C-412/98

OPINION OF MR FENNELLY — CASE C-412/98

OPINION OF ADVOCATE GENERAL FENNELLY delivered on 9 March 2000 *

1. This Brussels Convention reference eral rule of jurisdiction, whereby 'persons raises two questions: the first is whether domiciled in a Contracting State shall, the Convention applies where the plaintiff whatever their nationality, be sued in the is domiciled in a third country; the second courts of that State'. This general domicili- is whether the special rules concerning ary rule of jurisdiction is subject to the rules 'jurisdiction in matters relating to insur- of 'special jurisdiction' set out in section 2 ance' apply to disputes concerning reinsur- of Title II. They include Article 5 which, ance. 1 inter alia, provides that:

I — The legal and factual background 'A person domiciled in a Contracting State may, in another Contracting State, be sued:

A — The relevant provisions of the Brus- sels Convention

2. Section 1 of Title II of the Convention 1. in matters relating to a contract, in the contains Article 2 which sets out the gen- courts for the place of performance of the obligation in question;

1. in the courts of the State where he is 4. Universal General Insurance Company domiciled, or ('UGIC'), now in liquidation, is domiciled in British Columbia, Canada. It had instructed its broker, Euromepa, a French- domiciled company, to enter into a reinsur- ance contract with effect from 1 April 1990 in relation to a portfolio of Canadian home-occupiers' insurance policies. Acting on these instructions, Euromepa contacted 2. in another Contracting State, in the Group Josi Reinsurance Company (herein- courts for the place where the policy- after 'Group Josi'), a Belgian-domiciled holder is domiciled, or company, by a fax dated 27 March 1990 and offered a share in the reinsurance contract, stating that 'the main reinsurers are Union Ruck with 24% and Agrippina Ruck with 20% ...'. By a faxed reply of 6 April 1990, Group Josi agreed to acquire a 7.5% share. 3. if he is a co-insurer, in the courts of a Contracting State in which proceedings are brought against the leading insurer.

5. In the meantime, on 28 March 1990, Union Ruck told Euromepa that it did not intend to retain its share after 31 May 1990, and, by letter of 30 March 1990, An insurer who is not domiciled in a Agrippina Ruck said it would reduce its Contracting State but has a branch, agency share from 20 to 10% as of 1 June 1990. or other establishment in one of the Con- It is common case that Euromepa did not

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OPINION OF MR FENNELLY — CASE C-412/98

'1. Does the Convention of 27 September 1968 on jurisdiction and the enforce- ment of judgments in civil and com- 8. On 27 July 1995, the Tribunal de Com- mercial matters apply not only to merce, Nanterre, held that it had jurisdic- "intra-Community" disputes but also tion under French law on the basis that the to disputes which are "integrated into Brussels Convention did not apply in the Community"? More particularly, respect of a Canadian company. It found against Group Josi and ordered it to pay to UGIC the sum of CAD 54 679.34 plus 2 — It also relied on Article 5(1), which specifically covers interest. jurisdiction in matters relating to contract.

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GROUP JOSI

can a defendant established in a Con- tion is applicable in circumstances such as tracting State rely on the specific rules those involved in the main proceedings. 3 on jurisdiction set out in that Conven- tion against a plaintiff domiciled in Canada?

13. The Commission, the United Kingdom and France submit that, once the subject- matter of a dispute falls within the material 2. Do the rules on jurisdiction specific to scope of the Brussels Convention and, in matters relating to insurance set out in particular, where the defendant is domi- Article 7 et seq. of the Convention ciled in a Contracting State, the domicile of apply to matters relating to reinsur- the plaintiff is irrelevant. 4 ance?'

14. There is nothing in the Jenard Report on the Brussels Convention which would indicate that any general restriction on the I I— Analysis application of the basic rule is predicated upon the plaintiff's domicile being within the territory of a Contracting State. 5More- over, only exceptionally is the place of 11. Written observations have been sub- domicile of the plaintiff significant under mitted by UGIC, Group Josi, the French the Convention. 6The explicit references Republic, the United Kingdom of Great made in those exceptional cases to that Britain and Northern Ireland and the place indicate that in all other cases it is Commission. Only France and the Com- irrelevant. mission submitted oral observations.

