EUPillar C-98/06 Freeport plc v Olle Arnoldsson (Third Chamber) [2007] ECR I-08319

Summary

The reference on Art 6(1) of Brussels I was made in the context of proceedings in Sweden between Mr Arnoldsson and an English company, Freeport plc (‘Freeport’). In August 1999 Arnoldsson and the managing director of Freeport concluded an oral agreement that the former would receive a GBP 500,000 success fee when the Kungsbacka factory shop opened. Freeport confirmed that oral agreement in writing but added three conditions to payment of the fee. Mr Arnoldsson accepted those conditions, one of which provided for the payment which he would receive to be made by the company which was to become the owner of the Kungsbacka site. Later Freeport sent Mr Arnoldsson written confirmation of the agreement. The Kungsbacka factory shop is owned by a Swedish company, Freeport Leisure (Sweden) AB (‘Freeport AB’), which manages it and is in turn owned by one of Freeport’s subsidiaries, of which Freeport AB is a wholly owned subsidiary. Mr Arnoldsson has asked both Freeport AB and Freeport to pay the fee that he agreed with Freeport. Freeport AB refused the request on the ground that it is not a party to the agreement and that, furthermore, it did not exist when the agreement was concluded. Mr Arnoldsson brought an action before a Swedish District Court seeking an order against both companies jointly to pay him the sum of GBP 500,000 or its equivalent in Swedish currency, together with interest. To establish that that court had jurisdiction with regard to Freeport, Mr Arnoldsson based his action on Art 6(1) of Brussels I. Freeport pleaded that it was not established in Sweden and that the claims were not so closely connected as to confer jurisdiction on the Swedish courts. Freeport maintained that the action against it had a contractual basis, whereas the action against Freeport AB was based in tort, delict or quasi-delict, since there was no contractual relationship between Arnoldsson and that company. The difference in the legal bases of the actions against Freeport AB and Freeport was such as to exclude application of Art 6(1) since it could not be shown that the two actions were connected. The plea of inadmissibility was rejected by the court and Freeport’s first appeal was rejected. In the final appeal, the referring court sent some questions to the CJEU. In answer to the first question the CJEU said: “where a court’s jurisdiction is based on Art 2 of that Regulation, as is the case in the main proceedings, application of Art 6(1) of the Regulation becomes possible if the conditions set out in that provision and referred to in paras 39 and 40 of this judgment are met, without there being any need for the actions brought to have identical legal bases.” The conditions in those paras are: “it must be ascertained whether, between various claims brought by the same plaintiff against different defendants, there is a connection of such a kind that it is expedient to determine those actions together in order to avoid the risk of irreconcilable judgments resulting from separate proceedings (Kalfelis, para 13). The Court has had occasion to point out that, in order that decisions may be regarded as contradictory, it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in the context of the same situation of law and fact (Roche Nederland, para 26).” In relation to the second questions the Court said: “Art 6(1) …applies where claims brought against different defendants are connected when the proceedings are instituted, that is to say, where it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings, without there being any further need to establish separately that the claims were not brought with the sole object of ousting the jurisdiction of the courts of the Member State where one of the defendants is domiciled.”