C-150/80

JUDGMENT OF 24. 6. 1981 — CASE 150/80

defendant not only contests the requirements which agreements con- court's jurisdiction but also makes ferring jurisdiction must meet, Con- submissions on the substance of the tracting States are not free to lay action, provided that if the challenge down formal requirements other than to jurisdiction is not preliminary to those contained in the Convention. any defence as to the substance it When those rules are applied to does not occur after the making of provisions concerning the language to the submissions which under national be used in an agreement conferring procedural law are considered to be jurisdiction they imply that the the first defence addressed to the legislation of a Contracting State may court seised. not allow the validity of such an agreement to be called in question solely on the ground that the 3. Since the aim of Article 17 of the language used is not that prescribed Convention is to lay down the formal by that legislation.

In Case 150/80

REFERENCE to the Court under the Protocol of 3 June 1971 on the Interpretation by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters by the Hof van Cassatie [Court of Cassation], Belgium, for a preliminary ruling in the action pending before that court between

ELEFANTEN SCHUH G M B H , Kleve, Federal Republic of Germany,

and

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of its registered office at Genk-Zwartberg the procedure and the observations in Belgium. submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Difficulties arose concerning inter alia Justice of the European Communities the assignment of his contract of may be summarized as follows : employment to Elefant SA which led Elefanten Schuh GmbH to dismiss Mr Jacqmain without notice on urgent grounds in December 1975.

On 26 May 1976 Elefanten Schuh, the Article 10 of the Decree of 19 July 1973 first defendant in the action, stated its governing the use of languages, the case as to the substance of the claim. By contract of employment should have a further document lodged on 1 March been written in Dutch and that Article 10 1977 it invoked the jurisdiction clause aforesaid provides that any act or contained in the contract in order to document not written in Dutch is null challenge the jurisdiction ratione loci of and void, including therefore, documents the Arbeidsrechtbank Antwerp. which, under the legislation of 18 July 1966 on the use of languages, were already irregular at the time when the decree governing the use of the The tribunal decided that under the languages came into force. Consequently terms of Article 627 (9) of the the contract of employment written in Gerechtelijk Wetboek [Belgian Judicial German was null and void and the clause Code] the claim might be made to "the conferring jurisdiction contained therein court . . . of the place designated . . . for was invalid so that Article 17 of the the pursuance of the occupation"; that it Brussels Convention could not apply. was not contested that the plaintiff pursued his occupation in the service of the first defendant inter alia within the territorial jurisdiction of the Arbeids- The two companies appealed in cassation rechtbank Antwerp and that, under but the appeal by Elefant SA was Article 630 of the Belgian Judicial Code, declared inadmissible for being out of no agreement to the contrary between time. the parties could deprive the plaintiff of the right to bring his claim before that tribunal. The tribunal accordingly It appears from the order for reference rejected the plea as to jurisdiction and that as its first submission in cassation ordered the two companies to pay most Elefanten Schuh GmbH contended that of the damages claimed. the validity of an agreement conferring exclusive jurisdiction is governed uniformly, as regards all the Member States of the European Economic 2. Whilst acknowledging that under Community, by Article 17 of the Article 17 of the Brussels Convention of Convention of 27 September 1968 and 27 September 1968 the parties may by cannot be affected by rules on labour written agreement derogate from the relations between employers and workers rules on jurisdiction contained in the promulgated by a Member State. Belgian Judicial Code, on appeal the Arbeidshof [Labour Court] Antwerp upheld the jurisdiction of the Arbeids- The respondent in cassation in turn put rechtbank Antwerp to entertain the case forward two grounds for the inadmis- in pursuance of Article 627 (9) of the sibility of that submission. Belgian Judicial Code.

