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Published online by Cambridge University Press: 16 April 2020
The Brussels I Recast Regulation entitles business actors to agree on which court(s) will have jurisdiction but restricts the effectiveness of such jurisdiction agreements to disputes ‘which have arisen, or which may arise, in connection with a particular legal relationship’. This article fills a gap in the academic literature by examining the content and implications of this necessary connection (proximity) between the claim and the legal relationship between the parties. First, it characterises claim proximity as a question of party autonomy by distinguishing it from the subject matter of the jurisdiction agreement, which is an issue of contract interpretation. Second, it scrutinises the foreseeability test which has been frequently used by the CJEU in order to determine claim proximity, highlighting its main operational aspects. Building on both theoretical considerations and some cases where the foreseeability test has been used by domestic courts, this article provides clarifications about the scope, the proper functioning and the limits of such a test in order to raise awareness regarding the difficulties that may arise in its use in court to determine claim proximity and therefore assess jurisdiction.
I am very grateful to David Restrepo Amariles, Arnaud Van Waeyenberge and Mike Videler for reviewing multiple drafts of this article and providing meaningful suggestions for each of them. I am also grateful to Ronald Brand, Giorgio Cesari, Gilles Cuniberti, Ugo Draetta, Pietro Fazzini, Federico Ghezzi, Peter Mankowski and Alex Mills for their valuable comments. All errors are my responsibility.
1 For some examples see Born, GB, International Arbitration and Forum Selection Agreements: Drafting and Enforcing (Wolters Kluwer 2016) 20–1Google Scholar. See also Brand, RA, Transaction Planning Using Rules on Jurisdiction and the Recognition and Enforcement of Judgments (Brill Nijhoff 2014) 295–343CrossRefGoogle Scholar; Briggs, A, Agreements on Jurisdiction and Choice of Law (Oxford University Press 2008) 183–91Google Scholar.
2 Non-contractual claims are usually defined negatively in relation to contractual claims. See Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co. and others [1988] ECR 5565, para 18. Jansen, N, ‘The Concept of Non-Contractual Obligations: Rethinking the Divisions of Tort, Unjustified Enrichment, and Contract Law’ (2010) 1 Journal of European Tort Law 16CrossRefGoogle Scholar, 17, observes that there is no comprehensive definition of non-contractual obligations but simply a list of obligations that EU law considers as having a non-contractual nature such as ‘tort/delict, unjust enrichment, negotiorum gestio or culpa in contrahendo’. See Reg (EC) No 864/2007 on the law applicable to non-contractual obligations [2007] OJ L149/40, art 2(1). At the same time, although such a definition must be interpreted autonomously, the Regulation's recital 11 recognises that ‘[t]he concept of a non-contractual obligation varies from one Member State to another’.
3 See Mills, A, Party Autonomy in Private International Law (Cambridge University Press 2018) 187CrossRefGoogle Scholar.
4 With the exception of id 183–208. Despite the recent codification of private international law in certain jurisdictions, the issue of non-contractual claims connected to a contract has been ignored altogether. See Symeonides, SC, Codifying Choice of Law around the World: An International Comparative Analysis (Oxford University Press 2014) 137CrossRefGoogle Scholar.
5 (n 64).
6 Clauses A, C and D are taken from Mills (n 4) 176, 178; Clause B was litigated in O'Flynn & Ors v Carbon Finance Ltd & Ors [2015] IECA 93 [5]. For other examples of broadly worded jurisdiction agreements see Philips Domestic Appliances and Personal Care BV v Salton Europe Limited & Ors [2004] EWHC 2092 (Ch) [3] (‘All disputes under the Agreement’); Sabah Shipyard (Pakistan) Ltd v The Islamic Republic of Pakistan & anr [2002] EWCA Civ 1643 [1] (‘any action filed by the other Party under this Agreement’); Fondazione Enasarco v Lehman Brothers Finance SA & anr [2014] EWHC 34 (Ch) [4] (‘any suit, action or proceedings relating to this Agreement’).
7 For an historical analysis see H Muir Watt, ‘“Party Autonomy” in International Contracts: From the Makings of a Myth to the Requirements of Global Governance’ (2010) 6(3) ERCL 250, 265–72; M Lehmann, ‘Liberating the Individual from Battles between States: Justifying Party Autonomy in Conflict of Laws’ (2008) 41(2) Vanderbilt Journal of Transnational Law 381, 385–98; more recently, Mills (n 4) 31–44.
