C-256/00

BESIX v KRETZSCHMAR

OPINION OF ADVOCATE GENERAL ALBER delivered on 27 September 2001 1

I — Introduction I I — The relevant legislation

2. The relevant provisions of the Brussels 1. The object of this reference for a pre- Convention, 2in the version applicable in liminary ruling is to determine the forum of this case, are as follows: the place of performance of a contractual obligation under Article 5(1) of the Con- vention of 27 September 1968 on Jurisdic- tion and the Enforcement of Judgments in Civil and Commercial Matters (hereinafter 'the Brussels Convention'). The appellant Belgian companies, Six International Limited and Six Construct International 'Article 2 SA, whose legal successor is SA Besix (hereinafter 'Besix'), on the one hand, and the respondent company, WABAG Wasser- reinigungsbau Alfred Kretzschmar GmbH & Co (hereinafter 'WABAG') — part of the Deutsche Babcock group — on the Subject to the provisions of this Conven- other, had agreed to submit a joint tender tion, persons domiciled in a Contracting relating to a public contract in Cameroon. State shall, whatever their nationality, be They are currently involved in a dispute sued in the courts of that State. before the Belgian courts concerning whether WABAG is in breach of an exclu- sivity obligation contained in the agree- ment in so far as, like the defendant WABAG, the co-defendant Planungs- und Forschungsgesellschaft Dipl. Ing. W. Kretzschmar GmbH & Co KG (here- inafter 'AFOG'), which belongs to the same group of companies, took part in another 2 — Convention of 27 September 1968 on Jurisdiction and the undertaking's tender. The Court is being Enforcement of Judgments in Civil and Commercial Matters (OJ 1972 L 299, p. 32), as amended by the Convention of asked to determine whether the Belgian 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain courts have jurisdiction to hear the case. and Northern Ireland (OJ 1978 L 304, p. 1). The Convention of 25 October 1982 on the accession of the Hellenic Republic is not applicable because the action was brought before the court of first instance on 19 August, but the accession agreement did not enter into force in Belgium 1 — Original language: German. until 1 April 1989.

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— When the tenders were opened, Besix In respect of that lot, the tenders were found that PLAFOG, also a member of classified as follows: the Deutsche Babcock group, had taken part in the tender submitted by another company, Perusythyma (here- inafter: "POY"), a company incorpor- ated under Finnish law, about which 1. company X, Besix immediately complained to WABAG. WABAG replied by telex of 8 February 1984 that this was a mis- take due to poor exchange of infor- mation within the group and apolo- 2. company Y, gised for it.

3. the Finnish company and PLAFOG,

— The tender by the WABAG-Besix group was placed sixth out of the six 4. company Z, tenders received, being appreciably more expensive than the competing tenders; the Finnish tender was placed fifth. 5. WABAG-Besix.'

4. Besix consequently wrote to the Deut- sche Babcock group claiming compensation The contract was subsequently divided up for the damage caused to it as a result of and the execution of the different lots breach of the exclusivity agreement. entrusted to several undertakings.

7. It then notes, citing the case-law of the Court of Justice, that 'the place of perform- 11. The Court of Justice, the Cour d'appel ance of the obligation in question must be observes, has resolved similar problems, determined in accordance with the law arising out of proceedings concerning governing that obligation as designated by contracts of employment, by defining the the rules of conflict of laws of the court place of performance as the place 'where or before which the matter is brought'. Under from which the employee principally dis- the Belgian conflict rules, Belgian law is charges his obligations towards his applicable in this case. employer or the place where he has estab- lished the effective centre of his working activities'.

8. Finally, as regards the place of perform- ance, the Court d'appel finds that the registered office of the party against whom enforcement is sought cannot in any event 12. In this case, it may be assumed that be considered to be the place of perform- Belgium was the place 'where the parties in ance since it was clearly the parties' 'im- fact had the greatest interest in honouring plicit but certain [intention] ... to contract a their undertaking of exclusivity, since it general obligation of exclusivity applicable was in Belgium that they were to prepare in any place in the world'. the joint tender'.

