C-12/76

on the interpretation of the concept of 'place of performance of the obligation in question' within the meaning of Article 5 (1) of the Convention of 27 September 1968,

THE COURT

composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and F. Capotorti, Judges,

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

company Dunlop A.G. (hereinafter By interlocutory judgment dated 10 May referred to as 'Dunlop'), whose registered 1974 the Landgericht Hanau dismissed office is in Hanau, sent an order by letter the objection to jurisdiction. dated 29 April 1971 to Tessili for 310 women's ski suits. On 22 July 1974 Tessili appealed against this decision to the Oberlandesgericht Printed on Dunlop's letter were its Frankfurt am Main (Frankfurt am Main conditions of purchase containing in Higher Regional Court). particular the following clause: Dunlop cited Article 5 (1) of the 'Jurisdiction: the court in Hanau am Convention of 27 September 1968 on Main shall have jurisdiction to deal with Jurisdiction and the Enforcement of disputes arising from this contract'. Judgments in Civil and Commercial Matters which provides that a person domiciled in a Contracting State may, in Tessili completed the ski suits ordered another Contracting State, be sued in and sent them on 31 July 1971 to matters relating to a contract, in the Dunlop through the intermediary of a courts for the place of performance of transport undertaking appointed by the the obligation in question and the 21st latter. Dunlop took delivery on 18 Civil Senate of the Oberlandesgericht August 1971. considered that the matter should be brought before the Court of Justice Also on 31 July 1971 Tessili made out under Articles 2 (2) and 3 (2) of the an invoice which Dunlop received on 3 Protocol on the Interpretation by the August 1971 and on the back of which Court of Justice of the Convention of 27 Tessili's general conditions of sale were September 1968. By order dated 14 printed. These contained in particular January 1976 it stayed the proceedings the following clause: until the Court had given a preliminary ruling on the interpretation of the 'The court in Como shall have concept of 'place of performance of the jurisdiction in any dispute which may obligation in question' within the arise and the purchaser waives his right meaning of Article 5 (1) of the to have the dispute decided by any other Convention. court whether by means of a consolidation order or by joinder of The order of the Oberlandesgericht actions'. Frankfurt am Main was registered at the Court on 13 February 1976. Dunlop considered that there were defects in the manufacture of the ski In accordance with Article 5 (1) of the suits delivered by Tessili and on 28 June Protocol of 3 June 1971 and Article 20 1973, after a voluminous exchange of of the Statute of the Court of Justice of correspondence with Tessili brought an the EEC written observations were action before the Landgericht Hanau lodged on 15 April 1976 by the (Hanau Regional Court) for annulment of Commission of the European the contract. Communities, on 21 April by Tessili, on 28 April$$$ by espace by the Government of the Tessili argued before the Landgericht Federal Republic of Germany and by that German courts had no jurisdiction Dunlop and on 20 May by the and in particular that the Landgericht Government of the United Kingdom of Hanau had no jurisdiction ratione loci. Great Britain and Northern Ireland. Dunlop, on the other hand, claimed that the Landgericht Hanau did have To the question whether Member States jurisdiction. which are not parties to the Convention

After hearing the report of the The respondent to the appeal, Dunlop, Judge-Rapporteur and the views of the observes that the concept of 'place of Advocate-General the Court decided to performance of the obligation in open the oral procedure without a question' may either be interpreted preparatory inquiry. uniformly on the basis of comparative law or be interpreted on the basis of II — Written observations sub­ principles of international law and in mitted to the Court particular of the substantive law applicable. The appellant Tessili takes the view that, having regard to the increase which has (a) The first proposition would no taken place or is sought in international doubt favour the unification of European commercial relations more particularly in law. But it would force the Court to go the context of the European Community, beyond the narrow sphere of procedural the objective of the Convention of 27 law which is the subject of the September 1968 is to lay down uniform Convention of 27 September 1968 and rules on jurisdiction applicable to the create also a substantive European law of settlement by courts of disputes arising obligations. Thus by the indirect means from these relations and likely to of case-law relating to procedural guarantee that in the future similar questions a law of obligations would situations will be dealt with in the same develop at the European level; the result way. Article 5 (1) of the Convention of such 'unification would not be the establishes the jurisdiction in simplification sought but on the contrary international law of the court of the place much greater complexity by reason of of performance; having regard to the the different rules obtaining in the unification which the Convention seeks Community. to achieve this rule implies the recognition in advance of a uniform In any event as regards more particularly jurisdiction in respect of every Article 5 (1) of the Convention, complete contractual relationship of international unification is already stultified by Article law regarded as a whole, both with regard I, relating to Luxemburg, of the Protocol to the performance originally provided annexed to the Convention of 27 for by the contract and any 'retroactive September 1968. settlement' particularly in the event of actions for breach of warranty in respect Far from leading to the unification of of defective goods. Community law this concept would

