Italian courts had jurisdiction since the contract, concluded at its own seat in Italy, contained the clause ‘Delivered free ex our business premises’. The goods were delivered to the buyer by a carrier which took charge of those goods at the seller’s premises, and delivered them to the buyer’s headquarters. The referring court asked the CJEU the interpretation of ‘place of delivery’ under the first indent of Art 5(1)(b). Before deciding the present case, the CJEU gave its preliminary ruling in C-381/08 Car Trim and found that, under the first indent of Art 5(1)(b), in the case of a sale involving carriage of goods, the place of delivery must be determined on the basis of the provisions of that contract, and where it is impossible to determine it on that basis, without reference to the substantive law applicable to 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. The CJEU observed that that interpretation can be transposed to the present case. Then, it examined how the words ‘under the contract’ are to be interpreted and to what extent it is possible to take into consideration terms and clauses in the contract which do not identify directly and explicitly the place of delivery. By an analogy with Art 23, it observed that the EU legislature wished consideration to be taken of commercial usage in interpreting the Brussels I provisions, in particular, Art 5(1)(b). It also acknowledged the usages’ important role in international trade especially if they are collected, explained and published by recognised professional organisations and widely followed in practice by traders, such as ICC’s Incoterms. It found that the in order to determine the place of delivery, the referring court must take them into account in so far as they enable that place to be clearly identified. It then examined whether they merely lay down the conditions relating to the allocation of the risks connected to the carriage of the goods or the division of costs between the contracting parties, or whether they also identify the place of delivery of the goods. As regards Incoterms, it agreed with AG Kokott that ‘Ex Works’ clause entails not only the application of rules on ‘Transfer of risks’, and ‘Division of costs’, but also, and separately, the application of rules ‘Delivery’ and ‘Taking delivery’. It held that in distance selling, the place of delivery must be determined on the basis of the provisions of that contract under the first indent of Art 5(1)(b) and that in verifying whether that place is determined ‘under the contract’, the national court must take account of all the relevant terms and clauses of that contract which are capable of clearly identifying that place, including terms and clauses which are generally recognised and applied through the usages of international trade or commerce, such as Incoterms. It added that if it is impossible to determine that place on that basis, without referring to the substantive law applicable to 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.