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VI — The questions referred for a prelimi- reference to what criterion must that place nary ruling be determined?'

13. The Cour d'appel therefore referred the following questions to the Court of Justice for a preliminary ruling: V I I— Legal appraisal

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OPINION OF MR ALBER — CASE C-256/00

16. Only the undertaking of exclusivity is submit a joint tender. In support of its at issue here. The other obligations under view, Besix cites the Shenavai 6judgment, the contract with Besix are immaterial for according to which where action is being the purpose of determining jurisdiction. In taken in relation to more than one obli- its judgment in Leathertex, 5 the Court gation, ancillary obligations take second actually acknowledged that this approach place to the principal obligation. The place could result in a number of courts having of performance has therefore to be deter- jurisdiction, depending on which obligation mined in the light of the principal obli- was to be performed. As has already been gation. Under the applicable Belgian law, stated, the place of performance of the that place is in Belgium. undertaking of exclusivity is the registered office of the party against whom enforce- ment is sought.

5 — Case C-420/97 [1999] ECR I-6747. 6 — Case 266/85 [1987] ECR 239, paragraph 19.

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jurisdiction in respect of a contract is 23. Article 5(1) of the Brussels Convention avoided, the risk of inconsistent judgments can be interpreted in four different ways: is reduced and recognition and enforcement of judgments is made simpler.

— applying the traditional interpretation, without taking account of the special features of a world-wide undertaking of exclusivity;

21. Like Besix, the Commission points out that, according to the judgment in Shena- vai, where several obligations are pleaded simultaneously, ancillary obligations are secondary to the principal obligation. In — as assigning place of performance to this case, however, only one obligation is in the registered office of the party against dispute. whom enforcement is sought;

25. According to the referring court, it is taking of exclusivity would also be point- not possible, under Belgian law, to consider less. the place of performance to be the regis- tered office of the party against whom enforcement is sought in the case of a world-wide undertaking of exclusivity; consequently, that interpretation is not, in this instance, compatible with the judgment in GIE Groupe Concorde. 8 (The Commis- 28. The objection that the obligation to sion presumably means that this interpre- cooperate is not the subject-matter of the tation would not meet the aim of fore¬ dispute does not preclude that solution. If seeability either). an action for breach of both obligations were brought, then, according to Shenavai, only the court for the place of performance of the principal obligation would have jurisdiction.

26. If the place of performance were con- sidered to be the place where the under- taking of exclusivity was actually infringed, the determination of the place of perform- ance would depend entirely on the party against whom enforcement is sought. How- ever, the place of performance must be the outcome of the intention of both parties Opinion and be able to be foreseen by them when the contract is entered into.

33. It is settled case-law that the place of 31. It is therefore necessary to consider performance of that contractual obligation whether Article 5(1) of the Brussels Con- is, moreover, 'to be determined by the law vention is amenable to an interpretation governing that obligation according to the which precludes that outcome. The refer- conflict rules of the court seised'. 12 What is ring court, Besix and the Commission concerned, therefore, is not a concept of propose that the concept of the place of Community law which is uniform and performance should be determined in the autonomous and has a uniform meaning light of the principal contractual obli- to be determined by the Court for the gation. In this case, the principal obligation whole Community, but merely a reference is to prepare and submit a tender. to provisions of national law. These are the provisions which are to be applied to the contract in point — the lex causae. In purely national disputes — to which the Brussels Convention does not apply — the lex causae is the applicable national law. In disputes concerning contracts with cross- border implications, however, there may be A — The case-law on determination of the a degree of conflict between the different place of performance national legal systems which could apply — in this case German and Belgian law. In cases of this kind, it is necessary to 32. In determining, in this case, the place of examine expressly the question as to which performance, within the meaning of legal system the contract in question is Article 5(1) of the Brussels Convention, it subject. If, as in this case, the contract is solely the obligation which forms the contains no effective provision as to the subject-matter of the dispute that has to be national law applicable (choice of law), the taken into account, and not the whole court seised determines the law applicable contract. 10 That alone explains why juris- according to its own conflict rules. Accord- ing to the national court, the Belgian