17. It is sufficient to recall the scheme of the Brussels Convention to conclude that the domicile of the plaintiff is irrelevant. 16. I agree with the United Kingdom and The scope of the Convention is defined in France that it would be inappropriate, for Article 1 so as to 'apply in civil and the purposes of determining the personal commercial matters whatever the nature scope of a Brussels Convention that was of the court or tribunal'. The Court has designed to promote legal certainty, to confirmed that the Convention contains resort to such an indefinite concept as that rules of jurisdiction which enumerate of whether disputes are integrated into the exhaustively the cases in which a person Community. 'Legal certainty', as the Jenard may be sued outside the State in which he is Report noted, 'is most effectively secured domiciled. 1 1Article 26 on the recognition by conventions based on direct jurisdic- of judgments and Article 31 on their enfor- tion' — i.e. where the jurisdictional rules cement, the key provisions in Title III of the established are applicable in the State of the Convention on 'Recognition and Enforce- original legal proceedings rather than ment' of judgments, are drafted in similarly merely in the courts of the place where it general terms. 12 In short, the language of is sought to have a judgment recognised all the principal provisions presumes that and enforced — 'since, under them, judg- the material scope of the Convention is ments are given by courts deriving their defined by reference to the actions which jurisdiction from the conventions them- selves'. 8 This is precisely what the Brussels Convention does; it establishes 'common 9 — Ibid., p. 15. rules of jurisdiction ... to achieve ... in the 10 — Save in non-international cases where the plaintiff is domiciled in the same Contracting State as the defendant, field which it was required to cover, a in which case the rules of jurisdiction in force in that State alone apply; see the Jenard Report, op. cit., p. 9. 11 — Case C-26/91 Handte v Traitements Mécano-chimiques des Surfaces [1992] ECR I-3967, paragraph 13. 12 — The Jenard Report, op. cit., p. 43, states that the 7 — The Commission's agent pointed out at the hearing that, in Convention 'applies to any judgment given by a court or accordance with Article 52, this was a matter for the lex fori tribunal of a Contracting State in those civil and commer- of the court seised of the case, namely the French courts in cial matters which fall within the scope of the Convention, the main proceedings, which, however, had not considered whether or not the parties are domiciled within the this question. Community and whatever their nationality' (emphasis 8 — Op. cit., p. 7. added).

are brought before the courts of the Con- 19. The jurisdictional provisions of the tracting States regardless of the parties. Brussels Convention comprise two distinct sets of provisions which establish the framework for the operation of Title III. Firstly, Article 2 confers jurisdiction based on the defendant's domicile, subject to a number of special provisions such as Arti- cles 5, 6, 7 to 12a, 13 to 15, 16 and 17. Article 4 provides for the cases where 'the defendant is not domiciled in a Contracting State', in which case the jurisdiction of each Contracting State is to be determined 'by the law of that State', viz. by the private 18. The Brussels Convention takes the international law of the respective Con- domicile of the defendant consistently as tracting States. Thus, the Convention estab- its primary point of reference for the lishes a comprehensive scheme covering all exercise of jurisdiction. The basic rule in defendants whether or not they are dom- Article 2 and the special rules in, inter alia, iciled in a Contracting State. Articles 5 and 6 invariably refer to where a 'person domiciled in a Contracting State' may be sued. Neither in those provisions nor in any of the special provisions such as Article 13 (consumer contracts) or Arti- cle 16 (exclusive jurisdiction) is any refer- ence made to the domicile of the plaintiff. Indeed, such indications as appear from the text suggest that the Convention is pre- sumed to apply to litigation involving domiciliarles of non-Contracting States. The second paragraph of Article 13 pro- vides that where 'a consumer enters a contract with a party who is not domiciled in a Contracting State', the latter is 'deemed 20. The exclusion of the plaintiffs domi- to be domiciled' in a Contracting State ciled in non-Contracting States from Arti- when it has a branch or agency there and cle 2, as argued by UGIC, would create a the dispute arises out of its operations. The major and illogical gap in the scheme of the latter provision is merely designed to iden- Brussels Convention. Firstly, it would make tify the Contracting State which may, in no sense to exclude cases where plaintiffs proceedings brought by a consumer, exer- are domiciled in non-Contracting States cise jurisdiction. 13 Article 17 confers from the scope of the Convention when exclusive jurisdiction on the courts of a cases involving defendants from such States Contracting State nominated for that pur- are included. In particular, actions covered pose in a contract between parties 'one or by Article 4 would be regulated, where more of whom is domiciled in a Member necessary, by the provisions of Articles 21 State'. and 22 regarding lis alibi pendens and related actions, whereas actions by non- domiciled plaintiffs even against persons 13 —See Case C-318/93 Brenner and Noller v Dean Witter domiciled within a Contracting State Reynolds [1994] ECR I-4275. would not necessarily be so regulated.