(b) The imperative of judicial certainty products to the purchaser's address and militates in favour of an interpretation of also bear the risks of transport. There is the concept of place of performance in no reason in such cases to regard the terms of the national law of conflict of vendor's domicile as the place of laws in question in each case and of the performance. corresponding substantive law. In this way, the possibility of the same legal In short only the place where the service concept's having quite different has actually been supplied may be meanings would be avoided. Uniform regarded as the place of performance; it interpretation, within the meaning of the depends on the facts of the case and in national substantive law applicable to particular on the nature of the particular each case, of the concept of place of obligation. Agreements between parties performance is no doubt capable of derogating from these factual elements leading to diverse results; this should not can be recognized only if they satisfy the however involve serious inconvenience formalities laid down in Article 17 of the for one of the two parties. The legal Convention. systems of all the States which are parties to the Convention have a system of rules With regard to obligations arising under of conflict of laws which meet the warranties this solution would lead to the requirements of pending litigation and felicitous result that these obligations for which the two parties to a case may must be performed at the place where sufficiently prepare themselves. the defective goods are. It is at this place that any defects may be most easily (c) Even if the Court of Justice were to examined and if appropriate made good. consider that the concept of place of performance is determined not by the It would therefore appear fair to regard as principles of the national rules of conflict the place of performance of obligations of laws and the substantive national law under warranties the place where the but by a uniform 'European' law it would defective goods are. not necessarily have to subscribe to the view that the place of performance of an The Government of the Federal Republic obligation on a vendor must be the of Germany would be happy to see the latter's domicile. Such an extensive Court of Justice hold that the concept of assimilation of the place of performance the court for the place of performance to the domicile of the debtor would within the meaning of Article 5 (1) of the deprive Article 5 (1) of the Convention of Convention depends on the national law any purpose: the jurisdiction of the court applicable in each case. There are of the debitor's domicile already follows however certain difficulties in this from Article 2 of the Convention. respect: the concept of 'place of performance' differs in the various To take the general view with regard to Member States since the provisions of contracts of sale that the domicile of the private international law and the vendor was the place of performance substantive law applicable in each case would lead to unjust and unacceptable have not yet been harmonized. The solutions. The desirable unification of the Federal Government likewise considers it concept of place of performance would in accordance with the given legal

position that the Court of Justice should law of the court before which the matter have recourse to the relevant national law is brought. The private international law in providing an interpretation. Article 5 may refer to the court's own substantive (1) of the Convention should however be law but it may also refer to the interpreted in such a way that there is substantive law of another State. only one court for the place of However, private international law does performance for one and the same party not necessarily contain concrete under obligation. provisions on the law applicable which on the contrary may very often be (a) In view of the wording of Article 5 determined only on the basis of (1) of the Convention, the expression principles formulated by legal writers and 'obligation' within the meaning of this case-law. In this case the law applicable provision must include the main may be determined in terms of the obligation and all the ancillary centre of gravity of the legal relationship. obligations on one of the parties.

The place of be performed as being the only place performance determined by the where he may be sued to enforce the substantive law is likewise the place of performance of his obligations under the contract. This solution however assumes performance within the meaning of Article 5 (1) of the Convention and thus that the interpretation of Article 5 (1) of provides the basis of the international the Convention does not depend on the jurisdiction of courts. question whether the substantive law applicable to the contract separates the different obligations arising from it and This interpretation would have the stipulates an individual place of advantage of enabling the place of performance for each of these performance to be determined at least obligations; it postulates on the contrary theoretically on the basis of the that there is within the meaning of the provisions of the substantive law of a Convention a uniform concept of the State. However, the various national legal court for the place of performance which systems determine the place of may be directly inferred from the performance variously. To determine its