36. In Shenavai, the Court was asked to consider whether jurisdiction in respect of payment of architect's fees should be deter- mined by reference to the place where the buildings were to be erected or the place at which the claim for fees was made. The 34. A limitation was, however, placed on latter solution followed from the principle that case-law: 'In the case of contracts of that, in determining jurisdiction at the employment, the Court has ruled that the place of performance, it is the contractual place of performance of the relevant obli- obligation at issue which must be taken gation should be determined by reference, into account. In that case, the national not to the applicable national law in court and United Kingdom Government accordance with the conflict rules of the suggested, however, that, as in the case of court seised, but to uniform criteria which disputes involving employment law, the it is for the Court to lay down on the basis obligation characterising the contract of the scheme and objectives of the Brussels should be the criterion applied for deter- Convention ... These criteria lead to the mining the place of performance. However, choice of the place where the employee the Court emphasised that contracts of actually performs the work covered by the employment create a lasting bond which contract with his employer.' 13 brings the employee within the organisa- tional framework of the employer's busi-

ness, a framework which, in its turn, reference, under the Uniform Law, to the normally provides a territorial point of creditor's domicile would not result in reference. It was therefore possible to use jurisdiction being conferred on the courts the obligation characterising the contract as most closely connected with the dispute. 20 the criterion even where other contractual He explained this on the basis that deter- obligations arising out of the contract of mining the place of performance on the employment were in dispute. That did not, basis of substantive law pursued objectives however, apply to other contracts, includ- other than those pursued by use of the place ing architects' contracts. 17 of performance to establish the jurisdiction of a court closely connected to the case. 21 He therefore proposed that, in the case of contracts of sale, the place of performance should, in principle, be the place where the seller is to supply the goods. 37. In Custom Made Commercial, the Court had to consider whether the lex causae also applies if the contract at issue has to be assessed in the light of the Uniform Law on the International Sale of Goods. Under the Uniform Law, the credi- tor's domicile would, in principle, be the 39. The Court, however, stressed that place of performance in respect of the while Article 5(1) of the Brussels Conven- demand for payment. tion is based on the assumption that the closest links between the dispute and the competent court are usually to be found at the place of performance of the contractual obligation, none the less the decisive factor is that the criterion of the place of perform- 38. Advocate General Lenz took the oppor- ance should be able to be precisely and tunity to analyse the case-law as it then clearly determined. The legal certainty thus stood and came to the conclusion that achieved would be jeopardised were the while the Court's preferred solution was to criterion of the place of performance modi- determine the place of performance in fied in cases in which it would not have the accordance with the lex causae, it took a effect of conferring jurisdiction on the court different approach where that solution was most closely connected with the dispute. 22 clearly not compatible with the objectives of Article 5(1) of the Brussels Conven- tion. 18 He also noted that the choice of obligation to be used as the criterion for determining the place of performance was of crucial importance for determining the place of performance. 19 Finally, the Advo- 40. In January 1999, the Court had once cate General considered that the automatic again to consider, in two cases, whether it needed to abandon or least modify its

