Agrégateur de flux

An action brought between parties to a contract in a scenario where the consent to at least some of the contractual terms was allegedly expressed by the plaintiff only on account of the dominant position of the defendant is to be considered as falling within the concept of ‘matters relating to contract’ [Article 7(1) of the Brussels I bis Regulation] or within the concept of ‘matters relating to delict or quasi-delict’ [Article 7(2) of the Regulation]?

In his Opinion delivered last Thursday, 10 September 2020, Advocate General Saugmandsgaard Øe addresses that question for the purposes of the reference for a preliminary ruling in the case C-59/19, Wikingerhof.

 

Legal and factual context

A company established under German law and operating a hotel in this Member State, Wikingerhof GmbH & Co KG, signs a contract with Booking.com BV, a company which its registered office in the Netherlands that operates a hotel reservation platform. On the basis of the contract, the hotel is to be listed on that platform. The general terms and conditions that are supposed to apply to the contract contain a clause according to which the place of jurisdiction for all disputes arising from that contract, with the exception of payment and invoice disputes, is Amsterdam.

Wikingerhof brings and action for cessation against Booking.com before German courts and argues that it expressed its consent to at least to some of the contractual terms only on account of the dominant position of the defendant. The plaintiff views some of the practices of the defendant in connection with hotel reservation intermediation as an infringement of competition law. It seeks an order restraining the defendant from carrying on with these practices.

The defendant objects, inter alia, to the jurisdiction of the courts seised in the matter. The first instance court agrees and rules the action inadmissible. It considers that the parties have concluded an agreement conferring jurisdiction and as a consequence the action should have been brought before the courts in Amsterdam.

The second instance court dealing with an appeal brought by the plaintiff also views the action as inadmissible, yet on the different grounds.

It considers that the German courts do not have jurisdiction under Articles 7(1) and (2) of the Brussels I bis Regulation. For the second instance court, the action seeks to change the content of the contract and to alter the defendant’s practices. The action in question should therefore receive a contractual qualification, yet ‘the place of performance’ within the meaning of Article 7(1) of the Regulation is not situated in Germany. For that court, the question of whether an effective agreement conferring jurisdiction was entered into is therefore irrelevant. It seems that this court considers that under no circumstances the German courts hold jurisdiction over the action brought by the plaintiff.

Ultimately, the case comes before the Federal Court of Justice (Bundesgerichtshof). The latter considers that the parties have not entered into an effective agreement conferring jurisdiction. The requirements relating to the form of such agreement, set in Article 25(1)(a) and (2) of the Brussels I bis Regulation have not been met. However, the Federal Court of Justice refers a preliminary question relating to the characterization of the action brought by the plaintiff:

‘Is Article 7(2) of [the Brussels I bis Regulation] to be interpreted as meaning that jurisdiction for matters relating to tort or delict exists in respect of an action seeking an injunction against specific practices if it is possible that the conduct complained of is covered by contractual provisions, but the applicant asserts that those provisions are based on an abuse of a dominant position on the part of the defendant?’

 

Opinion of Advocate General

According to the Opinion of AG Saugmandsgaard Øe, a civil liability action based on a breach of competition law falls within the scope of ‘matters relating to delict or quasi-delict’ within the meaning of Article 7(2) of the Brussels I bis Regulation, also when the plaintiff and the defendant are parties to a contract and the alleged anticompetitive conduct materializes itself in their contractual relationship.

The analysis that precedes this conclusion begins with an observation that the action brought by the plaintiff in the main proceedings is ‘based’ on the violation of the rules of German law prohibiting, like Article 102 TFEU, abuse of dominant position (point 19).

Next, the Opinion acknowledges that while it results from the case-law that the actions on anticompetitive conducts – including those constituting an infringement under Article 102 TFEU – fall within the scope of Article 7(2) of the Regulation, the particularity of the proceedings at hand stem from the fact that the alleged anticompetitive conduct occurred within the context of a contractual relationship (point 26).

After that, a reminder of case-law on Article 7(1) and (2) of the Regulation leads the AG to the judgments in Kalfelis and Brogsitter. Concerning the latter, he considers that two interpretations of the judgment are a priori possible (point 68). First, which the AG describes as ‘maximalist’, would imply that an action based on delict falls under the concept of ‘matter relating to contract’ within the meaning of Article 7(1) if the action concerns a harmful event that could (also) constitute a breach of a contractual obligation. In other terms, a national court would have to verify whether an action could also have been brought on the basis of breach of a contractual obligation. For the AG, that interpretation would imply that the contractual characterisation of a claim prevails over its characterisation as a matter relating to delict (point 69).