Owing to the fact that the appellant in A court other than the court first seised cassation did not challenge the territorial may also, on the application of one of jurisdiction of the Arbeidsrechtbank the parties, decline jurisdiction if the law Antwerp until it lodged its conclusions at of that court permits the consolidation of the hearing of the tribunal on 1 March related actions and the court first seised 1977, the respondent in cassation, before has jurisdiction over both actions. the Arbeidshof, relied upon Article 854 of the Belgian Judicial Code by which the lack of jurisdiction of the court For the purposes of this article, actions seised of the case should be pleaded are deemed to be related where they are before all other objections or defences so closely connected that it is expedient except when it is a matter of public to hear and determine them together to policy. The court which made the avoid the risk of irreconcilable judgments reference held that the rules contained in resulting from separate proceedings." Article 627 (9) of the Judicial Code, concerning the territorial jurisdiction of courts in disputes over contracts of With the questions set out below employment, are not a matter of public (numbered 2) in mind the national court policy and then raised questions observes that the third paragraph of (numbered 1) on the interpretation of Article 22 defines the term "related" in the Brussels Convention which are set virtually the said terms as Article 30 of out below. the Judicial Code and that the term

JUDGMENT OF 24. 6. 1981 — CASE 150/80

As regards the submission in cassation If the agreement conferring jurisdiction itself, the court which made the was concluded for the benefit of only reference held that the Decree of 19 July one of the parties, that party shall retain 1973 of the Cultuurraad voor Neder- the right to bring proceedings in any landse Cultuurgemeenschap [Culture other court which has jurisdiction by Council for the Netherlands Cultural Community], governing the use of virtue of this Convention." languages in relations between employers and employees, has application to natural and legal persons having a place of 3. The Hof van Cassatie stayed the business in the Dutch-speaking area or proceedings and put the following which employs staff in that area; Article questions to the Court of Justice for a 2 of that decree provides that the preliminary ruling: language to be used in relations between employers and employees shall be Dutch; by Article 10 of the decree documents " 1 . (a) Is Article 18 of the Convention and acts which are not in accordance of 27 September 1968 on with the provisions of the decree are void Jurisdiction and the Enforcement and they shall be so declared by the of Judgments in Civil and court of its own motion; accordingly the Commercial Matters applicable court may not take cognizance of the if parties have agreed to confer content of a document which has been jurisdiction on a court within the drawn up in a language other than meaning of Article 17? Dutch. (b) Is the rule on jurisdiction contained in Article 18 Thus the submission raises a question on applicable if the defendant has the interpretation of Article 17 of the not only contested jurisdiction Brussels Convention which is set out but has in addition made below under 3. That article is worded as submissions on the action itself? follows: (c) If it is, must jurisdiction then be contested in limine litis ? "If the parties, one or more of whom is domiciled in a Contracting State, have, by agreement in writing or by an oral 2. (a) In application of Article 22 of agreement evidenced in writing, agreed the Convention can related that a court or the courts of a actions which, had they been Contracting State are to have jurisdiction brought separately, would have to settle any disputes which have arisen had to be brought before courts or which may arise in connexion with a of different Contracting States, particular legal relationship, that court or be brought simultaneously those courts shall have exclusive before one of those courts, jurisdiction. provided that the law of that