case-law on determination of the place of cate General Ruiz-Jarabo set out, first in performance. abstract terms, 24 and then with reference to the main proceedings, 25 the considerable difficulties with which a court is faced in applying the existing case-law of the Court of Justice on determination of the place of performance. At a practical level, therefore, 41. Leathertex concerned two equal-rank- according to the Advocate General, the ing obligations to pay arising out of a place of performance is frequently deter- commercial agency agreement, which were mined not in accordance with the lex to be performed in different places. Advo- causae but, because it is easier to admin- cate General Léger concluded that refer- ister pursuant to the law of the court seised, ence to the lex causae would afford no the lex fori. On that basis, the Advocate greater legal certainty than an autonomous General concluded that the approach taken interpretation, whereas, over time at least, by the Court of Justice afforded no greater autonomous determination of the place of legal certainty than an autonomous inter- performance for the different types of pretation, under Community law, of the obligation would cover most conceivable concept of place of performance. Nor is cases, 23 since these would gradually be jurisdiction of a court closely connected referred to the Court for a preliminary with the dispute assured in that way. He ruling. He suggested that in the case of therefore proposed that the place of per- obligations to pay, the criterion applied formance be determined in the light of the should be the place for the supply of the particular circumstances of the individual consideration to be provided under the case in conjunction with the relevant obli- contract. In the case of a commercial gation of payment. agency agreement, the place of perform- ance of the actual service should be deter- mined by reference to the geographical delimitation which has inevitably to be established in that agreement for the agency mandate and, where necessary, by determining main centre of activity. In that way, exclusive jurisdiction at the place of performance would be established in 43. The Court, however, again stressed, in relation to all claims arising out of a this case too, the need to safeguard legal commercial agency agreement. certainty. 26 It further pointed out that the substantive law, to which Article 5(1) of the Brussels Convention refers, and the intention of the parties are generally more suitable for the purpose of determining a place of performance than is an abstract 42. Gie Groupe Concorde, finally, con- and autonomous interpretation by the cerned a claim for damages against a Court. 27 shipping company and a ship's captain in relation to a cargo carried between Le Havre (France) and Santos (Brazil). Advo- 24 — Opinion in Gie Groupe Concorde and Others (cited in footnote 16 above), point 28 et seq and 45 et seq. 25 — Ibid., point 33 et seq. 26 — Judgment in Gie Groupe Concorde and Others (cited in 23 — Opinion in Leathertex (cited in footnote 16 above), footnote 8 above), patagtaph 23 et seq. point 118 et seq. 27 — Ibid., paragraph 25 et seq.

'It is for the national legislature, which has exclusive competence in this field, to define 47. Nor would the Convention on the law a place of performance which takes fairly applicable to contractual obligations, into account both the interest of sound which is not applicable in this case, pro- administration of justice and the interests duce a different outcome. 29 Although the of adequate protection for individuals. It Convention makes it easier to identify the may well be that in so far as national law lex causae, Article 10(1)(b) thereof specifi- allows, the national court will have to cally leaves it to the lex causae to determine determine the place of performance by the place of performance. reference to the criteria suggested by the referring court — i.e. by identifying, by reference to the obligations undertaken and the circumstances of the case, the place where the thing or service contracted for was, or should have been, provided.' 28 48. Finally, it is also not possible to derive from the recently adopted Council Regu- lation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the enforcement of judgments in civil and commercial matters 30 an argument for interpreting Article 5(1) of the Brussels Convention 45. In Leathertex, the Court refrained from differently. Article (5)(l)(b) of the regu- restating that case-law, but declined to lation does set out explicit rules governing allow a common jurisdiction for actions the place of performance of sales relating to obligations of equal rank which contracts — the place for delivery of the are to be performed in different places. goods — and contracts for the provision of services — the place for the provision of the services. But it is impossible to find anything to suggest that the Court should determine a place of performance in the present case. In terms of its temporal scope alone, the regulation is not applicable because it enters into force only in relation 46. It therefore follows from that case-law to actions brought after 1 March 2002. that, as Community law now stands, it is Nor does the obligation in this case sub- for the national legislature to lay down stantively fall within any of the categories rules governing the place of performance of

