C-288/92

CUSTOM MADE COMMERCIAL v STAWA METALLBAU

OPINION OF ADVOCATE GENERAL LENZ delivered on 8 March 1994 *

Mr President, 3. Those articles were intended for a build­ Members of the Court, ing complex in London. The price agreed was denominated in sterling. The contract on which the claim is based was the first one concluded between the parties. It was con­ cluded orally in London on 6 May 1988 after negotiations conducted in English.

A — Introduction

4. The plaintiff confirmed the conclusion of the contract by a letter of 9 May 1988 writ­ 1. In its request for a preliminary ruling, the ten in English. That letter contains the fol­ Bundesgerichtshof (Federal Court of Justice) lowing passage: raises questions concerning the interpreta­ tion of two important provisions of the Brussels Convention, namely Article 5(1) on jurisdiction in respect of the place of perfor­ mance and (possibly) Article 17 on jurisdic­ tion agreements. According to the particulars given by the national court, those two provi­ 'We refer to our meeting on May 6th and sions are applicable either in the 1978 version confirm your order for the manufacturing of or in the (identical) 1982 version. windows and doors for the Project "Cran- brook Estate", subject to our terms of sale and supply.

2. The questions arose in proceedings in which Stawa Metallbau GmbH seeks in the ...'. court for the place at which its registered office is located, Bielefeld, from a party to a contract with it, Custom Made Commercial Ltd, (part) payment for doors and windows of its manufacture.

7. The Bundesgerichtshof held that the con­ tract in question was governed by the Uni­ form Law on the International Sale of Goods (the 'Uniform Law') forming the annex to '1 . (a) Is the place of performance under Art­ the Hague Convention of 1 July 1964. 1 icle 5(1) of the Brussels Convention on According to the first part of Article 59(1) of jurisdiction and the enforcement of the Uniform Law, which is applicable in this judgments in civil and commercial case, the place of performance of the obliga­ matters to be determined pursuant to tion to pay the purchase price is the seller's the substantive law applicable to the place of business or, if he does not have a obligation in issue under the conflicts place of business, his habitual residence. rules of the court hearing the case where the case concerns a claim for payment of the price brought by the supplier against the customer under a contract for manufacture and supply, 8. As regards the procedure before the according to the conflicts rules of national courts, it should be observed that the court hearing the case that contract the plaintiff first obtained default judgment is governed by uniform sales law before the Landgericht (Regional Court) and under that law the place of performance of the obligation to pay the price is the place of establishment 1 — United Nations Treaty Series, Vol. 834, p. 7. of the plaintiff supplier?

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CUSTOM MADE COMMERCIAL v STAWA METALLBAU

(b) In the event that the Court of Justice not aware of any such trade practice replies in the negative to question 1(a): and it is the first time that the parties have done business with each other?

(a) Can a jurisdiction agreement validly be made under the third hypotheses in the second sentence of Article 17, first 3. In the event that the Court of Justice paragraph, of the Convention (in replies in the affirmative to questions 2(a) the 1978 version) where after the oral and (b): conclusion of a contract the supplier confirms the conclusion of the con­ tract in writing and that written con­ firmation is accompanied for the first time by general business conditions containing a jurisdiction clause, the In relation to a jurisdiction clause con­ customer does not dispute the juris­ tained in general business conditions diction clause, there is no trade prac­ which meets the requirements laid down tice at the place where the customer is in Article 17 of the Convention for a established to the effect that the valid jurisdiction agreement, does Art­ absence of response to such a docu­ icle 17 preclude further examination, ment is to be regarded as assent to the under the national substantive law which jurisdiction clause, the customer is is applicable in accordance with the

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conflicts rules of the court hearing the contained in that provision of 'the place of case, of the question whether the juris­ performance of the obligation in question'. diction clause is validly incorporated in More precisely, it seeks to establish whether the contract?' the meaning of that concept — 'the place of performance' — should be determined, in cases such as this, 'pursuant to the substan­ tive law applicable to the obligation in issue under the conflicts rules of the court hearing the case'. If that question is answered in the B — Appraisal negative, the national court wishes to know in what (other) way the place of performance should be determined.

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14. With regard specifically to Article 5(1), 16. In other words, that is to say, those of the Jenard Report lists a number of examples Advocate General Mancini the court of the showing the interest in defining the jurisdic­ place of performance of the obligation in tion of the court for the place of perfor­ question 'has by virtue of its physical prox­ mance in this way: imity to the relationship at issue the best chances of determining the nature of that relationship in the fullest possible knowledge 6 of the facts of the case'.

19. In this regard, I take the view that such a fair allocation of advantages and risks is a 'This freedom of choice was introduced in completely legitimate aim. Evidently, the view of the existence in certain well-defined authors of the Convention also took that cases of a particularly close relationship between a dispute and the court which may be most conveniently called upon to take 5 6 — Opinion in Case 34/82 Peters v ZNAV [1983] ECR 1005, at cognizance of the matter.' 1010. 7 — For example, Schack, Der Erfüllungsort im deutschen, aus- ländischen und internationalen Privat- und Zivilprozeßrecht, Frankfurt, 1985, section 144 et seq. and at 207 and 218; Spellenberg, Praxis des internationalen Privat- und Verfahr- 3 — Jenard Report, pp . 23 and 24 (see preceding footnote). ensrechts, 1981, p. 75, at p . 76 et seq. 4 — Judgment in Case 12/76 Tessili v Dunlop [1976] ECR 1473. 8 — See also Geimer, Praxis des internationalen Privat- und Ver- 5 — Paragraph 13. fahrensrechts, 1986, p. 85, at p. 87.

