C-214/89

On 28 July 1980 the statutes of IBH were altered in general meeting and a new clause was inserted into Article 4 of the statutes 1. Does a jurisdiction clause in the statutes with the following wording: 'By subscribing of a company limited by shares constitute for or purchasing shares or interim certificates an agreement conferring jurisdiction the shareholder submits with regard to all within the meaning of Article 17 of the disputes with the company or its organs, to the Convention, and must this question be jurisdiction of the courts ordinarily competent answered

* Original language: Italian.

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POWELL DUFFRYN

In view of the terms of the aforementioned provision, the question to be determined in (b) does the jurisdiction clause satisfy the the first place is whether the provision in requirement that the dispute must question contained in the statutes (the arise in connexion with a particular clause conferring jurisdiction) is of a legal relationship within the meaning contractual nature within the meaning of of Article 17; Article 17. In order to reply to that question it is essential to clarify as a preliminary point the scope of the concept of an agreement between the parties (literally 'if the parties ... have agreed ... ') referred to (c) finally, does the jurisdiction clause in Article 17. also cover claims to payment arising out of a contract for the subscription of shares and claims to the repayment of wrongly paid dividends? On that point it is clear that an autonomous meaning, and thus one common to all the Contracting States, may be attributed to concepts used in the Convention, where 3. The main point to be decided is therefore they are not defined by it, or regard may be whether a jurisdiction clause contained in had to national law. And it is well known the statutes of a company limited by shares that the Court has not in principle opted for constitutes an agreement conferring juris­ the 'national' interpretation or for an diction within the meaning of Article 17, autonomous interpretation, but has allowed thus complying with the formal that choice to be determined by an exam­ requirements laid down in that article. ination of the individual concepts in order to establish on a case-by-case basis which of the two options is likely to contribute most fully to the efficacy of the Convention. 1 Article 17, in the wording formulated in the 1 — See judgment in Case 12/76 Tessili v Dunlop ECR 1485, Accession Agreement in respect of paragraph 11.

Nevertheless, in its most recent judgment pective of the will of the individual. Thus, the Court has shown a clear preference for for example, it is not disputed that a the autonomous interpretation of the resolution adopted by a majority at a Convention, 2to the extent to which it may meeting of the company, which in principle be affirmed that practice in the matter has resists inclusion in any contractual classifi­ developed towards a situation in which cation, is binding on all the shareholders there exists a general rule (autonomous including those in disagreement, and on interpretation) subject to exceptions (renvoi persons who subsequently become share­ to national law). holders. Conversely, in the legal systems where the institutional concept prevails, whereby the statutes (and indeed the deed of incorporation) are sui generis acts having I therefore consider that the concept of an the value of objective law for the share­ agreement between the parties within the holders, it may be that certain clauses of the meaning of Article 17 must be interpreted in statutes are enforceable only against those an autonomous manner. In so doing, I am who expressly consented to them, in the taking account both of the objectives and of strict contractual sense of the term. the scheme of the Convention, and in particular, therefore, of the objective of avoiding divergences in the application of the Convention itself, and of thus ensuring greater legal certainty by means of a clear and uniform interpretation for all the The contractual-institutional dichotomy in Contracting States, and also of the general the categorization of corporate relationships principles common to all the national legal seems to me in the end rather theoretical systems. and thus of little relevance in the solution of the problem in question. What is important, in my opinion, is rather the fact that, 4. Indeed a comparison of the various legal regardless of the view adhered to and of the orders of the Member States demonstrates, academic discussion on this subject, there is on the one hand, that the nature of underlying the corporate phenomenon an corporate relationships and in expression of an intention to enter into legal particular — of relevance here — the relations which manifests itself in the deed relationships between a company and its of incorporation of the company, of which shareholders, are not treated uniformly, the statutes form an integral part, which although at the same time the differences do leads to close links being established not entail substantially different conse­ between the shareholders and between the quences. shareholders and the company, reciprocal obligations which are provided for most fully and completely in the statutes and, for present purposes, are in essence at least In fact, in the legal systems in which the analogous to contractual obligations in their contractual conception prevails, and they effects. are the largest majority, it is clearly estab­ lished that the obligation stemming from status as a shareholder may subsist irres­

that an action for the recovery of monies analogous to contract; and that, obviously, brought by an association having legal also applies to a clause conferring juris­ personality against one of its members was a diction such as the clause at issue in the matter relating to a contract. That judgment present proceedings. A clause of that kind has a twofold significance: on the one hand, may therefore be regarded as falling within the Court therein stated that, in order to the concept of an agreement between the ensure as far as possible the equality and parties, within the meaning of Article 17. uniformity of the rights and obligations arising out of the Convention for the Contracting States and the persons concerned, the concept of matters relating 6. Once it is established on the basis of the to a contract (referred to in Article 5 of the foregoing that a clause conferring juris­ Convention), cannot be interpreted 'simply diction contained in the statutes of a as referring to the national law of one or company falls within the concept of an other of the States concerned'; 4it then went agreement between the company and its on to state that 'membership of an asso­ shareholders, it is necessary to ascertain ciation creates between the members close whether that clause complies with the links of the same kind as those which are conditions laid down in Article 17 of the created between the parties to a contract' . 5 Convention.

