EUPillar B.V.B.A. DMT v. ACIM S.A. and REPPEL B.V.

Summary

The first respondent, ACIM, is a supplier who put an end to the exclusive distribution agreement of undetermined duration with the distributor, DMT, for gross negligence. DMT then sued ACIM in payment of the compensations provided by the Belgian Act of 27 July 1961 on the unilateral termination of exclusive distribution agreements of undetermined duration, i.e. 60,945.68 EUR in compensation in lieu of notice and 106,654.94 EUR in equitable additional remuneration, as well as payment of an invoice in the amount of 2,097.88 EUR plus interest. By way of counterclaim, ACIM sues DMT in payment of 14,498.11 EUR in unpaid invoices. DMT also sued REPPEL for acting as an accomplice to the wrongful termination of the agreement (“derdemedeplichtigheid”- “tierce-complicité”). The first judge granted DMT a compensation in lieu of notice equivalent to three months. The claim against REPPEL was dismissed. On appeal, ACIM contests the international jurisdiction of the court. ACIM also widens its initial counterclaim and also seeks damages in the amount of 500,000 EUR for unfair trade practices allegedly committed by DMT just before the termination of the agreement. DMT and REPPEL reached a settlement so that neither party appeals. ACIM refers to a choice of court clause in the distribution agreement. The first judge had decided that this clause offered the parties the possibility to sue before the courts of Luxembourg in the Grand Duchy of Luxembourg, but did not oblige the parties to do so. The clause stipulates that proceedings “may” be brought before those courts. Now that one of the parties sued before a different court, the court seised is allowed to examine its jurisdiction without regard to that clause. The distribution agreement has to be performed in – among others – Belgium. The distribution agreement is a framework agreement for the subsequent sale of goods, and it can be characterised as an agreement for the provision of services. The compensation claimed by DMT is nothing more than an alternative way of performance of the contract. This contract in particular was to be performed in several countries. The Belgian courts have in any case jurisdiction over the part of the contract that had to be performed in Belgium. The claim insofar as it concerns the performance in third countries, is so closely related to the part over which the Belgian courts do have jurisdiction, so that the whole dispute should be decided by the present court. The Court of Appeal fully agrees with the analysis given by the first judge. In light of the formulation of the choice of court clause, the parties preserve the possibility to sue before different courts on the basis of Art. 2 or 5(1)(a) Brussels I. Brussels I takes precedence over the exclusive jurisdictional ground in favour of the Belgian courts provided by Art. 4 of the Belgian Act of 27 July 1961 – nonetheless, the Belgian courts do have jurisdiction in the present case, on the basis of Art. 5(1)(a). The “obligation in question” underlying DMT’s claim within the meaning of Art. 5(1)(a) Brussels I is the obligation to give a reasonable notice period in case of termination of an exclusive distribution agreement, which follows from Arts. 2 and 3 of the Belgian Act of 27 July 1961. This obligation had to performed in Belgium. Short critique: At the time this judgment was given, there was a controversy in Belgian case law on the application of art. 5(1)(a)/5(1)(b) to exclusive distribution agreements. In its judgment of 19 December 2013 in C-9/12 (Corman-Collins), the ECJ put an end to the discussion and confirmed that such agreements are contracts for the provision of services within the meaning of art. 5(1)(b), second indent Brussels I.