Judgment of the Court of 22 November 1978. - Somafer SA v Saar-Ferngas AG. - Reference for a preliminary ruling: Oberlandesgericht Saarbrücken - Germany. - Case 33/78.



European Court reports 1978 Page 02183

Greek special edition Page 00653

Portuguese special edition Page 00733

Spanish special edition Page 00637

Swedish special edition Page 00209

Finnish special edition Page 00229



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . CONVENTION OF 27 SEPTEMBER 1968 ON JURISDICTION AND THE ENFORCEMENT OF JUDGMENTS - INTERPRETATION - GENERAL RULES

2 . CONVENTION OF 27 SEPTEMBER 1968 ON JURISDICTION AND THE ENFORCEMENT OF JUDGMENTS - SPECIAL JURISDICTION - CONCEPTS IN ARTICLE 5 ( 5 ): ' ' OPERATIONS OF A BRANCH , AGENCY OR OTHER ESTABLISHMENT ' ' - INDEPENDENT INTERPRETATION - MEANING - JURISDICTION OF THE NATIONAL COURT

( CONVENTION OF 27 SEPTEMBER 1968 , ART . 5 ( 5 ))

Summary

1 . THE CONVENTION OF 27 SEPTEMBER 1968 MUST BE INTERPRETED HAVING REGARD BOTH TO ITS PRINCIPLES AND OBJECTIVES AND TO ITS RELATIONSHIP WITH THE TREATY . THE QUESTION WHETHER THE WORDS AND CONCEPTS USED IN THE CONVENTION MUST BE REGARDED AS HAVING THEIR OWN INDEPENDENT MEANING AND AS BEING THUS COMMON TO ALL THE CONTRACTING STATES OR AS REFERRING TO SUBSTANTIVE RULES OF THE LAW APPLICABLE IN EACH CASE UNDER THE RULES OF CONFLICT OF LAWS OF THE COURT BEFORE WHICH THE MATTER IS FIRST BROUGHT MUST BE SO ANSWERED AS TO ENSURE THAT THE CONVENTION IS FULLY EFFECTIVE IN ACHIEVING THE OBJECTS WHICH IT PURSUES .

2 . THE NEED TO ENSURE LEGAL CERTAINTY AND EQUALITY OF RIGHTS AND OBLIGATIONS FOR THE PARTIES AS REGARDS THE POWER TO DEROGATE FROM THE GENERAL JURISDICTION OF ARTICLE 2 REQUIRES AN INDEPENDENT INTERPRETATION , COMMON TO ALL THE CONTRACTING STATES , OF THE CONCEPTS IN ARTICLE 5 ( 5 ) OF THE CONVENTION OF 27 SEPTEMBER 1968 .

THE CONCEPT OF BRANCH , AGENCY OR OTHER ESTABLISHMENT IMPLIES A PLACE OF BUSINESS WHICH HAS THE APPEARANCE OF PERMANENCY , SUCH AS THE EXTENSION OF A PARENT BODY , HAS A MANAGEMENT AND IS MATERIALLY EQUIPPED TO NEGOTIATE BUSINESS WITH THIRD PARTIES SO THAT THE LATTER , ALTHOUGH KNOWING THAT THERE WILL IF NECESSARY BE A LEGAL LINK WITH THE PARENT BODY , THE HEAD OFFICE OF WHICH IS ABROAD , DO NOT HAVE TO DEAL DIRECTLY WITH SUCH PARENT BODY BUT MAY TRANSACT BUSINESS AT THE PLACE OF BUSINESS CONSTITUTING THE EXTENSION .

