Posted on by Geert van Calster

‘Sale of Goods’ or ‘delivery of services’? Jaaskinen AG in Corman-Collins

In Case C-9/12 Corman-Collins, the questions referred are as follows:

Should Article 2 of Regulation No 44/2001,where appropriate in conjunction with Article 5(1)(a) and (b), be interpreted as precluding a rule of jurisdiction, such as that set out in Article 4 of the Belgian Law of 27 July 1961, which provides for the jurisdiction of Belgian courts where the exclusive distributor has its registered office in Belgian territory and where the distribution agreement covers all or part of that territory, irrespective of where the grantor of the exclusive distribution rights has its registered office, where the latter is the defendant?
Should Article 5(1)(a) of Regulation No 44/2001 be interpreted as meaning that it applies to an exclusive distribution of goods agreement, pursuant to which one party purchases goods from another party for resale in the territory of another Member State?
If Question 2 is answered in the negative, should Article 5(1)(b) of Regulation No 44/2001 be interpreted as meaning that it refers to an exclusive distribution agreement, such as that at issue between the parties?
If Questions 2 and 3 are answered in the negative, is the contested obligation in the event of the termination of an exclusive distribution agreement the obligation of the seller-grantor or that of the buyer-distributor?

Corman-Collins is registered in Belgium; La Maison du Whisky in France.  Jaaskinen AG justifiably replies to the first question in succinct fashion: where defendant is domiciled in a Member State other than the Member State of the forum, the Brussels I Regulation has priority over national jurisdictional rules (such as here: the 1961 Act on ‘concession’ agreements).

The 2nd and 3rd question are rephrased by the AG however also re-ordered: Article 5(1) b) of the Regulation, being the more specific, has priority over Article 5(1) a). Jaaskinen then points to an important difficulty: ‘concession’ agreements are not a concept known in EU law (in contrast, for instance, with ‘agency’). In view of the need for autonomous interpretation by the ECJ, the qualification or not of a contract as a ‘sale of goods’ cq ‘provision of services’ (two distinct categories employed by the Regulation), must not be left to national law (and ditto courts) to decide. The AG opts for ‘services’: sale of ‘goods’ is not the core distinguishing element in a ‘concession’ agreement – it is more than that: the holder of the concession rights is explicitly allowed by the other party, to distribute their goods in a given territory, indeed often this right is an exclusive right; holder and grantor often agree common sales techniques (indeed in the case at issue, use by the holder of a domain name indicating the grantor’s trading name); the concession agreement usually is a framework agreement, followed by individual sales agreements. Moreover, the holder commits to holding stock; to having an after sales service; frees the grantor from the requirement to have to establish their own distribution network in the territory; the grantor organises specific training sessions for the holder’s staff, etc. The holder therefore effectively provides a ‘service’, and jurisdiction has to be determined by Article 5(1) b), second indent.

Proof of whether such elements are present in the contractual relationship between parties, needs to be furnished by the party invoking the jurisdictional rule based on ‘services’; qualifications in accordance with lex fori are not relevant for such determination (European Law in other words harmonises qualification).

The final question, which the AG only entertains in subsidiary fashion, concerns the issue of what part of the contractual relationship needs to be withheld as ‘the obligation in question’ of Article 5(1)(a): ‘in matters relating to a contract, in the courts for the place of performance of the obligation in question;’ The concession holder in the case at issue (Corman-Collins) argues that where the grantor’s obligation entails delivery of the exclusive right for the holder to exercise an exclusive right of sale in a given territory, the suit for damages needs to be introduced in that territory.

‘The obligation in question’ was left undefined in both the Brussels Convention and the preparatory works. Indeed the Jenard Report is very brief on the special jurisdictional clause for contracts. In De Bloos the Court specified ‘For the purpose of determining the place of performance within the meaning of Article 5 (…) the obligation to be taken into account is that which corresponds to the contractual right on which the plaintiff’s action is based’. Plantiff’s suit inevitably leans upon defendant’s contractual obligations: it is the latter which determines ‘the obligation in question’. Where that place of performance lies, however, remains subject to national law: the Court in Tessili v Dunlop held that it was in no position to impose a European definition. Jaaskinen AG does not venture to give one, either: outside of the specific categories of Article 5(1)(b), European conflicts law has no grip on the qualification of contracts and their ‘place of performance’ by national courts.

Geert.