(b) Is that also the case if the parties The questions relating to Article 18 of the to one of the disputes which Convention have given rise to the actions have agreed, in accordance with Article 17 of the Convention, that a court of another Con- The Government of the United Kingdom tracting State is to have suggests that the reply to question 1 (a) jurisdiction to settle that dispute? should be that if a court is satisfied that by entering an appearance a defendant intends to submit to its jurisdiction and 3. Does it conflict with Article 17 of thus to waive an agreement entered into the Convention to rule that an pursuant to Article 17, that court may agreement conferring jurisdiction on properly assume jurisdiction in accord- a court is void if the document in ance with Article 18. That conclusion which the agreement is contained is follows from generally accepted prin- not drawn up in the language which ciples of the law of contract. Further- is prescribed by the law of a more, a valuable indication of the likely Contracting State upon penalty of intention of the parties to the 1968 nullity and if the court of the State Convention is also to be found in the before which the agreement is relied pre-existing bilateral arrangements. For upon is bound by that law to declare example, by the terms of bilateral the document to be void of its own conventions entered into between the motion?” United Kingdom on the one hand and France, Belgium, the Federal Republic of Germany, Italy and the Netherlands on 4. The order for reference dated 9 June the other hand, the jurisdiction of the 1980 was entered on the Court register original court is to be recognized where on 24 June 1980. the defendant submitted to the jurisdiction by voluntarily appearing in In accordance with Article 20 of the the proceedings, and the fact that there Protocol on the Statute of the Court of was an agreement between the plaintiff Justice of the EEC written observations and the defendant attributing jurisdiction were lodged by the Government of the to a different court is no exception to United Kingdom, represented by R. D. this rule. Munrow, of the Treasury Solicitor's Office, acting as Agent, and by the Commission of the European Com- In the Commission's view, Article 18 of munities, represented by its Legal the Brussels Convention is also applicable Adviser, A. McClellan, acting as Agent, if the parties have decided by agreement assisted by H . Van Houtte of the which court shall have jurisdiction, in Brussels Bar. accordance with Article 17.

Moreover, if the rule on supplementary The English text, which, like the Danish jurisdiction contained in Article 18 were and Irish texts, will be authentic on the not to apply in the case of an agreement entry into force of the Convention of 9 on jurisdiction in accordance with Article October 1978 on the accession of the 17, that would jeopardize the very object three new Member States, is worded as of Article 18 which is to widen the range follows : of courts having jurisdiction and consequently reduce legal uncertainty as regards the rules on jurisdiction (see "This rule shall not apply where Jenard Report on the Convention of appearance was entered solely to contest 27 September 1968, Official Journal the jurisdiction . . ." 1979, C 59, p. 1 at p. 38). The Danish text is similarly worded, Such a flexible interpretation of Article whilst the Irish text is closer to the 18 would not be in contradiction with French. the strict formalism required by Article 17 for an express jurisdiction agreement. It is arguable on the French text that a That difference is explained by the very defendant who enters an appearance to nature of the two kinds of prorogation contest the court's jurisdiction may at the of jurisdiction; one is founded on the same time submit arguments on the law and the other requires a contractual substance of the case without thereby basis. conferring jurisdiction on the court. But the English text, like the German, Italian As regards Question 1 (b) the and Dutch texts, requires the defendant to confine his defence to the question of Government of the United Kingdom first jurisdiction. of all points out that there is a certain discrepancy between the different language versions of the second sentence Although it does not seem possible to the of Article 18. The French text reads: Government of the United Kingdom to advocate an interpretation of Article 18 "Cette règle n'est pas applicable si la based only on the French text it comparution a pour objet de contester la nevertheless believes that the provision compétence . . . " should be flexibly applied. Article 18 would be better served if the defendant were allowed to plead on the substance but the other three texts which are at where it is clear that the plea as to the present authentic are worded as follows : substance is intended to be merely sub-