THE CONCEPT OF ' ' OPERATIONS ' ' COMPRISES :

- ACTIONS RELATING TO RIGHTS AND CONTRACTUAL OR NON-CONTRACTUAL OBLIGATIONS CONCERNING THE MANAGEMENT PROPERLY SO-CALLED OF THE AGENCY , BRANCH OR OTHER ESTABLISHMENT ITSELF SUCH AS THOSE CONCERNING THE SITUATION OF THE BUILDING WHERE SUCH ENTITY IS ESTABLISHED OR THE LOCAL ENGAGEMENT OF STAFF TO WORK THERE ;

- ACTIONS RELATING TO UNDERTAKINGS WHICH HAVE BEEN ENTERED INTO AT THE ABOVE-MENTIONED PLACE OF BUSINESS IN THE NAME OF THE PARENT BODY AND WHICH MUST BE PERFORMED IN THE CONTRACTING STATE WHERE THE PLACE OF BUSINESS IS ESTABLISHED AND ALSO ACTIONS CONCERNING NON-CONTRACTUAL OBLIGATIONS ARISING FROM THE ACTIVITIES IN WHICH THE BRANCH , AGENCY OR OTHER ESTABLISHMENT WITHIN THE ABOVE DEFINED MEANING , HAS ENGAGED AT THE PLACE IN WHICH IT IS ESTABLISHED ON BEHALF OF THE PARENT BODY .

IT IS IN EACH CASE FOR THE COURT BEFORE WHICH THE MATTER COMES TO FIND THE FACTS WHEREON IT MAY BE ESTABLISHED THAT AN EFFECTIVE PLACE OF BUSINESS EXISTS AND TO DETERMINE THE LEGAL POSITION BY REFERENCE TO THE CONCEPT OF ' ' OPERATIONS ' ' AS ABOVE DEFINED .

Parties

IN CASE 33/78

REFERENCE TO THE COURT UNDER THE PROTOCOL OF 3 JUNE 1971 ON THE INTERPRETATION BY THE COURT OF JUSTICE OF THE CONVENTION OF 27 SEPTEMBER 1968 ON JURISDICTION AND THE ENFORCEMENT OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS BY THE OBERLANDESGERICHT SAARBRUCKEN FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

ETABLISSEMENTS SOMAFER SA , WHOSE REGISTERED OFFICE IS AT UCKANGE ( FRANCE ),

AND

SAAR-FERNGAS AG , WHOSE REGISTERED OFFICE IS AT SAARBRUCKEN-SCHAFBRUCKE ( FEDERAL REPUBLIC OF GERMANY ),

Subject of the case

ON THE INTERPRETATION OF THE WORDS ' ' BRANCH ' ' AND ' ' AGENCY ' ' WITHIN THE MEANING OF ARTICLE 5 ( 5 ) OF THE CONVENTION OF 27 SEPTEMBER 1968 ,

Grounds

1BY ORDER DATED 21 FEBRUARY 1978 , RECEIVED AT THE COURT ON 13 MARCH 1978 , THE OBERLANDESGERICHT SAARBRUCKEN REFERRED TO THE COURT UNDER THE PROTOCOL OF 3 JUNE 1971 CONCERNING THE INTERPRETATION OF THE CONVENTION OF 27 SEPTEMBER 1968 ON JURISDICTION AND THE ENFORCEMENT OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS ( OFFICIAL JOURNAL 1978 , NO L 304 , P . 77 ) ( HEREINAFTER REFERRED TO AS ' ' THE CONVENTION ' ' ) THREE QUESTIONS ON THE INTERPRETATION OF ARTICLE 5 ( 5 ) OF THE CONVENTION . ACCORDING TO THE PROVISION , INTERPRETATION OF WHICH IS SOUGHT , A PERSON DOMICILED IN A CONTRACTING STATE MAY , IN ANOTHER CONTRACTING STATE , BE SUED : . . . ' ' ( 5 ) AS REGARDS A DISPUTE ARISING OUT OF THE OPERATIONS OF A BRANCH , AGENCY OR OTHER ESTABLISHMENT , IN THE COURTS FOR THE PLACE IN WHICH THE BRANCH , AGENCY OR OTHER ESTABLISHMENT IS SITUATED ' ' .

