C-318/93

BRENNER AND NOLLER v DEAN WITTER REYNOLDS

OPINION OF ADVOCATE GENERAL DARMON delivered on 8 June 1994 *

Mr President, mediated exclusively by Metzler Wirtschafts- Members of the Court, und Börsenberatungsgesellschaft mbH, a company which is independent of Dean Wit­ ter Reynolds Inc.

1. By order of 25 May 1993 the Bundesger­ ichtshof refers to the Court for a preliminary 3. The result of the investments made by ruling four questions on the interpretation of that firm on behalf of the plaintiffs in the Articles 13 and 14 of the Brussels Conven­ main proceedings was that, following specu­ tion on Jurisdiction and the Enforcement of lative transactions, they lost almost all the Judgments in Civil and Commercial Matters capital provided. Mr Brenner and Mr Noller (hereinafter 'the Convention') as amended therefore brought proceedings for compen­ on 9 October 1978. ' Three of the questions sation against the broking firm, seeking are identical in content with those referred repayment of the sums lost; they claimed on by the Bundesgerichtshof in the Shearson the basis of breach of contractual and pre- Lehman Hutton case. 2 contractual obligations, tortious conduct in connection with inflating charges by carry­ ing out a large number of sometimes unrea­ sonable transactions ('churning'), and unjust enrichment.

— 'contract for the supply of goods or a contract for the supply of services' in subparagraph 3 of the first paragraph of Article 13, in order to determine whether a contract on a commission basis for the purpose of carrying out commodity futures transactions comes within that '... Article 13 of the Convention is to be category; interpreted as meaning that where a plaintiff, party to one of the contracts mentioned in the first paragraph of that provision, is engaged in his trade or professional activity, and is not himself the consumer, he cannot enjoy the benefit of the special rules of juris­ — 'advertising' within the meaning of that diction laid down by the Convention con­ provision, in order to determine whether cerning consumer contracts'. 4

it means that there must be a link with the conclusion of a contract;

— 'proceedings concerning a contract' in the first paragraph of Article 13, so as to 7. The Court thus considered that the know whether it covers not only claims assignee of a claim acting in the course of his for damages for breach of contract but professional activity could not rely on the also claims on the basis of breach of pre- protective rules of Article 13 which the contractual obligations and unjust enrich­ assigning consumer could have relied on.

3 — Page 6 of the order for reference. 4 — Paragraph 24 and operative part.

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10. The Brussels Convention is not intended to regulate jurisdictional disputes which may arise between courts in a Contracting State on the one hand and those in a non- Contracting State on the other hand. As the 'where a defendant is not domiciled in a 6 Jenard Report states, Contracting State the Convention does not contain any rules of its own but refers to the

5 — That section originally related only to the sale of goods on instalment credit terms and to loans expressly made to finance the sale of goods and repayable by instalments. Its 7 — Page 13. scope was extended by the amendment in 1978. 8 — Ibid. 6 — OJ 1979 C 59. p. 1. 9 — OJ 1986 C 298. p. 1.

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OPINION OF MR DARMON — CASE C-318/93

internal law of the State of the court hearing 'embed' the case in the Community legal the action (Article 4, first paragraph). As order. It suffices here if one of them is domi­ against such a defendant, the Convention ciled in a Contracting State. permits any person domiciled in a Contract­ ing State, whatever his nationality, to avail 10 himself of the law of that State ...'.

15. Similarly, Article 18 deals with the case of a defendant who enters an appearance before a court of a Contracting State, where he does not contest its jurisdiction and there 12. The first paragraph of Article 4 of the is no conflict with the provisions of Article Convention indeed provides that: 16. 11

18. As Article 13 states,

1 21. As Gothot and Holleaux write, 7

'in proceedings concerning a contract con­ cluded by a person for a purpose which can be regarded as being outside his trade or profession, hereinafter called "the consum­ er", jurisdiction shall be determined by this '... if the defendant is not domiciled in the Section, without prejudice to the provisions of territory of a Contracting State, the first 15 Articles 4 and 5 (5)'. paragraph of Article 4 expressly refers to the law of each Contracting State for determina­ tion in such a case of the international juris­ diction of the courts of that State .... It is thus necessary — but also sufficient — that the defendant is domiciled outside the Com­ 19. The express reference to Article 4 in the munity for all the rales of international juris­ first paragraph of Article 13 is thus a diction of the court in which proceedings are reminder that the scope of Articles 13 to 15 brought to be applicable, including if appro­ is limited to cases where the defendant is priate so-called exorbitant rules of jurisdic­ 16 domiciled in a Contracting State. tion. Article 3 gives a list of them: ... the forum where the property is situated under Paragraph 23 of the German ZPO ... .

20. In the circumstances the rules on juris­ diction set out in the Convention do not apply to proceedings such as those pending The mere fact that he is not domiciled in a Contracting State thus means that the defen­ dant, even if he is a national of a Contracting 14 — With reference to the last point, note that the national court State, loses the benefit of the European juris­ considers that 'no branch, agency or other establishment 18 within the meaning of the second paragraph of Article 13 ... diction system in Articles 2 to 15 ...'. has acted as an intermediary in the conclusion or perfor­ mance of the contract' (p. 6 of the order for reference). 15 — My emphasis. 16 — See, inter aha, Lasok and Stone: Conflict of Laws in the European Community, Professional Books Limited, 1987, 17 — Cited in note 11 above. p. 228. 18 — Point 35, p. 20.

24. I note, however, that even if that condi­ '... the basic principle ... is that the Brussels tion were fulfilled Articles 13 to 15 would Convention lays down rules for intra- still not apply, since the proceedings would Community proceedings, not for national 22 not be international for the purposes of the proceedings ...'.

19 — Civil Jurisdiction and Enforcement of Foreign Judgments, 21 — Point 30. Professional Books Limited, 1987. 22 — Revue critique de droit international privé, 1993, p. 325, at 20 — Pages 842 and 843, my emphasis. p. 330.

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27. The main proceedings are therefore not 29. That is, moreover, the approach adopted covered by the rules on direct jurisdiction in by the Court in the judgment in Shearson the Convention, more particularly those in Lehman Hutton. I dealt with them in my the first paragraph of Article 14. Opinion, on an alternative basis. I will there­ fore restrict myself to referring to my obser­ vations in that Opinion 23 in case the Court, contrary to my conclusion, considers that Article 14 of the Convention does apply 28. There is therefore no need to answer the here. subsidiary questions.

30. Accordingly, I propose that the Court hold that Article 14 of the Brussels Con­ vention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters is not applicable where the proceedings are brought by a consumer in a Contracting State against the other party to the contract who is domiciled in a non-Contracting State, where the conditions in the second paragraph of Article 13 are not fulfilled. In any event, the latter provision is not applicable, for want of a foreign element, where the branch, agency or other establishment of a company based in a non-Contracting State is situated on the territory of the same Contracting State as that in which the consumer is domiciled.