The AG rejects such ‘maximalist’ interpretation. First, an analysis allowing to establish a potential breach of a contractual obligation would be too burdensome at the stage where the jurisdiction is determined and could require consideration of the substance of the case (point 76). Next, under the Regulation, no hierarchy exists between the rules on jurisdiction provided for in Articles 7(1) and (2) (point 79). In this context, the AG resorts to an argument based on the idea that the solution adopted in relation to the rules on jurisdiction would have to be followed in relation to the conflict-of-laws rules of the Rome I and Rome II Regulations: the contractual characterisation would have to prevail also under these Regulations (points 81 and 82).

As a consequence, the AG pronounces himself in favour of a second interpretation of the judgment in Brogsitter that he describes as a ‘minimalist’ one. Here, an action would fall within the scope of Article 7(1) of the Regulation where ‘the interpretation of the contract […] is indispensable to establish the lawful or, on the contrary, unlawful nature of the conduct complained of against the [defendant] by the [plaintiff]’ (point 70).

At points 90 et seq., the AG describes the method of characterisation that results from his ‘minimalist’ interpretation of the judgment in Brogsitter. He discusses the cases where a plaintiff invokes rules of substantive law in his submission of action and where he or she does not – according to the AG, in the latter scenario, his method does not change fundamentally. He argues that on the basis of other elements of the submission of action, a judge has to identify the ‘obligation’ relied on by the plaintiff (point 96).

At points 100 and 101, the AG furtherly explains and recaps the method: where the plaintiff invokes, in his submission of an action, rules of substantive law imposing a duty on everyone and it does not appear ‘indispensable’ to establish the content of a contract in order to assess the lawful or unlawful nature of the conduct alleged against the defendant, the action is based on a non-contractual obligation (the Opinion uses the term ‘obligation délictuelle’) and therefore falls within the scope of ‘matters relating to delict or quasi-delict’ within the meaning of Article 7(2) of the Brussels I bis Regulation. However, where, irrespective of the rules of law relied on, a judge can assess the legality of the conduct only by reference to a contract, the action is essentially based on a ‘contractual obligation’ and therefore falls within the scope of ‘matters relating to a contract’ within the meaning of Article 7(1) of the Regulation.

It is yet to be seen to what extent the importance of the rules of substantive law invoked by a plaintiff will play a role in the future judgment of the Court. In any case, on the basis of these findings, the AG concludes that the contractual characterisation of the action brought by the plaintiff before the German courts should be rejected.

The Opinion can be found here (no English version yet).

 

On a side note…

The lecture of the Opinion presented above raises a point that could on its own inspire an interesting discussion. It seems that, for the AG, what is true under the Brussels regime, should also stand as true under the Rome I and II Regulation. In fact, an argument relating to the consistency between the solutions adopted with regards to the Brussels I bis and Rome I/II Regulations is invoked in the Opinion in order to reject the interpretation which, for the AG, would imply the priority of contractual characterisation over non-contractual characterisation (see points 81 and 82).

Against this background, in his Opinion in Bosworth and Hurley (points 91 to 103), AG Saugmandsgaard Øe seemed to consider that the contractual characterisation of an action should be favoured over the non-contractual characterisation where an individual contract of employment is at stake. That consideration was made in relation to the rules of jurisdiction and more precisely – to Article 18 of Lugano II Convention. As it was not necessary to answer the preliminary question that inspired the aforementioned considerations of the AG, the Court did not have an opportunity to clarify in its Judgment whether such preference of contractual characterisation does indeed occur.

Yet, if that is the case and the argument on the consistency of solutions adopted under the Regulations is valid, should the Rome I and II Regulations be read as implying a priority (or even exclusivity) of a contractual characterisation also for the conflict-of-laws purposes in a situation where a harmful conduct concerns employee – employer scenario?

The Faculty of Law of the University of Zagreb will hold a conference on Applicable Law in Cross-Border Insolvency Proceedings on 18 and 19 September 2020. Those interested in attending the conference may do so either in person or online.

Speakers include Paul Omar (INSOL Europe), Ignacio Tirado (Secretary-General UNIDROIT), Miha Žebre (European Commission), Andreas Piekenbrock (University of Heidelberg), Jasnica Garašić (University ofZagreb), Francisco Garcimartín (Autonomous University of Madrid), Edward Janger (Brooklyn Law School), John Pottow (University of Michigan), Bartosz Groele (Tomasik & Pakostewicz & Groele), Zoltan Fabok (DLA Piper Posztl, Nemescsói, Györfi-Tóth & Partners), Miodrag Đorđević (Supreme Court of the Republic of Slovenia), Leif M. Clark (former US Bankruptcy Judge), Simeon Gilchrist (Edwin Coe LLP), Renato Mangano (University of Palermo), Rodrigo Rodriguez (University of Lucerne) and Gerry McCormack (University of Leeds).