2THE QUESTIONS PUT MUST ENABLE THE NATIONAL COURT TO DECIDE WHETHER IT HAS JURISDICTION UNDER THE SAID PROVISION - WITHOUT PREJUDICE TO ITS JURISDICTION ON THE BASIS OF OTHER PROVISIONS OF THE CONVENTION - TO TRY AN ACTION BROUGHT BY A GERMAN UNDERTAKING AGAINST A FRENCH UNDERTAKING , THE REGISTERED OFFICE OF WHICH IS IN FRENCH TERRITORY BUT WHICH HAS AN OFFICE OR PLACE OF CONTACT IN THE FEDERAL REPUBLIC OF GERMANY DESCRIBED ON ITS NOTE- PAPER AS ' ' VERTRETUNG FUR DEUTSCHLAND ' ' ( ' ' REPRESENTATION FOR GERMANY ' ' ), FOR THE RECOVERY OF THE EXPENSES INCURRED BY THE GERMAN UNDERTAKING TO PROTECT GAS MAINS BELONGING TO IT FROM ANY DAMAGE WHICH MIGHT BE CAUSED BY DEMOLITION WORK WHICH THE FRENCH UNDERTAKING WAS CARRYING OUT IN THE VICINITY ON BEHALF OF THE SAARLAND .

THE FIRST QUESTION

3THE FIRST QUESTION ASKS

' ' ARE THE CONDITIONS REGARDING JURISDICTION IN THE CASE OF ' THE OPERATIONS OF A BRANCH , AGENCY OR OTHER ESTABLISHMENT ' MENTIONED IN ARTICLE 5 ( 5 ) OF THE SAID CONVENTION TO BE DETERMINED .

( A ) UNDER THE LAW OF THE STATE BEFORE THE COURTS OF WHICH THE PROCEEDINGS HAVE BEEN BROUGHT ; OR

( B ) UNDER THE LAW OF THE STATES CONCERNED ( QUALIFICATION ACCORDING TO THE LAW TO BE APPLIED IN THE MAIN ACTION ); OR

( C ) INDEPENDENTLY , I.E . IN ACCORDANCE WITH THE OBJECTIVES AND SYSTEM OF THE SAID CONVENTION AND ALSO WITH THE GENERAL PRINCIPLES OF LAW WHICH STEM FROM THE CORPUS OF THE NATIONAL LEGAL SYSTEM ( JUDGMENT OF 14 OCTOBER 1976 IN CASE 29/76 LTU LUFTTRANSPORTUNTERNEHMEN GMBH & CO . KG V EUROCONTROL ( 1976 ) ECR 1541)?

' '

4THE CONVENTION , CONCLUDED PURSUANT TO ARTICLE 220 OF THE EEC TREATY , IS INTENDED ACCORDING TO THE EXPRESS TERMS OF ITS PREAMBLE TO IMPLEMENT THE PROVISIONS OF THAT ARTICLE ON THE SIMPLIFICATION OF FORMALITIES GOVERNING THE RECIPROCAL RECOGNITION AND ENFORCEMENT OF JUDGMENTS OF COURTS OR TRIBUNALS AND TO STRENGTHEN IN THE COMMUNITY THE LEGAL PROTECTION OF PERSONS THEREIN ESTABLISHED . IN ORDER TO ELIMINATE OBSTACLES TO LEGAL RELATIONS AND TO SETTLE DISPUTES WITHIN THE SPHERE OF INTRA-COMMUNITY RELATIONS IN CIVIL AND COMMERCIAL MATTERS THE CONVENTION CONTAINS , INTER ALIA , RULES ENABLING THE JURISDICTION IN THESE MATTERS OF THE COURTS OF CONTRACTING STATES TO BE DETERMINED AND FACILITATING THE RECOGNITION AND EXECUTION OF COURTS ' JUDGMENTS . ACCORDINGLY THE CONVENTION MUST BE INTERPRETED HAVING REGARD BOTH TO ITS PRINCIPLES AND OBJECTIVES AND TO ITS RELATIONSHIP WITHIN THE TREATY .