TESSILI v DUNLOP

Such a uniform interpretation would achieve uniform application of the however involve difficulties: the Treaties to the factual or legal matters substantive laws of the States of the which may arise before national courts, Community are very different; a uniform but not to unify the substantive law of interpretation of the concepts used in the the Member States to which the Treaty Convention would very often be possible provisions are to apply. Both in the only in so far as there was a comparative context of the Convention of 27 study of the laws in force in the September 1968 and in that of the EEC

For although the jurisdiction. Regard must be had in this ruling would be for the purpose of respect to the main service owed in each establishing jurisdiction under the case by a party or to the centre of gravity Convention, that jurisdiction is by Article of his obligation. Recourse would thus be 5 (1) founded on a duty to perform an

obligation as between the parties to a A uniform interpretation of Article 5 (1) contract. Seeing that national laws at of the Convention and the taking into present differ on where performance is to account of the national law on the place take place, the ruling given by the Court of performance as a matter of would result in a change of the law of comparative study leading to a uniform some, perhaps all, of the Member States; Community rule would have undesirable the effect of the ruling would extend to consequences. It is true that, if national all aspects of performance of contracts of courts apply their national law in the way the type in question and would have suggested by the Government of the repercussions even beyond the United Kingdom, they could arrive at performance of the contract to other different results on the same facts and aspects of the law which are directly or that there would consequently still be indirectly linked with performance. some lack of uniformity. Greater uniformity of application can, however, ultimately be achieved by the adoption of Moreover, the question where perfor­ uniform rules throughout the mance is to take place would call for a Community on the choice of law separate answer for every different type of applicable to contractual obligations. By contractual relationship, and would in adopting the method of ascertainment of every instance ultimately be a matter to the nature and place of performance of be referred to the Court of Justice. obligations which the United Kingdom Serious uncertainty would be introduced into the law. has suggested, national courts would then, on any given facts, arrive at the same result in the great majority of cases. In the present case the Court should confine itself to laying down the method The United Kingdom does not regard it by which national courts must as profitable to put forward any themselves arrive at the appropriate arguments as to what should be the place answer on the facts before them. What of performance of the seller's obligation the relevant obligations are under a in the type of contract which has come particular contract, which obligations before the Oberlandesgericht Frankfurt. under the contract are in issue in the The United Kingdom would not agree proceedings and where the relevant that, as suggested by that court, the obligations are to be performed should permanent residence of the seller is the be matters to be determined by the most appropriate place of performance. national court. That court should apply The place of performance of a national law, including the rules of contractual obligation should, for the private international law forming part of purposes of Article 5 (1), be determined that national law, to determine what law by the national court in which the governs the contract. Applying the law so proceedings are instituted in accordance found to the contract, the national court with the law applicable to the contract; should then determine the nature of the and that applicable law should be obligations which flow from the contract determined by the rules of private and the place where those obligations are international law of the legal system of to be performed. Where the contract is the national court.

— and special jurisdiction — in the preliminary question whether the place present case, the court for the place of of performance has been determined. performance — the plaintiff having the According to the German private choice of the competent court. The international law the place of plaintiff has this choice provided that it performance is determined in accordance has not been agreed that a court of a with German law. Contracting State should have exclusive jurisdiction in accordance with Article 17 In this respect it should be noted that at least in German law there is not of the Convention; it is for the Oberlandesgericht Frankfurt to decide necessarily only one place of per whether this is so in the present case. formance of contracts containing mutual obligations. As regards the interpretation of Article 5 The Convention on the other hand has (1) it should be observed that the Convention itself contains no actual regard to the place 'of performance of the obligation in question'. definition of 'place of performance'.

