#5025 - Custom Made Commercial - Conflict of Laws BCL

Custom Made Commercial (1994)

Facts

Proceedings between Stawa Metallbau GmbH ("Stawa"), which has its seat in Bielefeld (Germany), and Custom Made Commercial Ltd ("Custom Made"), which has its seat in London, concerning the payment by the latter of merely part of the price agreed under a contract for the supply of windows and doors to be manufactured by Stawa.

Stawa confirmed the conclusion of the contract by a letter of 9 May 1988 written in English, to which it attached for the first time its general business conditions written in German. Paragraph 8 of those general conditions stated that in the event of a dispute between the parties the place of performance and jurisdiction was to be Bielefeld. Custom Made did not raise any objection to those general conditions.

When Custom Made paid only part of the stipulated price, Stawa brought proceedings for recovery of the balance before the Landgericht (Regional Court) Bielefeld.

Question

Is the place of performance under Article 5(1) of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters to be determined pursuant to the substantive law applicable to the obligation in issue under the conflicts rules of the court hearing the case where the case concerns a claim for payment of the price brought by the supplier against the customer under a contract for manufacture and supply, according to the conflicts rules of the court hearing the case that contract is governed by uniform sales law and under that law the place of performance of the obligation to pay the price is the place of establishment of the plaintiff supplier?

Holding

No separate forum non-conveniens considerations other than performance

Although the connecting factor is the reason which led to the adoption of Article 5(1) of the Convention, the criterion employed in that provision is not the connection with the court seised but, rather, only the place of performance of the obligation which forms the basis of the legal proceedings.

The place of performance of the obligation was chosen as the criterion of jurisdiction because, being precise and clear, it fits into the general aim of the Convention, which is to establish rules guaranteeing certainty as to the allocation of jurisdiction among the various national courts before which proceedings in matters relating to a contract may be brought.

It has been submitted, certainly, that the criterion of the place of performance of the obligation which specifically forms the basis of the applicant' s action, a criterion expressly laid down in Article 5(1) of the Convention, may in certain cases have the effect of conferring jurisdiction on a court which has no connection with the dispute, and that, in such a case, the criterion explicitly laid down should be departed from on the ground that the result it yields would be contrary to the aim of Article 5(1) of the Convention.

That last argument cannot be accepted, however.

The use of criteria other than that of the place of performance, where that confers jurisdiction on a court which has no connection with the case, might jeopardize the possibility of foreseeing which court will have jurisdiction and for that reason be incompatible with the aim of the Convention.

The effect of accepting as the sole criterion of jurisdiction the existence of a connecting factor between the facts at issue in a dispute and a particular court would be to oblige the court before which the dispute is brought to consider other factors, in particular the pleas relied on by the defendant, in order to determine whether such a connection exists and would thus render Article 5(1) nugatory.

It follows that under Article 5(1), in...