Opinion of Mr Advocate General Mancini delivered on 4 November 1986. - Hassan Shenavai v Klaus Kreischer. - Reference for a preliminary ruling: Landgericht Kaiserslautern - Germany. - Brussels Convention - Place of performance of an obligation. - Case 266/85.



European Court reports 1987 Page 00239

Swedish special edition Page 00001

Finnish special edition Page 00001



Opinion of the Advocate-General

++++

Mr President,

Members of the Court,

1 . Article 2 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters refers to the domicile of the defendant as the general criterion in determining which court shall have jurisdiction . In addition to that rule - and not in derogation from it - Article 5 enables a plaintiff to bring proceedings before a different court, to be determined according to special criteria . The Court has held : "This freedom of choice was introduced in view of the existence in certain ... cases of a particularly close relationship between a dispute and the court which may be most conveniently called upon to take cognizance of the matter" ( judgment of 6 October 1976, Case 12/76 Tessili v Dunlop (( 1976 )) ECR 1473, at paragraph 13 of the Decision ). Thus, in resolving disputes in matters relating to a contract, a creditor may sue a debtor domiciled in another Contracting State "in the courts for the place of performance of the obligation in question" ( Article 5 ( 1 )*).

However, contracts usually give rise to a relationship involving a number of obligations . It is therefore understandable that, when the Convention came to be interpreted, doubts arose as to which of those obligations the provision refers to : the obligation whose non-performance is the subject of the plaintiff' s action, the obligation which characterizes the relationship, or one of the many other obligations flowing from the contract . When called upon to resolve the question, the Court of Justice had no hesitation in holding that Article 5 ( 1 ) "refers to the contractual obligation forming the basis of the legal proceedings" ( judgment of 6 October 1976, Case 14/76 De Bloos v Bouyer (( 1976 )) ECR 1497, at paragraph 11 of the Decision ).

The principle thereby established aroused some doubt in academic circles, but, being expressed in unequivocal terms which leave no room for uncertainty, it was received favourably by almost all the courts of the Contracting States ( see the Digest of Case-Law Relating to the European Communities, D Series, under I-5.1.1.-B ). The fact that, a decade after that judgment, the Court should have received a request for a preliminary ruling to clarify yet again the meaning of "obligation" under Article 5*(1 ) might therefore seem surprising . As will be seen, however, the request from the national court is explained by the particular rules of its domestic law and by a judgment of the Court subsequent to De Bloos which seems to introduce problems into the clearly-defined framework mentioned above .

2 . Mr Shenavai, a German architect residing at Rockenhausen in the Federal Republic of Germany, brought proceedings before the Amtsgericht (( Local Court )) Rockenhausen against Mr Kreischer, a German national residing in the Netherlands, claiming payment on the fees due to him for the preparation of plans for the construction of three houses in the district of Rockenhausen . The Amtsgericht held that the place in which payment ought to be made was the client' s domicile, and declared the application to be outside its territorial jurisdiction . On appeal, however, the Landgericht (( Regional Court )) Kaiserslautern deemed it necessary to stay the proceedings and to refer the following question to the Court : "For the purposes of Article 5 ( 1 ) ..., is the place of performance, in the specific case of a claim for fees by an architect ... to be determined by reference to the contractual obligation which forms the actual basis of the legal proceedings ( in this case a debt payable under German law at the place where the defendant is domiciled ), or by reference to the obligation typical of the contract and characterizing the contractual relationship as a whole ( that is to say the place where the architect has his practice and/or the site of the planned building )?"

As it stands, the question confuses two issues which, according to Article 5 ( 1 ), ought to be kept apart, namely on the one hand the identification of the obligation, and on the other the determination of the place in which it is to be performed . However, the Court has already given replies to both parts of the question : the first was resolved, as was seen above, by the De Bloos judgment, and the second by the Tessili judgment . At paragraph 13 of the Decision in the latter case, the Court held : "It is for the court before which the matter is brought to establish ... whether the place of performance is situated within its territorial jurisdiction . For this purpose it must determine in accordance with its own rules of conflict of laws what is the law applicable to the legal relationship in question and define in accordance with that law the place of performance of the contractual obligation in question ."