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1 individual 'dispute'. 0 tract, to perform an obligation at a particular place and should therefore also accept that he should be sued there. Against that argu ment I would point out that, in so far as it is prescribed by statute, the place of perfor mance under the substantive law does not warrant that conclusion. Such a conclusion is, moreover, all the more questionable in cases such as the one now before the Court. The place of performance of obligations to 20.

I cannot under try to define the aim of Article 5(1) system stand what that purely economic allocation atically on the basis of its own conception of of risks has to do with the question whether what is 'fair'. Moreover, in this regard the the debtor has to accept the creditor's suing Court takes a particularly cautious approach. him at a particular place. It is only in the field of employment law, which is characterized by the particular social importance of employment contracts, that the Court has allowed considerations relating to the protection of the weaker party to be taken into account, and solely as a complementary consideration to its consider ations as to the court which is the most appropriate to try the case by virtue of its

12 — Cf. the following judgments relating to facts which took 13 — Geimer/Schütze, Internationale Urteilsanerkennung, Vol. I, place before the Convention was amended by the San Part I, Munich, 1983, p . 553. Sebastian Convention (OJ 1989 L 285): Case 133/81 Ivenel 14 — German law, which distinguishes between questions relat v Schwab [1982] ECR 1891, paragraph 16, Case 32/88 Six ing to the place of performance and questions relating to Constructions v Humbert [1989] ECR 341, paragraph 14 in which party is to bear the risk, is an exception in this conjunction with paragraph 13, and Case C-125/92 Mulox respect: see Article 270 of the Bürgerliches Gesetzbuch v Geels [1993] ECR I-4075, paragraph 18. (Civil Code), especially Paragraph 4.

25. It might therefore be inferred from this that the place of performance, which is the spatial dimension of performance, is the place where the creditor's claim is extin­ guished by the debtor's having performed the obligation required of him and, as 27. Secondly, it should be pointed out that, regards the principal obligations, the place in demarcating the parties' responsibilities in where the aim of the contract is wholly or this way, the place of the act of performance partly achieved. and the place at which performance achieves its outcome may differ. Article 19(2) of the Uniform Law will serve as an example. According to that provision, where the con­ tract involves carriage of the goods and no 26. However, a two-fold reservation must be other place for delivery has been agreed entered with regard to that conclusion. First, upon, delivery is to be effected by handing it does not accurately mirror the aim of the over the goods to the carrier for transmission substantive provisions relating to the place of to the buyer. The aim of the contract, which performance. Not only do those provisions is to give the purchaser possession of the have, in the absence of agreement, to crystal­ goods, is not achieved until he takes delivery lize the parties' obligations, they must also of them. In contrast, the seller's responsibil­ demarcate the areas for which each of the ity comes to an end once he has duly handed parties are responsible, in case irregularities the goods over to the carrier (see also Art­ 15 should arise in carrying out the contract. icles 97(1) and 96 of the Uniform Law). Depending on the contractual obligation

28. It should be added that, under the sub­ should not be regarded as giving rise to dif­ stantive law, each contractual obligation may ficulty merely because it causes jurisdiction have its own place of performance. It is to be based on the plaintiff's place of busi­ therefore not precluded that, even if they are ness or residence. Such a reservation could closely related economically, two obligations be justified only if a species of general 'anti­ arising under a single contract may have dif­ pathy' to conferring jurisdiction on the plain­ ferent places of performance. tiff's courts were to be read into the Conven­ tion and became a criterion for correcting, where necessary, the outcome of an interpre­ tation. Admittedly, it must be allowed that Article 2 of the Convention adopted the gen­ eral rule that the courts of the defendant's domicile should have jurisdiction, whilst 29. (3) The conclusion to be reached from Article 3 ruled out the application of various what has been considered so far is that a national provisions conferring jurisdiction forum based on a concept derived from the 17 on the plaintiff's courts. Neither can it be substantive law is justified on procedural contested that, in view of the aforementioned grounds, namely a ground such as physical articles, 'apart from the cases expressly pro­ proximity to the relationship at issue. vided for, the Convention appears clearly hostile towards the attribution of jurisdiction 18 to the courts of the plaintiff's domicile'. Yet such 'exceptions' to the conditions laid down by Article 5 et seq. are by no means rare. Articles 13 and 14 on jurisdiction over 30. In this case, that tension is particularly consumer contracts show this clearly. The striking. It is sufficient to observe that Art­ court having jurisdiction under Article 5(3) icle 59(1) of the Uniform Law serves prima­ (place where the harmful event occurred) rily to allocate the risk, in any event in the may turn out, in the event, to be the court of present circumstances relating to payment. the plaintiff's domicile. There is therefore no justification for inferring conclusions favour­ ing a particular interpretation from the Con­ vention's more or less marked 'antipathy' to the plaintiff's court.

and 5 et seq. seems to me to be that which 36. As far as those two aspects are con­ the Court used as its starting point in the cerned, the Court came down in favour of an judgments in Shearson Lehman Hutton substantive interpretation of Article 5(1). 20 and Dumez France, namely that where an interpretation of Article 5 et seq. has the result that the court having jurisdiction is that of the plaintiff's domicile, particular care should be taken to see whether that interpre­ 37. In accordance with the considerations tation accords with the aim of the provision 21 which I have set out above, that is to say in question. Consequently, the Bundesger­ that, under the substantive law, obligations ichtshof is at the heart of the matter in so far arising under a contract are not all bound to as it bases its doubts on the fact that the be performed at the same place, the Court combination of Article 5(1) of the Conven­ held in De Bloos v Bouyer, which was con­ tion and Article 59(1) of the Uniform Law cerned with claims of the grantee of an means that ' as a general rule the court's for exclusive distribution contract towards its the place where ... the plaintiff ... is estab­ 22 suppliers, that: lished have jurisdiction'.