5THE CONVENTION FREQUENTLY USES WORDS AND LEGAL CONCEPTS DRAWN FROM CIVIL , COMMERCIAL AND PROCEDURAL LAW AND CAPABLE OF A DIFFERENT MEANING FROM ONE CONTRACTING STATE TO ANOTHER . THE QUESTION THEREFORE ARISES WHETHER THESE WORDS AND CONCEPTS MUST BE REGARDED AS HAVING THEIR OWN INDEPENDENT MEANING AND AS BEING THUS COMMON TO ALL THE CONTRACTING STATES OR AS REFERRING TO SUBSTANTIVE RULES OF THE LAW APPLICABLE IN EACH CASE UNDER THE RULES OF CONFLICT OF LAWS OF THE COURT BEFORE WHICH THE MATTER IS FIRST BROUGHT . THE ANSWER TO THIS QUESTION MUST ENSURE THAT THE CONVENTION IS FULLY EFFECTIVE IN ACHIEVING THE OBJECTIVES WHICH IT PURSUES .

6THE MEANING OF THE WORDS ' ' DISPUTE ARISING OUT OF THE OPERATIONS OF A BRANCH , AGENCY OR OTHER ESTABLISHMENT ' ' , WHICH ARE THE BASIS OF THE JURISDICTION GIVE BY ARTICLE 5 ( 5 ), ARE DIFFERENT FROM ONE CONTRACTING STATE TO ANOTHER , NOT ONLY IN THE RESPECTIVE LAWS BUT ALSO IN THE APPLICATION GIVEN TO BILATERAL CONVENTIONS ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS .

7THEIR FUNCTION IN THE CONTEXT OF THE CONVENTION MUST BE DECIDED IN RELATION TO THE GENERAL RULE CONFERRING JURISDICTION CONTAINED IN ARTICLE 2 ( 1 ) OF THE CONVENTION WHICH STATES ' ' SUBJECT TO THE PROVISIONS OF THIS CONVENTION , PERSONS DOMICILED IN A CONTRACTING STATE SHALL , WHATEVER THEIR NATIONALITY , BE SUED IN THE COURTS OF THAT STATE ' ' . ALTHOUGH ARTICLE 5 MAKES PROVISION IN A NUMBER OF CASES FOR A SPECIAL JURISDICTION , WHICH THE PLAINTIFF MAY CHOOSE , THIS IS BECAUSE OF THE EXISTENCE , IN CERTAIN CLEARLY-DEFINED SITUATIONS , OF A PARTICULARLY CLOSE CONNECTING FACTOR BETWEEN A DISPUTE AND THE COURT WHICH MAY BE CALLED UPON TO HEAR IT , WITH A VIEW TO THE EFFICACIOUS CONDUCT OF THE PROCEEDINGS . MULTIPLICATION OF THE BASES OF JURISDICTION IN ONE AND THE SAME CASE IS NOT LIKELY TO ENCOURAGE LEGAL CERTAINTY AND THE EFFECTIVENESS OF LEGAL PROTECTION THROUGHOUT THE TERRITORY OF THE COMMUNITY AND THEREFORE IT IS IN ACCORD WITH THE OBJECTIVE OF THE CONVENTION TO AVOID A WIDE AND MULTIFARIOUS INTERPRETATION OF THE EXCEPTIONS TO THE GENERAL RULE OF JURISDICTION CONTAINED IN ARTICLE 2 . THIS IS ALL THE MORE SO SINCE IN NATIONAL LAWS OR IN BILATERAL CONVENTIONS THE SIMILAR EXCEPTION IS FREQUENTLY DUE , AS THE UNITED KINGDOM RIGHTLY POINTS OUT IN ITS WRITTEN OBSERVATIONS , TO THE NOTION THAT A NATIONAL STATE SERVES THE INTERESTS OF ITS NATIONALS BY OFFERING THEM AN OPPORTUNITY TO ESCAPE THE JURISDICTION OF A FOREIGN COURT AND THIS CONSIDERATION IS OUT OF PLACE IN THE COMMUNITY CONTEXT , SINCE THE JUSTIFICATION FOR THE EXCEPTIONS CONTAINED IN ARTICLE 5 TO THE GENERAL RULE OF JURISDICTION IN ARTICLE 2 IS SOLELY IN THE INTERESTS OF DUE ADMINISTRATION OF JUSTICE .