In the light of those explanations, it seems to me that the problem raised by the Landgericht Kaiserslautern vanishes altogether . The order requesting the preliminary ruling cannot be said to contain elements of fact or law such as would justify the Court revising its previous approach .

On the other hand, the impression one forms of the order of the national court is that the real difficulty in this case is one of domestic law . The Landgericht Kaiserslautern inform the Court that, under German law, the place of payment of an architect' s fees is not clearly established . And it is well known that the simplest way to supply lacunae of this sort - that is, of resolving by indirect means the vexed question of domestic territorial jurisdiction - is to resort to an international forum, whose conclusions obviously take priority . In the present case, for example, it would be sufficient to read Article 5 ( 1 ) as if it referred, not to the obligation in dispute before the court ( namely the payment of the fees ), but to the obligation which characterizes the relationship, namely the architect' s services, in order to infer furthermore that performance of that obligation will necessarily take place in the architect' s office; and it is precisely with that result in view that the German court wishes to know whether, in the dispute brought before it, it may refer to the criterion of the "characteristic obligation" for the purposes of the application of that article .

When viewed in that perspective, therefore, the question referred to the Court by the Landgericht Kaiserslautern is not without purpose; that does not, however, alter the answer to be given to it . There can be no doubt that, for procedural purposes, the term "obligation" in Article 5 ( 1 ) is autonomous and cannot vary according to the different contractual relationships in dispute before a court . It is equally certain, moreover, that the doubts in German law as to the place in which the fees are to be paid do not, in themselves, warrant a derogation from the general rule enshrined in the De Bloos judgment . In conclusion I can only repeat that, if the problem on which the Court is requested to give a ruling is appraised by reference to the facts of the case alone, a comprehensive solution is to be found in the De Bloos judgment and the Tessili judgment .

3 . The same problem assumes quite different dimensions, on the other hand, if the circumstances of the case are disregarded and account is taken - although the national court did not do so - of another, more recent judgment of the Court of 26 May 1982 ( Case 133/81 Ivenel v Schwab (( 1982 )) ECR 1891 ). The plaintiff had put forward several claims based on the various obligations arising under a contract of employment, and the Court held that in such a case the provisions of the Convention must be interpreted "in such a way that the national court is not compelled to find that it has jurisdiction to adjudicate upon certain claims but not on others" and that therefore "the obligation to be taken into account for the purposes of the application of Article 5 ( 1 ) ... is the obligation which characterizes the contract" ( paragraphs 18 and 20 of the Decision ).

In the present case, however, there is no doubt that what is at issue is a contract ( other than a contract of employment ) for services of an intellectual nature, and that the plaintiff' s claim is founded on a single obligation . If, therefore, the solution formulated in the Ivenel case were to be applied, that solution would need to be treated not as an exceptional expedient dictated by the particularities of the case, but as the expression of a new and general criterion overturning that in De*Bloos . The question is, however, whether it is possible and, above all, desirable to adopt that approach . On that point the United Kingdom, the German and Italian Governments and the Commission of the European Communities have expressed opinions which should now be considered .

4 . The United Kingdom maintains that, if the criterion of "characteristic obligation" became the general rule, the application of Article 5 ( 1 ) would become more rational; it would serve to avoid the "fragmentation" of jurisdiction ( that is, the possibility that several courts in different States might have jurisdiction over different claims arising from the same contractual relationship ), and to prevent the plaintiff from determining the jurisdiction at will, according to the type of application which he decides to submit . The United Kingdom points out that that solution would, furthermore,

( a ) allow the forum under Article 5 ( 1 ) to be used as a genuine alternative to the general forum under Article 2, and

( b ) enable the rules of the Convention of 27*September 1968 to be harmonized with the aims and provisions of the Convention on the Law Applicable to Contractual Obligations, which was opened for signature in Rome on 19 June 1980 .

In the view of the German Government, too, the criterion established by De Bloos might bring about the fragmentation of jurisdiction and hence the delivery of divergent judgments in relation to one and the same contract . In practice, however, that danger is reduced by the option open to the defendant of lodging a counterclaim against the plaintiff ( Article 6 ( 3 ) of the Convention ), and by the fact that, where related actions are brought in the courts of different Contracting States, "any court other than the court first seised may ... stay its proceedings ... ( or ) ... decline jurisdiction" ( first and second paragraphs of Article 22; but see also the obligations imposed on that court by the first paragraph of Article 21 ). In any event, since the forum under Article 5 ( 1 ) does not exclude the forum under Article 2, raising the criterion in Ivenel to the status of a general rule would not eliminate the risk of divergent judgments and, in that case, it is as well to take the same approach as in the past .