I nevertheless consider that it is useful, before ascertaining that question, briefly to It is hardly necessary to point out that the review the Court's case-law in the matter. general and definitive terms of that description by the Court of corporate relationships preclude its scope from being confined to the concept of 'matters relating The Court has always held that the to a contract' in Article 5(1) of the provisions of the article in question must be Convention, which was specifically at issue interpreted in accordance with a restrictive in the Peters judgment. Ñor do I see any and strict criterion, given that they reason to depart in this case from the constitute an exception to the general abovementioned case-law. principle of the defendant's forum (Article 2) and the special jurisdiction referred to in Articles 5 and 6.

Moreover, the practical solutions adopted demonstrate that the Court has to some extent mitigated the strictness of the formal requirements laid down in the provisions in All that shows a very considerable (and question. necessary) attention and sensitivity to the demands of international trade and, more generally, to the actual functioning of the business world. For it is clear that an excessively strict application of the prin­ ciples laid down in Article 17 would render it practically impossible to apply clauses In fact it is clear from the relevant case-law conferring jurisdiction contained in that the consensus between the parties may contractual documents or documents arising be ascertained on the basis of presumptions out of contractual relationships (for example of logic (for example, where a party receives credit documents) which owing to their an advantage under a clause, he must be specific characteristics are not, and only presumed to have accepted that clause), 8or with difficulty could be, signed by one of on the basis of conclusive conduct (for the Contracting Parties. example where a written confirmation was not contested by the other party, or the acceptance of a benefit provided for in return for a clause conferring jurisdiction favouring the other party), 9or again on the basis of the application of reasonable care, 7. Having said that, it is also true that the as in the case of clauses which the party Court has always stressed that the reality of concerned could or should have been aware the consensus between the parties with of by exercising reasonable care, or of regard to the clause in question must be usages which he should or could have been proved, as must the fact that they agreed to 10 aware of, etc. it knowingly. The purpose is always to avoid a jurisdiction clause being inserted 7 — Ibid, at paragraphs 7 and 6 respectively. surreptitiously, that is to say in a situation in 8 — Judgment in Case 201/82 Gerling Konzern Speziale which one of the parties is not in fact aware Kreditversicherungs AG v Amministrazione del Tesoro dello Stato [1983] ECR 2503. of it, whether under the reasonable care 9 — Judgment in Case 313/85 Iveco Fiat SpA v Van Hool NV doctrine or under the presumption of [1986] ECR 3337 and the judgment in Case 221/84 Berghoefer Gmbh and Co KG v ASA [1985] ECR 2699. awareness of usages, as referred to in the 10 — Judgment in Case 24/76, cited above; judgment in Case Salotti and Tilly Russ judgments cited 71/83 Tilly Russ [1984] ECR 2417, and the judgment in Case 313/85, cited above. above.

Situations raising the problem of the validity and therefore the applicability of the dero­ gating provision may occur at various times in the life of the company. 8. Perplexity and disagreement have arisen on the question whether the clause assigning jurisdiction is to be deemed valid and enforceable also as against members who (a) voted against the insertion of the clause into The first situation relates, shall I say, to the the statutes; (b) have subsequently become Original' validity of the clause, that is to say members of the company, perhaps by its insertion in the statutes at the time when acquiring shares by telephonic means or, the company was incorporated. I do not according to the very infelicitous example consider that this situation poses particular given at the hearing, by finding the security problems where the corporate obligations by chance or even by stealing it, or by are essentially given a contractual desig­ subscribing for new shares on the occasion nation, as I have already suggested. As to of an increase of capital. Essentially, in both the formal requirements laid down in Article situations mentioned the conditions laid 17 it is inconceivable that those down in Article 17 are not satisfied: in the requirements, as elucidated by the Court, former situation there is no consensus since are not complied with in the case of a deed there was in fact disagreement; in the latter of incorporation of a company. there is no proof of actual consent to the clause.

