Jurisdiction EU II

The European Union Judgment Regulations sets out in which states, a person must be sued, and which state has jurisdictions over particular types of proceedings and disputes.

If a person is domiciled in a particular EU state, he may generally be sued in that State.  The relevant time is when the claim is issued. If one of the exceptional provisions do not apply, the domicile of the defendant is critical.  If the defendant is domiciled in an EU state, the Court may assume jurisdiction under the EU rules.  Otherwise, common law rules apply.

The defendant may be sued other than in his Member State, if the case  falls within one or other of the exceptions.  In each case there must be a particular close connection with the other country in which litigation is brought.  Where one of the grounds apply, proceedings may issue directly against the defendant without court permission.

The court of a Member State may acquire jurisdiction if the defendant enters an appearance in response to proceedings and does contest the jurisdiction.  If the defendant enters an appearance to challenge jurisdiction, the court may have no jurisdiction, unless the court has exclusive jurisdiction by reason of the type of dispute concerned e.g., a property dispute.

The rules relating to contract and tort i.e., civil wrongs are of prime practical importance. A high proportion of all disputes are in these categories.

In a matter relating to a contract a person may be sued in another state other than his domicile if it is the place of the performance of the contract obligation in question.  The provision applies even if the defendant challenges the existence of the contract concerned.

There are different views as to whether restitution claims are subject to the provisions.  The better view would appear to be that they do fall within the same provision.

The place of performance may or may not be clear. In many cases involving the sale of goods or supply of services, the position may be self-evident, in other cases, it will be a question of ascertaining the obligations and identifying where they are to be performed.  Each person\’s obligation may be looked at separately.  Where there are obligations involving two states, more complex issues may arise. The courts consider what are the principal obligations and what are the subsidiary or less significant obligations.

In the case of sale of goods and the supply of services, jurisdiction is determined by the place of performance of the obligation which determines the nature of the contract. This is the characteristic obligation.  In the case of the seller this is the obligation to deliver the goods or the obligation to provide the service. Therefore, the place of performance, unless otherwise agreed, is where the goods are delivered or should have been delivered or where the service is or should have been provided.  The payment is not regarded as the characteristic performance.

If the place of delivery of goods or the supply of services is not in an EU member state, the question turns where the principal obligation is performed.  Therefore an obligation to pay may be governed by the place where the creditor is based.

Agreement for Jurisdiction

Parties can agree that a particular state’s courts will have jurisdiction. There is no requirement that there is any connection between the parties to the dispute and the forum (court) designated to hear the disputes.

The agreement may be contained in an agreement dealing with other matters.  It may be contained in general conditions or small print. As long as the agreements comply with certain formal requirements, the agreement is binding subject to certain limitations.  This will even apply where there is a question over the validity of the contract itself.

European Union rules apply even if the defendant is not domiciled in the EU as long as the claimant is.  The European Union rules do not apply where the parties have chosen a non-EU State. Other common rules may apply.

The formal requirements which must be complied with for such an agreement require as follows:

• the agreement must be in writing or evidenced in writing. It must in a form which accords with practices
• the parties have established between themselves or
• in international trade or commerce in a form which accords with uses which the parties knew or ought to have been aware of and which in such trade or commerce is widely known to and regularly observe by parties to contracts of the type involved in the trade concerned.

The requirement for writing generally requires that the document is signed by both parties.  It may be contained in small print referred to in the signed document. An electronic note will usually suffice as writing. An agreement not in writing may still be effective under the second condition above.

The designated courts have exclusive power to hear unless the parties otherwise agree.  If neither party to the agreement is domiciled in the EU, the chosen Court may exercise jurisdiction unless it declines to do so.

In the case of a claim based on tort / civil wrongs, the person may be sued in the courts of the place where the harmful event occurred or may occur.  Therefore where a person is injured by the negligent driving of a person in another state, legal proceedings may be brought there.

The key question. where the harmful event has or may occur.  In some cases, the harmful event may occur in several places.  The harmful event occurs where the damage occurs or a place or event giving rise to it.  This, for example, has been applied in relation to pollution.

The harmful event occurs where the injury or damage is inflicted rather than, where the injury is suffered. The place where (for example the negligence occurs), rather than where the harmful consequences is suffered, determines the position. They will usually, although not necessarily be the same place.

In a libel case, the harm may occur in a number of States and the claimant may have a choice where to bring proceedings.  He may bring proceedings where the publisher is established or in any one of the places where the publication is distributed because damage occurs there.  However, he can only recover the damage suffered in that particular Member State.

The principles cover threatened wrongs as well as actual harm.  Therefore, an injunction may be sought restraining publication in a particular place where the publication is threatened.

There are certain categories of case, which do not depend on the residence or domicile of the parties. In this case, the states of a particular state have exclusive jurisdiction.  This is due to the nature of the proceedings themselves.  The categories are as follows:

• most proceedings arising from land and buildings.
• most proceedings relating to companies, partnerships.
• proceedings relating to public registers.
• proceedings relating to intellectual property rights.
• proceedings in relation to enforcement of judgment.

These rules are mandatory and cannot be changed by the agreement of the parties.

Because property is situated in a state, the Courts have long since held that rights to property or arising out of it, must be heard in the courts of that jurisdiction (state). Claims relating to the extent, content, ownership and possession of properties and rights in relation to properties are covered.  It also covers protection and enforcement of the owner’s right.

A claim based on a contract for the transfer of land need not necessarily be governed by the laws of the country where the land is situated. However, it usually will be the best law to cover such contracts.  There are certain other limited exceptions.

Leases and tenancies of immovable property and disputes in relation to their existence and term must be heard in the country where the land is situated.  So too must claims for the recovery of the premises, rent, compensation and for damage caused by the tenant.

Disputes relating

• indirectly to the use of properties such as loss of holiday, enjoyment, travel expenses
• holiday contracts which include not only accommodation but other services such as transport, reception insurance
• timeshare arrangements

need not necessarily be governed by the law of the place concerned.

The rules in relation to winding up of companies is determined by the place where they are formed.  Rules concerning the interpretation, operation and winding up of the company is determined by the place where the company is incorporated.