50. In principle, it is not for the Court of 32 — In relation to claims for damages resulting from the Justice — or the Advocate General — to termination of exclusive licensing agreements where the requisite period of notice has not been observed, the analyse the lex causae. It should, however, Belgian courts seem inclined to link the claim for damages to the principal contractual obligation (judgments of Cour be pointed out that 'when applying d'appel, Mons, of 21 December 1998, journal des tribu- domestic law the national court must, as naux, 1999, 275, 276; of the Tribunal de commerce, Brussels, of 29 May 1990, Revue du Droit Commercial far as is at all possible, interpret it in a way Beige, 1992, 907, 911; and of the Cour d'appel, Brussels, of 20 April 1988, in: G Bogaert 8c P Maeyaert, Dis- which accords with the requirements of tributierecht — droit de la distribution, 1987-1992, Community law'. 31 Kluwer, 1994,114, 117). But it would also appear possible — as in German law (see as far back as the judgment of the Reichsgericht of 6 May 1902 in Case Rep. III 19/02, RGZ 51, 312, 313 et seq; judgment of the Bundesgerichtshof of 6 November 31 — Case C-262/97 Rijksdienst voor Pensioenen v Robert 1973 in Case VI ZR 199/71, Neue Juristische Wochen- Engelbrecht [2000] ECR 1-7321, paragraph 38 et seq. schrift, 1974, 410, 411) — to use the domicile of the (paragraph 39); see also Case C-106/89 Marleasing [1990] person against whom enforcement is being sought as the ECR I-4135, paragraph 8; and Case 14/83 Von Colson and criterion. Community law is certainly not inimical to either Kamann [1984] ECR 1891, paragraph 26. solution.

C — Limiting the scope of Article 5(1) of the Brussels Convention

55. Should the national court take the view 57. Construing Article 5(1) of the Brussels that none of the approaches discussed Convention in that way would, however, above is permissible under Belgian law, lead to the unsatisfactory outcome that in with the result that no single place of cases like the present one there would be a performance can be determined, the ques- multiplicity of courts having jurisdiction. tion would, finally, arise as to whether Article 5(1) of the Brussels Convention can apply at all.

56. In that connection, consideration would have to be given to applying, by 58. A multiplicity of competent courts would be precluded were this Court to

33 — Sec Case 32/88 Six Constructions v Humbert [1989] ECU 341, paragraph 19. 34 — Sec Case C-68/93 Shevill[1995| ECR I-415, paragraph 33.

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59. The Court has already declared itself in favour of construing the jurisdictional rules under Article 5 of the Brussels Convention narrowly as derogations from the general jurisdiction of the defendant's domicile 62. Consequently, an interpretation which under Article 2 of the Convention. 35 adheres closely to the wording is consonant with the objectives of the Convention in this case. Were a contractual obligation to relate to several places of performance simultaneously, the parties would no longer be able to foresee before which court they might be sued. Furthermore, jurisdiction would inevitably be awarded to courts which could no longer be considered to be 60. Advocate General Léger also gave con- closely connected to the case. sideration in his Opinion in Leathertex to the view that Article 5(1) of the Brussels Convention cannot apply if its application is incompatible with the objectives of the Convention. I have to agree with him when he states that 'Article 5(1) of the Conven- tion cannot be prevented from applying on grounds other than those dictated by its own scope of application, even where the use which a plaintiff seeks to make of it leads to determining jurisdiction in a way 63. It follows that application of which is not in accordance with the prin- Article 5(1) of the Convention is precluded ciples of the Convention, if that is the where under the law applicable in accord- choice of the plaintiff'. 36 Article 5(1) does ance with the conflict rules of the court not provide for its scope to be restricted in seised there is no single place of perform- that way. ance but a choice of several places of performance of equal rank.

(2) So far as is possible, the national court must interpret the provisions on the place of performance which are applicable in accordance with the preceding paragraph in a way which accords with the requirements of Community law and, in particular, with the objectives of the Brussels Convention — in this case with the objective of determining a single competent court which is closely connected to the dispute.

(3) Article 5(1) of the Convention cannot apply if, under the law applicable to the obligation at issue under the conflict rules of the court seised, there is no single place of performance but a choice of several places of performance of equal rank.

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