8THE SCOPE AND LIMITS OF THE RIGHT GIVEN TO THE PLAINTIFF BY ARTICLE 5 ( 5 ) MUST BE DETERMINED BY THE PARTICULAR FACTS WHICH EITHER IN THE RELATIONS BETWEEN THE PARENT BODY AND ITS BRANCHES , AGENCIES OR OTHER ESTABLISHMENTS OR IN THE RELATIONS BETWEEN ONE OF THE LATTER ENTITIES AND THIRD PARTIES SHOW THE SPECIAL LINK JUSTIFYING , IN DEROGATION FROM ARTICLE 2 , THE OPTION GRANTED TO THE PLAINTIFF . IT IS BY DEFINITION A QUESTION OF FACTORS CONCERNING TWO ENTITIES ESTABLISHED IN DIFFERENT CONTRACTING STATES BUT WHICH IN SPITE OF THIS MUST BE CONSIDERED IN THE SAME WAY , WHETHER FROM THE POINT OF VIEW OF THE PARENT BODY OR OF AN EXTENSION OR EXTENSIONS WHICH THE PARENT BODY HAS ESTABLISHED IN THE OTHER MEMBER STATES OR FROM THAT OF THE THIRD PARTIES WITH WHOM LEGAL RELATIONS ARE CREATED THROUGH SUCH EXTENSIONS . IN THESE CIRCUMSTANCES THE NEED TO ENSURE LEGAL CERTAINTY AND EQUALITY OF RIGHTS AND OBLIGATIONS FOR THE PARTIES AS REGARDS THE POWER TO DEROGATE FROM THE GENERAL JURISDICTION OF ARTICLE 2 REQUIRES AN INDEPENDENT INTERPRETATION , COMMON TO ALL THE CONTRACTING STATES , OF THE CONCEPTS IN ARTICLE 5 ( 5 ) OF THE CONVENTION WHICH ARE THE SUBJECT OF THE REFERENCE FOR A PRELIMINARY RULING .

THE SECOND AND THIRD QUESTIONS

9IN THE EVENT OF THE WORDS REFERRED TO BEING INTERPRETED INDEPENDENTLY , THE SECOND QUESTION ASKS WHAT CRITERIA APPLY WITH REFERENCE TO THE CAPACITY TO TAKE INDEPENDENT DECISIONS ( INTER ALIA TO ENTER INTO CONTRACTS ) AND ALSO TO THE EXTENT OF THE OUTWARD MANIFESTATION . THE THIRD QUESTION ASKS

' ' ARE THE PRINCIPLES GOVERNING LIABILITY FOR HOLDING ONESELF OUT IN LAW TO OTHERS , I.E . TO THIRD PARTIES , TO BE APPLIED TO THE QUESTIONS WHETHER THERE IS IN FACT A BRANCH OR AGENCY , WITH LEGAL CONSEQUENCES THAT ANYONE WHO CREATES THE APPEARANCE OF SUCH A SITUATION IS TO BE TREATED AS HAVING OPERATED A BRANCH OR AGENCY - AS IS FOR EXAMPLE THE CASE UNDER GERMAN LAW ( CF . ARTICLE 21 OF THE ZIVILPROZESSORDNUNG ( CODE OF CIVIL PROCEDURE ) BAUMBACH , 36TH EDITION NOTE 2 A , STEIN-JONAS , 19TH EDITION , NOTE II 2 ; OBERLANDESGERICHT KOLN NEUE JURISTISCHE WOCHENSCHRIFT 1953 , 1834 , OBERLANDESGERICHT BRESLAU HOCHSTRICHTERLICHE RECHTSPRECHUNG 1939 ( CASE NO 111))?