8 sept 2020 CCIP-CA RG 1906635Download

The International Commercial Chamber of the Court of Appeal of Paris (France) delivered a few days ago (8 September 2020) a decision (RG 19/06635) on jurisdiction clauses.

Summary / Resumé: “This case involved a company incorporated under Belgian law and a company incorporated under Emirati law. The latter signed a letter of guarantee for its Gabonese subsidiary in favor of the Belgian company, thereby securing the performance of a telecommunications services contract signed between the Gabonese subsidiary and the Belgian company. This contract stipulated a jurisdiction clause in favor of the Paris courts. Although the Emirati company (the guarantor) did not sign the contract containing the jurisdiction clause, the International Commercial Chamber of the Court of Appeal of Paris decided that the French court had jurisdiction, considering that the said clause was enforceable against it in respect of the warranty action brought by the Belgian company.

The ICCP-CA held that the agreements, although distinct, were intimately linked, as one conditioned the second and vice versa. As a result, it found that both agreements constituted “the Agreement”, so that their existence and performance were only justified by the overall scheme of the operations. It considered that these two acts could be qualified as an indivisible contractual whole, as the parties had intended to include the two contracts in a single transaction, thus rendering the jurisdiction clause stipulated in the Agreement enforceable against the guarantor, which had, furthermore, expressly agreed to the “terms and conditions” and had therefore been aware of it ».

The decision (in French) is attached to this post. 

Saugmandsgaard AG opined yesterday in C-59/19 Wikingerhof v Booking.com (no English version of the Opinion at the time of writing). At issue is whether allegations of abuse of dominant position create a forum contractus (Article 7(1) Brussels Ia) or a forum delicti (A7(2) BIa).

I published on jurisdiction and applicable law earlier this year and I am as always genuinely humbled with the AG’s (three) references to the handbook.  Wikingerhof submits inter alia that it only ever agreed to Booking.com’s general terms and conditions (‘GTCs’) because Booking.com’s dominant position leaves it no choice. And that it had most certainly not agreed to updates to the GTCs, effected via amendments on the ‘Extranet’, which is the portal via which the hotel may update its information and retrieve reservations.

At 16 of its referral, the Bundesgerichtshof holds acte clair and therefore without reference to the CJEU that there is no durable record of the alleged consent by Wikingerhof of the amended GTCs, including choice of court. Booking.com claimed these amounted to a ‘form which accords with practices which the parties have established between themselves’ pursuant to Article 25(1)(b). This finding echoes the requirements of housekeeping which I signalled yesterday.

In my 2020 paper I point out (p.153) inter alia that in the context of Article 25’s choice of court provisions, the CJEU in C-595/17 Apple v eBizcuss suggested a fairly wide window for actions based on Article 102 TFEU’s prohibition of abuse of dominant position to be covered by the choice of court. At 28 in Apple v eBizcuss: ‘the anti-competitive conduct covered by Article 102 TFEU, namely the abuse of a dominant position, can materialise in contractual  relations that an undertaking in a dominant position establishes and by means of contractual terms’. The AG as I note below distinguished Apple on the facts and applicable rule.

In the request for preliminary ruling of the referring court, CJEU C-548/12 Brogsitter features repeatedly. The Bundesgerichtshof itself is minded to hold for forum delicti, given that (at 24 of its reference)

‘ it is not the interpretation of the contract that is the focus of the legal disputes  between the parties, but rather the question of whether the demand for specific contractual conditions or the invoking of them by a company with an — allegedly — dominant market position is to be regarded as abusive and is therefore in breach of provisions of antitrust law.

In fact on the basis of the request, the court could have held acte clair. It referred anyway which gives the AG the opportunity to write a complete if  to begin with concise précis on the notion of ‘contract’ and ‘tort’ in BIa. At 38, this leads him to conclude inter alia that despite the need strictly to interpret exceptions to the A4 actor sequitur forum rei rule, these exceptions including the special jurisdictional fori contractus ut delicti, must simply be applied with their purpose in mind.

He calls it an application ‘assouplie’, best translated perhaps as ‘accommodating’ (readers may check this against the English version when it comes out) (viz tort, too, the AG uses the term assouplie, at 45, referring eg to CJEU C-133/11 Folien Fisher).

Further, the AG notes that in deciding whether the claim is one in contract, necessarily the claimant’s cause of action has an impact, per CJEU C-274/16 Flightright (at 61 of that judgment, itself refering to C‑249/16 Kareda which in turn refers to 14/76 De Bloos). The impact of claimant’s claim form evidently is a good illustration of the possibility to engineer or at least massage fora and I am pleased the AG openly discusses the ensuing forum shopping implications, at 58 ff. He starts however with signalling at 53 ff that the substantive occurrence of concurrent liability in contract and tort is subject to the laws of the Member States and clearly differs among them, making a short comparative inroad e.g. to English law, German law and Belgian /French law. (Michiel Poesen recently wrote on the topic within the specific context of the employment section).