8 Mills (n 3) 175.
9 See JF Coyle, ‘Interpreting Forum Selection Clauses’ (2019) 104 IowaLRev 1791, 1803–6 (a US view); Born (n 1) 20; Brand (n 1) 320–1; P Sheridan, ‘Construction Act Review: Jurisdiction, Disputes Arising under or in Connection with the Contract’ (2015) 31(2) ConstLJ 108; ZS Tang, Jurisdiction and Arbitration Agreements in International Commercial Law (Routledge 2014) 102–9; F Sparka, Jurisdiction and Arbitration Clauses in Maritime Transport Documents: A Comparative Analysis (Springer 2009) 69–70; D Joseph, Jurisdiction and Arbitration Agreements and Their Enforcement (Sweet & Maxwell 2005) 110–11.
10 See Roche Products Ltd. & Ors v Provimi Ltd [2003] EWHC 961 (Comm) [60]–[68]; Fiona Trust & Holding Corporation v Yuri Privalov [2007] UKHL 40 [23]. The latter case concerned an arbitration agreement but is commonly referred to in the context of jurisdiction agreements: see L Merrett, ‘Article 23 of the Brussels I Regulation: A Comprehensive Code for Jurisdiction Agreements’ (2009) 58(3) ICLQ 545, 548–9.
11 For example, Fillite (Runcorn) Ltd. v Aqua-Lift [1989] 45 B.L.R. 27, held that the expression ‘disputes arising under the contract’ contained in an arbitration agreement was not wide enough to include a claim of negligent misstatement or misrepresentation.
12 For an overview, see Briggs (n 1) 184–91. See for example Philips Domestic Appliances and Personal Care BV v Salton Europe Limited & Ors [2004] EWHC 2092 (Ch) [3] (‘All disputes under the Agreement’); Sabah Shipyard (Pakistan) Ltd v The Islamic Republic of Pakistan & anr [2002] EWCA Civ 1643 [1] (‘any action filed by the other Party under this Agreement’); Fondazione Enasarco v Lehman Brothers Finance S.A. & anr [2014] EWHC 34 (Ch) [4] (‘any suit, action or proceedings relating to this Agreement’). On restitution claims, see G Panagopoulos, Restitution in Private International Law (Bloomsbury Publishing 2000) 219–21.
13 The same distinction has been made in international commercial arbitration: see I Welser and S Molitoris, ‘The Scope of Arbitration Clauses – Or “All Disputes Arising out of or in Connection with this Contract …”.’ (2012) 17 Austrian Yearbook of International Arbitration 18, 20–1.
14 For a US view see Coyle (n 9) 1803–6.
15 See L Brown & Sons Ltd v Crosby Homes (North West) Ltd [2005] EWHC 3503 (TCC) [49] (‘In this case it is evident that the phrase “under” the contract is less broad than “arising out of or in connection with” the contract’); Government of Gibraltar v Kenney [1956] 2 QB 410 (noting that ‘it is quite clear that “arising out of” is very much wider than “under” the agreement’); Heyman v Darwins Ltd [1942] AC 356, 399.
16 Pacific Resources Corp v Credit Lyonnais Rouse (CA, 7 October 1994).
17 For an example of controversial translation from English of a complex jurisdiction agreement see Cassazione (It.), S.U. (20 February 2007) No 3841, Poste Italiane SpA v JP Morgan Chase (2008) 44(1) Rivista italiana di diritto internazionale privato e processuale 160.
18 As suggested by S Davis, ‘The Critical Importance of Carefully Drafting Arbitration Clauses’ (2003) 22 Australian Resources and Energy Law Journal 161, 166 (with reference to arbitration agreement, but as applicable to jurisdiction agreements too).
19 Under Ashville Investments Ltd v Elmer Contractors Ltd, (1987) B.L.R. 55.
20 See Norther Developments (Cumbria) Ltd v J&J Nichol [2000] B.L.R. 158 [35] (‘The repudiation issues were matters arising under the contract’); Mackender Hill and White v Feldia AG [1966] 2 Lloyd's Rep. 449, 455 (qualifying a rescission for non-disclosure as a dispute arising under the policy ‘just as does a dispute as to whether one side or other was entitled to repudiate the contract’).
21 See ET Plus SA v Welter [2005] EWHC 2115 (Comm) [45] (concluding that ‘the clause extends beyond the four corners of the contract; it will cover disputes as to its true construction and it will further extend to both contractual and tortious claims, provided these are sufficiently connected to the non-performance of the contract so as to satisfy the test encapsulated in the word “regarding”’).