Lastly, the Italian Government and the Commission contend that, far from being in conflict, the principles set out in the De Bloos and Ivenel judgments are complementary . The first is the general rule whilst the second applies only in circumstances analogous to those which caused it to be adopted in the first place, namely an employment relationship ( or more generally, according to the Commission, any relationship where there is disparity of bargaining power between the parties ) and a number of claims which a plaintiff bases on various obligations arising under the same contract .

5 . Of the standpoints summarized above I prefer the last . The United Kingdom' s argument cannot withstand the objections raised by the Federal Republic of Germany and, as far as the reference to the Rome Convention of 19 June 1980 is concerned, is open to three simple counterarguments :

( a ) far from reducing the risk of "fragmentation of jurisdiction", that Convention enables the parties to arrange for the obligations arising under the contract to be governed by different legal systems ( Article 3 ( 1 )*);

( b ) in its general scheme, reference to the "performance which is characteristic of the contract" is merely subsidiary and is not in any event a reliable criterion for determing the forum;

( c ) with regard to contracts of employment, the Rome Convention safeguards the employee not by designating the lex loci laboris ( law of the place where the work is performed ) as the legal system governing the obligation characterizing the contract but by providing that the "mandatory rules of law", even those of a foreign country, are to override the lex contractus ( Article 6 ( 1 )*).

Having said that, I must observe that, although it correctly defines the relationship between De Bloos and Ivenel in terms of rule and exception, the Commission' s line of argument attributes too wide a scope to the principle laid down by the second judgment; I do not think that the principle may be applied outside the context of an employment relationship; in particular, it does not apply to dealings which are characterized merely by the economic inferiority of one party . It seems to me that this is demonstrated by the case of insurance contracts, for which the 1968 Convention determines jurisdiction by means of rules ( Articles 7 to 11 ) which, according to the Jenard Report, "are dictated by social considerations which are aimed in particular at preventing abuses which could result from the terms of contracts in standard form" ( Official Journal C*59 of 5 March 1979, p.*29 ). Article 8 provides a number of forums for legal proceedings brought by the insured, and it adopts as the determining criterion not the place in which the "characteristic obligation" is to be performed ( that is, the business operations of the insurer ), but the place in which the harmful event occurs or the parties' domiciles .

The question arises whether insurance may be considered - for present purposes, of course - to be representative of the whole range of contracts concluded between parties having disparate bargaining power, including contracts for professional and other services . In my opinion it may and the conclusion to be drawn is that where such contracts are concerned, the 1968 Convention does not provide for a single forum for all conceivable disputes which may arise from the contractual relationship, but leaves the weaker party with an option . That conclusion is, moreover, consistent with the rationale of Article 5 which, as the Tessili judgment establishes, is to enable a creditor to commence proceedings before the court of the place which, from the point of view of court proceedings, is most closely connected with the subject-matter of his claim .

It follows from the foregoing that the requirement in Article 5 ( 1 ) that "the obligation to be taken into account" be "that which corresponds to the contractual right on which the plaintiff' s action is based" ( De*Bloos judgment, cited above, at paragraph 13 of the Decision ) also applies to disputes concerning contracts of the kind at issue in the present case .

6 . In view of all the foregoing considerations I propose that the Court should give the following answer to the question referred to it by the Landgericht Kaiserslautern in its order of 5 March 1985 in the proceedings brought by Mr Shenavai against Mr Kreischer :

In a dispute concerning the payment of an architect' s fees, the term "obligation" under Article 5 ( 1 ) of the Convention of 27 September 1968 refers to the contractual obligation forming the basis of the legal proceedings, which in the present instance means the obligation to pay the fees . The place in which that obligation has been, or should be, performed is determined in accordance with the law which governs the obligation in question according to the rules of conflict of laws of the court before which the matter is brought .

(*) Translated from the Italian .