It sphere which it governs. would thus be possible to avoid expressly determining in respect of each of the With regard to the express or implied obligations of a party the place of intention, the parties are, according to performance in terms of the private the legal systems of the Member States, international law of a State, which could free to determine the place of lead to a multiplicity of places of performance of their contractual performance of the contract and thus of obligations or, in the case of contracts courts having jurisdiction. containing mutual$$$ del point . obligations, to determine several places of performance. This interpretation finds support in the The Convention does not in any way objective of the Convention, which is to interfere with the parties' independence contribute to the unification of European in this matter. law and thus to have connected claims brought before and tried as far as With regard to the international purchase possible by one court. of goods, there is a uniform law, the Convention of The Hague of 1 July 1964 The question raised should be answered on the International Sale of Goods. as follows: According to the Oberlandesgericht Frankfurt this 'uniform law' does not Article 5 (1) of the Convention of 27 apply to the contract in question in the September 1968 must be interpreted as main action. meaning that as regards the determination of the 'place of There is as yet no uniform law of conflict performance of the obligation in of laws in the EEC in respect of question' reference must be made in the contractual obligations and the first place to the intention of the parties, Convention of 27 September 1968 does in the second place to relevant not alter the position since it is for the international Conventions and in the national court to settle according to its third place to the national law of conflict own law of conflict of laws the of laws. In so far as the latter is decisive

3 The German undertaking after taking delivery of the goods and selling some of them considers as a result of complaints from its customers that the suits delivered by the manufacturer are defective and do not correspond to the specifications agreed between the parties. For this reason it brought an action in its local court against the Italian manufacturer.

TESSILI v DUNLOP

4 The court by interlocutory judgment dated 10 May 1974 declared itself to have jurisdiction to hear the case whereupon the Italian undertaking brought an appeal before the Oberlandesgericht Frankfurt am Main. In the view of this latter court the question of jurisdiction raised must be settled in accordance with the provisions of the Convention. In its view there is no valid agreement between the parties conferring jurisdiction within the meaning of Article 17 of the Convention. On the other hand the Oberlandesgericht does not rule out the possibility that the court of first instance may have jurisdiction under Article 5 (1) of the Convention as being the place 'of performance of the obligation in question'. To settle this question it asks the Court of Justice to rule on the interpretation of that provision.

Procedure

5 The Republic of Ireland and the United Kingdom submitted observations during the written procedure and the Court therefore requested the parties in the main action, the Member States and the Commission to give their views on the question whether the new Member States which are not yet parties to the Convention are entitled to participate in proceedings relating to its interpretation.

The interpretation of the Convention in general

9 Article 220 of the EEC Treaty provides that Member States shall, so far as necessary, enter into negotiations with each other with a view to securing for the benefit of their nationals the establishment of rules intended to facilitate

the achievement of the common market in the various spheres listed in that provision. The Convention was established to implement Article 220 and was intended according to the express terms of its preamble to implement the provisions of that article on the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts or tribunals and to strengthen in the Community the legal protection of persons therein established. In order to eliminate obstacles to legal relations and to settle disputes within the sphere of intra-Community relations in civil and commercial matters the Convention contains, inter alia, rules enabling the jurisdiction in these matters of courts of Member States to be determined and facilitating the recognition and execution of courts' judgments. Accordingly the Convention must be interpreted having regard both to its principles and objectives and to its relationship with the Treaty.

10 The Convention frequently uses words and legal concepts drawn from civil, commercial and procedural law and capable of a different meaning from one Member State to another. The question therefore arises whether these words and concepts must be regarded as having their own independent meaning and as being thus common to all the Member States or as referring to substantive rules of the law applicable in each case under the rules of conflict of laws of the court before which the matter is first brought.

14 Having regard to the differences obtaining between national laws of contract and to the absence at this stage of legal development of any unification in the substantive law applicable, it does not appear possible to give any more substantial guide to the interpretation of the reference made by Article 5 (1) to the 'place of performance' of contractual obligations. This is all the more true since the determination of the place of performance of obligations depends on the contractual context to which these obligations belong.

JUDGMENT OF 6. 10. 1976 - CASE 12/76

15 In these circumstances the reference in the Convention to the place of performance of contractual obligations cannot be understood otherwise than by reference to the substantive law applicable under the rules of conflict of laws of the court before which the matter is brought.

Costs

16 The costs incurred by the Government of the Federal Republic of Germany, the Government of the United Kingdom of Great Britain and Northern Ireland and the Commission of the European Communities which have submitted observations to the Court are not recoverable and, as these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Oberlandesgericht Frankfurt am Main, the decision as to costs is a matter for that court.

On those grounds,

Pescatore Sørensen Mackenzie Stuart Capotorti

Delivered in open court in Luxembourg on 6 October 1976.

A. Van Houtte R. Lecourt

Registrar President