22 Fiona Trust (n 10) [12].
23 ibid [13] (L Hoffmann) and [27] (L Hope of Craighead). See in this regard P Gillies, ‘Arbitration and Fragmentation of the Dispute Resolution Process into Competing Arbitral and Judicial Proceedings – The Courts Role’ (2013) 16 International Trade and Business Law Review 397, 399–400.
24 Fiona Trust (n 10) [28].
25 Mills (n 3) 183.
26 ibid 183–4 (concluding to be better ‘attempting to determine the intentions of the parties through a teleological approach based on their broader contractual intentions’). For further criticisms to the one-stop adjudication doctrine see J Delaney and K Lewis, ‘The Presumptive Approach to the Construction of Arbitration Agreements and Separability – English Law Post Fiona Trust and Australian Law Contrasted’ (2008) 31 UNSWLJ 341, 344–5; K Sadrak, ‘Arbitration Agreements and Actions for Antitrust Damages after the CDC Hydrogen Peroxide Judgment’ (2017) 16 YARS 77, 102–3 (defining the application of this doctrine to antitrust claims ‘controversial’).
27 This paradox reflects Jürgen Habermas’ recognition of the aporias of tolerance, on which see L Thomassen, ‘The Inclusion of the Other? Habermas and the Paradox of Tolerance’ (2006) 34(4) Political Theory 439, 448–53.
28 Coyle (n 9) 1806.
29 In fact, the contract itself may prevent the parties from relying on contextual circumstances to interpret their intention under the contract. This occurs, for instance, in case of a ‘merger’ or ‘entire agreement clause’ stating that all the terms between the parties have been merged into the writing. See M Barber, ‘The Limits of Entire Agreement Clauses’ (2012) 6(4) JBL 486, 488; M Fontaine, F De Ly, Drafting International Contracts: An Analysis of Contract Clauses (Martinus Nijhoff 2008) 129–50. An open issue remains whether the principle of severability of a jurisdiction agreement which is part of a contract permits the merger clause to be discarded.
30 Briggs (n 1) 184–5.
31 On ‘effectiveness’ see Mills (n 3) 175–6; on ‘workability’ (in the context of international commercial arbitration) see A Frignani, ‘Interpretation and Application of the New York Convention in Italy’ in GA Bermann (ed), Recognition and Enforcement of Foreign Arbitral Awards: The Interpretation and Application of the New York Convention by National Courts (Springer 2017) 561, 566–7.
32 Emphasis added. See (1) Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters [2012] OJ L35/1 (Brussels I Regulation Recast), art 25(1), preceded by art 23(1) of the Regulation 44/2001 and art 17(1) of the 1968 Brussels Convention. See U Magnus, ‘Article 25’ in U Magnus and P Mankowski (eds), European Commentaries of Private International Law – Brussels Ibis Regulation (Otto Schmidt 2016) 583; P Mankowski, ‘The Role of Party Autonomy in the Allocation of Jurisdiction in Contractual Matters’ in F Ferrari and F Ragno (eds), Cross-Border Litigation in Europe: The Brussels I Recast Regulation as a Panacea? (Wolters Kluwer 2015) 97; M Herranz Ballestreros, ‘The Regime of Party Autonomy in the Brussels I Recast: The Solutions Adopted for Agreements on Jurisdiction’ (2014) 10(2) Journal of Private International Law 291; T Ratković and D Rotar Zgrabljić, ‘Choice-of-Court Agreements under the Bussels I Regulation (Recast)’ (2013) 9(2) Journal of Private International Law 259. See also Art 3(1)(a) of the 2005 Hague Convention on Choice-of-Court Agreements, reported in (2005) 44(6) International Legal Materials 1294.
33 Such wording was originally influenced by the Hague Convention on the jurisdiction of the selected forum in the case of international sale of goods (adopted 15 April 1958, not in force), Art 2 and the Hague Convention on the choice of court (adopted 25 November 1965, not in force) art 1. See G van Calster, European Private International Law (2nd edn, Hart Publishing 2016) 114–15.
34 See Magnus (n 32) 591–2.
35 Case C-543/10 Refcomp SpA v Axa Corporate Solutions Assurance SA and Others, Opinion of AG Jääskinen, EU:C:2012:637, note 35.
36 CGJ Morse, ‘Forum-Selection Clauses – EEC Style’ (1989) 1 AJICL 576 (emphasis added); Magnus (n 35) 620.
37 Case C-214/89 Powell Duffryn v Petereit, Opinion of AG Tesauro [1992] ECR I-1756, para 13.
38 See Brussels I Regulation Recast, recitals 18–19 and the ‘exclusive jurisdiction’ provisions of the various EU provisions reported in (n 32).
