#5058 - Wood Floor Solutions - Conflict of Laws BCL

Wood Floor Solutions (2010)

Facts

The reference has been made in the course of proceedings between Wood Floor Solutions Andreas Domberger GmbH ('Wood Floor'), established at Amstetten (Austria), and Silva Trade SA ('Silva Trade'), established at Wasserbillig (Luxembourg), relating to a claim for compensation for the termination of a commercial agency contract performed in several Member States.

It is apparent from the order for reference that on 21 August 2007 Wood Floor sued Silva Trade before the Landesgericht Sankt Pölten (Austria) seeking damages for termination of a commercial agency contract of EUR 27 864.65 and compensation of EUR 83 593.95.

In order to found the jurisdiction of the court seised, Wood Floor relied on Article 5(1)(b) of the regulation and claimed to have carried on business exclusively from its seat at Amstetten, the work of signing up and acquiring of clients thus taking place in Austria.

Questions

Is the second indent of Article 5(1)(b) of [the regulation] applicable in the case of a contract for the provision of services also where the services are, by agreement, provided in several Member States?

If the answer to that question is in the affirmative, should the provision referred to be interpreted as meaning that

(b) the place of performance of the obligation that is characteristic of the contract must be determined by reference to the place where the service provider's centre of business is located, which is to be determined by reference to the amount of time spent and the importance of the activity;

(c) in the event that it is not possible to determine a centre of business, an action in respect of all claims founded on the contract may be brought, at the applicant's choice, in any place of performance of the service within the Community?

Holding

Does Art. 5(1)(a) or Art. 5(1)(b) apply when services are provided in more than one member-state?

In the light of the objectives of proximity and predictability, the Court held that the rule set out in the first indent of Article 5(1)(b) of the regulation is also applicable where there are several places of delivery of goods within a single Member State, since one court must have jurisdiction to hear all the claims arising out of the contract (Color Drack, paragraphs 36 and 38, and Rehder, paragraph 34).

Second, the Court then held that the factors which it took as a basis in order to arrive at the interpretation set out in Color Drack are also valid with regard to contracts for the provision of services, including the cases where such provision is not effected in a single Member State (Rehder, paragraph 36).

Having regard to all the foregoing considerations, the answer to Question 1(a) must be that the second indent of Article 5(1)(b) of the regulation is to be interpreted as meaning that that provision is applicable in the case in which services are provided in several Member States.

How is jurisdiction decided when there are more than one places of provision of services?

Place of Main Provision of Services manifest from the contract

Accordingly, for the purposes of applying the rule of special jurisdiction in matters relating to a contract, laid down in the second indent of Article 5(1)(b) of the regulation, concerning the provision of services, when there are several places of delivery of the goods the 'place of performance' must be understood as the place with the closest linking factor, which, as a general rule, will be at the place of the main provision of services.

Having regard to the objective of predictability laid down by the legislature in recital 11 in the preamble to the regulation, and taking account of the wording of the second indent of Article 5(1)(b), according to which it is the place in a Member State where, under the contract, the services were provided or should have been provided which is decisive, the place of the main provision of services must be deduced, in so far as possible, from the provisions of the contract itself. Thus, in the context of a commercial agency contract, the place where the agent was to carry out his work on behalf of the principal, consisting in particular in preparing, negotiating and, where appropriate, concluding the transactions for which he has authority has to be identified, on the basis of that contract.

Alternatively, factually, main provision of services

It is appropriate, in the alternative, to take account of the place where he has in fact for the most part carried out his activities in the performance...