'... for the purposes of determining the place 34. (4) How has the Court reacted in of performance within the meaning of Art­ decided cases to the structure of Article 5(1) icle 5 ... the obligation to be taken into as I have defined it? account is that which corresponds to the contractual right on which the plaintiff's 25 action is based'.

39. However, the Court has attenuated that 42. Three points from the grounds of that principle where the obligations at issue have judgment should be stressed. taken the place of contractual obligations which have not been performed. In such case, the obligation for the purposes of Art­ icle 5(1) continues to be the contractual obli­ gation whose non-performance is relied 27 upon in order to support such claims. As a 43. The first relates to the criterion accord­ comparison of the judgment and the Opin­ ing to which it has to be assessed whether a 28 ion in that case shows, that principle also concept in the Convention is to be inter­ aims at avoiding a number of courts having preted independently — and hence in a man­ jurisdiction and, more specifically, at encour­ ner common to all the Member States — or aging related questions to be dealt with by as a reference to the substantive rules which the same court. are applicable in accordance with the con­ flicts rules of the first court seised. In that connection, the Court of Justice held as fol­ lows:

40. It was also on the basis of an approach guided by the substantive law that, in the judgment in Tessili v Dunlop, the Court laid down the criterion for choosing the prin­ 'Neither of these two options rules out the ciples and provisions for determining the other since the appropriate choice can only actual place of performance. be made in respect of each of the provisions of the Convention to ensure that it is fully effective having regard to the objectives of 3 Article 220 of the Treaty.' 0

45. With regard to the choice between an reserve the possibility in each case of choos­ independent interpretation and a reference to ing an appropriate interpretation. 8 the conflicts rules of the forum, the Court initially opted for a pragmatic criterion: the aim should be an 'appropriate choice'. Account should be taken to that end of the fact that the Convention as such pursues 32 very different aims: strengthening the legal protection of persons established in the 46. The second important point in the Community with a view to the elimination grounds of the judgment in Tessili v Dunlop of obstacles to legal relations and the resolu­ is, as I have already pointed out, the refer­ 33 tion of disputes; equality of rights and ence made to the aims of the special jurisdic­ obligations for the Contracting States and 39 tions provided for in the Convention. The 34 the persons concerned; the need to avoid a Court apparently did not consider it ques­ 35 number of courts having jurisdiction; pre­ tionable to satisfy the aims of the Conven­ dictability as regards the application of the tion by referring to the lex causae. That is 36 jurisdiction rules. In addition, each provi­ not surprising, since none of parties which sion and indeed each concept appearing in submitted observations in that case ques­ the Convention has its own function, which tioned that solution. Admittedly, the desir­ may be more or less closely connected with ability of an independent interpretation was the aforementioned aims. Accordingly, even discussed, but from quite different points of though in its more recent decisions it has view. The discussion essentially came down shown a general preference for an indepen­ to weighing the advantages of such an inter­ 37 dent interpretation, the Court has held pretation from the point of view of the uni­ that it was appropriate in the final analysis to form application of the Convention against certain disadvantages, namely the ensuing difficulties in the field of comparative law and the (undesired) effects on the substantive law of the Member States.

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goods, but a claim by the purchaser based on those judgments did the Court take physical defective performance. After stating that in proximity as a reason for examining whether such case it was appropriate to take account it was necessary to deviate from the substan­ of the said principal obligation, he discussed tive law (of the contract) in interpreting the application of the lex causae relatively Article 5(1). The Court's considerations on briefly. As in the case of the observations the basis of which it examined such a step submitted to the Court, he discussed only were of another kind: in so far as in the judg­ the question of the harmonization (or lack of ment in De Bloos v Bouyer it decided that harmonization) of the conflict rules and of the same court that had jurisdiction in 42 the substantive law. respect of the principal obligations should have jurisdiction in respect of obligations derived from principal obligations, it sought to avoid more than one court having juris­ 44 diction over related issues. The question considered in the judgment in Tessili v Dun- lop as to whether it was necessary to go 48. We are now touching on the third rele­ beyond a reference to the lex causae was vant point of the grounds of the judgment in raised in view of the possible aim of unifying Tessili v Dunlop for present purposes. In that 45 the concept of the place of performance. point, the Court discussed whether in the interests of harmonization of the concept of the place of performance it might go further than merely referring to the lex causae. According to the Court, that was impossible 'at this stage of legal development' regard being had to 'the differences obtaining 50. (b) In its subsequent case-law, the Court between national laws of contract and gradually introduced special rules for dis­ to the absence ... of any unification in the putes relating to employment law, but, in substantive law applicable ..., [especially general, remained consistent with that which since] the determination of the place of I have just described. I shall now consider performance of obligations depends on those matters in detail. the contractual context to which these 43 obligations belong'.