39 Case C-23/78 Nikolaus Meeth v Glacetal [1978] ECR 2133.
40 ibid para 8.
41 In this case, adjudication in the same proceedings is the rule. R Zimmermann, Comparative Foundations of a European Law of Set-Off and Prescription (Cambridge University Press 2002) 56.
42 This is a typical case where German law would demand separate proceedings (Art 145(3) ZPO). See D Looschelders and M Makowsky, ‘Set-Off’, in S Leible and M Lehmann, European Contract Law and German Law (Wolters Kluwer 2014) 695–7.
43 Case C-214/89 Powell Duffryn plc v Wolfgang Petereit [1992] ECR I-01745.
44 ibid para 2.
45 ibid para 31.
46 ibid para 34.
47 S Rammeloo, ‘Jurisdiction Clauses in Transnational Company Relationships’ (1994) 1 MJ 433.
48 See Brussels I Regulation Recast, art 24(2); Brussels I Regulation, art 22(2); 1968 Brussels Convention, art 16(2). See MV Polak, ‘Case C-214/89, Powell Duffryn PLC v Wolfgang Petereit, Judgment of 10 March 1992, not yet reported’ (1993) 30 CMLRev 406, 416–17.
49 See Case C-352/13 Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Evonik Degussa GmbH and Others, EU:C:2015:335. The judgment also addresses other questions concerning art 5(1) and 6(1) of the Brussels I Regulation. See W Wurmnest, ‘International Jurisdiction in Competition Damages Cases under the Brussels I Regulation: CDC Hydrogen Peroxide’ (2016) 53 CMLRev 225; O Geiss and H Daniel, ‘Cartel Damage Claims Hydrogen Peroxide SA v Akzo Nobel NV and others: A Summary and Critique of the Judgment of the European Court of Justice of May, 21 2015’ (2015) 36 European Competition Law Review 430.
50 See the referred questions in CDC (n 49) para 14.
51 See Commission Decision No C(2006) 1766, (2006) OJ L 353, 54, paras 3–4, 11–12, 40.
52 A parallel litigation was launched in Helsinki. See District Court of Helsinki (4 July 2013) CDC Hydrogen Peroxide Cartel Damage Claims SA v Kemira Oyj, Välituomio 36492, no 11/16750.
53 On arbitration agreements in CDC, see K Sadrak, ‘Arbitration Agreements and Actions for Antitrust Damages after the CDC Hydrogen Peroxide Judgment’ (2017) 16 Yearbook of Antitrust and Regulatory Studies 77; D Geradin, ‘Arbitrability of EU Competition Law-Based Claims: Where Do We Stand after the CDC Hydrogen Peroxide Case?’ (2016) 40 World Competition 67.
54 CDC (n 49) para 70.
55 ibid para 71.
56 On this point see J Segan, ‘Arbitration Clauses and Competition Law’ (2018) 9(7) Journal of European Competition Law & Practice 423, 425–6.
57 Cour de Cassation, First Civil Chamber (7 October 2015) no 14-16.898 (2015) Recueil Dalloz 2621.
58 See O Sendetska, ‘Arbitrating Antitrust Damages Claims: Access to Arbitration’ (2018) 35(3) JIntlArb 370.
59 See H Gaudemet-Tallon and F Jault-Seseke, ‘Droit international privé mars 2016–février 2017’ (2017) Recueil Dalloz 1023, and Briggs (n 1) 183, both defining such a change as ‘unrealistic’.
60 That is, opting out of a boilerplate provision generates transaction costs. See P van Wijck, ‘Foreseeability’ in G De Geest (ed), Contract Law and Economics (Edward Elgar 2011) 232.
61 See Sendetska (n 58) 362.
62 See Case C-595/17 Apple Sales International, Apple Inc., Apple Retail France EURL v MJA, acting as liquidator of eBizcuss.com, EU:C:2018:854. See P Caro de Sousa, ‘Should Jurisdictional Clauses Be Interpreted Differently in Competition Law Cases? A Comment on Case C 597/17 Apple’ (November 2018) Competition Policy International 4.
63 See Cour de Cassation (11 October 2017) no 16-25.259 (2018) Revue critique de droit international privé 132. See also Supremo Tribunal de Justiça (16 February 2016) Interlog, Taboada & Barros v Apple, 135/12.7TCFUN L1.S1, on which M Sousa Ferro, ‘Antitrust Private Enforcement in Portugal and the EU: The Tortuous Topic of Tort’ (2016) 4 Global Competition Litigation Review 140.
64 Apple (n 62) para 9.
65 ibid para 28.
66 ibid paras 28 and 30.