Nor are any greater or different problems posed by the situation in which the clause assigning jurisdiction is introduced I do not share this perplexity and consider subsequently by an alteration of the statues instead that a clause assigning jurisdiction by a resolution of the general meeting, in contained in the statutes of a company is particular as regards those members binding on all its members, including future expressing by a vote in favour their members and members who were against agreement to the introduction of the clause. the introduction of the clause and who have In that case as well, it is undeniable that remained as shareholders. I consider

As regards, then, the situation in which a person becomes a shareholder on the acquisition of or the subscription for a It is perhaps superfluous to emphasize that, whilst a reference to general conditions of 11 — In addition to this part of the present proceedings, the argument refuted here was put forward by Thode, actually sale is doubtless necessary since those in a note on the order for reference before the Court (in conditions might even be missing, reference Wirtschafts- und Bankrecht VH B.I., 1989, p. 1425). Taking the opposite view, that is to say tending essentially to statutes contained in a document in the direction I have suggested, ana again commenting attesting the acquisition of or subscription on this same order for reference, are Geimer in Entscheidung zum 'Wirtschaftsrecht, 1989, p. 855), who for shares would constitute excessive and expressed the same opinion before the case before the Court arose (Geimer-Schütze, Internationale Urteilsaner­ unnecessary formalism. Even the most kennung, Vol. I, Munich 1983, p. 696), and others heedless and casual acquirer of shares is in (Kropholler, Europäisches Zivilprozeßrecht, Heidelberg Ì987, p. 152). In favour of the validity of an arbitration fact well aware of the fact that he is always clause in statutes, in the light of a provision on formal requirements for oppressive clauses analogous to Article 17, see Italian Court of Cassation, Judgment of 3 February 12 — See to that effect Geimer-Schütze, Internationale Urteil­ 1968, No 353 in Giustizia Civile, 1968, p. 179. sanerkennung, loc. cit., p. 940.

On the other hand, it is precisely the In particular, to seek the consent of the principle of equality between shareholders individual shareholder in the traditional together with the requirements of trans­ manner, applying to the jurisdiction clause parency emphasized at the outset, which the criteria used for the contract of a sale of have inspired the most enlightened legis­ a consignment of beetroot, would lead latures to affirm the criterion of forum inexorably and primarily to an intolerable societatis. Indeed it is well known that the duality of regimes as between shareholders. exclusive or concurrent jurisdiction of the That would be in this way: although falling court of the place in which the company has within the sphere of Article 17, such a its principal office is consistently applied in clause would be enforceable only against disputes between members and as between those persons taking part in the adoption of the company and its members, irrespective, the statutes contemporaneously with the evidently, of the nature of the dispute and deed of incorporation, or in the case of a of whether the company is the plaintiff or clause introduced subsequently, only against 14 the defendant. those expressing a vote in favour of such a clause. But not only in that way: in the case 13 — Ibid, at paragraphs 24 and 25. of subsequent shareholders acquiring 14 — In Belgium (exclusive) jurisdiction is conferred on the existing shares it may be possible to come to court competent for the principal office or the main estab­ lishment (Article 628 of the Judicial Code); in Denmark the conclusion that such a clause is Article 238 of the Code of Civil Procedure provides for enforceable against them or not depending the concurrent jurisdiction of the court of the place in which the registered office is situated, as does Germany in on whether they acquired the shares of Article 22 of the Zivilprozessordnung; and the same may members in respect of whom that clause was be said of Luxembourg (Article 36 of the Code of Civil Procedure) and of the Netherlands (Article 126 of the applicable; clearly that unacceptable result Code of Civil Procedure); in Italy the general jurisdiction rule applies to companies (Article 19 of the Code of Civil would be achieved, for example, if the Procedure) and to cases between shareholders (Article 23).

Nor obviously would it be reasonable to suggest that each shareholder, in the process Thus, the original convergence of interests of acquiring that status, should have to and the identical legal position of the subscribe to an express and specific members (equality of status subsists not acceptance of the derogation of jurisdiction merely as between the founder members at in favour of the forum societatis. Such a the time of incorporation but also as solution, which has already been by-passed between them and persons joining the by the Court's case-law, would in any event company subsequently since the same be unfeasible having regard to the methods community of interests in pursuit of and techniques applicable to the movement common ends extends to them as well) of securities, and would not eliminate the include an inherent possibility of sacrificing two-fold regime as between shareholders: in the interest of the individual seen in the essence it would amount to affirming the light of the objectives pursued by the radical impossibility for a company limited company which are in any event common to by shares to enjoy the benefit of a clause of all the participants. the type now before the Court.

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POWELL DUFFRYN

of the organs of the company adopted in Convention are fulfilled if the corporate accordance with the provisions of the will, that is to say the expression of the statutes and of the law concerning the overall will of the shareholders, has been formation of the corporate will. arrived at in conformity with the rules of national law applicable in that respect.