' '

10THESE TWO QUESTIONS MUST BE TAKEN TOGETHER .

11HAVING REGARD TO THE FACT THAT THE CONCEPTS REFERRED TO GIVE THE RIGHT TO DEROGATE FROM THE PRINCIPLE OF JURISDICTION OF ARTICLE 2 OF THE CONVENTION THEIR INTERPRETATION MUST SHOW WITHOUT DIFFICULTY THE SPECIAL LINK JUSTIFYING SUCH DEROGATION . SUCH SPECIAL LINK COMPRISES IN THE FIRST PLACE THE MATERIAL SIGNS ENABLING THE EXISTENCE OF THE BRANCH , AGENCY OR OTHER ESTABLISHMENT TO BE EASILY RECOGNIZED AND IN THE SECOND PLACE THE CONNEXION THAT THERE IS BETWEEN THE LOCAL ENTITY AND THE CLAIM DIRECTED AGAINST THE PARENT BODY ESTABLISHED IN ANOTHER CONTRACTING STATE .

12AS REGARDS THE FIRST ISSUE , THE CONCEPT OF BRANCH , AGENCY OR OTHER ESTABLISHMENT IMPLIES A PLACE OF BUSINESS WHICH HAS THE APPEARANCE OF PERMANENCY , SUCH AS THE EXTENSION OF A PARENT BODY , HAS A MANAGEMENT AND IS MATERIALLY EQUIPPED TO NEGOTIATE BUSINESS WITH THIRD PARTIES SO THAT THE LATTER , ALTHOUGH KNOWING THAT THERE WILL IF NECESSARY BE A LEGAL LINK WITH THE PARENT BODY , THE HEAD OFFICE OF WHICH IS ABROAD , DO NOT HAVE TO DEAL DIRECTLY WITH SUCH PARENT BODY BUT MAY TRANSACT BUSINESS AT THE PLACE OF BUSINESS CONSTITUTING THE EXTENSION .

13AS REGARDS THE SECOND ISSUE THE CLAIM IN THE ACTION MUST CONCERN THE OPERATIONS OF THE BRANCH , AGENCY OR OTHER ESTABLISHMENT . THIS CONCEPT OF OPERATIONS COMPRISES ON THE ONE HAND ACTIONS RELATING TO RIGHTS AND CONTRACTUAL OR NON-CONTRACTUAL OBLIGATIONS CONCERNING THE MANAGEMENT PROPERLY SO-CALLED OF THE AGENCY , BRANCH OR OTHER ESTABLISHMENT ITSELF SUCH AS THOSE CONCERNING THE SITUATION OF THE BUILDING WHERE SUCH ENTITY IS ESTABLISHED OR THE LOCAL ENGAGEMENT OF STAFF TO WORK THERE . FURTHER IT ALSO COMPRISES THOSE RELATING TO UNDERTAKINGS WHICH HAVE BEEN ENTERED INTO AT THE ABOVE-MENTIONED PLACE OF BUSINESS IN THE NAME OF THE PARENT BODY AND WHICH MUST BE PERFORMED IN THE CONTRACTING STATE WHERE THE PLACE OF BUSINESS IS ESTABLISHED AND ALSO ACTIONS CONCERNING NON-CONTRACTUAL OBLIGATIONS ARISING FROM THE ACTIVITIES IN WHICH THE BRANCH , AGENCY OR OTHER ESTABLISHMENT WITHIN THE ABOVE DEFINED MEANING , HAS ENGAGED AT THE PLACE IN WHICH IT IS ESTABLISHED ON BEHALF OF THE PARENT BODY . IT IS IN EACH CASE FOR THE COURT BEFORE WHICH THE MATTER COMES TO FIND THE FACTS WHEREON IT MAY BE ESTABLISHED THAT AN EFFECTIVE PLACE OF BUSINESS EXISTS AND TO DETERMINE THE LEGAL POSITION BY REFERENCE TO THE CONCEPT OF ' ' OPERATIONS ' ' AS ABOVE DEFINED .