icle 5(1) of the Convention ... in the case of claims based on different obligations arising under a contract of employment as a repre­ sentative binding a worker to an undertaking is the obligation which characterizes the con­ tract.' 55. In the judgment in Shenavai v Kreis- 54 cher, the Court felt itself constrained — albeit the question raised did not arise in the sphere of employment law, but related to an action brought by an architect with a view to 52. The Court gave three different reasons recovering his fees — to supplement the for that decision. First, it took account of the arguments set out in Ivenel v Schwab relat­ aim of Article 5(1) of conferring jurisdiction ing to physical proximity to the effect that, on a court which has a close connection with in employment disputes, proceedings should, the case. In the case of a contract of employ­ where possible, be brought before a court for ment, the Court saw that connection as lying the place where the work in question was 'particularly in the law applicable to the con­ performed, since it is, generally speaking, the tract', 48 which 'as a general rule, ... contains substantive provisions of that place which 5 provisions protecting the worker'. 49 will be applicable. 5In the Court's view, the According to the trend in the conflict rules fact that employment contracts and other in regard to that matter, 50 that law is deter­ similar contracts 'create a lasting bond which mined by the obligation characterizing the brings the worker to some extent within the contract in question, which is normally the organizational framework of the business of 56 obligation to carry out work. It will usually the undertaking or employer' also militates be the law of the place where the work is carried out. 51 — Paragraph 16. See also section 20, supra. 52 — Cf. sections 38 and 39, supra. 53 — Paragraph 18 of the judgment in Ivenel v Schwab. 47 — See section 41, supra. 54 — Cited in footnote 35. 48 — Paragraph 15. 55 — See the critical comments of Advocate General Mancini in 49 — Paragraph 19. Shenavai v Kreischer [1987] ECR 246, at 249, and of Advo­ cate General Jacobs in Mulox, cited in footnote 12, sec­ 50 — The Court refers in this connection to the Convention on tions 26 to 29. the law applicable to contractual obligations, OJ 1980 L 266, p . 1. 56 — Paragraph 16 of the judgment in Shenavai v Kreischer.

57. The Court came to the conclusion that in the field of employment law the place of performance should not be determined in accordance with the lex causae, but — inde­ 59. If you would bear with me, I would now pendently — on the basis of uniform criteria take stock of the case-law from Ivenel v which, in its view, should be defined on the Schwab to Mulox. basis of the system and aims of the Conven­ tion. The difficulties arising from the differ­ ent views as to the place of performance of the obligation in question which the Court had used in Tessili v Dunlop as justification for deciding that the place of performance should be determined in accordance with the 60. It is clear at first glance that the criteria lex causae did not exist in the sphere of set out in Mulox with a view to determining employment law. In that sphere, the employ­ the place of performance were already deter­ ee's obligation to carry out the agreed work mined in advance by the choice which the as the characteristic obligation of the con­ Court had made since Ivenel v Schwab as tract of employment is the obligation in regards the obligation in question. In order question within the meaning of Article 5(1). to justify that solution, the Court based itself The Court referred in this connection to the in Mulox solely on arguments on which it particularities of contracts of employment had already relied in Ivenel v Schwab (as 5S which it had already described in its earlier refined in subsequent judgments). The case-law: they create a lasting bond bringing decision in favour of an independent inter­ the worker within the framework of the pretation of the place of performance had

therefore been taken ever since the judgment court's proximity to the dispute, but which in Ivenel v Schwab. might undermine the concept of place of per­ formance and turn Article 5(1) into a vague 61 forum conveniens rule. On closer inspec­ tion, the Court had already left the door open in Tessili v Dunlop to making such an exceptional distinction between the substan­ 61. Having regard to the grounds of the tive and procedural places of performance judgment in Ivenel v Schwab, it can be seen (cf. section 44, supra). that, as early as this, the Court already took the view that to determine the place of per­ formance on the basis of the substantive law of the contract did not square with the aim of Article 5(1) — at any event, not in the sphere of contracts of employment. 64. Secondly, it turns out that the problem of the choice of the obligation to take into consideration and that of the test to be used in order to determine the place of perfor­ mance are closely linked. Any interpretation which, by diverging from the substantive law 62. Accordingly, a twofold conclusion can of the contract (and also from the wording be reached. of some language versions of Article 5(1), takes account of an obligation other than the obligation at issue constitutes a step towards an independent interpretation (in relation to the substantive law governing the contract). Such an interpretation affects, intentionally 63. First, the case-law discussed above or unintentionally, the relationship between shows that although the Court intended that the aim of Article 5(1) and the outcome of the place of performance should continue to applying it. Conversely, such a correction be determined as a general rule on the basis may — as one conceivable means — be of the substantive law of the contract, it will deliberately employed in order to take depart from that principle where its applica­ account of the aim of Article 5(1) when it is tion, in a given case, manifestly does not applied. Such a manner of proceeding may, square with the aim of Article 5(1). To my as the case-law discussed above shows, con­ mind, this correctly constitutes a via media stitute a better potential solution than deter­ between two extremes (which should be mining the place of performance by using rejected): (a) a rigid application of Art­ comparative law, especially since the use of icle 5(1) which sticks strictly to its wording, comparative law does not necessarily guaran­ 60 but departs from its aim and (b) an inter­ tee that criteria unsuited to determine a court pretation which takes account solely of the physically proximate to the relationship at issue will be replaced by more appropriate