11. Corporate logic and its underlying prin­ ciples, as I have described them, clearly demonstrate that the consent of the parties That reference to the applicable national to the statutes, thus to the rules governing law, in the terms stated, seems to me the functioning of the company, constitute essential in order to establish the valid the expression of the collective will of the formation of the corporate will (the shareholders namely the corporate will. provisions governing its formation and, Similarly, it is the corporate will, and the specifically the majorities required, being acts giving expression to it, which regulate different in the various Member States) and, the obligations as between members and at the same time, specifically to mark the company, and, again, it is the corporate will limits thereof. It is in fact hardly necessary in which the contractual origins of the to stress that any such reference may in no company are subsumed. So much is that so way enable the Contracting States to impose that it is inconceivable to seek an agreement different formal requirements going beyond between the parties in the strict sense of the those provided for in Article 17 as inter­ term, as an exclusive source of the obli­ preted in these proceedings. gations in question.

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OPINION OF MR TESAURO — CASE C-214/89

As regards, then, those shareholders who case-law. But on a closer and more did not take part in the adoption of the thorough examination it is certainly not to clause in question, the same conclusion must be excluded that the Court's case-law (the be arrived at, regard being had to the Tilly Russ and the Salotti judgments) and specific characteristics of companies and the specifically Article 17 itself, as amended by requirements inherent in the circulation of the 1978 Convention, (the reference to shares. Thus, the acquisition of the status of international trade, and in particular the shareholder (regardless of whether already usages which the parties were or ought to existing shares are acquired or whether new have been aware of) very opportunely shares are subscribed for on an increase in provide hints for that choice, in fact, hints capital) entails acceptance of all the obli­ as to the coherence and rationality of the gations flowing from the statutes including choice of the competent courts in relation to 15 any clause conferring jurisdiction. practice.

clause provides for 'the jurisdiction of the courts ordinarily competent to entertain ' 15 — See to this effect the interesting remarks made by suits concerning the company , that is to say Carbone) la disciplina communitaria della proroga della giurisdizione in materia civile e commerciale, in Diritto del the courts of the place in which the Commercio Intemazionale, 1989, p. 351 et seq., company has its principal office. Having particularly at pp. 356 et seq.; and also, by the same author, Area dell'economie communitaria e clausole di said that, I consider that the problem deroga alla giurisdizione contenute in polizze di carico, in deserves to be examined in a manner which Diritto marittimo, 1977, p. 169 et seq., in particular p. 181. 16 — On this point see Kohler, Rigueur et souplesse en droit goes beyond the present case, both in view international privé: Les formes possibles pour une of the importance of the question raised, convention de juridiction dans le commerce international par l'article 17 de la Convention de Bruxelles dans sa and the fact that the question raised by the nouvelle redaction, in Diritto del Commercio Interna­ national court is formulated in general zionale, 1990, pp. 611 et seq. The author rightly emphasizes that the relaxation of the formal requirements terms. effected by the new wording of Article 17 entailing a necessary relaxation of the same conditions with regard to the establishment of consensus, can be justified only by the possibility of substantive review of clauses conferring jurisdiction. Whilst stating that national law, particularly the common law systems, have always permitted their courts to perform such a review, not only in order to protect parties in a weak bargaining position, but also in On a first reading, indeed, the choice made areas in which professionals carry on their business on the by the parties as to the competent court basis of established conditions', the author is nevertheless of the opinion that such review is not possible on the basis might appear irrelevant from the point of of the current wording of Article 17, and therefore stands view of the Convention and the Court's in need of amendment.

Finally, as regards question 2(c), in which I therefore suggest that the Court should the national court asks whether the clause limit the validity of a clause conferring juris­ referred to in Article 4 of the statutes also diction to the situation in which, as in the covers claims to payment arising out of a present case, it is provided that the courts contract relating to the subscription for ordinarily competent to entertain suits shares and claims to the repayment of concerning the company are to have juris­ wrongly paid dividends, the interpretation diction, and should affirm that a provision of the article in question is a matter for the contained in the statutes conferring such court hearing the main dispute. It is that jurisdiction constitutes a valid agreement court which is required to give a decision on within the meaning of Article 17, where it the jurisdiction clause in order to determine comes into existence in accordance with the to what extent and subject to what limits it applicable national rules governing the is applicable to money owing to the formation of the corporate will. That company and to claims for the recovery of conclusion also replies to question 2(a). wrongly paid dividends.

14. In the light of the foregoing observations, I conclude that the Court should reply as follows to the questions raised by the Oberlandesgericht, Koblenz :

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OPINION OF MR TESAURO — CASE C-214/89

1. A clause conferring jurisdiction contained in the statutes of a company limited by shares, pursuant to which the shareholder is bound to accept the jurisdiction of the courts ordinarily competent to entertain suits concerning the company in respect of disputes with it or its organs, constitutes for all shareholders a valid agreement conferring jurisdiction within the meaning of Article 17 of the Convention, if it is concluded in compliance with the applicable rules of national law concerning the formation of the corporate will.