14THE ABOVE CONSIDERATIONS MAKE IT UNNECESSARY TO ANSWER THE THIRD QUESTION .

Decision on costs

COSTS

15THE COSTS INCURRED BY THE GOVERNMENT OF THE UNITED KINGDOM AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED WRITTEN OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE AND AS THE PROCEEDINGS ARE , SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE OBERLANDESGERICHT SAARBRUCKEN BY ORDER OF 21 FEBRUARY 1978 , HEREBY RULES :

1 . THE NEED TO ENSURE LEGAL CERTAINTY AND EQUALITY OF RIGHTS AND OBLIGATIONS FOR THE PARTIES AS REGARDS THE POWER TO DEROGATE FROM THE GENERAL JURISDICTION OF ARTICLE 2 REQUIRES AN INDEPENDENT INTERPRETATION , COMMON TO ALL THE CONTRACTING STATES , OF THE CONCEPTS IN ARTICLE 5 ( 5 ) OF THE CONVENTION .

2 . THE CONCEPT OF BRANCH , AGENCY OR OTHER ESTABLISHMENT IMPLIES A PLACE OF BUSINESS WHICH HAS THE APPEARANCE OF PERMANENCY , SUCH AS THE EXTENSION OF A PARENT BODY , HAS A MANAGEMENT AND IS MATERIALLY EQUIPPED TO NEGOTIATE BUSINESS WITH THIRD PARTIES SO THAT THE LATTER , ALTHOUGH KNOWING THAT THERE WILL IF NECESSARY BE A LEGAL LINK WITH THE PARENT BODY , THE HEAD OFFICE OF WHICH IS ABROAD , DO NOT HAVE TO DEAL DIRECTLY WITH SUCH PARENT BODY BUT MAY TRANSACT BUSINESS AT THE PLACE OF BUSINESS CONSTITUTING THE EXTENSION .

3 . THE CONCEPT OF ' ' OPERATIONS ' ' COMPRISES :

- ACTIONS RELATING TO RIGHTS AND CONTRACTUAL OR NON-CONTRACTUAL OBLIGATIONS CONCERNING THE MANAGEMENT PROPERLY SO-CALLED OF THE AGENCY , BRANCH OR OTHER ESTABLISHMENT ITSELF SUCH AS THOSE CONCERNING THE SITUATION OF THE BUILDING WHERE SUCH ENTITY IS ESTABLISHED OR THE LOCAL ENGAGEMENT OF STAFF TO WORK THERE ;

- ACTIONS RELATING TO UNDERTAKINGS WHICH HAVE BEEN ENTERED INTO AT THE ABOVE-MENTIONED PLACE OF BUSINESS IN THE NAME OF THE PARENT BODY AND WHICH MUST BE PERFORMED IN THE CONTRACTING STATE WHERE THE PLACE OF BUSINESS IS ESTABLISHED AND ALSO ACTIONS CONCERNING NON-CONTRACTUAL OBLIGATIONS ARISING FROM THE ACTIVITIES IN WHICH THE BRANCH , AGENCY OR OTHER ESTABLISHMENT WITHIN THE ABOVE DEFINED MEANING , HAS ENGAGED AT THE PLACE IN WHICH IT IS ESTABLISHED ON BEHALF OF THE PARENT BODY .

4 . IT IS IN EACH CASE FOR THE COURT BEFORE WHICH THE MATTER COMES TO FIND THE FACTS WHEREON IT MAY BE ESTABLISHED THAT AN EFFECTIVE PLACE OF BUSINESS EXISTS AND TO DETERMINE THE LEGAL POSITION BY REFERENCE TO THE CONCEPT OF ' ' OPERATIONS ' ' AS ABOVE DEFINED .