The AG’s discussion of CJEU authority eventually brings him to Brogsitter. He he firmly supports a minimalist interpretation.  This would mean that only if the contractual context is indispensable for the judge to rule on the legality or not of the parties’ behaviour, is forum contractus engaged. This is similar to his Opinion in Bosworth, to which he refers. He rejects the maximalist interpretation. This approach puts forward that contractual qualification trumps non-contractual (arguably, a left-over of CJEU Kalfelis; but as the AG notes at 81: there is most certainly not such a priority at the applicable law level between Rome I and II) hence the judge regardless of the claimant’s formulation of claim, must qualify the claim as contractual when on the facts a link may exist between the alleged shortcomings of the other party, and the contract.

The maximum interpretation, at 76 ff, would require the judge to engage quite intensively with the merits of the case. That would go against the instructions of the CJEU (applying the Brussels Convention (e.g. C-269/95 Benincasa)), and it would (at 77) undermine a core requirement of the Brussels regime which is legal certainty. That the minimalist approach might lead to multiplication of trials seeing as not all issues would be dealt with by the core forum contractus, is rebuked at 85 by reference to the possibility of the A4 domicile forum (an argument which the CJEU itself used in Bier /Mines de Potasse to support the Mozaik implications of its ruling there) and by highlighting the Regulation’s many instances of support for forum shopping.

The AG then discusses abusive forum shopping following creative claim formulation at 88 ff. This  is disciplined both by the fact that as his comparative review shows, the substantive law of a number of Member States eventually will not allow for dual characterisation and hence reject the claim in substance. Moreover clearly unfounded claims will be disciplined by lex fori mechanisms (such as one imagines, cost orders and the like). This section confuses me a little for I had understood the minimalist approach to lay more emphasis on the judge’s detection of the claim’s DNA (along the lines of Sharpston AG in Ergo) than on the claim’s formulation.

The AG then continues with further specification of the minimalist approach, including at 112 a rejection, correct in my view (for the opposite would deny effet utile to A7(2), of the suggestion to give the A7(1) forum contractus the ancillary power to rule of over delictual (A7(2)) issues closely related to the contractual concerns.

Applying the minimalist test to the case at issue the AG concludes that it entails forum delicti, referring in support to CDC and distinguishing Apple v eBizcuss (which entails choice of court and relies heavily on textual wording of the clause).

It will be interesting to see which of the two possible interpretations of Brogsitter the CJEU will follow and whether it will clarify the forum shopping implications of claim formulation.

Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9.

 

Les dispositions de l'article 7, point 2, du règlement (UE) n° 1215/2012 doivent-elles être interprétées en ce sens que la personne qui, estimant qu'une atteinte a été portée à ses droits par la diffusion de propos dénigrants sur Internet, agit tout à la fois aux fins de rectification des données et de suppression des contenus, ainsi qu'en réparation des préjudices moral et économique en résultant, peut réclamer, devant les juridictions de chaque Etat membre sur le territoire duquel un contenu mis en ligne est ou a été accessible, l'indemnisation du dommage causé sur le territoire de cet État membre, conformément à l'arrêt eDate Advertising (points 51 et 52) ou si, en application de l'arrêt Svensk Handel (point 48), elle doit porter cette demande indemnitaire devant la juridiction compétente pour ordonner la rectification des données et la suppression des commentaires dénigrants ?

An online roundtable addressing the coordination between the Brussels Ia Regulation and other instruments of EU law will take place next 24 September, 3 p.m., on Teams channel.

The event is part of the EU co-financed “EN2BRIa” Project and scheduled within the PEPP Programme (Programme in European Private Law for Postgraduates). EN2BRIa mainly aims to shed light on how the relationship between the Brussels Ia Regulation and other EU law instruments is to be handled. The upcoming roundtable will showcase and discuss the preliminary results of the investigation conducted by the Partners of the Project, namely the Universities of Genoa, Nice, Valencia, and Tirana. Chaired by Chiara E. Tuo (Univ. Genoa), the roundtable features as speakers Jean-Sylvestre Bergé (Univ. Nice), Guillermo Palao Moreno (Univ. Valencia), Giulio Cesare Giorgini (Univ. Nice), Rosario Espinosa Calabuig (Univ. Valencia), Rosa Lapiedra Alcami (Univ. Valencia), Isabel Reig Fabado (Univ. Valencia), and Stefano Dominelli (Univ. Genoa).

Participation is free; more info, specially about the access to the Teams channel, may be found here.