It is therefore the United Kingdom's Furthermore, the Jenard Report de- submission that, whilst Article 18 scribes the purpose of Article 18 in normally requires the challenge of neutral language which makes no jurisdiction to be made in isolation, it mention of the need for the plea to the should be interpreted in a flexible jurisdiction to stand alone: manner so as to permit arguments being also addressed to the substance without automatically providing a foundation of "Article 18 governs jurisdiction implied that jurisdiction in exceptional cases from submission. If a defendant where such arguments are clearly sub- domiciled in a Contracting State is sued sidiary to the main objective of in a court of another Contracting State contesting the jurisdiction of the court which does not have jurisdiction under seised. the Convention, two situations may arise: the defendant may either, as he is entitled to do, plead that the court has no jurisdiction under the Convention, in In the Commission's view it is not which case the court must declare that it possible in law for the defendant to does not have jurisdiction; or he may plead first on the substance and thereby elect not to raise this plea, and enter an implicitly recognize the jurisdiction of appearance. In the latter case, the court the court and then refute that will have jurisdiction." (Official Journal jurisdiction in the course of the 1979, C 59, p. 38.) proceedings. However it regards as excessively strict the view that a defendant who argues on the substance after challenging the jurisdiction of the There is moreover a risk, in the view of court seised has accepted the jurisdiction the Government of the United Kingdom, of that court. It points out that that too rigid an interpretation of Article specifically where Article 18 of the 18 might do injustice to the defendant Convention is concerned courts of the where proceedings are accompanied by Contracting States have already provisional or protective measures which confirmed that a defendant who denies the defendant can only prevent by jurisdiction may plead on the substance addressing arguments to the substance of of the case in the alternative (Bundes- the case. Difficulties might also arise if a gerichtshof, 3 March 1976, Recht der time-limit for the lodging of a defence internationalen Wirtschaft 1976, 447; runs out before the jurisdiction issue has Italian Court of Cassation, 23 June and been settled, or in the rather exceptional 10 November 1977, Giustizia Civile circumstance contemplated by Article 59 1978, No 1, pp. 44 to 47; Arron- of the Convention. Finally it is illogical dissementsrechtbank, Roermond, 31 that a court, which, having heard the October 1974, Nederlandse Jurispru- defendant, concludes that it lacks dentie 1975, No 405; Tribunale di jurisdiction, should nevertheless be auto- Bassano del Grappe, 13 February 1976, matically required to assume jurisdiction EEG — Documentatie No 36; Tribunale under Article 18 simply because the de Pinerolo, 31 March 1976, Rivista di defendant has not confined his argument Diritto Internazionale Privato e Pro- to the issue of jurisdiction but has cessuale 1977, No 1, p. 78).

As regards Question 1 (c) the Government of the United Kingdom and The question on Article 17 of the the Commission are both of the opinion Convention that jurisdiction must be contested in limine litis. However they refer to the Jenard Report (p. 38) as confirmation The Government of the United Kingdom that the precise point in time up to which first proposes that Question 3 should be the defendant may raise a plea to the re-phrased more generally as follows : jurisdiction should be left to the rules of procedure of the court seised of the proceedings. "Where an agreement satisfying the conditions of Article 17 and conferring exclusive jurisdiction in relation to a The questions relating to Article 22 of the dispute on the courts of one Contracting Convention State forms part of a contract which is void by the law of another Contracting State, does this allow the courts of that The Government of the United Kingdom other State to disregard the agreement observes that Questions 2 (a) and (b) are and to assume jurisdiction over the not questions on the interpretation of dispute in accordance with other Article 22 of the Convention as they are provisions of the Convention?" both concerned with the circumstances in which a court may assume jurisdiction. Article 22 however deals with the The government stresses that where circumstances in which a court may proceedings relating to the validity of an either stay its proceedings or decline agreement on attribution of jurisdiction, jurisdiction. Consequently the which is clearly a separate agreement, government believes that, worded as they are brought before a court other than the are, these two questions cannot be court having jurisdiction under Article answered. 17, the court seised should examine the validity of the agreement solely in the light of the requirements of Article 17. The Commission, too, believes that According to judgments of the Court of Article 22 does not constitute a basis for 14 December 1976 in Cases 24/76 founding jurisdiction which would allow (Estasis Salotti v RÜWA [1976] ECR claims, because they are related, to be 1831) and 25/76 (Segoura v Bonakdańan lodged otherwise than with the courts [1976] ECR 1851) those requirements having jurisdiction to entertain those must be strictly construed.