67. In Shenavai v Kreischer, 64 the Court held that, in proceedings relating to an action for the recovery of fees brought by an archi­ 65. In this context, I would further point tect for the preparation of building plans, the out that the concept of 'independent inter­ obligation to be taken into account was the pretation' should not lead one to suppose contractual obligation on which the legal that there are only two possibilities available action was actually based. In order to justify in any given case: that is to say, to determine that solution, as against the different one the place of performance absolutely consis- which it reached in Ivenel v Schwab, the tently with the substantive law or completely Court first rehearsed the arguments to the independently of it. On the contrary — and effect that an employee was brought within still in the interest of having an interpreta­ the framework of the employer's business tion consistent with the aims of the provi­ and that the contracts were localized at the sion in question — many intermediate solu­ place where the activities were pursued, tions are conceivable. I would mention in which determined the application of manda­ 65 this context as an example only the judgment tory rules and collective agreements. The in De Bloos v Bouyer, which I have already Court added that: discussed. In that judgment, the Court held, as regards claims for damages or claims seek­ ing the dissolution of the contract in ques­ tion, that the contractual obligation to be taken into account was the obligation the non-performance of which was relied upon 'When no such particularities exist, it is nei­ in support of such claims. That step towards ther necessary nor appropriate to identify an independent interpretation of Article 5(1) the obligation which characterizes the con­ was again accompanied, however, by a refer­ tract and to centralize at the place of perfor­ ence to the lex causae: 'In the case of actions mance thereof jurisdiction, based on place of for the payment of compensation by way of performance, over disputes concerning all damages, it is for the national court to ascer­ the obligations under the contract. The vari­ tain whether, under the law applicable to the ety and multiplicity of contracts as a whole contract, an independent contractual obliga­

69. Outside the sphere of contracts of 68. Those considerations show, in the first employment, mention should also be made 68 place, that the Court clearly recognized the of the judgment in Zelger v Salinitri in 66 imperfect nature of Article 5(1), since it addition to Shenavai v Kreischer. That judg­ allows that the place of performance of the ment was concerned with a clause relating to obligation at issue (only) 'usually' constitutes the place of performance with regard to the the closest connecting factor between the repayment of a loan. In it, the Court con­ dispute and the court having jurisdiction firmed the Tessili v Dunlop case-law, since it over it. Secondly, the Court's considerations held that the place of performance within the only cover a limited number of the problems meaning of Article 5(1) was the place which arising. On the one hand, the question as to had been 'specified by the parties in a clause whether the rules relating to the place of per­ which is valid according to the national law formance of the obligation to make payment applicable to the contract'. The question as are such as to confer jurisdiction on a court to whether that solution was warranted in physically proximate to the relationship at practice by the 'existence of a direct link issue was not discussed. Although the Ger­ between the dispute and the court called 69 man Government drew attention to the fact upon to take cognizance of it' was not that taking account of the characteristic obli­ raised. The main theme of the judgment was gation of the contract corresponded more the relationship between Article 5(1) and nearly to the aim of Article 5(1) than taking Article 17.

72. In this connection, it should be observed that, in disputes relating to the payment of the purchase price — where the actual con­ 71 clusion of the contract is not in issue —, it is a question in most cases as to whether the performance provided by the seller was duly 74. It is therefore clear that the criterion set 72 effected. Of the courts which are geo­ out in the first part of Article 59(1) is mani­ graphically close to the events in connection festly not able to confer jurisdiction on a with the performance of the contract, the court which is physically proximate to the one which is to be taken into consideration relationship at issue. Consequently, ques­ for the purposes of the aim contemplated by tion 1(a) should be answered in the negative. Article 5(1) is that which is in the best posi­ tion to assess the due nature of that perfor­ mance.

75. (2) In order to answer question 1(b), that is to say, how the place of performance is to 73. The first part of Article 59(1) of the Uni­ be determined if question 1(a) is answered in form Law results in contrast in the courts for the negative, a direct link can be made with that which I have already stated.

70 — See section 63, supra. 71 — Spellenberg, Zeitschrift für Zivilprozeß 91 [1978], p. 38 and bottom of p . 56, rightly points out that, in such a case, the court for the place where the contract was concluded would be the most appropriate court, but that the Convention does not provide for that solution. 72 — Cf. the observations of the German Government in Shenavai v Kreischer (see section 69, supra) ; Spellenberg, 76. To my mind, it is not appropriate here to loc. cit. (preceding footnote). take into consideration the obligation to

77. Before setting out this solution in some­ what more detail, I would describe very briefly its relationship with the judgments in 80. The rules of the lex causae relating to the De Bloos v Bouyer and Tessili v Dunlop, place of performance of the seller's obliga­ from which it in fact diverges only very tion to supply the goods may, like the rules slightly. As far as the judgment in De Bloos v on the place of performance with regard to Bouyer is concerned, it should be observed the payment of the purchase price, embody that the proposed solution does not refer to elements which serve solely to apportion the just 'any' contractual obligation, but to the risk — more specifically in this case the car­ one which is far more likely to result in the riage risk — and do not provide reliable determination of a court physically proxi­ indications about the economic objective of 75 mate to the relationship than the obligation the seller's obligations. As I used such ele­ at issue. In addition, that solution is consis­ ments when I examined the rules on the tent with the principle set out in De Bloos v place of performance of the obligation to Bouyer and confirmed in Shenavai v Kreis- make payment as a reason for diverging from cher, to which some writers refer as the 'iso­ the substantive law of the contract on the lation principle', that as a general rule a place ground that those rules could not serve to of performance is to be determined sepa­ determine a court which was physically rately for each obligation. Only the method proximate to the relationship at issue, it of determining the place of performance dif­ would seem illogical to use another method fers from that laid down in De Bloos v when considering the rules on the place of Bouyer. performance of the seller's obligation to deliver the goods. It should be held in that