21. Furthermore, no support for non-appli- 22. Accordingly, I recommend that the cation of the Brussels Convention may be Court confirm that the non-Contracting- derived from the fact that it does not apply State domicile of the plaintiff is irrelevant to proceedings concerning the recognition for the purposes of the application of the and enforcement of judgments given in Brussels Convention. In my opinion, it may non-Contracting States.14 The proceedings only have a bearing in those cases where it at the origin of such application, unlike an is stated explicitly, whether directly or action brought against a defendant dom- indirectly, by the Convention to constitute iciled in one Contracting State before the a relevant factor.17 courts of another, have manifestly no connection with the Community. More- over, as the Commission observes, some support for dismissing the relevance of the plaintiff's domicile may be derived from certain case-law which has concerned actions brought by non-Contracting-State- domiciled plaintiffs but in which that domicile was not viewed as being pertinent. Thus, in Rich, the Court did not comment B — The Brussels Convention and reinsur- on the fact that the main proceedings ance involved a Swiss plaintiff who had brought an application before the English courts for the appointment of an arbitrator against an Italian domiciliary.15 While, in The Tatry, although one of the various series of actions 23. Only UGIC favours treating reinsur- involved in that case comprised proceed- ance as falling within the scope of section 3 ings brought in the Netherlands by Polish of Title II of the Brussels Convention. It shipowners for a declaration that they were refers particularly' to the potentially very not liable for the alleged contamination of weak position of the insurer in certain 'fronting' situations, and submits that rein-

25. The Commission observes that the relationship between the reinsured and the reinsurer does not affect that between the insurer and the original insured person and that the relevant provisions of the Conven- tion are ambiguous. However, it has deci- 24. Group Josi, supported on this point by ded to reconsider the view it expressed in France and the United Kingdom, submits its observations in Overseas Union Insur- that the special rules regarding insurance ance and Others. 20 Accordingly, it now (especially Article 8(2) of the Brussels Con- submits that the insurance rules are vention, which allows the policy-holder to designed to protect the 'weaker' party, sue in the courts for the place where it is which would tend to exclude reinsurance domiciled) do not apply. They are designed contracts. The rules on insurance should be to protect insured persons as the presump- viewed as being inspired by the same tively weaker contracting parties. This is philosophy as that underlying the rules not the case with reinsurance. Group Josi, concerning consumer contracts in section 4 along with France and the United King- of Title II (Articles 13 to 15) of the Brussels dom, draws support from the Schlosser Convention. Report on the 1978 Accession Convention, which states that '[reinsurance contracts cannot be equated with insurance con- tracts. Accordingly, Articles 7 to 12 do not apply to reinsurance contracts'. 19 France notes that, although reinsurance has arisen in the context of certain Arti- cle 21 cases, the Court did not consider that the special rules concerning insurance 26. There are two possible bases upon applied. It also contends that, even if which reinsurance may be regarded as reinsurance were covered, Article 8(2) of falling within the scope of the special the Convention could only apply where the insurance rules. The first is that there is insured is the weaker party and where it is no fundamental difference between insur- ance and reinsurance that would justify excluding the latter from the scope of 18 — 'Fronting' refers to the situation where insurer B, usually in section 3 of Title II of the Brussels Con- return for a commission, acts as a 'front' for insurer A, vention. The second is the textual argument who may be unlicensed or otherwise unacceptable to the insured. Ordinarily insurer B will, under the contract of that, while certain large risks are expressly insurance, be fully liable to the insured, but entitled to an indemnity from insurer A under the contract of reinsur- excluded by Article 12a, which was ance; see MacGillwray on insurance Law (Leigh-Jones, general editor), 9th ed. (London, 1997), at paragraph 33-

inserted by the 1978 Accession Conven- rules on jurisdiction in respect of insurance. tion, reinsurance is not among them. Some It is clear from the Jenard Report that indirect support for this view could be 'social considerations for the protection of drawn, as suggested by UGIC, from the certain categories of person, such as insured French legislature's decision, so as to persons ...' necessitated certain exceptions exclude reinsurance from the scope of the from the general domiciliary jurisdiction French Code des Assurances (Insurance rule, 'aimed in particular at preventing Code), to insert an express provision (Arti- abuses which could result from the terms cle L.111-1) into the Code to that effect. of contracts in standard form'. 23 The notion of protecting the insured, jurisdic- tionally, against the (usually) economically more powerful insurer would seem to have inspired even the original text of section 3 of Title II of the Brussels Convention. Indeed, the Court had taken the view in Bertrand v Ott, several months before even 27. However, I do not find these arguments the signature of the 1978 Accession Con- convincing. In the first place, insurance and vention, that protection of the weaker reinsurance, though related, 'are concep- private (final-consumer) party formed the tually distinct'. 21 Thus, while there is no basis for the rules of the original section 4 generally accepted broad definition of rein- of Title II, notwithstanding that its provi- surance, it may, in substance, be distin- sions made no reference to 'consumers'. 24 guished from ordinary insurance contracts, This view was expressly confirmed in 1983, because '[i]t is neither an assignment nor as regards section 3 of Title II of the transfer of the original insurance business original Brussels Convention, in Gerling v from one insurer to another, nor is it a Amministrazione del Tesoro dello Stato, relationship of partnership or agency where the Court held that it was 'apparent between insurers', but, rather, it constitutes from a consideration of the provisions of 'an independent contract of insurance that section in the light of the documents whereby the reinsurer engages to indemnify leading to their enactment that, in afford- the reinsured wholly or partially against ing the insured a wider range of jurisdiction losses for which the latter is liable to the than that available to the insurer and in insured under the primary contract of insurance'. 22 excluding any possibility of a clause con- ferring jurisdiction for the benefit of the insurer, their purpose was to protect the insured who is most frequently faced with a predetermined contract the clauses of which are no longer negotiable and who is in a weaker economic position'. 25