In either case, that is, where the contract in which the jurisdiction clause is embedded is valid or the jurisdiction Finally the Commission submits that the agreement considered separately is a possibility that Belgium might be able to valid one, it may be disregarded only impose the use of Dutch, on pain of in exceptional circumstances, where nullity, as an additional requirement for its operation would manifestly be the validity of an agreement conferring incompatible with the public policy of jurisdiction when one of the parties is an the forum. The fact that the jurisdiction employer or employee resident in the clause, or the agreement of which it Dutch-speaking area would pre-suppose forms part, would be void under a rule the adoption of a Protocol to that effect of the national law of the court seised of like the one for Luxembourg.

JUDGMENT OF 24. 6. 1981 — CASE 150/80

III — Oral procedure purposes of the oral procedure by its Legal Adviser, A. McClellan, acting as Agent and assisted by H. Van Houtte of At the sitting on 31 March 1981 oral the Brussels Bar. argument was presented on behalf of the Commission of the European The Advocate General delivered his Communities, represented for the opinion at the sitting on 20 May 1981.

Decision

1 By judgment dated 9 June 1980 which was received at the Court on 24 June 1980 the Cour de Cassation [Court of Cassation] of Belgium referred to the Court for a preliminary ruling under the Protocol of 3 June 1971 on the Interpretation by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters several questions as to the interpretation of Articles 17, 18 and 22 of that Convention.

5 The Arbeidshof Antwerpen, to which an appeal from the judgment of the Arbeidsrechtbank was made, considered that pursuant to Article 17 of the Brussels Convention of 27 September 1968 the parties to the contract of employment could confer territorial jurisdiction on the court of Kleve by agreeing in writing to derogate from the rules on territorial jurisdiction contained in the Belgian Judicial Code. However, the Arbeidshof held that the German company could not rely on the jurisdiction clause on the ground that the contract of employment had to be written in Dutch by virtue of Article 10 of the Decree of 19 July 1973 governing the use of languages in relations between employers and employees, adopted by the Cultuurraad voor Nederlandse Cultuurgemeenschap [Culture Council for the Netherlands Cultural Community] (Moniteur Belge, p. 10089). The Arbeidshof took the view that Article 10, which provides that any act or document not written in Dutch is null and void, applies to documents drawn up before the decree entered into force. Consequently the contract of employment, drawn up in German, was null and void and the clause conferring jurisdiction contained therein was invalid.

6 The appeal in cassation lodged against the judgment of the Arbeidshof by the Belgian company was declared inadmissible by the Hof van Cassatie [Court of Cassation]. As the appeal in cassation lodged by the German company concerned the validity of the jurisdiction clause in particular the Hof van Cassatie decided in view of Article 17 of the Brussels Convention to put three questions to the Court of Justice.

8 Articles 17 and 18 form Section 6 of Title II of the Convention which deals with prorogation of jurisdiction; Article 17 concerns jurisdiction by consent and Article 18 jurisdiction implied from submission as a result of the defendant's appearance. The first part of the question seeks to determine the relationship between those two types of prorogation.

9 In the first sentence, Article 18 of the convention lays down the rule that a court of a Contracting State before whom a defendant enters an appearance is to have jurisdiction and in the second sentence it provides that that rule is not to apply where appearance was entered solely in order to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 16 of the Convention.

10 The case envisaged in Article 17 is not therefore one of the exceptions which Article 18 allows to the rule which it lays down. Moreover neither the general scheme nor the objectives of the Convention provide grounds for the view that the parties to an agreement conferring jurisdiction within the meaning of Article 17 are prevented from voluntarily submitting their dispute to a court other than that stipulated in the agreement.

ELEFANTEN SCHUH v JACQMAIN

1 1 It follows that Article 18 of the Convention applies even where the parties have by agreement designated a court which is to have jurisdiction within the meaning of Article 17.

12 The second and third parts of the question envisage the case in which the defendant has appeared before a court within the meaning of Article 18 but contests the jurisdiction of that court.