81. It therefore seems that the Bundesge­ richtshof's question should be qualified in this way. It follows from the judgment given — General observations on appeal by the Oberlandesgericht Hamm that that court interpreted the clause delivery 'free site in London' simply as an agreement on the circumstances in which delivery was to be made. It seems that it therefore did not consider that London was the place of per­ 83. The Bundesgerichtshofs second ques­ formance of the (plaintiff's) obligation in tion is to be answered in the event that in kind and this is precisely why it was not the view of the answer to the first question 'the second part of Article 59(1) of the Uniform German courts cannot derive jurisdiction Law but the first part which was applied. from Article 5(1) of the Convention'. Since the place of performance within the meaning of that article, as I have just interpreted it, cannot be in Germany in this case, it is nec­ essary to answer the second question.

82. IV — For all those reasons, I propose that the reply to questions 1(a) and (b) of the Bundesgerichtshof should be as follows:

84. In that question, the Bundesgerichtshof seeks to establish whether, in the circum­ stances described in the question, 'a jurisdic­ tion agreement [can] validly be made' within Where a supplier makes a claim against a the meaning of Article 17 of the Convention. customer for the payment of the price due As the Bundesgerichtshof considers that

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76 85. It appears from the Schlosser Report 86. In the following appraisal of the ques­ that, in the case of the other two hypotheses tions raised by the Bundesgerichtshof I shall contemplated by Article 17, the Court's consider the meaning of the provision in interpretation 'does not cater adequately for question in more detail. the customs and requirements of interna­ tional trade'. The authors of the addition to Article 17 sought in particular to attenuate the consequences of the judgment in Segou- 7 ra. 7In that case, faced with an orally con­ cluded contract of sale embodying no oral — Question 2(a) jurisdiction agreement within the meaning of Article 17, the Court refused to give any effect to a letter of confirmation from the seller to which the latter had appended its general conditions of sale which did embody a jurisdiction clause. The Court held that such a clause did not form part of the con­ tract unless the purchaser agreed to it in 87. I — In this part of the question, the 78 writing. The fact that the purchaser did Bundesgerichtshof starts by describing the conduct of the parties which might possibly form the basis of a valid jurisdiction clause

76 — OJ 1979 C 59, p. 124 (section 179). 77 — Judgment in Case 25/76 Segoura v Bonakdarian [1976] ECR 1851. 78 — Judgment in Segoura, cited above, paragraphs 8 and 10. 79 — Second paragraph of the operative part.

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OPINION OF MR LENZ — CASE C-288/92

(under the third hypothesis): — it is the first time that the parties have done business with each other.

— the customer is not aware of any such trade practice; and 80 — Order for reference, p. 17.

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the affirmative. There is no doubt that the acting in their own sector of business, there transaction covered by the jurisdiction is no doubt to my mind that the transactions clause, as a contract of sale relating to the at issue relate to (international) commerce or supply of goods from one Contracting State trade. to another the parties to which are estab­ lished as commercial companies in those States, is international in character. Admit­ tedly, that condition could be construed as limiting the application of the provision in question to specific commercial sectors capa­ ble of being clearly defined. It was this situ­ ation that the Select Committee on the Euro­ 93. (2) It should next be considered what pean Communities of the House of Lords guidance can be provided to the Bundesge­ seems to have had in mind when it proposed richtshof for the purposes of interpretation 81 adding a third case to Article 17. However, having regard to the obligation for a jurisdic­ the aim of Article 17 — which is to prevent tion clause to be concluded in a 'form which jurisdiction clauses in contracts going unno­ accords with practices in that trade or com- 82 ticed — does not support such an interpre­ merce'. tation. Without limiting the scope of the art­ icle in question from the outset in this way, it seems appropriate to take into consideration, when interpreting the concept of a commer­ cial or trade practice and the subjective con­ ditions for the application of the third hypothesis, any differences between institu­ tionalized trade and commerce (in the com­ modities sector, for example) and other inter­ 94. (a) As has been seen, the third hypo­ 83 national transactions. thesis contemplated by Article 17 was intro­ duced so as authorize modes of concluding valid jurisdiction clauses other than clauses in writing or evidenced in writing. In view of the structure of Article 17, it is clear that jurisdiction agreements according with the relevant 'practices in the trade or commerce' should be authorized as valid types of juris­ diction agreement.

