#5019 - Mulox Ibc - Conflict of Laws BCL

Mulox IBC (1993)

Facts

Proceedings between Mulox IBC Ltd, a company incorporated under English law whose registered office is in London (hereinafter "Mulox"), and one of its former employees, Hendrick Geels, a Netherlands national residing in Aix-les-Bains, France, following termination of his contract of employment by his employer.

It is apparent from the documents before the Court that Mr Geels, who had been employed by Mulox as international marketing director since 1 November 1988, established his office in France and sold Mulox products initially in Germany, Belgium, the Netherlands and the Scandinavian countries, to which he travelled frequently. As from January 1990, Mr Geels worked in France.

Following termination of his contract of employment, Mr Geels sued his former employer before the Conseil de Prud' Hommes, Aix-les-Bains (France), for compensation in lieu of notice and for damages.

Question

Does the application of the jurisdiction rule under Article 5(1) of the Brussels Convention of 27 September 1968 require the obligation characterizing the employment contract to have been performed wholly and solely in the territory of the State of the court seised of the dispute, or is it sufficient for its operation that part of the obligation - possibly the principal part - has been performed in the territory of that State?

Holding

Relevant obligation is the obligation of the employee

It is true that, with regard to the rule in Article 5(1) of the Convention on special jurisdiction, the Court has already held (Case 12/76 Tessili v Dunlop [1976] ECR 1473) that, for contracts in general, "the place of performance of contractual obligations", within the meaning of that provision, cannot be understood otherwise than by reference to the law which governs the obligations in question under the conflict rules of the court before which the matter is brought.

However, no such problem arises in relation to contracts of employment. The Court has consistently held that, in view of the specific nature of contracts of that kind (Case 133/81 Ivenel v Schwab [1982] ECR 1891, paragraph 20, Case 266/85 Shenavai v Kreischer [1987] ECR 239, paragraph 11, and Case 32/88 Six Constructions v Humbert [1989] ECR 341, paragraph 10), the obligation to be taken into consideration for the purposes of the application of Article 5(1) of the Convention to contracts of employment is always the obligation which characterizes such contracts, namely the employee' s obligation to carry out the work stipulated.

It follows that, in the case of a contract of employment, it is appropriate to determine the place of performance of the relevant obligation, for the purposes of applying Article 5(1) of the Convention, by reference not to the applicable national law in accordance with the conflict rules of the court seised but, rather, to uniform criteria which it is for the Court to lay down on the basis of the scheme and the objectives of the Convention.

Protection of the weaker party - before the special rules for employment contracts: Furthermore, in Ivenel and Six Constructions, the Court took the view that, in interpreting that provision of the Convention, account must be taken of the concern to afford proper protection to the party to the contract who is the weaker from the social point of view, in this case the employee.

“Place of performance of the obligation” – employment contracts

It follows that in relation to contracts of employment, the place of performance of the relevant obligation must be interpreted as meaning, for the purposes of Article 5(1) of the Convention, the place where the employee actually performs the work covered by the contract with his employer.

In that connection, the Court has held that, where various obligations derive from the same contract and form the basis of the plaintiff' s action, it is the principal obligation which must be relied on in order to determine jurisdiction (Shenavai, paragraph 19).

Where, as in this case, the work is performed in more than one Contracting State, it is important to interpret the Convention so as to avoid any multiplication of courts having jurisdiction, thereby precluding the risk of irreconcilable decisions and facilitating the recognition and enforcement of judgments in States...