17 Therefore the answer to the second and third parts of Question 1 should be that Article 18 of the Convention must be interpreted as meaning that the rule on jurisdiction which that provision lays down does not apply where the defendant not only contests the court's jurisdiction but also makes submissions on the substance of the action, provided that, if the challenge to jurisdiction is not preliminary to any defence as to the substance, it does not occur after the making of the submissions which under national procedural law are considered to be the first defence addressed to the court seised.

Question 2

18 Question 2 is as follows:

"2. (a) In application of Article 22 of the Convention, can related actions which, had they been brought separately, would have had to be brought before courts of different Contracting States, be brought simultaneously before one of those courts, provided that the law of that court permits the consolidation of related actions and that court has jurisdiction over both actions?

(b) Is that also the case if the parties to one of the disputes which have given rise to the actions have agreed, in accordance with Article 17 of the Convention, that a court of another Contracting State is to have jurisdiction to settle that dispute?"

ELEFANTEN SCHUH v JACQMAIN

23 Article 17 stipulates that the agreement conferring jurisdiction must take the form of an agreement in writing or an oral agreement evidenced in writing.

24 According to the Report on the Convention submitted to the Governments of the Contracting States at the same time as the draft Convention those formal requirements were inserted out of the concern not to impede commercial practice, yet at the same time to cancel out the effects of clauses in contracts which might go unread, such as clauses in printed forms for

JUDGMENT OF 24. 6. 1981 — CASE 150/80

business correspondence or in invoices, if they were not agreed to by the party against whom they operate. For those reasons jurisdiction clauses should be taken into consideration only if they are the subject of a written agreement, and that implies the consent of all the parties. Furthermore, the draftsmen of Article 17 were of the opinion that, in order to ensure legal certainty, the formal requirements applicable to agreements conferring jurisdiction should be expressly prescribed.

25 Article 17 is thus intended to lay down itself the formal requirements which agreements conferring jurisdiction must meet; the purpose is to ensure legal certainty and that the parties have given their consent.

26 Consequently Contracting States are not free to lay down formal requirements other than those contained in the Convention. That is confirmed by the fact that the second paragraph of Article 1 of the Protocol annexed to the Convention expressly prescribes special requirements of form with regard to persons domiciled in Luxembourg.

On those grounds,

THE COURT,

in answer to the questions referred to it by the Hof van Cassatie by judgment of 9 June 1980, hereby rules:

1. Article 18 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters applies even where the parties have by agreement designated a court which is to have jurisdiction within the meaning of Article 17 of that Convention.

2. Article 18 of the Convention of 27 September 1968 must be interpreted as meaning that the rule on jurisdiction which that provision lays down does not apply where the defendant not only contests the court's jurisdiction but also makes submissions on the substance of the action, provided that, if the challenge to jurisdiction is not preliminary to any defence as to the substance, it does not occur after the making of the submissions which under national procedural law are considered to be the first defence addressed to the court seised.

3. Article 22 of the Convention of 27 September 1968 applies only where related actions are brought before courts of two or more Contracting States.

O P I N I O N O F ADVOCATE GENERAL SIR G O R D O N SLYNN DELIVERED O N 20 MAY 1981

My Lords, The appellant in the proceedings before the court making the reference, This case was referred to the Court by Elefanten Schuh GmbH, is a company the Hof van Cassatie, Brussels by order incorporated under German law. I refer dated 9 June 1980 in accordance with to the appellant as "the German Article 3 of the Protocol of 3 June 1971 Company." It maintains its registered on the Interpretation of the Convention office in Kleve and is engaged in the of 27 September 1968 on Jurisdiction shoe business. The respondent, Pierre and the Enforcement of Civil and Jacqmain, lives in Schoten in Belgium. Commercial Judgments ("the Conven- tion"). It concerns three articles of the Convention: Articles 17 and 18, on prorogation of jurisdiction; and Article On 1 February 1970 the German 22, on the consolidation of related Company engaged Mr Jacqmain as its actions. commercial representative in Belgium