97. The Court of Justice confirmed this approach again very recently in the judgment 89 in Powell Duffryn, which was concerned with a clause conferring jurisdiction con­ tained in a company's statutes. After observ­ 96. In my view, the latter view is correct. ing that in the legal systems of the Contract­ Admittedly, the Commission rightly points ing States the statutes of a company are in out that the Schlosser Report regards the writing and constitute the basic instrument third hypothesis in Article 17 'merely' as a governing the relations between a share­ 'relaxation of the formal provisions' and holder and the company, the Court held that raises the question as to whether 'questions of consensus other than the matter of form should be decided according to the national laws applicable or to unified EEC prin­ 84 ciples'. However, the aim of the 1978 amendment would not be achieved if merely a formal provision were involved. In the 'irrespective of how shares are acquired, judgment in Segoura, the Court held that every person who becomes a shareholder of there was no valid jurisdiction clause, pre­ a company knows, or ought to know, that he 90 cisely because there was no proof of actual is bound by the company's statutes ...'. consensus between the parties as required by 85 Article 17: the fact that the purchaser does not respond to written confirmation does 86 not 'amount to acceptance'. If the new ver­ sion referred only to the form, the need for actual consensus would still have be exam­ 98. As far as the instant case is concerned, it ined in accordance with that case-law, with­ should be added that commercial practices out any relaxation being achieved having concerning purely formal requirements in the regard to the needs of international com­ field in question can arise only with great merce or trade. More generally, it should be difficulty, if at all. Such requirements come observed that, in accordance with a consis­ under procedural law, the mandatory rules of tent line of cases of the Court, including Seg- oura, the formal requirements set out in Article 17 do not have an aim in them­ 87 selves but perform the function of 88 — Judgments in Case 24/76 Estatis Salotti v RÜWA [1976] ECR 1831, paragraph 7, in Segoura, paragraph 6, in Case 784/79 Porta-Leasing v Prestige International [1980] ECR 1517, paragraph 5, in Case 201/82 Cerling v Ammin- istrazione del Tesoro dello Stato [1983] ECR 2503, para­ graph 13, in Case 71/83 Tilly Russ v Nova [1984] ECR 2417, paragraph 14, in Case 221/84 Berghoefer v ASA 84 — Loc. cit. (footnote 76), p. 125 (section 179). [1985] ECR 2699, paragraph 13, and in Case 73/85 Iveco 85 — See the judgment in Segoura, paragraph 6. Fiat v Van Hool [1986] ECR 3337, paragraph 5. 86 — See the second paragraph of the operative part of the judg­ 89 — Judgment of 10 March 1992 In Case 214/89 Powell Duffryn ment in Segoura. [1992] ECR 1745. 87 — See footnote 82 and the passage cited therein. 90 — Paragraph 27, my emphasis.

— Under Article 17, in international trade the absence of a response to a commercial letter of confirmation may, by virtue of a commercial or trade practice, signify agreement to a jurisdiction clause added by that confirmation (in any event, where 99. (b) It is no accident that the Bundesge­ the parties are or ought to be aware of richtshof provides details of the parties' con­ that practice). Such a practice does not duct and of the legal situation in the United have to be specifically proved. 95

— There is a commercial or trade practice 97 significance of the practice in question and with regard to a manner of reaching con that it cannot be ruled out that there are dif sensus where it is recognized by (a) legal ferences depending on the commercial sector system(s) to be determined that the par in question. ties' conduct constitutes agreement (or consent) by virtue of a commercial or trade practice. The criterion for deter mining that legal system or those legal systems has to be established by inter

101. The conclusion following from the sec ond approach set out above, namely that the Convention itself recognizes the practice of the commercial letter of confirmation as a commercial practice is certainly not justified. It can, admittedly, be inferred from the Schlosser Report that the judgment in Seg- 103. In the first place, it appears from the oura, cited above, which related to that prac system of the provision in question, in par tice, was the reason for the revamping of ticular the English and French versions, that

In cle 2, sections 90 and 92; Rauscher, Zeitschrift für Zivil- that regard, attention should be drawn to the prozeß 104 (1991), pp . 272, 292 et seq.; ibid., Praxis des Internationalen Privat- und Verfahrensrechts, 1992, pp . 143, 145; Ulmer, in Ulmer/Brandner/Hensen, AGB- Gesetz, Kommentar, 5th ed., Cologne, 1987, annex to Arti cle 2, section 33; see also Hausmann, in Reithmann/Martiny, Internationales Vertragsrecht, 4th ed., 97 — For a detailed discussion of the question, see Stove (foot Cologne, 1988, section 1203. note 93), p . 129 et seq.

wording of the Lugano and San Sebastian sus (namely legal capacity and agency). In Conventions, 8which, in addition to the my view, the interpretation of the third conditions laid down in the 1978 version, hypothesis in Article 17 should remain con­ require that the usage should 'in such trade sistent with this and therefore, as in the case or commerce [be] widely known to, and reg­ of the other two hypotheses, should give rise 102 ularly observed by, parties to contracts of the to an independent interpretation. type involved in the particular trade or com­ merce concerned'. According to the Jenard/Müller Report on the Lugano Con­ vention, 99 'having regard to the words "internationale Handelsbräuche" and "us­ ages" which are used in the French and Ger­ man versions of Article 17 of the Brussels 105. (c) The application of that solution to Convention, it seems that there are at least the present case calls for the following obser­ no major differences in substance between vations. the provisions concerned in the two Con­ ventions'. To my mind, that commentary is hard to square with the new version if Art­ icle 17 of the 1978 version was a mere con­ flicts rule or a reference to national conflict rules. 106. (aa) It should first be observed that the legal situation in the United Kingdom, as described by the Bundesgerichtshof, is not decisive in itself, no more than the legal sit­ uation in Germany: Article 17 is not a con­ flicts rule. I shall be returning shortly to the question of the — limited — importance of national law for the purposes of proving the existence of a commercial practice and as 104. Secondly, as I have already mentioned, regards the subjective conditions for the the Court has viewed the formal require­ application of Article 17. ments laid down in the first two hypotheses in Article 17 as guaranteeing actual consen­ sus and has accordingly laid down certain independent requirements with regard to consensus itself. In that regard, it has avoided bringing into that provision complex, very controversial problems relating to conflicts 107. (bb) I would next explain the impor­ 10 of laws. 0 Moreover, regret has been tance, from two points of view, of the crite­ expressed since the outset that Article 17 was rion which I have just put forward with a not coupled with an express conflict rule on view to giving a useful answer to the ques­ account of certain preconditions for consen­ tions raised by the Bundesgerichtshof. The first relates to the need for the practice in

