Status updated: can a ‘relationship’ be a ‘contract’? CJEU says it’s complicated in Granarolo, and complements the Handte formula.

In C-196/15 Granarolo, extensive reference is made to Brogsitter, in which the CJEU held that the fact that one contracting party brings a civil liability claim against the other is not sufficient to consider that the claim concerns ‘matters relating to a contract’ within the meaning of Article 7(1) Brussels I Recast. That is the case only where the conduct complained of may be considered a breach of contract, which may be established by taking into account the purpose of the contract, which will in principle be the case only where the interpretation of the contract which links the defendant to the applicant is indispensable to establish the lawful or, on the contrary, unlawful nature of the conduct complained of against the former by the latter. 

Kokott AG Opined that there was no such contractual relationship in the case at hand: see my review of the Opinion. The Court held last week and was less categorical. It suggests a contractual relationship between the parties (which did not have a framework agreement in place: rather a long series of one-off contracts) should not be excluded: the long-standing business relationship which existed between the parties is characterised by the existence of obligations tacitly agreed between them, so that a relationship existed between them that can be classified as contractual (at 25).

What follows can be considered a CJEU addition to the rather byzantine double negative C-26/91 Handte formula: ‘matters relating to a contract is not to be understood as covering a situation in which there is no obligation freely assumed by one party towards another’. In Granarolo at 26 the Court notes

The existence of a tacit relationship of that kind cannot, however, be presumed and must, therefore, be demonstrated. Furthermore, that demonstration must be based on a body of consistent evidence, which may include in particular the existence of a long-standing business relationship, the good faith between the parties, the regularity of the transactions and their development over time expressed in terms of quantity and value, any agreements as to prices charged and/or discounts granted, and the correspondence exchanged.

These criteria obviously are quite specific to the question at hand yet it is the first time the Court, carefully, ventures to give indications of some kind of a European ius commune on the existence of ‘a contract’.

Whether any such contract then is a contract for the sale of goods or one for services, is not a call the Court wishes to make. It lists the various criteria it has hitherto deployed, with extensive reference in particular to C-9/12 Corman-Collins, and leaves the decision up to the national court.

Make a mental note of Granarolo. It may turn out to have been quite pivotal. Geert.

(Handbook of) European Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2, Heading 2.2.11.2.9

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