67 H Gaudemet-Tallon, ‘Clause contributive de juridiction et droit de la concurrence: l'affaire eBizcuss devant la CJUE’ (2018) Recueil Dalloz 2338, 2341.
68 A-L Calvo Caravaca and J Carrascosa Gonzalez, ‘European Union Private International Law in Front of Antitrust Damages Action’ (2018) 10(2) Cuadernos Derecho Transnacional 47.
69 See Caro de Sousa (n 62) 3.
70 See Mills (n 3) 184–9.
71 ibid 187.
72 ibid.
73 A Dickinson, ‘Background and Introduction to the Regulation’ in A Dickinson, E Lein (eds), The Brussels I Regulation Recast (OUP 2015)1, 23.
74 Report on the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters by Mr P Jenard, OJ EC 1979 C 59, 1, 3.
75 Brussels I Regulation, Recital 11 and Brussels I Regulation Recast, Recital 15.
76 Determining ‘clearly and precisely’ which court has jurisdiction ‘is conducive to the legal certainty sought by the Convention’. Case C-116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I-14693, para 51.
77 J Van Meerbeeck, ‘The Principle of Legal Certainty in the Case Law of the European Court of Justice: From Certainty to Trust’ (2016) 41(2) ELRev 275, 280.
78 See Brand (n 1) 109. See also Kurer, P, Legal and Compliance Risk: A Strategic Response to a Rising Threat for Global Business (Oxford University Press 2015) 84–8Google Scholar; Avila, H, Certainty in Law (Springer 2016) 172–4CrossRefGoogle Scholar.
79 See D Saidov, The Law of Damages in the International Sale of Goods (Hart Publishing 2008) 101–19.
80 Lastly Case C-196/2015 Granarolo SpA v Ambrosi Emmi France SA, EU:C:2016:559, para 16; Case C-523/10 Wintersteiger AG v Products 4U Sondermaschinenbau GmbH, EU:C:2012:220, para 23; Case C-533/07 Falco Privatstiftung v Gisela Weller-Lindhorst [2009] ECR I-03327, para 22.
81 CDC (n 49) para 70.
82 Saidov (n 79) 113. See also Etihad Airways PJSC v Prof Dr Lucas Flöther [2019] EWHC 3107 (Comm) [120].
83 This analysis must necessarily be performed on a summary basis, as courts must ‘readily’ rule on jurisdiction. See Case C-375/13 Harald Kolassa v Barclays Bank plc, EU:C:2015:37, para 61.
84 Saidov (n 79) 122.
85 Hart, HLA and Honoré, T, Causation in the Law (Oxford University Press 1985) 261–2CrossRefGoogle Scholar.
86 M Sousa Ferro, ‘Apple (C-595/17): ECJ on Jurisdiction Clauses and Private Enforcement: “Multinationals, Go Ahead and Abuse Your Distributors”?’ (2018) Competition Policy International <https://ssrn.com/abstract=3276569> 3–4, observes that anticompetitive conduct arising out of art 101 TFEU ‘is just as (or more) likely to be linked to the contractual relationship and to materialize in contractual terms as [one under art] 102’. See also Apple, AG Opinion (n 65) para 70, where AG Wahl rejected ‘the notion that cartels … always produce their harmful effects outside any contractual relationship, while conduct constituting an abuse of dominant position … would necessarily have its source in the contract entered into by the victim of the alleged conduct and the person committing such an abuse’.
87 Sousa Ferro (n 86) 3.
88 Notably, ‘the list of abusive practices contained in [art 102 TFEU] is not an exhaustive enumeration of the abuses of a dominant position prohibited by the Treaty’. Case C-395/96 Compagnie Maritime Belge Transports and others v Commission [2000] ECR I-01365, para 112; Case 6/72 Europemballage and Continental Can v Commission [1973] ECR 215, para 26.
89 CDC (n 49) para 61.
90 Apple (n 62) para 28.
91 See Etihad (n 82) [148], [152].
92 Hewden Tower Cranes Ltd v Wokffkran GmbH [2007] EWHC 857 (TTC).
93 ibid [34].
94 ibid [38].
95 (n 63).
96 ibid para II.b.3 in fine.
97 ibid.
98 See D'Avout, L, ‘Comportement du règlement « Bruxelles I » en cas d'entente anticoncurrentielle’ (2015) Recueil Dalloz 2041Google Scholar.
99 See Etihad (n 82).
100 ibid [16].
101 ibid [130], [135].
102 These tests were proposed by Professors Vischer and Schwander in Roche Products (n 10) [54].
103 ibid [65].
104 ibid [67]–[68].