Vienna Convention on contracts for the 104 international sale of goods, that the prac­ tice acquires the practical effectiveness which will enable it also to be legally recognized through Article 17. As regards the practice of the subsequent incorporation of general business conditions into a contract by means 111. When assessing the circumstances of a commercial letter of confirmation, the pleading for or against the existence of a conditions for the third hypothesis to apply commercial or trade practice, it is possible, in

an individual case, also to take into account the 1978 reform is to have practical effect, — with all the requisite circumspection — practices relating to other contractual provi­ the national legal systems concerned. The sions must decide the matter. In other words, emergence and continuance of usages in it is necessary to interpret the third hypo­ international trade or commerce depend, thesis in Article 17 as conferring on general inter alia, on the extent to which judicial practices the legal effects in the sphere of notice is taken of such practices by the jurisdiction clauses which they were denied courts in the Member States. Thus, in trade by the old version of Article 17. between two Member States whose courts attach no importance to the practice of the commercial letter of confirmation in signify­ ing possible consensus, a usage to that effect can scarcely ever come about. The contrary will apply where the courts in the two Mem­ ber States are prepared to take judicial notice of such a usage. At the present stage of the proceedings, those indications — which are, 113. (3) Iwould now turn to the subjective of necessity, very general — should suffice. conditions of Article 17, where it provides that 'the parties are or ought to have been aware' of the practices in trade or commerce.

tioned subjective conditions. Accordingly, clauses — absence of response to a commer­ account can be taken of all relevant circum­ cial letter of confirmation to which general stances. business conditions are appended for the first time is not regarded as signifying assent 10 to the content of those conditions. 8In such a case, the practice in question cannot be regarded as being known to the customer, unless other circumstances (for instance, commercial contracts with other economic operators in the trade or commerce) suffi­ ciently supporting the opposite view are relied upon and proved. This is also a matter 116. As far as the present case is concerned, for the tribunal of fact. it appears from the order for reference that the customer was unaware of the commercial practice relied on, to the effect that absence of response to a letter of confirmation of the type described by the Bundesgerichtshof has to regarded as assent to a jurisdiction clause. That fact is relevant in any event where the party concerned was not aware in a general way — irrespective of the question of juris­ 107 diction clauses — of the commercial usage 118. III — For all the above reasons, I con­ alleged by the other party. sider that the reply to question 2(a) should be as follows:

121. Reference should be made in limine to 11 the judgment in Elefanten Schuh, 0accord­ — Question 2(b) ing to which legislation of a Contracting State requiring a particular language to be used in private relations does not have to be taken into consideration in the field of appli­ cation of Article 17. This should also hold good, however, of rules relating to the 'lan­ guage risk' developed by case-law in a Mem­ ber State, since such rules, like the legislation referred to in Elefanten Schuh, have an effect 119. The Bundesgerichtshof raised this part on the requirements relating to the manner of the question in case a jurisdiction clause in which the agreement is reached (form and may be validly concluded in the circum­ 1 substantive conditions). 11 stances set out in question 2(a). If, as regards the subjective conditions set out in Art­ icle 17, there should be no circumstances other than those set out in the order for ref­ 109 — See section 3 of the order for reference at p. 20. erence, question 2(a) should be answered in 110 — Judgment in Case 150/80 Elefanten Schuh v Pierre Jacq- main [1981] ECR 1671. the negative and there would be no need to 111 — Kohler, Praxis des internationalen Privat- und Verfahren- answer question 2(b). I consider that if the srechts, 1991, p . 299, at p. 300 (footnote 7).

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CUSTOM MADE COMMERCIAL v STAWA METALLBAU

126. In the context in which this question is necessary forms for guaranteeing those raised, it should be answered in the negative. requirements. Accordingly, there is no room Article 17 is intended to create, within its for provisions of domestic law carrying out field of application, independent and, hence, the same function in addition thereto. The 11 uniform law. 2 Article17 provides an third question should be answered to this exhaustive definition of the requirements effect. with regard to substantive consensus and the

C — Conclusion

127. For the reasons set out above, I propose that the Court should answer the questions raised by the Bundesgerichtshof as follows:

Question 1(a) and (b):

in point of their localization, to the transaction at issue and warrants the conclusion that the parties' conduct implies assent to the content of the let­ ter of confirmation and the general business conditions appended thereto.

If, in view of the fact that one of the parties was unaware of such a practice — if any —, the resolution of the dispute turns on whether that party ought to have been aware of that practice, the question should be answered in the negative if no such practice existed at the place at which that party has its head office and it was the first time that that party did business with a party adopting such a usage. Matters will be different where other circumstances are relied on and proved which bear out to a sufficient degree the fact that the party concerned ought to have been aware of the commercial practice in question.

(b) Agreement on a jurisdiction clause cannot be validly concluded for the pur­ poses of Article 17 by silence following receipt of a commercial letter of confirmation where the general business conditions attached to the letter of confirmation and containing the jurisdiction clause are in a language other than that in which the contract was concluded and the negotiations were conducted, the addressee of the letter does not know the language in ques­ tion, no specific reference to that clause was made in the language in which the negotiations were conducted and the contract was concluded, and it is the first time that the parties did business with each other. The situation would be different only if the commercial practice in force itself authorized a language to be used other than the language in which the contract was concluded and the negotiations were conducted.