29. It is in this context that the unequivocal Brussels Convention apply. Indeed, the view regarding reinsurance expressed in whole thrust of section 3 of Title II is to paragraph 151 of the Schlosser Report prescribe a series of alternative rules of must be considered. Since it categorically jurisdiction intended to benefit those suing rejects the equation of reinsurance con- 'an insurer domiciled in a Contracting tracts with insurance contracts and since State' (see Article 8). Only Article 11 Article 9 of the 1978 Accession Convention addresses the right of an insurer to 'bring inserted a new Article 12a into the Brussels proceedings'. Yet it provides, apart from Convention so as explicitly to exclude counterclaims which may always be made certain (but not all) business-risk insurance in the court in which the original claim is contracts, the authors of the 1978 Acces- pending, that insurer-initiated proceedings sion Convention must be regarded as must be brought 'in the courts of the having accepted the Schlosser Report's view Contracting State in which the defendant that there was no need to remove any types is domiciled'. In effect, therefore, as France of reinsurance contracts because reinsur- points out, in so far as the right of action of ance had never been covered in the first insurers is concerned section 3 of Title II place. merely confirms the general rule of Arti- cle 2. If those provisions also extended to reinsurance, it might, not unreasonably, be contended that the reassured could only sue the 'reinsurer' at the latter's place of domicile because, after all, it would remain an 'insurer', while the reinsurer, since it would fall to be equated with an 'insurer', could also only sue the reinsured 'insurer' at the reassured's place of domicile. It seems to me highly unlikely that the authors of the Brussels Convention inten- ded to deprive either insurers or reinsurers of the right, in disputes between them- selves, to bring proceedings in particular 30. Moreover, the Court has consistently pursuant to Article 5. held that all exceptions to the general rule that a defendant be sued in the courts for the place of his domicile are to be narrowly construed.26 Since it is, at the very least, doubtful that it was originally intended to include reinsurance within the scope of section 3 of Title II of the Brussels Con- vention or, even if it were so originally included, to maintain that inclusion follow- ing the adoption of the 1978 Accession Convention, the Court should now confirm that the general jurisdictional rules of the

32. Consequently, I am satisfied that rein- surance contracts, i.e. those which create relationships between a reinsured and his

27 — Kaye, 'Business insurance and reinsurance under the European Judgments Convention: application of protective provisions' (1990) journal of Business Law 517, p. 522. See also: Hunter, 'Reinsurance Litigation and the Civil Jurisdiction and Judgments Act 1982' (1987) JBL 344; O'Malley and Layton, European Civil Practice (1989), paragraph 18.07; MacGillivray on Insurance Law, op. cit., paragraph 33-84; Colinvaux's Law of Insurance (Merkin editor), 7th ed., London, 1997, p. 39. 28 — See Colinvaux's Law of Insurance, op. cit., p. 29. The significant role of United Kingdom courts flowing from the importance of the London market was also cited by the Tribunal de Commerce, Nanterre, in its judgment in the main proceedings and, indeed, was recognised in the Schlosser Report, op. cit., paragraph 136. 30 — At the hearing, the Commission referred, in this respect, to certain provisions in Spanish law. Contrary to UGIC's 29 — See Kerr L.J. in the Court of Appeal of England and Wales submission, no such considerations apply in respect of the in Citadel Insurance v Atlantic Union Insurance [1982] 2 relationship between a reinsurer and an insurer in fronting Lloyd's Rep. 543, p. 549, Rix J. in the High Court of situations. England and Wales in Trade Indemnity and Others v Førsäkringsaktiebolaget Njord (in lia) [1995] 1 All ER 31 — The notion of subrogation has recently been considered by 796, p. 804 and Evans L.J. in Agnew and Others, op. cit., the Court in Case C-8/98 Dansommer v Andreas Götz footnote 21 above, pp. 943 and 944. [2000] ECR 1-393, paragraph 37.

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